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5.1.1.7
(08-21-2006)
Processing Third Party Authorizations
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This section provides guidance on the types of
third party authorization requests that can be filed by a taxpayer and the
extent of authority the authorization conveys to the third party in their
dealings with the IRS. Additional information on third party authorizations
can be found in IRM 21.3.7, Processing Third Party Authorization onto the
Centralized Authorization File (CAF).
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A taxpayer may use the following forms to record an authorization made
to a third party:
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Form 2848, Power of Attorney and Declaration of Representative, designating
a third-party as their representative or power of attorney
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Form 8821, Tax Information Authorization, designating an appointee
Note:
Taxpayers are not required to use Forms 2848 or 8821 to
record a third party authorization. See IRM 11.3.3 for the requirements for
authorizations not on these forms. For the procedures on disclosure to Reporting
Agents and the use of Form 8655, Reporting Agent Authorization, see IRM 21.3.9
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Collection personnel may choose to verify a representative's eligibility
to ensure that the representative is authorized to act for the taxpayer and
that the Service can disclose return information within the scope of the tax
matters for which the taxpayer has authorized representation. Individuals
are required to certify their eligibility to practice before the Service on
the Form 2848.
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When verifying eligibility of attorneys to practice, check with both the
state bar by using "name of state"
, or "
state bar"
on one of the web search engines and the Office of Professional
Responsibility (OPR).
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When verifying eligibility of CPAs to practice, check with both the state
accounting board (http://www.aicpa.org/states/index.htp or http://www.state.oh.us./acc/stateweb.html)
and OPR.
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When verifying the enrollment status of an enrolled agent, call OPR's
Office of Practitioner Enrollment at 313-234-1280 or send an e-mail via Outlook
to *CCDCC epp or via the Web to EPP@irs.gov.
Note:
Access the "Want to Find Out ..."
link
on the OPR web site at http://nhq.no.irs./gov/OPR/ to determine if the third
party is suspended or disbarred from practice by OPR. Links to some of the
state accounting web sites as well as the various state bar web sites are
included in the OPR web site in the "Helpful Links"
. If
the individual is suspended or disbarred from practice before the IRS, refer
the matter to your Area Return Preparer Coordinator (ARPC) for further action.
Use the intranet link http://PSP.WEB.IRS.GOV/DOCS/RPCLIST.DOC to find your
ARPC.
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Eligible attorneys, Certified Public Accountants (CPA), enrolled agents,
or enrolled actuaries are authorized to represent taxpayers before the IRS
on collection matters. An unenrolled return preparer cannot represent a taxpayer
before the IRS on any collection matter. An unenrolled return preparer is
an individual other than an attorney, CPA, enrolled agent, or enrolled actuary
who:
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prepares and signs a taxpayer’s return as a preparer, or
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prepares a return but is not required, by the instructions on the return
or regulations, to sign the return
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When a taxpayer submits a properly completed and filed Form 2848 or
Form 8821, these documents should be recognized in the collection investigation.
Interaction with the third party should be governed by the authority granted
by the specific document. The major distinction between the forms is that
Form 2848 authorizes an eligible individual (e.g. attorney, CPA, enrolled
agent, or enrolled actuary) to represent the taxpayer before the IRS as well
as to receive confidential information (e.g. disclosure); Form 8821 only authorizes
limited disclosure but does not authorize the third party to represent the
taxpayer before the IRS. See Exhibit 5.1.1–1 and 5.1.1–2.
Note:
If a taxpayer is in bankruptcy, the
attorney of record who filed the petition is authorized to act on the debtor's
behalf with respect to taxes subsumed by the proceeding per IRC 6103(e)(6).
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The following provides a table that summarizes the differences between
the actions a designee may take based on whether Form 2848 or Form 8821 was
submitted.
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Consider the following factors when Form 2848 is received:
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As of March 2004, IRS will not honor a Form 2848 if it designates a representative
who is not authorized to practice and the form will not be treated as a taxpayer
information authorization. Form 8821 is required to allow those individuals
who cannot practice before Collection personnel access to tax information.
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A taxpayer may authorize a student who works in a tax clinic program to
represent them under a special order issued by the OPR. A copy of the letter
from the OPR authorizing practice before the IRS must be attached to Form
2848. If a lead attorney or CPA will be listed as a representative, his/her
name should be listed on Line 2, and the student’s name on the next
line.
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The power to sign the taxpayer’s tax returns can be granted only
in limited situations. Refer to Form 2848 and Treasury Regulations 1.6012-1(a)(5)(b)(3)
and 1.6061-1(a) for additional information.
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If a husband and wife filed a joint tax return, both spouses must sign
the Form 2848 if the listed representative(s) will be representing both spouses
with respect to the liabilities reported for the tax period covered by the
joint tax return. If only one spouse signs the Form 2848, the listed representative(s)
is permitted access to the tax information related to the joint tax return,
but he only represents the spouse who signed the form, notwithstanding that
husband and wife filed a joint tax return. Separate Forms 2848 must be submitted
by the spouses if different representatives will be representing each spouse
with respect to the liabilities reported for the tax period covered by the
joint return.
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Consider the following factors when Form 8821 is received:
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Return to the taxpayer any Form 8821 that is missing critical information
that can only be provided by the taxpayer (e.g. tax years, type of tax, missing
taxpayer signature, date).
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Information that may be disclosed to the designee is limited to the type
of tax, tax form number, years or periods, or a specific tax matter, that
is listed on Form 8821, Item 3.
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If Form 8821, Item 5(a) is checked, the designee is also entitled to receive
copies of tax information, notices, and other written communication on an
ongoing basis for the type of tax, tax form number, years listed, or the specific
tax matter cited on Item 3.
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The designee is not entitled to respond to any type of correspondence
on behalf of the taxpayer, if the response advocates a position that would
indicate a representational role.
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