Tax Form 2848, Power of Attorney and Declaration of Representative Definition

Tax Form 2848 Power of Attorney and Declaration

Look no further than Tax Form 2848 – the power of attorney and declaration of representative definition. This form may seem intimidating at first glance, but understanding its purpose can save you time, money, and stress in dealing with your taxes. In this blog post, we’ll break down everything you need to know about Tax Form 2848 and how it can benefit you as a taxpayer.

Essentially, Tax Form 2848 is referred to as the Power of Attorney and Declaration of Representative document which is authorized by the IRS. This document is meant to authorize an individual or an organization to be able to represent a taxpayer for appearing before the IRS. This is especially important for Audits. As per Federal laws, it is necessary to keep all the information confidential that has been supplied to you on your tax return. Hence, it is recommended that the individual files Tax Form 2848 with the IRS before anyone else other than oneself, in order to be able to receive and inspect the tax information that will be represented by you to the IRS.

The Main Purpose: Why File the Tax Form 2848

Tax Form 2848 is quite similar to the Power of Attorney-POA. However, this tax is not in any way related to relieving or indemnifying the taxpayer of any tax liability. Once the individual signs the Tax Form 2848, a Certificate Public Accountant-CPA has been authorized for an attorney or any other person who has been designated as an agent to able to take certain actions on the behalf of the individual in question. The other aspects of the purpose also include:

  • To receive confidential tax information.
  • To sign an agreement with the IRS with regards to taxes, on the tax returns as specified on Form 2848. 
  • To sign the documents that request extra time to assess the tax obligation along with the extra time in order to agree to a tax adjustment.
  • To be able to sign a tax return in a limited situation.

So, what do we mean by a limited situation? Well, this could refer to a case when you are suffering from a disease or an injury. Also, in case you reside outside of the United States for 60 days continuously, before the date that the return needs to be filed. In other cases, like when you are on a holiday, before or after the return has been prepared and needs to be filed. Hence, you need to submit a request in writing to the IRS for permission for some other person, like a taxpayer to sign your return.

  • Nevertheless, Tax Form 2848 is not a blanket grant of authority order to do everything related to the taxes on your behalf. For example: 
  • To endorse or negotiate a refund check, or to direct that a refund can be deposited electronically into the agent’s account. 
  • To substitute another agent for themselves, although one can specifically authorize this.

What is Authorized Tax Form 2848

The authority or any other designated individual is allowed to carry out a few specific actions on your behalf:

  • To be able to receive confidential tax information.
  • To be able to perform those acts that can not be otherwise done, such as the signing of the agreement with the IRS concerning the taxes on the returns specified on Tax Form 2848. 
  • To be able to sign the tax return in limited situations like if the individual is suffering from an injury or illness.

One can also authorize a student who works in a qualified Low-income Taxpayer Clinic-LITC or Student Tax Clinic Program-STCP in order to represent. This can be done under a special appearance authorization that has been issued by the Taxpayer Advocate Service. 

Once the qualified representative has been authorized, then the individual will be able to inspect and receive the required confidential tax information. 

Read More-: Tax Form W-7 Application for IRS Individual Taxpayer Identification Number

Using the Non-IRS Power of Attorney Form

In this case, the POA is a legal document that allows an agent to be able to act on your behalf. This can be used instead of Tax Form 2848 under specific conditions. This ‘feature’ can be utilized when someone is either ill or disabled and are not fit to take charge of their financial situation.

The Power of Attorney Needs to be:

  • Able to authorize the agent to act in matters related to taxes. In case the POA is a blanket grant of authority, no specific grant of authority in the matters of taxes is required. However, the POA is unable to restrict the agents’ actions in matters of taxes. 
  • It contains all the details required in the government’s form.

Also, the agent can act under your power of attorney form and can sign the form on your behalf as well.

Revoking the Power of Attorney

There are times and situations when one would need to change the agents. This can be when you need to hire a new CPA as you are not happy with the kind of representation of the CPA to whom the original authority has been granted. In this case, you need to complete a new Tax Form 2848. When filing a form for a new agent, this automatically revokes a former POA as long as the previous agent is in the CAF system. Hence, bear in mind that the number assigned to your agent is important. 

In case you are simply adding a new POA and not revoking a former one, then you need to indicate this by checking the box in line 6 on Tax Form 2848. Likewise, it is also necessary that you need to attach a copy of the former Tax Form 2848 along with the new form.

Who Needs to File them?

This can be filed by any person who wishes to be represented by an authorized power of attorney when meeting with the IRS. Such an individual can easily fill out and submit Tax Form 2848. When we talk about the authorized individual we are referring to individuals or organizations which also include the likes of attorneys or law firms, enrolled agents, and CPAs. These agents can completely represent the taxpayers to the IRS. 

