CCA 200851081: A power of attorney need not be on Form 2848, but the CAF still wants one

Plain-English summary

A checklist, written out for a colleague who asked for it. The subject is when the IRS will honour a power of attorney that is not on the Service's own form.

The starting point is that it will. A power of attorney executed by the taxpayer on some other instrument, including a durable power of attorney of the kind drawn up for incapacity, is acceptable so long as it contains the required elements. The release lists them: the taxpayer's name and mailing address; the taxpayer's identifying number; the employee plan number where one applies; the name and address of each recognised representative; a description of the matters representation is authorised for, which where applicable must give the type of tax, the federal tax form number, the specific years or periods, and in estate matters the date of death; and a clear expression of the taxpayer's intention as to the scope of the authority granted.

The last element is the one that does the most work in practice. The representative must declare, under penalties of perjury, that they are not currently suspended or disbarred from practice before the IRS, that they are aware of the rules in Circular 230, that they are authorised to represent the person identified for the matters specified, and that they fall within one of ten listed categories. Those categories are attorneys in good standing, certified public accountants duly qualified to practise, enrolled agents, enrolled retirement plan administrators, enrolled actuaries, bona fide officers of the taxpayer, regular full-time employees of the taxpayer, immediate family members, individuals abroad representing a taxpayer abroad where the representation happens abroad, and individuals granted temporary recognition by the Director of the Office of Professional Responsibility. A general power of attorney drafted by someone's own lawyer will rarely contain any of that language, which is why the point is worth stating.

A defective instrument is fixable. If the power of attorney is missing some or all of the required information, the attorney-in-fact can cure it by executing a Form 2848 on the taxpayer's behalf supplying what is missing, and attaching that form to the power of attorney. The attorney-in-fact signs for the taxpayer under the authority the taxpayer already gave them, so the fix does not need the taxpayer to act again, which matters when the reason for a durable power of attorney is that the taxpayer cannot.

Two limits close the discussion. The first draws a line the cure could otherwise be read to erase. The Service will not accept a durable power of attorney that names someone who is not a recognised representative, nor a Form 2848 executed by that person on the taxpayer's behalf purporting to appoint a recognised representative. In other words a general agent cannot be used as a conduit to install a representative; the authority to appoint one has to run from the taxpayer.

The second is administrative rather than legal, and is the practical sting. Even a power of attorney that meets every requirement will not be loaded onto the centralised authorization file unless the representative signs a Form 2848 and attaches it. The CAF is the system that records who is authorised on an account and drives such things as copies of notices. So a conforming instrument is valid and will be honoured, but until a Form 2848 accompanies it the authorisation lives only in the file it was submitted to. The upshot is that the form is not required for acceptance and is still the path of least resistance.

This is a clean digital release rather than a scan, so no OCR correction was needed. Kept as released: "He/She is(are)" in the final bullet where the parallel bullets read "He/She/They is(are)"; the missing punctuation after "the Federal tax form number"; "that purporting to authorize a recognized representative"; and "unless the recognize representative(s) signs".

Ruling snapshot

• Question: Will the IRS accept a power of attorney that is not on Form 2848, and what must it contain?
• Outcome: Advice given. Yes, including a durable power of attorney, provided it contains the taxpayer's name, address and identifying number, the employee plan number if applicable, the representative's name and address, a description of the matters authorised, a clear expression of the scope of authority, and the representative's declaration under penalties of perjury covering suspension or disbarment, awareness of Circular 230, authority to represent, and qualification within one of ten listed categories. A defect can be cured by the attorney-in-fact executing and attaching a Form 2848. The Service will not accept a durable power of attorney naming someone who is not a recognised representative, or a Form 2848 executed by that person to appoint one. A conforming power of attorney is not loaded onto the CAF unless a signed Form 2848 is attached.
• Key authorities: Circular 230 (31 CFR Part 10); Form 2848; the centralized authorization file.

Full text (IRS public release)

ID: CCA_2008090516322754 Number: 200851081
Office: ---------------------------- Release Date: 12/19/2008

UILC: 9999.00-00

From: ------------------------
Sent: Friday, September 05, 2008 4:32:28 PM
To: --------------------------
Cc: ------------------------
Subject: Powers of Attorney

Here is the discussion on powers of attorney that you requested.

The IRS will accept a power of attorney executed by the taxpayer that is not on a Form 2848, including a durable power of attorney, provided the power of attorney contains:

• name and mailing address of the taxpayer;
• identification number of the taxpayer (i.e., social security number and/or employer identification number);
• employee plan number (if applicable);
• name and address of the recognized representative(s);
• description of the matter(s) for which representation is authorized, which, if applicable, must include—

► the type of tax involved;
► the Federal tax form number
► the specific year(s)/period(s) involved; and
► in estate matters, decedent’s date of death;

• a clear expression of the taxpayer’s intention concerning the scope of authority granted to the recognized representative(s); and
• a declaration from the recognized representative(s) made under penalties of perjury that:

► He/She/They is(are) not currently under suspension or disbarment from practice before the IRS;
► He/She/They is(are) aware of the regulations contained in Circular 230 (31 CFR Part 10) concerning the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries and others;
► He/She/They is(are) authorized to represent the person identified for the matters specified in the power of attorney; and
► He/She is(are) (choose the applicable one):
i) an attorney who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia; ii) a certified public accountant who is duly qualified to practice as a certified public accountant in any state, possession, territory, commonwealth, or the District of Columbia; iii) enrolled agent who is enrolled to practice before the IRS and is in active status pursuant to the requirements of Circular No. 230; iv) enrolled retirement plan administrator who is enrolled to practice before the IRS and is in active status pursuant to the requirements of Circular 230; v) enrolled actuary who is enrolled as an actuary by and is in active status with the Joint Board for the Enrollment of Actuaries; vi) bona-fide officer of the taxpayer; vii) a regular full-time employee of the taxpayer; viii) an immediate family member of the taxpayer; ix) an individual outside the United States who is representing a taxpayer who is outside the United States before IRS personnel where the representation will take place outside the United States; x) an individual who is granted temporary recognition to practice before the IRS by the Director, Office of Professional Responsibility.

If a power of attorney fails to include some or all of the required information, the attorney-in-fact can cure the defect by executing a Form 2848 (on behalf of the taxpayer) that includes the missing information and attaching the Form 2848 to the power of attorney.

The IRS will not accept a durable power of attorney naming an individual other than a recognized representative or a Form 2848 executed by that individual on behalf of the taxpayer that purporting to authorize a recognized representative to represent the taxpayer.

Also, although the IRS accepts a power of attorney that meets the above requirements regardless of the form in which it is provided, a power of attorney that contains these elements but is not on a Form 2848 will not be loaded onto the centralized authorization file (CAF) unless the recognize representative(s) signs and attaches a Form 2848 to the power of attorney.