Practicing Before the IRS

[Bird Legs]

E A Exam

Best wishes for you, Dona, in studying for & taking the exam.

[geekgirldany]

Ea

I'm holding off until May 07 to take my test. It says they will have it setup where the test score will be given right after you finish the exam. If I don't pass then I only have to wait two weeks to retake instead of another few months. For me that little thing is worth wait But I will be getting it.

I'm taking some tax and accounting classes at a local college too. So that will help me get ready for the testing later.

Bart you are right I think it depends on who you talk to. Every time I call the Tax Prac. Hotline they always ask for a 8821 on file. I don't think I've had one ask for a 2848.

[veritas]

Yeah, you're right and I was wrong about the 8821. It does also allow IRS to give information back to you.

However, in the real world, it doesn't alway work that way, as your experience in the second paragraph amply demonstrates -- it all depends on who you talk to or who's handling the case. One rep thinks an 8821 is just fine; another feels a 2848 is needed (or vice-versa). And jainen's statement (like the NYEA said: "...needs...some additional information") that "anyone can GIVE info to the IRS" doesn't always hold true -- again it depends on who you're talking to. Some IRS agents won't take any info that you furnish or even have a conversation at all to discuss anything about a client, period, unless you're holding a POA.

Unless things have changed recently you could not access online a transcript for a client with form 8821. I used it once and it wouldn't work. Called E-services and they said they were having discussion as to whether to allow access online with form 8821. Maybe that has been rectified.

[Donanita]

E-Services

must have changed as I used it this year for income transcripts.

Thanks Bird Legs.I will need all the support I can get as the test is changing this year and I have no idea what to expect.

I would wait to 07 but if the bill passes and is sign by the President for paid prepares being tested and licenses I don't know what kind of time period you get for taking a test.Might as well be for EA as the test for a licenses will probably be just as hard.

[Acownt4it]

8821 vs 2848

Just signed on to this website after two days at the IRS Tax Form in Chicago. One of the seminars dealt with this exact subject.

As far as the difference between the 8821 and 2848, my understanding is this. The major difference for EA's, CPA's and Attorneys is with an 8821 you can give the IRS information and get information on behalf of the TP, but it DOES NOT state you are ACTING on behalf of the TP. It basically gives you an out if you do not want to represent this TP. With a 2848, you can ACT on behalf of the TP.

The third party designee box is good for one year only. Basically April 15-April 15. Even if you filed the return in October, it is only good till April 15 of the next year.

There are new rules for unenrolled preparers on the horizon, but I didn't take any notes on this because it did not directly pertain to my situation.

Sandy,
Just a heads up with all those POA's out there.
One thing I did learn at this seminar is that if you are no longer representing a client and you have an outstanding POA for that client you could be held liable for whatever that TP is doing (or not doing) regarding his/her taxes for that time period. Meaning, if TP is no longer your client, gets an audit notice or CP200 or some such letter for underreporting for example, you could be penalized right along with the TP if he does not get the issue resolved. Their advise to us was to make sure when we no longer represent a TP to revoke our power of attorney with the IRS.

If you are not sure what POA's are outstanding, they said there is a blank draft letter on the IRS website in the Office of Profressional Regulations that you can send in, and for a fee (not sure what it is, I haven't had the time to research the website yet), you can get a list of your outstanding POA's. Then revoke the ones you need to.

Hope this helps,

[Possi]

too 'fraid

This possi plays dead...
I have wanted to take the EA exam but I am too afraid.
I've been doing taxes for 11 years. I NEVER remember figures.
I was told that the exam is not open-book, and you have to have numbers in your head. My 50 year old head depends on the computer for specifics.
I'd need a mentor close by...

[geekgirldany]

Revoke

How do you revoke or have the IRS stop sending you information regarding a taxpayer?

I had a guy come to me two years ago wanting to file his back taxes. I filed a 8821 to get his prior years W-2s. He found out he wasn't getting a refund and never came back to me. I still get IRS notices for him. I need to get my name off this.

