IRS Representation

Representation means someone else deals with the IRS on your behalf — receives the correspondence, attends the interviews, produces the documents, and makes the arguments. It sounds procedural. In practice it changes the shape of a case, because most tax matters are decided by what enters the record and who controls how it gets there.

This page covers representation itself: who may do it, what authority it carries, when privilege matters, and what actually changes when a representative appears. For examination procedure see IRS audits; for resolution options see tax relief.

We represent taxpayers before the IRS, the FTB, CDTFA, the EDD, the Office of Tax Appeals, and the United States Tax Court, from offices in Temecula and San Diego.

Who May Represent You

Only three categories of practitioner have unlimited practice rights before the IRS: attorneys, certified public accountants, and enrolled agents. Practice is governed by Circular 230, and all three may handle examinations, collection matters, and appeals.

The distinctions that matter are not about competence but about what each can do when a case turns:

• Attorneys can represent you in federal court — the Tax Court, district court, and the Court of Federal Claims — and communications are protected by attorney-client privilege in both civil and criminal matters.
• CPAs and enrolled agents may appear before the IRS and, for those admitted, before the Tax Court in limited circumstances. Their communications carry the more limited Section 7525 practitioner privilege.

For most examinations, any of the three is appropriate. The question is what happens if the case does not stay ordinary.

Privilege, and Where It Ends

This is the single most consequential difference, and it is routinely misunderstood.

Section 7525 extends a limited confidentiality protection to communications with federally authorized tax practitioners — but it applies only to noncriminal tax matters before the IRS and noncriminal proceedings in federal court. It does not apply in a criminal investigation, and it does not apply to the preparation of returns.

Attorney-client privilege applies in both civil and criminal matters.

The practical consequence: if a civil examination develops facts suggesting intentional understatement and is referred to Criminal Investigation, an accountant’s notes, emails, and recollections become available. A taxpayer who discussed the problem candidly with their CPA has created evidence.

Where an accountant’s analysis is genuinely needed in a matter with criminal exposure, the accepted structure is a Kovel arrangement — the attorney engages the accountant, whose work is then performed in support of legal advice and covered by the attorney’s privilege. This must be established before the work begins; it cannot be applied retroactively to an existing accountant relationship.

One further point on preparer conflicts. Where the professional who prepared the return is also defending it, their interests and yours are not perfectly aligned — an adjustment may implicate their work. That is not a reason to distrust a good preparer, but it is a reason the defense of a contested return is often better handled by someone else. See IRS fraud accusations.

Form 2848 and What It Does

Representation is established by Form 2848, Power of Attorney and Declaration of Representative, which must specify the tax matters and the tax periods covered. Authority is limited to what the form describes.

Once filed, the representative may receive and inspect confidential tax information, correspond with the IRS, attend and conduct interviews, negotiate resolutions, sign agreements and extensions where authorized, and receive copies of notices.

Two limits worth understanding. Some notices are sent only to the taxpayer and not to the representative — passport certification under IRC 7345 is one, which is why a client with travel plans should forward anything that arrives. And a power of attorney does not permit the representative to sign the return or to receive refund checks.

Form 8821 is the narrower alternative, authorizing information access without representation authority. It is useful for a lender or a family member who needs transcripts, not for handling a case.

California requires its own authorization — FTB Form 3520-PIT or 3520-BE — because the federal power of attorney does not carry to the state agencies. CDTFA and EDD each have their own forms as well. A taxpayer who has authorized federal representation only is unrepresented in California.

What Changes When a Representative Appears

You stop talking to the IRS. Once a valid power of attorney is on file, the IRS is generally required to deal with the representative, and if you are contacted directly you can direct the contact to your representative. In a field examination this matters considerably — agents ask open questions about how a business operates, and those answers become part of the file.

The record gets controlled. Information document requests are answered with what is responsive and nothing more. Overproduction is the most common unforced error in an examination, and it is what turns a narrow question into a broad one.

Deadlines get calendared. The dates that decide tax cases — 30 days on a Final Notice of Intent to Levy, 60 days on a California Notice of Proposed Assessment, 90 days on a statutory notice of deficiency — are the most common way a defensible position is lost.

The posture is assessed early. Whether a case is an ordinary substantiation dispute, a matter with criminal exposure, or a collection problem misdiagnosed as an audit determines everything that follows.

Representation Across Agencies

A federal matter frequently has a California counterpart that arrives later and is handled by a different agency under different rules.

Under Revenue and Taxation Code section 18622, federal adjustments must be reported to the FTB within six months. Report on time and California has two years to assess; report late and it has four; never report and the window never closes. This is why a federal case that appears closed can produce a state assessment years later, with an agency that has twenty years to collect rather than ten.

Coordinated representation across both systems is usually more efficient than handling them sequentially, because positions taken federally constrain what can be argued in California.

Circular 230 and What a Representative Owes You

Practice before the IRS is governed by Treasury Circular 230, which imposes duties that exist for the taxpayer’s protection and are worth knowing about when choosing someone.

A practitioner must exercise due diligence in preparing and filing documents and in representations made to the Service, must not unreasonably delay a matter, must promptly submit records lawfully requested unless a good faith basis exists to withhold them, and must advise a client of any noncompliance, error, or omission discovered — including on returns the practitioner did not prepare.

Circular 230 also restricts contingent fees in most tax matters, permitting them only in narrow circumstances such as certain refund claims and matters already under examination. A practitioner offering to work purely on a percentage of savings across the board is describing an arrangement that is generally not permitted, and that pattern has driven much of the recent enforcement activity around promoted credits.

Sanctions for violations run from censure to suspension and disbarment from practice before the Service. The practical takeaway for a taxpayer is straightforward: ask what the fee arrangement is, ask whether the practitioner has unlimited practice rights, and be skeptical of anyone quoting an outcome before reviewing your transcripts.

Frequently Asked Questions

Do I need an attorney, or will a CPA do?

For routine examinations and collection matters, a CPA or enrolled agent is often appropriate. An attorney matters where there is criminal exposure, where the matter may go to court, or where privilege is needed — Section 7525 protection does not extend to criminal matters.

Can my accountant’s records be used against me?

In a criminal matter, generally yes. The practitioner privilege applies only to noncriminal proceedings. Attorney-client privilege applies to both.

What is a Kovel arrangement?

An engagement in which an attorney retains an accountant so the accountant’s work supports legal advice and falls within the attorney’s privilege. It must be established before the work begins.

Does a federal power of attorney cover California?

No. The FTB, CDTFA, and EDD each require their own authorization forms. Federal representation alone leaves you unrepresented before the state agencies.

Will the IRS still contact me directly?

Generally it deals with your representative once Form 2848 is on file. Some notices go only to the taxpayer, including passport certification, so forward anything that arrives.

Can a representative sign my return?

Only in narrow circumstances specifically authorized on the form. A power of attorney does not by itself confer signing authority or the right to receive refunds.

How quickly should I engage someone?

Before responding to the first substantive request, if possible. Most of what is difficult to fix later — statements made, documents produced, deadlines passed — happens in the opening weeks.

Get Representation in Place Early

The cheapest point to involve a representative is at the first notice, before the record has been built by someone without a strategy. The most expensive is after a statutory notice of deficiency has been ignored and the only remaining route is paying in full and suing for a refund.

Pietro Canestrelli holds an LL.M. in Taxation and represents taxpayers before the IRS, California’s tax agencies, the Office of Tax Appeals, and the United States Tax Court. Schedule a consultation, or review our IRS audit and IRS notice pages.