IRM 5.1.23, Field Collecting Procedures, Taxpayer Representation, provides taxpayer representation procedural guidance to revenue officers and group managers in SB/SE Field Collection. This IRM provides guidance on the following topics: taxpayer representation, third party authorizations, changing or cancelling a third party authorization, by-passing a taxpayer's authorized representative, and practitioner misconduct as these topics will arise while communicating with taxpayers and their authorized representatives. These procedures are consistent with the Taxpayer Bill of Rights and the Privacy Act of 1974.

The following authorities provide the basis for these guidelines:

Director, Collection Policy is responsible for the policies and procedures in this IRM.

Director, Field Collection, has executive oversight for all Field Collection programs.

Field Collection area directors, territory managers, and group managers are responsible for ensuring compliance by Field Collection personnel with these procedures.

Revenue officers are responsible for reading and implementing the procedures listed in this IRM.

Program Reviews: Operational reviews are conducted by the Collection area directors and territory managers annually to evaluate program delivery and conformance to administrative and program requirements. Group managers participate in one or more Embedded Quality (EQ) consistency reviews each year to assist in rating EQ attributes. Group managers perform annual and periodic case and performance reviews as described in IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid. Collection Policy performs periodic program reviews to identify trends and opportunities for improvement.

Program Effectiveness: National Quality Reviews and consistency reviews are routinely conducted to measure program consistency, effectiveness in case actions, and compliance with policy and procedures. Trends reported in these reviews are used to promote and improve program effectiveness. Trends, recommendations, and corrective actions issued during the course of program and operational reviews are used to identify opportunities for improvement and achieve program goals.

Program Reports: The reports that Field Collection managers utilize to monitor inventory are addressed in IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid.

Collection managers verify program and procedural compliance by conducting case consultations, case reviews, performance reviews, and security reviews. Prescribed internal controls are detailed in IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid which communicates responsibility to Collection managers for promoting quality case work and required internal controls. The ICS, ENTITY Case Management, Automated Trust Fund Recovery Program (ATFR), Embedded Quality Review, and National Quality Review Systems provide the case access, data, and reports used by managers to monitor internal controls. Procedural controls include: GMs must approve the issuance of Letter 4016-A, the TM and the Area RPC must be notified of an authorized representative’s by-pass, GMs must concur with a decision to report suspected practitioner misconduct, and GMs must concur with a referral regarding post-employment violations. A relevant systemic control involves the input of the POA authorization to the CAF Function which will appear on both the IDRS and ICS systems.

Acronyms:

Circular 230, Regulations Governing Practice before the Internal Revenue Service

TBOR, IRS.gov Taxpayer Bill of Rights information

IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights

IRC 6304, Fair tax collection practices

26 CFR 601.504(a)(2) through (6), Statement of Procedural Rules, Conference and Practice Requirements, Requirements for filing power of attorney

Disciplined-Tax-Professionals, IRS.gov search for disciplined tax professions

CPA Verify, National Association of State Boards of Accountancy (NASBA) information on licensed CPAs and public accounting firms

IRM 5.1.10, Taxpayer Contacts

Records of all third party authorization documents are generally maintained on the automated Centralized Authorization File (CAF). See IRM 5.1.23.5.3.1, Exceptions to Sending a Third Party Authorization to the CAF Function, for exceptions for sending a third party authorization to the CAF.

The CAF system consists of taxpayer records and representative records:

The CAF system will send courtesy copies of notices and communications to the authorized representative/designee only when the appropriate box is checked on either Line 2 of the Form 2848 or Line 5 of Form 8821. No more than two authorized representatives or designees may receive copies of notices and communications sent to the taxpayer by the IRS.

Use IDRS Command Code CFINK to research third party authorization files.

See IRM 21.3.7.5.5.3, How to Report a Compromised or Potentially Compromised CAF Number, if you become aware of fraudulent or potentially fraudulent authorization requests or stolen CAF numbers through taxpayer contact or while conducting your official duties. Some examples that may be encountered include:

Interaction with the third party should be governed by the authority granted by the specific document:

The major distinction between the forms is:

The following table summarizes a few of the differences between designees and authorized representatives:

Form 8821 authorizes the designee to receive confidential information limited to the tax matters and tax periods specified on line 3.

Form 8821 does not authorize the designee to negotiate with the IRS on behalf of the taxpayer, advocate the taxpayer’s position to IRS officials or employees, or perform the acts enumerated in Section 601.504(a)(2) through (6), Conference and Practice Requirements, Section 601.504 Requirements for filing power of attorney.

Form 8821, "Line 3, Tax Matters" , provides space in column (d) for the taxpayer to enter any specific information they want the IRS to provide to the designee. Tax Matters must be properly completed to be valid. Examples of information that could be listed in column (d) include lien information, a balance due amount, a specific tax schedule, or a tax liability.

