DEFINITION of Specific Use
Specific use is a type of authorization for an individual with power of attorney (POA) to discuss certain private tax matters with the Internal Revenue Service (IRS) on behalf of a taxpayer. Specific use items are outside the blanket of the Centralized Authorization File (CAF), a computerized system of records containing third party authorizations for the purpose of resolving federal tax issues.
BREAKING DOWN Specific Use
Specific use items may be related to applications for employer identification numbers (EIN), tax withholding certificates, refund claims or abatement requests, corporate dissolutions or liquidations, mortgage interest statements, Form 1099 matters, elections for small businesses to be treated as S corporations, and applications to adopt or change a tax year. Other examples of specific uses not recorded in the CAF are requests to disclose information to loan companies or educational institutions and to federal or state agency investigators for background checks.
IRS Form 8821 ("Tax Information Authorization") and Form 2848 ("Power of Attorney and Declaration of Representative") are where a taxpayer (or his or her representative) would check the "Specific use" boxes. The difference between Form 8821 and Form 2848 is that Form 2848 authorizes an individual to represent, or speak on behalf of, the taxpayer, whereas Form 8821 does not confer this legal authority. Form 2848 allows the representative to execute a request to disclose tax return information to a third party; execute waivers, consents and closing agreements; and argue for the taxpayer in disputes with the IRS. The IRS does not record a power of attorney for a specific use in its CAF, so the representative with the power of attorney must bring Form 2848 to every meeting with the IRS.