Unable or unwilling to work with the IRS yourself? No problem! There are multiple ways to authorize someone to work on your behalf. The IRS has established four basic levels for third-party help:
- Power of attorney. This allows someone to represent a taxpayer in tax matters before the IRS. With this authorization, the representative must be an individual authorized to practice before the IRS.
- Tax information authorization. This appoints a person to review or receive a taxpayer’s confidential tax information for the type of tax for a specified period.
- Third-party designee. This designates a person on the taxpayer’s tax form to discuss that specific tax return and tax year with the IRS.
- Oral disclosure. This authorizes the IRS to disclose the taxpayer’s tax info to a person the taxpayer brings in on a phone call or to a meeting with the IRS about a specific tax issue.
Are these authorizations permanent?
If you’re anxious about giving certain rights to others, don’t be — you can revoke any of the above authorizations at any time.
Indeed, third-party designees and oral disclosures expire automatically. A third-party designee authorization ends one year from the due date of the relevant tax return; an oral disclosure authorization may expire at the end of the conversation but can also be granted longer if the taxpayer wants the IRS to continue having a conversation with the designated third party until the tax matter is resolved. Power of attorney and tax information authorization stay in effect until the taxpayer revokes the authorization or the representative withdraws it.
Are any of these third-party authorizations right for you? And if so, which ones? As tax season approaches, work with tax professionals to see whether they can do any of them for you or can suggest someone else who might be able to work with you.