One of the better services that the IRS provides to the tax pro community is e-Services. e-Services is a web based suite of tools that can help tax pros resolve problems their clients are having with the IRS. It allows the preparer to file forms 2848 (Power of Attorney and Declaration of Representation) and 8821 (Tax Information Authorization) with the IRS, get transcripts of their clients returns or accounts, resolve account issues by secure e-mail, match TIN with names and create or modify their e-File Applications. Recently, the Treasury Inspector General for Tax Administration (TIGTA) has looked at e-Services and found some concerns.
TIGTA’s concerns are centered on Disclosure Authorizations (Forms 2848 and 8821). They have found that some IRS employees are accessing information through e-Services that they shouldn’t access, some preparers do not have signed copies of Forms 2848 and 8821 before they file the forms online, that some preparers are using Form 2848 to access transcripts and some preparers are using Form 2848 when they shouldn’t.
As an Enrolled Agent (EA), I have the ability to represent clients before the IRS. To do that, I need a completed Form 2848 (Power of Attorney) on file with the IRS. If possible, I want to be able to file that form through e-service. If I mail or fax the form, there is a processing delay before I can access the information I need. What TIGTA found was that about 8.3% of the taxpayers they surveyed didn’t sign a completed Form 4828 before the tax preparer filed it through e-Services.
TIGTA is also concerned that Form 2848 is being used just to get transcripts. From reading the report, if I just need to get a transcript of a client’s wage and income for a year so I can prepare a return, TIGTA would say I need to use Form 8821 instead of the Form 2848. If I need the same transcript to deal with a CP2000 notice where I will be representing the client, then I can use the Form 2848.
Only EAs, CPAs and Attorneys can represent any client. An un-enrolled preparer or a RTRP can only represent a client (with a Form 2848) when they signed the return and they’re limited what they can do then. TIGTA found that many were fling Form 2848 when they were not eligible to file the form.
Finally, some IRS employees are accessing e-Service to get taxpayer info (from transcripts and disclosure authorizations) that they normally wouldn’t be able to get.
The IRS generally agreed with TIGTA that there are changes that can be made to the e-Service program that will lessen the issues TIGTA found. They will work to educate tax pros as to who is allowed to use the Power of Attorney (Form 2848) and having a completed and signed copy on file at all times. They didn’t go as far as agreeing to create the compliance verification program TIGTA suggested. The IRS also agreed their employees shouldn’t have access e-Services and requested TITGAs supporting info to further investigate each case.
The big issue is that the IRS doesn’t have a problem with tax pros using a form 2848 to get transcripts but TIGTA does. My thinking is that I don’t know what I will find on the transcripts I request and if I don’t start with the Form 2848 (the most expansive) then I may need to bring the client back in and get it signed later. (As long as you are eligible to use Form 2848.)
It seems that the tax pro issues are based in the recent changes in licensing, Circular 230, and the business of preparing taxes. Too many preparers need to acknowledge that the rules have changed and follow the current rules.