The IRS Opens Up Electronic Submission for Power of Attorney

Getting the power of attorney for a client used to be an unenjoyable venture, especially for major tax firms, like Kruze Consulting, who have multiple clients to consider. All firms had to go through this process, specifically if they needed to speak with the IRS about a given company’s tax returns and/or tax history. In the past, clients have filled out, on paper, forms such as 2848s or 8821s and sent them into the IRS for approval. If there was an issue with the forms, firms had to call the IRS and attempt to get the forms abated which could not occur without a Power of Attorney signature.

For example, say a client missed their 5471 filings, meaning they had a foreign subsidiary and forgot to file their foreign corporation statement. In order to have the missed forms abated, a firm had to obtain the Power of Attorney by having the client sign the appropriate forms and mail it via snail mail to either Kansas City or Utah depending on the location of the client.

Thankfully, this is no longer an issue.

The IRS is now allowing electronic filings of power of attorney requests!

As of July 18th, 2021, the IRS allows firms to submit Power of Attorney requests and signatures online via a Tax Pro Account. This helps firms tremendously, allowing individual tax professionals to securely request third party authorization for an individual taxpayer as a Power of Attorney or tax information authorization (TIA). Oftentimes, founders, before coming to Kruze, might use a less than favorable tax firm to cut back on costs. When they decide to leave said firm and work with us, they realize they don’t have a copy of their own tax return. Shocking, yes, but we have seen it multiple times.

Having the ability to retrieve a copy of a client’s EIN letter, past tax returns, or simply advocate on behalf of the startup to the IRS is a truly innovative measure. The new Tax Pro Account can be used in lieu of filing:

  • Form 2848 and 8821
  • Power of Attorney
  • Declaration of Representative
  • Tax Information Authorization

Kruze Consulting is filled with gratitude towards the IRS for this strikingly novel move. We always recommend everyone be kind to the folks over at the IRS. They’re under an undue amount of stress due to COVID. The IRS is backlogged and inundated with additional work now that they’ve gone back to work after quarantine. It is a tough job. When you call the IRS, and thankfully you don’t have to call and ask about a Power of Attorney any longer, but when you do call, be kind. They are smart people that will help you out.

How to Electronically File a Power of Attorney with the IRS

As of July 18th, 2021, the IRS allows CPA firms to submit Power of Attorney requests and signatures online via a Tax Pro Account on the IRS website. After logging in, you can electronically submit IRS Forms 2848 and 8821.

Can I submit a Form 2848 Online?

Yes. After July 18th, 2021, CPA firms like Kruze can use their Tax Pro Account on the IRS website to submit an IRS Form 2848.

Kruze Knows Startups’ Taxes!!!

We’ve attempted to make filing a tax return for a startup as easy as possible. Our tax team is experienced with pretty much everything that a VC-backed company might experience, from tax credits to general taxation issues. If you have any questions on this, hit us up! We look forward to doing this particular piece of work electronically from now on.