austin3515

ERPA Important?

11 posts in this topic

Do people think it is important to be an ERPA? Am I correct that I will probably not be allowed to assist in an audit, or even talk to the IRS abouta client's account without being an ERPA (i.e., will my Power of Attorney not be accepted without it?)?

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Do people think it is important to be an ERPA? Am I correct that I will probably not be allowed to assist in an audit, or even talk to the IRS abouta client's account without being an ERPA (i.e., will my Power of Attorney not be accepted without it?)?

Why would your CPA designation not allow you to do any of those items?

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I;m just a certificate holder (as opposed to fully licensed), so I'm really not legally allowed to do anything with it other than calling myself a CPA. The full license requires 40 hours of CPE a year, plus the annual registration is over $500, plus I need to get 30 hours of CPE in Accounting and Auditing before they;ll give me my license.

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I;m just a certificate holder (as opposed to fully licensed), so I'm really not legally allowed to do anything with it other than calling myself a CPA. The full license requires 40 hours of CPE a year, plus the annual registration is over $500, plus I need to get 30 hours of CPE in Accounting and Auditing before they;ll give me my license.

Then you'll need to get the ERPA designation. I'm planning on doing it next year.

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I think that the Form 8821 allows you (and anyone in your company) to talk to the IRS and "help" with an IRS audit/exam. The 8821 names your company. However, under the Form 8821, you do not have the authority to represent your client on their behalf to the IRS. This could be a problem if the IRS tries to impose a sanction - you really won't be able to help them to negotiate with the IRS if that occurs.

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There is an article on the IRS website that looks like it says they will no longer allow Form 8821 for representation in a plan audit.

Can you please explain the forms used for providing representation?

There are three forms. The first is Form 2848, Power of Attorney and Declaration of Representative (instructions), which authorizes an individual to represent the plan sponsor before the IRS. The individual authorized must be a person eligible to practice before the IRS. Remember, individuals who represent the taxpayer as unenrolled return preparers must have prepared the Form 5500 for the year being examined and their representation is limited. The next is Form 8821, Tax Information Authorization (instructions are below the form), which authorizes any individual, corporation, firm, organization or partnership the plan sponsor designates to inspect and/or receive confidential information in any office of the IRS for the type of tax and the years or periods listed on the form. The final one is Form 56, Notice Concerning Fiduciary Relationship (instructions are below the form), which the fiduciary uses to notify the IRS of the creation or termination of a fiduciary relationship. For retirement plans, the form lists the trustee(s) of the plan.

It appears Forms 2848 and 8821 are similar. True?

The forms are similar in their preparation, but not in their use. Allow me to quote from the Form 8821 instructions:

Form 8821 does not authorize your appointee to advocate your position with respect to the federal tax laws; to execute waivers, consents, or closing agreements; or to otherwise represent you before the IRS. If you want to authorize an individual to represent you, use Form 2848, Power of Attorney and Declaration of Representative.

If someone other than the plan sponsor is going to participate in the examination, that individual must be qualified to complete the Form 2848 and do so properly. Only individuals listed on that form can represent the taxpayer. Also note, one name on the form does not automatically include all other members of that firm. This is a frequent situation encountered by my examination agents.

The article is here.

http://www.irs.gov/retirement/article/0,,id=224400,00.html

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Right, 8821 allows talk and info exchange, but you need a 2848 to allow representation:

"Form 8821 does not authorize your appointee to advocate your position with respect to the federal tax laws; to execute waivers, consents, or closing agreements; or to otherwise represent you before the IRS. If you want to authorize an individual to represent you, use Form 2848, Power of Attorney and Declaration of Representative."

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In my ERPA quest, what I was somewhat disappointed by is that anyone can representa taxpayer with respect to a 5500 if that person prepared the 5500 AND if the 5500 is under examination, which of course is 95% of the situations that we would need to be able to represent.

Anyone have any thoughts n that? I know we would be in trouble on takeover plans, and issues arising NOT related to an audit, but again that does seem to cover quite a bit of the situations.

I've heard that sometimes the auditors still insist on dealing with an enrolled preparer. Any thoguts?

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In my ERPA quest, what I was somewhat disappointed by is that anyone can representa taxpayer with respect to a 5500 if that person prepared the 5500 AND if the 5500 is under examination, which of course is 95% of the situations that we would need to be able to represent.

Anyone have any thoughts n that? I know we would be in trouble on takeover plans, and issues arising NOT related to an audit, but again that does seem to cover quite a bit of the situations.

I've heard that sometimes the auditors still insist on dealing with an enrolled preparer. Any thoguts?

Where did you see this (bolded)? I've never (last 5-6 years) had an IRS or DOL auditor allow us to represent a taxpayer whether we prepared the 5500 or not. We always have one of the CPA's get the 2848.

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Austin:

I have found it a major convenience to be able to "represent" when dealing with screwed up 945 deposits. FWIW

6 of them this year. 2 of them mistakes on the part of the IRS.

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