[00:00:01] Speaker 05:
Thank you.

[00:00:09] Speaker 02:
Your Honor, the ultimate question here is whether the regulation 301.6402-2E, which I'll refer to as subsection E, if that works for you.

[00:00:31] Speaker 02:
requires concurrent physical attachment or submission of the power of attorney, the form 2848, in the context of a claim made via form 843.

[00:00:43] Speaker 03:
This question was never... In the specific language you're talking about, a claim may be executed by an agent.

[00:00:49] Speaker 03:
Power must be accompanied the claim?

[00:00:51] Speaker 03:
Accompanied, yes.

[00:00:53] Speaker 02:
That's correct.

[00:00:54] Speaker 03:
So your argument is that a filing on CAF should be deemed to accompany

[00:01:01] Speaker 02:
Correct, Your Honor.

[00:01:03] Speaker 02:
It seems logical that a power of attorney on file with the IRS in the system that the IRS has created to allow its employees to check and verify that there is a valid... What is your proposed definition of the word accompany?

[00:01:27] Speaker 01:
Because I don't think I saw it in your briefing where you articulated

[00:01:31] Speaker 01:
OK, a company doesn't mean attached.

[00:01:33] Speaker 01:
A company doesn't have to even mean submitted together.

[00:01:36] Speaker 01:
A company means something else.

[00:01:39] Speaker 01:
What is that something else?

[00:01:40] Speaker 02:
What's your definition?

[00:01:42] Speaker 02:
It would certainly seem to have to be relevant, Your Honor.

[00:01:44] Speaker 02:
It would have to be on file and existing at the time valid and sufficient to authorize the signing of the power of the Form 843.

[00:01:56] Speaker 02:
So could you just put it into a sentence for me?

[00:02:02] Speaker 02:
I would argue that a power of attorney accompanies a claim when it is existing and sufficient to authorize the representative to sign it.

[00:02:17] Speaker 02:
And it hasn't been invalidated.

[00:02:19] Speaker 02:
It hasn't been terminated in any respect.

[00:02:23] Speaker 05:
Isn't there a problem for you under that because I don't remember the numbers of all these forms, but it seems like the forms that were on file were not checked or were not the power of attorney forms that were on file.

[00:02:38] Speaker 05:
were not the ones that went to this particular filing, did not cover this particular filing.

[00:02:45] Speaker 02:
Absolutely they did, Your Honor.

[00:02:46] Speaker 01:
They were for forms 940 and 941.

[00:02:49] Speaker 01:
This was a form 843.

[00:02:50] Speaker 01:
Right.

[00:02:51] Speaker 02:
Right.

[00:02:51] Speaker 02:
But Cooper, as Cooper walked through, a generally completed power of attorney is sufficient for the signing of a form 843.

[00:03:02] Speaker 02:
Cooper walked through all these arguments.

[00:03:04] Speaker 02:
These were the same arguments that the government attacked us on on brief.

[00:03:08] Speaker 03:
which is actually... That goes to the question of whether or not the two powers that were on file for 94941 are sufficient to cover an 843, which is 843 as a request for relief as a result of problems arising out of a 94941, right?

[00:03:24] Speaker 03:
Correct.

[00:03:25] Speaker 03:
Or the penalties.

[00:03:26] Speaker 03:
My point is that's a different question from whether or not the CAF filing constitutes a company.

[00:03:34] Speaker 03:
The second question is whether or not the thing you filed was sufficient

[00:03:38] Speaker 03:
to connect.

[00:03:39] Speaker 03:
So that's a separate thing.

[00:03:40] Speaker 02:
Correct.

[00:03:41] Speaker 02:
I would agree those are two different questions.

[00:03:42] Speaker 03:
My understanding was that you were, without saying so, thinking about something that I would call, in the IRS environment, transactional accompaniment.

[00:03:52] Speaker 03:
You would say, when a taxpayer is engaging with the IRS and is told that it can put a power of attorney, assuming it's sufficient for whatever your problem is, on file, that should suffice to

[00:04:06] Speaker 03:
satisfy the requirement that a power accompany the subject matter that you're talking about.

[00:04:13] Speaker 03:
Correct.

[00:04:13] Speaker 03:
I'd call it transactional accompaniment.

[00:04:15] Speaker 03:
Correct.

[00:04:16] Speaker 03:
And so your argument would make some sense if you could show to me that the CAF system had been created for the benefit of the taxpayer in the first place, as opposed to the CAF system having been created for the benefit of the IRS.

[00:04:34] Speaker 03:
There's nothing I saw anywhere in any of my readings about announcing the creation of CAF or advertising it where it says, taxpayer, any time you file here, this will suffice.

[00:04:48] Speaker 03:
No need to ever file any more paper copies of powers.

[00:04:52] Speaker 03:
I didn't see any of that.

[00:04:54] Speaker 03:
The rationale I saw was, oh, the poor old IRS has been terribly burdened.

[00:05:00] Speaker 03:
Because when it decides to shift a piece of your claim over to some other office, it had to go to a Xerox machine and Xerox a copy of your authorization, your power, so that the guy in the other office could proceed.

[00:05:15] Speaker 03:
That was the reason for doing it.

[00:05:17] Speaker 03:
It had nothing to do with making it easier for the taxpayer to have a power of attorney authorization on file that would work future for lots of things.

[00:05:31] Speaker 02:
That may be true, Your Honor.

[00:05:32] Speaker 02:
I'm not sure what that has to do with it.

[00:05:34] Speaker 02:
The practitioners out there are working with respect to what the IRS has put in place.

[00:05:41] Speaker 02:
And the CAF system clearly reflects everything about a generally completed form.

[00:05:49] Speaker 02:
And that's all that's required to authorize a representative to sign.

[00:05:55] Speaker 03:
When the regulation requires that your

[00:06:01] Speaker 03:
power of attorney accompany the claim, it certainly suggests that there has to be some temporal connection between the two.

[00:06:14] Speaker 03:
And that a filing of a power of attorney in one year for it to be effective three years later with a related issue to what the power was all about doesn't feel like it accompanies.

[00:06:29] Speaker 02:
Well, Your Honor, the CAF system substitutes for the physical 2848, the power of attorney.

