Understanding the CAF Number: A Tax Pro’s Guide

IRS Solutions 27 September, 2022

The Centralized Authorization File (CAF) is a database that the Internal Revenue Service uses to manage information regarding professionals appointed to act on behalf of others. The CAF number is not an authorization in and of itself. Rather, it identifies the file containing any legal authorizations that have been filed by a tax resolution professional. With it, IRS personnel can look up whether the tax professional has the authority to access the taxpayer's data, rather than having to ask them to fax the signed authorization each time. Anyone working with tax resolution clients will want to get a CAF number to save time when communicating with the IRS.

Whether calling to request information or downloading IRS transcripts through e-Services, it will save a ton of time. Your CAF number is nine digits long and is unique to you. It is different from your TIN (Taxpayer Identification Number), EIN (Employer Identification Number), or PTIN (Preparer Tax Identification Number). As a professional specializing in tax resolution, you may need all of them.

How Do I Get a CAF Number?

A CAF number is assigned to you the first time you are designated as an authorized representative on IRS Form 2848 (Power of Attorney and Declaration of Representative) or Form 8821 (Tax Information Authorization). Getting a CAF number is easy. The first time you file one of those forms with the IRS, simply indicate "none" as your CAF number, and one will be automatically generated for use on all future cases. Previously, you could expect that the IRS would mail your CAF number in a week or two. It seems that, like so much in the post-Covid world, CAF number generation is now slowed down, so you’ll have to be patient. On its website, the IRS currently says, “Expect delays for Centralized Authorization File (CAF) number authorizations. Normal operations will resume as soon as possible.” Once you have a CAF number, you will use that same number when communicating with the IRS about your tax resolution clients. Be sure to put it on forms 2848 and 8821.

IRS Solutions’ software offers CAF Check Monitoring which will check to see if your authorization has been approved so you can download transcripts and relevant documents straight from the client dashboard. See it in action:

Errors That Can Delay Processing of Your CAF Number

As in all things related to tax services, when it comes to getting a CAF number, details matter, and small mistakes can cause long hold-ups. The IRS processes more than 3.5 million Forms 2848 and 8821 each year, many of which require the generation of new CAF numbers. During the fiscal year 2018, the IRS rejected 384,081 authorization requests and issued a statement with recommendations for tax professionals. Among the reasons for rejection were:

No signature or issues with the digital signature or signature stamp by the taxpayer. Forms may be signed with a ‘wet’ signature (by hand and in ink) As of June 2021, digital signatures are now accepted by the CAF unit when uploading the POA directly. If you fax, you still need a wet signature.
The incomplete taxpayer or representative information, blank titles for Business and/or Company officers, lack of signatures, or missing signature dates on Form 2848 or Form 8821.
A copy of a previously filed Form 2848 was not included when a change of designee was requested.
A lack of specificity around the matter in question. Filing a form for “all years” or “all future periods” will get it bounced back to you.

The best way to ensure that your CAF number is processed in a timely fashion is by supporting your business with specialty software like IRS Solutions that interfaces directly with the IRS, and which offers default settings to make it less likely you will miss something or enter data incorrectly.

Keeping Your CAF Number Secure

In the same statement referenced above, the IRS also emphasized the need to keep your CAF number secure. You should keep your CAF number private, as you should, with all sensitive, personally identifiable information (PII). If your CAF number were to fall into the hands of cybercriminals, chaos could result for your business and your clients. Never leave it where others could find it, like on a sticky note or pinned to a bulletin board. Suggestions from the IRS include:

Read IRS Publication 4557, Safeguarding Taxpayer Data, and use it to help you create and implement a data security plan.
Designate someone at your firm to review your third-party authorizations annually. If the list includes clients who are no longer active, fax a copy of the authorization form to the CAF unit with the word “Withdraw” written at the top. More details about this are available in IRS Publication 947, Practice Before the IRS, and Power of Attorney.
Learn about the signs of data theft, such as transcripts that you did not request or for clients you do not represent.
Immediately communicate with the IRS if you suspect a data breach.

Be sure that any software you use to manage your tax resolution business takes steps to ensure your privacy. IRS Solutions is hosted on the Amazon Web Services Government Cloud (AWS GovCloud), a secure platform. AWS successfully protects your PII along with Controlled Unclassified Information (CUI), medical documents, financial data, law enforcement records, and more for government agencies, businesses, and millions of citizens every day.

What if I Lose or Forget My CAF Number?

Tax professionals who forget or misplace their CAF number can get help from the IRS. Call the Practitioner Priority Service (PPS) at 866-860-4259. A PPS agent will help you retrieve your CAF number after you authenticate your account.

What's Next?

Getting a CAF number is the first step toward a rewarding, fulfilling career in tax resolution. Next, enjoy a 30-day trial of IRS Solutions, a tax pro’s best friend. Our powerful product will help you:

complete IRS forms, including Forms 2848 and 8821, accurately and in full.
access and download your clients’ IRS transcripts.
calculate options and recommend options, including Currently Not Collectible (CNC) status, installment plans, and Offers in Compromise.
stay on top of deadlines, changes, and IRS actions with automated alerts.
calculate CSED and bankruptcy discharge dates.
get the answers to your questions in our friendly online community of expert colleagues.
communicate elegantly with clients and colleagues using materials branded with your logo on them.
attract new clients with an easy-to-use marketing toolbox.
stay current with the latest industry trends and best practices through continuing education.

Our experts can even guide you through the process of getting a CAF number if you need one! Let’s connect and get you started. Schedule your free demo today.

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