Onboarding a new tax representation client involves several key steps: checking for conflicts of interest, obtaining an engagement agreement that defines the scope of work, conducting a tax compliance check using IRS transcripts, helping the client become fully tax compliant, determining if the IRS balance is accurate and reviewing collection alternatives or deficiency resolution options, which may require preparing IRS Form 433 financial statements. The overall goal is to properly define the representation and resolve the client's tax issues.

1. Onboarding a Tax Representation Client
Presenter: Brandon Groseclose

2. Learning Objectives:
• Understand what a conflict-of-interest is and what actions a tax professional needs to take upon
identifying one
• Understand the importance of engagement agreements in a tax representation case.
• Identify and list the key differences between the IRS Form 8821 and IRS Form 2848
• Recognize the importance of tax compliance when working a tax representation case
• Recognize the importance of IRS transcripts in a tax representation case and understand the
common transcripts made available by the IRS
• Identify and name some common options tax professionals have in resolving a taxpayer’s case
• Discuss the IRS 433 series of forms and their importance in resolving a taxpayer’s case

3. Conflicts of Interest
• A practitioner may not represent a client before the IRS if the representation involves a
“conflict of interest.” (Treasury Circular 230 §10.29).
• A conflict of interest exists if one of the two conditions below is met.
▫ Representation is directly adverse to another client
▫ Significant risk that representation will be materially limited by the practitioner's responsibilities to
another client, a former client, or a personal interest of the practitioner
• A tax professional may still represent a taxpayer if all the following conditions are met.
▫ Reasonable belief you are able to provide competent and diligent representation.
▫ Representation is not prohibited by law, and
▫ Get signed, a written, informed waiver of the conflict by each affected client signed no later than 30
days after conflict is known by the practitioner (retain consent for 36 months)

4. Engagement Agreements
• Always necessary, but especially when dealing with tax representation cases.
• A good engagement agreement will clearly list the years, tax matters, and scope of work you will
perform on behalf of a client.
• There should be a way to amend the agreement if necessary. You should be diligent in ensuring it is
kept up to date as needed.
• It should clearly list a refund policy.
• It should clearly list the responsibilities you have to the client and more specifically, what the client
has to you. It should include expectations regarding the timeliness of a client providing you needed
documentation.
• There should be a way for either party to disengage from the agreement

5. IRS Forms 8821 and 2848: Overview:
• IRS Forms 8821 and 2848 are sent to the IRS Centralized Authorization File (CAF) unit for processing.
• Each taxpayer representative is assigned a CAF number when either an 8821 or 2848 is filed listing them. The
CAF unit issues businesses CAF numbers as well.
• Normal processing turn-a-round time is 2 weeks
• These forms can be faxed directly to most IRS departments if they are not already on file with the IRS.
▫ Examples: Automated Collections, Exam, IRS Centralized Lien Operation, Practitioner Priority Service
• To successfully represent a taxpayer, you may need multiple 2848s or 8821s covering different parties.
▫ Example: MFJ returns, S-Corps, C-Corps, Partnerships, etc.
• The IRS is working on an online submission option that allows for e-signatures. Presently you need to fax
these forms to the IRS with a wet signature.

6. IRS Form 8821: Tax Information Authorization
• The 8821 can be filed listing either an organization or an individual as an appointee
• Authorizes someone to receive confidential tax information from the IRS
• Limited in scope. Does NOT allow you to negotiate with the IRS or enter into
alternatives to collection
• Anyone can be listed on the 8821. You do not need to be an enrolled agent, CPA, or
attorney.
• This form is best used to help determine the scope of work you need to assist a
taxpayer with or if a full power of attorney is unnecessary

7. IRS Form 2848: Power of Attorney
• The 2848 is filed with individual representatives listed. You cannot file a
Power of Attorney (POA) listing a business as a representative
• Allows someone to propose, negotiate, and enter arrangements with
the IRS. Allows full representation rights
▫ You can sign waivers, extensions, appeals, etc., on behalf of taxpayers.
Remember: just because you can do something doesn’t mean you should
• Generally, you must be an enrolled agent, CPA, or attorney to be listed
on this form.

8. Tax Compliance
• When onboarding a new tax representation client, there is no substitute for calling the IRS for a
compliance check. The first step in a representation case is checking a taxpayer’s compliance history.
• To be in tax compliance. A taxpayer must:
▫ File all “required” returns
▫ Be making any required estimated tax payments or estimated tax payments. Have sufficient withholding.
• The IRS generally requires the last six years of returns to be filed for compliance purposes.
▫ Remember: there is no assessment statute expiration date (ASED) for an unfiled return.
• A taxpayer may enter an alternative to collective action by just making the most recent required
estimated payment or tax deposit, but they may still owe for that tax year
• Ongoing compliance is required to maintain any established alternative with the IRS - including
payment arrangements. It is also required that a taxpayer maintain at least 5 years of tax compliance
on an accepted offer.

