Form 2848 vs. 8821: What’s the Difference?

Taxpayers may need to formally permit another person or entity to communicate with the Internal Revenue Service (IRS) on their behalf. This need can arise from complex financial audits or simple requests for past tax documents. The IRS provides two primary forms to grant this authority, ensuring taxpayer information remains confidential while allowing for necessary third-party involvement.

Granting Full Representation with Form 2848

When a taxpayer requires comprehensive assistance with a tax issue, IRS Form 2848, Power of Attorney and Declaration of Representative, is the correct document. Filing this form grants a designated individual a “power of attorney,” a legal authority to act on the taxpayer’s behalf before the IRS. This means the authorized person can represent, advocate, and negotiate for the taxpayer in meetings and correspondence with the agency.

The authority includes the power to sign agreements, consents, and other official documents. It also allows the representative to receive the taxpayer’s refund checks and, in some circumstances, sign a tax return.

Because of this level of responsibility, the representative must be an individual authorized to practice before the IRS, such as an attorney, Certified Public Accountant (CPA), or Enrolled Agent. This form is used for complex tax matters like audits, appeals, or negotiating collection alternatives.

Authorizing Information Access with Form 8821

For situations where a third party only needs to view or receive tax information without the power to act for the taxpayer, IRS Form 8821, Tax Information Authorization, is the correct choice. This form does not grant any representative rights. The person or organization designated on Form 8821, the appointee, is limited to inspecting and receiving confidential tax records for the specific tax types and periods listed.

The appointee cannot speak on the taxpayer’s behalf, sign agreements, or otherwise represent the taxpayer. A distinction is that the appointee does not need to be a licensed tax professional; the taxpayer can authorize any individual, corporation, or organization.

Common uses for Form 8821 include authorizing a mortgage lender to obtain tax transcripts to verify income or allowing a financial advisor to review past tax data. The authorization expires after seven years if no date is provided and can be revoked by the taxpayer at any time.

Information Required for Both Forms

Taxpayer Information

To complete either form, the taxpayer must provide their full name, address, and taxpayer identification number. For individuals, this is a Social Security Number (SSN), while businesses use an Employer Identification Number (EIN). A daytime telephone number is also required. If the authorization relates to a joint return, each spouse must file a separate form, even if they are choosing the same person.

Representative/Appointee Information

The forms require the name, address, and contact information for the person being authorized. For professionals on Form 2848, a Preparer Tax Identification Number (PTIN) is often required. Both forms also reference a Centralized Authorization File (CAF) number, which the IRS assigns to a representative or appointee when processing their first authorization form.

Tax Matters

A component of both forms is the description of the tax matters the authorization covers. The taxpayer must list the type of tax (e.g., Income), the corresponding tax form number (e.g., 1040), and the exact years or periods the authorization applies to. This ensures the authority granted is limited to the intended tax issues.

How to Submit Your Completed Form

Taxpayers should download the most current versions of Form 2848 and Form 8821, along with their instructions, directly from the IRS website. Completed forms can be submitted by mail or fax. The correct mailing address or fax number depends on the taxpayer’s state of residence and is listed in the form’s instructions.

The IRS also provides an online submission tool that can be accessed by tax professionals for secure uploads. It is important to submit only one form and not send a duplicate.

After submission, the forms are processed by the IRS’s Centralized Authorization File (CAF) unit, which records the authorization. This allows the designated individual to interact with the IRS as specified. Processing times can vary, and the IRS website provides information on current status.