[00:06:39] Speaker 02:
And it also houses all that authority in it.

[00:06:44] Speaker 02:
And that's what practitioners rely on.

[00:06:46] Speaker 03:
So the practitioner... But the very form that you are claiming that the power of attorney works for says that the power of attorney is supposed to be attached.

[00:06:58] Speaker 02:
That is correct, Your Honor.

[00:07:00] Speaker 03:
And attached doesn't mean over in the CAF.

[00:07:05] Speaker 02:
We would not argue that, Your Honor.

[00:07:07] Speaker 05:
Can I shift gears a bit?

[00:07:08] Speaker 05:
Because I understood an alternative argument, if we don't agree with you on, or if we decide, we're not even going to decide what a company.

[00:07:17] Speaker 05:
I think you preserved this argument, telling it wrong, that it doesn't really matter.

[00:07:24] Speaker 05:
Because there's a waiver here on the part of the government.

[00:07:27] Speaker 05:
because they had processed and recognized you.

[00:07:31] Speaker 05:
And there's a waiver given because this is a regulatory regime and not a statutory regime.

[00:07:38] Speaker 02:
That's ultimately where we wind up, Your Honor.

[00:07:41] Speaker 02:
If a company actually means attachment, then we would argue that two steps.

[00:07:50] Speaker 05:
Well, in a way, we don't have to reach what a company means if we were to agree with your argument that whatever it means,

[00:07:57] Speaker 05:
the government waived that argument, and that waiver was sufficient under the regime.

[00:08:03] Speaker 05:
And one of the only things that stands between you and that conclusion, it would seem, I'm sure your friend will argue, is our opinion in Brown.

[00:08:15] Speaker 02:
All right.

[00:08:16] Speaker 02:
I would argue that Brown doesn't take this up directly.

[00:08:19] Speaker 02:
It didn't take it head on.

[00:08:20] Speaker 02:
It mentioned attachment once.

[00:08:23] Speaker 02:
It mentioned the regulatory regime, but it didn't even talk about subsection E, which is where that come to mind.

[00:08:30] Speaker 05:
Well, what Brown seems to say that under certain circumstances, and it may not be this case, and it may be factually distinct, but under certain circumstances, the statutory regime lies on to the regulatory regime, and therefore you can't have a way

[00:08:51] Speaker 02:
Yes, that's what the government argues no waiver is possible, because you cannot waive an explicitly statutory regulation.

[00:09:07] Speaker 05:
Why is that not applicable here?

[00:09:09] Speaker 05:
And two, how is your case different than Brown?

[00:09:13] Speaker 02:
Well, first of all, Brown was mostly focused on the nature of the claim, which was done

[00:09:20] Speaker 02:
via refund because it was seeking a tax refund.

[00:09:24] Speaker 02:
And those have to be done via amended returns which require a whole different

[00:09:35] Speaker 02:
power of attorney than is required for Form 843.

[00:09:38] Speaker 05:
In Brown, there was absolutely no power of attorney.

[00:09:41] Speaker 05:
There wasn't a question of the right.

[00:09:45] Speaker 02:
Correct.

[00:09:45] Speaker 02:
The powers of attorney were not valid and sufficient to authorize the representative there to sign.

[00:09:53] Speaker 05:
And why is that different than here?

[00:09:54] Speaker 02:
Because here, all that's required to sign Form 843 is a generally completed one, which

[00:10:02] Speaker 02:
They certainly were.

[00:10:03] Speaker 02:
There's no specific use authorization required.

[00:10:06] Speaker 02:
There's no box five check this so you can find a refund.

[00:10:10] Speaker 05:
So is the argument you're making now why Brown found that the regulation was part and parcel of the statutory regime and why you say this regulation is not similar in terms of the statute?

[00:10:23] Speaker 02:
No, I would say this goes to just the sufficiency of the power of attorney itself.

[00:10:27] Speaker 02:
The argument I would say as to why

[00:10:31] Speaker 02:
Again, I don't think Brown took this head on.

[00:10:36] Speaker 02:
Why the statutory regime does not include accompaniment or attachment is because it's kind of nonsensical.

[00:10:46] Speaker 02:
If you read the statute, subsection B1 talks about a signature and verification

[00:10:52] Speaker 02:
requirement and talks about specificity requirement.

[00:10:56] Speaker 02:
Well, those seem to be very inextricably related.

[00:10:59] Speaker 02:
If you're going to sign and certify, which is what the statutes require, IRC 61 and IRC 6065, if you're going to comply with those,

[00:11:10] Speaker 02:
That's what those statutes say, that these things need to be signed and certified and verified.

[00:11:14] Speaker 01:
Well, I did hear Brown just about resolve this question when it said there's a statutory default rule that you must personally sign and verify these documents when you file these forms.

[00:11:26] Speaker 01:
or if you don't, then you have to strictly follow the implementing regulations.

[00:11:33] Speaker 01:
And if you don't personally sign and you don't strictly follow the implementing regulations, then the document is effectively unsigned and unverified under 6061A and 6065.

[00:11:45] Speaker 01:
In other words, you haven't duly filed your claim.

[00:11:49] Speaker 02:
And there I would argue that there is still a waiver possible, and we need to establish that

[00:11:55] Speaker 02:
that each component of the regulatory regime is something that is explicitly statutory.

[00:12:03] Speaker 02:
So when you look at the statutes, IRC 6061 and IRC 6065.

[00:12:08] Speaker 01:
But the whole point I understand of the accompaniment requirement is not only that there's a power of attorney somewhere, but there is a signed form by this taxpayer that's right there with the claim.

[00:12:24] Speaker 01:
whether that has been signed by the agent.

[00:12:27] Speaker 01:
And so now we know and can quickly verify that we can ensure that the claim is legitimate and that we can even prosecute this taxpayer if there is something wrong with the form.

[00:12:42] Speaker 02:
Sure.

[00:12:43] Speaker 02:
But again, as the government admitted in its brief, the CAF substitutes for the physical form.

[00:12:53] Speaker 02:
The power of attorney, which was completely sufficient and valid, was sitting on file.

[00:12:58] Speaker 02:
And that's exactly why the government just processed the form and actually sent the determination letters to Mr. Sheldon saying, under the power of attorney, you have on file.

