1. Representation (3.1)
- Definition: Acts performed by a representative (e.g., attorney, CPA) on behalf of a taxpayer before the IRS.
- Exceptions:
- Anyone may appear as a witness or furnish information at the IRS's request.
2. Power of Attorney (POA)
- Definition: Document signed by taxpayer appointing an attorney-in-fact for specific acts.
- Types:
- General POA: Authorizes any act the taxpayer can perform.
- Durable POA: Continues after taxpayer’s incompetency/death.
- Limited POA: Restricts authority to specific acts.
- Key Form: Form 2848 (POA and Declaration of Representative).
3. Recognized Representatives
Must file POA + Declaration of Representative. Categories include:
- Attorneys (bar members in good standing).
- CPAs (duly qualified).
- Enrolled Agents (active under Circular 230).
- Enrolled Actuaries (active with Joint Board)
- AFSP Participants:
- Limited to representation for returns they prepared/signed.
- Only before revenue agents/examining officers.
- Must provide a valid PTIN.
- Special Appearances: IRS-authorized for specific matters.
4. Limitations & Requirements
- Signing Returns: POA does not authorize signing returns unless:
- Permitted under tax code and explicitly authorized in POA
- POA Requirements:
- Taxpayer/representative IDs, tax matters (type/years), scope of authority.
- TIA (Form 8821):
- Allows access to confidential tax info (not representation).
- Limitations: Cannot advocate, sign waivers, or represent.
5. Scope of Authority
- With POA, a representative may:
- Represent before any IRS office, sign waivers/consents/closing agreements, and receive (not endorse) refund checks.
- Restrictions:
- Unenrolled preparers → only before revenue agents.
- The authority must specify tax types/years (vague terms like "all tax matters" are invalid).
- Time Limit: POA covers tax periods ending ≤3 years after IRS receipt.
6. Disclosure & Confidentiality
- Return Information: Data on returns/deficiencies/penalties (confidential).
- Permitted Disclosure:
- Designated persons, Congress, state tax officials.
- POA not required for disclosure if:
- The representative attends the conference with the taxpayer.
- Special cases (e.g., executors, court-appointed trustees).
7. Changes & Execution
- Revoking POA:
- File a new POA (revokes prior unless stated otherwise).
- Write "REVOKE" on the old POA and list revoked representatives.
- Withdrawal: Representative files signed statement with IRS.
- Execution Rules:
- Joint Returns: Both spouses sign (unless authorized).
- Corporations: Authorized officer signs.
- Estates: Executor/administrator signs.
8. Special Cases
- Partnership Audits:
- Tax treatment determined at partnership level.
- Partnership Representative: Receives notices for small partners (<1% interest).
- Settlements bind all partners if consistent.
- Descendants:
- The personal representative (executor/administrator) files returns/pays taxes.
- Duties: Obtain EIN, file returns (income/estate/gift), and pay taxes.
- Fiduciaries:
- File Form 56 (Notice of Fiduciary Relationship) for roles (e.g., executor, trustee).
9. Centralized Authorization File (CAF)
- Purpose: IRS database for POA/TIA authorizations.
- CAF Number: Issued to recognized reps/TIA appointees (does not validate practice rights).
- Recording Rules:
- Only tax periods ending ≤3 years after POA receipt.
- Older periods recorded under IRS review.
10. Key Exceptions & Notes
- POA Not Required: For disclosure via Tax Information Authorization (TIA).
- Substitution: Allowed if original POA grants authority; requires new declaration + notice.
- Direct Contact with Taxpayer: Permitted if representative unreasonably delays IRS proceedings.
- Court Representation: POA does not authorize practice before courts (separate admission required).
Memory Anchors:
- POA = Representation; TIA = Information Access.
- AFSP = Limited scope (prepared returns only).
- CAF ≠ Practice Rights (only tracks authorizations).
- Partnerships: Audited at the entity level.
- Estates: Executor files return (no "reasonable cause" for late filing via agent).