Accounting Question

Course – Acc 383 Tax Corp & Partner

See attachment of Tax Ethics Paper Checklist.

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2016 Filing Season: When Ethics Are Costly
2016 Filing Season: When Ethics Are Costly
POSTED ON SEP. 28, 2017
Mark West is a visiting lecturer and Valrie
Chambers is an associate professor of
accounting at the School of Business
Administration at Stetson University.
In this article, West and Chambers
describe the ethical dilemma facing
regulated tax return preparers who
MARK WEST
VALRIE CHAMBERS
encounter Affordable Care Act questions
on tax returns. They explain how that
puts those preparers at a competitive disadvantage compared with less regulated
preparers.
Tax return preparers encounter changes in the law every year. For 2016 returns, preparers
encountered a novel ethical challenge: Noncompliance with the Affordable Care Act legally
results in penalties, but a new executive order gives carte blanche to the public to not pay
them.
Background: ACA Mandate and Penalties
As of the 2016 filing season, the IRS was scheduled to begin rejecting “silent returns,” which
are returns without completed (Box 61) declarations on Form 1040 indicating that clients had
health insurance for the entire year as part of the shared responsibility requirement under
the ACA.1 The ACA with individual mandate was signed into law seven years ago, but
President Trump’s recent executive order largely negates the enforcement of the key ACA
individual shared responsibility declaration and mandate.
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Under the ACA, penalties for noncompliance start at $695 for an adult taxpayer and $347.50
for a child under 18.2 Any tax returns that indicated partial compliance or were silent on Box
61 were scheduled to trigger a letter of noncompliance, investigative audit, or IRS agent
follow-up calls for up to three years within client report submission.
Executive Order
Within hours of his inauguration, Trump signed an executive order that disrupted IRS plans to
begin rejecting silent returns this tax season. The order states in section 2:
To the maximum extent permitted by law, the Secretary of Health and Human
Services (Secretary) and the heads of all other executive departments and agencies
(agencies) with authorities and responsibilities under the Act shall exercise all
authority and discretion available to them to waive, defer, grant exemptions from,
or delay the implementation of any provision or requirement of the Act that would
impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory
burden on individuals, families, healthcare providers, health insurers, patients,
recipients of healthcare services, purchasers of health insurance, or makers of
medical devices, products, or medications.3
With this executive order, the IRS pivoted away from rejecting silent Box 61 returns beginning
with tax return filings for 2016. Many tax return preparers interpret this to suggest that the
executive branch has relaxed the ACA law and that the IRS is unable to enforce compliance
with the law. However, the ACA still stands as the law of the land.4 Reactions from tax return
preparers vary.5
Tax Return Preparer Dilemma
Tax return preparers do not follow uniform licensing rules or use the same professional codes
of ethics. For example, CPAs are licensed by a U.S. state or territory and follow that
jurisdiction’s code of ethics, which is generally consistent with the American Institute of CPAs
code of professional conduct.6 Attorneys are also licensed by a U.S. state or territory and
follow that state’s code of ethics, which is generally consistent with that of the American Bar
Association’s model rules of professional conduct.7 Enrolled agents (EAs) are approved to
practice before the IRS after taking a rigorous exam on taxation and by keeping current
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through continuing education. They follow the National Association of Enrolled Agents’ Code
of Ethics and Rules of Professional Conduct.8 Volunteer Income Tax Assistance (VITA)
volunteers are trained and certified to prepare tax returns under the supervision of a site
coordinator. They follow the rules and instructions of the site coordinator and the IRS liaison
for that site. Seasonal return preparer employees are not necessarily licensed, and as
employees of large tax return preparation companies, they abide by those companies’ ethics
and instructions. Other unenrolled return preparers are free to set their own ethics, if any.
Also, individuals can prepare their own tax returns, but they generally prepare and file them
using tax software.
All of those return preparers faced the same dilemma : Do they advise clients who would be
penalized for inadequate insurance under the ACA to pay the penalty, in compliance with the
law, or do they advise them to remain silent to avoid the financial penalty?
The tax return preparer industry is an exclusive trade because client word-of-mouth
endorsements and references are key to the ongoing success and survival of the business.
The novel tax-return-preparer, ACA-compliance dilemma rises to a dubious level for 2016
returns. Respected companies lose business and their integrity is threatened when loyal
clients go shopping for any preparer who willingly files silent returns to avoid legally imposed
penalties. The IRS’s decision to continue accepting silent returns for 2016 leaves tax return
preparers in a bad position regarding what to tell clients about potential Obamacare fines and
shared ACA responsibilities. On one end, as part of their respective ethical and professional
codes of conduct, the highest level of tax practitioners — including those with legal licenses,
those with state board or IRS certifications, and VITA volunteers — are being advised to
decline to file silent returns when a client owes taxes. On the other end, some tax return
preparers believe that a simple word of caution concerning the ACA law is sufficient and
allows or persuades clients to submit silent returns.
Who’s Doing What
As early as March of this year, a few prominent tax return preparation companies made
public that they were allowing their clients to file silent returns. For example, H&R Block hosts
a blog on filing silent returns through multiple exemptions.9 TurboTax, one of the largest U.S.
tax return software companies, allows clients to fill out silent returns by making Box 61
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optional.10 These are significant examples of how the IRS reversal could encourage millions of
silent returns to be filed, which would upend the tax return preparation industry.
The chart below compares Box 61 treatment for the most common types of tax return
preparers. A strong relationship exists between each tax return preparer’s codified ethical
code of conduct — which includes continuing professional education, registration with the
IRS, and adherence to rigorous professional licensing standards — and the overall likelihood
that the tax return preparer will file returns that comply with the ACA. However, other tax
return preparers are far more likely to file silent returns and avoid significant IRS
consequences. What’s more, the chart does not indicate the potential risk for even highly IRScredentialed and licensed tax return preparers to advise clients to file silent returns, despite
advice from their professional association to the contrary and the ACA compliance mandate
itself. The IRS decision to accept silent returns leaves tax return preparers in a bad position
about what to tell clients about potential Obamacare fines and shared ACA responsibilities. In
2016 tax return preparers had to choose between the cost of upholding ethical standards of
conduct and pleasing business partners and clients. In 2017 the ethical tax dilemma of
upholding codified rules could be more costly still as word spreads that some preparers will
look the other way on the law.
The IRS has mitigated that risk for VITA volunteers by directing them to attempt to answer
every question on the income tax forms required for filing, including Box 61. When asked how
VITA volunteers were responding to the dilemma , the IRS responded:
The legislative provisions of the ACA are still in force until changed by the Congress,
and taxpayers are still required to follow the law and pay all taxes they may owe
under it. Volunteer sites are to continue to follow the instructions for individual
taxpayers involving the ACA which require taxpayers to indicate on their Form 1040
filing whether they had health insurance, an exemption from coverage or
made/are reporting a shared responsibility payment. The TaxSlayer software for
the VITA and TCE sites also continues to require taxpayers to report this
information. This is the same process followed last year.11
Tax Return Preparers and Ethics Rules for Box 61
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Preparer Type
2016 Filing Season: When Ethics Are Costly
Tentative
Treatment
Why?
Unregulated
preparers
Submit
silent
Helps clients avoid
penalties now
Annual season
Submit
Helps clients avoid
filers
silent
penalties now
VITA filers
Comply
with ACA
Enrolled
Comply
agents
with ACA
CPAs
Comply
with ACA
It’s the law
Code of Conduct
Set their own ethical conduct
Set by company
Set by site coordinator and IRS
liaison
Professional licensing
issues and monetary
Set by the NAEA
penalties
Professional licensing
Set by the AICPA: Statements of
issues and monetary
penalties
Standards on Tax Services,
Rules No. 1, 2, and 6
Set by the ABA: Model Rules of
Attorneys
Comply
with ACA
Professional licensing
issues and monetary
penalties
Professional Conduct (sections
1-6);
State bar association codes of
professional responsibility
Submit silent: Preparer fails to reject clients who omit Box 61 disclosures on submissions
to IRS.
Comply with ACA: Preparer rejects clients who omit Box 61 disclosures to the IRS.
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Similarly, EA status is a credential awarded by the IRS, and EAs are directed to follow the
law.12
Published professional codes of ethics, when they apply, give guidance to other licensed
preparers. Attorneys generally follow the ABA Model Rules of Professional Conduct,13 but
they are authoritatively bound by the ethical code of the state in which they are licensed.
