4.11.55. Power of Attorney Rights and Responsibilities

(1) This IRM provides examiners with information and guidance on interactions with taxpayer representatives and the required forms to make such a designation.

(1) By law, the Service has the authority to discuss income tax return information with a designated representative under Title 26, IRC, Subtitle F – Procedure and Administration, Chapter 61, Information and Returns which includes, but is not limited to, the following IRC section:

• IRC 6103, Confidentiality and disclosure of returns and return information.

(1) The Director, Headquarters Examination, is the executive responsible for providing policy and guidance for SB/SE Examination employees and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers’ rights. See IRM 1.1.16.3.5, Headquarters Examination for additional information.

(2) The Director, Examination Field and Campus Policy (formerly known as the Director, Examination AUR/Policy), reports to the Director, Headquarters Examination, and is responsible for the delivery of policy and guidance that impacts the SB/SE examination process. See IRM 1.1.16.3.5.1, Exam/AUR Policy for additional information.

(3) FESP, which is under the Director, Examination Field and Campus Policy, is the group responsible for providing oversight and policy and procedural guidance on specialized examination processes to SB/SE field examiners and managers. See IRM 1.1.16.3.5.1.2, Examination-Field Special Processes.

(1) Periodic program reviews are conducted by FESP to:

• Assess the effectiveness of specific programs within Examination or across the organization,

• Determine if procedures are followed,

• Validate policies and procedures, and

• Identify and share best/proven practices.

(1) The following table lists commonly used acronyms:

(1) The following table lists commonly used terms and associated definitions:

(1) The following table contains related resources referenced in this IRM.

(1) Practice before the Internal Revenue Service covers all matters connected with a presentation to the Internal Revenue Service relating to a taxpayer's rights, privileges, or liabilities under laws and regulations administered by the Internal Revenue Service. Such presentations include, but are not limited to:

1. Corresponding and communicating with the Internal Revenue Service;

2. Representing a taxpayer at conferences, hearings, or meetings with the Internal Revenue Service; and

3. Preparing and filing documents with the Internal Revenue Service for a taxpayer.

(1) Practitioners have the duty to perform certain acts and are restricted from performing other acts.

(2) A practitioner cannot engage in disreputable conduct. Any practitioner who does not comply with the rules of practice or engages in disreputable conduct is subject to disciplinary action.

(3) Circular 230 provides the regulations governing the practice of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, enrolled actuaries and appraisers before the Internal Revenue Service and must be consulted regarding rules of practice.

(4) Unenrolled return preparers must comply with the rules of practice and conduct to exercise the privilege of limited practice before the Internal Revenue Service. Rev. Proc. 81-38 and Rev. Proc. 2014-42 provide additional rules for limited practice by unenrolled return preparers. As part of the Annual Filing Season Program requirements for returns prepared and signed after December 31, 2015, unenrolled return preparers must consent to follow the regulations in Circular 230.

(1) A POA is a taxpayer's written authorization for an individual to perform certain specified acts on the taxpayer's behalf.

(2) The POA must include:

1. Name and mailing address of the represented party;

2. Identification number of the represented party (for example, social security number and/or employer identification number);

3. Employee plan number (if applicable);

4. Name and address of the recognized representative(s);

5. Description of the matter(s) for which representation is authorized;

6. A clear expression of the taxpayer’s intention concerning the scope of authority granted to the recognized representative(s); and

7. Declaration of Representative.

(3) Unless limited by the taxpayer, the authorized individual generally can:

1. Negotiate with the Internal Revenue Service on behalf of the taxpayer.

2. Advocate the taxpayer’s position to an Internal Revenue Service official or employees.

3. Offer or execute a waiver of restriction on assessment or collection of a deficiency in tax.

4. Offer or execute a waiver of notice of claim disallowance.

5. Execute a consent to extend the period of assessment or collection of tax.

6. Execute a closing agreement.

7. Receive, but not endorse, a check drawn on the United States Treasury with respect to a tax.

8. Specific election on line 5a of Form 2848, Power of Attorney and Declaration of Representative.

(4) The authority granted to an unenrolled return preparer cannot exceed what is allowed under the special rules of limited practice described in Rev. Proc. 81-38 and Rev. Proc. 2014-42.

(1) A TIA is a disclosure authorization that conforms to the requirements of IRC 6103, Confidentiality and disclosure of returns and return information.

(2) Form 8821, Tax Information Authorization, authorizes any individual, corporation, firm or partnership the taxpayer designates to inspect and/or receive confidential information from any office of the Internal Revenue Service for the type of tax matters and taxable periods listed on the form. See IRM 4.11.55.2, for more information.

(3) Use of Form 8821 itself is not mandatory; however, this is the only TIA that will be processed to the CAF. Authorizations not on Form 8821 will be accepted for release of information, provided they conform to IRC 6103, Confidentiality and disclosure of returns and return information requirements. A copy of the non-Internal Revenue Service TIA document must be retained in the case file.

