EA Exam & Questions

[New York Enrolled Agent]

The first is under the scope of authority [26 CFR 601.504(a)] it says that a power of attorney is a written authorization for an individual to act on behalf of an individual in tax matters. It goes on to say that a representative can do all of the following:

1. Represent the taxpayer before any office of the IRS. However, a representative cannot advocate the taxpayer's position with respect to the federal tax laws. What exactly does this mean?

The second question is related to section 10.21 of circular 230 Knowledge of client's omission. It says the practitioner must advise the client of the consequences as provided under the Code and regulations of such noncompliance, error, or omission.
Thank You! I am just looking to find out how other EA's deal with these types of issues.

GTS1101

GTS1101

It's difficult to comment without see exactly what was written but certainly the WHOLE POINT of a C230 practitioner accepting a POA from a taxpayer is,in fact, to serve as an advocate for the taxpyer. Advocating for a taxpayer does not suggest espousing incorrect or flawed positions on a tax return but it does suggest vigorous support for a taxpayer's position when there is authority for that position. Perhaps, there is some confusion with filing a Form 8821 which allows for an interchange of information with the IRS but specifically does NOT allow the holder of the 8821 to advocate on behalf of the taxpayer. (I might add that the IRS has sometimes slipped on this in the past).

The regulation you cite §601.504 only describes the requirements for filing a POA and certainly does not prohibit the holder of the POA from advocating for the taxpayer.

To your second question - §10.21 of C230 really addresses situations where a practitioner has been retained by a taxpayer for a representation matter. IMO, it contemplates situations after a tax return has been filed and not in the situation you describe.

Certainly, in the situation you write about, you would be subject to any number of sanctions, whether you are a C230 practitioner or not, for submitting a false return. You sign a tax return under the jurat printed on the return and in the least subject yourself to a minimum preparer penalty of $1,000 under §6694 for an understatement of tax on the return.

[GTS1101]

Thank You

Just wanted to say thank you for all your thoughts. You have been really helpful. Thanks for recommending the two hour ethics course. I will definitely sign up for that course in the near future. I hope you all have a great Thanksgiving holiday next week.

[DTS]

Thanks for recommending the two hour ethics course. I will definitely sign up for that course in the near future...

GTS,

Consider purchasing the yearly Ethics course from the Tax Book. It's an online test, certificate is in your hands in a minute. I did this year and it was fine. They will ship out when you order your book or CD for January.

D