Further Updates on the IRS Revised Power of Attorney Form 2848
Rev. 08/05/04, E-mail Alert 2004-16

The revised Form 2848 requires that only individuals in the following four categories be allowed to be appointed to represent the employer: a Certified Public Accountant, an Attorney, an Enrolled Agent, or an Enrolled Actuary. Practitioners who don’t fall into one of the four approved categories will not be allowed to represent employers in negotiations on Determination Letter submissions. We are conducting a survey of our clients and recipients of this E-Alert to see how their firms might be affected by this change. We are specifically interested in finding out if the new rules mean that the firms will be without anyone to sign the Form 2848.

Some of the changes brought about by the IRS Restructuring and Reform Act of 1998 are starting to impact our jobs. When the law was enacted, there were concerns about IRS employees speaking about specific taxpayer issues with individuals who were not appropriately authorized to represent the taxpayer. In the past, individuals had to meet certain criteria in order to represent taxpayers before the IRS. Specifically, they had to be a Certified Public Accountant, an Attorney, an Enrolled Agent or an Enrolled Actuary.

In the employee benefit arena, other individuals (qualified and not) would often represent employers, even though the individuals did not fall into these categories. Whether or not it was appropriate, wide use was made of the “unenrolled return preparer” category. The IRS has now issued a new Form 2848 to be used as of April 1, 2004. The instructions to the Form make it clear that use of the unenrolled return preparer category will be limited. Specifically, practitioners who don’t fall into one of the four approved categories will not be allowed to represent employers in negotiations on Determination Letter submissions. Additionally, the IRS agreed that, unless the practitioner is a member of one of the four approved categories, he or she is not authorized to sign the employer’s Form 5558.

We are conducting a survey of our clients, recipients of this E-mail Alert, and attendees of some of our public seminars to see if their firms might be left exposed by the new rules. We also want to see what other credentials the firms’ staff members may have. We are among the industry representatives working with the IRS to solve this potentially significant problem, we want to have data available that will allow us to intelligently discuss the possible expansion of who could practice relative to employee benefit issues before the IRS. All survey answers will be kept confidential. Data will be disclosed on a gross basis only, rather than firm by firm.

Your information is very valuable to us and we appreciate your assistance in completing this survey. Please either print out and complete the survey and fax to Rich Hochman’s attention at 973-492-6633, or save it to a Word™ file, complete it, and e-mail to rhochman@mhco.com. All respondents who return surveys by August 31 will be entered into a drawing for a free single-session McKay Hochman E-Seminar of their choice. The winner will be notified and announced on our website by September 15, 2004.