Generally, those state codes closely parallel the federal Model Rules and discourage lawyers
from disobeying the law. For example, Florida Rule 4-1.2(d) of the Rules Regulating the Florida
Bar reads:
Criminal or Fraudulent Conduct. A lawyer shall not counsel a client to engage, or
assist a client, in conduct that the lawyer knows or reasonably should know is
criminal or fraudulent. However, a lawyer may discuss the legal consequences of
any proposed course of conduct with a client and may counsel or assist a client to
make a good faith effort to determine the validity, scope, meaning, or application
of the law.14
The comment section of this rule goes on to explain:
Subdivision (d) applies whether or not the defrauded party is a party to the transaction. For
example, a lawyer must not participate in a transaction to effectuate criminal or fraudulent
avoidance of tax liability. . . . The last sentence of subdivision (d) recognizes that determining
the validity or interpretation of a statute or regulation may require a course of action
involving disobedience of the statute or regulation or of the interpretation placed upon it by
governmental authorities.
If a lawyer comes to know or reasonably should know that a client expects assistance not
permitted by the Rules of Professional Conduct or other law or if the lawyer intends to act
contrary to the client’s instructions, the lawyer must consult with the client regarding the
limitations on the lawyer’s conduct. See rule 4-1.4(a)(5).
Because the ACA penalty is part of the tax code and could increase the taxpayer’s
tax liability, a reading of these rules indicates that an attorney should not to assist
the taxpayer in intentionally avoiding that liability through a silent Box 61 return.
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CPAs have a similar national code of ethics and specific state licensing requirements that are
generally modeled on that code of ethics. Specific to tax practice, the AICPA publishes seven
Statements of Standards on Tax Services (SSTS). Two of these standards guide members
through the ethical dilemma . SSTS Rule No. 1, “Tax Return Positions,” directs members to
follow the law. Specifically, paragraph 4 reads, “A member should determine and comply with
the standards, if any, that are imposed by the applicable taxing authority with respect to
recommending a tax return position, or preparing or signing a tax return.”15 Paragraph 7
elaborates so that even when a position is unlikely to be audited by the IRS, “a member
should not recommend a tax return position or prepare or sign a tax return reflecting a
position that the member knows . . . exploits the audit selection process of a taxing authority.”
The SSTS goes on to explain the ethical theory behind these positions in paragraph 10:
Our self-assessment tax system can function effectively only if taxpayers file tax
returns that are true, correct, and complete. A tax return is prepared based on a
taxpayer’s representation of facts, and the taxpayer has the final responsibility for
positions taken on the return. The standards that apply to a taxpayer may differ
from those that apply to a member.
SSTS No. 2, “Answers to Questions on Returns,” sets forth the standards if one or more
questions on a tax return have not been answered. This statement directs members to “make
a reasonable effort to obtain from the taxpayer the information necessary to provide
appropriate answers to all questions on a tax return before signing as preparer.” While not all
information may be available, the standard is clear that “a member should not omit an
answer merely because it might prove disadvantageous to a taxpayer.” That is, the AICPA
Code of Professional Conduct directs CPAs to try to answer the Box 61 question.
However, having a CPA, attorney, EA, or VITA volunteer complete Box 61 when the taxpayer is
uninsured could result in additional taxpayer penalties that would not have been assessed
had the taxpayer had the return prepared by an unlicensed preparer. As taxpayers become
more aware of this financial difference, they may — as early as this tax season if filing an
extension — choose unlicensed over licensed preparers, hurting the revenues of those
licensed preparers who uphold the law. There are also broader implications.
Broader Implications
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Unlicensed preparers might leverage their positions, touting “highest possible refunds,”
whereas licensed preparers might leverage their positions and tout “highest ethical
standards.”
Because state income tax returns are often based on federal income tax returns, they too
may be affected. For example, if taxpayers opted in the past to be insured to avoid the
penalty but will now forgo health insurance, they will also forgo health insurance deductions
and subsidies. Further, the health insurance they bought may have been purchased on a state
exchange, and supply and demand for services on that exchange will arguably shift when they
drop their coverage, affecting the financial health of those state exchanges.
Medicaid and state Medicaid programs are being targeted for reduction. Federal funding for
both prevention and public health funds may be repealed after 2018. Community-run
healthcare programs, including Planned Parenthood, could be eliminated. Recipients of
current health insurance can expect higher deductibles and repeal of cost sharing. Many
expect to see diminished coverage.
Deliberations in recent U.S. congressional sessions over the ACA among Republicans and
Democrats point to potential issues regarding ACA compliance with various state programs
and agencies, though the ACA mandate is still the law. Trump’s order gave broad powers to
these administrations to implement the ACA at their own discretion. “The complexity of the
ACA law makes any plan for repeal and replace filled with obstacles in both the U.S. House of
Representatives and Senate,” according to Jennifer Steinhauer.16 So the dilemma for tax
preparers shows no sign of natural resolution in the short term.
Conclusion and Recommendation
In the short term, our democracy allows opportunities for one political agenda to experience
short-term victories over another. In the long term, we have a shared responsibility as U.S.
citizens and tax return preparers to respect the rule of law. It’s up to our elected leaders to
establish the tone at the top, which inevitably flows throughout our society and to aspiring
U.S. citizens. However, some preparers are following the law while others are following the
executive order, creating uneven conditions for competition for market share among the
partially insured or uninsured taxpayers. Those professions adhering to the law might
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consider providing marketing and communication tools to their members, which would
advertise that they hold to the highest ethical standards.
FOOTNOTES
1 For a definition of a return that is “silent,” see IRS, “ACA Information Center for Tax
Professionals” (Apr. 26, 2017).
2 HealthCare.gov, “The Fee for Not Having Health Insurance.”
3 The White House, “Executive Order Minimizing the Economic Burden of the Patient
Protection and Affordable Care Act Pending Repeal” (Jan. 20, 2017).
4 P.L. 111-148.
5 Ben Steverman, “The ‘Silent’ but Risky Way to Protest Obamacare This Tax Season,”
Bloomberg, Mar. 28, 2017.
6 AICPA, “AICPA Code of Professional Conduct.”
7 American Bar Association, “Model Rules of Professional Conduct: Table of Contents” (2016).
8 NAEA, “Code of Ethics & Rules of Professional Conduct.”
9 Steverman, supra note 5.
10 Id.
11 Email from IRS dated April 18, 2017.
12 IRS, “Enrolled Agent Information.”
13 ABA, “Model Rules of Professional Conduct.”
14 The Florida Bar, “Rule 4-1.2 Objectives and Scope Representation.”
15 AICPA, “Statement on Standards for Tax Services No. 1, Tax Return Positions .”
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16 Jennifer Steinhauer, “Repeal of Health Law Faces Obstacles in House, Not Just in Senate,”
The New York Times, Feb. 23, 2017.
END FOOTNOTES
D O C U M E N T AT T R I B U T E S
JURISDICTIONS
UNITED STATES
SUBJECT AREAS / TAX TOPICS
RETURN PREPARATION
MAGAZINE CITATION
TAX NOTES, SEPT. 11, 2017, P. 1415
INDIVIDUAL INCOME TAXATION
156 TAX NOTES 1415 (SEPT. 11, 2017)
AUTHORS
MARK WEST AND VALRIE CHAMBERS
INSTITUTIONAL AUTHORS
STETSON UNIVERSITY
TAX ANALYSTS DOCUMENT NUMBER
DOC 2017-61488
TAX ANALYSTS ELECTRONIC CITATION
2017 TNT 187-9
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Treasury Department
Circular No. 230
(Rev. 6-2014)
Regulations Governing Practice before
the Internal Revenue Service
Catalog Number 16586R
www.irs.gov
Department
of the
Treasury
Internal
Revenue
Service
Title 31 Code of Federal Regulations,
Subtitle A, Part 10,
published (June 12, 2014)
31 U.S.C. §330. Practice before the Department
(a) Subject to section 500 of title 5, the Secretary of the Treasury may —
(1) regulate the practice of representatives of persons before the Department of the Treasury; and
(2) before admitting a representative to practice, require that the representative demonstrate —
(A) good character;
(B) good reputation;
(C) necessary qualifications to enable the representative to provide to persons valuable service; and
(D) competency to advise and assist persons in presenting their cases.
