How the CAF unit screens a form
Domestic authorizations are processed in Memphis and Ogden and international ones in Philadelphia (IRM 21.3.7.1.9). Receipts are worked “first in first out (FIFO), regardless of the method used to submit the authorization” (IRM 21.3.7.1.10). The examiner first validates the essential elements, then researches the taxpayer and third party on IDRS, then codes and inputs the form. Research has to settle the question: IRM 21.3.7.2 says “Research must be conclusive or the authorization is rejected.”
Partial processing is the norm, not the exception. When information is missing for one representative but complete for others, the IRM tells the examiner to process the complete ones, annotate “Processed” next to them, and send Letter 861C for the rest. Who receives the letter depends on what is missing: for elements 1, 3, 4 or 5 on a domestic form the letter goes to the taxpayer; if only element 2 (the representative's declaration) is missing, it goes to the representative (IRM 21.3.7.5.1).
The essential elements
| Element | Requirement (IRM 21.3.7.5.1) | Common failure |
|---|---|---|
| 1. Taxpayer signature and date | Dated signature; title for business accounts | Typed or stamped signature on a mailed or faxed form; missing title for an entity |
| 2. Representative declaration (Form 2848 only) | Designation (a to r), licensing jurisdiction, license or enrollment number where applicable, signature and date | Missing designation or jurisdiction; unsigned Part II |
| 3. Acts authorized or tax information | Type of tax or form number and specific periods | “All years,” “all periods,” missing form number |
| 4. Taxpayer identification | Name, address and TIN | No TIN; name does not match IRS records |
| 5. Third-party identification | Name and address (CAF number not required) | Illegible name; no street address |
The IRS's own list of common reasons for rejection tracks the same points: missing signatures or dates, non-specific periods such as “All Years, All future periods,” a line 6 retention box checked with no copy attached, missing designation or jurisdiction, missing license or enrollment number, and no title for a business taxpayer. For Form 8821 it adds an incorrect EIN or SSN.
Signature problems
Electronic signatures on mailed or faxed forms. IRM 21.3.7.5.1 says “An electronically signed, printed or stamped signature is not acceptable” except for authorizations received through the online submission platform. The Form 2848 instructions say the same: forms with an electronic signature “may only be submitted to the IRS online.” A hand-printed (not typed) signature is acceptable, and the date can be typed, stamped or handwritten. The fix is to have the client wet-sign, or to upload the electronically signed form online.
The 45-day rule. When the taxpayer signs first, the representative must sign within 45 days (60 days for taxpayers residing abroad). If the representative signs first there is no limit for the taxpayer. Late representative signatures mean a new form.
Business signers. “For BMF accounts, a signature, date and title is required.” The instructions specify who signs: an officer with authority to bind a corporation, all partners or one partner authorized under state law for a partnership (with a copy of that authorization), the partnership representative or designated individual for BBA matters, and a trustee for a trust.
Fiduciary signers. If a fiduciary signs (an executor, trustee, guardian or receiver, for example), the examiner checks that the signer matches the second name line on the IRS entity record. If it does not, the IRM says to “reject the authorization and request Durable Power of Attorney, court appointment papers, guardianship papers or Form 56.” File Form 56 first; see Form 56 and deceased taxpayers.
Joint filers. Each spouse signs a separate Form 2848 even when naming the same representative. One Form 2848 signed by both spouses is not the procedure the instructions describe.
Tax matters and periods
The instructions are explicit: “Do not use a general reference such as “All years,” “All periods,” or “All taxes.” The IRS will return any power of attorney with a general reference.” List each matter with its form number and periods, using “through,” “thru” or a hyphen for ranges and YYYYMM for fiscal years. Penalties not tied to a return (for example the trust fund recovery penalty) need “Civil Penalty” in the description column.
Future periods are recorded only up to three years. The instructions say the IRS will not record future periods “that exceed 3 years from December 31 of the year that the IRS receives the power of attorney.” This is a recording limit, not invalidity; the regulation at 26 CFR 601.506(d)(3) says unrecorded periods can be resubmitted later.
Fiscal year mismatches are corrected, not rejected: if the fiscal year month on the form does not match IRS records, the examiner annotates the correct month and processes (IRM 21.3.7.5.2). Plan numbers are different: if the taxpayer has several plans and the form omits the plan number, it is not processed.
Taxpayer identification
If the TIN is missing, the form is rejected. If the name and name control do not match any name on the IRS entity record, the IRM tells the examiner to issue Letter 861C saying “the taxpayer’s name listed on line 1 does not match our records.” Use the name exactly as it appears on a recent notice or return.
Sole proprietors may list their SSN and business EIN together, and the CAF processes both individual and business matters if research confirms the EIN belongs to the sole proprietorship. But IRM 21.3.7.5.3 also says to “reject Form 2848 and/or Form 8821 that list more than one EIN on line 1,” and if research finds more than one sole proprietor EIN the form goes back to the taxpayer. One entity per form.
A Form 8821 naming the taxpayer as their own designee is not processed. IRM 21.3.7.5.3 tells the examiner to explain that “You do not need to submit a Form 8821” to inspect or receive your own confidential tax information.
