According to the Taxpayer First Act, the IRS was required to provide digital signature options for submitting Form 2848, Power of Attorney, and Form 8821, Tax Information Authorization by July 2019. By signing the forms, taxpayers are giving tax professionals or other third parties permission to access or view their tax information.

Currently, submitting and processing these authorization forms is a paper operation. Tax professionals typically complete the forms and taxpayers sign them with a pen. The forms are mailed or faxed to the IRS. The faxed forms are printed or distributed electronically to the staff in the Centralized Authorization File (CAF) Unit. These teams review the forms for accuracy and fraud before adding the information to the CAF database.

Director of the IRS Office of Professional Responsibility, Sharyn M. Fisk, writes in the IRS newsletter “A Closer Look,” CL-20-06, that the IRS is working towards moving to an online submission. While this new online submission process will not eliminate the reviewing and processing time by the CAF staff, it would permit taxpayers and their representatives to electronically sign and upload these critical documents without an in-person meeting.

The IRS plans to launch in January 2021 a new IRS.gov secure submission platform and a new page, “Submit Forms 2848 and 8821 Online,” that will allow tax professionals to upload third-party authorization forms electronically.

This new IRS.gov third-party authorization submission process will not be the only electronic option for Forms 2848 and 8821. Next summer, the IRS plans to launch a platform called the “Tax Pro Account.” Tax professionals will be able to electronically initiate and sign an online third-party authorization form, which will transfer to the client’s IRS online account. Clients could then access their personal IRS account and electronically sign the document. The document will post directly to the CAF database immediately with no wait time and no backlog.

Even after this new process is launched, the IRS will still accept mailed or faxed powers of attorney. But because of the risk of fraud, the Service does not plan to accept electronic signatures on mailed or faxed authorization forms.