[00:13:10] Speaker 02:
Here's our determination.

[00:13:13] Speaker 03:
Can you come back to the waiver point for a second?

[00:13:15] Speaker 03:
Sure.

[00:13:18] Speaker 03:
I think it's possible to read Brown.

[00:13:20] Speaker 03:
to be a case which was concerned with the question of whether or not a power has to be filed in the first place, because there was no power in that case.

[00:13:30] Speaker 03:
And so the regulations that were cited make it clear that there has to be a power.

[00:13:36] Speaker 03:
So there is no extensive discussion of the regulations in the Brownian opinion, just a citation.

[00:13:42] Speaker 03:
And to say the question before us is whether or not there is an obligation to apply.

[00:13:49] Speaker 03:
The question in this case is, we know now from Brown that there is an obligation to supply.

[00:13:55] Speaker 03:
And to the extent the regulations require you to supply it, that falls under an express statutory command.

[00:14:04] Speaker 03:
But the issue in this case is not that.

[00:14:06] Speaker 03:
The issue is how, where, and when to file a power.

[00:14:11] Speaker 03:
How, where, and when to do it, which is very different from the question of whether you have to do it in the first place.

[00:14:16] Speaker 03:
And so the regulations that the Secretary is relying on here are the how, where, when regulations that bring into this whole question of servicing at his work.

[00:14:25] Speaker 03:
And those regulations feel more regulatory and less statutory, because there's certainly no explicit command in the statute to say, for example, attach or accompany.

[00:14:36] Speaker 02:
That's exactly right.

[00:14:38] Speaker 03:
And I'd be your argument, I believe, as to why the regulations as applied

[00:14:43] Speaker 03:
in this case are regulatory in nature, not statutory.

[00:14:46] Speaker 02:
This is a hugely different case than Brown.

[00:14:50] Speaker 02:
And so we would argue that it makes more sense to have specificity, which the courts have said is waivable.

[00:14:59] Speaker 02:
And it actually exists in the same subparagraph of the regulation, that that be an explicitly statutory

[00:15:07] Speaker 02:
regulation that can't be waived, but the courts waive it.

[00:15:11] Speaker 02:
It makes more sense for those two things to be together because what are you signifying and verifying if not specific allegations in the claim?

[00:15:24] Speaker 02:
But over here you have a completely formal

[00:15:29] Speaker 02:
procedure you need to do, which the government is looking at the instructions and wants to elevate those instructions, not just to a regulation, but all the way to an explicitly statutory regulation that they then cannot be waived.

[00:15:49] Speaker 05:
I think we have your argument.

[00:15:50] Speaker 05:
Why don't we hear from the other side on what we store in the Republic?

[00:16:01] Speaker 00:
May it please the court?

[00:16:03] Speaker 00:
I'm going to start with Judge Clevenger's question about what does Brown actually say.

[00:16:08] Speaker 03:
Before we do that, can we just start with what CAF is all for?

[00:16:13] Speaker 03:
Is it for the benefit of the taxpayer or for the benefit of the service only?

[00:16:17] Speaker 00:
It was developed for the benefit of the service.

[00:16:20] Speaker 03:
It may have some secondary benefit to the taxpayer in saving them the hassle of... Has the service ever indicated in any way, shape or form to the public that filing on staff is a substitute for paper filing?

[00:16:33] Speaker 00:
I'm not aware of any such publication or public notice.

[00:16:38] Speaker 00:
What I can tell you is in IRS publication 947 and the relevant instructions for form 2848, it says that if you file a power of attorney,

[00:16:48] Speaker 00:
certain information will be put into the system, but then it also lists a number of specific issues or specific uses which are expressly not put into the system.

[00:16:59] Speaker 00:
And it says for those specific issues or specific uses,

[00:17:03] Speaker 00:
mail your power of attorney to the office with which you're dealing which again is correct and that's consistent with the default rule for powers of attorney in the regulation itself that's 601.504 which basically says you have to file a power of attorney

[00:17:18] Speaker 00:
with each office with which you deal with.

[00:17:20] Speaker 01:
This taxpayer filed a power of attorney with the CAF related to forms 940 and 941, right?

[00:17:29] Speaker 01:
Yes.

[00:17:30] Speaker 01:
Was that required by the taxpayer?

[00:17:33] Speaker 00:
Was what required by the taxpayer?

[00:17:35] Speaker 01:
To file the power of attorney with the CAF.

[00:17:38] Speaker 00:
No, they didn't have to do it that way.

[00:17:40] Speaker 00:
They did that in part, I suppose, for their own convenience, so they didn't have to attach it when they filed the returns or had communications with the returns.

[00:17:49] Speaker 01:
I guess in that instance, there's no regulation that requires that the power of attorney accompany the return filing?

[00:17:57] Speaker 00:
Well, again,

[00:17:58] Speaker 00:
it depends on what the scope of the representation is.

[00:18:01] Speaker 00:
So a power of attorney does a couple of things.

[00:18:04] Speaker 01:
I know, but let me get to my question.

[00:18:07] Speaker 01:
Here we have a regulation that says whatever this thing is, if you do it with an agent signing it, it must be accompanied with the power of attorney.

[00:18:17] Speaker 01:
Yes.

[00:18:18] Speaker 01:
Right?

[00:18:19] Speaker 01:
Now my question is, well, for forms 940, 941,

[00:18:23] Speaker 01:
whatever applicable regulation is does that one say that if you're going to have an agent file forms 949 41 that must be accompanied by a power of attorney.

[00:18:33] Speaker 00:
If someone other than the taxpayer is signing the 940 or 941 either as an original return or a refund return they have to that that power attorney has to accompany the refund claim.

[00:18:46] Speaker 01:
Okay so is the instead of

[00:18:49] Speaker 01:
uh... literally submitting it literally submitting the power of attorney with the form nine forty nine forty one uh... can you still satisfied that that regulatory company requirement by instead having filed that power of attorney with the cap so find a question the taxpayer doesn't follow the instruction for nine forty nine forty one

[00:19:11] Speaker 00:
but has already submitted a 2848 to the CAF with respect to the return forms, can they still satisfy the accompaniment requirement?

[00:19:20] Speaker 00:
Is that your question?

