Practitioners Cautiously Await Opening of New Tax Pro Account

You will recall that the IRS previously created an online Power of Attorney (POA) application for practitioners but closed that system down quite a while back. The IRS is reviving the ability to apply for POAs online. Currently, the IRS has about a four-month backlog of processing POAs.

The IRS is expecting to introduce the Tax Pro Account on July 18. The Tax Pro Account is an online system that allows tax professionals to securely request POA authorization and/or tax information authorization (TIA) to represent an individual taxpayer in front of the IRS, in lieu of filing a paper Form 2848 or Form 8821.

The Tax Pro Account's functionality will allow tax professionals to initiate what the IRS refers to as a "third-party authorization" online and send it to a client's IRS online account. The taxpayer will then be able to access their online account and digitally approve (or reject) the authorization, sending it to be recorded on the IRS' Centralized Authorization File (CAF). The process is fully electronic and most requests will be posted immediately (within 48 hours) to the CAF database.

Only two tax professionals can elect to receive copies of IRS notices and communications sent to a taxpayer. If more than two tax professionals make an election, after approval of the first two authorizations by the taxpayer, the remaining authorizations will not be processed.

At this time, it does not appear that taxpayers will receive notification about pending authorization requests. Tax professionals also cannot view authorization history such as pending requests and statuses.

Some practitioners are skeptical that the new interface will reduce the time it takes to post POAs on the CAF database. Since the client needs to have an online account with the IRS, this may create a bottleneck. Most taxpayers do not generally interact with the IRS electronically and may not be able to successfully navigate through the process, especially the Secure Access registration.

Tax professionals can still use the current established options to make requests such as submit Forms 2848 and 8821 via online tool, fax or mail into the CAF.

Publication 5533 Why You Should Create an IRS Online Account

Publication 5533-A How to Submit Authorizations Using Tax Pro Account and Online Account

Publication 5533-B Benefits of Tax Pro Account and Digital Authorizations

Comments

[Paul Walker]

Great post! Thanks for sharing.