IRS Form 8821 Explained
IRS Form 8821 Explained
All of your taxpayer information is strictly confidential, so in the case that you want to authorize another person to access your tax information, such as a tax attorney or other tax professional, you must fill out IRS Form 8821.
TABLE OF CONTENTS
What Is IRS Form 8821?
What Does IRS Form 8821 Allow The Appointee To Do?
What Does IRS Form 8821 Not Allow The Appointee To Do?
Is Form 8821 A Power Of Attorney?
What’s The Difference Between Form 2848 And Form 8821?
What Grants More Authority: Form 8821 Or Power Of Attorney?
What Is IRS Form 8821 Used For?
When Can Form 8821 Be Filed?
Key Takeaways:
- The IRS Tax Form 8821, or the Tax Information Authorization, is an IRS-issued document allowing individuals to authorize a person, organization, firm, or corporation permission to access certain confidential personal information from prior tax returns.
- Designating an authorized tax representative using IRS Form 8821 allows the appointee to access the account information of the taxpayer, analyze information from the time period and type of tax designated by the taxpayer, cancel prior tax information authorizations, confirm the taxpayer’s tax return filing status, receive the taxpayer’s tax transcripts, and view all the payment history made to the client’s account.
- Designating an authorized tax representative using IRS Form 8821 does not allow the appointee to advocate or negotiate on behalf of the taxpayer regarding the federal tax laws outlined in the Internal Revenue Code, conduct any form of representation on behalf of the taxpayer in front of the IRS, designate a third party as your authorized representative, disclose the taxpayer’s information to another third-party source, fill out waivers, consent forms, or closing agreements in place of the taxpayer, negotiate with the IRS regarding the taxpayer’s tax refund check, receive the taxpayer’s refund check through direct deposit, nor speak on behalf of the taxpayer.
- Form 8821 appointee is different from a power of attorney in that it only grants the person permission to access the tax data and not advocate for them with the IRS. Tax form 2848 is used to authorize a power of attorney, giving them permission to access the taxpayer’s tax information as well as contact the IRS on their behalf.
Quick Tip
While IRS tax form 8821 is used to authorize a person or company to access your tax information, IRS tax form 2848 is used to designate a power of attorney to represent you to the IRS. Need assistance filing your taxes? See how you can get your biggest tax refund here.
What Is IRS Form 8821?
The IRS Form 8821, or the Tax Information Authorization, is an IRS-issued document allowing individuals to authorize a person, organization, firm, or corporation permission to access certain confidential personal information from prior tax returns. This document can also be used if taxpayers wish to revoke a previous authorization of tax information.
What Does IRS Form 8821 Allow The Appointee To Do?
- Access the account information of the taxpayer, such as their taxpayer identification number
- Analyze information from the time period and type of tax designated by the taxpayer
- Cancel prior tax information authorizations
- Confirm the taxpayer’s tax return filing status
- Receive the taxpayer’s tax transcripts
- View all the payment history made to the client’s account
What Does IRS Form 8821 Not Allow The Appointee To Do?
- Advocate or negotiate on behalf of the taxpayer regarding the federal tax laws outlined in the Internal Revenue Code
- Conduct any form of representation on behalf of the taxpayer in front of the IRS
- Designate a third party as your authorized representative
- Disclose the taxpayer’s information to another third-party source
- Fill out waivers, consent forms, or closing agreements in place of the taxpayer
- Negotiate with the IRS regarding the taxpayer’s tax refund check
- Receive the taxpayer’s refund check through direct deposit
- Speak on behalf of the taxpayer
Is Form 8821 A Power Of Attorney?
No, IRS Form 8821 is not the same thing as a power of attorney. The reason these two terms are commonly confused is that filling out a tax form for either of these circumstances results in the authorization of a third-party representative to access your tax information.
While Form 8821 allows the authorized designee to access the taxpayer’s private tax information, they do not have permission to contact or negotiate with the IRS on their behalf.
A power of attorney, on the other hand, has permission to access the authorized tax information provided by the individual as well as speak on behalf of the taxpayer. Powers of attorney also have the ability to disclose the taxpayer’s information to a third party as a further form of advocacy, such as in the case of setting up tax abatement services or registering an IRS online payment agreement.
What's The Difference Between Form 2848 And Form 8821?
Tax form 2848 is the IRS document that allows for the appointment of a power of attorney, giving them authorization to access their tax information as well as advocate for them in regard to their taxes.
Tax form 8821 is the document that allows taxpayers to authorize an individual to access their tax information but does not permit them to speak on their behalf.
What Grants More Authority: Form 8821 Or Power Of Attorney?
While tax form 8821 is similar to a power of attorney, the power of attorney is granted more authority, being able to access the taxpayer’s information as well as communicate with the IRS on their behalf.
What Is IRS Form 8821 Used For?
There are several instances in which a taxpayer may wish to authorize a third party to access a copy of your tax information, such as:
You Received An IRS Notice
Form 8821 allows taxpayers to authorize a third-party individual or company to receive copies of any IRS notices they receive in the mail for the years that are listed. Usually, the appointee will receive the notice before the taxpayer does, which can be beneficial in that the tax professional has extra time to investigate the tax issue. This can be helpful when taxpayers struggle to keep up with their tax updates.
To List A Firm As Appointee On The Form
Unlike with power of attorney, a benefit of filing form 8821 is that taxpayers can list their practice as the appointee on the tax form. In this case, anyone working in the firm has the authorization to access the client’s information.
If there are many staff members that must get involved in the casework, registering the firm as the appointee can be helpful to make the process of accessing information faster.
Receive Help While Granting Limited Access
If a taxpayer wishes to receive tax advice but feels apprehensive about granting too much access to their personal information, authorizing access using form 8821 instead of form 2848 can feel much more comfortable. Form 8821 appointees can only view copies of their information and not act on their behalf, whereas form 2848 designated a power of attorney, granting them permission to act on their behalf.
Authorization Automatically Expires
One of the benefits of Form 8821 is that the authorization of access to taxpayer information automatically expires after the designated period is over. Form 2848, on the other hand, must be manually canceled, making it a slightly larger commitment for taxpayers to appoint a power of attorney compared to form 8821.
When Can Form 8821 Be Filed?
Form 8821 must be received by the IRS within 120 days of the taxpayer signing to authorize access to their tax information for a non-tax-related matter.
If form 8821 is being filed in relation to a tax matter, you have more than 120 days to file this form.
If you want to receive customized tax help, allowing an experienced tax professional to access your confidential tax information during a situation using IRS Form 8821 may be the right step to take. If you have any questions about how to fill out IRS Form 8821 or want advice from a tax authority, contact us at Ideal Tax for all the answers.
Head to our website for information about filing taxes or requesting tax-exempt status, or to talk to a lawyer, CPA, or IRS-enrolled agent.