[00:19:21] Speaker 01:
Well, I'm not sure I followed what you just said.

[00:19:25] Speaker 01:
I'm just trying to understand.

[00:19:27] Speaker 01:
They filed with the CAF the power of returning.

[00:19:31] Speaker 01:
Yes.

[00:19:32] Speaker 01:
Is that enough for their

[00:19:35] Speaker 01:
form 940 filing enough to be considered to have accompanied the power of attorney with the filing of the form 940.

[00:19:44] Speaker 01:
Or was there some kind of redundant requirement where they had to file the thing with the CAF and they had to literally attach the power of attorney with their form 940?

[00:19:54] Speaker 00:
You never have to file your power of attorney with the centralized authorization file.

[00:19:59] Speaker 00:
If you follow the instructions for the form, the forms tell you to attach it.

[00:20:03] Speaker 00:
If you want to pre-file, which form?

[00:20:06] Speaker 00:
Well, the instructions at 2848, I believe the instructions for forms 949, 41, which address execution by somebody else or signing of a return.

[00:20:14] Speaker 03:
The 2848 is the form for giving the power of attorney.

[00:20:18] Speaker 00:
Yes, that's the power of attorney form.

[00:20:19] Speaker 03:
And it says attach.

[00:20:20] Speaker 00:
Yes.

[00:20:21] Speaker 00:
But even for instance, a form 1040, a normal tax return that you would file, the form 1040 instructions say, if you're going to have someone execute your power or execute your return,

[00:20:33] Speaker 00:
with a power attorney attached.

[00:20:35] Speaker 05:
Attach it.

[00:20:36] Speaker 05:
So what is the point of uploading the Form 2848 to the CAF?

[00:20:41] Speaker 00:
Well, it's twofold.

[00:20:42] Speaker 05:
For one, it doesn't substitute for physically attaching it after both?

[00:20:47] Speaker 00:
The scope of representation before the IRS is not limited to just signing documents.

[00:20:51] Speaker 00:
It's principally for communicating with the IRS on behalf of the taxpayer and receiving confidential taxpayer information, which is protected under 6103.

[00:20:59] Speaker 00:
So when you pre-file a power of attorney with the IRS, when you have a controversy before assessment, you're under audit and they're trying to determine if you owe more money, should we penalize you?

[00:21:10] Speaker 00:
But you have someone who's an expert or a tax practitioner

[00:21:15] Speaker 00:
You file that power of attorney, and now when that person calls or sends a letter or follows up with the IRS, the IRS knows that this person who's communicating with me about this taxpayer, about this particular matter, I'm authorized to talk to this person.

[00:21:28] Speaker 00:
I'm authorized to share confidential tax information.

[00:21:30] Speaker 03:
So that's for the benefit of the IRS?

[00:21:33] Speaker 03:
No.

[00:21:33] Speaker 05:
So they have to do both.

[00:21:35] Speaker 05:
In every form, the 1040, the 940, the 941, it's not sufficient to file the form on the CAF.

[00:21:42] Speaker 05:
They also have to attach it in all those instances.

[00:21:45] Speaker 05:
If we're talking about... Can you just answer me yes or no and then explain?

[00:21:48] Speaker 05:
Does he have to do both?

[00:21:51] Speaker 00:
I don't mean to resist the question.

[00:21:52] Speaker 00:
I'm just trying to explain that.

[00:21:53] Speaker 00:
If we're just talking about representation that doesn't involve signing and executing a document under the penalties of perjury, you don't need to do both.

[00:22:01] Speaker 00:
If you have it on file, you can communicate with the IRS... But when it comes to filing these forms... Yes, when it comes to executing a form, signing it and executing it under the penalties of perjury,

[00:22:14] Speaker 00:
You are now triggering the statutory requirements, which, again, the ink is barely dry on Brown, that the default rule is the taxpayer signs and verifies its own refund claim, which this is, or else comply strictly with the regulation, the exception in the regulation that allows an agent to sign, provided that the power attorney accompanies the refund claim.

[00:22:35] Speaker 03:
Can I phrase the question just a little differently?

[00:22:37] Speaker 03:
Yes.

[00:22:38] Speaker 03:
Is there any instance in which a CAF filing

[00:22:43] Speaker 03:
will be deemed to satisfy the accompanying requirement in the regulation with regard to a form filing.

[00:22:51] Speaker 00:
OK.

[00:22:51] Speaker 00:
So let's take a form 1040.

[00:22:55] Speaker 00:
A form 1040 requires a taxpayer to sign and verify.

[00:22:58] Speaker 00:
And if it's a refund return, it has to be signed and verified just because it's a return and a document required to be made.

[00:23:04] Speaker 03:
And the form itself says attach.

[00:23:07] Speaker 00:
Now, the form 2848 says,

[00:23:09] Speaker 00:
consistent with our regulation and a regulation that applies only to returns, or income tax returns, that you have to check a box that expressly authorizes someone to sign for you and execute your return.

[00:23:23] Speaker 00:
The CAF tracks that special authorization for a return because a regulation requires an additional indicium of authority.

[00:23:33] Speaker 03:
With a Form 843, which is not a... So in the case of a 1040, right,

[00:23:39] Speaker 03:
So you file your cap filing on the first day of the tax shooter.

[00:23:46] Speaker 03:
And then on behalf of the taxpayer at the end of the tax shooter before the 15th, you file the 1040 return.

[00:23:54] Speaker 03:
Right?

[00:23:54] Speaker 03:
Yes.

[00:23:55] Speaker 03:
The 1040 return is signed by the person who has the power of attorney.

[00:24:00] Speaker 04:
Yes.

[00:24:00] Speaker 03:
Right?

[00:24:03] Speaker 03:
And they've done that.

[00:24:04] Speaker 03:
They do not attach a paper copy of the power.

[00:24:08] Speaker 00:
OK.

[00:24:08] Speaker 03:
OK.

[00:24:09] Speaker 03:
Later on, there comes the question of whether or not the regulatory requirement is that the power had to accompany the return.

[00:24:18] Speaker 03:
And that hypothetical, will the CAF filing be deemed to accompany the return?

[00:24:23] Speaker 00:
Yes.

