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
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.
If 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:
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.
A 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.
The 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:
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.
Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
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