The IRS Says You’re No Longer Represented by Your CPA

Your Guide to State, Local, Federal, Estate + International Taxation

You get a letter from the Internal Revenue Service and right away you don’t have a very good feeling about it. You open it up, read it, and then panic hits. You owe them $10,000! No. Fortunately, it doesn’t tell you that (I hope!). It tells you that your long-trusted CPA whom you’ve come to know and love (we hope, right?) and have worked with for many years will “no longer be representing you”. That’s when a whole lot of thoughts can come into your mind. Did my CPA retire? Lose their license to practice? Doesn’t want to work with me anymore? Was run over by a truck? Fortunately for us both, the answer is NO when you get a letter like this.

You may get a letter like this when, at some point in time, – it could be four months or four years ago – your CPA executed a Power of Attorney to represent you on a tax matter that required him/her to contact IRS directly on your behalf. This wouldn’t have happened without your approval and signature on the Power of Attorney on file with the agency. If it was on a tax matter from years ago, you may have completely forgotten about it by now. What most don’t realize, is that the Power of Attorney can stay on file with the IRS and be active for many years, even well after the tax issue on hand at the time was resolved. This can result in correspondence going to your CPA from the IRS indefinitely for the time period(s) covered by the original P.O.A. And, it’s possible that such future correspondence could be on matters that you and/or your CPA never intended involvement with. This can happen even in situations where you no longer work with the CPA originally on the P.O.A.

Periodically, and for reasons mentioned above, either at your discretion or at the discretion of the CPA (or the firm they work for), a request can be made to the IRS to revoke a previously filed Power of Attorney. When such a request is made, once processed by the IRS, a letter is sent to the taxpayer informing him or her of the revocation though in their words, “no longer be representing you”. Be assured that this only applies to a specific tax matter that was probably long ago resolved and does not mean that your CPA is no longer working for you. Shew!

By Dale F. Jensen, CPA