IRS speeds creation of tax professional accounts due to COVID

The Internal Revenue Service plans to offer online Tax Pro Accounts for practitioners in the third quarter of this year, due to a timeline accelerated by the COVID-19 pandemic.

At a recent Internal Revenue Service meeting attended by the National Association of CPA Practitioners, the upcoming Tax Pro Accounts will offer real-time processing while entering data into the system, which will automatically identify information that needs to be fixed. It will be accessed through the IRS e-Services log-in, already used by many tax professionals.

The IRS has needed to delay many of its filing deadlines due to the novel coronavirus pandemic in the past year, but this may be one of the first it has sped up because of the pandemic. The Tax Pro Accounts weren’t originally expected to debut for more than a year.

“Thanks to COVID, the IRS accelerated its release of the Tax Pro Account,” wrote NCCPAP tax chair Stephen Mankowski in an IRS update to NCCPAP members Wednesday. “While the first release was anticipated for Q3 2022, the IRS is now looking at Q3 2021. With the upcoming release, the forms will automatically be entered into the Centralized Authorization File (CAF), as long as the data matches the IRS’s records. Tax Pro Account features real-time processing while entering data — the system will identify information that needs to be corrected on the spot. The Tax Pro Account will logistically live behind the e-Services login.”

The IRS headquarters in Washington, D.C.

Andrew Harrer/Bloomberg

The initial version of the Tax Pro Accounts may not be as functional as hoped, however. It is considered to be a “Minimal Viable Product,” or MVP (which in this case, doesn’t seem to mean Most Valuable Player) and was funded by budget money received by the IRS last spring, probably from the CARES Act. The first step to implement the system was an online authorization form, which gives tax practitioners the ability to set up a Power of Attorney and Tax Information Authorization.

The IRS did not immediately respond to a request for comment.

“Under this new release, only the tax pro will be able to initiate a request, although the taxpayer may be able to create one at a later date,” said Mankowski. “This release applies to individual accounts (86 percent of requests). There are additional issues to address related to business accounts, including if the person is truly authorized to represent the company.”

The initial release will only be for taxpayer representatives who have certain codes with the IRS (A, B, G and R) because they represent the largest portion of taxpayers, according to Mankowski. The IRS plans to add other codes for more tax pros in the future. Multiple representatives can be added through the IRS’s Taxpayer Digital Communication program, but in a slightly different way.

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