Ladies and gentlemen thank you for standing by. Welcome to Making Authorizations Easier: The Do’s and Don’ts of Forms 2848 and 8821 Conference Call. Today’s call is being recorded. At this time all participants are in listen-only mode.

Later we will conduct a question and answer session. Instructions will be given at that time.

I would now like to turn the conference over to your host, Ms. Debra Mardanlou. Please go ahead.

Good day everyone. My name is Debra Mardanlou and I am Government Liaison with the Internal Revenue Service. I will be your moderator for today’s event. Thank you for participating in our National Phone Forum on Making Authorizations Easier: Do’s and Don’ts of Forms 2848 and 8821.

Before we begin I need to review some administrative items: First, our procedures for granting CPE credit: IRS’ stakeholder liaison field organization has entered into an agreement with the Office of Professional Responsibility to meet the requirements of a sponsor of continuing professional education for enrolled agents.

Enrolled agents joining this phone forum will be entitled to one CPE credit, provided they participate for at least 50 minutes from its start. Tax professionals may receive a certificate of completion that can be used to request a continuing professional education credit if the phone forum meets your organization’s or state’s CPE requirements.

To receive a certificate of completion for today’s forum you must have called the number and entered the PIN that was assigned to you when you registered. This is so we can verify your participation.

Second: This program will be archived on our IRS video portal at www.IRSVideos.gov for later viewing. However, only those attending one of the three sessions offered today, June 16th, will be able to receive a certificate of completion. Those entitled to certificates will receive them by e-mail approximately one week following this event.

We’d like to extend a welcome to any participants representing the news media. If you’re with the media, please send us a message at NationalPhoneForum@IRS.gov with your contact information. This is so our media relations staff can assist in clarifying the discussion or answer any additional questions you might have following the presentation.

We have two presenters for today’s event. You should have been e-mailed a copy of the presentation. If you did not receive one, please e-mail us now at NationalPhoneForum@IRS.gov.

Now here is some background information on our representatives. Anna Bazaco is a Senior Tax Analyst within Accounts Management, Process and Program Management, Specialty Accounts.

The Specialty Accounts section develops and implements policies and procedures regarding various tax authorizations that are processed to the Centralized Authorization File, CAF database. Anna started her IRS career in 1977 and has over 21 years in various accounts management positions.

Rita Prendergast is also a Tax Analyst within Accounts Management, Process and Program Management, Specialty Accounts. Her group oversees the Power of Attorney and Tax Information Authority for the CAF program. Rita started her career with the IRS in 1987. She has over 22 years of accounts management experience.

With that I’ll turn it over to our presenters, Anna Bazaco and Rita Prendergast. Anna.

Thank you, Debra. Good afternoon, everyone. I am Anna Bazaco and, as Debra mentioned, presenting with me today is Rita Prendergast.

Now, one of the most important things that we are required to do here at the IRS is to protect the taxpayer’s information. At the same time though, we want to ensure that taxpayers are able to receive the assistance they need from tax professionals, such as yourself.

So we offer many different types of authorizations to allow for the disclosure of taxpayer information to help meet your customer needs, but we do require that legal step and that is a valid authorization, before we can disclose any information to anyone other than the taxpayer or before we can allow a third party to act on behalf of the taxpayer. We hope that the information we go over today will help you understand the forms and procedures better, making the authorization process easier for you.

Today we will concentrate on two of the most common types of authorizations, which are the Forms 2848, Power of Attorney and Declaration of Representative, better known as the POA; and Form 8821, Taxpayer Information Authorization, referred to as a TIA.

We will discuss the differences between the forms 2848 and 8821; an overview of the authorization forms 2848 and 8821’ un-enrolled return preparers and the authorization forms; joint and separate authorizations; processing authorization forms, including processing timeframes; common reasons for rejection of authorization forms; and ordering transcripts.

Rita will now go over the differences and commonalities between a Form 2848 and 8821.

Thank you, Anna. Hello, everyone. The Form 2848, Power of Attorney and the Form 8821, Tax Information Authorization, TIA, are different. Let’s go through some of those differences.

We’ll start with the Form 2848 first. A Form 2848 is a legal instrument used to authorize a third party to represent a taxpayer before the IRS. The authorized individual named on a Form 2848 is referred to as a representative. Form 2848 can be used by taxpayers, who are individuals, businesses or other entities; however, the representative must be an individual.

