Tax Analysts publishes news, analysis, and commentary on various tax-related professional responsibility issues, including the rules governing practice before the IRS, responsibilities of tax professionals, and continuing education for tax return preparers.
Circular 230, “Regulations Governing Practice Before the Internal Revenue Service” provides rules governing the recognition of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, registered tax return preparers, and other persons representing taxpayers before the IRS. Circular 230 provides the ethical standards required of those individuals along with the procedural rules that govern the discipline of practitioners who violate the standards. The IRS Office of Professional Responsibility has the authority to exercise responsibility for all matters regarding conduct, discipline, and fitness to practice under Circular 230. Some tax preparer responsibilities and obligations under Circular 230 include exercising due diligence in preparing and filing tax returns and other documents; providing competent representation; following the conflict of interest rules; advising clients on the consequences under the tax code and regulations of any noncompliance, error, or omissions; and handling matters promptly.
Penalties may be imposed under sections 6694, 6695, 6700, 6701, 6713, 7206, 7207, and 7216 when individuals fail to meet their responsibilities as tax professionals. And under sections 7407 and 7408, a federal district court may enjoin tax return preparers or other individuals from engaging in specified proscribed conduct. Final regulations (T.D. 9608) provide guidance under section 7216 on the disclosure and use of tax return information by tax return preparers.
Recurring issues and controversies in this area include legal hurdles to the IRS’s attempts to regulate paid tax return preparers. ("Year in Review: Legal Hurdles Stymie IRS's Plans to Regulate Return Preparers")