Sharing your tax information requires authorization

Sharing your tax information requires authorization

Your tax return is your private business, and the IRS is prohibited from releasing information you report, except in limited circumstances. You have to grant specific authorization to allow someone to discuss your return with the IRS, receive copies of your returns or tax notices, or negotiate with the IRS on your behalf.

For example, say you receive an IRS notice, and you want your tax preparer to resolve the issue for you. The only way your preparer can help is if you have given permission allowing an exchange of information with the IRS.

Here are three ways to grant authority for access to certain tax information.

  • Third Party Designee. You may think of this as the “checkbox” authorization found near the signature area of your tax return. By checking the box and completing the requested information, you grant limited authority for the receipt or inspection of your tax information for that particular return.
    The person you authorize will not automatically receive copies of IRS notices, but can review your information for the specific tax period. The authorization expires one year from the original due date of the return.
  • Form 8821, Tax Information Authorization. This form is a disclosure authorization that allows the person you choose to automatically receive notices and other information about your taxes for periods you specify. You can revoke the authorization by submitting a signed copy of the original with the word “Revoke” written across the top.
  • Form 2848, Power of Attorney and Declaration of Representative. The power of attorney lets someone who is eligible to practice before the IRS represent you and, in some cases, sign agreements and other documents on your behalf. You can revoke a power of attorney by filing a new one for the same tax period, or by sending a signed copy of the original with the word “Revoke” written across the top.

Other forms may be required, depending on the type of tax information and how much authority you want to grant. Give us a call. We’ll help you choose the appropriate level of authorization and complete the necessary form.