The IRS Power of Attorney, Form 2848, is the document required (well, sort-of, see below) in order to represent a taxpayer in front of the IRS. There are some common misconceptions about this form that we would like to lay to rest.
Myth #1: You have to be an attorney to operate under an IRS Power of Attorney.
Not true. All sorts of people can use this form to help someone else (represent a taxpayer) in front of the IRS. Although, like a lot of things, just because you can does not necessarily mean you should. Who can be authorized to represent a taxpayer before the IRS using an IRS Power of Attorney? This is who the IRS allows:
- Attorneys – But, not all attorneys are created the same. Some law schools don't require any tax knowledge, and in schools where a tax law class is required, that class has little to do with tax resolution. We have yet to hear of a bar exam that has any tax-related questions.
- Certified Public Accountants – some CPAs are very good at representing taxpayers before the IRS. However, this is not what CPAs are trained to do, so be very careful before hiring a CPA to resolve your tax issue. Make sure that they are experienced and have a good track record resolving issues like yours.
- Enrolled Agent – They have to take a test that covers basic information about IRS tax resolution before they can become an enrolled agent. Just make sure that the enrolled agent has actually handled a case like yours before hiring them. Many ex-IRS employees are Enrolled Agents, but the types of cases they can practice will be limited.
- Officer of the Taxpayer (for companies) – this is basically representing yourself before the IRS.
- Full-Time Employee (when the taxpayer is a company) – is your employee experienced in tax resolution? Unless you have a major language barrier, this is probably worse than representing yourself before the IRS.
- Family Member (an immediate family member) – From what we've seen, having a family member help try to resolve an issue does not bode well.
- Enrolled Actuary – only allowed to practice in very specific situations where their skills as an actuary would be most beneficial.
- Unenrolled Return Preparer – only in an audit and only where the tax return preparer prepared and signed the return that is being audited.
- Registered Tax Return Preparer – only in an audit and only where the tax return preparer prepared and signed the return that is being audited.
- Student Attorney or CPA practicing in a qualified Clinical program through their school.
- Enrolled Retirement Plan Agent – only with respect to retirement plan issues.
Myth #2: By signing the IRS Power of Attorney, my representative can do all sorts of other things for me.
The IRS Power of Attorney ONLY authorizes your attorney to represent you before the IRS. This does not authorize your attorney to sign deeds, sign checks, or anything else outside of dealings with the IRS.
Myth #3: Only the attorney whose name is on the Power of Attorney can represent me before the IRS.
There is a box on the form that allows the person you designated as your IRS Power of Attorney to appoint a new Power of Attorney or authorize information about your taxes to be disclosed to someone else. If this box is checked, they can appoint a new Power of Attorney. If the box is not checked, then you would have to sign a new Power of Attorney to appoint someone else.
Myth #4: My IRS Power of Attorney can sign my tax return for me.
Only if you granted them that ability by checking the box specifically giving them that power.
Myth #5: In order for the IRS power of Attorney to be valid, I need the original, notarized.
Not true. Not only are copies fine, the IRS power of attorney form, unlike a regular power of attorney, does not need to be notarized.
Myth #6: You need a power of attorney to request documents from the IRS for a taxpayer.
Nope. If you want to get tax information for a taxpayer, all you need is a Form 8821. This doesn't let you negotiate with the IRS, but allows you to do things like request transcripts and get balances.
Bonus Fun fact:
You actually don’t need to use the IRS Form 2848 to designate an IRS Power of Attorney. Unfortunately, if you don’t use the form, the IRS can’t/won’t put it into their centralized systems (through the Central Authorization File, or CAF, Unit), so your Power of Attorney won’t receive the normal notices that are automatically sent to you. They will only receive notices from a Revenue or Settlement Officer to whom you have sent a copy of the Power of Attorney.
We offer a basic service where we can become your Power of Attorney and request documents from the IRS on your behalf to find out exactly what the IRS thinks about you, and let you know the best course of resolution if you have an issue. Learn more about it here, or call us at 888-727-8796, email firstname.lastname@example.org.