A firm or business entity cannot be named as a representative. The representative must be a person eligible to practice before the IRS. Generally, they would be an attorney, a certified public accountant, an enrolled agent, an enrolled actuary or an enrolled retirement plan agent.

In addition, the taxpayer may authorize the representative to substitute or delegate the authority to another representative in the space provided on line five, Act to Authorize. This is useful when you have multiple employees at your firm working on a client’s issue. You would then be authorized to delegate your authority to another using Form 2848 without going back to the taxpayer.

One word of caution, however: If the original representative are to remain in effect then you must check line eight, Retention/Revocation of Prior Powers of Attorney, and include a copy of any prior Form 2848s. We will discuss this in more detail in a few minutes.

Keep in mind that the power to sign tax returns can be granted only in limited situations. Page three of the Form 2848 instructions address these circumstances; for example, disease, injury, taxpayer outside the U.S. or permission granted by IRS.

Additionally, a Power of Attorney authorizes a certain representative to address other outstanding matters that involve audit or collection activities, such as formally representing clients before IRS counsel, appeals, collection or exempt; signing consents extending the time to asses tax; recording in interview; executing waivers agreeing to a tax adjustment; establishing an installment agreement; and executing claims for refund and receiving refund checks, but the representative cannot endorse or cash the refund check.

The representation authorities on Form 2848 are different from those granted to representatives appearing before United States Tax Court. For further information regarding the use of a Power of Attorney to represent a taxpayer before the IRS, please see publication 216, Conference and Practice Requirements.

Let’s talk for a few minutes regarding taxpayer accountability. It seems that some taxpayers think that once they give you their Power of Attorney they never have to think about taxes again, whether they provided you with all of their information or not.

We would appreciate it if you would stress to your clients that this does not relieve them of their tax obligations and that they need to work with you and us on anything involving their tax liability.

Moving on to Form 8821, TIA: The Form 8821 allows an appointee to inspect and/or receive confidential tax information. An appointee has a lesser scope of authority than a representative does.

An appointee can be an individual, corporation, firm, organization or partnership; whereas, a representative named on a Form 2848 must be an individual. So the Form 8821 may be used when the third party does not qualify as a representative on a POA since it may be used to authorize anyone to obtain information about the taxpayer.

A Form 8821 may be all that is needed if the third party does not intend to represent, practice, receive refunds or sign documents on behalf of the taxpayer.

Just like the form 2848, some taxpayers think that once the Form 8821 is submitted naming you or your company as an appointee they don’t have to think about their taxes again, whether they provided you with all of their information or not. Again, you may want to stress to your clients that this does not relieve them of their tax obligation.

Anna will now go over representative and appointee information on slide three.

Thank you, Rita. When filing a Form 2848 or 8821 with the IRS, always use the CAF number assigned to you. If you leave the space blank a new number may be assigned, particularly if you modify your name and use a different address from the one used when you applied for your CAF number or from a previous update.

For example, a modification of a name means that you initially used the name of Robert, but prepared the authorization this time using Bob. This change may result in a new CAF number assignment under Bob, particularly if there is a change of address and the IRS has not been notified of that address change.

If you don’t remember your CAF number you may call the Practitioner Priority Service, or PPS, line. When calling PPS you will need to provide identifying information to authenticate you as the owner of a CAF number. The CAF number will not be provided via the telephone; however, it will be mailed to your address of record within the CAF database; therefore, it is imperative to keep your address updated.

Should you need to change your address, be sure to contact the CAF function in writing. You may send a letter either by mail or fax to the function with your identifying information, such as your name and CAF number, and the new address or simply check the Check if New box on Form 2848 or 8821 that you are filing.

This also applies to your telephone and fax number changes. If there are changes to your address, telephone or fax number and the Check if New box is not checked the CAF database will not be updated and you may not receive notices and other communications that you are entitled to receive. This applies only to changes made using the form, not changes made by sending a fax or a mailed letter.

If you use the Disclosure Authorization, or DA, through the e-Services suite of products, remember that the prefilled field with My Data box on the representative information screen does not populate the CAF number.

