Tax Power of Attorney
By definition, a power of attorney is a legal document that authorizes a person to make medical or financial decisions on your behalf. For tax matters, you can designate a person to represent you before the IRS. To do that, you would be required to file a Power of Attorney - Form 2848. This Form is filed directly with the IRS.
Based on the actions authorized on the Form 2848, the tax power of attorney may allow your representative to:
Sign agreements or consents.
Access your IRS records.
Sign a tax return.
Authorize disclosure of information to third parties.
Substitute or add representatives.
A power of attorney may be revoked and you may designate a different person by filing a new Form 2848. Some states may require a separate power of attorney.
So...do you need a power of attorney? In most cases, probably not. If you are filing your returns timely and have not received correspondence from the IRS, there may not be an immediate need unless warranted by your health or other circumstances.
We assist clients with issues with the IRS through a tax power of attorney. Our clients may be requested to execute this Form in some of the following cases:
Notice of examination from the IRS
Notice of change of return by the IRS
Assessment of interest and penalties by the IRS
Delayed receipt of refund by the IRS
Incorrectly applied tax payments by the IRS
You may wait to sign a power of attorney until it becomes necessary or you can opt to sign one in advance of any tax problems.
This post may not contain a complete analysis of the tax issues discussed herein and does not represent official conclusions or advice regarding the matter.
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