941 Quarterly Federal Tax Return - Maintain Data - Part 4
Use the Part 4 tab on the 941 Quarterly Federal Tax Return page to designate a trusted third party, such as an accountant, payroll service, or tax professional, to discuss this specific Form 941 with the IRS on your behalf. It's a convenience feature that provides limited, temporary authorization without the complexity of filing a full power of attorney. Most small employers leave this section blank and handle IRS communications themselves. Businesses that use professional tax or payroll services typically complete it to ensure the efficient handling of any IRS questions or correspondence. The authorization is specific to the individual return, expires after one year, and requires the designee to provide a five-digit PIN to verify their identity when contacting the IRS..
During the data load process, the fields are initialized to blank or zero:
Box 67 (checkbox): Set to 0 (unchecked)
Box 68 (name): Set to empty string
Box 69 (phone): Set to empty string
Box 70 (PIN): Set to empty string
For more detailed information and the latest file layout specification, search for and refer to the current versions of the following documents on the IRS website:
Instructions for Form 941
General Instructions for Forms W-2 and W-3
Field descriptions
The Part 4 tab on the 941 Quarterly Federal Tax Return page consists of the following fields:
Allow Third Party Designee to Discuss this Return with IRS
Description
Indicates whether you authorize the IRS to discuss this specific Form 941 with a third party of your choosing. When checked, it grants permission for the IRS to speak with your designated representative about this quarterly tax return without requiring direct contact with you.
If this option is selected, you must enter valid values in the following fields:
Designee Name
Designee Phone Number
Designee Personal Identification Number (PIN)
When to select this option:
Check this option if:
You use a tax professional (CPA, enrolled agent, tax attorney) to prepare your Form 941.
You employ a payroll service provider (like ADP, Paychex, Gusto) that handles your tax filings.
You have a bookkeeper, accountant, or payroll manager who handles tax matters.
You want someone else to field routine IRS questions on your behalf.
You travel frequently or are often unavailable during business hours.
You want to streamline IRS communications and get faster responses.
Leave this option unchecked if:
You prefer to handle all IRS communications yourself.
You don't have a specific person or company you trust to discuss your taxes.
You're not comfortable sharing tax return information with a third party.
You want to maintain direct control over all interactions with the IRS.
Scope of authorization:
This authorization is:
Limited to this specific return: Only applies to this Form 941, not other tax forms or quarters.
Limited in time: Automatically expires one year from the return's due date.
Limited in scope: The designee can discuss the return but cannot sign documents, amend returns, or make binding agreements on your behalf.
Revocable: You can cancel the authorization at any time by submitting a written request to the IRS.
Common use cases:
Professional Tax Preparer: "Yes, authorize my CPA who prepared this return to answer IRS questions."
Payroll Service: "Yes, authorize ADP to discuss this return since they calculated and filed it."
Company Controller: "Yes, authorize our in-house accountant to handle IRS correspondence."
DIY Filer: "No, I'll handle all IRS communications myself."
Important notes:
This is entirely optional; most small business owners leave it unchecked.
Checking this box does not replace the need for a Power of Attorney (Form 2848) if you need broader representation.
You must complete this section on each quarterly Form 941 if you want ongoing authorization (it doesn't carry over automatically).
Designee Name
Description
The specific person or organization you are authorizing to discuss this Form 941 with the IRS. The name you enter here is the name the IRS will use to contact and communicate with regarding this return.
This field is required if the Allow Third Party Designee to Discuss this Return with IRS option is selected.
What to enter:
Enter the full name of the person or business entity you are designating. This can be:
Individual person:
Full legal name: "John Michael Smith"
Name with credentials: "Jane Doe, CPA"
Name with title: "Robert Johnson, Controller"
Employee name: "Sarah Williams, Payroll Manager"
Business entity:
Company name: "ABC Accounting Services"
Payroll provider: "National Payroll Services, Inc."
Professional firm: "Smith & Associates, CPAs"
Department: "XYZ Corporation Payroll Department"
Best practices:
Use the exact name the person or company uses professionally.