Find further information about the differences between the authority conveyed by Form 2848 and Form 8821 in IRM 11.3.3-1, Quick Guide to the Powers of Attorney and Tax Information Authorizations.

Form 8821 is generally input to CAF so the authorization will be available to all areas and campuses.

A reporting agent will often have information needed to resolve an open case since they are involved in the filing of the tax returns and/or the payment of the taxes for the taxpayer.

A taxpayer may prepare and sign Form 8655, Reporting Agent Authorization, to designate a reporting agent to file certain tax returns electronically. Form 8655:

Form 8655 authorizes a reporting agent to:

The Reporting Agents File (RAF) is the IRS file of taxpayers and reporting agents who file employment tax returns electronically (e-file). See IRM 21.3.9, Processing Reporting Agents File Authorizations, for procedures on disclosure to a reporting agent and use of the Form 8655.

See IRM 5.1.24.4, Types of Third-Party Payer Arrangements, and IRM 5.1.24.4.3, Reporting Agent, for additional information on reporting agents.

A military POA is sufficient authorization to permit an individual to represent a deployed member of the military before the IRS.

An individual holding a military POA is often the spouse of the deployed military member. Since the military POA is broader and cannot be input into the CAF, it is acceptable for the IRS to require the non-deployed spouse (or other military POA holder) to complete a Form 2848. The spouse (or other military POA holder) should be permitted to sign the Form 2848 for the military member and as the deployed military member's authorized representative if the signer is a spouse, immediate family member, or otherwise eligible to represent the taxpayer.

Attach a copy of the military POA to the completed Form 2848 before submission to the IRS.

In a bankruptcy proceeding involving the tax liabilities of a debtor-taxpayer, the IRS may disclose to the debtor-taxpayer’s attorney of record the debtor-taxpayer’s return information relevant to the resolution of those tax matters affected by the proceeding. In this situation, a Form 2848 or Form 8821 is not required.

See the Exhibit in IRM 5.9.19-1, Disclosure Chart, for additional information on bankruptcy authority.

Record the receipt of Form 2848 or Form 8821 in the Integrated Collection System (ICS) case history when a taxpayer submits either of these documents.

Document the ICS case history as follows:

Add the Power of Attorney (POA) information in the ICS "Name and Address" application.

To determine if the authorization is valid:

Request the taxpayer (or the taxpayer's authorized representative or designee) to perfect Form 2848 or Form 8821, if necessary. See IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF).

Send a properly executed, valid authorization to the appropriate CAF Function by fax or mail within 24 hours of receipt unless an exception applies.

Determine the appropriate CAF Function (Memphis, Ogden, or Philadelphia (International)) to direct the authorization to depending on the taxpayer’s state of residence (for individuals) and taxpayer’s principal place of business (for entities). See IRM 21.3.7.1.6, Audience-Processing Sites (CAF Function), to determine which CAF Function should receive the third party authorization. The appropriate CAF Functions are located in:

CAF Function information is also provided in the following sources:

Request a written statement from the taxpayer when the taxpayer wants to revoke an existing third party authorization, or from the taxpayer's authorized representative or the taxpayer's designee when the representative or designee wants to withdraw from representing the taxpayer.

A taxpayer can revoke an existing Power of Attorney (POA) or Tax Information Authorization (TIA) without naming a new authorized representative or authorized person by either:

An authorized representative/designee may withdraw from representation or appointment by either:

Upon receipt of a written statement, annotate the bottom of the statement requesting revocation or withdrawal with the date of receipt and your area office name or area office address. Write across the top of the form the word “REVOKE” or “WITHDRAW.”

Review the revocation or withdrawal to ensure basic information is correct.

Send the statement of revocation or withdrawal to the appropriate CAF Function (Memphis, Ogden, or Philadelphia (International)).

Update or delete the POA address in the ICS "Name and Address" application, as appropriate.

When a third party authorization change or cancel request is received via EEFax, the incoming email should be retained in the case file to document the origin of the EEFax.

Notify your group manager (GM) when you first encounter instances of unreasonable delay or hindrance by an authorized representative on a collection case.

Document the notification in the ICS case history.

Consider using Letter 4016–A, By-Pass Warning to Power of Attorney, to advise the authorized representative of their responsibilities and of the possible consequences of failing to fulfill them.

Take the following actions from that point on:

Prepare Letter 4016–A when you determine that it may be necessary to by-pass the authorized representative.

Obtain your GM's approval of Letter 4016–A either in person, over the phone, or via secure email.

Mail Letter 4016–A to the authorized representative only.

Notify the territory manager (TM) and the area return preparer coordinator (RPC) about the potential by-pass according to the following procedures:

Monitor the case for the authorized representative's appropriate response to the by-pass warning letter within the period of time specified in the letter (generally 15 to 30 calendar days).

The Letter 4016–B, By-Pass Power of Attorney - Contact Taxpayer Directly:

Prepare Letter 4016–B if the authorized representative does not appropriately respond to Letter 4016–A within the period of time specified in the letter (generally 15 to 30 calendar days).