If you have already been assigned a CAF number, please enter the number on the screen; otherwise, you will be issued a new CAF number and will end up with multiple numbers that you will need to keep track of. This also creates a mess within our own database that we will need to work together to clean up, especially as you change employers.

Now I will go to the next slide for multiple representatives and appointees. On occasion taxpayers would like to name more representatives than the space provided on the Form 2848 or 8821. The 2848 provides space for up to three representatives, while the Form 8821 provides for only one named appointee.

If the taxpayer wants to name more than three representatives on the 2848, indicate so on line two and attach the additional Form 2848. Be sure to also check line eight, Retention/Revocation of Prior Powers of Attorney.

If the taxpayer wants to name more than one appointee on the Form 8821, indicate on line two, See Attached Sheet and attach a listing of the appointees. Be sure to include all pertinent information, such as the name, address, CAF number and telephone and fax numbers of the appointee.

Please turn to the next slide, which is slide five. Rita.

Okay. Tax matters.

For both 2848 and Form 8821 tax matters are listed on line three. Be sure to list the types of tax, such as income, employment or excise and list the form number, such as 1040, 1120, 941, 940 if applicable. Should you be submitting the Power of Attorney or the Taxpayer Authorization Information for a civil penalty, a separate liability, etc., identify this in the Type of Tax section of line three.

When listing the years, please be as specific as possible. You may list the years separately or, for multiple years, you may list them using a hyphen or the word “to.” Do not use “all years.” If this is done the POA or the TIA will not be processed and will be returned. If you use a hyphen then it will include all periods within the years you have provided.

We’ll now go to the next slide Specific Use. I want to talk about Specific Use Only requests on Form 2848 and Form 8821. When you mark the box on line four to indicate specific use the authorization is not recorded on the CAF database; however, if tax matters are listed on line three of Forms 2848 and 8821 these tax matters will be recorded on the CAF database, even though the box on line four is checked.

For Form 2848 if you have a specific use only issue it needs to be listed on line five, Authorized Acts.

A Specific Use Authorization is practical for assisting clients with things like private letter rulings or technical advice requests, but please note that you will need to provide a copy of the Form 2848 each time you deal with the IRS since the information will not be available to other employees through CAF.

Checking the box on line four on Form 8821 is a great way to request verification of information, such as an EIN or an address or to verify income from mortgages or for small business selection.

If there are no tax matters listed on line three of either form you will not receive copies of notices and you will need to provide a copy of a Power of Attorney or the TIA each time you deal with the IRS.

Again, authorizations for specific use information are not processed to the CAF database and information about the authorization is not available to other employees through CAF. Therefore, you will need to present a specific use authorization each time you contact the IRS.

However, if tax matters are listed on line three of the authorization and box four, Specific Use, is also checked the tax matters portion of the authorization will be processed to the CAF database.

The next slide is Acts Authorized. On occasion taxpayers may use a Form 2848 to grant a representative additional powers of authority. These additional powers of authority are substituting or delegating another representative, authority to sign a taxpayer’s return.

Regulation Section 1.6012-1(a)(5) permits another person to sign a return for a taxpayer only in the following circumstances: Disease or injury; continuous absence from the United States, including Puerto Rico, for a period of at least 60 days prior to the date required by law for filing a return or specific permission is requested of and granted by the IRS for other good cause.

Authority to sign the income tax return may be granted to, number one, the taxpayer’s representative or, two, an agent, a person other than the taxpayer’s representative, disclosure of return or return information to another third party.

Next slide. Anna, please explain Receipt of Refund Checks.

On occasion the taxpayers may want you, as a representative, to receive their refund checks.

Now, the taxpayer may choose any of the named representatives identified on line two, even where only one representative is listed on line two the representative’s name must be provided on line six as well. The authorized representative can only receive the refund check. He cannot endorse or cash the check.

In addition, the taxpayer must also initial the authority in the space provided on line six. If the Power of Attorney is for joint taxpayer assessments, both taxpayers must initial. We cannot process this authority if only one taxpayer has initialed for a joint tax assessment. Please note, an appointee named on a Form 8821 is not authorized to receive a taxpayer’s refund check.

Let’s go on to slide nine, Notices and Communications. As stated on this slide, a notice and other written communication will be sent to the first named representative on the Form 2848 unless box 7a or 7b is checked. If box 7a is checked then the first two representatives will receive the notice.

