When searching for an IRS Representative to better help you resolve a delicate matter with the IRS, it is important to understand the difference between the Forms 2848 and 8821 – Power of Attorney vs Declaration of Representative.
Now, you might be wondering why…
If a professional is ineligible to fill out Form 2848, their ability to help you will be limited because usually attorneys, certified public accountants (CPAs), and enrolled agents may represent taxpayers before the IRS. These professionals can speak on your behalf before the IRS even when you’re not present.
On the other hand, Form 8821 authorizes any individual, corporation, firm, organization, or partnership you designate to inspect and/or receive your confidential information. For example, a family member or employee of the company could receive information from the IRS if you authorize them. However, a family member or employee cannot represent you on tax matters; they can only be present when you are there.
Another question to consider: Why shouldn’t you, a taxpayer, go with your representative to an IRS appointment?
In one of my earliest engagements, there was a client (a Pastor/Preacher) who owed almost $50,000 to the IRS due to errors on the tax preparation from his previous tax preparer. The Pastor wanted to go with me to the IRS appointment and I did not see any issue with this request. During the IRS appointment, an IRS officer asked if the client had filed a “Vow of Poverty” (usually referred to Form 4361 “Application for Exemption from Self-Employment Tax”). Then, as a Preacher, the client answered: “I am not in poverty, my Father owns all the wealth in this world”. At that moment the IRS officer said “Ok, I understand. Please ask your Father to send a check for $50,000 to the IRS. There’s nothing else we need to discuss.” Later on I was able to reestablish communication with the IRS officer and fixed the situation. I learned that in most cases, both the client and I want to avoid situations in which the client says something to the IRS officer that undermines their case.
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