There has been a lot of market noise about Silicon Valley Bank (SVB). When a huge bank (#16 in the country) is taken over by the feds, it’s worth at least a mention.
But here’s my quick take:
Unless you are a CFO of a startup or you actually live in the Silicon Valley area … press that mental “delete” button — and move on.
You have far greater things to cogitate over than these market machinations, and I say that even if you are in finance or banking! Unless it directly affects YOU, these market prognostications are almost always more “disaster-forward” than anything else. And subsequently, you end up filling your brain with unnecessary fear and future catastrophe.
(If you ARE a CFO or you live in the Silicon Valley area, the good news is that the government *is* backstopping the deposits, so even in that case … disaster averted! For now.)
So let’s move on, shall we?
You never expect to have to rely on someone else to take care of delicate legal matters on your behalf until it happens upon you — whether because of sickness, sudden injury, or even just getting older.
Not planning for this could mean you’d get stuck having to choose an option that may not be best for you. And you most certainly want someone in your corner that you can trust to be FOR YOU.
But trust isn’t easy to come by these days.
It’s not just about know-how here. It’s also about having a reliable Castle Rock someone who is actually looking to serve you and fight for what is in your best interest.
Choosing a tax advocate who can make legal decisions about healthcare and also taxes can be difficult if you don’t know what you’re looking for. But we’re here to help make it easy. Which is what we want to talk about today.
And just a real quick detour on the tax note here. We’re about a month out from the filing deadline. Really, it’ll be here before you know it. So, if you still haven’t made moves to take care of yours, what are you waiting for?
calendly.com/davidforney
Now, let’s talk about future filing seasons.
Considerations for Choosing a Castle Rock Tax Advocate
“Few things can help an individual more than to place responsibility on him, and to let him know that you trust him.” – Booker T. Washington
It’s comforting to know the IRS doesn’t let just anyone waltz in and start managing your tax information. At the same time, everybody’s favorite government agency realizes that taxpayers occasionally need a fighter in their corner when dealing with major tax matters.
Suppose you have a federal tax audit that you can’t figure out. A formal and lengthy appeal to the IRS on a tax problem? Perhaps you’ve been laid low by injury or illness, or you’re just getting on in years … You don’t want your taxes to get out of hand, but maybe you don’t know how to proceed and need somebody on your side?
You’re not on your own — but you might have to formally appoint someone to speak for you. A power of attorney is a document legally authorizing an individual to act for you in tax concerns (and in other parts of life).
Here’s what’s involved in authorizing someone to speak for you with the IRS.
What it is and isn’t
A power of attorney for tax matters is your written authorization for another person to receive your confidential tax information from the IRS and to perform certain actions on your behalf.
(It’s worth noting that a power of attorney for tax purposes is not automatically a healthcare proxy or healthcare representative. If you want someone to also have that authority, you must stipulate it separately and use different ways to verify it.)
Your representative should be authorized to practice before the IRS (a tax pro such as an attorney, certified public accountant, or enrolled agent, for instance). In some circumstances, they can be enrolled retirement plan agents and enrolled actuaries — and under very limited circumstances, they can be simply unenrolled tax return preparers or members of your family, etc.
This representative/tax advocate can advocate, negotiate, and sign documents such as an offer or a waiver, as well as argue facts and application of law for you. They can also get your tax info for anything whenever you choose and receive copies of IRS notices and communications. You don’t need a power of attorney if you’re just providing information to the IRS or green-lighting the IRS to disclose some of your tax return information.
They cannot sign your income tax return unless you’re unable to — and under stringent regulations — specifically, authorize this in your power of attorney. You might want this if you’re too injured or sick to sign or if you’re out of the country for a long time. They also can’t show your tax return to a third party unless you specifically allow it.
Getting started
You use an IRS Form 2848 to appoint a tax advocate (it should be no surprise that your representative fills out part of the form, too). The 2848 includes information beyond documentation or a typical durable power of attorney, such as your Social Security number and a description of the matter(s) they are authorized to handle (for example, the type of tax or the years involved).
You can also set up a power of attorney through your IRS online account if you have one.
A power of attorney generally ends if you become too injured or sick to voice whether you want it to continue. You can elect right from the start, though, to have the arrangement continue in such circumstances. For obvious reasons, there are strict requirements for electing this. (People could take advantage of you too easily.)
Finding a good fit tax advocate
What should you look for in the right person?
Can you automatically turn to your wife, husband, your CPA brother-in-law, or best friend for years who’s got a thriving law practice? Sure.
But you’re not necessarily looking for the person closest to you — you’re looking for your best potential tax advocate. Do they know tax law (or can they learn it)? Can they be assertive and make themselves clear with authorities like the IRS? Will they force their opinions on you, or do what you want after discussing the matter?
Do you trust them?
And nothing lasts forever… which is often one reason powers of attorney exist in the first place. People and relationships that are emotional, friendly, or professional can and do change. Maybe you got divorced or maybe that friend with the law practice got indicted …
You can end a power of attorney with a revoking power of attorney form, which must comply with state law. You send a copy to the IRS. You can also send a new signed and dated 2848 with REVOKE written on it. If you just want to appoint someone new with a power of attorney for the IRS, authorize them as your new representative for the same tax matters and periods; the new authorization automatically revokes your prior one.
Dealing with the IRS can be complex, which is one reason you may decide to appoint a power of attorney or Castle Rock tax advocate. Always know we’re also on your side to help in any way we can.
All the best,
David Forney