Purposes and Limits to Taxpayer Representation Favor Enrolled Agents

February 23, 2012 by  Filed under: Taxes 

The dreaded IRS letter is usually a cause for panic by recipients. Confusing wordy explanations are especially troubling. Plus, some other form is often enclosed that creates further anxiety. Despite IRS efforts to make letters easier to understand, only so much simplification is possible in computer-generated communication addressing tax subjects.

No matter how sure people are about comprehending the complete nature of an IRS letter, they should all realize the benefit of consultation with enrolled agents. Almost every IRS letter requires a response, either in writing or with a phone call. The best way to meet the deadlines for these replies is with professional representation.

A professional with enrolled agent certification is the most affordable adviser regarding IRS matters and the only representative with training in tax matters alone. Too many individuals are unaware of the enrolled agent option. Consequently, more of the tax practitioners with this designation must promote their privilege to represent taxpayers whose returns they did not prepare.

The public is generally aware of the other potential tax representatives. They don’t know that using the services of an enrolled agent vs. CPA results in procuring the same professional ability at generally lower cost.

Too often, people are tempted to represent themselves in contact with the IRS. However, communication with the IRS demands having someone who can speak tax language. Rendering brief explanations about complex tax matters is usually tricky.

Enrolled agents assure that details presented about the situations of taxpayers are consistent with tax rules. In addition, taxpayers with professional representation avoid giving too much information to the IRS or wasting time with irrelevant facts. Developing knowledge about tax subjects in order to represent taxpayers in meetings, phone calls, or written correspondence with the IRS is all part of enrolled agent training.

Taxpayers should learn that they have nothing to lose when choosing representatives to contact the IRS. They still retain control over their tax destinies even after using Form 2848 to appoint their representatives. This form designates a person to represent a specified taxpayer. A company is not listed. However, approving an alternative representative who works at the same firm as a primary professional is permissible.

Form 2848 grants considerable power to representatives, but a place on the form exists for taxpayers to specify limits regarding their representation. For example, a taxpayer can limit an enrolled agent to negotiating an IRS settlement but not making the agreement binding without the taxpayer signature. Every taxpayer who receives an IRS letter should know about the availability of professional tax representation for the cost of reasonable enrolled agent fees.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

Fast Forward Academy is a leading publisher of education for enrolled agents and tax professionals. Access to free questions for the enrolled agent certification is available on their website.

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