In the case of Levi v. Commissioner, TC Memo 2015-118 the question before the court was, effectively, whether the Levis had filed a valid return. The issue arose because the return had been signed by an attorney retained by the couple to prepare their tax return.
As the court explained the situation:
In April 2011 petitioners hired Florida attorney Sarah Martello to prepare their Form 1040, U.S. Individual Income Tax Return, for 2010 (2010 return). On April 29, 2011, petitioners executed Form 2848, Power of Attorney and Declaration of Representative, appointing Ms. Martello and her assistant, Misty Priest, as their representatives. Ms. Martello prepared, signed, and timely submitted petitioners’ 2010 return on their behalf, attaching thereto Form 2848, which states in relevant part: “Acts authorized. …the authority does not include…the power to sign certain returns”.
As you might expect, that last statement, found on the October 2008 version of Form 2848, which would have been the current version of the form in April 2011, was a key issue.
Under Reg. §1.6012‑1(a)(5) a third party can sign a return on behalf of the taxpayer only in the following circumstances:
- Disease or injury that renders the taxpayer unable to sign the return,
- 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.
The Tax Court pointed out that none of these situations applied to the taxpayers. Although a Form 2848 was attached to the return, it did claim to provide such authority and, as well, no third party can sign except in the limited circumstances noted above. Thus, the Court found no valid return had been filed by the taxpayers.
The current version of Form 2848 (Revision Date July 2014) no longer has the language found in the 2008 version noted above. Now the general rights language notes that individuals looking to grant authority to sign returns to a third party should consult the instructions to Form 2848.
The current Form 2848 provides the following the general “Acts authorized” block:
Block 5a does contain a check box for signing the return, as shown below:
However, as is noted in Block 3, there are conditions on granting that authority. The instructions recite the basic requirements for allowing a representative or agent to sign the return, but then provide the following additional specific requirements:
Authorizing your representative.
Check the box on line 5a authorizing your representative to sign your income tax return and include the following statement on the lines provided: “This power of attorney is being filed pursuant to Treasury Regulations section 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 [enter the specific reason listed under (a), (b), or (c) under Authority to sign your return above].”
Authorizing an agent.
To authorize an agent who is not your representative, you must do all four of the following:
- Complete lines 1-3.
- Check the box on line 4.
- Check the box on line 5a titled “Sign a return” and write the following statement on the lines provided:
- “This power of attorney is being filed pursuant to Treasury Regulations section 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 [enter the specific reason listed under (a), (b), or (c) under Authority to sign your return above]. No other acts on behalf of the taxpayer are authorized.”
- Sign and date the form. If your agent e-files your return, he or she should attach Form 2848 to Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, and mail it to the address listed in the instructions for Form 8453. If your agent files a paper return, he or she should attach Form 2848 to your return. See Line 7. Signature of Taxpayer, later, for more information on signatures. The agent does not complete Part II of Form 2848.
Advisers at times may face a request by taxpayers to sign a return on their behalf because it’s “inconvenient” for them to sign the return. Advisers must be aware of the limitations on signing such a return and insure that a) the situation in question is one that meets the requirements of Reg. §1.6012‑1(a)(5) and b) that the proper procedures required by the instructions to Form 2848 are followed in obtaining authority to sign the return.