Q. What is CAF
A. CAF is the acronym for Centralized Authorization File. The CAF contains information on third parties authorized to represent taxpayers before the IRS and/or receive and inspect confidential tax information on active tax accounts or those accounts currently under consideration by the IRS.

Q. What is the difference between "represent taxpayers before the IRS"       and "receive or inspect confidential tax information on active accounts"?
A. A Power of Attorney allows the third party to act on behalf of and negotiate for the taxpayer. The representative is an advocate for the taxpayer and may argue facts or law with the IRS.

The appointee of a Tax Information Authorization is able to receive and exchange information with the IRS for the purposes of resolving tax account issues.

Q. How is CAF data received from the taxpayer?
A. Taxpayers file Form 2848, Power of Attorney and Declaration of Representative (PDF), to authorize individuals to represent them before the IRS and/or to receive copies of notices sent to the taxpayer and account transcripts, and to receive IRS refund checks.

Form 8821, Tax Information Authorization (PDF), is submitted to authorize an appointee, including but not limited to, legal and accounting firms, to inspect and/or receive confidential tax account information including copies of notices and account transcripts, but not IRS refund checks. 

Form 706, U.S. Estate Tax Return (PDF), authorizes one attorney, accountant or enrolled agent to represent the estate on a limited basis and to receive notices, but not IRS refund checks.

Q. When did the CAF centralization occur?
A. In July 2001, CAF information from ten service centers was consolidated into one database with nationwide access. Beginning January 1, 2002, the processing of third party authorizations onto the CAF was centralized in three CAF Units, Memphis, Ogden and Philadelphia (international only).

Q. How do I obtain a list of all clients on the CAF that I am authorized to represent?
A. Instructions for requesting a list of clients from the CAF whom you are authorized to represent can be found on the IRS Freedom of Information Web page.

Q. Are there authorization products other than Form 2848, Form 8821 and Form 706?
A. Yes. A number of third party authorization products are available to the taxpayers. They include, but are not limited to:

• The Third Party Designee (Checkbox) Authorization
• The Oral Disclosure Consent (ODC)
• The Oral Tax Information Authorization (OTIA)

Q. Can you provide more information about the Third Party Designee (Checkbox) Authorization?
A. The Third Party Designee (Checkbox) Authorization appeared first on all paper and e-file individual income tax forms in January 2001 for the 2000 reporting tax year. It was available on all forms in the 1040 series, except the 1040X or amended tax return. It was also not available on Tele-file. For the 2000 reporting period, taxpayers were only allowed to designate paid return preparers to receive verbal account information (no written information) related to return processing issues (missing information, match error and penalty notices) and payments and refunds. The Third Party Designee (Checkbox) Authorization does not allow the designee to "represent the taxpayer." The authorization is also specific to the tax return upon which the designation appeared.

In January 2002, for the reporting tax year 2001, the Third Party Designee (Checkbox) Authorization was expanded to allow the taxpayer to name any third party, including friends and family, to assist them in resolving return processing and payment/refund issues. The authorization also appeared on business tax forms as well as forms in the 1040 series (Forms in the 94X series, and Forms 720, 1041, 1120, 2290 and CT-1).

Currently, the Third Party Designee (Checkbox) Authorization is not recorded on the CAF. Instead, during returns processing, the authorization is recorded directly onto the account of the taxpayer.

Effective January 1, 2004, the Third Party Designee (Checkbox) Authorization was expanded to mirror the authority of a Form 8821. The designee may address any issue arising out of the tax return for a period not to exceed one year from the due date of the tax return. The designee may also receive written account information including transcripts upon request. Please see Pub 4019 for a quick reference of third party authorizations.

As a TIA, the Third Party Designee (Checkbox) Authorization can co-exist with a Power of Attorney for the same tax and tax period.

Q. How does the taxpayer name a designee and how does the IRS know who the designee is?
A. The taxpayer completes the Third Party Designee Authorization directly on the tax return entering the designee's name and phone number and a self-selected 5-digit PIN, which the designee will have to confirm when requesting information from the IRS.