Possi I bet you would do pass the exam. I've been doing taxes for 11 years. I think if you can just study for it then you can remember those numbers

[Acownt4it]

Revoke

Send a letter to the IRS similar to this:

To whom it may concern:

Please be advised that we are rescinding our Power of Attorney for Mr. TP and Ms. TP as of < insert date >. We have notified the taxpayers by mail that we are no longer able to represent them.

Enclosed is a copy of our letter dated < insert date >.

Sincerely,




Noel Baldwin
CAF No. 360225

And the letter to your client can look like this:

Since you have not contacted us, nor sent the necessary records regarding the audit of your <insert year > tax return, we are assuming you are no longer in need of our services. The Power of Attorney has been rescinded as of < insert date >.

We recommend that you contact the Internal Revenue Service immediately and make arrangements to represent yourself. Failure to do this will ultimately result in the assessment of additional taxes, penalties and interest.

Sincerely,

My guess is that you could do the same for an 8821.

[Black Bart]

&quot;Maybe,&quot;

How does all this relate to the family member signing a return for dear old Mom under a general power of attorney? Is that even allowed? Will the IRS talk to the person who signed the return?

to all three questions. For an immediate answer, call 1-800-829-1040. The first rep generally won''t know and will transfer you to a "technical specialist" who may (assuming that they -- unlike some of us -- did not sleep through seminars). Make your original question "sound complicated" and you'll avoid 5 to10 minutes of useless speculation by the first, unknowing clerk.

P.S. To generate less heat and shed more light; I suggest you restrain yourself when debating them.

P.P.S. Yes, I know it's better/easier to use the PHL and I occasionally do, but I also want to know how it's going with the "regular" IRS operation (the "big picture," so to speak), to compare notes re variations in accuracy of 829-1040 and PHL, and to find out what the average citizen is hearing when they call.

[Donanita]

Possi I'm Fraid Too

and have been doing taxes since 1985 and have no intention to practice before the IRS but if the bill to licenses prepares I will have to take some kind of test so might as will be a EA. By the way, they are using computers for the test this year so I am really fraid.

[Bird Legs]

Donanita-do you

prepare taxes with a computer? If so, were you afraid of it when you started?
But, now you are relaxed with them at work, right? Just carry that relaxed
attitude over to the E A Exam.
Just think of it as doing another tax return.

[Black Bart]

Third Party Designee (Checkbox)

Some history and facts from IRS website:

First appeared Jan-'01 for 2000 returns. For that year taxpayers were only allowed to designate paid preparers to receive verbal (no written) account information related to return processing issues (missing information, match error, penalty notices) and payments/refunds.

The authorization does not allow the designee to "represent the taxpayer" and is specific to that year's tax return.

Jan.-'02 -- For year 2001, the authorization was expanded to name any third party, including friends and family to assist in resolving processing and payment/refund issues.

Beginning Jan.-'04 -- The authorization was expanded to mirror the authority of a form 8821. The designee may address any issue arising out of the tax return for a period not to exceed one year from the due date (emphasis mine) of the tax return (it doesn't say, but I'm taking that to mean including extensions). The designee may also receive written account information including transcripts.

[Armando Beaujolais]

This possi plays dead...
I have wanted to take the EA exam but I am too afraid.
I've been doing taxes for 11 years. I NEVER remember figures.
I was told that the exam is not open-book, and you have to have numbers in your head. My 50 year old head depends on the computer for specifics.
I'd need a mentor close by...

I was afraid too. Then the owner of the tax prep firm where I worked signed me up for the exam. I studied hard, and passed the first try. Good thing there was someone else to get over my fear for me.

I took an NATP prep course. They presented a short list of formulas to memorize before you go in to take the test. I spent most of my time studying prior year exams, then a couple days before the test I memorized the forumlas. It's not open book, but you can start writing on your scratch paper as soon as you sit down. I sat down, wrote the formulas I'd memorized before the test started, then I didn't have to rely on memory.

Study for the test and take it. You might surprise yourself.