Avoiding POA Problems with the IRS.

• Author: Ely, Mark H.
• Position: Power of attorney

Practitioners frequently encounter difficulties regarding the processing of Form 2848, Power of Attorney and Declaration of Representative. An Austin Service Center focus group has developed a list of the six most frequent errors encountered in processing power of attorney (POA) forms. The list is provided below in an effort to help practitioners minimize future problems.

Form 2848 consists of two parts. Part I is signed by the taxpayer and authorizes the representative to act on behalf of, or receive information with respect to, the taxpayer. Part II (Declaration of Representative) is signed by the representative and indicates the representative's status (attorney, CPA, enrolled agent, etc.).

Failure to Correctly Specify Type of Tax or Specific Matter

Item 3 of page 1 of Form 2848 asks for the "type of tax." The IRS cannot process a Form 2848 with a general reference to "all taxes" or "specific issues" The correct reference should be to "income" "estate" "excise" or other specific type of tax as appropriate. If the matter does not fit within one of these recognized categories, the matter should be specifically described. The Service does not enter all POAs into the Centralized Authorization File (CAF) system. The types not recorded in the system include: documents that do not relate to a specific tax year; documents that concern a tax year more than three years in the future; specific issue requests (e.g., a penalty issue); letter ruling requests; or requests to change accounting periods. In such cases, the representative checks a box on Form 2848 and must bring the POA to each meeting with the IRS.

Failure to Specify Title--Business Returns

Item 9 of page 2 of Form 2848 requires the signature of the taxpayer(s). Unless the title of the authorized signer is provided, the POA cannot be processed. For corporations, an officer with authority to bind the taxpayer must sign. All partners of a partnership must sign, unless a partner is authorized to act in the partnership's name. (A Tax Matters Partner is authorized to execute Form 2848 on behalf of other partners and the partnership.) For joint returns, both spouses must sign if they are represented by the same individual.

Missing Information--Declaration of Representative

Part II, Declaration of Representative, requires the signature, date and designation (CPA, attorney, officer, family member, etc.). Unless all authorized representatives complete all items, the POA will be returned.

Improper...