Understanding Tax Information Authorization: Everything You Need to Know

Introduction

Tax Information Authorization (TIA) is a legal document that allows a designated individual or organization to obtain tax information from the Internal Revenue Service (IRS) on behalf of a taxpayer. This document is particularly important in situations where an individual or organization needs to access a taxpayer’s tax information but lacks the legal authority to do so. In this article, we will delve deeper into the concept of TIA, including its purpose, how it works, and why it is essential.

What is Tax Information Authorization?

TIA is a legal document that authorizes a third party to access a taxpayer’s tax information. This document is commonly used by individuals or organizations who need to access a taxpayer’s tax information but do not have the legal authority to do so. Examples of third parties who may require access to a taxpayer’s tax information include an employer, a financial institution, or a tax preparation service.

How Does Tax Information Authorization Work?

To obtain TIA, a taxpayer must complete and sign Form 8821 or Form 2848. Form 8821 is used to authorize a designated individual or organization to access tax information, while Form 2848 is used to authorize a designated individual or organization to represent a taxpayer before the IRS. Both forms require the taxpayer to provide the name and contact information of the designated individual or organization, the specific tax information that is authorized to be accessed, and the duration of the authorization.

Once the forms have been completed and signed, the designated individual or organization can submit them to the IRS. The taxpayer will receive a copy of the authorization, and the designated third party will receive a copy of the authorization as well. With this authorization, the designated third party can access the authorized tax information on behalf of the taxpayer.

Why is Tax Information Authorization Important?

TIA is essential for individuals or organizations who need to access a taxpayer’s tax information but lack the legal authority to do so. It allows for streamlined communication between the third party and the IRS, reducing the chances of miscommunication and potential errors. It also ensures that the taxpayer’s privacy is protected by limiting access to only authorized parties. Additionally, TIA is required for tax preparation services to access a taxpayer’s tax information, ensuring that the tax preparation process is accurate and efficient.

Conclusion

In summary, Tax Information Authorization (TIA) is a legal document that authorizes a designated individual or organization to access a taxpayer’s tax information. TIA is essential for individuals or organizations who need to access tax information but lack the legal authority to do so. It ensures streamlined communication between the third party and the IRS, protects the taxpayer’s privacy, and is required for tax preparation services to access a taxpayer’s tax information. By understanding TIA, taxpayers can ensure that their tax information is accessed only by authorized parties.