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Get Authorized to Represent Tax Resolution Clients in 3 Steps

Ready to start offering tax resolution? We'll walk you through the steps of getting authorized to represent tax resolution clients. Learn more!

1 min read

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Canopy

Getting authorized to offer tax resolution isn’t a complicated process, especially if you’re already a certified enrolled agent, CPA, or attorney. In fact, in just a few steps, you can become authorized to represent tax resolution clients and start doubling your monthly income with tax resolution cases.

Follow these three steps to get started on your way to becoming a tax resolution professional. 

Step 1: Become an enrolled tax preparer

become-enrolled-tax-preparerIf you want to start offering tax resolution services, you will have to be certified as either a CPA, a tax attorney, or an enrolled agent, which are all designated by the IRS as able to represent clients in tax disputes. Becoming an enrolled agent (EA) is the only option that doesn’t require at least a bachelor’s degree, but you do still have to prove competency.

If you want to become an EA, first you need to obtain a Preparer Tax Identification Number (PTIN). To obtain a PTIN, navigate to the IRS PTIN System. Be sure to have the following information ready for smooth application: 

  • Social Security Number
  • Personal information such as name, mailing address, and date of birth
  • Business information such as name, mailing address, and phone number
  • Previous year’s individual tax return 
  • Explanations for felony convictions, if any
  • Explanations for problems with your US tax obligations, if any

Once you have gathered your information, you simply create an account and apply. You can log into your account to check the status of your PTIN, but in general, your PTIN will likely be issued to you immediately after you apply.

Then you need to pass a comprehensive three-part exam that tests your knowledge of tax law and processes. This exam, known as the Special Enrollment Examination (SEE), covers individuals, businesses, and representation, practice, and procedures. Participants must pass each of the parts within three years to earn their license. There’s no educational requirement or hourly threshold that qualifies a person to become an EA, just the exam itself.

Once you’ve passed the exam, you must go through a background check administered by the IRS. Every three years after that, you must keep up on continuing education credits.

Another way to become an enrolled agent is by working at least five years with the IRS in a taxpayer-facing field position such as an appeals officer, revenue officer, revenue agent, special agent, tax specialist, tax law specialist, or settlement officer. Once you have qualifying experience you’ll be able to fill out Form 23. After you fill out the form, you will need to pass a background check conducted by the IRS.

Step 2: Get your CAF number

get-caf-numberA Centralized Authorization File (CAF) number is a nine-digit number assigned to you by the IRS the first time you file a Power of Attorney or a Tax Information Authorization. The number is used by the IRS to track your requests for client information, such as transcripts.

The first time you file a Form 2848 (Power of Attorney) or Form 8821 (Tax Information Authorization), simply write “none” in the space designated for your CAF number, and the IRS will send you a letter with your CAF number. You will only have to apply for a CAF number once, and will use the same CAF number for each case going forward.

Step 3: Obtain Power of Attorney

obtain-power-of-attorneyThe only other legal paperwork you need to have in order to do tax resolution work is Form 2848, Power of Attorney. Having Power of Attorney gives you the legal right to represent your client before the IRS. A new Power of Attorney will have to be filed for each client. To obtain Power of Attorney follow these steps:

  • Submit your completed Form 2848 to the IRS 

Depending on how much time you have, you can submit this form in several ways. First, you can mail it, which takes at least a week. Second you can fax it, which takes 5-7 business days for processing. And lastly, you have the option of faxing your form while you’re on the phone with an IRS agent. During the call, you can request transcripts to help you get started on the case, but you won’t be able to represent your client to the IRS until the Power of Attorney request is processed.

Keep in mind, you can use Form 8821 (Tax Information Authorization) to access your client’s transcripts without having Power of Attorney on file, but you won’t be able to represent your client before the IRS in any way until Form 2848 is on file.

Congratulations! Once you have completed these three steps, you're ready to start representing your clients in various types of tax resolution cases such as offer in compromise, penalty abatement, trust fund recovery, innocent spouse, and more. 

Want to jump into tax resolution work without the spending hours on IRM research? We’ve built every feature in Canopy with you, your team, and your clients in mind so you can work together to resolve tax issues. With tools for notices, transcripts, form auto-population, and more, you’ll be able to focus on important casework instead of busywork.

Canopy is a one-stop-shop for all of your accounting firm's needs. Sign up free today to see how our full suite of services can help you. 

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