Key Takeaways
- Form 8821 authorizes a third party to inspect/receive confidential information.
- Does NOT grant authority to represent, negotiate, or sign documents.
- Designee does NOT need to be eligible to practice before the IRS.
- Used for lenders, insurance companies, or checking account status.
- Does not revoke prior Forms 2848.
- Revokes prior Forms 8821 for the same matters unless "no revocation" is checked.
Form 8821: Tax Information Authorization
Why This Matters for the Exam
Form 8821 is frequently tested in comparison to Form 2848. The exam tests whether you understand the critical difference: Form 8821 grants information access only—no representation authority.
Expect at least 2-4 questions comparing Forms 2848 and 8821.
What Is Form 8821?
Form 8821 (Tax Information Authorization) authorizes a designated individual or organization to inspect and receive confidential tax information on behalf of the taxpayer.
Key Distinction: Information Only, No Representation
| Form 8821 CAN | Form 8821 CANNOT |
|---|---|
| Receive copies of notices | Represent the taxpayer |
| Inspect tax return transcripts | Negotiate with the IRS |
| Get account balance information | Sign documents on behalf of taxpayer |
| Receive written correspondence | Advocate positions or arguments |
Memory Device: Form 8821 = "See" (inspect/receive). Form 2848 = "Do" (represent/act).
Who Can Be Named on Form 8821?
Unlike Form 2848, anyone can be designated on Form 8821. The designee does not need to be:
- An attorney, CPA, or EA.
- Enrolled with the IRS.
- A tax professional at all.
Common Designees:
- Mortgage lenders (verifying income for loan applications).
- Insurance companies (verifying income for coverage).
- Family members (helping elderly parents).
- Practitioners who only need to check account status.
Revocation Rules
| Action | Effect on Prior 8821s | Effect on Prior 2848s |
|---|---|---|
| File new Form 8821 | Revokes prior 8821s for same matters | Does NOT revoke any 2848s |
| File new Form 2848 | Does NOT revoke any 8821s | Revokes prior 2848s for same matters |
Key Point: Filing Form 8821 does not affect existing Powers of Attorney. The two forms operate independently.
Form 2848 vs. Form 8821 Comparison
| Factor | Form 2848 | Form 8821 |
|---|---|---|
| Name | Power of Attorney | Tax Information Authorization |
| Authority | Represent + receive info | Receive info only |
| Who Can Be Named | Eligible practitioners only | Anyone |
| Sign Documents | Yes (if authorized) | No |
| Negotiate | Yes | No |
| Revokes Prior POAs | Yes (same matters) | No |
| Revokes Prior TIAs | No | Yes (same matters) |
When to Use Form 8821
- Practitioner needs account info only: You just want to check the status of a client's account before meeting.
- Third party needs verification: A lender requests proof of income/tax returns.
- Limited access desired: Client wants someone to receive notices but not act on their behalf.
Real-World Scenario
Scenario: Your client is applying for a mortgage. The lender asks for verification of the past 2 years of tax returns directly from the IRS.
- Form to Use: Form 8821 (not Form 2848).
- Designee: The mortgage company.
- Tax Years: 2022, 2023.
- Result: The lender can obtain transcripts from the IRS but cannot represent the taxpayer.
On the Exam
Expect 2-4 questions on Form 8821, typically:
- Authority Questions: "What authority does Form 8821 grant?"
- Comparison Questions: "What is the difference between Form 2848 and Form 8821?"
- Revocation Questions: "Does filing Form 8821 revoke a prior Form 2848?"
- Eligibility Questions: "Who can be named on Form 8821?"
The key is to remember: Form 8821 = Information only. Anyone can be named. Does NOT revoke Form 2848.
What authority does Form 8821 grant?
Does filing Form 8821 revoke a previously filed Form 2848?
Who can be named as a designee on Form 8821?