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Taxpayers can authorize a third-party representative to work with the IRS on their behalf. This representative can be a family member, friend, or tax professional. Different types of representatives need different authorizations before they can represent the taxpayer to the IRS.
Types of Third-Party Authorizations
- Power of Attorney: This authorization allows someone to represent a taxpayer in tax matters before the IRS. The representative must be an individual authorized to practice before the IRS.
- Tax Information Authorization: This authorization appoints a person to review or receive a taxpayer’s confidential tax information for a specific period of time.
- Third Party Designee: This authorization designates a person on the taxpayer’s tax form to discuss that specific tax return and tax year with the IRS.
- Oral Disclosure: This authorization authorizes the IRS to disclose the taxpayer’s tax information to a person the taxpayer brings into a phone call or meeting with the IRS about a specific tax issue.
Revoking a Third-Party Authorization
A taxpayer can choose to revoke any authorization at any time. Third-Party Designees and Oral Disclosures expire automatically. Power of Attorney and Tax Information Authorization stay in effect until the taxpayer revokes the authorization or the representative withdraws it.
How to Revoke a Third-Party Authorization
There are two ways for a taxpayer to revoke any authorization:
- Authorize a new representative. If a taxpayer authorizes a new representative for the same tax matters and periods/years, the new authorization will automatically revoke the prior authorization unless the taxpayer chooses to retain the prior representative by checking the box to retain and attaching prior copies of any authorization they want to remain in effect.
- Send a revocation to the IRS. Taxpayers can follow the revocation instructions in Form 2848, Power of Attorney and Declaration of Representative for Power of Attorney. For Tax Information Authorizations, they should follow the revocation instructions for Form 8821, Tax Information Authorization.
Even with an authorized third party representing them, taxpayers are ultimately responsible for meeting their tax obligations.
There are many benefits to using a CPA for IRS tax representation
CPAs are highly trained and experienced in tax law and procedure. They can help you with a wide range of tax issues, including:
- Audits: CPAs can represent you during an IRS audit and help you to resolve any issues that may arise.
- Tax disputes: If you have a tax dispute with the IRS, such as a disagreement over the amount of tax you owe, a CPA can help you to negotiate a settlement or represent you in court.
- Tax planning: CPAs can help you to develop a tax plan to minimize your tax liability and maximize your tax savings.
- Tax preparation: CPAs can help you to prepare your tax returns accurately and completely.
In addition to their technical expertise, CPAs are also experienced in dealing with the IRS. They know how to communicate with the IRS effectively and how to navigate the IRS bureaucracy. This can be a huge advantage if you are facing a complex tax issue or if you are dealing with an uncooperative IRS representative.
Here are some specific reasons why you should use a CPA for IRS tax representation:
- CPAs are experts in tax law and procedure. They have the knowledge and experience to help you with any tax issue, no matter how complex.
- CPAs are authorized to represent you before the IRS. This means that they can communicate with the IRS on your behalf and negotiate on your behalf.
- CPAs can help you to avoid costly mistakes. By preparing your tax returns accurately and completely, and by representing you during audits and tax disputes, CPAs can help you to save money in the long run.
- CPAs can help you to reduce your stress. Dealing with the IRS can be stressful and time-consuming. By hiring a CPA to represent you, you can free yourself up to focus on other things.
If you are facing a tax issue, it is important to seek professional help as soon as possible. Brownsberger & Messineo, LLC is a full-service CPA firm dedicated to providing our clients with the highest quality accounting and tax services. We can help you to resolve your tax issue quickly and efficiently, and can help you to minimize the negative impact on your finances.