9. IRS Transcripts: Overview:
• To successfully work a tax representation case, you need transcripts. You want at
least account transcripts and wage & income transcripts for years in which you
are engaged in representing a taxpayer.
• Transcripts are your gateway into figuring out what is going on with a taxpayer’s
account. It is the IRS’s itemized record of events.
• Obtaining:
▫ With a valid authorization on file, you can get transcripts directly from the IRS
through E-Services’ Transcript Delivery System.
▫ If you have a valid authorization, but it is not on file with CAF, you can contact the IRS
and request they provide you transcripts directly.
▫ Many representation software packages allow you to pull transcripts using them as a
third party.
 Example: Canopy & Tax Help Software (THS)
• We are going to discuss the first two types of transcripts listed.
Common Transcript Types
• IRS Account Transcripts
• IRS Wage & Income (Full & Summary)
• IRS Tax Return Transcripts
• Record of Account Transcripts
Resource:
https://www.irs.gov/individuals/transcript-types-and-ways-to-order-them

10. IRS Transcripts: Account Transcripts:
• This transcript shows basic data such as return type, marital status, adjusted gross income,
taxable income, and all payment types. It also shows changes made after an original return
is filed
• You can generally go back and request account transcripts for as long as the IRS has a record
of them.
• Account transcripts will be the most useful transcript type for determining the taxpayer’s
account status.
• Each line item has a code and a textual readout identifying what the code means.
Sometimes these codes are not clear.
 Tax Help Software has a complied list of codes and their meanings: https://taxhelpsoftware.com/irs-transaction-codes

11. IRS Transcripts: Wage & Income Transcripts:
• These transcripts are helpful for filing missing returns or reviewing a taxpayer’s already filed
return.
• They show data from informational returns such as Forms W-2, 1099, 1098, and 5498.
• These transcripts are available in both the full and summary versions. The summary version
is useful if the taxpayer has a lot of small transactions showing on their transcripts.
• Available for the last ten years. The previous year’s transcript is usually not complete until
October of the current year.
• BE CAREFUL: These transcripts don’t preclude you from due diligence - always inquire about
a taxpayer’s sources of income.

12. IRS Resolutions:
• Remember: To effectively resolve a taxpayer’s account, they need to be in and maintain tax
compliance.
• Methods of Resolving a Taxpayer’s Account:
▫ Is the balance assessed against a taxpayer accurate? If not, work to correct the deficiency.
 Amend Returns
 Doubt-As-To-Liability Offer (IRS Form 656-L)
 Audit Reconsideration
 File Original Returns
▫ If the balance is accurate, then review for collection alternatives.
 Abatements
 Installment Agreements
 Doubt-As-To-Collectability Offer (IRS Forms 433-A (OIC) and 656)
 Non-Collectible Status / Running Collection Statutes
• It can get complicated as many taxpayers have multiple years in collections.

13. IRS 433 Series Forms: Overview:
• The 433 series of IRS forms consist of requests for installment agreements and financial
statements.
• In order to determine the best course of action on a non-deficiency-related resolution path,
you need to complete the appropriate form for your taxpayer.
• There are seven forms used by the IRS in this series:
▫ 433-A: Collection Information Statement for Wage Earners and Self-Employed Individuals
▫ 433-A (OIC): Collection Information Statement for Wage Earners and Self-Employed Individuals (Offers Only)
▫ 433-B: Collection Information Statement for Businesses
▫ 433-B (OIC): Collection Information Statement for Businesses (Offers Only)
▫ 433-D: Installment Agreement
▫ 433-F: Collection Information Statement
▫ 433-H: Installment Agreement Request and Collection Information Statement
• In practice, the most used forms are the 433-A, 433-B, 433-F. We’ll discuss these in a little more detail

14. IRS Forms 433-A, 433-B, and 433-F:
• The IRS uses financial statements to calculate “Disposable Income” and available equity.
• IRS field collections use the 433-A and 433-B forms. Automated Collections (ACS) uses the 433-F and
433-B forms.
• Disposable income is income minus allowable expenses. It is calculated on a monthly basis.
 Income:
 Income is always counted in full – even if the income is not normally taxable.
 Expenses:
 Categories with National Standards:
 Food, Clothing, and Other Items: Always allowed in full.
 Out of Pocket Healthcare: Always allowed in full. Deviations above standards are easily allowed here
 Housing and Utilities: Actual amount paid or the national standard. Whatever is less
 Vehicle Ownership Costs: Actual amount paid or the national standard. Whatever is less.
 Vehicle Operating Costs: Always allowed in full if they have a vehicle.
 https://www.irs.gov/businesses/small-businesses-self-employed/collection-financial-standards
 Categories without standards are allowed at their provable amounts if they are reasonable.

15. IRS Forms 433-A, 433-B, and 433-F: Continued
• The disposable income and equity values should help guide your decision making on
the best collection alternative available to your client.
▫ For example: if there is very little equity and no disposable income, an offer could be
an option.
▫ For example: if there is high equity and a lot of disposable income, an installment
agreement would likely be the best option.
• Deviations from national standards are allowed in certain circumstances if warranted.
▫ Example: A person with diabetes requiring a specialized diet could argue their food
cost is higher than the national standard.
▫ Example: A home that has been retrofitted for an elderly and mobility impaired
taxpayer could argue a higher housing and utility expense.

16. Summary: Flow-chart
1. Is there a conflict of interest?
2. Determine scope of work. Get Engagement Agreement.
3. Conduct Compliance Check. Get Transcripts.
• Amend agreement if needed. Continue to monitor the agreement for needed changes.
4. Get Client Compliant
• Assist client in filing, making estimated tax payments, adjusting withholdings, or making federal tax
deposits
5. Determine if balance is substantially accurate.
• If accurate – review for collection alternatives. Prepare appropriate IRS 433 form to aid in your review
• If inaccurate – review for deficiency fixing alternatives