What is the difference between a Power of Attorney (Form 2848) and a Tax Information Authorization (Form 8821)?

• A. Form 2848 authorizes the representative to receive confidential tax information.
• B. Form 8821 authorizes the representative to act before the IRS.
• C. Both forms grant the same authority.
• D. Form 2848 authorizes the representative to act before the IRS; Form 8821 authorizes the representative to receive confidential tax information.

Answer: (D)

The key idea is the scope of authority granted to the representative. The Power of Attorney form (Form 2848) lets the named person act before the IRS on the taxpayer’s behalf. That includes representing the taxpayer in audits or appeals, signing documents, and handling IRS matters as needed, with access to confidential tax information to carry out those duties. The Tax Information Authorization (Form 8821), on the other hand, only lets the designated person receive confidential tax information and discuss the taxpayer’s account with the IRS; it does not authorize them to act for the taxpayer or to represent them before the IRS.

Use Form 2848 when you want someone to actively represent you before the IRS and handle matters on your behalf. Use Form 8821 when you want someone to view or receive your tax information and communicate with the IRS about your account, without representing you or taking actions in your name. You can revoke either form later, but their powers remain distinct.