Q. Can you tell me more about the Oral Disclosure Consent (ODC) and how the IRS knows whom the designee is?
A. The ODC, available October 2001, allows the taxpayer to verbally establish an authorization for all types of open tax accounts, after receiving an IRS notice. The appointee can be any third party, including friends and family, and is allowed to respond to the issue raised in the notice, to ask questions and provide information. The ODC does not allow the appointee to receive any written information and does not allow the appointee to represent the taxpayer.

The authorization is valid until the tax related issue is resolved. If the taxpayer receives subsequent notices from the IRS, he/she must establish another authorization, even if it is for the same appointee.

The ODC can co-exist with Power of Attorney for the same tax and tax period. This authorization is not recorded on the CAF but, instead, directly on the taxpayer's account.
 
Q. Can you tell me more about the Oral Tax Information Authorization (OTIA) and how the IRS knows who the designee is?
A. The OTIA allows the taxpayer the ability to grant a third party, including friends and family, the authority to receive and inspect both written and verbal tax account information. The appointee must either have a CAF number or will be assigned a CAF number. The appointee may receive copies of notices and transcripts, on open issues, but not IRS refund checks.

The taxpayer contacts the IRS and expresses their desire to establish an OTIA. The call is transferred to one of three CAF Units who will input the authorization directly onto the CAF while the taxpayer is on the phone. The taxpayer should be prepared to identify the appointee, provide the appointee's CAF number (if available), and the tax and tax period with which the taxpayer is seeking assistance. Once the authorization is recorded to the CAF, the appointee may call in, identify himself and begin sharing and exchanging information with the IRS.

It is not necessary that the taxpayer receive a notice prior to establishing an OTIA.
An OTIA may co-exist with a Power of Attorney and is not superseded or revoked by the submission of a new TIA. Therefore, when the tax account issue is resolved, a decision should be made by the taxpayer and the appointee whether or not to submit a revocation of the authorization in writing.

Q.  These three products are very different from the standard Power of Attorney and Tax Information Authorization. What brought about the design of these products?
A. Public Law 104-168, commonly known as the Taxpayer Bill of Rights II, was signed into law on July 30, 1996, deleted the requirement that a taxpayer's request for disclosure to a third party be in writing. The change was not possible until Temporary Regulation 301-6103(c)-IT, effective January 11, 2001, which authorized the IRS to accept non-written requests or consents, authorizing the disclosure of return information to third parties assisting taxpayers resolve federal tax related matters. The temporary regulation was made permanent by 26 CFR 301.6103(c) - 1 (c).

Q. How does a taxpayer determine which third party authorization product to use for purposes of resolving federal tax related matters?
A. The Third Party Designee (Checkbox) Authorization is submitted with the filing of a tax return and for the purpose of resolving return processing, payment or refund issues.

The Oral Disclosure Consent is used when addressing a specific issue raised in a notice received from the IRS.

The Oral Tax Information Authorization or Form 8821 is used when an examination of written account information is needed and the issues are related to the tax period versus a specific notice issue.

The Power of Attorney is used when the authorization is for the purpose of allowing a tax professional (attorney, CPA, enrolled agent, etc.) to represent and act on behalf of the taxpayer, including negotiating with the IRS and arguing facts or law.

Q. Is this information available in writing?
A. Please see the table of Third Party Authorizations which features the various authorization levels, expiration dates, processing times, etc. The CAF Web site also contains a brochure, Third Party Authorization Product Line, which seeks to assist taxpayers in making their product choices.

Q. What product should be used when submitting authorizations for federal non-tax related matters?
A. When requesting the disclosure of return information such as copies of tax returns, transcripts of an account to verify adjusted gross income, wages earned, etc., for non-tax matter purposes (income verification, loan and financing applications), the taxpayer should use Form 4506, Request for a Copy or Transcript of Tax Form (PDF) and submit it to the IRS, Return and Income Verification Services.