[00:24:24] Speaker 00:
And the reason is because as long as the power of attorney form is properly filled out with a box checked that says my designated representative is authorized to sign this return form for me,

[00:24:38] Speaker 00:
That information is put into the system, and it is tracked, and it is available to all the offices that can access the database.

[00:24:46] Speaker 00:
But a Form 843... Let's come back.

[00:24:47] Speaker 03:
Let's say that particular power of attorney was signed.

[00:24:50] Speaker 03:
Is it only good for the one year, or can the power of attorney say until further notice?

[00:24:55] Speaker 00:
It has to have the tax years.

[00:24:58] Speaker 00:
It has to be for tax years that are open.

[00:25:01] Speaker 00:
It can be for future tax years, but only up to three years in the future, and then you have to refile.

[00:25:05] Speaker 00:
There are limitations.

[00:25:06] Speaker 03:
And in that instance, a

[00:25:08] Speaker 03:
CAF filing will suffice as a company.

[00:25:11] Speaker 03:
Yes, but again... Okay, so let me just say, so the service agrees that the word a company does not require any contemporaneous attachment.

[00:25:21] Speaker 03:
The power was going to be filed on January 1 of attached year.

[00:25:25] Speaker 00:
For a refund claim filed on a return?

[00:25:27] Speaker 03:
No, just filed with regard to the return, to start with.

[00:25:31] Speaker 00:
Sure, a return.

[00:25:32] Speaker 03:
And so you said that that is valid for

[00:25:34] Speaker 03:
for the filing constitutes a company.

[00:25:38] Speaker 00:
That is certainly a better argument than here and yes.

[00:25:41] Speaker 03:
My point is you're agreeing that a company does not require any contemporaneous connection of the power to the form.

[00:25:55] Speaker 03:
The power was filed way back when in a different place electronically.

[00:26:00] Speaker 03:
The form was filed over here.

[00:26:03] Speaker 03:
If you're willing to say

[00:26:05] Speaker 03:
That still constitutes accompaniment.

[00:26:09] Speaker 03:
That only works because the IRS has said for 1040s and this particular thing, we're going to allow it.

[00:26:18] Speaker 03:
Why doesn't that mean, as a general proposition, accompaniment doesn't require a contemporaneous, now connected violence?

[00:26:27] Speaker 00:
I think we understand contemporaneous to mean different things.

[00:26:30] Speaker 00:
And let me see if I can highlight the difference.

[00:26:32] Speaker 00:
Do you see my point?

[00:26:33] Speaker 00:
I do understand your point about the pieces of paper.

[00:26:37] Speaker 03:
How can a company mean no physical relationship whatsoever in one instance and on a different form mean they have to be connected?

[00:26:44] Speaker 00:
The information on the form 2848 has to be in the same place at the same time as the claim form.

[00:26:53] Speaker 00:
If you pre-file your power of attorney and the relevant information reflecting the authorization is in the system, the person who's processing the claim form, paper claim form, can look in the system and you have the evidence of the authorization and the claim form in the same place at the same time.

[00:27:08] Speaker 00:
The CAF is a perfect substitute in that instance for a paper 2848.

[00:27:12] Speaker 03:
In this case, the service had assumed that the power is valid.

[00:27:19] Speaker 03:
Assume that they had, in essence, an 843 filing on record.

[00:27:27] Speaker 03:
Why wouldn't that be sufficient to a company?

[00:27:30] Speaker 00:
Well, two reasons.

[00:27:32] Speaker 00:
The first is the company requirement serves not only an actual authority function, it serves a signaling function to let the person who's processing the claim know that the person who signed the form is someone other than the taxpayer.

[00:27:46] Speaker 00:
And there's a reason that's important.

[00:27:48] Speaker 00:
Because there's a regulation that says the IRS.

[00:27:50] Speaker 03:
We don't know that when he looks at the 843 form and it says POA, power of the attorney.

[00:27:56] Speaker 00:
Nothing required Mr. Sheldon to write that.

[00:27:58] Speaker 00:
And those two claims, respectfully, are out of the case because they were satisfied maybe prior to the litigation.

[00:28:05] Speaker 00:
But my point is, when a 2848 power of attorney comes with the refund claim, the IRS knows, or certainly has reason to know, that the person who signed the claim form is not the taxpayer.

[00:28:18] Speaker 00:
There's a regulation that says the IRS can decide not to accept the sworn statement under penalties of perjury of a designated representative and insist instead on the evidence supporting the claim itself.

[00:28:29] Speaker 00:
That's 601.507.

[00:28:31] Speaker 00:
It's in the same series of regulations governing powers of attorney in the statement of procedural rules.

[00:28:38] Speaker 00:
Now, the second problem with respect to our case with that premise is venture never argued in the motions briefing below or in its blue brief

[00:28:48] Speaker 00:
that the power attorney that it attached to its protest to the Office of Appeals in 2017 satisfied the regulation, they were always arguing that the powers of attorney that they had faxed to the CAF years earlier satisfied the regulation.

[00:29:06] Speaker 00:
So separate from the legal question, there's a practical problem with the premise of the argument.

[00:29:11] Speaker 00:
It's a basis for reversal.

[00:29:13] Speaker 00:
It presumes an argument that venture never made.

[00:29:16] Speaker 01:
I hate to intervene here, but I've gotten confused over the last five minutes.

[00:29:21] Speaker 01:
As I understood your colloquy with Judge Clevenger, you said that for a 1040 return, if there had been, before the filing of the 1040, a power of attorney on file at the CAF authorizing the tax agent to file the 1040 on behalf of the taxpayer,

[00:29:43] Speaker 01:
then there wouldn't need, in that circumstance, to be an actual power of attorney copy attached to the 1040 filing.

[00:29:55] Speaker 01:
Is that what I heard you say?

[00:29:56] Speaker 00:
Under the term accompany, under that provision of regulation?

[00:30:03] Speaker 00:
that would probably satisfy the company requirement.

[00:30:05] Speaker 01:
Okay, stop.

[00:30:08] Speaker 01:
I know you'd like to keep talking, but stop for a second.

[00:30:11] Speaker 01:
Let me hear why you think that satisfies a company.

[00:30:14] Speaker 01:
Why does that satisfy the definition of a company?