(b) After notice and opportunity for a proceeding, the Secretary may suspend or disbar from practice before the
Department, or censure, a representative who —
(1) is incompetent;
(2) is disreputable;
(3) violates regulations prescribed under this section; or
(4) with intent to defraud, willfully and knowingly misleads or threatens the person being represented or a
prospective person to be represented.
The Secretary may impose a monetary penalty on any representative described in the preceding sentence. If the
representative was acting on behalf of an employer or any firm or other entity in connection with the conduct
giving rise to such penalty, the Secretary may impose a monetary penalty on such employer, firm, or entity if
it knew, or reasonably should have known, of such conduct. Such penalty shall not exceed the gross income
derived (or to be derived) from the conduct giving rise to the penalty and may be in addition to, or in lieu of, any
suspension, disbarment, or censure of the representative.
(c) After notice and opportunity for a hearing to any appraiser, the Secretary may —
(1) provide that appraisals by such appraiser shall not have any probative effect in any administrative
proceeding before the Department of the Treasury or the Internal Revenue Service, and
(2) bar such appraiser from presenting evidence or testimony in any such proceeding.
(d) Nothing in this section or in any other provision of law shall be construed to limit the authority of the
Secretary of the Treasury to impose standards applicable to the rendering of written advice with respect to any
entity, transaction plan or arrangement, or other plan or arrangement, which is of a type which the Secretary
determines as having a potential for tax avoidance or evasion.
(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 884; Pub. L. 98–369, div. A, title I, §156(a), July 18, 1984, 98 Stat.
695; Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 108–357, title VIII, §822(a)(1), (b), Oct. 22, 2004,
118 Stat. 1586, 1587; Pub. L. 109–280, title XII, §1219(d), Aug. 17, 2006, 120 Stat. 1085.)
Page 2
Treasury Department Circular No. 230
Table of Contents
Paragraph 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
§ 10.0 Scope of part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Subpart A — Rules Governing Authority to Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
§ 10.1 Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
§ 10.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
§ 10.3 Who may practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
§ 10.4 Eligibility to become an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
§ 10.5 Application to become an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
§ 10.6 Term and renewal of status as an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
§ 10.7 Representing oneself; participating in rulemaking; limited practice; and special appearances. . . 16
§ 10.8 Return preparation and application of rules to other individuals. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
§ 10.9 Continuing education providers and continuing education programs. . . . . . . . . . . . . . . . . . . . . . . . 17
Subpart B — Duties and Restrictions Relating to Practice Before the Internal Revenue Service . . . . . . . 19
§ 10.20 Information to be furnished. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
§ 10.21 Knowledge of client’s omission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
§ 10.22 Diligence as to accuracy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
§ 10.23 Prompt disposition of pending matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 10.24 Assistance from or to disbarred or suspended persons and former
Internal Revenue Service employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
§ 10.25 Practice by former government employees, their partners and their associates. . . . . . . . . . . . . . . 20
§ 10.26 Notaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
§ 10.27 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
§ 10.28 Return of client’s records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
§ 10.29 Conflicting interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
§ 10.30 Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
§ 10.31 Negotiation of taxpayer checks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
§ 10.32 Practice of law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
§ 10.33 Best practices for tax advisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
§ 10.34 Standards with respect to tax returns and documents, affidavits and other papers. . . . . . . . . . . 24
§ 10.35 Competence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
§ 10.36 Procedures to ensure compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
§ 10.37 Requirements for written advice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
§ 10.38 Establishment of advisory committees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Treasury Department Circular No. 230
Page 3
Subpart C — Sanctions for Violation of the Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
§ 10.50 Sanctions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
§ 10.51 Incompetence and disreputable conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
§ 10.52 Violations subject to sanction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
§ 10.53 Receipt of information concerning practitioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Subpart D — Rules Applicable to Disciplinary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
§ 10.60 Institution of proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
§ 10.61 Conferences.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
§ 10.62 Contents of complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
§ 10.63 Service of complaint; service of other papers; service of evidence in support of complaint;
filing of papers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
§ 10.64 Answer; default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
§ 10.65 Supplemental charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
§ 10.66 Reply to answer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
§ 10.67 Proof; variance; amendment of pleadings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
§ 10.68 Motions and requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
§ 10.69 Representation; ex parte communication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
§ 10.70 Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
§ 10.71 Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
§ 10.72 Hearings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
§ 10.73 Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
§ 10.74 Transcript. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
§ 10.75 Proposed findings and conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
§ 10.76 Decision of Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
§ 10.77 Appeal of decision of Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
§ 10.78 Decision on review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
§ 10.79 Effect of disbarment, suspension, or censure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
§ 10.80 Notice of disbarment, suspension, censure, or disqualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
§ 10.81 Petition for reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
§ 10.82 Expedited suspension.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Subpart E — General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
§ 10.90 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
§ 10.91 Saving provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
§ 10.92 Special orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
§ 10.93 Effective date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Page 4
Treasury Department Circular No. 230
Table of Contents
Paragraph 1. The authority citation for 31 CFR, part
10 continues to read as follows:
Authority: Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat.
237 et. seq.; 5 U.S.C. 301, 500, 551-559; 31 U.S.C.
321; 31 U.S.C. 330; Reorg. Plan No. 26 of 1950, 15
FR 4935, 64 Stat. 1280, 3 CFR, 1949-1953 Comp.,
p. 1017.
§ 10.0 Scope of part.
(a) This part contains rules governing the
recognition of attorneys, certified public accountants,
enrolled agents, enrolled retirement plan agents,
registered tax return preparers, and other persons
representing taxpayers before the Internal Revenue
Service. Subpart A of this part sets forth rules relating
to the authority to practice before the Internal Revenue
Service; subpart B of this part prescribes the duties
and restrictions relating to such practice; subpart C
of this part prescribes the sanctions for violating the
regulations; subpart D of this part contains the rules
applicable to disciplinary proceedings; and subpart E
of this part contains general provisions relating to the
availability of official records.
(b) Effective/applicability date. This section is
applicable beginning August 2, 2011.
Treasury Department Circular No. 230
Subpart A — Rules Governing Authority to
Practice
§ 10.1 Offices.
(a) Establishment of office(s). The Commissioner
shall establish the Office of Professional
Responsibility and any other office(s) within the
Internal Revenue Service necessary to administer
and enforce this part. The Commissioner shall
appoint the Director of the Office of Professional
Responsibility and any other Internal Revenue
official(s) to manage and direct any office(s)
established to administer or enforce this part.
Offices established under this part include, but are
not limited to:
(1) The Office of Professional Responsibility, which
shall generally have responsibility for matters related
to practitioner conduct and shall have exclusive
responsibility for discipline, including disciplinary
proceedings and sanctions; and
(2) An office with responsibility for matters related
to authority to practice before the Internal Revenue
Service, including acting on applications for
enrollment to practice before the Internal Revenue
Service and administering competency testing and
continuing education.
(b) Officers and employees within any office
established under this part may perform acts necessary
or appropriate to carry out the responsibilities of their
office(s) under this part or as otherwise prescribed by
the Commissioner.
(c) Acting. The Commissioner will designate an
officer or employee of the Internal Revenue Service
to perform the duties of an individual appointed
under paragraph (a) of this section in the absence of
that officer or employee or during a vacancy in that
office.
(d) Effective/applicability date. This section is
applicable beginning August 2, 2011, except that
paragraph (a)(1) is applicable beginning June 12,
2014.
§ 10.1 — Page 5
Table of Contents
§ 10.2 Definitions.
(a) As used in this part, except where the text
provides otherwise —
(1) Attorney means any person who is a member
in good standing of the bar of the highest court of
any state, territory, or possession of the United
States, including a Commonwealth, or the District of
Columbia.
(2) Certified public accountant means any person
who is duly qualified to practice as a certified public
accountant in any state, territory, or possession of the
United States, including a Commonwealth, or the
District of Columbia.
(3) Commissioner refers to the Commissioner of
Internal Revenue.
