Taxpayer information may be at risk of unauthorized disclosure and misuse when tax professionals electronically submit power of attorney forms, the Treasury Inspector General for Tax Administration has said.
It said the IRS allows some tax professionals to obtain tax transcripts for clients using e-Services online tools and the IRS is authorized to disclose taxpayers’ tax information only to the taxpayer or the taxpayer’s designee or representative.
However, TIGTA found that tax professionals are using e-Services to circumvent standard IRS procedures and controls by submitting power of attorney forms for the sole purpose of ordering and providing transcripts for taxpayers, allowing them to obtain a tax account transcript for taxpayers within minutes.
IRS officials agreed to improve internal controls for accessing and using e-Services, but did not agree that tax professionals are misusing e-Services and noted that the instructions on the power of attorney form state that authorization of an eligible representative will allow the individual to receive and inspect confidential tax return data, according to the audit.
