On January 9, 2018, IRS informed tax practitioners and tax industry partners of a January 3 policy change to Internal Revenue Manual (IRM) Section 21.1.3.3, “Third Party (POA/TIA/F706) Authentication.” The stated purpose of this section of the IRM is to provide appropriate research and procedural instructions for IRS customer service representatives (CSRs) to verify the identities of taxpayer representatives who indicate they have a third-party authorization for a taxpayer on file with the IRS. In practice, the IRM update requires CSRs to ask practitioners holding valid POAs who contact the agency via the PPS phone line—or any toll-free IRS telephone number—to provide their Social Security number (SSN) and date of birth (DOB) in addition to their name and their CAF number. Practitioners must also provide this information to IRS so the agency can verify the identity of the person to whom IRS would be releasing taxpayer information. IRS’s correspondence on the matter indicated that these new procedural updates are being implemented to better protect sensitive taxpayer data.

Since this policy has been in place, a number of NAEA members have voiced their concerns, indicating that PPS line CSRs have been asking members with taxpayer POAs on file to provide an unknown assortment of the following items for verification before the CSR will help authenticate them:

  • the practitioner’s SSN;
  • the practitioner’s DOB;
  • the practitioner’s CAF number;
  • the greatest source of income from the practitioner’s last filed 1040;
  • the address and filing status from the practitioner’s last filed 1040;
  • the SSN of someone on the practitioner’s last filed 1040 who is not the practitioner; and potentially,
  • some variation of information related to the practitioner’s family members or spouse (e.g., spouse’s last name).

NAEA President James R. Adelman, EA submitted comments to IRS Acting Commissioner David Kautter to offer IRS alternative solutions to consider to authenticate practitioners when they contact the IRS PPS line to indicate they have a third-party authorization for a taxpayer on file with the IRS.

NAEA’s comments can be found in the letter here.

Download Letter