The Internal Revenue Service said in an email to tax professionals Friday that it plans to retire and remove its Disclosure Authorization and Electronic Account Resolution applications from its online eServices on August 11, largely because of low usage and budget cuts.
Last year, users submitted less than 10 percent of all their disclosure authorizations through the DA application. Similarly, only 3 percent of all account-related issues came in through the EAR application.
In anticipation of this change, the IRS said it has increased the number of employees who process authorizations and has improved internal work processes to decrease the average processing time significantly from the current 10-day processing period.
The IRS noted that it would continue to explore better ways to reduce processing time and improve overall service to the users. However, budget cuts are having an impact on the resources dedicated to the program and the IRS is working to determine the impact on processing time. The IRS said it would also continue to look for ways to improve its current processes and is exploring an improved electronic solution for both applications in the future.
The news about the impending retirement of the DA and EAR applications was originally reported Wednesday in an alert on New River Innovations’ Beyond415 site. New River Innovations managing editor Jayme White told Accounting Today, “The practitioner reaction has been intense. Mostly, practitioners are outraged that the IRS would take a step backwards when it comes to electronically interacting with practitioners.”
Once the IRS removes the two applications, former Disclosure Authorization users will need to complete Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorizations, and mail or fax it to the appropriate IRS location listed on the form’s instructions. The IRS said to allow at least four days for the authorization to post to the IRS database before requesting a transcript through the Transcript Delivery System. Former users of the Electronic Account Resolution application should call the Practitioner Priority Service at (866) 860-4259 for help resolving account-related issues.
In response to requests from practitioners, New River Innovations and a number of other tax professional associations have created an online petition to urge the service to reconsider the decision or solicit further practitioner comments before proceeding.