Form 7216 Consent to Disclosure

[Tributos]

It would be a great time saver to have the ability for taxpayers to sign a 7216 after reviewing their return. The contract for Audit Protection services is printed with the return for the client but there is no authorization for this service - unless it is added separately (outside of the Intuit return).

Not only would it be a great time saver, it keeps preparers compliant if they would ever need to share the taxpayers return information.

[itonewbie]

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@Tributos wrote:

It would be a great time saver to have the ability for taxpayers to sign a 7216 after reviewing their return.

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Wouldn't you have your client sign that at the start of your engagement?

If you are thinking that this is applicable to Audit Protection Service, wouldn't this also depend on whether you outsource the notice review/response to this external service provider behind the scene, with you fronting the client (which should probably require it) or your client buys the protection through you and contact the service provider directly (which should render the disclosure irrelevant)?

I don't use their services and probably never will trust the handling of notices for our returns with an external service provider but that would be my take based on my understanding of how it works, without reviewing the T&C's.

[Tributos]

Thanks for responding. Yes, I have heard others have the client sign with the Engagement Letter and others prior to e-filing the return when they also sign the 8879 e-file authorization. In my case it is solely respective to Audit Protection & ID Theft services.

The service is a team of EA's that would take the burden of the audit process, so that the Tax Professional could continue with their daily operations. As a one-person office, I appreciate having that available if needed. I could certainly understand firms with sufficient staff may not consider the service as beneficial.

[rbynaker]

If it's any consolation, I have the same problem in Drake software.  My clunky work-around (which may be too late for you this year):

1) Before I renew Protection Plus, I go into my own return and "check the box" to opt into Audit Protection.  That WILL conveniently generate a nice 7216 disclosure letter, with my name at the top as Firm and my name at the bottom as Taxpayer, that I then print to PDF.  Using a PDF editor I remove my name as Taxpayer (but keep my name as Firm).  I print a stack of these to slip into the client packets (unfortunately manually).  I also generate a PDF which has the 7216 letter on top and the five pages of tiny print behind it for folks who get everything electronically (I assume you get the same five pages of tiny print as I do).

2) Then I uncheck the opt-in for audit protection (in Drake I actually delete this entire input screen).

3) Then I renew my PP subscription and Drake has a way to refresh the software so it turns on for all clients.  Problem is, once I do this, the software no longer generates the 7216 letter.

Some clients sign, some don't.  I tell them it doesn't have to be signed unless/until we have to open a case with Protection Plus so they can sign now, sign later, or hopefully never have to sign!

I've never had to open a case so you could argue this service is worthless (you might also argue that insurance is worthless if you never have to use it).  I signed up three years ago when the IRS wasn't opening mail or answering the phone.  I may decide not to renew next year if IRS customer service returns to "normal" but after the horror stories of tax professionals not being able to get through, or being on hold for two hours only to get a "courtesy disconnect", I decided it's worth $10/client to let someone else deal with that hassle.  I agree it doesn't make sense for a larger firm with more resources.

Rick

[Tributos]

Great minds think alike : )  I've used Drake prior to this year, which prompted my questions. I did similar to your suggestion (Thank You) by printing their form and updating a 7216 template with TY 2023. As you say - manually executed, which is a bummer.

I equate having the 7216 signed prior to submitting the tax return like having car insurance before driving. Fortunately, I have not had to use it, either. The peace of mind for both client & myself is worth it and no one objects to the service, thankfully.

I met a former Rev. officer that became an EA comment they don't represent any file they've prepared. Thought that was interesting, maybe for the sake of objectivity, I guess.