Ask The California Employment Tax And Payroll Tax Attorney – Using A Durable Power Of Attorney For IRS Representation

By Robert S. Schriebman
2023

Introduction

There are two basic types of Powers of Attorney (POA): the Standard POA and the Durable POA. By far, the most commonly used POA is the standard or financial POA. This type of POA is used for financially related matters such as bank transactions, and agency-type representation. In this type of POA there are 13 categories of representation and a final category that allows the agent to have “all of the above” powers. The standard POA expires either at a date certain, death, or on mental incompetency of the principal. The durable POA is commonly used to make financial and medical decisions in the event of physical or mental disability including the appointment of an attending physician and burial arrangements. The durable POA does not expire upon death. A standard POA will not be accepted by the IRS in lieu of Form 2848, the usual IRS POA. May a durable POA be used in representing taxpayers before the IRS in lieu of Form 2848?

Use of a Durable POA for IRS Representation

On August 30, 2023, the IRS Office of Professional Responsibility (OPR) announced that a durable POA may be used for general IRS representation in the event the taxpayer is mentally or physically unable to execute Form 2848. The agent, known as an Attorney-in-Fact, will have the authority to represent the taxpayer in the usual IRS matters. The requirements for the use of a durable POA are set forth in IRS Regulation 601.503(b). This Regulation can be found in IRS Publication 216 (Conference and Practice Requirements), or in the usual published Regulations. The OPR further announced that the durable POA must be created and executed before the physical or mental incompetency of the principal.

Conclusion

While the durable POA may be a substitute for IRS Form 2848 and allow the Attorney-in-Fact to handle the usual IRS matters, such as audit and collection issues, it is uncertain whether the durable POA will be accepted by California taxing agencies. It is also unknown whether the Attorney-in-Fact may use the powers set forth in a durable POA to prepare and file an FTB or EDD POA.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

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