My organization wants to use TFS to track user sign-off of work items by changing the work item Status. The first user I asked to view a work item in TFS is being prevented from viewing the work item. How do I set permissions for him to view and edit the work item status?

I suggest you to access your
Web Portalof project, selectSecurity sectionensure that your user have permission, exist inContributors Groupthat contains permission. (Best practise is to set contributor group to your members team)