IRS Modernization – The Fax Machine is Not Dead

Your Guide to State, Local, Federal, Estate + International Taxation

The fax machine’s heyday may have come and gone, but it hasn’t gone the way of the eight track or cassette tape player just yet. In fact, it is even part of the IRS’s current modernization effort. But then again, wouldn’t “modernization” and “fax” be considered an oxymoron these days? Probably. But if you’re an organization still working on updating from 1960s era technology in some areas of your operations, then making more use of faxes could still be considered a modern improvement. Even in 2016. Right? I guess. Well OK. I think you can see that I’m still trying to convince myself here same as I’m trying to convince you. I think in the end we just have to accept the fact that when it comes to government bureaucracy, some improvements come a bit late and in baby steps.

Starting last November, the IRS has expanded its very limited acceptance of signed forms by fax to include consents to assess additional tax of any amount, taxpayer closing agreements involving any amount, and consents to extend the time to assess tax. Just be aware that the IRS will not independently send an acknowledgement of received faxes. The taxpayer or representative with a power of attorney (POA) would need to call and request a verbal confirmation of receipt for that.

Other notable forms and correspondence now accepted by fax include:

  • Taxpayer statement about a refund.
  • Installment agreements and offers in compromise (Forms 433-D and 656).
  • Collection information statements (Forms 433-A and 433-B).
  • Election by small business corporations (Form 2553).
  • Letters to request non-assertion of a penalty or to provide a reasonable cause statement.
  • Taxpayer closing agreements.

By Dale F. Jensen, CPA