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IRS Audits Tax Procedure

Who Can Sign a Form 2848 Power of Attorney for a LLC

We are often asked who can sign a POA or Form 2848, Power of Attorney and Declaration of Representative, for a limited liability company or LLC. The IRS addressed this in AM 2015-004.

About Form 2848 – Power Of Attorney

The Form 2848 allows the IRS to disclose taxpayer information to persons who represent the taxpayer. Thus, this form allows the IRS to talk and correspond with the taxpayer’s representative. The IRS usually insists that the form be filled out correctly and rejects forms that are not correct. Unfortunately, the instructions for the form do not explain how the form is to be completed in all circumstances. Who can sign the form for a LLC that is taxed as a partnership is one such circumstance.

In the attorney memo, the IRS notes that:

a POA from a partner of the partnership, including a member of an LLC taxed as a partnership, during the taxable year at issue allows the Service to solicit and discuss partnership-level issues with the person appointed. Because the partnership or LLC itself is generally not a party to the partnership proceeding or a member in itself, the POA from the partner should be done in the partner’s individual capacity as a partner.

So the form should be signed by partner in his or her individual capacity as a partner.

The IRS goes on to address LLC managers who do not own the LLC, saying “[t]o the extent a manager of a LLC has no ownership interest, however, he is not treated as a “partner” to whom partnership return information can be disclosed under section 6103(e).” So a LLC manager who does not own the LLC may not be able to sign the POA.

However, the IRS also notes that the IRS can solicit a POA from LLC managers who do not own the LLC as a matter of convenience. The IRS points out that this POA would not be sufficient for the representative to act on behalf of the LLC, such as executing consent forms to extend the statute of limitations on assessing tax.