Prepare an email message to send Letter 4016–B to your GM using the following procedures:

Type a request to your GM into the body of the message; request your GM to:

Document your GM's approval and the TM's approval in the ICS case history.

Mail Letter 4016–B to the authorized representative.

Notify the taxpayer and the Area RPC about the by-pass.

Letter 4016–B provides that the authorized representative may respond within ten calendar days to offer evidence of reasonable cause for the delays, however, you may initiate contact with the taxpayer after mailing Letter 4016-B to the authorized representative.

Issue Letter 725-B to schedule an IRS office or telephonic appointment per taxpayer contact procedures in IRM 5.1.10, Taxpayer Contacts.

Following the mailing of Letter 4016-B and the initial contact meeting, the taxpayer may be contacted when you need to obtain information or advise the taxpayer of any decision you made on their case.

Monitor the case for a possible response from the authorized representative within the ten calendar day timeframe specified in Letter 4016–B.

Circular 230, Section 10.23, Prompt Disposition of Pending Matters, states that a practitioner may not unreasonably delay the prompt disposition of any matter before the IRS. OPR investigates and disciplines violations of this section, particularly where a practitioner has demonstrated a pattern of delay. However, before referring a practitioner for a violation of Section 10.23, consult IRM 5.1.23.6, By-Passing a Taxpayer’s Authorized Representative, procedures for guidance concerning authorization to by-pass an authorized representative and instances when a represented taxpayer may be contacted directly.

Three common indicators of practitioner misconduct are:

Clearly document all instances of practitioner misconduct in your ICS case history.

Use Form 8484, Report of Suspected Practitioner Misconduct and Report of Appraiser Penalty to the Office of Professional Responsibility (OPR).

Consult with your local Counsel office if a practitioner refuses to provide information on grounds of privilege.

Maintain a carefully detailed chronology in the collection ICS case history throughout the course of the collection case when you suspect practitioner misconduct.

Make a referral to report suspected practitioner misconduct when you:

Contact Associate Chief Counsel, Office of General Legal Services (GLS), Ethics and General Government Law Branch when you need to seek legal advice about a practitioner committing a possible post-employment violation.

When reporting misconduct or seeking legal advice from the Office of Chief Counsel:

IRS employees have an obligation to report suspected practitioner misconduct to OPR under section 10.53(a), Receipt of information, of Circular 230.

IRS employees may contact the Office of Professional Responsibility at the EEFax number and mailing address shown on the OPR-At-A-Glance web page during the course of working a case to discuss any perceived instances of practitioner misconduct or for questions about Circular 230 issues.

Prior to making the referral use the Disciplinary Look-Up provided by IRS on its website at https://www.irs.gov/tax-professionals/search-for-disciplined-tax-professionals to determine whether a practitioner has been suspended or disbarred from practice before the IRS.

The IRS Source homepage also provides additional resources for the verification of practitioner credentials, links to the state boards of accountancy and state bar associations, and additional information about reporting suspected practitioner misconduct at https://irssource.web.irs.gov/OPR/sitepages/AdditionalResources.aspx. If a state does not make information available electronically, you may have to contact the State Bar Association or the State Board of Accountancy directly.

Complete Form 8484, Report of Suspected Practitioner Misconduct and Report of Appraiser Penalty to the Office of Professional Responsibility (OPR), to report suspected practitioner misconduct and to refer the practitioner to OPR for appropriate disciplinary action by following the specific "Instructions to Form 8484" (printed on the reverse side of the form).

Ensure you include all the documentary evidence in support of your allegation(s).

Consider whether you should also make a referral to the Treasury Inspector General for Tax Administration (TIGTA) for potential criminal sanctions.

Scan and save any supporting document(s), as applicable, and save the scanned document(s) as a PDF file(s).

Compose an email message to your GM as follows:

Attach Form 8484 and any other supporting documents to the email message.

Send the message and attachment(s) to your GM via secure email.

Transmit Form 8484 and/or any supporting document(s) to the *OPR Referrals mailbox.

In all but rare situations, OPR investigations begin at the conclusion of enforcement efforts and do not influence ongoing IRS compliance activity.

Refer a post-employment violation under Section 207 of Title 18 of the United States Code to GLS.

See IRM Exhibit 1.25.1-1, How to Make a Referral to the Office of Professional Responsibility, for detailed information on how to make a referral.

Practitioner misconduct may be an indicator of potential fraud, so it may be appropriate to discuss practitioner misconduct with the Fraud Technical Advisor.

Make a report to refer a practitioner for misconduct directly to TIGTA by one of the methods displayed in the following table:

Consult with Counsel under the following circumstances:

Refer the matter to TIGTA for investigation if Counsel so advises.

Ensure that you include all the documentary evidence in support of your allegation(s).