(4) Practice before the Internal Revenue
Service comprehends all matters connected with a
presentation to the Internal Revenue Service or any
of its officers or employees relating to a taxpayer’s
rights, privileges, or liabilities under laws or
regulations administered by the Internal Revenue
Service. Such presentations include, but are not
limited to, preparing documents; filing documents;
corresponding and communicating with the Internal
Revenue Service; rendering written advice with
respect to any entity, transaction, plan or arrangement,
or other plan or arrangement having a potential for
tax avoidance or evasion; and representing a client at
conferences, hearings, and meetings.
(5) Practitioner means any individual described
in paragraphs (a), (b), (c), (d), (e), or (f) of §10.3.
(6) A tax return includes an amended tax return
and a claim for refund.
(7) Service means the Internal Revenue Service.
(8) Tax return preparer means any individual
within the meaning of section 7701(a)(36) and 26
CFR 301.7701-15.
(b) Effective/applicability date. This section is
applicable on August 2, 2011.
§ 10.3 Who may practice.
(a) Attorneys. Any attorney who is not currently
under suspension or disbarment from practice
Page 6 — § 10.2
before the Internal Revenue Service may practice
before the Internal Revenue Service by filing with
the Internal Revenue Service a written declaration
that the attorney is currently qualified as an attorney
and is authorized to represent the party or parties.
Notwithstanding the preceding sentence, attorneys
who are not currently under suspension or disbarment
from practice before the Internal Revenue Service
are not required to file a written declaration with the
IRS before rendering written advice covered under
§10.37, but their rendering of this advice is practice
before the Internal Revenue Service.
(b) Certified public accountants. Any certified
public accountant who is not currently under
suspension or disbarment from practice before the
Internal Revenue Service may practice before the
Internal Revenue Service by filing with the Internal
Revenue Service a written declaration that the
certified public accountant is currently qualified as
a certified public accountant and is authorized to
represent the party or parties. Notwithstanding the
preceding sentence, certified public accountants who
are not currently under suspension or disbarment
from practice before the Internal Revenue Service
are not required to file a written declaration with the
IRS before rendering written advice covered under
§10.37, but their rendering of this advice is practice
before the Internal Revenue Service.
(c) Enrolled agents. Any individual enrolled as an
agent pursuant to this part who is not currently under
suspension or disbarment from practice before the
Internal Revenue Service may practice before the
Internal Revenue Service.
(d) Enrolled actuaries.
(1) Any individual who is enrolled as an actuary
by the Joint Board for the Enrollment of Actuaries
pursuant to 29 U.S.C. 1242 who is not currently
under suspension or disbarment from practice before
the Internal Revenue Service may practice before the
Internal Revenue Service by filing with the Internal
Revenue Service a written declaration stating that he
or she is currently qualified as an enrolled actuary
and is authorized to represent the party or parties on
whose behalf he or she acts.
(2) Practice as an enrolled actuary is limited
Treasury Department Circular No. 230
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to representation with respect to issues involving
the following statutory provisions in title 26 of
the United States Code: sections 401 (relating to
qualification of employee plans), 403(a) (relating
to whether an annuity plan meets the requirements
of section 404(a) (2)), 404 (relating to deductibility
of employer contributions), 405 (relating to
qualification of bond purchase plans), 412 (relating
to funding requirements for certain employee
plans), 413 (relating to application of qualification
requirements to collectively bargained plans and
to plans maintained by more than one employer),
414 (relating to definitions and special rules with
respect to the employee plan area), 419 (relating
to treatment of funded welfare benefits), 419A
(relating to qualified asset accounts), 420 (relating
to transfers of excess pension assets to retiree health
accounts), 4971 (relating to excise taxes payable as
a result of an accumulated funding deficiency under
section 412), 4972 (relating to tax on nondeductible
contributions to qualified employer plans), 4976
(relating to taxes with respect to funded welfare
benefit plans), 4980 (relating to tax on reversion of
qualified plan assets to employer), 6057 (relating
to annual registration of plans), 6058 (relating to
information required in connection with certain plans
of deferred compensation), 6059 (relating to periodic
report of actuary), 6652(e) (relating to the failure
to file annual registration and other notifications
by pension plan), 6652(f) (relating to the failure to
file information required in connection with certain
plans of deferred compensation), 6692 (relating to
the failure to file actuarial report), 7805(b) (relating
to the extent to which an Internal Revenue Service
ruling or determination letter coming under the
statutory provisions listed here will be applied without
retroactive effect); and 29 U.S.C. § 1083 (relating to
the waiver of funding for nonqualified plans).
(3) An individual who practices before the
Internal Revenue Service pursuant to paragraph (d)
(1) of this section is subject to the provisions of this
part in the same manner as attorneys, certified public
accountants, enrolled agents, enrolled retirement
plan agents, and registered tax return preparers.
(e) Enrolled retirement plan agents —
Treasury Department Circular No. 230
(1) Any individual enrolled as a retirement plan
agent pursuant to this part who is not currently under
suspension or disbarment from practice before the
Internal Revenue Service may practice before the
Internal Revenue Service.
(2) Practice as an enrolled retirement plan agent
is limited to representation with respect to issues
involving the following programs: Employee Plans
Determination Letter program; Employee Plans
Compliance Resolution System; and Employee
Plans Master and Prototype and Volume Submitter
program. In addition, enrolled retirement plan agents
are generally permitted to represent taxpayers with
respect to IRS forms under the 5300 and 5500 series
which are filed by retirement plans and plan sponsors,
but not with respect to actuarial forms or schedules.
(3) An individual who practices before the
Internal Revenue Service pursuant to paragraph (e)
(1) of this section is subject to the provisions of this
part in the same manner as attorneys, certified public
accountants, enrolled agents, enrolled actuaries, and
registered tax return preparers.
(f) Registered tax return preparers.
(1) Any individual who is designated as a
registered tax return preparer pursuant to §10.4(c)
of this part who is not currently under suspension
or disbarment from practice before the Internal
Revenue Service may practice before the Internal
Revenue Service.
(2) Practice as a registered tax return preparer
is limited to preparing and signing tax returns
and claims for refund, and other documents for
submission to the Internal Revenue Service. A
registered tax return preparer may prepare all or
substantially all of a tax return or claim for refund of
tax. The Internal Revenue Service will prescribe by
forms, instructions, or other appropriate guidance the
tax returns and claims for refund that a registered tax
return preparer may prepare and sign.
(3) A registered tax return preparer may represent
taxpayers before revenue agents, customer service
representatives, or similar officers and employees of
the Internal Revenue Service (including the Taxpayer
Advocate Service) during an examination if the
registered tax return preparer signed the tax return
§ 10.3 — Page 7
Table of Contents
or claim for refund for the taxable year or period
under examination. Unless otherwise prescribed by
regulation or notice, this right does not permit such
individual to represent the taxpayer, regardless of
the circumstances requiring representation, before
appeals officers, revenue officers, Counsel or similar
officers or employees of the Internal Revenue
Service or the Treasury Department. A registered tax
return preparer’s authorization to practice under this
part also does not include the authority to provide
tax advice to a client or another person except as
necessary to prepare a tax return, claim for refund,
or other document intended to be submitted to the
Internal Revenue Service.
(4) An individual who practices before the
Internal Revenue Service pursuant to paragraph (f)
(1) of this section is subject to the provisions of this
part in the same manner as attorneys, certified public
accountants, enrolled agents, enrolled retirement
plan agents, and enrolled actuaries.
(g) Others. Any individual qualifying under
paragraph §10.5(e) or §10.7 is eligible to practice
before the Internal Revenue Service to the extent
provided in those sections.
(h) Government officers and employees, and
others. An individual, who is an officer or employee
of the executive, legislative, or judicial branch of the
United States Government; an officer or employee
of the District of Columbia; a Member of Congress;
or a Resident Commissioner may not practice before
the Internal Revenue Service if such practice violates
18 U.S.C. §§ 203 or 205.
(i) State officers and employees. No officer or
employee of any State, or subdivision of any State,
whose duties require him or her to pass upon,
investigate, or deal with tax matters for such State
or subdivision, may practice before the Internal
Revenue Service, if such employment may disclose
facts or information applicable to Federal tax matters.
(j) Effective/applicability date. Paragraphs (a), (b),
and (g) of this section are applicable beginning June
12, 2014. Paragraphs (c) through (f), (h), and (i) of
this section are applicable beginning August 2, 2011.
Page 8 — § 10.3
§ 10.4 Eligibility to become an enrolled agent,
enrolled retirement plan agent, or registered tax
return preparer.