Q. How long is a Power of Attorney authorization valid and how is it revoked?
A. A Power of Attorney is valid until revoked. It may be revoked by the taxpayer or withdrawn by the representative or may be superseded by the filing of a new power of attorney for the same tax and tax period. If a Power of Attorney is on the CAF and the taxpayer desires to add another representative and not replace the representative already on the record, Line 8 of Form 2848 must be checked.

Care should be taken to ensure an authorization is revoked when it has accomplished its purpose.

Q. How long is a Tax Information Authorization valid and how is it revoked?
A. A Tax Information Authorization, whether submitted via Form 8821 or orally, is valid until revoked. It may be revoked by the taxpayer or withdrawn by the representative. It is not superseded by the filing of a new Form 8821 or the granting of a new OTIA and can co-exist with a Power of Attorney.

Care should be taken to ensure an authorization is revoked when it has accomplished its purpose.

Q. How do I notify the IRS of my desire to revoke an authorization?
A. A revocation statement should be submitted in writing and must contain the taxpayer's identifying information (name and taxpayer identification number), the representative or appointee's identifying information (name and CAF number), and the specific tax and tax periods covered by the revocation. The notice should be signed and dated by the party desiring the revocation.

The recommended method for quickly and efficiently accomplishing a revocation of a paper Form 2848 or 8821 is to write at the top of the authorization form (or copy of the form), the word "REVOKE" and to sign and date it. The notice of revocation should be mailed or faxed to a CAF Unit so the IRS can update its records accordingly. Care should be taken not to strike over any of the original information contained on the authorization.

Q. There seems to be a lot of confusion with regard to the unenrolled return preparer and the authority granted to them. Can you clarify?
A. The unenrolled return preparer may represent a taxpayer as power of attorney on tax account issues related to a tax return prepared by that unenrolled return preparer. If providing representation services, the unenrolled return preparer may only represent the taxpayer before IRS Examination function.

If an unenrolled return preparer did not prepare the tax form from which the tax matter arose, nor is representing the taxpayer before Examination, the Form 2848 will be returned. Because Form 2848 implies representation authority, when an unenrolled return preparer has not prepared the return or when the unenrolled return preparer expects to exchange information with offices other than Examination (Collection, ACS, Appeals), it is strongly suggested that a Form 8821 be submitted.

A brochure specifically designed to explain the role of the unenrolled return preparer is available at CAF website.

Q. When a Power of Attorney is modified on Line 5 allowing the representative named to redelegate the authority to another representative, how is that accomplished?
A. A new Form 2848 is completed with the taxpayer data and identifying the representative to whom authority should be redelegated. The Form 2848 is then signed by the original representative. If the original representative wishes to "share" authority rather than "relinquish" authority, the original representative should check Line 8 prior to signing Form 2848. The authority to redelegate or substitute cannot be redelegated.

Q. If I have Power of Attorney authority and I want to have a paralegal check on the status of an account or request information, can I redelegate authority to the paralegal?
A. Redelegation applies to the granting of authority to a party with the equivalent in credentials as the representative of record, for example, an attorney redelegating to another attorney.

For quick inquiries by members of your office, who do not necessarily share the same level of credentials, the authorized representative of record may complete Form 8821 designating the paralegal or any other third party to receive tax account information. As representative of record, you may sign the authorization on behalf of the taxpayer.

Q. What future CAF and third party authorization changes will occur in the near future?
A. The CAF will be able to record more than three representatives/appointees per tax matter.

Specific, authorized actions modifying a Power of Attorney (Line 5) will be available to IRS assistors, making the resubmission of Forms 2848 unnecessary.

The CAF will be able to distinguish the student attorney and student accountant from the practicing attorney and certified public accountant.

And the CAF will receive authorizations electronically via the internet through the e-services product, Disclosure Authorization. Through this medium, authorizations will be recorded immediately and directly onto the CAF. Tax professionals wishing to use this product will have to be registered and approved e-services users.

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.

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