When you deal with the IRS, your interaction is very often mediated through numbered forms. Some of these forms, such as the 1040, are well known to taxpayers. Others are not so well known or even obscure.
Fittingly, in our form-based tax compliance system, even when you authorize someone to act on your behalf before the IRS, there is a form involved. In this post, we will take note of that form and explain its purpose.
The form we are referring to is Form 2848. The longer, non-numerical name for it is Power of Attorney and Declaration of Representative.
The form allows a taxpayer to designate someone to represent his or her interests before the IRS. But it is not the exclusive way to authorize another individual to act in this way. It is possible to use a power of attorney not granted by Form 2848 to do this, as long as the document meets various requirements. Those requirements are detailed in IRS Publication 216, concerning Conference and Practice Requirements for tax practitioners.
Keep in mind, however, that the individual whom you seek to authorize to take your part before the IRS must be eligible to practice there. You can’t simply designate anyone.
There are several different types of representatives who are permitted to play this role. Attorneys are the first one of these groups listed in the instructions for Form 2848.
Other types of authorized representatives include certified public accountants, family members and something called “enrolled agents.” We will follow up in part two of this post with an explanation of what this curious term means.
IRS keeps track of power of attorney designations in something called a centralized authorization file (CAF). When a tax professional you authorize to act for you is a member of a firm, both the professional and the firm have to get a
CAF number from the IRS.
Source: IRS.gov, “Form 2848, Power of Attorney and Declaration of Representative”