Obtaining a Power of Attorney Through IRS E-Services

Editor: John L. Miller, CPA

E-services is a suite of internet-based products that allows tax professionals to conduct client business with the IRS 24 hours a day, 7 days a week. Compared with mailing or faxing a Form 2848, Power of Attorney and Declaration of Representative, the e-services application is a much faster way for tax professionals to register their authority and represent a taxpayer before the IRS. This registration process is relatively simple and allows tax professionals to not only obtain a power of attorney but also use other applications within e-services.

If the tax professional is a member of a firm, the firm and the tax professional each must obtain a centralized authorization file (CAF) number with the IRS. The simple registration process is outlined below.

Registration Services

To register for e-services, the tax professional should access “e-Services for Tax Pros” under the “Tax Professionals” tab on the IRS website (www.irs.gov). During registration, the IRS requests the following information:

• Legal name;
• Social Security number;
• Date of birth;
• Telephone number;
• E-mail address;
• Adjusted gross income (AGI) from either the current year or a prior year’s filed tax return;
• Username selected by the tax professional;
• Password and PIN selected by the tax professional;
• Reminder question to recover a forgotten username; and
• Home mailing address.

The IRS will verify much of this information using its own or Social Security Administration records.

Disclosure Authorization

After registering with e-services, creating the power of attorney is a simple process. Before obtaining an online power of attorney, the tax professional must always obtain written authorization from the taxpayer(s). Form 2848 should be completed with the exact information requested. When completing the online Form 2848, the tax professional represents to the IRS that he or she already has signed authorization to represent the taxpayer(s). Before beginning, the tax professional will also need the taxpayer’s date of birth and AGI for the current year or any of the three prior years for which a tax return has been processed, plus the spouse’s date of birth if the taxpayer is married and files jointly.

The tax professional should go to the Tax Professionals page on the IRS website and enter his or her unique e-services ID and password. The user should then either create a new form for a business or individual or modify Form 2848 if necessary.

The tax professional needs to enter the taxpayer’s Social Security number, telephone number, address, and first name, middle initial, and last name. If applicable, this information should also be entered for the spouse. The tax professional enters his or her CAF number, verifies that all information is correct, and adds an appropriate designation (e.g., CPA) and jurisdiction. The tax professional’s name will then be shown as the designated representative.

The user can also enter the tax forms (e.g., Form 1040), which are available from a drop-down menu. The user must choose the tax form and enter the tax period for each year desired.

At this point, the tax professional validates his or her signature using the unique password and PIN number set up upon registration with e-services. He or she must then provide the taxpayer’s date of birth, AGI, and year of the AGI and will be asked to select a five-digit PIN number for the taxpayer. Practitioners may wish to assign random PIN numbers for clients as part of their firm’s best practices. If applicable, the same information is required for the spouse.

The taxpayer’s and spouse’s signatures are validated, and a message appears for each taxpayer stating that authorization was successful. The practitioner is now ready to submit the final power of attorney. A source document locator number will be provided for each individual power of attorney. It is useful to record this number so the document can be recalled in the e-services system and modified or finalized at a later date. The user should attach a printed copy of the power of attorney to the signed Form 2848.

Transcript Delivery System

Once the online process for registering the power of attorney is complete, registered tax professionals may use the transcript delivery system to request and receive account transcripts, wage and income documents, tax return transcripts, and verification of nonfiling letters. A new product, Record of Account, combines both the return and account transcripts in one product. Tax professionals can request products for both individual and business taxpayers. The transcript delivery system can be used to quickly resolve a client’s needs for return and account information in a secure online session.

The few minutes it takes to become familiar with the e-services offered by the IRS and to incorporate their use into a tax practice will result in long-term savings for any practice.

Editor Notes

John Miller is a faculty instructor at Metropolitan Community College in Omaha, NE. Vance Randall is with Grantham, Poole, Randall, Reitano, Arrington, & Cunningham PLLC in Jackson, MS, and is a member of the AICPA Tax Division’s IRS Practice and Procedures Committee. For further information about this column, contact Mr. Miller at johnmillercpa@cox.net.