(a) Enrollment as an enrolled agent upon
examination. The Commissioner, or delegate, will
grant enrollment as an enrolled agent to an applicant
eighteen years of age or older who demonstrates
special competence in tax matters by written
examination administered by, or administered under
the oversight of, the Internal Revenue Service, who
possesses a current or otherwise valid preparer tax
identification number or other prescribed identifying
number, and who has not engaged in any conduct
that would justify the suspension or disbarment of
any practitioner under the provisions of this part.
(b) Enrollment as a retirement plan agent upon
examination. The Commissioner, or delegate, will
grant enrollment as an enrolled retirement plan
agent to an applicant eighteen years of age or older
who demonstrates special competence in qualified
retirement plan matters by written examination
administered by, or administered under the oversight
of, the Internal Revenue Service, who possesses a
current or otherwise valid preparer tax identification
number or other prescribed identifying number, and
who has not engaged in any conduct that would justify
the suspension or disbarment of any practitioner
under the provisions of this part.
(c) Designation as a registered tax return preparer.
The Commissioner, or delegate, may designate
an individual eighteen years of age or older as
a registered tax return preparer provided an
applicant demonstrates competence in Federal tax
return preparation matters by written examination
administered by, or administered under the oversight
of, the Internal Revenue Service, or otherwise meets
the requisite standards prescribed by the Internal
Revenue Service, possesses a current or otherwise valid
preparer tax identification number or other prescribed
identifying number, and has not engaged in any conduct
that would justify the suspension or disbarment of any
practitioner under the provisions of this part.
(d) Enrollment of former Internal Revenue Service
employees. The Commissioner, or delegate, may
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Table of Contents
grant enrollment as an enrolled agent or enrolled
retirement plan agent to an applicant who, by virtue
of past service and technical experience in the
Internal Revenue Service, has qualified for such
enrollment and who has not engaged in any conduct
that would justify the suspension or disbarment of
any practitioner under the provisions of this part,
under the following circumstances:
(1) The former employee applies for enrollment
on an Internal Revenue Service form and supplies
the information requested on the form and such other
information regarding the experience and training of
the applicant as may be relevant.
(2) The appropriate office of the Internal Revenue
Service provides a detailed report of the nature and
rating of the applicant’s work while employed by
the Internal Revenue Service and a recommendation
whether such employment qualifies the applicant
technically or otherwise for the desired authorization.
(3) Enrollment as an enrolled agent based on an
applicant’s former employment with the Internal
Revenue Service may be of unlimited scope or it
may be limited to permit the presentation of matters
only of the particular specialty or only before the
particular unit or division of the Internal Revenue
Service for which the applicant’s former employment
has qualified the applicant. Enrollment as an enrolled
retirement plan agent based on an applicant’s former
employment with the Internal Revenue Service will
be limited to permit the presentation of matters only
with respect to qualified retirement plan matters.
(4) Application for enrollment as an enrolled
agent or enrolled retirement plan agent based on an
applicant’s former employment with the Internal
Revenue Service must be made within three years
from the date of separation from such employment.
(5) An applicant for enrollment as an enrolled
agent who is requesting such enrollment based
on former employment with the Internal Revenue
Service must have had a minimum of five years
continuous employment with the Internal Revenue
Service during which the applicant must have been
regularly engaged in applying and interpreting
the provisions of the Internal Revenue Code and
the regulations relating to income, estate, gift,
Treasury Department Circular No. 230
employment, or excise taxes.
(6) An applicant for enrollment as an enrolled
retirement plan agent who is requesting such
enrollment based on former employment with the
Internal Revenue Service must have had a minimum
of five years continuous employment with the
Internal Revenue Service during which the applicant
must have been regularly engaged in applying and
interpreting the provisions of the Internal Revenue
Code and the regulations relating to qualified
retirement plan matters.
(7) For the purposes of paragraphs (d)(5) and (6)
of this section, an aggregate of 10 or more years of
employment in positions involving the application
and interpretation of the provisions of the Internal
Revenue Code, at least three of which occurred within
the five years preceding the date of application, is the
equivalent of five years continuous employment.
(e) Natural persons. Enrollment to practice may be
granted only to natural persons.
(f) Effective/applicability date. This section is
applicable beginning August 2, 2011.
§ 10.5 Application to become an enrolled agent,
enrolled retirement plan agent, or registered tax
return preparer.
(a) Form; address. An applicant to become an
enrolled agent, enrolled retirement plan agent,
or registered tax return preparer must apply as
required by forms or procedures established and
published by the Internal Revenue Service, including
proper execution of required forms under oath or
affirmation. The address on the application will be
the address under which a successful applicant is
enrolled or registered and is the address to which all
correspondence concerning enrollment or registration
will be sent.
(b) Fee. A reasonable nonrefundable fee may be
charged for each application to become an enrolled
agent, enrolled retirement plan agent, or registered
tax return preparer. See 26 CFR part 300.
(c) Additional information; examination. The Internal
Revenue Service may require the applicant, as a
condition to consideration of an application, to file
§ 10.5 — Page 9
Table of Contents
additional information and to submit to any written
or oral examination under oath or otherwise. Upon
the applicant’s written request, the Internal Revenue
Service will afford the applicant the opportunity to
be heard with respect to the application.
(d) Compliance and suitability checks.
(1) As a condition to consideration of an
application, the Internal Revenue Service may
conduct a Federal tax compliance check and
suitability check. The tax compliance check will be
limited to an inquiry regarding whether an applicant
has filed all required individual or business tax
returns and whether the applicant has failed to pay, or
make proper arrangements with the Internal Revenue
Service for payment of, any Federal tax debts.
The suitability check will be limited to an inquiry
regarding whether an applicant has engaged in any
conduct that would justify suspension or disbarment
of any practitioner under the provisions of this part
on the date the application is submitted, including
whether the applicant has engaged in disreputable
conduct as defined in §10.51. The application will
be denied only if the results of the compliance or
suitability check are sufficient to establish that the
practitioner engaged in conduct subject to sanctions
under §§10.51 and 10.52.
(2) If the applicant does not pass the tax
compliance or suitability check, the applicant will
not be issued an enrollment or registration card or
certificate pursuant to §10.6(b) of this part. An
applicant who is initially denied enrollment or
registration for failure to pass a tax compliance
check may reapply after the initial denial if the
applicant becomes current with respect to the
applicant’s tax liabilities.
(e) Temporary recognition. On receipt of a properly
executed application, the Commissioner, or delegate,
may grant the applicant temporary recognition to
practice pending a determination as to whether status
as an enrolled agent, enrolled retirement plan agent,
or registered tax return preparer should be granted.
Temporary recognition will be granted only in
unusual circumstances and it will not be granted, in
any circumstance, if the application is not regular on
its face, if the information stated in the application,
Page 10 — § 10.5
if true, is not sufficient to warrant granting the
application to practice, or the Commissioner,
or delegate, has information indicating that the
statements in the application are untrue or that the
applicant would not otherwise qualify to become
an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer. Issuance of temporary
recognition does not constitute either a designation
or a finding of eligibility as an enrolled agent,
enrolled retirement plan agent, or registered tax
return preparer, and the temporary recognition may
be withdrawn at any time.
(f) Protest of application denial. The applicant
will be informed in writing as to the reason(s) for
any denial of an application. The applicant may,
within 30 days after receipt of the notice of denial of
the application, file a written protest of the denial as
prescribed by the Internal Revenue Service in forms,
guidance, or other appropriate guidance. A protest
under this section is not governed by subpart D of
this part.
(f) Effective/applicability date. This section is
applicable to applications received on or after
August 2, 2011.
§ 10.6 Term and renewal of status as an enrolled
agent, enrolled retirement plan agent, or
registered tax return preparer.
(a) Term. Each individual authorized to practice
before the Internal Revenue Service as an enrolled
agent, enrolled retirement plan agent, or registered
tax return preparer will be accorded active enrollment
or registration status subject to renewal of enrollment
or registration as provided in this part.
(b) Enrollment or registration card or certificate.
The Internal Revenue Service will issue an
enrollment or registration card or certificate to each
individual whose application to practice before the
Internal Revenue Service is approved. Each card
or certificate will be valid for the period stated on
the card or certificate. An enrolled agent, enrolled
retirement plan agent, or registered tax return preparer
may not practice before the Internal Revenue Service
if the card or certificate is not current or otherwise
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valid. The card or certificate is in addition to any
notification that may be provided to each individual
who obtains a preparer tax identification number.
