IRS establishes contact-free signature options for power of attorney, authorization forms
IRS establishes contact-free signature options
The IRS today announced a new online option intended to allow tax professionals to obtain signatures remotely from individual and business clients and to submit authorization forms electronically.
As explained in today’s IRS release—IR-2021-20 (January 25, 2021)—tax professionals are referred to a new tool, Submit Forms 2848 and 8821 Online. Tax professionals must register and create a “secure access account” in advance of submitting an online authorization form. This process reflects implementation of measures included in the “Taxpayer First Act” that require the IRS to expand use of taxpayer electronic signatures on authorization forms.
Form 2848 and Form 8821
Today’s release continues by explaining that Form 2848, Power of Attorney and Declaration of Representative [PDF 127 KB] and Form 8821, Tax Information Authorization [PDF 70 KB] are two forms that allow taxpayers to authorize the IRS to disclose their tax information to third parties—including tax professionals.
- Is a taxpayer's written authorization appointing an eligible individual to represent the taxpayer before the IRS, including performing certain acts on the taxpayer's behalf
- Authorizes the representative to receive related confidential tax information of the taxpayer from the IRS
- Is a taxpayer's written authorization designating a third party to receive and view the taxpayer's information
- Must be signed by both the taxpayer and the tax professional
If the tax professional uses the new online option, the signatures on the forms can be handwritten or electronic.
Form 8821 only needs to be signed by the taxpayer, and if using the new online option, the taxpayer's signature can be handwritten or electronic.
If the tax professional uses the electronic signature option for a new client, the tax professional must first authenticate the client's identity. The IRS has provided a set of “frequently asked questions” (FAQs) about this process. Tax professionals may also use the "Submit Forms 2848 and 8821 Online" to withdraw previous authorizations. However, the new online option cannot be used to ask questions or address other issues.
The IRS further noted:
- The process to mail or fax authorization forms to the IRS is still available.
- Signatures on mailed or faxed forms must be handwritten.
- Electronic signatures are not allowed.
The IRS explained that most Forms 2848 and 8821 are recorded on the IRS's Centralized Authorization File (CAF). Authorization forms uploaded through this tool will be addressed on a first-in, first-out basis along with mailed or faxed forms.
Lastly, during the summer 2021, the IRS plans to launch the “Tax Pro Account” that will allow tax professionals to initiate a third-party authorization on IRS.gov and send it to a client's IRS online account. Individual clients will access their online account and digitally sign the authorization, sending it to be recorded on the CAF. The IRS stated that it expects this new method will dramatically speed processing and allow for almost immediate authorization.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.