Centralized Authorization File (CAF)
Centralized Authorization File – Managing Taxpayers’ Power Of Attorney
The Centralized Authorization File (CAF) is the computer file system that has information concerning the control of those people who have been given a signed power of attorney or people who have been chosen under the tax information authorization system. With the use of the Centralized Authorization File (CAF) system, it is possible for the IRS officials to obtain authorization information in very little time.
Tax professionals are given a signed power of attorney so that they can represent taxpayers regarding tax issues before the IRS. For the purpose of negotiating agreements, resolving balances, and disclosure of otherwise confidential information, these professionals will need to submit Form 8821 or Form 2848. When the form is filed, a Centralized Authorization File (CAF) number will be allocated to the representative. This number is actually a file number that has details about the kind power or control that the taxpayer has given to the representative for the different modules in his account.
Basically, the Centralized Authorization File (CAF) has the authorization records of POAs, authorization records of TIAs, representative’s records and taxpayer’s records. There are three forms that are used to select a third party representative and they are as follows:
- U.S. Estate Tax Return (Form 706).
- Tax Information Authorization (Form 8821).
- Power of Attorney and Declaration of Representative (Form 2848).
How is information included in the Centralized Authorization File (CAF) file?
Information is added to the Centralized Authorization File (CAF) file only by the employees of the service center CAF Units.
How is the Centralized Authorization File (CAF) information received by the taxpayers and representatives?
The taxpayer will need to file a Power of Attorney and Declaration of Representative (Form 2848) to give control and authorization to the person that he wants to represent him. The representative will receive copies of notices that are sent to the taxpayer.
People who can represent the tax payers are CPAs, enrolled agents, and attorneys. Employees of the taxpayer can too. Once the representative has been made a legal representative, IRS will issue a Centralized Authorization File (CAF) number to them. With this number, the representative will be able access the authorized information of the taxpayer faster.
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