If box 7b is checked then none of the named representatives will receive notices or other communications. However, for the Form 8821 no notices or other communications will be sent to the appointee unless box 5a is checked for the first appointee to receive notices. Regardless of what boxes are checked on either form, the taxpayer will continue to receive notices and communications.

Let’s go to the next slide for Retention and Revocations. As you know, a taxpayer can revoke a Power of Attorney and a representative withdraw from the Power of Attorney. In either case the request must be submitted in writing by mail or fax and it must list all of the tax periods and matters to be removed.

If you want to withdraw from representation or as an appointee the easiest thing you can do is to send a copy of the original Form 2848 or 8821; write across the top, “Withdraw,” then sign and date it directly below the word withdraw.

If you don’t have a copy of the form you may mail or fax a statement to the CAF function, but the statement must include a statement that this is a request to have the authority withdrawn; list the name; the taxpayer identification number; and the address of the taxpayer, tax matters, including specific forms and periods and it must be signed and dated.

If the taxpayer is revoking an authorization they can also use a copy of the form. If they don’t have a copy they can send a statement with the items that I had just mentioned along with a list of the names and addresses of each representative.

I want to point out that you cannot withdraw using a list of clients and respective ... unless the listing is an official, what we call a CAF 77 listing. The CAF 77 listing is a complete listing of all clients for a given representative. It may be obtained through a Freedom of Information Act request.

For example, if you are moving from one firm to another, but the clients are remaining with the old firm, using the CAF 77 listing and a written request is an effective way to withdraw your authorities for those taxpayers.

On the CAF 77 you can line through those clients for which you want to retain authority and fax it to the CAF function for processing. You can find complete information on submitting a Freedom of Information request at IRS.gov.

If you are retiring or going out of business and need to withdraw from representing all of your taxpayers you can submit a written statement with the current signature and date requesting retirement of your CAF number. This does not require the CAF 77 listing.

Rita will now cover signature requirements on the next slide, number 11.

Thank you, Anna. For either of the forms the taxpayer must sign and date the authorization for the authorization to be valid. If the return is filed as married filing joint, there is a difference in the signature requirements for each form.

For the Form 2848, if the authorization is for a joint representation, both spouses must sign and date the authorization. On Form 8821 if the authorization is for a jointly filed return either spouse may sign and date the authorization.

For a business entity an officer of the entity within the authority to bind the entity must include his or her signature, date and title held. See Form 8821 line seven instructions for persons who have signature authority.

If you are submitting an authorization for an estate or trust and have the authority under Section 6103(e) to execute the form on behalf of the taxpayer the relationship of the representative, for example, whether it’s a trustee, executor, surviving spouse for the estate or trust must be entered in the title section.

Form 56, Notice Concerning Fiduciary Relationship, must be submitted to establish the fiduciary relationship. The Form 56 must have been filed with the IRS previously or you may submit the Form 56 with the authorization and we will forward the form for additional processing.

However, if the Form 56 is not attached to the authorization and we cannot verify the fiduciary relationship then the authorization will not be processed and will be returned to you.

Next up is Declaration of Representative on slide 12. The representative must sign and date part two, Declaration of Representative, and enter the designation and jurisdiction for which the named representative is authorized to practice before the IRS. The representative is required to enter either their state or enrollment number, depending on the designation level. If the declaration is not signed and dated or does not provide the designation and jurisdiction the Power of Attorney will be returned.

Let’s move on to the Un-enrolled Return Preparer on the next slide. Many people are uncertain as to what the un-enrolled preparer is authorized to do under a Form 2848. An un-enrolled return preparer must have prepared the return and the return must be under examination. An un-enrolled return preparer is an individual, other than an attorney, a CPA, enrolled agent, enrolled actuary or an enrolled retirement plan agent.

The un-enrolled return preparer’s ability to practice before the IRS is limited. Generally, they are permitted to represent a taxpayer only before customer service representatives, revenue agents and other examiners or examination officers.

An un-enrolled return preparer cannot represent a taxpayer before other offices of the IRS, such as counsel, appeals or collection, including the automated collection system, ACS function. They cannot execute closing agreements. They cannot extend the statutory period. They cannot execute waivers, execute claims for refund, negotiate and execute installment agreements, nor receive refund checks.

