Glossary of resolution and practice software terms
Short answer
This glossary defines the IRS and software terms a solo practitioner meets when adding resolution work, from CSED and CNC to Form 8821 and TDS. Each definition stands on its own, and terms with a full playbook link to it.
By the BestTaxSoftware.com editorial team. Updated . Prices checked on vendor sites that day.
- Account transcript
- An IRS record of every transaction on one tax period for one taxpayer: assessments, payments, penalties, interest, and collection actions, each with a transaction code and date.
- Learn more: Account transcript
- AFSP (Annual Filing Season Program)
- A voluntary IRS program for preparers without a credential. Participants get limited representation rights for returns they prepared and signed, not including collections or appeals.
- Learn more: AFSP
- AI resolution assistant
- Software that uses AI to read IRS records, analyze finances, and draft resolution forms for a credentialed practitioner to review. It cannot represent a taxpayer.
- Learn more: AI resolution assistant
- CAF number
- The Centralized Authorization File number the IRS assigns to a representative or designee when it processes their first Form 2848 or 8821.
- Circular 230
- The Treasury regulations governing practice before the IRS, including who may practice, fee limits, advertising rules, and duties to clients.
- Collection Financial Standards
- IRS allowances for food, clothing, housing, transportation, and health care used to decide how much a taxpayer can pay each month.
- CSED (Collection Statute Expiration Date)
- The date the IRS can no longer collect an assessed tax, generally ten years after assessment plus any suspension periods.
- Learn more: CSED
- CNC (Currently Not Collectible)
- An IRS status that pauses most collection when a taxpayer cannot pay basic living expenses. The debt remains and penalties and interest continue.
- Learn more: CNC
- Enrolled agent (EA)
- A federally licensed tax practitioner who passed the IRS Special Enrollment Examination and suitability check. EAs have unlimited representation rights.
- Learn more: Enrolled agent
- First-time abatement (FTA)
- An IRS administrative waiver of failure-to-file, failure-to-pay, or failure-to-deposit penalties for one period when the taxpayer has a clean three-year history.
- Learn more: First-time abatement
- Form 2848
- Power of Attorney and Declaration of Representative. Authorizes a CPA, EA, attorney, or other eligible individual to represent a taxpayer.
- Learn more: Form 2848
- Form 433-A / 433-F
- IRS Collection Information Statements: the financial disclosure used for installment agreements, CNC, and, in the OIC version, offers in compromise.
- Form 8821
- Tax Information Authorization. Lets a named person or organization receive a taxpayer’s IRS information without representing them.
- Learn more: Form 8821
- Installment agreement
- An IRS payment plan that lets a taxpayer pay a balance in monthly payments, with a setup fee that depends on how it is requested.
- Learn more: Installment agreement
- Offer in compromise (OIC)
- An agreement to settle a tax debt for less than the full balance when the taxpayer cannot pay it in full before the CSED.
- Learn more: Offer in compromise
- Pay-per-return pricing
- A prep software license priced per filed return or in return bundles, rather than an unlimited yearly fee.
- Learn more: Pay-per-return pricing
- PTIN
- Preparer Tax Identification Number. Required for anyone who prepares federal returns for pay.
- RCP (Reasonable Collection Potential)
- The IRS calculation of what it could collect from a taxpayer: equity in assets plus future disposable income. The floor for an acceptable offer.
- Learn more: RCP
- TDS (Transcript Delivery System)
- The IRS system through which authorized practitioners retrieve client transcripts. Resolution and transcript software pulls data through it.
- Learn more: TDS
- Unlimited representation rights
- The right to represent any taxpayer on any matter before the IRS, held by CPAs, enrolled agents, and attorneys.
- Learn more: Unlimited representation rights
Sources
- Understanding tax return preparer credentials and qualifications (IRS)
- Circular 230: Regulations governing practice before the IRS (IRS)
- About Form 8821, Tax Information Authorization (IRS)
- About Form 2848, Power of Attorney and Declaration of Representative (IRS)
- Transcript Delivery System (TDS) (IRS)
- Collection Financial Standards (IRS)
- IRM 5.1.19, Collection Statute Expiration (IRS)