Include credentials if applicable (CPA, EA, Attorney).
Include title or position for clarity ("Controller", "Payroll Manager").
Be specific when designating a company department.
Match official records to avoid confusion.
What not to enter:
Generic descriptions: "my accountant" or "payroll company"
Unclear references: "accounting department"
Multiple names: "John Smith or Jane Doe" (designate only one primary contact)
Just a first name: "John" (use full name)
IRS usage:
When the IRS needs to discuss this return, they will:
Look up your Form 941.
See that you've designated a third party.
Contact the person/company named in Box 68.
Verify their identity using the PIN from Box 70.
Important notes:
This person/company will have access to confidential tax information for this return, so only designate someone you trust completely.
The name should match what the designee will use when identifying themselves to the IRS.
If your designee changes during the year, you must update this information on subsequent quarterly returns.
Keep a record of who you designated for each quarter in case you need to reference it later.
Designee Phone Number
Description
The direct phone number to reach your third-party designee when they have questions or need information about this Form 941. This is the number the IRS will call to discuss the return.
This field is required if the Allow Third Party Designee to Discuss this Return with IRS option is selected.
What to enter:
Enter a valid phone number where your designee can be reliably reached during regular business hours.
Format options:
The IRS accepts various phone number formats:
With parentheses: (555) 123-4567
With hyphens: 555-123-4567
With periods: 555.123.4567
With spaces: 555 123 4567
Plain numbers: 5551234567
Preferred Format: (555) 123-4567 or 555-123-4567
Components:
Area code (first three digits):
Required - must include the area code.
Use the area code where the designee is located or their business line.
Main number (next seven digits):
The local phone number
Should be a direct line or main business number where the designee can be reached.
Extension (optional):
If the designee has a direct extension, you may include it.
Format: (555) 123-4567 ext. 123 or (555) 123-4567 x123
What type of number to use:
Preferred:
Direct business line
Main office number where the designee works
Professional service provider's client service line
Direct extension at an accounting firm
Acceptable:
Company switchboard (if it reliably reaches the designee)
Shared office number (if designee is consistently available)
Avoid:
Personal cell phones (unless that's the primary business contact)
Numbers that go to voicemail without a live answer
Temporary or frequently changing numbers
Numbers in different time zones without context
International numbers:
If your designee is located outside the United States:
Include country code: +44 20 1234 5678 (UK example)
Follow the international dialing format.
Ensure the IRS can reach them during US business hours.
Verification:
Before entering the phone number:
Verify it's correct with your designee.
Verify that the number is active and functioning properly.
Confirm the designee can be reached at this number.
Ensure someone answers during business hours.
Verify that the person answering can transfer to your designated representative.
IRS usage:
The IRS will use this number to:
Call the designated person with questions about the return.
Request additional information or documentation.
Clarify discrepancies or errors.
Provide updates on the status of the return.
Issue notices or correspondence by phone.
Response time:
The IRS typically calls during business hours (9 AM - 5 PM local time).
Your designee should be prepared to respond within a reasonable timeframe.
If the designee is unavailable, the IRS may leave a message with callback information.
Common mistakes to avoid:
Transposing digits (double-check the number)
Using a disconnected or old number
Entering a fax number instead of a phone number
Using a number that always goes to voicemail
Forgetting to include the area code
Important notes:
Accuracy is critical: A wrong phone number defeats the purpose of designating someone.
Keep it current: If the phone number changes, notify the IRS in writing or update it on the next quarterly return.
Business hours availability: Ensure someone is available to answer during regular business hours.
Designee awareness: Ensure your designee is aware that they may receive calls from the IRS.
Professional setup: If using a large firm, ensure the number is routed to the right person or department.
Designee Personal Identification Number (PIN)
Description
The PIN (Personal Identification Number) is a security measure that verifies the identity of your third-party designee when they contact the IRS. It serves as a password that verifies the person calling the IRS is indeed your authorized representative.
This field is required if the Allow Third Party Designee to Discuss this Return with IRS option is selected.
What to enter:
A 5-digit number that you and your designee agree upon and keep confidential.