(4) An appointee cannot sign a closing agreement or tax return, or receive a refund check.

(5) Form 8821 allows a third party to obtain tax information such as a copy or transcript of a filed return and copies of notices and communications, but does not authorize a third party to represent a taxpayer during audit.

(1) The signature of the taxpayer is required in order to appoint a representative. The person required to sign the POA is dependent upon the type of entity involved.

(1) The Internal Revenue Service has available forms that a taxpayer can use to designate a representative or provide tax information authorization.

(1) Upon receipt of a POA, Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, the employee must ensure that all required elements are properly completed and the form must be date stamped.

(2) Form 2848 or Form 8821 may be a fax or a copy. If there are questions concerning forgery or its validity, the representative could be required to produce the original.

(1) A new POA or TIA regarding the same tax matter(s) and tax period(s) revokes a prior POA or TIA unless the box on step 6 of Form 2848, Power of Attorney and Declaration of Representative, or the box on step 6 of Form 8821, Tax Information Authorization, is checked. If the box is checked, a copy of the POA or TIA not being revoked must be attached.

(2) A Form 8821 will never revoke a previously submitted Form 2848, and a Form 2848 will never revoke a previously submitted Form 8821.

(3) A taxpayer can revoke an existing POA or TIA without naming a new representative/authorized person. There are two ways a taxpayer can accomplish this:

1. File a copy of the POA or TIA to be revoked with each office of the Internal Revenue Service where the POA or TIA was filed. This copy must have a current signature and date under the signature already on line 7 (Form 2848) or (Form 8821) and the word "REVOKE" written across the top of the first page with a current signature and date below this annotation.

2. File a revocation statement with each office of the Internal Revenue Service where the POA or TIA was filed. The statement of revocation must indicate that the authority of the POA/designee is revoked and must be signed by the taxpayer(s). Also, the name and address of each recognized representative/designee whose authority is revoked must be listed.

(4) A recognized representative/designee may withdraw from representation by filing a statement with the Internal Revenue Service office where the POA or TIA to be revoked was filed. The statement must be signed and dated by the representative/ designee and must identify the name(s), TIN, address of the taxpayer(s), and the tax matter(s) from which the representative/designee is withdrawing.

(5) Upon receipt of a document (POA, TIA, revocation statement, or withdrawal statement) revoking an authorization, the examiner must:

1. Make a copy of the document and send the copy to the CAF Unit where the original POA or TIA was filed as soon as possible or within 24 hours of receipt; and

2. Attach the original document to the prior Form 2848 or Form 8821, attached to the tax return.

(1) Original notices and other written communications will be sent to the taxpayer and a copy to the first and second listed representative(s) if the taxpayer checks appropriate boxes on the Form 2848, Power of Attorney and Declaration of Representative.

(2) Original notices and other written communications are sent to the taxpayer and a copy to the appointee, if the taxpayer checks the appropriate box on Form 8821, Tax Information Authorization.

(3) If copies of letters and notices are sent to the authorized designee, Form 3198, Special Handling Notice For Examination Case Processing, must be annotated to reflect this requirement under the section titled "Letter Instructions for CCP" found on page two.

(1) IRC 7521(c), Representatives Holding Power of Attorney permits a representative authorized by a taxpayer to represent that taxpayer at any interview. A taxpayer may not be required to accompany a representative in the absence of an administrative summons.

(2) IRC 7521(b), Safeguards require taxpayers to be clearly informed of rights to be represented at interviews and to suspend the interview if the taxpayer wishes to consult with a person authorized to practice before the Internal Revenue Service. Pub 1, Your Rights as a Taxpayer, and Pub 3498, The Examination Process explain these rights.

(3) Examiners must not violate or give the perception of violating the taxpayer's right to representation.

(4) Although a request for the taxpayer's voluntary presence must be made through the representative, the taxpayer's presence will not be mandated as long as the person being interviewed:

1. Has first hand knowledge of the taxpayer's business, business practices, bookkeeping methods, accounting practices and the daily operation of the business;

2. Provides factual, reliable information to questions asked by the examiner;

3. Timely provides follow-up information for any questions that could not be answered at the time of the initial interview; and

4. Has a properly executed Form 2848, Power of Attorney and Declaration of Representative, or equivalent POA. See IRM 4.11.55.2.7, for more information.

(5) If the taxpayer is not available for the initial interview, or if the representative is resolute in not having the taxpayer present at the initial interview, the examiner must attempt to conduct the initial interview with the taxpayer's representative.

(6) In many cases, the taxpayer will be the only one who has the information necessary for the examiner to determine the accuracy of the books and records. This has a direct bearing on the ultimate scope and depth of the examination. If the examiner determines the representative does not have sufficient knowledge of the taxpayer and the business to provide factual information, the examiner must request an interview with the individual who has first-hand knowledge of the taxpayers business operations.

