Form 2848 is also known as a “Power of Attorney and Declaration of Representative” and is one of many IRS forms. The purpose of Form 2848 is to authorize a designated individual or entity to act as a taxpayer’s representative before the IRS. In other words, when you want someone to work with the IRS on your behalf, you will need to fill out and sign Form 2848 to expressly state that they are authorized to represent you in certain tax matters.
When a taxpayer fills out and file Form 2848, they are granting a power of attorney to a designated representative, allowing them to perform various tax-related functions on their behalf. This includes the ability to receive and respond to IRS notices, represent the taxpayer during audits or examinations, and more.
Form 2848 is automatically limited in scope. You will typically have to note exactly what issues you are granting authorization for, as well as which specific tax periods. A Form 2848 does not allow you to transfer all responsibilities over your taxes to someone else, nor does it limit your liability as a taxpayer.
Understanding the limitations and authorities granted by Form 2848 is crucial if you intend to hire someone to perform certain tax duties for you, whether it’s completing a tax return, or representing you before a panel or IRS agent in the event of an audit.
While Form 2484 constitutes a limited power of attorney, it is not solely limited to attorneys. You can name a CPA, tax attorney, an enrolled agent, an employee, or even a family member as your representative in Form 2848. There are certain requirements that your designated representative will have to meet before they are granted any authorization by the IRS, however.
Understanding the Purpose of Form 2848
Form 2848 may be used to provide certain limited powers to a designated representative over a single tax account. These powers include:
- The ability to receive confidential tax information.
- The ability to sign a tax return if you are unable to do so (for example, you’re in a foreign country for the foreseeable future).
- The ability to sign agreements with the IRS.
- The ability to represent you before the IRS.
Form 2848 does not allow your representative to:
- Name another representative.
- Redirect a tax refund into the representative’s account.
- Take responsibility for your taxes or you tax debt.
Form 2848 is not always needed when working with a tax professional. If you don’t need someone to sign something on your behalf or actively negotiate with the IRS, for example, then you might be better served through a Form 8821. Form 8821, Tax Information Authorization gives a designated individual limited access to certain tax information, enough to advise you on tax matters, for example. Form 8821 is also often requested by lenders and mortgage banks, to review your financial data and determine eligibility for a loan, for example.
Requirements for Form 2848
The form requires the taxpayer’s information, the representative’s information, and specifies the scope of authority granted to the representative. Again, note that Form 2848 does not relieve the taxpayer of their responsibility for the accuracy of the tax return or the payment of any taxes owed. You will need to determine:
- Which exact matter the designated individual will help with (a late income tax return, for example).
- The form numbers of every form your designated individual will need access to (Form 1040 is your income tax return)
- The exact tax period for which that information should be divulged (from year to year, or a certain period length).
- Your representative’s personal details, including name and telephone number.
- Their Preparer Tax Identification Number (PTIN), which certifies them as a registered tax professional, and must be renewed annually.
- Their Centralized Authorization File (CAF) number, an additional identification number for the IRS to determine who your representative is.
You can find and print a Form 2848 from the IRS’ website directly. You must sign this form, and send it back to the IRS, either online, via fax, or via mail. If you’re filing online, you must create an electronic signature – one that is accepted by the IRS.
It should be noted that you can designate a tax professional as your personal representative through your own notarized and legally valid power of attorney. It is crucial, however, that your custom power of attorney contain all the same details and information already required on Form 2848. If anything is missing, such as your designated representative’s PTIN or CAF, the IRS may not accept the power of attorney as a substitute.
When is a Form 2848 Needed?
The IRS can be an obtuse organization to work with, especially if you’re on their bad side. Taxpayers who are facing a potential audit or are trying to push through an appeal to reconsider their tax liability may have a hard time cutting through the red tape and communicating with someone at the IRS. If you want a professional to handle the issue for you, then Form 2848 will grant them that authority.
If you simply need to send a CPA your basic tax information to prepare a tax return for you, and can’t bring them your documents yourself, then a detailed Form 8821 will grant them access to that information instead. Only choose a Form 2848 if you need someone to act in an official capacity or substitute your signature with theirs under very specific circumstances.
Finally, note that Form 2848 will also need to be filled out every time you want to change or revoke an ongoing power of attorney. If you intend to extend or retain a representative’s authority, for example, you will need to specify such under line 6 of the form. If you want to limit or even remove authority from a representative, such as forbidding them from signing anything in your name, you will need to specify such under line 5b.
A family member or employee can act as your designated representative, but only under strict and specific conditions. It is usually in your best interest to select and hire an experienced professional.
Contact Rush Tax Resolution today to learn more!