Why Should You Sign a Consent to Disclosure of Tax Return Information?

Understanding the Consent to Disclosure of Tax Return Information

As taxpayers, we are required to provide accurate financial information to the government. This information is essential for the government to assess our taxes and ensure compliance. However, the government cannot access our financial information without our consent. In this article, we will discuss the consent to disclose tax return information and why it is essential.

What is Consent to Disclosure of Tax Return Information?

The Consent to Disclosure of Tax Return Information, or Form 8821, is a document that gives someone permission to access your tax return information. This form is commonly used by tax professionals or attorneys who need access to your financial information to provide you with proper tax guidance or represent you in front of the IRS.

Example: Let’s say you hire a tax consultant to prepare your taxes. To ensure that they have all the necessary information, you sign a Form 8821, giving them access to your tax return records.

Why Should You Sign a Consent to Disclosure of Tax Return Information?

There are several reasons why it’s essential to sign a Consent to Disclosure of Tax Return Information. First, signing the form allows you to share your tax information with a trusted professional who can help you with your taxes.

For example, if you’re facing audits or legal issues, an attorney would require access to your tax return information to assist you better. The form ensures that they have access to all necessary information, allowing them to provide you with more accurate advice.

Secondly, it’s essential to sign the form if you’re applying for a loan or mortgage. Banks and lenders may require access to your tax information to verify your income, assess your creditworthiness, and determine your repayment ability.

Example: If you’re applying for a mortgage, the lender may require access to your tax returns to confirm whether you can afford to repay the mortgage.

Finally, signing the form can help you resolve issues with the IRS. The IRS may require access to your tax records to verify your financial information and resolve disputes.

Example: Suppose you’re facing an audit from the IRS. In that case, the agency may require access to your tax records to investigate the issue further and determine if there are any discrepancies.

Conclusion

In conclusion, consent to disclosure of tax return information is essential if you want to share your financial information with a trusted professional or resolve issues with the IRS. By signing the form, you allow someone to access your tax records, ensuring that you receive accurate advice while maintaining confidentiality.

It’s important to note that while the form grants permission to access your tax information, it shouldn’t be taken lightly. Ensure that you only sign the form in the presence of a trusted professional, and only when it is necessary.