Q&A — Filing a Form 2848 for Your Tax Clients

In our recent webinar, "Two Clicks to Transcripts with Dawn Brolin," Dawn discussed the firm-wide benefits of Canopy's Transcripts & Notices tool and how it's increased the value of her firm, improved client relationships, and saved time. If you need to pull transcripts for your client, you must have a signed Form 2848. Here is a closer look, with answers included, into the great questions from our digital audience about IRS Form 2848. 

Yes — to pull tax transcripts for your clients, you need to file IRS Form 2848. 

No, you must be authorized with Form 2848 to represent a taxpayer when appearing before the IRS. This includes attorneys, CPAs, and enrolled agents.

Not necessarily. I don't pull transcripts on all of my clients. This is because:

A.) When you have a 2848 on file with the IRS and you get notices on behalf of clients, you're required to respond to those notices.

B.) If you don't have an engagement with your client to represent them before the IRS, then you are on the hook to respond to the notices and won’t necessarily be paid for that.

My process has always been to get a 2848 when I am being engaged to represent them before the IRS. And that means I have an engagement letter to represent them and then I can bill them accordingly. This year I included a notice management and payment plan service in my proposals through Ignition, which was optional.

Clients could either pay for their tax return or pay for their tax return with this notice management and payment plan service fee. The service fee was $350. 

It works like this:

• Clients pay upfront, so if they get a notice or they need a payment plan, I take care of it.
• If you don't pay for the plan, it's $500 an hour. If you get a notice or you need a payment plan or anything else it's $500 an hour at a minimum of $1,000.00.

If someone gets a notice and comes to me and says, "Oh, I got a notice; I need your help." I tell them it's $1000 upfront. I will track my time, and you will pay a minimum of $1000. If it takes me an hour, so be it. If it takes me five, so be it.

I have a couple of clients that I get form 2848 on file because I do pull their transcripts for a specific engagement. I pull them in June for Ws,1099-Rs, 1099-INTs, and anything like that, which is reported to the IRS on behalf of the taxpayer. Those are available in May at the earliest. 

I also wait until June for those clients whose returns automatically go on extension, and I pull transcripts in June for clients who do estimated tax payments. This helps if we've had issues with incorrect dates because dates matter. If they don't pay it timely, there's interest and penalties, potentially.

We have to know the date they make those estimated payments, which are on their account transcript, the minute they're posted. If I have a client who does estimated tax payments and I'm filing them timely, I can pull an account transcript, you know, in February or March, I know what their estimated tax payments are.

4. Do I have to file the 2848 directly through my IRS services account the first time?

Yes, you have to send in your 2848 either by fax (two to four-week turnaround) or online (it takes four to five business days). Canopy does not issue the Form 2848 on behalf of the tax professional.

5. Can we also get business transcripts?

Yes, you can. This is only for federal, not individual states.

6. Can we go to the state boards to access transcripts?

I can't get to people's transcripts in Connecticut, where I practice. However, I don't know what states offer the ability to access transcripts. Usually, you call, and they give you verbal answers over the phone.

That being said, I know from experience that Rhode Island will email you balances by year, what the client owes, etc. I don't know of a state where you can actually access transcripts.

8. Are there any functions that can turn all of these years of transcripts into charts and graphs? 
Canopy has a simple, easy-to-read table where the most important data across all of the years that you've collected is compiled.

9. Can the transcript balances be exported to other systems with the Zapier integration?
No. We only have contact endpoint set up with Zapier right now. But I will give this feedback to our product manager.

For more information on how to use the tool to save time at your firm, and add value for your clients check out the full webinar below.