[REG] Professional Responsibilities

Authority to Practice

Treasury Department Circular230 is the IRS publication entitled

: Regulations governing practice before the Internal Revenue Service

- Rules governing the Authority to practice before the IRS

- Duties and restrictions relating to practice before IRS

- Sanctions for violation of the regulations

- Rules applicable to disciplinary hearings

 

Practice

- communicating with the IRS for a taxpayer

- Representing a taxpayer

- Preparing and filing necessary documents with the IRS for a taxpayer

* Anyone who prepares or assists in preparing a federal tax return for compensation must register with the IRS

 

Duties and Restrictions Relating to Practice before the IRS

- Information to be furnished to the IRS (sec10.20)

- Knowledge of Client omission (sec 10.21)

     no need to withdraw or notify IRS for a client omission or error

- Diligence as a to accuracy (sec 10.22)

- Prompt disposition of pending matters (sec 10.23)

    no practitioner may unreasonably delay any matter before the IRS

- Assistance from or to disbarred or suspended persons and former IRS employees(section 10.24)

- Practice by former government employees, their partners, and their associates(section 10.25)

   no member of a firm where a former government employee works can represent a taxpayer where a conflict of int may exist, unless the firm isolates the former government employee from the representation

- Fees (section 10.27)

  a practitioner cannot charge an unconscionable fee in connection with matters before the IRS(grossly unfair relative to industry standards)

contingent fee is allowed in the follwing three situations before the IRS:

 1) IRS examination of an original tax return

 2)  Claim for a refund of interest and / or penalties

 3) A judicial proceeding

- Return of client's records(10.28)

   a duty of confidentiality(*exception: peer review)

   promptly return client records necessary for the client to comply with federal tax obligations

- Conflict of interest (section 10.29)

   practitioner may not represent a client before the IRS 

- Solicitation(section 10.30), No false or misleading information

   a written schedule of fees- a practitioner must honor those fees for 30 days following the last date the fees were publicized, communicating fee info must be retained for 36months

- Negotiation of taxpayer checks(sec 10.31)

   The practitioner may not endorse or negotiate any refund check issued to a client, holding for safekeeping okay

- Best practices for tax advisors(sec 10.33)

- Competence(Sec 10.35)

  

Circular230

practitioner may not willfully or recklessly sign a tax return or advise a client to take a tax position they know or should know

practitioner can not advise a client to take a position unless that position is not frivolous

must inform the client of any penalties that are reasonably likely to apply with  respect to 

   - position taken on tax return   - any document submitted to the IRS

 

Compliance, Sanctions, and petition for reinstatement

rules for disciplinary hearings

Authority to practice, Duties as a tax practitioner, Sanctions for violations

 

Compliance and Sanctions

The firm's procedures to ensure compliance with Circular 230

Potential failures to comply

Sanctions for violations of the regulations

 

Incompetence and Disreputable Conduct: Not Acting in Good Faith

Petition for Reinstatement

a practitioner disbarred or suspended may petition for reinstatement before the IRS after the expiration of five years following suspension or disbarment