Third Party Authorization Flashcards
What is a Power of Attorney (POA)?
A Power of Attorney allows someone else to represent a taxpayer before the IRS.
Who can be a representative under a POA?
The representative must be eligible to practice before the IRS (e.g., an attorney, CPA, or enrolled agent).
What can a representative do with a POA?
A representative can speak to the IRS on behalf of the taxpayer, sign certain documents, and receive refund checks (but not cash).
When is a POA required?
A POA is required when representing a taxpayer at an IRS meeting or responding in writing to the IRS.
How can a POA be revoked?
To revoke a POA without assigning a new representative, write ‘REVOKE’ on the old POA, sign, and date it.
What is fiduciary authority?
A fiduciary acts as the taxpayer, not a representative, and can sign and act on behalf of the taxpayer.
What form do fiduciaries file to notify the IRS?
Fiduciaries file Form 56 to notify the IRS of their role.
What is Form 2848?
Form 2848 is the Power of Attorney and Declaration of Representative, which authorizes someone to represent a taxpayer.
What tasks must be authorized on Form 2848?
Specific tasks include signing returns, receiving refund checks, allowing another representative, and receiving copies of IRS notices.
What is a special tip for married couples filing jointly regarding Form 2848?
Each spouse must submit a separate Form 2848.
What is Form 8821?
Form 8821 allows someone to receive tax information but not represent the taxpayer.
How can Form 8821 be granted?
Form 8821 can be granted verbally or in writing.
What happens when a new Form 8821 is submitted?
A new Form 8821 cancels any previous authorization unless specified otherwise.
Do Form 8821 and Form 2848 affect each other?
No, Form 8821 and Form 2848 do not affect each other.
What is Third-Party Designee (Checkbox Authorization)?
Taxpayers can authorize someone to discuss a tax return by checking a box on the return.
What can a Third-Party Designee do?
A designee can answer IRS questions, request notices, fix math errors, and provide missing information.
How long does the authority of a Third-Party Designee last?
This authority lasts for one year after the return’s due date.
What is the Central Authorization File (CAF)?
The CAF is an IRS database that tracks representatives and authorizations.
What forms are entered into the CAF?
Forms 2848 (POA) and 8821 (Tax Information Authorization) are entered into this system.
How far in advance can CAF entries include tax years?
CAF entries can include past, current, and future tax years (up to 3 years ahead).
When is a Power of Attorney not needed?
A POA is not needed for simply providing information, using Form 8821, allowing discussions with a designee, or when fiduciaries act on behalf of a taxpayer.
