Unit 3: Authorizations and Disclosures

Question 1

2848

Answer 1

“Power of Attorney and Declaration of Representative”

• Allows a taxpayer to authorize a specific individual to receive confidential tax information and to perform the actions detailed on the form. Up to four representatives can be authorized per form.

Question 2

A non-IRS POA must contain all of the following information:

Answer 2

• Taxpayer’s name, mailing address, and identification number
• The name and mailing address of a representative
• The types of tax involved and the federal tax form number in question
• The specific periods or tax years involved
• For estate tax matters, the decedents date of death
• A clear expression of the taxpayer’s intention concerning the scope of authority granted to the representative
• The taxpayer’s signature and date

Question 3

The following situations do not require a POA

Answer 3

• Providing information to the IRS
• Authorizing the disclosure of tax return information through Form 8821, tax information authorization, or other written or oral consent
• Allowing the IRS to discuss return information with a third party via the checkbox provided on a tax return or other document
• Allowing the IRS to discuss tax return information with a fiduciary or an executor

Question 4

A representative named under POA is generally not permitted to sign a personal income tax return unless both of the following conditions are met:

Answer 4

• The signature is permitted under the IRC and the related regulations
• The taxpayer specifically grants signature authority on the power of attorney

Question 5

IRS regulations permit a representative to sign a taxpayer’s return if the taxpayer is unable to sign for any of the following reasons:

Answer 5

• Disease or injury
• Continuous absence from the United States for a period of at least 60 days prior to the filing date
• Other good cause if specific permission is requested of and granted by the IRS

Question 6

8821

Answer 6

“Tax Information Authorization”

• Authorizes any individual, corporation, firm, organization, or partnership to inspect or receive confidential information for the type of tax and periods listed

Question 7

What is CAF:

Answer 7

Centralized authorization file

• Is the IRS computer database that contains information regarding the authorizations that taxpayers have given representatives for their accounts

Question 8

4506-T

Answer 8

Request for Transcript of Tax Return

Question 9

A preparer may disclose information to a second taxpayer from another person’s tax return in certain circumstances. The preparer may disclose return information obtained from the first taxpayer if:

Answer 9

• The information obtained from the first taxpayer appears on the first person’s tax return
• The information is used for the purpose of preparing the second person’s tax return
• The second taxpayer is related to the first taxpayer
• The first taxpayer’s interest is not adverse to the second taxpayer’s interest
• The first taxpayer has not prohibited the disclosure

Question 10

IRC 7216

Answer 10

Prohibits tax return preparers, including those who offer services related to the ACA, from using tax return information for unauthorized purposes

Question 11

Limited confidentiality protection applies to communications that would be considered privileged if they were between the taxpayer and an attorney and that relate to:

Answer 11

• Noncriminal tax matters before the IRS
• Noncriminal tax proceedings brought in federal court by or against the United States

Question 12

The confidentiality privilege does not apply:

Answer 12

• In any criminal tax matter
• To any written communications regarding the promotion of a tax shelter
• In any state tax proceedings
• To the general preparations of tax returns

Question 13

ITINs that have not been used on a federal tax return at least once in the last three consecutive year:

Answer 13

Expire