Late IRS signature invalidated one assessment extension but prior POA consent remained valid

Plain-English summary

A taxpayer signed a Form 872 extending the assessment period, but the IRS did not sign before the limitations period expired because of a government shutdown. Chief Counsel advised that the consent was invalid because both parties had to execute it before expiration, regardless of why the IRS signature was late. A prior consent signed by a representative was valid for excise tax because the power of attorney specified a date range covering the years and authorized signing agreements and consents. It did not extend the income tax assessment period because the power of attorney covered only excise tax.

Ruling snapshot

• Questions: Was the taxpayer-signed but late-IRS-signed consent valid, and did an earlier representative have sufficient authority to sign a consent?
• Outcome: advice given, the late-signed consent was invalid, while the earlier consent validly extended excise tax only
• Key authorities: Treas. Reg. § 301.6501(c)-1(d); I.R.M. 25.6.22.5.8.1

Full text (IRS public release)

ID:       CCA_2019022617290448
UILC:     6501.08-00

Number: 201937017
Release Date: 9/13/2019
From:
Sent: Tuesday, February 26, 2019 5:29:04 PM
To:
Cc:
Bcc:
Subject: RE: 872 excecution question -


Hi------------

You asked us first whether, where the IRS did not timely sign a Form 872 Consent to
Extend the Time to Assess Tax—due to a government shutdown at the time—but the
taxpayer did sign the Consent, the consent is valid. If it is invalid, you also asked
whether a prior Consent signed by a Power of Attorney (POA) is valid when the POA (1)
lists a date range that includes all years at issue but does not mention them explicitly,
and (2) conveys only the boilerplate POA authorities and does not go beyond that to list
authority to sign consents.

Issue #1: The consent is invalid. The period of limitations to assess a tax may only be
extended by consent “prior to the expiration” of the time to assess, and consent to
extend “shall become effective when the agreement has been executed by both
parties.” Treas. Reg. § 301.6501(c)-1(d). Here, the consent at issue was not executed
by the IRS prior to the expiration of the period of limitations, at which point it can no
longer be extended. That the failure to execute the extension was justified does not
change this answer.

Issue #2: The prior Consent is valid for extending excise tax. (1) The POA gives a range
of years that included all years at issue, and therefore the POA had authority to act on
the taxpayers behalf for all years at issue. While the Internal Revenue Manual cautions
against accepting POAs that grant general authority such as “all years,” I.R.M.
25.6.22.5.8.1(2)(a), in this case a specific range of years is specified, and that suffices.
(2) The boilerplate POA form language explicitly grants the POA authority to sign “any
agreements, consents, or similar documents” (emphasis added). This satisfies the
Manual’s requirement that POAs be “specific in authorizing the representative to sign
consents for the taxpayer.” I.R.M. 25.6.22.5.8.1(2)(b). Note: Because the POA only
conveys authority to extend excise tax and not income tax, only excise tax was validly
be extended by the Consent.

                                                   2


Please feel free to reach out to me with any additional questions.

Thanks.


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