[00:30:17] Speaker 00:
Because a properly executed 2848, with respect to a return, has to have an actual indication of authority to sign, and the system actually tracks that authorization.

[00:30:30] Speaker 00:
It's a function of the fields on the 2848.

[00:30:35] Speaker 00:
and the authorization to execute a return, which is governed by regulation.

[00:30:38] Speaker 01:
So now let's fast forward to an 843 form, which is here.

[00:30:45] Speaker 01:
Same facts.

[00:30:47] Speaker 01:
Before the form 843 is filed, there is a power of attorney on file at the CAF authorizing that particular agent to file the form 843 on behalf of the taxpayer.

[00:31:03] Speaker 01:
And then the agent files the form 843 without actually, you know, submitting at the same time a copy of that power of attorney that's on file with the CAF.

[00:31:15] Speaker 01:
I guess your view is that wouldn't satisfy the company requirement?

[00:31:19] Speaker 00:
No, because the actual power of attorney form that reflects the authorization, if it's not already been destroyed, is offsite at an archive, which is not the office undertaking the exam.

[00:31:30] Speaker 00:
And if the CAF is supposed to be a substitute for the piece of paper, it can only be a substitute if it reflects the authority on the document.

[00:31:37] Speaker 00:
And what we said, as borne out by the publications and the regulations, is that the CAF doesn't track authorizations for form 843, among other many specific issue or specific uses.

[00:31:49] Speaker 01:
So it will for the 1040, but not for the 843.

[00:31:52] Speaker 01:
Correct.

[00:31:53] Speaker 01:
And why is that?

[00:31:54] Speaker 00:
Because again, the 2848 has specific fields

[00:31:58] Speaker 00:
Where I'm looking at 2848 which which walk line five five five and five a It says additional acts authorized and there's a box that says sign a return That has to be checked in order for there to be authority to execute a return like a 949 41 a 1040

[00:32:21] Speaker 00:
And if this power of attorney has that box checked and goes to the central authorization file, that information is coded into the system and is then available to the examiner who gets a return signed by an agent.

[00:32:32] Speaker 05:
And are there regulations?

[00:32:33] Speaker 05:
You've mentioned instructions and something else that govern how this works.

[00:32:37] Speaker 00:
Yes, there's an IRS publication that explains this to the public.

[00:32:40] Speaker 00:
which is IRS publication 947, pages 9 and 10, and possibly 11.

[00:32:45] Speaker 05:
Does that refer back to the regulations?

[00:32:47] Speaker 00:
I don't know if it refers to regulation, but it is consistent with the instructions on the form 2848.

[00:32:54] Speaker 01:
Can you explain why for 940, 941 forms this is enough to constitute a company, but for form 83 it's not enough?

[00:33:05] Speaker 00:
Because forms 940 and 941 are returns.

[00:33:08] Speaker 00:
And so if someone's executing the document, executing a 940 or 941 return, and they check the box on line 5A,

[00:33:15] Speaker 00:
that information goes into the system.

[00:33:17] Speaker 01:
I understand, but I guess I'm just trying to look for a rationale.

[00:33:22] Speaker 01:
Sitting over here, it feels arbitrary that some forms, having the thing on cap will satisfy the company requirement.

[00:33:31] Speaker 01:
For other forms, for some reason it will not, because I guess the IRS says so, but at the moment it's lost on me why.

[00:33:40] Speaker 01:
there's this choice has been made.

[00:33:41] Speaker 00:
It's not in the brief and I am happy to explain it to make it make have it make sense to you.

[00:33:45] Speaker 00:
That's why I'm asking the question.

[00:33:46] Speaker 00:
And I see I'm over my time so.

[00:33:48] Speaker 00:
I'm asking the question.

[00:33:50] Speaker 00:
Returns and things like returns precede IRS assessments.

[00:33:58] Speaker 00:
Those are self-reporting and before the IRS takes action on a return

[00:34:03] Speaker 00:
For instance, undertaking an audit.

[00:34:05] Speaker 00:
There is information sharing, request for information.

[00:34:09] Speaker 00:
All of those things are governed by or stemmed directly from the four corners of the return document.

[00:34:16] Speaker 00:
How much is owed?

[00:34:18] Speaker 00:
How much tax was paid?

[00:34:20] Speaker 00:
Is there a deficiency?

[00:34:21] Speaker 00:
Should there be an addition?

[00:34:22] Speaker 00:
Should there be a penalty?

[00:34:24] Speaker 00:
Will the IRS propose penalties?

[00:34:25] Speaker 00:
Will you ask the IRS not to assess a penalty?

[00:34:28] Speaker 00:
All of those things stem from the return form.

[00:34:33] Speaker 00:
Claims filed on form 843 are not based on a return form.

[00:34:39] Speaker 00:
Therefore, tax is unrelated to a return or for monies paid like a penalty after an assessment, which is an IRS administrative step.

[00:34:49] Speaker 00:
So things dealing with returns, the 2848 addresses it.

[00:34:53] Speaker 00:
You check the box on line five.

[00:34:55] Speaker 00:
We're talking about return.

[00:34:55] Speaker 00:
We're talking about pre-assessment, the period of audit.

[00:35:00] Speaker 00:
All of that's covered.

[00:35:01] Speaker 00:
That's volume.

[00:35:02] Speaker 03:
It's hundreds of millions.

[00:35:03] Speaker 03:
That releases the taxpayer and his designated power from any duty to supply a paper copy in connection with anything.

[00:35:12] Speaker 00:
They've already satisfied it.

[00:35:13] Speaker 00:
And it's a function of volume because people, I mean, you can imagine how many people have their preparers, designated agents execute returns.

[00:35:23] Speaker 00:
And returns are the bulk of the paperwork that the IRS receives.

[00:35:26] Speaker 00:
Forms 843 are minuscule in comparison.

[00:35:30] Speaker 00:
Now here, Venture wanted an abatement and a refund of a penalty, a penalty that was imposed because they were late filing or paying and depositing taxes.

[00:35:39] Speaker 00:
But nevertheless, after the IRS had determined not just proposed, but determined and assessed a penalty.

[00:35:45] Speaker 00:
So now we're talking about a different form of relief, abatement and refund of monies paid, separate statutes, separate from the requirement to pay the tax, to report the tax.

