January 24, 2022
Brian Daly - Tax Practice & Procedures Committee | Bottom Line Solutions
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Signed, sealed, delivered does not mean “duly filed” according to Federal Circuit Court of Appeals or maybe the Court was not a fan of Stevie Wonder. In Brown, (CA Fed. Cir. 2022) 129 AFTR 2d ¶2022-311, the court determined that a return was not duly filed, according to IRC 7422(a), as the tax return preparer signed the return, but not in accordance with Treas. Reg. § 301.6402-2(e) which governs when a legal representative can sign a return. This raises the question “What is a duly filed return when signed by the taxpayer’s representative?”
Those of us in practice know that Form 2848, Power of Attorney and Declaration of Representative, is required for the Internal Revenue Service to recognize us, as a taxpayer’s representative. Included on the 2848 are additional options such as signing a return. In the situation where your client is not able to sign the tax return and wishes you to sign on their behalf, it is important to know the applicable procedural rule.
To be able to sign a return on behalf of a client, you must complete the 2848 as normal including checking the box on line 5a to “Sign a Return” and include the following statement on the lines provided:
“This power of attorney is being filed pursuant to 26 CFR 1.6012-1(a) (5), which requires a power of attorney to be attached to a return if a return is signed by an agent by reason of _________________.”
Fill in the blank with any of the three authorized reasons which are as follows:
- Disease or injury,
- Continuous absence from the United States (including absence from Puerto Rico) for a period of at least 60 days prior to the date required by law for filing the return, or
- Specific permission is requested of and granted by the IRS for other good cause
This could be dangerous, if the IRS does not agree with the above reasons, leaving the taxpayer with an unfiled return and the applicable penalties. If time allows, the best reason is to get permission from the IRS.
Here is where the magic happens. To meet the duly filed provision of IRC 7422(a), the taxpayer’s representative must attach the 2848 to the filed return, if a paper return is filed. If the return is electronically filed, the IRS requires the representative to attach the executed 2848 to Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and mail it to the address in the instructions.
Disclaimer: This article is designed to provide information in regard to the subject matter and has been prepared with the understanding that neither the Illinois CPA Society nor the author of this article is providing accounting, tax or legal advice or is performing any legal, accounting or other professional service. If accounting, tax or legal advice or other expert assistance is required, the services of a competent professional person should be sought.