How to work with auditors before your power of attorney (POA) relationship is approved February 2019 Tax News

How to work with auditors

When taxpayers receive an Initial Contact Letter (ICL) for an audit, they may retain an individual or entity to represent them in working with our Audit staff. A POA declaration will usually be required since most audit activities involve the representative acting on the taxpayer's behalf. POA declarations can be submitted by MyFTB or mail. Our current POA processing time is approximately 15 business days if manual intervention is not needed. It is helpful if the POA relationship is already approved in our system before the representative initially contacts our Audit staff.

A common reason for manual intervention is relationship verification. Protecting taxpayer's confidential information is our primary goal. For this reason, we verify all new POA relationships. If we are unable to verify the relationship during our initial processing, a letter is sent to the taxpayer requesting they contact us to authorize the relationship.  A letter will also be sent to the representative informing them that the request is on hold and their client has 45 days to respond. Additionally, we will call the representative letting them know we have contacted their client as part of the relationship verification process and we ask them to have the taxpayer contact us by phone to authorize the relationship.  When the taxpayer contacts us, we can immediately approve the POA. Additional discussion on relationship verification can be found in the September 2018 Tax News, Relationship Verification for Power of Attorney (POA)/Tax Information Authorization (TIA) Relationship Requests.

After the POA is submitted, but before it is approved, the representative can still work with FTB Audit staff using implied consent (a discussion of implied consent can be found in February 2017 Tax News, Implied Consent.)  Unfortunately, we are unable to provide any written communication (e.g. Information Document Request) to the representative using implied consent. Our Audit staff will send or email the written correspondence directly to the taxpayer until the POA is approved, and the representative can then obtain the information from their client. Representatives are encouraged to check MyFTB for the status of their POA declarations.