IRS expands features in Tax Pro Accounts

The Internal Revenue Service added new abilities to its online Tax Pro Account service, allowing tax practitioners to see their client's tax information, including balance due amounts, as well as withdraw from their active authorizations online in real time.

The new features are part of the IRS's larger efforts to improve technology, thanks to funding from the Inflation Reduction Act. However, the agency itself, along with the rest of the federal government, is facing the probability of a government shutdown this weekend. On Friday, the Treasury Department released a contingency plan that envisions furloughs for roughly two-thirds of the IRS workforce, or 60,000 out of about 90,000 employees (see story).

"Tax professionals provide a vital service to taxpayers and the nation, and the IRS is committed to making improvements to help them serve their clients," said IRS Commissioner Danny Werfel in a statement Friday. "As part of our transformation efforts, we will be working to add new technology and expand our relationship with the tax professional community. The ongoing improvements to the Tax Pro Account are just part of a larger effort."

Samuel Corum/Bloomberg

The new additions to the Tax Pro Account will help tax pros manage their active client authorizations on file with the IRS's Centralized Authorization File database, allowing them to view their client's tax information, including balance-due amounts, and withdraw from their active authorizations online in real time.

Tax pros need to have a CAF number to use a Tax Pro Account; a CAF number can't be requested through the Tax Pro Account for security reasons. Currently, the digital authorization process is available only for individual taxpayers, not businesses or other entities.

The new features continue ongoing efforts at the IRS to enhance the third-party authorization process. Among the recent enhancements, tax professionals can now use their Tax Pro Account to send power of attorney and tax information authorization requests directly to a taxpayer's individual IRS Online Account. Upon the taxpayer's approval and validation of the information, the authorization records immediately to the CAF database, avoiding the need for faxing, mailing and uploading, as well as the lengthy review and processing time by the IRS's CAF Unit.

The IRS said it's continuing to work on more expansions to improve services to taxpayers and tax pros, and it is committed to improving and expanding Tax Pro Account capabilities and engaging with the tax pro community as these efforts progress. The partnership will enhance the authorization request process and provide tax professionals with the tools they need to access relevant taxpayer information and the ability to address relevant tax-related issues for their clients quickly.

Tax Pro Account gives tax pros a digital self-service portal they can use to manage their authorization relationship with taxpayers and view client information. Over 260,000 people have used a Tax Pro Account since it debuted in July 2021, and the webpage has been viewed over 2.7 million times.