Representative designation problems
| Designation | What the CAF unit requires | Rejection trigger |
|---|---|---|
| a Attorney | State abbreviation; bar number if any | No jurisdiction (a missing bar number alone is not a reason to reject) |
| b CPA | State abbreviation; license number if any | No jurisdiction; LPA from a non-qualifying state |
| c Enrolled agent | IRS as jurisdiction; enrollment card number | No enrollment number |
| d Officer | Title of the officer | Used on a Form 1040 matter (individuals do not have officers) |
| e Full-time employee | Title or position | Individual matters unrelated to the business |
| f Family member | Relationship to the taxpayer | Relationship missing; guardian without court papers |
| h Unenrolled return preparer | PTIN; return prepared and signed by preparer and under exam | No exam indicator or PTIN mismatch (Letter 4527C) |
| k Student or law graduate | LITC or STCP; Taxpayer Advocate Service authorization letter attached | Letter not attached |
Licensed public accountants can use designation b in states where an LPA has the same rights as a CPA. IRM 21.3.7.5.2 gives a non-exclusive list of such states and a list of states where LPAs or RPAs are not eligible (Delaware, Illinois, Iowa, Kansas and Michigan); forms from other states go to OPR for a determination.
Level H forms are researched before processing. The examiner verifies that the year is under examination and that the preparer's PTIN appears on the return; if not, the taxpayer gets Letter 4527C. Level H representatives cannot be given authority to sign returns or statute extensions, future periods, substitution, disclosure to third parties or civil penalty representation (IRM 21.3.7.5.6). A form showing the obsolete designation i (registered tax return preparer) is treated as h. More on this in who can represent a taxpayer.
Other screening rules
- Old revisions. “The CAF processing sites will not process Form 2848 with a revision date prior to October 2011.” Use the current form from IRS.gov.
- Retention box without a copy. If line 6 (Form 2848) or line 5 (Form 8821) is checked but the prior authorization is not attached, the form is not processed, unless CAF research shows nothing on file to retain, in which case it is processed as if the box were unchecked (IRM 21.3.7.5.3).
- Durable powers of attorney alone. A general durable POA with no TIN or address is treated as classified waste if no contact information can be found; otherwise the IRS asks for a Form 2848. Attach the durable POA to a Form 2848 signed by the attorney-in-fact (IRM 21.3.7.8.4).
- Substitution without authority. A representative acting outside the authority granted, for example by substituting another representative without line 5a authority, triggers correspondence to the third party (IRM 21.3.7.13.1).
- Government agencies as designees. Forms naming a government agency to obtain records for non-tax programs are not processed (IRM 21.3.7.5.3).
- Suspended or pending CAF numbers. Forms listing a representative whose CAF number is in pending review, or who is suspended or disbarred, are not processed for that representative (IRM 21.3.7.5.5.2 and 21.3.7.9.2). See CAF number.
What Letter 861C means and what to do
Letter 861C is the CAF unit's standard notice that a Form 2848, 8821 or 706 authorization was incomplete for processing. IRM 21.3.7.13.1 lists standard paragraphs for designation, illegible or incomplete forms, an existing POA, durable POA, a missing page, missing years, licensing jurisdiction, missing title, missing signatures, a sign-the-return grant without a reason, BMF form numbers, business versus individual, and electronic signatures received by mail or fax. The IRM requires that all reasons be addressed in the correspondence, so the letter should give you the full list.
- Read which representatives were processed. The letter may follow a partial processing in which some names were already recorded.
- Correct every listed defect on a new form. If the client must re-sign (essential elements 1, 3 or 4), get a fresh signature and watch the 45-day window.
- Submit once, by one method. The IRS online submission page says: “If you already faxed or mailed a form, don’t submit it online.”
- If you need to act before the corrected form posts, fax the wet-signed form to the employee working the case or call PPS, which can accept a faxed authorization during the call if it contains all essential elements (IRM 21.3.10.3.4).
- For Level H rejections (Letter 4527C), either document that the preparer prepared the return and that it is under exam, or use Form 8821 instead.
Pre-filing checklist
| Check | Why |
|---|---|
| Current revision (Form 2848 and 8821 are both Rev. January 2021) | Pre-October 2011 Forms 2848 are not processed |
| Taxpayer name and TIN match a recent notice | Name control mismatch is a rejection |
| One taxpayer and at most one EIN on line 1 | Multiple EINs are rejected |
| Each matter has a description, form number and specific periods | General references are returned |
| Part II complete for every representative, in line 2 order | Element 2 failures go back to you |
| Wet signatures if faxing or mailing | Electronic signatures must be uploaded online |
| Retention box only with a copy of the prior authorization | Otherwise the form is not processed |
| Fiduciary signer has Form 56 or court papers on file | Signer must match the IRS entity record |
A cover sheet that identifies the client, the form and the contact for problems helps the examiner. See the Form 2848 or 8821 CAF submission cover sheet.
Questions practitioners ask
Will the CAF unit fix small errors without writing to me?
Some. Fiscal year months are corrected from IRS records, and a missing bar number is not a rejection reason if the jurisdiction is shown. Missing signatures, general period references, a missing TIN and name mismatches are not corrected.
Who gets Letter 861C, me or my client?
For a domestic form, the taxpayer receives it when elements 1, 3, 4 or 5 are missing. If only the representative's declaration (element 2) is missing, it goes to the representative. For international forms it goes to the representative.
Can I resubmit online after faxing the original?
Only a corrected form, and only once. The IRS says not to upload a form you already faxed or mailed, and duplicates slow processing for everyone.
My client signed in March and I signed in May. Is that a problem?
Yes, if your signature is more than 45 days after the taxpayer's (60 days if the taxpayer lives abroad). If you sign first, the taxpayer has no deadline.
Can I list 2020 through 2035 on line 3?
You can, but the CAF will record only future periods ending within three years from December 31 of the year it receives the form. Later periods can be resubmitted later.
Why was my Form 2848 for an individual rejected when I checked officer?
IRM 21.3.7.5.2 says individuals do not have officers, so designation d on a Form 1040 matter is rejected for that representative.