# IRS representation engagement letter for exams and notices [Home](/) / [Engagement letter templates](/templates/engagement-letters) / IRS representation By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-10-31, updated 2026-10-31. > **In brief:** An IRS representation engagement letter names the notice or exam you will handle, the tax years and forms in scope, and what the client must send and by when. Pair it with Form 2848, list the same matters on both, and keep return preparation in a separate letter. ## The template: IRS representation engagement letter **Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026. Fill the matters table from the IRS letter the client received, then copy the same rows to Form 2848. Delete the optional clauses that do not apply and have your own counsel review the template once. ```text [Firm name] [Firm address] [Date] [Taxpayer name(s)] [Taxpayer address] Re: Representation before the IRS, [notice or letter number] dated [notice date] Dear [Taxpayer name(s)], Why you are receiving this letter You have asked [Firm name] to represent you in the IRS matter described below. This letter sets out what we will do, what we will not do, and what we need from you. [Representative name], [attorney / CPA / enrolled agent], [license or enrollment number], will lead the work. Matters covered We will represent you for: [description of matter, for example income tax examination], [Form 1040], tax years [years]; and [penalty matter, if any]. These are the same matters we will list on Form 2848. If the IRS raises another year or tax, we will add it only with a written amendment to this letter. Power of attorney You will sign Form 2848 for these matters before we contact the IRS, and we will sign it within the time the IRS allows. [If you filed jointly, each spouse will sign a separate Form 2848.] We may also file Form 8821 so we can obtain your account transcripts. What we will do We will communicate with the examiner for you, attend the interviews and meetings, prepare responses to each information document request, review the proposed adjustments with you and negotiate the examination report. Where there are grounds, we will ask that penalties be removed. What is not included Unless we agree in writing, this engagement does not include: a protest or appeal to the IRS Independent Office of Appeals; a petition to the Tax Court; collection matters such as payment plans or offers; state tax matters; or preparing or amending returns for any year. Your part You agree to: (a) send us every IRS letter you receive within [number] business days; (b) not contact the examiner directly while we represent you; (c) give us the records we request at least [number] business days before each IRS response date; (d) give complete and truthful information, including about items the IRS has not yet raised; and (e) file and pay your current taxes on time. Records we will ask for Expect to provide: your filed return for each year under exam with all schedules; Forms W-2 and 1099; bank and card statements for the months under review; receipts, invoices and logs that support the items in question; and any prior correspondence with the IRS about these years. No guarantee We will present your position as well as the facts and the law allow. We cannot promise the outcome, the amount of any change, or that penalties and interest will be removed. Fees Our fee is [fixed amount for the examination / (rate) per hour], billed [monthly]. A retainer of [amount] is due before we file Form 2848 and will be applied to the final invoice. Work on matters outside this letter is billed separately. Your records When you ask, we will promptly return the records you need to meet your federal tax obligations, even if there is a dispute about our fees, as federal rules require. We may keep copies for our files for [retention period]. Use of your tax information We will use your tax information only for this representation. We will not disclose it or use it for any other purpose without your separate written consent. Ending the representation Either of us may end this engagement by written notice. When it ends, we will withdraw from Form 2848, send you a short letter on the status of the matter and any upcoming IRS dates, and return your records. Your signature To confirm, please sign below and return this letter with your signed Form 2848 and the retainer. If you filed a joint return, both of you should sign. Yours truly, [Representative name], [Designation] [Firm name] Signature: ____________________ Date: __________ Taxpayer: [Name] Signature: ____________________ Date: __________ Spouse: [Name] Signature: ____________________ Date: __________ ``` Download: [Word](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/irs-representation.docx) · [PDF](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/irs-representation.pdf) ## Why an exam needs its own letter Your annual return letter covers preparing and filing a return. An examination is a different job with a different risk. You speak for the client, you answer document requests on the IRS’s timetable, and the client may owe more tax at the end. Write a separate letter when a notice or an exam letter arrives. A **power of attorney** is the client’s grant of authority to an eligible person to represent them before the IRS, filed on Form 2848 ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). The engagement letter is the contract between you and the client. The IRS reads the form, not the letter, so the two must describe the same matters. Only certain people can sign on. The IRS lists attorneys, certified public accountants and enrolled agents among the federally authorized practitioners who may represent a taxpayer in an exam ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). Put your designation and your license or enrollment number in the letter, as you will on the form. ## Match the scope to Form 2848, line by line Form 2848 is valid only when it names the matter, the tax form number and the years or periods ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). Use the same three columns in the letter. If the IRS opens another year, you add a row to both documents. Penalties and interest tied to a listed return are covered by that line unless you limit them on line 5b ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). A penalty not tied to a return, such as the trust fund recovery penalty, gets its own Civil Penalty row ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). 1. The client signs Form 2848 first. For a domestic client, you must then sign within 45 days of the client’s date ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). 2. Spouses who filed jointly each sign their own Form 2848 ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). 3. If you only need to see transcripts and notices, use Form 8821 instead: it gives access to tax information but not the right to represent ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). 