IRS Introduces New Tax Pro Accounts

The IRS has just launched a new feature that will make it easier for tax professionals to act on behalf of their clients (IR-2021-154, 7/19/21). Thanks to an enhancement to the “Online Account,” taxpayers may now digitally authorize a tax practitioner to represent them before the IRS with a Power of Attorney (POA) or view their tax accounts through a Tax Information Authorization (TIA).

Effective immediately, tax professionals may access the new Tax Pro Account on www.irs.gov to digitally initiate POAs and TIAs. These digital authorization requests are simplified versions of Forms 2848 and 8821.

“The ability for taxpayers to connect online with their tax professional is a groundbreaking step for the IRS,” said IRS Commissioner Chuck Rettig in a press release. “This is the first, basic step toward a more fully integrated digital tax system that will benefit taxpayers, tax professionals and the IRS.”

How it works: After an authorization request is completed and submitted by the tax professional, it will appear in the taxpayer’s Online Account for review, approval or rejection and electronic signature. Because taxpayer identities already are verified at the time of login, they simply check a box as their signature and submit the authorization request to the IRS.

If it’s accurate, the completed digital authorization goes directly to the Centralized Authorization File (CAF) database and will not require manual processing. Most requests will be immediately recorded and appear on the list of approved authorizations in the taxpayer’s Online Account and the tax professional’s Tax Pro Account. Some authorizations may take up to 48 hours. Tax professionals may then go to e-Services Transcript Delivery Service to view the taxpayer’s records.

This new digital authorization option will be a much faster process. It will allow the IRS to reduce its current CAF inventory and to focus on authorization requests received through fax, mail or submit the forms online—all which require IRS personnel to handle.

To connect with their tax professionals, taxpayers either login to their Online Account using their IRS username and password or create an account after passing a one-time identity verification process. If a taxpayer can’t validate his or her identity, their tax professional must use the fax, mail or online submission process. However, the IRS will be announcing a new process for this application later this year.

Tax professionals should use their IRS usernames and passwords to access the Tax Pro Account or create an account after verifying their identity.

This initial launch of the Tax Pro Account represents the first release of the tool. Over time, additional functionality will be added to increase the options for electronic interactions.

Finally, the IRS has added other features to improve the Online Account. Taxpayers can now view—

The amount they owe, updated for the current calendar day
Their balance details by year
Their payment history and any scheduled or pending payments
Key information from their most recent tax return
Payment plan details
Digital copies of select notices from the IRS
Their Economic Impact Payments (EIPs), if any
Their address on file

The IRS says that taxpayers can also—

Make a payment online
See payment plan options and request a plan via Online Payment Agreement
Access their tax records via Get Transcript

Both taxpayers and tax practitioners can expect more digital-related improvements from the IRS in the near future.