[00:35:56] Speaker 00:
You're initiating an administrative proceeding.

[00:35:59] Speaker 00:
That's a specific issue.

[00:36:01] Speaker 00:
That is why you have to file the Form 843.

[00:36:03] Speaker 00:
The CAF doesn't track those, for better or for worse, it doesn't track those.

[00:36:11] Speaker 00:
And the instructions are consistent with the regulation, at least for claims filed on a Form 843, after an assessment of a penalty or the refund of a tax not covered by return,

[00:36:25] Speaker 00:
You need to attach your Form 843 so that we know, because we look at the CAF, we don't know, that the form has been executed by somebody else and that that person has the authority to execute the form for you and to bind you as principle to the factual assertions underlying the claim for relief.

[00:36:40] Speaker 00:
which is just like what we do with the return.

[00:36:43] Speaker 00:
You're saying the facts supporting the amount of tax owed is true and correct.

[00:36:47] Speaker 01:
Okay, so just bottom line, the IRS has a different understanding of what complies with the accompany requirement for powers of attorney related to returns than powers of attorney related to Form 843.

[00:36:59] Speaker 00:
Yes, and any of the other special issue or specific issues or specific uses listed on the instructions of Form 2848 and listed in IRS Publication 947.

[00:37:10] Speaker 05:
I know you're over, but I have an assessment, and I want to give it to you so that you can tell me why I'm wrong.

[00:37:19] Speaker 05:
Because I love the discussion.

[00:37:20] Speaker 05:
I spent a few years at the IRS, and it was a very good experience.

[00:37:24] Speaker 05:
But what I see as the issue in this case is whether or not this is regulatory and therefore could have been waived.

[00:37:32] Speaker 05:
There might be a waiver question.

[00:37:34] Speaker 05:
I don't know.

[00:37:35] Speaker 05:
But it seems like there's a strong argument for waiver here.

[00:37:39] Speaker 05:
So does Brown govern?

[00:37:42] Speaker 05:
And the conversation for the past 10 minutes to suggest that governs what we're talking about here, you've referred to IRS publications, IRS instructions, and a whole bunch of other things that aren't even regulatory, let alone statutory.

[00:38:03] Speaker 05:
They govern appropriately the how, the why, the when,

[00:38:08] Speaker 05:
timing of the filing or whatever.

[00:38:10] Speaker 05:
That's IRS's obligation.

[00:38:12] Speaker 05:
But the hurdle I think you have to get over is why this comes under Brown.

[00:38:17] Speaker 05:
All of this stuff that we've been talking about in instructions and not even regulations comes within Brown's edict.

[00:38:26] Speaker 05:
that this particular requirement is statutory and not regulatory, and therefore not waivable.

[00:38:33] Speaker 05:
And it seems to me the conversation has been drifting the other way.

[00:38:37] Speaker 00:
OK.

[00:38:37] Speaker 00:
So let's start back with Brown.

[00:38:39] Speaker 00:
Brown says the floor.

[00:38:40] Speaker 00:
You comply with the statute first.

[00:38:41] Speaker 00:
That's the default rule.

[00:38:43] Speaker 00:
Here we have a refund claim.

[00:38:45] Speaker 00:
The statute says you must sign and verify your own refund claim.

[00:38:49] Speaker 00:
Now, the IRS has promulgated an exception.

[00:38:51] Speaker 00:
It's in a regulation.

[00:38:53] Speaker 00:
The regulation says an agent can execute, but the power of attorney must accompany the refund claim.

[00:38:59] Speaker 00:
That's Brown.

[00:39:01] Speaker 00:
So we're at Brown.

[00:39:02] Speaker 00:
The regulation that Brown said the taxpayer had to follow is the same regulation we're talking about here.

[00:39:08] Speaker 00:
I think ultimately the parties disagree about what the word accompany means.

[00:39:13] Speaker 00:
And our first argument is that the term accompany, the plain language of the term accompany, and what Brown said company means,

[00:39:21] Speaker 00:
and some other court of federal claims cases say a company gains requires attachment.

[00:39:25] Speaker 05:
But in Brown, they never filed anything.

[00:39:28] Speaker 05:
So that's what Brown was dealing with.

[00:39:30] Speaker 05:
And Brown has a very important sentence, which he says, we deal here only with the facts presented to us relating to the return that is both unsigned by the taxpayers and not accompanied by a power of attorney.

[00:39:42] Speaker 05:
The question in Brown didn't involve the kind of quagmire, I don't mean that in the pejorative sense, of instructions

[00:39:50] Speaker 05:
and publications that govern how and the specificity of what constitutes sufficient filing of a power of attorney.

[00:40:01] Speaker 05:
And so you may be right.

[00:40:03] Speaker 05:
You may be right on the merits.

[00:40:04] Speaker 05:
They may not have done what they were supposed to do.

[00:40:07] Speaker 05:
That's not the question, I think.

[00:40:09] Speaker 05:
The question is whether or not this was a regulatory or even less than regulatory requirement as opposed to a statutory requirement without an issue.

[00:40:17] Speaker 00:
Two things about Brown.

[00:40:18] Speaker 00:
On pages 1010,

[00:40:20] Speaker 00:
The court used the word append in describing the defect.

[00:40:24] Speaker 00:
And on page 1012, Judge Lurie used the word attach.

[00:40:27] Speaker 00:
In the blue brief in brown, the taxpayer said, we did not comply with the regulation because we did not attach a power of attorney.

[00:40:34] Speaker 00:
In the trial court, in the trial court opinion, the court explained that there had been a power of attorney on file which had a defect.

[00:40:41] Speaker 00:
But the focus was on the failure to attach the power of attorney.

[00:40:45] Speaker 00:
I even believe there's a footnote.

[00:40:46] Speaker 03:
But the question in Brown was not whether or not power had accompanied anything.

[00:40:51] Speaker 03:
It's whether one had been filed in the first place.

[00:40:54] Speaker 03:
In this case, you've demonstrated to me at least that from that services point of view, a company has different meanings depending on which form you're talking about.

[00:41:04] Speaker 03:
And you've carefully and I think thankfully to me explained

[00:41:09] Speaker 03:
that the reason why you have a different meaning for a company for $10.40 as opposed to $8.43 are very peculiarly specific to the nature of the return and everything that's going to happen.

