Filing Form 8821, The Solution for Simplifying Your Taxes

Your client is unlikely to ever receive a phone call or visit from the IRS, and that’s probably a good thing.  But they are very likely to receive an IRS notice in the mail, as that’s the most common way that the IRS communicates with taxpayers.  Over 200 million IRS notices go out annually, and it’s estimated that one in ten taxpayers will receive one each year.  These notices will either ask for more information, for payment, or for nothing but patience, which can confuse the average taxpayer. 

As a tax professional, the problem arises that we never know about these notices until it gets very late.  Clients ignore them, lose them, and hope that they’ll go away, only to watch them pile up with more and more urgency.  Then the client shows up at our door with a pile of notices and sheepishly asks for help.  Isn’t there a better way to deal with all these notices? 

 There is.  Filing form 8821, with the client’s signature, allows any tax professional to receive tax notices simultaneously as the taxpayer (sometimes earlier).  They can then proactively contact the client and/or the IRS for more details and respond to the notice quickly.  The one downside to form 8821 is that it doesn’t permit one to represent the client before the IRS- that ability can only be granted with form 2848. 

IRS form 8821 is the best way to stay on top of IRS notices, and most clients are open to them.  They are specific to each tax year and must be renewed for future years, but once in place, they guarantee that notices will get dealt with in a timely and correct fashion. 

Written by Dan Connors