Category: Taxpayer Representation

What years do I include on my Power of Attorney (2848 – POA) or Tax Information Authorization (8821)

I frequently get asked by tax professionals who handle representation work (Collections and Exam), what years do I put on a Power of Attorney aka POA (Form 2848) or Tax Information Authorization (Form 8821) when I am trying to get information on a taxpayer/client, research what years they have filed or not, or need to see what payments or credits were applied?

Here is what I usually say to them. It depends. (I bet you didn’t see that one coming)

If you are having a discussion with a client and they tell you they believe the last time they filed was about 6 years ago, at a minimum I will start about 9-10 years prior to the year they said. So, if they say they last filed in 2016, then I will generally put on the Form 2848 or Form 8821 2013 to the current year.

If you just need information for 2021, in general, I still suggest putting at least 3 years prior to 2021. That would mean 2018 to 2021.

If they are really unsure or there is a very reasonable doubt as to the starting year, I will usually go back to the year 2000. I will explain to the client as it will keep me from having to go back to them and ask for another one causing further delay. I will generally tell them it can take 3-5 weeks for the IRS to process my POA (which often it does, but as of the time I am writing this, they are generally taking a week or less).

Now the next question is why would I do that? Well, there are a few reasons.

  1. the client’s fuzzy recollection may cause you to have to do another POA if you did not get all of the necessary years. For many clients, it is difficult to get them to sign one (not mention a lot of work by my team), but to two it two or more times is crazy.
  2. If you need to see if your client qualified for a first-time penalty abatement opportunity, then you will need to see if they have a clean history for the 3 years prior to the year at issue.
  3. If you don’t get it right, the IRS cannot tell/give you anything about years you do not have authority for. Occasionally, I have had a nice IRS employee on the phone tell me there is an
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Taxpayers Have a Right to Challenge IRS Positions

While getting ahold of the IRS right now might seem like an impossible challenge, the customer service issues caused by the COVID-19 pandemic don’t change the fundamental rights that all taxpayers have. Today, the IRS issued Tax Tip 2020-171, reminding taxpayers of their rights to challenge any position the IRS takes in regards to their tax matters. In addition, the IRS reminds Americans that they have the right to be heard. Again, it may not quite feel like it right now, with the increased difficulty in getting through to the IRS and actually be heard, but it is still a right that all taxpayers have.

As outlined in the Taxpayer Bill of Rights, taxpayers have the right to:

  • Raise objections.
  • Provide additional documentation in response to formal or proposed IRS actions.
  • Expect the IRS to consider their objections timely.
  • Have the IRS consider any supporting documentation promptly.
  • Receive a response if the IRS does not agree with their position.

With the current mail backlog running an estimated 3 million pieces of mail, and phone line hold times exceeding two hours on many days, it’s more difficult than ever for the IRS to meet the customer service expectations they’ve set, and that you expect. This issue is not falling on deaf ears at the Service, nor has it gone unnoticed by Congress. Over the past few months, the IRS has hired a few hundred new customer service agents, and has a couple hundred openings right now for seasonal/temporary positions in an effort to resolve some of these issues.

Challenging IRS Positions

Here are some specific examples illustrating a taxpayer’s right to challenge the IRS’s position.

In some cases, the IRS will notify a taxpayer that their tax return has a mathematical or clerical error. If this happens, the taxpayer will be provided a 60 day period in which to tell the IRS that they disagree. In response, the taxpayer should provide copies of any record that may assist the IRS in correcting the error. The taxpayer may call the number listed on the IRS notice for assistance, and also has the right to retain representation to act on their behalf. If the IRS upholds the taxpayer’s assertion, taxpayers should expect the Service to make timely corrections to their accounts.

But what happens if the IRS doesn’t agree with your challenge?

In such a situation, the IRS will send another notice that proposes a specific adjustment … Continue reading

IRS announces Taxpayer Relief Initiative to help those financially impacted by COVID-19

The IRS is following up on their People First Initiative from summer 2020 with some new administrative program changes to make life a little easier for taxpayers that owe back taxes and are not in a position to immediately repay those tax debts. While these are not new programs, the IRS is attempting to make it easier for taxpayers to take advantage of the existing programs, by increasing access to relief.

Under this new initiative:

  • Taxpayers now have 180 days to pay tax debts on a short-term payment plan, up from 120 days.
  • For taxpayers already paying on a previously accepted Offer in Compromise, the IRS is now offering some flexibility on the payment terms of that accepted offer.
  • Individuals with an existing payment plan on a tax debt will automatically have new tax debt balances tacked on to their existing payment plan.
  • As per March 2020 changes to the Internal Revenue Manual, certain individuals with income tax debts less than $250,000 no longer need to submit financial documentation in order to obtain a payment plan. This option is only available via call center staff, not cases that are assigned to field agents.
  • For individuals that only owe 2019 tax debt, and owe less than $250,000, the IRS may agree to not file a Notice of Federal Tax Lien (NFTL) against the taxpayer.
  • IRS is now allowing some individuals with existing Direct Debit Installment Agreements to use the IRS website tool (Online Payment Agreement) to modify their payment plan to lower their monthly payments.

If you owe back taxes to the IRS, you may qualify for these simplified options to take care of your tax problem.… Continue reading