The first step in our representation of clients before the IRS is to get an IRS Form 2848 from them, which allows us to speak to the IRS on their behalf. This works for almost everything, including OVDI representation. But when it comes to FBAR penalties, the IRS won't accept form 2848. The Financial Crimes Enforcement Network (FinCEN) does not recognize the validity of the standard IRS power of attorney form when dealing specifically with FBARs.
An odd thing, this FBAR form
The FBAR form is a strange character. It is not quite an IRS form, and it isn't quite a US Treasury form. Ultimately, because of the separation of duties within the US Department of the Treasury (both the IRS and FinCEN report to the US Secretary of the Treasury) the forms that work for the IRS in matters administered by the IRS are not enough for FinCEN.
In order to represent a taxpayer with regard to an FBAR form, or learn any information about its filing or follow-up, you need a "real" or general power of attorney. Not the Form 2848, IRS Power of Attorney form, but a power of attorney allowable as defined by state law. Here is a link to Connecticut's statutory power of attorney, for example.
Why is this a big deal? The difference is that a regular IRS form 2848 does not need to be notarized. A "real" power of attorney, on the other hand, does. So this notary requirement is a big deal — especially for expatriate taxpayers with FBAR problems. Getting something notarized in a foreign country is, let's say, a giant pain in the…ok, it can be very difficult to do.
Fortunately, FinCEN is now considering allowing not just form 2848 to be used, but also authorized third party contact — thereby making the hassle mentioned above unnecessary. If you agree that it should be easier for others to speak with the Treasury Department about your FBAR issues, send and email to email@example.com with the caption in the body of the text, ‘‘Attention: PRA Comments— Update to the FBAR report" and tell them that you want the process simplified.
Current Action: FinCEN is proposing to update the current TD F 90–22.1 report to standardize it with other BSA electronically filed reports and add the capability for a third party preparer to file the report should the owner of the foreign account wish to employ this option. To standardize the FBAR with other BSA reports, FinCEN proposes to add an item to record taxpayer identification number (‘‘TIN’’) Type to Part I, item 3a; Part I, item 4; Part III, item 25a; Part IV, item 35a; and V, item 35a. The addition of a check box to indicate that the amount is unknown is added to Parts II, III, IV, and V in item 15a. FinCEN also proposes to add a new item ‘‘Suffix’’ to Part I, item 8a; Part III, item 28a; and Part IV, item 37a. This update includes a revised signature section. It adds item 44a, a check box with the instruction ‘‘Check here if this report is completed by a 3rd party preparer and complete item 46 and the third party preparer section.’’ 3 A new section, ‘‘3rd Party Preparer Use Only,’’ is added to the report to support this method of filing.