How to explain the 7216 consent form to your clients

A guide for tax professionals on how to communicate the benefits and risks of signing a 7216 consent form.

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What is a 7216 consent form?

A 7216 consent form is a document that allows a tax preparer to use or disclose a client’s tax return information for purposes other than preparing their tax return. For example, a tax preparer may use a client’s information to offer them additional services, such as financial planning, bookkeeping, or audit protection. A tax preparer may also disclose a client’s information to a third-party service provider, such as a software company, a bank, or a marketing firm.

Why do clients need to sign a 7216 consent form?

The Internal Revenue Service (IRS) requires tax preparers to obtain written consent from their clients before using or disclosing their tax return information for any purpose other than preparing their tax return. This is to protect the privacy and confidentiality of the client’s information and to prevent unauthorized or improper use or disclosure.

The consent form must clearly state the purpose, scope, and duration of the use or disclosure, as well as the identity of the recipients of the information. The consent form must also inform the clients of their right to revoke their consent at any time and the consequences of doing so.

How to talk to your clients about signing a 7216 consent form

Some clients may be reluctant or hesitant to sign a 7216 consent form, especially if they are not familiar with the form or the benefits and risks of giving their consent.

Here are some tips on how to communicate with your clients and persuade them to sign a 7216 consent form:

• Explain the benefits of signing a 7216 consent form. You can explain to your clients that by signing a 7216 consent form, they can receive additional services from you or from a trusted partner that can help them save money, time, or hassle. You can also tell them that by signing a 7216 consent form, they can help you improve your service quality and efficiency by allowing you to use software or a platform that can streamline your workflow and enhance your security.
• Explain the risks of not signing a 7216 consent form. For example, you can tell your clients that by not signing a 7216 consent form, they may miss out on valuable opportunities or offers that can benefit them or their business. You can also tell them that by not signing a 7216 consent form, they may limit your ability to provide them with the best service possible or to comply with IRS regulations.
• Address any concerns or questions that your clients may have. You can assure your clients that signing a 7216 consent form does not mean that they are giving up their rights or control over their information. You can also assure them that you will only use or disclose their information for the purposes that they have agreed to and that you will protect their information with the highest standards of security and confidentiality. You can also clarify any terms or conditions that your clients may not understand or may find confusing.
• Make the process of signing a 7216 consent form easy and convenient for your clients. For example, you can use a digital platform that allows your clients to sign a 7216 consent form electronically and securely. You can also provide your clients with a copy of the consent form and a confirmation of their consent for their records.

What are some Section 7216 insights for 2023?

As the tax industry evolves and adapts to the changing needs and expectations of clients and regulators, tax professionals need to be aware of the trends and challenges that may affect their practice in 2023.

Here are some insights that may help you prepare for the future:

• The IRS may increase its enforcement and oversight of the 7216 consent form compliance. The IRS may audit more tax preparers and impose more penalties for violations of the 7216 rules. The IRS may also update or revise the 7216 consent form requirements or guidance to reflect changes in the tax law or technology.
• Clients may demand more transparency and accountability from their tax preparers regarding the use or disclosure of their information. Clients may also expect more personalized solutions from their tax preparers that can help them achieve their financial goals and objectives.
• The technology may offer more opportunities and challenges for tax preparers to use or disclose their clients’ information. The technology may enable tax preparers to access, analyze, and share their clients’ information more easily and efficiently. The technology may also expose tax preparers to more risks and threats of data breaches, cyberattacks, or identity theft.

Software solutions for Section 7216

As a tax preparer, you need to be aware of the 7216 consent form compliance and its implications for your business. You need to follow the IRS rules and regulations, protect your client’s information, and provide them with the best service possible. You also need to leverage the technology to optimize your workflow, enhance your productivity, and increase your profitability.

That’s why you need software from Thomson Reuters SurePrep ®, the leading provider of tax automation software and services for the professional tax preparer. SurePrep can help you simplify and streamline your 7216 consent form process with its innovative solutions, such as:

• SurePrep TaxCaddy: It connects taxpayers and tax professionals to streamline communication, document gathering, questionnaires, e-signatures, tax payments, invoicing, and tax return delivery, both as a mobile app for iOS and Android and as a website.

Don’t wait any longer. Contact us today and get a free demo of our solutions. Find out how SurePrep can help you follow the 7216 consent form requirements, secure your client’s information, and grow your business.

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