[00:41:19] Speaker 03:
That's happening in a sub-regulation.

[00:41:22] Speaker 03:
Those rules and regulations about how you decide what a company means depend on which form it's all about.

[00:41:31] Speaker 03:
That strikes me as being non-statutory.

[00:41:37] Speaker 03:
Angelus Milling asked for an explicit statutory command.

[00:41:43] Speaker 03:
There's no explicit statutory command that an 843 power of attorney has to be dealt with in one way, whereas a 1040 has to be done in a different way.

[00:41:53] Speaker 03:
All that's being done in the almost presiding judge's sub-regulatory environment.

[00:41:59] Speaker 05:
OK, so we've held you a long time, and I appreciate your effort to help us here.

[00:42:05] Speaker 05:
But I'll give you a couple minutes to just respond to Judge Clepenter.

[00:42:07] Speaker 00:
OK, so our first argument was Brown said attach, that a company means attach.

[00:42:13] Speaker 00:
I'm getting some pushback from that.

[00:42:14] Speaker 00:
I recognize that.

[00:42:15] Speaker 00:
Our second argument was that a company, the plain meaning of the term a company means same place at the same time.

[00:42:22] Speaker 00:
And we cited dictionary definitions on pages 23 to 24, and 26 to 27 of the red brief.

[00:42:28] Speaker 00:
And we also supplied.

[00:42:29] Speaker 00:
contextual arguments.

[00:42:30] Speaker 00:
Now, everything I'm saying about the IRS publication, the instructions, that's for context.

[00:42:36] Speaker 00:
We're not relying on those instructions to demonstrate as the basis for saying they didn't comply.

[00:42:45] Speaker 00:
But we're doubly and triply supporting our gloss on the term accompany in the regulation.

[00:42:51] Speaker 00:
Now, under Brown, they have to accompany or else they haven't complied with the acceptance of the statute.

[00:42:58] Speaker 00:
The question is, did it accompany?

[00:43:00] Speaker 00:
We provided our assessment of the case law, our understanding of the plain meaning and context.

[00:43:06] Speaker 00:
And I'm saying, even if we concede that, at least in some cases, maybe in all cases, that you could satisfy the accompany requirement in the regulation and thus satisfy the statute by sending a form to the CAF, it only works if the centralized authorization file is actually tracking the information that reflects authorization.

[00:43:25] Speaker 00:
Because when the claims form comes in,

[00:43:28] Speaker 00:
The IRS has to be able to look at something to see that it's authorized to be executed.

[00:43:32] Speaker 00:
And if the centralized authorization file doesn't reflect that authorization, as it didn't in this case, then the authorization hasn't accompanied the refund claim.

[00:43:42] Speaker 00:
We take your point.

[00:43:43] Speaker 05:
Thank you very much.

[00:43:45] Speaker 05:
Thank you.

[00:43:46] Speaker 05:
Will we start two minutes of rebuttal if you have anything?

[00:43:49] Speaker 02:
Yes, Your Honor.

[00:43:49] Speaker 02:
I just wanted to point out a couple of things.

[00:43:52] Speaker 02:
First, that the IRS houses the information from the 2848

[00:43:56] Speaker 02:
is in the IRM and in the regulations at 601-501-B2.

[00:44:04] Speaker 05:
The IRM is the manual, right?

[00:44:06] Speaker 02:
The IRM is the manual, which practitioners look at to see how to deal with.

[00:44:12] Speaker 02:
And that it substitutes for the physical form is also in 601-501-D1.

[00:44:19] Speaker 02:
I think Judge Chen was confused because

[00:44:25] Speaker 02:
The government has just shifted its whole argument.

[00:44:28] Speaker 02:
On its answering brief in 30 and 31, what it is arguing is that the POAs here are not sufficient because they didn't check the special authorization box in four.

[00:44:40] Speaker 02:
And because of that, a company doesn't work with the CAF because the CAF does not store that information.

[00:44:50] Speaker 02:
And so they've just reversed everything that they've been arguing on brief.

[00:44:55] Speaker 02:
It is supremely rare, and actually only in limited circumstances, that a representative can sign a return for anybody.

[00:45:07] Speaker 02:
Any kind of return.

[00:45:08] Speaker 02:
1040, 941, whatever it is.

[00:45:10] Speaker 02:
But it is contemplated.

[00:45:12] Speaker 02:
that representatives will sign forms 843.

[00:45:15] Speaker 02:
The Cooper Cakes walks through all of these arguments and says, you don't have to check box four for an 843.

[00:45:22] Speaker 02:
You don't have to check box five like you would for a return.

[00:45:25] Speaker 01:
Well, that gives the power of attorney was literally filed with the... Well, that was the argument is whether it was.

[00:45:31] Speaker 02:
But they walked through this, what's sufficient for a power of attorney in the case of an 843?

[00:45:39] Speaker 02:
And my point is that all of that is actually stored on the cap.

[00:45:45] Speaker 02:
The parts to file a return is not stored on the cap.

[00:45:49] Speaker 02:
So you would have to attach something to a return if you wanted to do that.

[00:45:55] Speaker 02:
843 doesn't have that limitation.

[00:45:58] Speaker 02:
And that's why Brown is so kind of on its own out there.

[00:46:02] Speaker 02:
It didn't take one head on.

[00:46:04] Speaker 02:
the attachment issue.

[00:46:05] Speaker 02:
It didn't take head on the sufficiency of the power of attorney.

[00:46:09] Speaker 02:
It just basically had a tax return that needed to have a specific power of attorney with box 5's checked that had to be attached.

[00:46:19] Speaker 02:
That's not our case.

[00:46:21] Speaker 02:
843 just takes, as Cooper says, a generally filled out power of attorney that's completed suffices.

[00:46:30] Speaker 02:
And all of that information is on the CAF

[00:46:32] Speaker 02:
and retained by the CAF, again, I point to the regulations I just provided and say that substitutes for a power of attorney.

[00:46:44] Speaker 02:
And therefore, it should satisfy the accompaniment requirement in subsection E of the implementing regulation.

[00:46:55] Speaker 02:
Thank you.

[00:46:56] Speaker 02:
We thank both sides for their input in the case.