IRSAC 2012 Report

The 24-member Internal Revenue Service Advisory Panel (IRSAC) published their 2012 public report, and their suggestions for improving the Practioner Priority Service (PPS) are spot on.  If the IRS follows these recommendations, there is no question it will improve access to tax relief.

The level of service and number of calls that can be handled by PPS is dropping due to budgetary constraints, so the IRS will need to figure out how to encourage practitioners to turn to E-Services more often and they will also need to be more efficient with the calls that they do take.

There were 14 suggestions in all, but my favorite has to do with the handling of Form 2848 (IRS Power of Attorney).  It currently takes about 10 days to process a F2848.  If the IRS would establish a priority CAF fax number that would be used through E-Services, processing times could be improved dramatically.  IRSAC also suggested that the IRS service center reps stop being so nitpicky with their POA verifications.  Currently if a practitioner calls before a F2848 has been processed by the CAF Unit, he/she must fax in the POA while on the line with the service center rep in order to obtain access to the account.  That’s fine; that makes sense.  However, if the practioner calls in a day or two later (before the CAF Unit has processed the POA), he/she is required to fax it over again.  IRSAC recommends making a simple notation showing that the F2848 has already been reviewed/approved.

Right to Representation Threatened by IRS Carelessness

Didn’t I just write about taxpayer rights?  Didn’t I say something about how the IRS is not interested in protecting taxpayer rights?  The Treasury Inspector General for Tax Administration (TIGTA) released a report today that exposes IRS’ disgregard for taxpayers’ right to representation.  I usually like being right, but not when it’s something like this that threatens access to tax relief.

There are procedures in place that are supposed to ensure that the tax attorney, or other representative, is kept in the loop with regard to certain key actions.  For example, an IRS Revenue Officer is not supposed to contact the taxpayer directly when there is a Power of Attorney on file, and a Revenue Officer is supposed to send copies of correspondence to the authorized representative.  However, the procedures are not being followed by some revenue officers and the procedures are not being enforced by some key management personnel.

I realize this is not a direct denial of the right to representation, but any action (or inaction) that would weaken the benefits associated with this right is troubling and should be viewed as a significant threat.  TIGTA’s report mentions that nobody complained about the infringements on their right to representation in any of the sample cases in it’s study, and I find this equally troubling.

TIGTA Detects Unauthorized Disclosure at IRS

The Treasury Inspector General for Tax Administration (TIGTA) recently published a report expressing concern over the submission of tax account transcripts to tax professionals through E-services.  The concern is that confidential tax records are being sent without proper authorization.

Proper authorization normally means the signing of a Form 2848 Power of Attorney (POA).  When this form is submitted to the IRS by mail or by fax, the “CAF Unit” reviews the form for accuracy and completeness and updates IRS computers accordingly.  Then, when the tax professional (tax attorney, CPA, enrolled agent) contacts the IRS, they may obtain access to the taxpayer’s tax account and they may request tax account records either by phone, by fax, or online through E-services.

However, some tax professionals are authorized to submit Form 2848 electronically through IRS’ E-services.  Electronic POA processing works differently, in that the tax professional is able to gain immediate access to sensitive tax records without human verification that the Form 2848 has been completed correctly.  TIGTA’s concern in this audit was that some tax professionals may be submitting a “preliminary” or incomplete Form 2848 as a way to handle their most pressing tax problems immediately and then getting the required signatures afterwards.  Or worse, some may be failing to secure a fully-executed POA at any point during the representation.

Of course, TIGTA did test this hypothesis using its customary small sample size, so we don’t really know how big of a problem this really is.  Also, we don’t know if the problem extends to the tax relief community or if it is limited to tax preparation.  But any breach in the process that could result in unauthorized disclosure of tax information should be taken seriously.

New CAF Unit Fax Numbers

Practitioners who represent taxpayers before the Internal Revenue Service must have a valid Power of Attorney form (Form 2848) on file in order to access their clients’ confidential tax account information.  You can always mail a F2848, but the quickest and easiest way to file is by fax.  Since tax relief is typically an urgent matter, I always file by fax.  Once the POA has been filed and processed at one of the three IRS “CAF Units,” it can be accessed by various IRS employees throughout the nation.

After October 1, 2012 the old fax numbers at the Ogden and Memphis centers will no longer be functional.

Ogden, UT CAF Unit

  • For all states west of the Mississippi
  • New fax number: (855) 214-7522

Memphis, TN CAF Unit

  • For Louisiana, Arkansas, and all states east of the Mississippi
  • New fax number: (855) 214-7519

Philadelphia, PA CAF Unit

  • For taxpayers residing abroad
  • Fax number remains the same: (267) 941-1017