IRS launches 'Tax Pro Account' feature

On Monday, the IRS announced the "Tax Pro Account," an online tool that automates the submission of powers of attorney (POAs) that empower tax practitioners to represent individual taxpayers and tax information authorizations (TIAs) that allow them to examine those taxpayers' accounts. However, the IRS has grander intentions for the Tax Pro Account interface in the long run. 

In addition to that an Additional functionality for taxpayers and tax professionals will be provided, allowing for more electronic interactions, according to the IRS's statement on the Tax Pro Account feature. “This is the first, basic step toward a more completely integrated digital tax system that will benefit taxpayers, tax professionals, and the IRS,” said Commissioner Chuck Rettig, according to the Service. 

Separate from e-Services, the Tax Pro Account is designed to expedite the process of acquiring authorizations to represent taxpayers. The digital submissions will go immediately to the Centralized Authorization File (CAF) database, eliminating the need for IRS personnel to manually process them, according to the IRS. The digital POAs and TIAs are simpler versions of Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. 

Tax Pro Account does not replace other options for obtaining third-party authorizations, because POAs and TIAs will still be accepted by fax, mail, or the “Submit Forms 2848 and 8821 Online” portal — although all of these require manual processing, the Service said. 

The new automated system has the advantage of being all electronic with real-time processing. The basic steps for using Tax Pro Account to obtain authorizations to represent clients are as follows: 

1. The tax professional initiates the request for a POA or TIA by going to Tax Pro Account on IRS.gov; 

2. The tax professional informs the taxpayer that an authorization request should be pending in his or her IRS online account; 

3. The taxpayer logs in to his or her IRS online account, reviews the authorization request for accuracy, and electronically signs it; 

4. The request is recorded to the CAF database (most will be recorded immediately, but some authorizations may take up to 48 hours, the Service says). 

Tax Pro Account can currently only be used to obtain POAs and TIAs from individuals, not businesses or other entities. Here are some pointers on how to use the new computerized system: 

        • Both the tax professional and the taxpayer must have addresses in the United States; 

        • The taxpayer's and tax professional's names and addresses must perfectly match IRS records; 

        • The tax professional must already have a CAF number and be in good standing with the IRS;