Format:
Exactly five digits: 12345, 98765, 54321, 00123, etc.
Numbers only: Cannot use letters or special characters
Any combination: You choose the numbers
How to create a PIN:
Step 1: Choose Any 5-Digit Number
Can be any combination from 00000 to 99999.
You decide what the PIN will be.
Common approaches:
Sequential: 12345, 54321
Birth year: 01985
Random: 73492
Memorable: 55555
Step 2: Share with Your Designee
Communicate the PIN securely to your designee using one of these methods:
In person
Secure email
Phone call
Encrypted message
Do not include it in unsecured emails or voicemails.
Step 3: Keep it Confidential
Only you and your designee should know the PIN.
Do not share with others.
Store it securely.
Treat it like a password.
PIN selection best practices:
Good PINs:
Memorable but not obvious: 24680, 13579
Random numbers: 83047, 61925
Significant to you but unknown to others: 10815
Professional: 97531
Avoid:
Obvious sequences: 12345 (though allowed, it's the first one hackers would try)
Repeated digits: 11111, 99999 (too easy to guess)
Personal information that's easily discovered:
Last five digits of SSN
Birth dates (MMYY format)
Street address numbers
Phone number digits
How the PIN is used:
When Your Designee Calls the IRS:
Designee identifies themselves by name (from Box 68).
IRS looks up your Form 941.
The IRS requests a PIN to verify your identity.
Designee provides the 5-digit PIN.
If the PIN matches, the IRS proceeds with the discussion.
If the PIN doesn't match, the IRS will not discuss the return.
When the IRS calls your Designee:
IRS places an outbound call to the number in Box 69.
Asks to speak with the designee named in Box 68.
Verifies the designee's identity by requesting the PIN.
If correct, proceeds with the discussion.
Security function:
The PIN prevents:
Unauthorized individuals from accessing your tax information.
Someone impersonating your designee.
Accidental disclosure to the wrong person.
Former employees or old service providers from accessing current returns.
PIN management:
For Each Quarterly Return:
You can use the same PIN for all four quarterly returns in a year for consistency.
Or use a different PIN for each quarter for enhanced security.
Best practice: Use the same PIN throughout the year with one designee for simplicity.
If using multiple Designees:
If you change designees during the year, create a new PIN for the new designee.
Don't reuse the same PIN across different designees for security.
If PIN is compromised:
If you suspect someone unauthorized knows the PIN:
Write to the IRS to revoke the third-party authorization.
Use a different PIN on your next quarterly return.
Notify your designee of the security issue.
PIN storage:
Your Records:
Keep a secure record of which PIN you used for each quarter.
Store in a secure location (encrypted file, locked cabinet).
Designee's records:
Your designee should also keep a secure record of PINs.
Essential if they represent multiple clients.
Helps them respond quickly when the IRS calls.
Important security notes:
Critical security rules:
Never share the PIN with anyone except your designated third party.
Don't write it on the physical form that goes to the IRS (the IRS receives it, but it shouldn't be visible to others handling the form).
Don't include it in email subject lines or unsecured communications.
Change it if compromised or if you suspect unauthorized access.
Keep it separate from other passwords and PINs.
Consequences of incorrect PIN:
If your designee provides the wrong PIN to the IRS:
IRS will not discuss the return with them.
IRS may contact you directly instead.
Delays in resolving any issues.
Designee may need to contact you to verify the correct PIN.
Legal implications:
The PIN serves as your electronic signature, authorizing the disclosure.
By providing it, you consent to the IRS sharing your tax information with the designated recipient.
The designee's use of the PIN confirms they are acting with your permission.
Common questions:
Q: Can I use the same PIN every quarter?
A: Yes, for convenience and consistency, especially with the same designee.
Q: What if I forget the PIN?
A: Check your records. If lost, you may need to revoke and create a new authorization.
Q: Does my designee need a different PIN for each client?
A: Yes, each client should have their own unique PIN for their returns.
Q: What if my designee enters the wrong PIN?
A: The IRS won't discuss the return. The designee should contact you to verify the correct PIN.