noxplague: Yes the window shows up, but then how do you actually give the papers to the guard?
In the inventory screen, you can left-click on any item for a description of it. You can right-click to use it with some other object.
So just right-click on the papers, move your mouse down so the inventory screen disappears ("use papers &" should be showing up at the bottom of the screen), and click on the guard (when you move the mouse over the guard "use papers & guard" should appear).
That should work.