Likewise, the IRS also allows the individuals that are related to the taxpayers, such as the family members or the fiduciaries to ‘act’ like third-party representatives. Nevertheless, the access is limited and they can represent taxpayers only in the presence of customer-service agents, revenue agents and other similar IRS employees. The closing agreements cannot be executed by them and the same is applied to the waivers or refunds. Also, they cannot sign documents for the taxpayers.

Steps to File the Tax Form 2848: Power of Attorney and Declaration of Representative

In order for the form to be effective, one needs to specify the tax form and the year for which the authority has been granted. Here are a few tips on how to fie the Tax Form 2848 correctly:

  • The description of the matter, for instance, the income taxes
  • The tax form number for example Tax Form 1040 X. Also simply declaring ‘all forms’ is not enough. 
  • The year or period of application for instance the year to be ‘2020’ or ‘2023’. Likewise, declaring ‘All years’ and ‘all periods’ is not a good idea.

Also, it is recommended that one needs to offer sufficient details regarding the agent you have appointed or any other representative like:

  • Name, Address, Telephone Number, and the Fax Number.
  • The PIITN or the Preparer Tax Identification Number, the attorneys, the CPAs, enrolled agents, and the paid tax preparers need to renew annually. 
  • The CAF or the Centralised Authorized File Number is used by the IRS to identify the representative.

The individual needs to sign the form, and in case of ‘joint filing,each spouse needs to file the form individually in order to grant them the authority and separate filing of Tax Form 2848 to the appropriate representative. Here the individual does not need to use the same representative.

Now, let us take a look at Tax Form 2848 in a line-wise manner:

  • Line 1: The Taxpayer Information: Here you need to enlist your parent’s personal information as your parents are the taxpayers who will be using the form to appoint the representative. Also, be sure to list your parent’s Social Security Number as well.
  • Line 2: The Representative: Here you need to enlist your personal information in case you need to be a representative. Also, include the CAF number and in case you don’t have one, you need to enter ‘None’ and the number will be assigned to you by the IRS.
  • Line 3: Acts Authorized: These are the acts you, the representative are being authorized to perform. In case the filing a return for a parent, one needs to list the ‘income’ under the ‘Description of Matter’. In case you are filing for the basic tax return for your parent then you need to write Tax Form 1040 for the tax number. Also, you need to be specific under the ‘Years of period’, section. Be sure not to enter ‘All years’. Instead, you need to enter the current tax year for which the filing is being done. Likewise, you can also list the series of years to cover the past and future filings. Finally, bear in mind that one can only list up to three future years from the year the power of attorney form has been filed.
  • Line 4: Specific USe Not Recorded on CAF: This box needs to be marked only if the power of attorney designated is specific use or one-time use.
  • Line 5 (a): Additional Acts Authorized: This needs to be entered in case you need to sign your parent’s Tax return because your parent can no longer do so on their own. The following statement needs to be entered, as instructed by the IRS:
“This power of attorney is being filed according to 26 CFR 1.6012-1(a) (5), which requires a power of attorney to be attached to a return if a return is signed by an agent because of [enter the specific reason listed under (a), (b), or (c) under Authority to sign your return above].”

Generally, most people list the reason to be (a) disease or injury. Reason (be) relates to a taxpayer in case they are out of the country and the returns cannot be filed as a result. The reason © is for special permission in order to act as a representative for any other cause

  • Line 5(b): Specific Acts Not Authorized: This space can be left blank until there are specific acts that cannot be performed by your parent.
  • Line 6: Revocation/Retention of prior power of Attorney: This box needs to be marked only if the previously appointed power of attorney by your parent and you do not wish for the power of attorney to be revoked with the appointment of yourself as the new representative of your parent.
  • Line 7: Signature of Taxpayer: This space needs to be signed by your parent in case he or she is still competent of signing. In case this does not happen, you can sign as the power of attorney and list POA under your parent’s name as your title. Now, print your name and the name of your parents on behalf of whom you are signing up.

Part II-Declaration of Representative: Here one needs to list the letters that can best describe you. Generally, it can be an ‘F’ if you are a family member. Also, you need to list your relationship to the taxpayer under the license jurisdiction. Also under the licensing jurisdiction, you need to list the relationship between yourself and the taxpayer. Finally sign, date and form.

Also Read-: Tax Form 1120-F

Conclusion

These are the details and the information related to tax form 2848. Filing taxes can sound difficult, but they don’t necessarily have to be so. However, in case you still have any doubts regarding the same, be free to reach out to our team of experts and we will be more than happy to help you out. Also, one needs to bear in mind that there can be a case when you might make a mistake when filing out, however, you need not worry as the IRS will notify you and request for you to refile once again.

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💠Frequently Asked Questions💠

What is Tax Form 2848?

This form is used by an individual to represent a certain person instead of them before the IRS.

Who needs to Submit the Tax Form 2848?

This is important for people who need someone to represent them before the IRS.

What is the duration of the Validity of the Tax Form 2848?

The form is valid till the time it is revoked.

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