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Why a Power of Attorney is Sometimes Needed for Your Tax Pro

April 14, 2019


Tax pros such as enrolled agents are some of the best mediators with the IRS. Great tax pros constantly stay on hold with the IRS agents, deal with tax refund statuses, and find additional ways to reduce further tax issues down the road.


There are instances where the IRS requires an opportunity to directly communicate with the taxpayer. When this occurs, it is always wise to hire a tax pro to speak on your behalf.  This can be achieved through the enactment of a Power of Attorney (POA). The legal document provides the authorization to act on the behalf of an individual


Benefits of a POA


Tax Pros with a POA can:

  • Research your IRS account for both standing and compliance.

  • Copied on any future notices from the IRS – the tax pro can advise on how to approach these methods of communication as they are occuring in real time.

  • Respond to an IRS notices or inquiry on your behalf- speaking with an IRS agent can be intimidating. A tax pro can serve as your mediator.

  • Set up agreements on your behalf- tax pros can prepare and negotiation the best payment plans for taxes or during audits.

  • Taxation with Representation – a tax pro will argue the legitimacy of a deduction, status of account, or relief of penalty.

  • Deal with the IRS Taxpayer Advocate Service.

  • Appeal a Dispute


Do POAs apply to all people for representation purposes?

No, you have to authorize specific family members and licensed tax pros such as CPAs, enrolled agents, and attorney usually use POAs to negotiate on their behalf. Unlicensed tax pros will only have limited capacity to assist based upon whether or not they prepared the taxes at hand.


Filing a POA and how it works

Form 2848 is commonly known as the Power of Attorney and Declaration of Representative.

The taxpayer and the representative must agree and sign this form.As soon as the form is filed,

the representative can speak on the taxpayer’s behalf.

The agreement expires once one of the parties withdraws the authorization or seven years passes.


Are there alternatives to granting a POA?

There is a checkbox on your returns which allows someone the authority to speak with the IRS about their tax return. The authorization box isn’t the same as a POA. It allows the IRS to contact a third-party individual to answer direct questions until the 15th of April of the next year.


Want to limit authorization?

There is an option to dilute access. It is called the Tax Information Authorizations and can be achieved through Form 8821. It is also not privy to just tax professionals, anyone can utilize this option, just by filing the form.


Want to engage in further discussion? Fill out our contact form and we will get in touch with your shortly.


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