Signatures (Advanced): Knowledge-Based Authentication (KBA)

Knowledge-based authentication (KBA) is required for IRS Form 8879. TaxDome fully meets the IRS requirements at a low per-signature cost. You can request signatures with KBA from both your clients who have access to the portal and from third parties.

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KBA, explained

KBA is used to verify a taxpayer's identity in order to obtain IRS-compliant electronic signatures. Clients are verified through a combination of ID document and consumer data verification. 

KBA will not work for ITINs, so make sure that your clients have their SSNs handy before enabling KBA.

Tip: More in our blog on KBA and how pricing compares for different providers

Here’s how it works:

1. First, you need to check whether Show KBA Verification toggle in the Signatures section of the Settings > Firm settings page is enabled.

2. Second, add funds to your firm’s balance. Here's the pricing for each signer's attempt.

3. Then, upload the document that needs to be signed, request the signatures, and then toggle on Require KBA. It will work both for logged-in users and those who are not logged in.

4. When signing, your client will be asked to verify their social security number and answer five questions randomly generated from their public records. These are usually multiple-choice questions—such as the name of their mortgage lender, type of car, a former address or previous phone number. It’s not a credit check but a way to digitally verify their identity.

5. The client gets only two attempts to answer the KBA questions. They need to answer at least three out of five correctly during either attempt.

You'll receive a notification when a client passes or fails KBA.

KBA pricing

If you decide to use KBA, you are charged for each signer's attempt to sign a single document. It happens once the client is trying to sign with KBA. You are charged regardless of the attempt (successful or unsuccessful).

Tip: To save money, merge several documents of one client and use them for one KBA attempt.

However, before the document with the KBA is sent, we check if there are enough funds on your firm balance. When you request a KBA, you are always informed of how much money is already used for pending KBA signatures, how much will be used for the current document, and how much you have on your balance. 

Each signer's KBA attempt price is based on the national currency of the country your firm listed when creating your TaxDome account. 

For example, if the firm is registered in the US and you request two spouses' signatures, you will be charged a total of $2 (1$ for each signature verification). But if they fail to pass KBA and attempt one more time, you will be charged a total of $4.

You can add different amounts to your firm’s balance depending on your needs. Go to  Settings > Firm Balance from the left menu bar, select the amount and then click Buy. A firm owner, admin or any employee with the Charge firm balance access rights can do this.

You can always view your KBA usage stats by clicking the Audit trail link at the top right of the Firm Balance page.

On the Firm balance page, you can also see the amount of money reserved for KBA requests

Add KBA to a signature request

To send a signature request with KBA:

1. Upload the document to the Firm docs shared with client folder, click the three dots to the far right of the document’s name, then select Request signature.

2. Toggle on Require KBA, then add the required signature fields.

Keep in mind:

• A document can contain as many signature fields as needed. But if you merge documents (e.g., state and federal returns) into one file, each KBA signature field will be charged separately according to these prices.
• When requesting a signature with KBA for a client account that has two or more email addresses in their linked contacts, indicate which user needs to sign the document by selecting their email address under the Signers.
• If your firm balance is zero or you have pending KBA signatures equal to your balance, you’ll be prompted to add funds.

Can a client use an ITIN instead of an SSN for KBA?

No. An individual taxpayer identification number (ITIN) is issued to an individual for taxation purposes only. ITINs are not meant to be used as identification for obtaining credit. Credit systems won’t recognize them as anything other than an incorrect social security number, so they cannot be used for KBA.

Is a credit check performed during the KBA? 

No. During KBA, credit is not verified, so there is no credit check.

What to do if a client fails KBA

A client gets two attempts to pass KBA. If they fail to answer a sufficient number of questions correctly both times, you’ll receive a notification, and the KBA failure will also be noted in the document’s audit trail.

You can reset the failed attempts and resend the signature request to clients who did not pass KBA. To do this, go click the three dots to the far right of the document’s name, then select Reset KBA and resend signature request.

After clicking this, the signature request will be resent to clients who failed KBA. Note that you will be charged according to these prices for each verification attempt. Clients that have successfully signed the documents will not be affected. 

Note! All KBA resets can be found in the document audit trail.

You can also use either of these workarounds:

• Upload the document again and request a signature like you did the first time
• Ask the client to print the document, sign it by hand, then upload it to their client portal