Knowledge-Based Authentication (KBA) is an identity-verification method — used under IRS Publication 1345 to confirm who's signing Form 8879 in a remote transaction — that asks the signer a set of out-of-wallet questions drawn from public and credit-history records.
Why it matters to a preparer
When a taxpayer signs Form 8879 somewhere other than in your physical presence, Publication 1345 requires the ERO to verify their identity through an accepted method (your e-signature software is how you do that) before the signature counts. KBA has long been used for that step — but it comes with a real failure rate: legitimate clients with thin or outdated public-records data can fail the quiz and get stuck right when you need their signature fastest.
That failure mode is worth planning around rather than discovering the first time it happens to a client mid-season — usually with a return ready to file, a client on the phone, and no fallback verification method already set up.
How it works
The signer is presented with a handful of multiple-choice questions — generated from third-party records, not anything you or the client supply — before the document unlocks for signing. Typical questions ask about previous addresses, past lenders, or similar details pulled from credit-history and public records.
A passing score clears them to sign. Publication 1345 states that if the taxpayer fails the knowledge-based authentication questions after three attempts, the ERO must obtain a handwritten signature on Form 8878 or 8879. One IRS-accepted alternative to knowledge-based authentication is document-and-selfie verification at NIST IAL2, which doesn't depend on public-records data quality. See our full KBA explainer for how the two compare.