(7) If the taxpayer's representative does not comply with the request to interview someone more knowledgeable, including the taxpayer, the examiner must consider management involvement and/or an administrative summons.

(1) The Taxpayer Bill of Rights does not alter the right and obligation of the examiner to control the examination.

(2) The examiner has the right to determine the time and place of the examination under IRC 7605, Time and Place of Examination, as long as the examiner does not abuse this right. The time and place of the examination must be reasonable and the examiner will attempt to accommodate reasonable requests. See IRM 4.10.2.9.2, Place and Time of Examination. Neither the taxpayer nor the taxpayer's representative will be allowed to control or unduly influence the scope or depth of an examination.

(3) The examiner sets the scope and depth of the examination. The examiner must exercise professional judgement to determine what books, records, and accountant’s work papers to request. See IRM 4.10.2.10, Requesting Information: Overview. The examiner must be firm yet courteous in his or her demeanor with the representative and taxpayer.

(4) Examiners must be aware that an uncooperative representative may employ one or more of the following tactics in an attempt to gain control of the examination:

• Procrastinating.

• Failing to provide requested documents.

• Failing to attend conferences.

• Constantly questioning the need for certain information.

• Denying the examiner access to the taxpayer.

• Demonstrating abusive and/or aggressive behavior and attitude.

(5) Examiners will document all contacts, cancellations of appointments, and unanswered telephone calls and letters.

(6) If a pattern of noncooperation is developing, the examiner must notify the manager. Depending on the circumstances, the examiner and the manager will consider:

1. The group manager’s involvement to assist in moving the examination forward;

2. Issuing an administrative summons. See IRM 4.11.55.3, for additional guidance, and

3. By-passing the representative. See IRM 4.11.55.4, for additional information.

(1) IRC 7525, Confidentiality Privileges Relating to Taxpayer Communications creates a statutory confidentiality privilege for communications from a taxpayer to any "federally authorized tax practitioner" concerning "tax advice."

(2) Although this communications privilege is partly defined by reference to, and is no broader than, the attorney-client privilege, it is clearly a different privilege, created solely by statute, and defined as much by the statutory language as by reference to the common law attorney-client privilege.

(3) The confidentiality protection applies to communications that would be considered privileged if they were between the taxpayer and an attorney and that relate to non-criminal:

1. Tax matters before the Internal Revenue Service, or

2. Tax proceedings brought in federal court by or against the United States.

(4) Federally authorized tax practitioner - Any person described in Circular 230 who is an Attorney, CPA, Accountant, Enrolled Agent, Enrolled Retirement Plan Agent, or Enrolled Actuary.

(5) Tax advice - Advice given by a federally authorized tax practitioner acting within the scope of authority to practice before the Internal Revenue Service.

(1) If any of the following occur, the employee must document the case file:

1. The representative impedes or delays an examination by failing to submit the taxpayer's records or information requested by the employee.

2. The representative impedes or delays an examination by failing to keep scheduled appointments.

3. The representative impedes or delays an examination by failure to return telephone calls and written correspondence.

(2) If a trend is noted and the examination is being hindered because of the representative, the examiner will notify the group manager of the representative's actions. The manager will ensure that all reasonable efforts have been taken to work directly with the representative and that the case file sufficiently details the facts that support how the representative has delayed or hindered the examination.

(3) Prior to initiating by-pass procedures, the following steps must be taken, depending on the circumstances:

1. If the employee has not done so already, the taxpayer will receive copies of all written correspondence to the representative. This includes all IDRs.

2. Either Letter 4020-A, Warning for Bypass Procedures for Preparers covered under Circular 230, (attorneys, CPAs, enrolled agents and enrolled actuaries) or Letter 4020-B, Warning for Bypass Procedures for Unenrolled Preparers, must be prepared and sent to the representative from the group manager advising the representative of responsibilities under Circular 230 and conveying advance notice of a possible by-pass because the representative is violating Circular 230. Copies of prior document requests, a list of outstanding items and a brief chronology of events must be attached to the letter. A copy of the letter will not be sent to the taxpayer.

   Caution: The taxpayer will not be sent a copy of the warning letter. A copy of the letter must be sent to the Territory Manager, and the Area Return Preparer Coordinator must be contacted and advised of the possible by-pass.

(1) If the representative delays or refuses to provide the information requested after repeated attempts, a by-pass request must be prepared for the territory manager's signature.

(2) The decision to seek a by-pass rests with the employee and group manager. In taking such an action, the following items must be considered:

1. It is imperative that the case file be properly documented with the efforts made by the employee to obtain the information and the actions (or lack thereof) of the representative. It is suggested that when the employee first suspects uncooperative behavior all appointments and document requests must be confirmed in writing.