4. When the work ends, write “WITHDRAW” across the first page of the form, sign and date it, and send a copy to the IRS as the instructions describe ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). | Letter clause | Form 2848 entry | Example | | --- | --- | --- | | Matter | Description of matter | Income tax examination | | Return | Tax form number | Form 1040 | | Years | Years or periods | The years on the IRS letter | | Penalties | Civil penalty matter, if separate | Trust fund recovery penalty (a penalty not tied to a return) | | Joint filers | One Form 2848 for each spouse | Both spouses sign their own form | ## Where representation stops Say what the fee covers: talking to the examiner, attending interviews, answering each information document request, reviewing the proposed changes and negotiating the report. Then list what it does not cover, such as an appeal, a Tax Court case, collection work, state tax and returns for other years. Those limits matter because the exam has exits. A **30-day letter** is the notice, sent after the closing conference, of the right to appeal the proposed changes ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). The client generally has 30 days to accept or appeal ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). If there is no agreement, a notice of deficiency follows, and the client has 90 days to petition the Tax Court ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). Say that each of these steps needs a new written scope and fee. Make no promise about the result. The examiner and, later, Appeals, make the call. Your letter can say you will ask for penalty relief where there are grounds, and nothing more. Also say what happens if the client stops answering: you will tell the examiner you cannot respond, and you may withdraw. A client who goes silent mid-exam is a real risk, and the letter is the place to settle it in advance. ## Contingent fees and client records Circular 230 § 10.27 limits contingent fees on IRS matters to the cases it lists ([31 CFR 10.27, Fees (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.27)). A **contingent fee** is any fee based on whether a position avoids challenge or is sustained, such as a percentage of the tax saved ([31 CFR 10.27, Fees (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.27)). An exam of an original return is one of the listed cases, and so is a refund claim filed within 120 days of a written exam notice ([31 CFR 10.27, Fees (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.27)). A 2014 court ruling narrowed the rule: the IRS cannot enforce it against fees for preparing and filing an ordinary refund claim before any exam ([Ridgely v. Lew, D.D.C. 2014, memorandum opinion](https://www.govinfo.gov/content/pkg/USCOURTS-dcd-1_12-cv-00565/pdf/USCOURTS-dcd-1_12-cv-00565-1.pdf)). Hourly or fixed fees avoid the question. A fee dispute does not let you keep the client’s records. On request, you must promptly return the records the client needs to meet their federal tax duties ([31 CFR 10.28, Return of client’s records (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.28)). If state law allows retention in a fee dispute, you still return the records that must be attached to the return ([31 CFR 10.28, Return of client’s records (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.28)). Put that rule in the letter, so the client knows it too. ## What the client must do during the exam The exam runs on IRS dates. Every request you receive has a response date, so your letter should tie the client’s deadline to it, for example five business days before the date on each request. - Forward every IRS letter or notice the day it arrives, envelope included. - Do not call or meet the examiner without you, once Form 2848 is on file. - Send the records behind each item under exam: the prior-year return and schedules, Forms W-2 and 1099, bank statements, receipts and mileage logs. - Tell you the truth about income and expenses, including items the IRS has not asked about yet. - Keep filing and paying current-year taxes on time while the exam is open. ## Questions people ask ### Who can represent a taxpayer in an IRS audit? A federally authorized practitioner, such as an attorney, a CPA or an enrolled agent, and in some cases the person who prepared and signed the return ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). The representative files Form 2848 signed by the taxpayer. ### Is Form 2848 the same as an engagement letter? No. Form 2848 tells the IRS who may represent the taxpayer and for which matters ([IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848)). The engagement letter is the agreement on scope, fees and duties between the representative and the client. ### Can I charge a contingent fee for an IRS audit? Circular 230 allows a contingent fee for services connected with the IRS examination of, or challenge to, an original return, and in a few other listed cases ([31 CFR 10.27, Fees (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.27)). Elsewhere, charge hourly or a fixed fee. ### Does audit representation include an appeal? Only if the letter says so. After the 30-day letter, the taxpayer chooses whether to appeal ([IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556)). Scope the appeal as a new engagement with its own fee, so the client sees the price before choosing. ## Sources - [IRS Instructions for Form 2848, Power of Attorney and Declaration of Representative](https://www.irs.gov/instructions/i2848): Form 2848 must name the matter, form number and years; the representative signs within 45 days of a domestic taxpayer; joint filers each sign their own form; Form 8821 gives information access only; how to withdraw. - [IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund](https://www.irs.gov/publications/p556): Who may represent a taxpayer in an exam, the 30-day letter and the right to appeal, and the 90-day notice of deficiency. - [31 CFR 10.27, Fees (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.27): Contingent fees are barred on IRS matters except for exams of or challenges to original returns, certain refund claims, interest and penalty claims and judicial proceedings. - [Ridgely v. Lew, D.D.C. 2014, memorandum opinion](https://www.govinfo.gov/content/pkg/USCOURTS-dcd-1_12-cv-00565/pdf/USCOURTS-dcd-1_12-cv-00565-1.pdf): The court held that the IRS lacks statutory authority to regulate fees for preparing and filing ordinary refund claims, filed after the original return and before an audit, and granted a permanent injunction. - [31 CFR 10.28, Return of client’s records (Circular 230)](https://www.law.cornell.edu/cfr/text/31/10.28): A practitioner must promptly return client records needed for federal tax compliance on request, even in a fee dispute, subject to state law. ## More on this topic - [Engagement letter template (general)](/blog/engagement-letter-template) - [Disengagement letter template](/blog/disengagement-letter-template) - [Engagement letter templates by service](/templates/engagement-letters) ## About the author Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul). How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? [Contact us](/contact). ## Ask once. DokuTrak does the chasing. - Your client uploads from one link, with no account and no password. - Reminders go out on a schedule, by default 2, 5, 10 and 14 days after the request, until the file arrives. - You accept every file or mark it for re-upload, and your client gets the note by email. The AI never accepts a file. 14-day free trial, no card. Add one only to keep going. [Request these documents with DokuTrak](https://app.dokutrak.com/sign-up?docs=1040-prior-year%2Cw-2%2C1099-nec%2C1099-misc%2Cbank-statement%2Creceipt)