(c) Change of address. An enrolled agent, enrolled
retirement plan agent, or registered tax return preparer
must send notification of any change of address
to the address specified by the Internal Revenue
Service within 60 days of the change of address.
This notification must include the enrolled agent’s,
enrolled retirement plan agent’s, or registered tax
return preparer’s name, prior address, new address,
tax identification number(s) (including preparer tax
identification number), and the date the change of
address is effective. Unless this notification is sent,
the address for purposes of any correspondence
from the appropriate Internal Revenue Service
office responsible for administering this part shall
be the address reflected on the practitioner’s most
recent application for enrollment or registration, or
application for renewal of enrollment or registration.
A practitioner’s change of address notification
under this part will not constitute a change of the
practitioner’s last known address for purposes of
section 6212 of the Internal Revenue Code and
regulations thereunder.
(d) Renewal.
(1) In general. Enrolled agents, enrolled
retirement plan agents, and registered tax return
preparers must renew their status with the Internal
Revenue Service to maintain eligibility to practice
before the Internal Revenue Service. Failure to
receive notification from the Internal Revenue
Service of the renewal requirement will not be
justification for the individual’s failure to satisfy this
requirement.
(2) Renewal period for enrolled agents.
(i) All enrolled agents must renew their preparer
tax identification number as prescribed by forms,
instructions, or other appropriate guidance.
(ii) Enrolled agents who have a social security
number or tax identification number that ends with
the numbers 0, 1, 2, or 3, except for those individuals
who received their initial enrollment after November
1, 2003, must apply for renewal between November
1, 2003, and January 31, 2004. The renewal will be
Treasury Department Circular No. 230
effective April 1, 2004.
(iii) Enrolled agents who have a social security
number or tax identification number that ends with
the numbers 4, 5, or 6, except for those individuals
who received their initial enrollment after November
1, 2004, must apply for renewal between November
1, 2004, and January 31, 2005. The renewal will be
effective April 1, 2005.
(iv) Enrolled agents who have a social security
number or tax identification number that ends with
the numbers 7, 8, or 9, except for those individuals
who received their initial enrollment after November
1, 2005, must apply for renewal between November
1, 2005, and January 31, 2006. The renewal will be
effective April 1, 2006.
(v) Thereafter, applications for renewal as an
enrolled agent will be required between November
1 and January 31 of every subsequent third year as
specified in paragraph (d)(2)(i), (d)(2)(ii), or (d)
(2)(iii) of this section according to the last number
of the individual’s social security number or tax
identification number. Those individuals who
receive initial enrollment as an enrolled agent after
November 1 and before April 2 of the applicable
renewal period will not be required to renew their
enrollment before the first full renewal period
following the receipt of their initial enrollment.
(3) Renewal period for enrolled retirement plan
agents.
(i) All enrolled retirement plan agents must
renew their preparer tax identification number as
prescribed by the Internal Revenue Service in forms,
instructions, or other appropriate guidance.
(ii) Enrolled retirement plan agents will be
required to renew their status as enrolled retirement
plan agents between April 1 and June 30 of every
third year subsequent to their initial enrollment.
(4) Renewal period for registered tax return
preparers. Registered tax return preparers must
renew their preparer tax identification number and
their status as a registered tax return preparer as
prescribed by the Internal Revenue Service in forms,
instructions, or other appropriate guidance.
(5) Notification of renewal. After review and
approval, the Internal Revenue Service will notify
§ 10.6 — Page 11
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the individual of the renewal and will issue the
individual a card or certificate evidencing current
status as an enrolled agent, enrolled retirement plan
agent, or registered tax return preparer.
(6) Fee. A reasonable nonrefundable fee may be
charged for each application for renewal filed. See 26
CFR part 300.
(7) Forms. Forms required for renewal may be
obtained by sending a written request to the address
specified by the Internal Revenue Service or from
such other source as the Internal Revenue Service
will publish in the Internal Revenue Bulletin (see
26 CFR 601.601(d)(2)(ii)(b)) and on the Internal
Revenue Service webpage (www.irs.gov).
(e) Condition for renewal: continuing education.
In order to qualify for renewal as an enrolled agent,
enrolled retirement plan agent, or registered tax
return preparer, an individual must certify, in the
manner prescribed by the Internal Revenue Service,
that the individual has satisfied the requisite number
of continuing education hours.
(1) Definitions. For purposes of this section —
(i) Enrollment year means January 1 to
December 31 of each year of an enrollment cycle.
(ii) Enrollment cycle means the three successive
enrollment years preceding the effective date of
renewal.
(iii) Registration year means each 12-month
period the registered tax return preparer is authorized
to practice before the Internal Revenue Service.
(iv) The effective date of renewal is the first day
of the fourth month following the close of the period
for renewal described in paragraph (d) of this section.
(2) For renewed enrollment as an enrolled agent
or enrolled retirement plan agent —
(i) Requirements for enrollment cycle. A
minimum of 72 hours of continuing education credit,
including six hours of ethics or professional conduct,
must be completed during each enrollment cycle.
(ii) Requirements for enrollment year. A
minimum of 16 hours of continuing education credit,
including two hours of ethics or professional conduct,
must be completed during each enrollment year of an
enrollment cycle.
(iii) Enrollment during enrollment cycle —
Page 12 — § 10.6
(A) In general. Subject to paragraph (e)(2)(iii)
(B) of this section, an individual who receives initial
enrollment during an enrollment cycle must complete
two hours of qualifying continuing education credit
for each month enrolled during the enrollment cycle.
Enrollment for any part of a month is considered
enrollment for the entire month.
(B) Ethics. An individual who receives
initial enrollment during an enrollment cycle must
complete two hours of ethics or professional conduct
for each enrollment year during the enrollment cycle.
Enrollment for any part of an enrollment year is
considered enrollment for the entire year.
(3) Requirements for renewal as a registered
tax return preparer. A minimum of 15 hours of
continuing education credit, including two hours of
ethics or professional conduct, three hours of Federal
tax law updates, and 10 hours of Federal tax law
topics, must be completed during each registration
year.
(f) Qualifying continuing education —
(1) General —
(i) Enrolled agents. To qualify for continuing
education credit for an enrolled agent, a course of
learning must —
(A) Be a qualifying continuing education
program designed to enhance professional
knowledge in Federal taxation or Federal tax related
matters (programs comprised of current subject
matter in Federal taxation or Federal tax related
matters, including accounting, tax return preparation
software, taxation, or ethics); and
(B) Be a qualifying continuing education
program consistent with the Internal Revenue Code
and effective tax administration.
(ii) Enrolled retirement plan agents. To qualify
for continuing education credit for an enrolled
retirement plan agent, a course of learning must —
(A) Be a qualifying continuing education
program designed to enhance professional knowledge
in qualified retirement plan matters; and
(B) Be a qualifying continuing education
program consistent with the Internal Revenue Code
and effective tax administration.
(iii) Registered tax return preparers. To
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qualify for continuing education credit for a registered
tax return preparer, a course of learning must —
(A) Be a qualifying continuing education
program designed to enhance professional
knowledge in Federal taxation or Federal tax related
matters (programs comprised of current subject
matter in Federal taxation or Federal tax related
matters, including accounting, tax return preparation
software, taxation, or ethics); and
(B) Be a qualifying continuing education
program consistent with the Internal Revenue Code
and effective tax administration.
(2) Qualifying programs —
(i) Formal programs. A formal program
qualifies as a continuing education program if it —
(A) Requires attendance and provides each
attendee with a certificate of attendance;
(B) Is conducted by a qualified instructor,
discussion leader, or speaker (in other words, a
person whose background, training, education, and
experience is appropriate for instructing or leading
a discussion on the subject matter of the particular
program);
(C) Provides or requires a written outline,
textbook, or suitable electronic educational materials;
and
(D) Satisfies the requirements established for
a qualified continuing education program pursuant to
§10.9.
