Filing a POA

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#1
Andrew  
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Just wondering what others do. Do you routinely file a POA for every client with the IRS (and state)? Or do you only file a POA when the client received a notice?

I'm thinking of routinely filing them for all clients. Some wait months to give me a copy of a notice while time is usually of the essence. However I'm wondering if filing a POA for a client could be a red flag if no notice has been issued.
Last edited by Andrew on 5-Aug-2021 10:37am, edited 1 time in total.
 

#2
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We used to do this for every new business client. But then we had some turnover and things got busier and we stopped. It's kind of nice getting all the notices straight from the IRS; I prefer it. Although sometimes it's stuff that the client will handle and we might spend time on it needlessly.

I don't think filing the Form 2848 would be a flag. We never had any problems with it. It does show up on the account transcript, and I heard another accountant say one time that he thought it could possibly trigger the IRS to resume following up on an issue that had sat dormant for a while (although I don't really think so).
 

#3
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My new firm does this as a matter of course. I'm, candidly, a little skeptical that it is really as beneficial as everyone believes it to be, but with things like the Advance CTC and stimulus payments, there's a lot of value in being able to pull a transcript directly for a client rather than have to wait for them to request it or have it mailed.
~Captcook
 

#4
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It feels like that would be opening a new liability exposure if you had a POA for every client, but I can see how it would be nice to have easy immediate access to certain information.
If the IRS would get back to the 3-5 days to process a faxed POA, that would make life much easier.
 

#5
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What liability? We simply have access to different numbers, but already have the same sensitive information for other purposes. Clients rarely address notices, in my experience at least, and rely on me. Well, when they provide the notices late, it can be more difficult to address. While SC will not send me notices, I can access notices sent to my clients via my agent portal.

I have thought about filing POAs for all clients, but then withdrawing them if a client leaves because I really do not care to receive notices for work unrelated and subsequent to mine. I just submitted a few withdraw requests; state processed same day, I'm sure the IRS has not even looked at them, yet.

At this time, it has been on an as-needed basis. For 2022+, I may simply make it a requirement that every tax client signs POAs if they want me to be their tax preparer and handle tax matters beyond preparation. But, I have some clients where I do not always know what states they need to file (it can change each year), and so I would be filing POAs after tax prep is done unless filing jurisdictions are known in advance.
 

#6
ATSMAN  
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I know many accountants make it part of the engagement letter but I have opted to do it on a as needed basis. Generally when I pick up an engagement I know 99% of the time if there are prior issues that may need more research so I get a POA. But for your run of the mill tax returns it may be an overkill. I can always talk to IRS or State DOR for the returns I prepared and e-filed because TP authorization is always mine.
 

#7
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There are obvious pros and cons of setting up a POA for "every client", and they mostly have to do with either saving time or losing time.

I think the answer depends on the type of client(s).

I do it for about 20 of my clients "automatically", but I talk to them about it first.

For them it's a time saver. For the others, I feel like it is much better to prepare it on a case-by-case basis.
 

#8
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My former employer wondered about offering a service for existing where we would pull transcripts on a regular basis. He could not find a price point at which it would be worth it for most clients.
 

#9
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The real value, IMO, is checking the box to receive copies of IRS notices sent to clients. I seem to receive them a few days before clients do, which provides added value when I can inform them of an issue or situation to be addressed (or disregarded).

Preparing the POAs is a PITA, which is why I have yet to do it. I wish there were a means for completing POAs in bulk, but haven't seen one yet.
 

#10
HowardS  
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I can't file 2848's but can file 8821's to alert me to client notices. I do on a per case/per person basis when I expect issues.
Only about 1-2% of my clients contact me on this issue each year, mostly missing 1099's.
POA's for everybody sounds like a radical effort for a 1-2% problem.
Retired, no salvage value.
 

#11
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I've had situations where an issue arose--let's say after a divorce--and it proved to be difficult to get a POA from the ex-spouse to address an issue on the joint return. Had I done it before, it would not have been nearly as difficult.

Still on the fence. We all have valid arguments for and against requiring POAs for all clients.
 

#12
ATSMAN  
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and it proved to be difficult to get a POA from the ex-spouse to address an issue on the joint return.


Any time I am dealing with a situation like that where a MFJ return I prepared has issues and the couple is divorced or in the process of divorcing I am extra cautious and I often refer them to their divorce attorney to bring them into the loop. This has saved me a lot of hassles especially when the parties are not even talking to each other. Also one of the spouses is going to have another accountant, so that person needs to be brought into the loop also.
 


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