What is the 7216?
Tax preparers are likely to see Form 7216 if a return includes a bank product of any kind. The form can also come into play if the tax preparation office is part of a multi-office setup working under a master EFIN.
Form 7216 is actually two separate forms, a Consent to Use and a Consent to Disclose.
A Consent to Use must be obtained prior to using the taxpayer’s information for any purpose other than to prepare or e-file the return. This would apply to offering the taxpayer any type of product such as an IRA or a bank product based on taxpayer information. Generic Consent to Use forms are on the Drake Software CD in Blank Forms and in PDF format.
Additionally, as an option, there is a USE screen within the software that the taxpayer can electronically sign at the beginning phase of tax preparation. The tax preparer is not permitted to sign the Consent to Use screen on the taxpayer’s behalf.
Consent to Disclose must be obtained prior to sharing taxpayer’s information with a third party. This form is automatically produced when a bank product is selected and prints with the bank documents. Another option is the DISC screen within the software that the taxpayer can sign electronically. As with the Consent to Use, the tax Preparer may not sign the Consent to Disclose on the taxpayer’s behalf.
You do not have to obtain a Consent to Use or a Consent to Disclose to e-file to Drake.
On a joint return the best practice is to get signatures from both the taxpayer and spouse if both are present.
For more on the Form 7216, links to helpful IRS websites and additional tips on its use, check out our Knowledge Base article, “7216 – Consent to Use, Consent to Disclose.”