(ii) Correspondence or individual study
programs (including taped programs). Qualifying
continuing
education
programs
include
correspondence or individual study programs that
are conducted by continuing education providers
and completed on an individual basis by the enrolled
individual. The allowable credit hours for such
programs will be measured on a basis comparable to
the measurement of a seminar or course for credit in
an accredited educational institution. Such programs
qualify as continuing education programs only if
they —
(A) Require registration of the participants by
the continuing education provider;
(B) Provide a means for measuring successful
completion by the participants (for example, a written
Treasury Department Circular No. 230
examination), including the issuance of a certificate
of completion by the continuing education provider;
(C) Provide a written outline, textbook, or
suitable electronic educational materials; and
(D) Satisfy the requirements established for a
qualified continuing education program pursuant to
§10.9.
(iii) Serving as an instructor, discussion leader
or speaker.
(A) One hour of continuing education credit
will be awarded for each contact hour completed
as an instructor, discussion leader, or speaker at
an educational program that meets the continuing
education requirements of paragraph (f) of this
section.
(B) A maximum of two hours of continuing
education credit will be awarded for actual subject
preparation time for each contact hour completed as
an instructor, discussion leader, or speaker at such
programs. It is the responsibility of the individual
claiming such credit to maintain records to verify
preparation time.
(C) The maximum continuing education credit
for instruction and preparation may not exceed four
hours annually for registered tax return preparers and
six hours annually for enrolled agents and enrolled
retirement plan agents.
(D) An instructor, discussion leader, or
speaker who makes more than one presentation
on the same subject matter during an enrollment
cycle or registration year will receive continuing
education credit for only one such presentation for
the enrollment cycle or registration year.
(3) Periodic examination. Enrolled Agents and
Enrolled Retirement Plan Agents may establish
eligibility for renewal of enrollment for any
enrollment cycle by —
(i) Achieving a passing score on each part of
the Special Enrollment Examination administered
under this part during the three year period prior to
renewal; and
(ii) Completing a minimum of 16 hours of
qualifying continuing education during the last year
of an enrollment cycle.
§ 10.6 — Page 13
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(g) Measurement of continuing education
coursework.
(1) All continuing education programs will be
measured in terms of contact hours. The shortest
recognized program will be one contact hour.
(2) A contact hour is 50 minutes of continuous
participation in a program. Credit is granted only for
a full contact hour, which is 50 minutes or multiples
thereof. For example, a program lasting more than
50 minutes but less than 100 minutes will count as
only one contact hour.
(3) Individual segments at continuous
conferences, conventions and the like will be
considered one total program. For example, two
90-minute segments (180 minutes) at a continuous
conference will count as three contact hours.
(4) For university or college courses, each
semester hour credit will equal 15 contact hours and
a quarter hour credit will equal 10 contact hours.
(h) Recordkeeping requirements.
(1) Each individual applying for renewal must
retain for a period of four years following the date
of renewal the information required with regard to
qualifying continuing education credit hours. Such
information includes —
(i) The name of the sponsoring organization;
(ii) The location of the program;
(iii) The title of the program, qualified program
number, and description of its content;
(iv) Written outlines, course syllibi, textbook,
and/or electronic materials provided or required for
the course;
(v) The dates attended;
(vi) The credit hours claimed;
(vii) The name(s) of the instructor(s), discussion
leader(s), or speaker(s), if appropriate; and
(viii) The certificate of completion and/or
signed statement of the hours of attendance obtained
from the continuing education provider.
(2) To receive continuing education credit for
service completed as an instructor, discussion leader,
or speaker, the following information must be
maintained for a period of four years following the
date of renewal —
(i) The name of the sponsoring organization;
Page 14 — § 10.6
(ii) The location of the program;
(iii) The title of the program and copy of its
content;
(iv) The dates of the program; and
(v) The credit hours claimed.
(i) Waivers.
(1) Waiver from the continuing education
requirements for a given period may be granted for
the following reasons —
(i) Health, which prevented compliance with
the continuing education requirements;
(ii) Extended active military duty;
(iii) Absence from the United States for an
extended period of time due to employment or other
reasons, provided the individual does not practice
before the Internal Revenue Service during such
absence; and
(iv) Other compelling reasons, which will be
considered on a case-by-case basis.
(2) A request for waiver must be accompanied
by appropriate documentation. The individual is
required to furnish any additional documentation
or explanation deemed necessary. Examples of
appropriate documentation could be a medical
certificate or military orders.
(3) A request for waiver must be filed no later
than the last day of the renewal application period.
(4) If a request for waiver is not approved, the
individual will be placed in inactive status. The
individual will be notified that the waiver was not
approved and that the individual has been placed on a
roster of inactive enrolled agents, enrolled retirement
plan agents, or registered tax return preparers.
(5) If the request for waiver is not approved, the
individual may file a protest as prescribed by the
Internal Revenue Service in forms, instructions, or
other appropriate guidance. A protest filed under this
section is not governed by subpart D of this part.
(6) If a request for waiver is approved, the
individual will be notified and issued a card or
certificate evidencing renewal.
(7) Those who are granted waivers are required
to file timely applications for renewal of enrollment
or registration.
(j) Failure to comply.
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Table of Contents
(1) Compliance by an individual with the
requirements of this part is determined by the Internal
Revenue Service. The Internal Revenue Service
will provide notice to any individual who fails to
meet the continuing education and fee requirements
of eligibility for renewal. The notice will state the
basis for the determination of noncompliance and
will provide the individual an opportunity to furnish
the requested information in writing relating to
the matter within 60 days of the date of the notice.
Such information will be considered in making a
final determination as to eligibility for renewal. The
individual must be informed of the reason(s) for any
denial of a renewal. The individual may, within 30
days after receipt of the notice of denial of renewal,
file a written protest of the denial as prescribed by
the Internal Revenue Service in forms, instructions,
or other appropriate guidance. A protest under this
section is not governed by subpart D of this part.
(2) The continuing education records of an
enrolled agent, enrolled retirement plan agent, or
registered tax return preparer may be reviewed to
determine compliance with the requirements and
standards for renewal as provided in paragraph (f)
of this section. As part of this review, the enrolled
agent, enrolled retirement plan agent or registered tax
return preparer may be required to provide the Internal
Revenue Service with copies of any continuing
education records required to be maintained under
this part. If the enrolled agent, enrolled retirement
plan agent or registered tax return preparer fails
to comply with this requirement, any continuing
education hours claimed may be disallowed.
(3) An individual who has not filed a timely
application for renewal, who has not made a timely
response to the notice of noncompliance with the
renewal requirements, or who has not satisfied
the requirements of eligibility for renewal will be
placed on a roster of inactive enrolled individuals
or inactive registered individuals. During this time,
the individual will be ineligible to practice before the
Internal Revenue Service.
(4) Individuals placed in inactive status and
individuals ineligible to practice before the Internal
Revenue Service may not state or imply that they
Treasury Department Circular No. 230
are eligible to practice before the Internal Revenue
Service, or use the terms enrolled agent, enrolled
retirement plan agent, or registered tax return
preparer, the designations “EA” or “ERPA” or other
form of reference to eligibility to practice before the
Internal Revenue Service.
(5) An individual placed in inactive status
may be reinstated to an active status by filing an
application for renewal and providing evidence of
the completion of all required continuing education
hours for the enrollment cycle or registration year.
Continuing education credit under this paragraph (j)
(5) may not be used to satisfy the requirements of
the enrollment cycle or registration year in which the
individual has been placed back on the active roster.
(6) An individual placed in inactive status
must file an application for renewal and satisfy the
requirements for renewal as set forth in this section
within three years of being placed in inactive
status. Otherwise, the name of such individual will
be removed from the inactive status roster and the
individual’s status as an enrolled agent, enrolled
retirement plan agent, or registered tax return
preparer will terminate. Future eligibility for active
status must then be reestablished by the individual as
provided in this section.
(7) Inactive status is not available to an individual
who is the subject of a pending disciplinary matter
before the Internal Revenue Service.
(k) Inactive retirement status. An individual who no
longer practices before the Internal Revenue Service
may request to be placed in an inactive retirement
status at any time and such individual will be placed
in an inactive retirement status. The individual will
be ineligible to practice before the Internal Revenue
Service. An individual who is placed in an inactive
retirement status may be reinstated to an active
status by filing an application for renewal and
providing evidence of the completion of the required
continuing education hours for the enrollment cycle
or registration year. Inactive retirement status is not
available to an individual who is ineligible to practice
before the Internal Revenue Service or an individual
who is the subject of a pending disciplinary matter
under this part.
