Effective representation before the Internal Revenue Service (“IRS”) can be crucial, and finding an experienced attorney to stand by your side is advisable when you’re involved in a tax controversy, such as a complex examination (audit), a legal matter that could result in criminal prosecution, a dispute with the IRS collection office or Appeals Office, applying for an offer in compromise, or filing a claim for a refund. Securing qualified tax counsel can improve the presentation of your case, the protection of your interests, and the building of the case’s legal record. The last is especially true if further judicial action is necessary.
Representation in these cases is also known as practice before the IRS, and it is detailed in IRS Publication 947 (download Pub 947 pdf) and Circular 230. This process and who is authorized to represent you at various stages with the IRS is highly regulated, so you should review Publication 947 and the tips and directives below before getting started.
Representation Before the IRS
What does practice before the IRS cover?
The IRS refers to a person’s representation of you before the IRS as “practice before the IRS,” which covers all of the following activities (source IRS publication 947):
- Communicating with the IRS on a taxpayer’s behalf regarding the taxpayer’s rights, privileges, or liabilities under laws and regulations administered by the IRS
- Representing a taxpayer at conferences, hearings, or meetings with the IRS
- Preparing, filing, or submitting documents, or advising a taxpayer on the preparation, filing or submission of documents with the IRS on behalf of a taxpayer, including tax returns
- Providing a taxpayer with written tax advice on one or more Federal matters
Who may practice before the IRS?
An individual can represent him or herself, and family members can represent members of their immediate family, including their spouse, child, parent, brother, or sister.
A variety of professionals can practice before the IRS, including attorneys, appraisers, CPAs, enrolled actuaries, enrolled agents, low income taxpayer clinic student interns, and unenrolled return preparers. Unenrolled return preparers may only represent taxpayers before revenue agents, customer service representatives, or similar IRS officers and employees.
Unless you are present during the communication, the person representing you must be designated as your representative with a written declaration, typically Form 2848: Power of Attorney and Declaration of Representative. This document must be filed with the IRS and requires the following information:
- Your contact information (name, address, ID number, telephone number)
- Your representative’s information (name, address, CAF number, PTIN, telephone number, fax number)
- The acts they are authorized to perform (description of matter, tax form number, year/period if applicable)
- The signature of the representative (with professional designation, licensing jurisdiction, bar, license, certification, registration, or enrollment number if applicable, and date)
A power of attorney authorizes the representative to receive your confidential tax information and to perform specific related actions on your behalf. If no restrictions are imposed, the individual can do anything that you can perform, including representing you before the IRS, signing waivers, signing consents, agreeing to audit assessments, closing agreements, appeals settlements, etc.
You should complete Form 2848 fully and accurately to prevent unnecessary delays and difficulties. You should also carefully consider which acts you will authorize your representative to perform in section 3 and specific acts that you do NOT authorize the representative to perform in section 5.
What are the duties required of a representative?
You can view a representative’s responsibilities in full at irs.gov/, but the most important duties during representation before the IRS include:
- Act within the rules of practice, found in Treasury Department Circular No. 230
- Swiftly submit requested records or information, unless they conclude the information is privileged
- Advise you of noncompliance, errors, or omissions and their consequences
- Perform due diligence throughout the process, including during the preparation, approval, and filing of documents (returns, affidavits, etc.)
- Use due diligence when relying on others
- Not unreasonably delay arranging matters before the IRS
- Not knowingly accept assistance from disbarred or suspended persons or former IRS employees
How can a representative be disbarred or suspended from practice?
A representative that engages in conduct that is considered disreputable may be disbarred, suspended, censured, or even fined. Examples include:
- Conviction of a criminal offense
- Any offense involving dishonesty or breach of trust
- Knowingly providing false or misleading information
- Solicitation of employment by prohibited means
- Failure to file a tax return
- Misappropriation of funds received from clients for payment of taxes
- Attempting to influence an IRS employee through threats, gifts, favors, etc.
- Disbarment or suspension from practice
- Abusive language or false accusations
- Circulation or publication of libelous matter
Why should I hire an attorney before an audit?
If you have never dealt directly with the IRS, hiring an experienced tax attorney may be to your advantage. The attorney will understand the law and have experience with audits. Their expertise will help you successfully prepare for the audit and will likely lower your stress levels and bolster your confidence.
Before the audit begins, your attorney can review your records to spot and prevent or prepare to deal with potential problems. You can consult with your attorney at any point during the audit if you have questions or concerns. Your attorney can contact the auditor on your behalf.
Why should I hire an attorney for a tax controversy?
When confronting a tax controversy, hiring a reputable and knowledgeable representative may be in your best interest. Tax matters can be complex and financially critical. Having a legal representative on your side will bolster your confidence and ensure that the IRS does not take advantage of your naiveté. A legal representative can help you navigate complicated tax laws, avoid penalties and criminal actions, and perhaps achieve a more favorable resolution.
Contact the attorneys at Carnahan, Evans, Cantwell & Brown, P.C., if you’re seeking representation before the IRS. It is easier for an attorney to represent you if you are both in the same geographic area, but we may still be able to assist you even if do you not live in southwest Missouri. Our experienced lawyers are well equipped to represent clients before federal and state agencies. We can help you challenge or seek redress of an agency action. Whether you need help communicating with the IRS or the Missouri Department of Revenue, Carnahan, Evans, Cantwell & Brown, P.C., is here to help. Let us provide you with the sound legal counsel you need to manage the situation and navigate the regulations of the IRS or Missouri Department of Revenue. To get started, telephone us at 417-447-4400 or contact us online. We look forward to hearing from you!