2. As previously mentioned, prior to initiating the by-pass procedures, the group manager may contact the representative in writing and advise him of his responsibilities under (Circular 230) Regulations Governing Practice before the Internal Revenue Service and explain the consequences of his continued conduct.

3. The permission to by-pass must be obtained from the territory manager. A letter to the representative from the territory manager must be prepared. Letter 4020-C, Final Bypass, must be used for this purpose. The letter must outline the facts and circumstances which constitute the basis for the by-pass. The letter is prepared by the employee with the assistance of the area return preparer coordinator, as needed. This letter must be routed through the examiner's group manager and the area return preparer coordinator to the territory manager for signature.

4. The employee may not circumvent the representative until the territory manager approves the by-pass by signing and issuing the letter in item above to the representative.

(3) The by-pass permits the employee to contact the taxpayer directly. The practitioner can continue to represent the taxpayer, if accompanied by the taxpayer. The representative will be afforded the courtesy of being advised of the time and place for future appointments with the taxpayer.

(1) A summons must be utilized as opposed to by-pass procedures in the following circumstances:

1. The taxpayer and the representative are both intentionally uncooperative.

2. The representative refuses to provide the requested documentation when they believe this documentation is privileged or that the request for such records is of doubtful legality. Issuance of a summons in this situation permits the representative to request a court to consider the legal issue of privilege or whether the information is relevant and material to the examination.

(1) A referral to OPR is a consideration to institute disciplinary action against a practitioner. If OPR has reason to believe that a provision of the law or regulations governing practice before the Internal Revenue Service has been violated based on the referral, OPR may reprimand or institute proceedings for disbarment or suspension. Each referral must describe and document the practitioner's actions in order to support potential disciplinary action.

(2) Announcements of censures, disbarments, and suspensions normally are published in the Internal Revenue Bulletin. Also, employees can access this listing via OPRs intranet website at https://www.irs.gov/tax-professionals/enrolled-actuaries/disciplinary-sanctions-internal-revenue-bulletin.

(3) As long as the preparer's name appears on the list, they are not permitted to appear before the examiner as an advocate with or without the taxpayer, but only as a witness for the taxpayer under Rev. Proc. 68-29.

(1) OPR exercises jurisdiction over all professionals who practice before the Internal Revenue Service, including unenrolled tax preparers.

(1) The CAF is an automated file containing information on the authority of representatives that will allow the Internal Revenue Service to handle matters regarding authorizations and representatives quickly and efficiently. The CAF allows employees to identify representatives and the scope of authority.

(2) Employees must check IDRS before the start of an examination to see if there is a POA or TIA on file for the specific tax period for the taxpayer. The following codes on a transcript will reflect if a POA is on file:

1. ENMOD - will display a "C" in the "CAF" indicator next to the SSN if a POA is present on at least one tax period.

2. TXMODA - will display a "1" in the "CAF" indicator next to the ASED and CSED if a POA is on file for the tax period requested.

3. Transaction Code 960 - will be present on a transcript of account if a POA is on file for the tax period requested.

   Caution: A Transaction Code 960 only indicates a Form 2848, Power of Attorney and Declaration of Representative, was processed by the CAF unit. It does not mean the alpha designation is correct. For additional information on verification of the alpha designation, see IRM 4.11.55.2.1.2.

4. The IDRS CC CFINK must be requested for additional information.

(1) The CAF contains taxpayer records regarding POAs on file with the Internal Revenue Service. It contains the years for which POAs are on file for a given taxpayer.

(2) The IDRS CC that is input to access the tax periods for which a POA is present is "CFINK". The CFINK command with the taxpayer's TIN will yield a listing of all years for which a POA is on file. IRM 2.3.31-1, CFINK with Taxpayer SSN through IRM Exhibit 2.3.31-10 provides a description of all the information available via IDRS CC CFINK and RPINK:

1. Name and CAF number of the representative,

2. Date the POA was signed,

3. Last action to CAF for this representative for this taxpayer,

4. Type of Representative (attorney, CPA, enrolled agent, etc.),

5. Whether the representative is authorized to receive correspondence,

6. Whether the duties the representative is authorized to perform have been changed or modified,

7. Form number,

8. If it is a blind trust. In which case, only one representative is authorized to receive confidential information,

9. If the POA was submitted with the original filed return, and

10. If the tax year on the Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, has been revised.

(3) CC CFINK input with the CAF Number of the representative will provide the following information:

1. The first and second representatives' names,

2. The representatives' addresses and telephone numbers,

3. The date the POA was signed.

(1) CAF contains representative records. It contains the name and address information for the representative. RPINK is the IDRS CC used to access this information if the representative's CAF number is available. For a complete discussion of the use of this CC and the information available via this CC, see IRM 2.3.31.3, Command Code RPINK — Description and Use.