The form does not, however, authorize the designee to represent the taxpayer before the IRS or make any decisions on their behalf. For representation, a taxpayer must use Form 2848, Power of Attorney and Declaration of Representative.
Who Can Use Form 8821?
Form 8821 can be used by any individual 8821 tax form or entity that needs to grant access to their tax information to another person or organization. This is often necessary in situations where professional assistance is required to handle tax matters, such as:
Preparation and Filing of Tax Returns: Taxpayers might authorize their tax preparer to access previous tax returns and related information to ensure accurate and comprehensive filing.
Resolution of Tax Issues: When dealing with complex tax issues or audits, taxpayers often authorize their tax attorney or accountant to review their IRS records to provide effective assistance.
Financial and Legal Planning: Businesses and individuals may authorize financial advisors or legal professionals to access tax information for planning purposes, ensuring all decisions are informed by accurate tax data.
How to Complete Form 8821
Filling out Form 8821 involves several steps, each requiring careful attention to detail:
Taxpayer Information: Provide the taxpayer’s name, address, taxpayer identification number (TIN), and daytime phone number. For businesses, include the business name and employer identification number (EIN).
Appointee Information: Enter the name, address, and phone number of the person or organization being authorized to receive the tax information. This section also requires the Centralized Authorization File (CAF) number, which the appointee must have.
Tax Matters: Specify the type of tax, the tax form number, and the tax years or periods for which the authorization is being granted. For instance, to authorize access to income tax returns for the years 2020 and 2021, you would list “1040” under the “Tax Form Number” and “2020, 2021” under the “Years or Periods”.
Retention/Revocation of Prior Authorization: Indicate whether this authorization should revoke any previous authorizations on file with the IRS or should be added to existing ones.
Signatures: The form must be signed and dated by the taxpayer. If it is a joint return, both spouses must sign.
Submission and Processing
Once completed, Form 8821 can be submitted to the IRS by mail or fax. The specific submission address or fax number can be found in the instructions for the form, which vary based on the taxpayer’s location. Processing time can vary, but generally, it takes about one to two weeks for the IRS to process the form and grant the designated appointee access to the taxpayer’s information.
Importance of Accurate Completion
Accuracy in completing Form 8821 is crucial. Any errors or omissions can lead to delays in processing or failure to grant the authorization. Taxpayers should double-check all information entered on the form and ensure that the appointee’s details are correct and up-to-date. Inaccuracies can hinder the appointee’s ability to access the needed tax information, which can be particularly problematic during time-sensitive tax matters.
Revoking Authorization
If a taxpayer needs to revoke the authorization granted by Form 8821, they can do so by submitting a written statement to the IRS indicating their intention to revoke the authorization. The statement should include the taxpayer’s name, TIN, the appointee’s name and address, the tax matters, and the tax periods involved, along with the taxpayer’s signature.
Conclusion
IRS Form 8821 is an essential tool for taxpayers who need to authorize third parties to access their tax information. By carefully completing and submitting this form, taxpayers can ensure their tax professionals have the necessary information to assist them effectively. Whether for preparing returns, resolving issues, or planning, Form 8821 facilitates a smoother and more efficient tax management process.