An un-enrolled return preparer cannot submit a Power of Attorney for future years because no return has been prepared for those years as of the date the POA was filed. The IRS researches each tax matter listed on Form 2848 to verify that the named designation representative, the un-enrolled preparer actually prepared the return and the return is under examination.

For this reason it’s imperative that you complete the paid preparer block on the tax return to include not only your firm’s name and employer identification number, but your own signature accompanied by your Social Security number or your PTIN as the preparer of the tax return.

If we are unable to verify that you prepared the return or that the return is under examination the Form 2848 will be rejected and returned to the taxpayer. If you did not complete the paid preparer section on the return, but you did prepare the return you may resubmit the form along with a statement from the taxpayer indicating that you did prepare the return.

Forms 2848 designating an un-enrolled return preparer cannot be added to CAF through e-Services’ Disclosure Authorization Tool. These Powers of Attorney, Form 2848 must be submitted via fax or mail.

Now Anna will talk about joint filers on our next slide.

Often, IRS receives a Power of Attorney or a Taxpayer Information Authorization for joint filers. However, many times the returns covered by the form are not filed jointly or with the same taxpayer. When you have a couple requesting joint representation, please ask the couple for their specific tax filing history.

For example, ask did you file jointly for each year listed. If the response is no, please submit a separate Power of Attorney or TIA for those years where the taxpayer filed individually. If future years are to be included, be sure to list them on the separate authorizations rather than the joint.

If during research the IRS determines that one or more tax period was not filed jointly then we must separate the taxpayers according to filing status and process each taxpayer independently. This will help reduce processing delays.

Now, the next slide provides an example. John and Mary submit a Form 2848 or an 8821 as joint for tax years 2002 to 2010; however, during research IRS records indicate that John and Mary filed single for tax year 2002.

The authorization will be processed as joint for tax years 2003 through 2009, as Mary and John filed jointly for those years. But the authorization will be processed as separate for the tax year 2002 and 2010, as John and Mary did not file a joint return together.

The IRS treats future years as separate years since the return has not been filed yet. Now, we understand that your taxpayers may have historically filed jointly, but events do happen that may cause their filing status to change.

Now let’s talk a little bit more about processing these forms. Let’s turn to slide 16, please. In order to process a Form 2848 there are some rules regarding signature dates. The signature date of the representative must be within 45 days of the taxpayer’s signature date for domestic Power of Attorney or within 60 days for an International Power of Attorney.

However, if the taxpayer signs the Power of Attorney after the representative then the 45/60-day rule does not apply. As long as the signature date meets the 45 or 60-day requirement just stated, then the 2848 may be submitted and processed at any time.

If only tax matters are listed on line three, as stated before, the IRS can process the Form 2848 at any time; however, if there are specific use items listed those must be received within 60 days of the taxpayer’s signature to be valid.

In addition, the Form 2848 bearing the most recent date of the taxpayer, whether already processed to the CAF database or just received by fax or mail, is the document that controls who has representational authority for the taxpayer.

For this, as an example, is that a Form 2848 has already been processed to the CAF database with a taxpayer signature date of January 2010. However, another 2848 is received with a taxpayer signature date of November 2009.

The document would be the form with the taxpayer signature date of January 2010 even though the one dated November 2009 was received after the January 2010 date of signature. We use the most recent signature for the taxpayer.

Form 8821 must be filed within 120 days of the taxpayer’s signature for any specific use requests. However, if the sole purpose of the 8821 is to address tax matters the form does not have to be received within the 120 days of the taxpayer’s date of signature. Just as the Form 2848, the 8821 may be filed at any time.

Let’s go on to slide 17, Processing Timeframes. As you know, submitting a Form 2848 or 8821 through Disclosure Authorization Tool on e-Services is immediately posted to the CAF database; however, specific use requests cannot be processed through the e-Services Disclosure Authorization Tool since these are not loaded on the CAF database.

If you wish to submit both tax matters and specific use, we recommend that you submit one for the tax matters through DA and have the taxpayer sign another for the specific use issue.

Now, at this time the IRS is experiencing processing delays of Powers of Attorney and TIAs due to a considerable increase in receipts. Included in these receipts are duplicate filings of POAs and TIAs. Any duplicate power or tax authorization received must be researched to ensure all periods have been processed to the CAF database.

