IRS Form 8821, also known as the Tax Information Authorization, is an official document used to grant permission to an individual or organization to receive confidential tax information. This form specifically permits the designated representative to access tax information but does not provide the authority to represent the taxpayer before the Internal Revenue Service (IRS).
What Is IRS Form 8821?
IRS Form 8821 is a legal document that a taxpayer uses to authorize third-parties, such as family members, attorneys, or tax professionals, to access their tax information. Unlike Form 2848, which grants the power of attorney and allows representation before the IRS, Form 8821 solely permits the recipient to receive and inspect confidential tax data, thus maintaining a significant boundary on the power granted.
Types and Uses of Form 8821
Types of Authorization
- General Authorization:
- Allows the representative to access various types of tax information without specification of particular details.
- Specific Authorization:
- Limited to certain tax years, forms, or specific issues as designated by the taxpayer.
Common Uses
- Preparation of Financial Statements:
- Allows accountants to gather necessary tax information without formal representation.
- Loan Applications:
- Provides lenders with access to a borrower’s tax data for verification purposes.
- Tax Consultation:
- Permits tax professionals to review past filings and related information.
How to Complete Form 8821
- Taxpayer Information:
- Include taxpayer’s name, address, and social security number (SSN) or employer identification number (EIN).
- Appointee Information:
- Enter details about the person or organization authorized to receive the tax information.
- Tax Matters:
- Specify the type of tax information and the tax years or periods covered by the authorization.
- Retention/Revocation:
- Indicate the duration of the authorization or any previous authorizations that should be revoked.
- Signature:
- The taxpayer must sign and date the form to validate the authorization.
Historical Context and Evolution
The IRS introduced Form 8821 to streamline the process of granting limited access to tax records. Historically, involvement with the IRS required more burdensome documentation, but growing needs for simple, non-representational access to tax data prompted the formal creation of this form.
Comparisons with Related IRS Forms
Form 2848 (Power of Attorney and Declaration of Representative)
- Form 8821:
- Permission: Access to tax information.
- Authority: No representation before IRS.
- Form 2848:
- Permission: Access to tax information and power of attorney.
- Authority: Full representation before IRS on specified matters.
Form 4506-T (Request for Transcript of Tax Return)
- Used to request tax return transcripts directly from the IRS, but does not involve authorization of third parties to access information.
FAQs
What information does Form 8821 cover?
How long is the authorization valid?
Can a taxpayer revoke Form 8821?
References
- IRS.gov – Official Documentation and Instructions for IRS Form 8821.
- Internal Revenue Code – Provisions and guidelines related to tax information authorization.
Summary
IRS Form 8821 is a critical tool for taxpayers seeking to allow third-parties access to their confidential tax information without transferring the authority to represent them before the IRS. It is an essential form for ensuring specific compliance, financial processes, and consultation activities while maintaining clear boundaries on representational powers. Understanding how to properly complete and utilize Form 8821 helps streamline tax-related procedures and safeguards taxpayer confidentiality.
