How to Give Power of Attorney to Your CPA
Managing tax and financial matters can be complex, and sometimes you need a trusted professional to act on your behalf. Granting Power of Attorney (POA) to your CPA allows them to communicate with the IRS, handle tax filings, and resolve issues on your behalf. But how do you give POA to your CPA? Here’s a step-by-step guide.
What Is Power of Attorney for a CPA?
A Power of Attorney (POA) is a legal document that grants someone the authority to act on your behalf in specific matters. In the case of a CPA, this typically involves tax-related issues. By granting POA to your CPA, they can:
- Request and review tax information
- Respond to IRS notices
- Sign documents on your behalf
- Represent you in tax matters before the IRS
The most common form used for this purpose is IRS Form 2848, Power of Attorney and Declaration of Representative.
Steps to Grant Power of Attorney to Your CPA
Step 1: Determine the Scope of Authority
Before granting POA, decide what authority your CPA needs. Do you want them to handle only specific tax years, a particular issue, or have broad representation? Be clear about the limitations and scope of their authority.
Step 2: Obtain IRS Form 2848
IRS Form 2848 is the official document needed to authorize a CPA to represent you. You can download it from the IRS website. This form allows you to specify which tax years and forms the CPA will handle.
Step 3: Complete the Form
Here’s what you’ll need to fill out:
- Taxpayer Information: Your name, address, Social Security Number (SSN), or Employer Identification Number (EIN).
- Representative Information: Your CPA’s name, address, phone number, and Preparer Tax Identification Number (PTIN) or Centralized Authorization File (CAF) number.
- Tax Matters: Indicate which tax years and types of tax returns the CPA is authorized to handle.
- Acts Authorized: Define what the CPA can and cannot do on your behalf.
- Signatures: Both you and your CPA must sign and date the form.
Step 4: Submit the Form to the IRS
Once completed, submit Form 2848 to the IRS by fax or mail, depending on your state and IRS processing center. The instructions on the form will provide the correct submission details.
Step 5: Confirm IRS Processing
The IRS typically processes Form 2848 within a few weeks. You or your CPA can check the status by calling the IRS Practitioner Priority Service (PPS) line. Once approved, your CPA can act on your behalf within the specified scope.
When Should You Revoke a POA?
If you no longer want your CPA to have Power of Attorney, you can revoke it by:
- Filing a new Form 2848 and selecting the revocation option.
- Sending a written statement to the IRS requesting revocation.
It’s essential to revoke POA if you switch CPAs or no longer need their representation.
Final Thoughts
Giving Power of Attorney to your CPA simplifies tax matters and ensures an expert is handling your financial concerns. However, always review the details carefully and only grant authority to a trusted CPA. If you have questions, consult your CPA for guidance on completing the process efficiently.
Need assistance with tax representation? Contact DWD CPAs & Advisors.
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