Due to the influx of receipts the IRS is taking about 15 days to process these types of authorizations. We expect to have the receipt inventory to a manageable level in about three weeks.

In addition, all authorizations are processed on a first in/first out basis. We are not giving priority to fax authorizations over those authorizations received via mail until the inventory is under control. To avoid duplicate processing, please do not fax and mail forms to all of our CAF processing sites at the same time.

Rita will now go over common reasons for rejection on slide 18.

Let’s start by going over some of the most common reasons for rejection for the Form 2848. The most common error types are related to signatures and signature dates. We see a lot of forms with missing representative or taxpayer signatures or signature dates. We cannot accept stamped or digital signatures; however, we do accept faxes.

Signature dates for taxpayers and representatives must be within 45 days of each other for taxpayers residing domestically or 60 days for those taxpayers residing overseas, including your FPO and APO addresses.

Another common error related to tax matters: Tax periods must be specifically listed. Statements, such as all periods or all future periods will not be honored. Listing a range of tax periods using the word through or placing a hyphen is acceptable.

For example, for Form 1040 you could state, “2000 through 2006,” or simply just put a hyphen between 2000 and 2006. The representative cannot re-delegate the representational authority to another individual unless the taxpayer has granted that delegation authority to the first representative. The taxpayer may specify this on line five of Form 2848; that the delegation authority has been granted.

We spoke a little while ago about revoking and withdrawing POAs, but I want to stress that if a new Form 2848 is submitted for the same tax matters the prior POA is replaced. Again, if the intent is to retain a previous POA check the box on line eight and attach the prior Form 2848. If the box on line eight is checked, but the earlier form is not attached the new Form 2848 will be rejected.

The delegation code, which designates the authority under which the representative is operating must be shown in section two of the Form 2848. You should also list the jurisdiction under which that authority was granted or your enrollment number for enrolled agents and actuaries.

As mentioned before, an un-enrolled return preparer must have prepared the return and the return must be under examination. If these two qualifications are not met the Form 2848 will be returned to the taxpayer.

Here are some additional tips for submitting an error free Form 2848: Use the correct CAF number. Make sure you’re using the same exact name and address for that CAF number for each POA submitted.

We will attempt to research and perfect this information to match what already exists on the CAF; however, often times duplicate CAF numbers are established for the same representative just because the information submitted is not the same as was originally submitted.

Only submit Power of Attorney requests for three future years. Remember that an un-enrolled return preparer cannot submit a POA for future years since they have not yet prepared those returns.

As stated earlier, stamped and digital signatures are not accepted.

Now we will provide you with some information on Form 8821 rejections. As with the Form 2848, again, missing taxpayer signature and/or date is one of the most common reasons that the Form 8821 is also rejected.

Having an incorrect taxpayer identification number, an SSN or an EIN is another common error on Form 8821 and 2848. We will attempt to research and verify the correct number, but if unable to do so we will return it to the taxpayer.

As you know, either husband or wife must sign the Form 8821 if the tax matter applies to a joint return. We receive many authorizations where joint taxpayers are listed on line one of the Form 8821; however, during research we determine that some of the years were not filed as joint for the named taxpayers. Consequently, we will only process the non-joint years for the signing spouse.

Now Anna will talk about transcript requests on the next slide.

IRS provides transcripts only to authorized third parties. We will verify the authorization by checking the CAF database or request the Power of Attorney or Tax Information Authorization if you’re calling one of our many telephone lines or visiting one of our Taxpayer Assistance Centers.

If you are registered on e-Services and have a Form 2848 on file you more than likely can obtain a transcript using the Transcript Delivery System or better known as TDS. Do not use the Form 8821 to request transcripts. If you need to contact the Practitioner Priority Service for a transcript, please note that at this time there is a limit on the number of transcripts you may obtain when calling.

You are limited to up to five taxpayers or up to ten transcripts per call. If you need more transcripts or have more taxpayers and have a Form 2848 or 8821 on file we suggest submitting the Form 4506-T, Request for Transcript of Tax Return.

The Form 4506-T may be submitted via fax or mail using the general instructions on page two of the form and/or if the practitioner is eligible to use the Transcript Delivery System.

Now let’s go on to the final slide, which lists some resources that could be very helpful to you and provide reference material. All of these resources can be accessed on the IRS Web site.