The IRS “power of attorney” (POA) authorization is not like the durable power of attorney that most people are more familiar with. That one can grant someone rights to manage your bank accounts or make healthcare decisions for you. The IRS power of attorney is very different and much more limited. It only grants someone authorization with the IRS to access a portion of your tax records and authorizes them to discuss your tax matters with the IRS.
Anyone can request the IRS power of attorney to access the tax records of an immediate family member (such as your child, or your spouse with their permission and signature). Other than that situation and a few other limited exceptions, primarily only IRS recognized tax professionals (CPAs, EAs, and tax attorneys) can request an IRS POA.
IRS POA is granted using IRS form 2848. It must be signed by both you as the taxpayer and by the representative that you are granting permission to. It only grants access to a limited time period of your tax records, and just for the tax forms specified. It also has options to elect to have a copy of IRS notices and communications be sent to the tax professional, or to allow them to sign tax documents and returns on your behalf. There is also an option to “access my IRS records via an Intermediate Service Provider,” which may be selected if the tax professional uses software to retrieve your tax documents. The POA never grants anyone the right to deposit your tax refund or other payment into their own bank account.
When it is Used
Tax professionals will request the IRS POA when they need to access your tax records to better understand your tax situation and history, or if they will need to call the IRS to discuss an IRS notice or other tax matters. It is necessary if a tax professional is representing you before the IRS, such as in an audit, or to negotiate a tax payment plan or penalty abatement. But it also may be a necessary step in preparing your tax return if there is a need to review your tax transcripts and tax history.
How to Revoke It
The IRS power of attorney is only granted for the limited number of past tax years entered on the form, and up to 3 years of future tax records (only if specifically requested on the POA form). If you want to no longer work with a tax professional, you can choose to revoke a POA that you previously granted by following the form 2848 revoking instructions found here.
