Simplification of third-party authorization process.

• Author: Ely, Mark H.
• Position: New IRS rules governing taxpayer representation; Oral Disclosure Consent and Oral Taxpayer Information Authorization

Without any fanfare, the IRS has implemented two new avenues for taxpayer representation without the need for a Form 2848, Power of Attorney and Declaration of Representative. The two methods are called Oral Disclosure Consent and Oral Taxpayer Information Authorization. Both methods were effective April 1, 2001.

The Oral Disclosure Consent is the most limited. This method allows the taxpayer to call the Service and establish disclosure authority for all types of tax accounts for his designated representative. The taxpayer simply tells the IRS the name of his representative. Once established, the designated person may call the Service to resolve the taxpayer's problem. However, the authority is good only for two weeks, in which time the IRS expects to be able to resolve the taxpayer's issue. The Service has indicated that this authority can be renewed for an additional two weeks.

The Oral Tax Information Authorization is for those issues likely to take longer to resolve. This authority will last for one year; the IRS likens this to a paperless Form 8821, Tax Information Authorization. This method also allows the taxpayer to call the Service and establish disclosure authority for all types of tax accounts. But, in this case, the designated representative will have to have a Centralized Authorization File (CAF) number established before the taxpayer calls. The taxpayer must give the CAF number of his designated representative to the IRS to establish this authority. The representative may then immediately call the Service to discuss the taxpayer's issue.

Practitioners have long...