§ 10.6 — Page 15
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(l) Renewal while under suspension or disbarment.
An individual who is ineligible to practice before the
Internal Revenue Service by virtue of disciplinary
action under this part is required to conform to the
requirements for renewal of enrollment or registration
before the individual’s eligibility is restored.
(m) Enrolled actuaries. The enrollment and renewal
of enrollment of actuaries authorized to practice
under paragraph (d) of §10.3 are governed by the
regulations of the Joint Board for the Enrollment of
Actuaries at 20 CFR 901.1 through 901.72.
(n) Effective/applicability date. This section is
applicable to enrollment or registration effective
beginning August 2, 2011.
§ 10.7 Representing oneself; participating
in rulemaking; limited practice; and special
appearances.
(a) Representing oneself. Individuals may appear on
their own behalf before the Internal Revenue Service
provided they present satisfactory identification.
(b) Participating in rulemaking. Individuals
may participate in rulemaking as provided by the
Administrative Procedure Act. See 5 U.S.C. § 553.
(c) Limited practice —
(1) In general. Subject to the limitations in
paragraph (c)(2) of this section, an individual who
is not a practitioner may represent a taxpayer before
the Internal Revenue Service in the circumstances
described in this paragraph (c)(1), even if the
taxpayer is not present, provided the individual
presents satisfactory identification and proof of
his or her authority to represent the taxpayer. The
circumstances described in this paragraph (c)(1) are
as follows:
(i) An individual may represent a member of his
or her immediate family.
(ii)A regular full-time employee of an individual
employer may represent the employer.
(iii) A general partner or a regular full-time
employee of a partnership may represent the
partnership.
(iv) A bona fide officer or a regular fulltime employee of a corporation (including a
Page 16 — § 10.6
parent, subsidiary, or other affiliated corporation),
association, or organized group may represent the
corporation, association, or organized group.
(v) A regular full-time employee of a trust,
receivership, guardianship, or estate may represent
the trust, receivership, guardianship, or estate.
(vi) An officer or a regular employee of
a governmental unit, agency, or authority may
represent the governmental unit, agency, or authority
in the course of his or her official duties.
(vii) An individual may represent any individual
or entity, who is outside the United States, before
personnel of the Internal Revenue Service when such
representation takes place outside the United States.
(2) Limitations.
(i) An individual who is under suspension or
disbarment from practice before the Internal Revenue
Service may not engage in limited practice before the
Internal Revenue Service under paragraph (c)(1) of
this section.
(ii) The Commissioner, or delegate, may,
after notice and opportunity for a conference, deny
eligibility to engage in limited practice before the
Internal Revenue Service under paragraph (c)(1) of
this section to any individual who has engaged in
conduct that would justify a sanction under §10.50.
(iii) An individual who represents a taxpayer
under the authority of paragraph (c)(1) of this section
is subject, to the extent of his or her authority, to such
rules of general applicability regarding standards
of conduct and other matters as prescribed by the
Internal Revenue Service.
(d) Special appearances. The Commissioner,
or delegate, may, subject to conditions deemed
appropriate, authorize an individual who is not
otherwise eligible to practice before the Internal
Revenue Service to represent another person in a
particular matter.
(e) Fiduciaries. For purposes of this part, a
fiduciary (for example, a trustee, receiver, guardian,
personal representative, administrator, or executor) is
considered to be the taxpayer and not a representative
of the taxpayer.
(f) Effective/applicability date. This section is
applicable beginning August 2, 2011.
Treasury Department Circular No. 230
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§ 10.8 Return preparation and application of
rules to other individuals.
§ 10.9 Continuing education providers and
continuing education programs.
(a) Preparing all or substantially all of a tax return.
Any individual who for compensation prepares or
assists with the preparation of all or substantially
all of a tax return or claim for refund must have
a preparer tax identification number. Except as
otherwise prescribed in forms, instructions, or other
appropriate guidance, an individual must be an
attorney, certified public accountant, enrolled agent,
or registered tax return preparer to obtain a preparer
tax identification number. Any individual who for
compensation prepares or assists with the preparation
of all or substantially all of a tax return or claim for
refund is subject to the duties and restrictions relating
to practice in subpart B, as well as subject to the
sanctions for violation of the regulations in subpart C.
(b) Preparing a tax return and furnishing
information. Any individual may for compensation
prepare or assist with the preparation of a tax return
or claim for refund (provided the individual prepares
less than substantially all of the tax return or claim for
refund), appear as a witness for the taxpayer before
the Internal Revenue Service, or furnish information
at the request of the Internal Revenue Service or any
of its officers or employees.
(c) Application of rules to other individuals. Any
individual who for compensation prepares, or assists
in the preparation of, all or a substantial portion of a
document pertaining to any taxpayer’s tax liability for
submission to the Internal Revenue Service is subject
to the duties and restrictions relating to practice in
subpart B, as well as subject to the sanctions for
violation of the regulations in subpart C. Unless
otherwise a practitioner, however, an individual
may not for compensation prepare, or assist in the
preparation of, all or substantially all of a tax return
or claim for refund, or sign tax returns and claims for
refund. For purposes of this paragraph, an individual
described in 26 CFR 301.7701-15(f) is not treated
as having prepared all or a substantial portion of the
document by reason of such assistance.
(d) Effective/applicability date. This section is
applicable beginning August 2, 2011.
(a) Continuing education providers —
(1) In general. Continuing education providers
are those responsible for presenting continuing
education programs. A continuing education provider
must —
(i) Be an accredited educational institution;
(ii) Be recognized for continuing education
purposes by the licensing body of any State, territory,
or possession of the United States, including a
Commonwealth, or the District of Columbia;
(iii) Be recognized and approved by a qualifying
organization as a provider of continuing education
on subject matters within §10.6(f) of this part. The
Internal Revenue Service may, at its discretion,
identify a professional organization, society or
business entity that maintains minimum education
standards comparable to those set forth in this part as
a qualifying organization for purposes of this part in
appropriate forms, instructions, and other appropriate
guidance; or
(iv) Be recognized by the Internal Revenue
Service as a professional organization, society, or
business whose programs include offering continuing
professional education opportunities in subject
matters within §10.6(f) of this part. The Internal
Revenue Service, at its discretion, may require such
professional organizations, societies, or businesses
to file an agreement and/or obtain Internal Revenue
Service approval of each program as a qualified
continuing education program in appropriate forms,
instructions or other appropriate guidance.
(2) Continuing education provider numbers —
(i) In general. A continuing education provider
is required to obtain a continuing education provider
number and pay any applicable user fee.
(ii) Renewal. A continuing education provider
maintains its status as a continuing education provider
during the continuing education provider cycle by
renewing its continuing education provider number as
prescribed by forms, instructions or other appropriate
guidance and paying any applicable user fee.
Treasury Department Circular No. 230
§ 10.9 — Page 17
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(3) Requirements for qualified continuing
education programs. A continuing education
provider must ensure the qualified continuing
education program complies with all the following
requirements —
(i) Programs must be developed by individual(s)
qualified in the subject matter;
(ii) Program subject matter must be current;
(iii) Instructors, discussion leaders, and speakers
must be qualified with respect to program content;
(iv) Programs must include some means for
evaluation of the technical content and presentation
to be evaluated;
(v) Certificates of completion bearing a current
qualified continuing education program number
issued by the Internal Revenue Service must be
provided to the participants who successfully
complete the program; and
(vi) Records must be maintained by the
continuing education provider to verify the
participants who attended and completed the
program for a period of four years following
completion of the program. In the case of continuous
conferences, conventions, and the like, records must
be maintained to verify completion of the program
and attendance by each participant at each segment
of the program.
(4) Program numbers —
(i) In general. Every continuing education
provider is required to obtain a continuing education
provider program number and pay any applicable
user fee for each program offered. Program
numbers shall be obtained as prescribed by forms,
instructions or other appropriate guidance. Although,
at the discretion of the Internal Revenue Service, a
continuing education provider may be required to
demonstrate that the program is designed to enhance
professional knowledge in Federal taxation or
Federal tax related matters (programs comprised
of current subject matter in Federal taxation or
Federal tax related matters, including accounting, tax
return preparation software, taxation, or ethics) and
complies with the requirements in paragraph (a)(2)of
this section before a program number is issued.
Page 18 — § 10.9
(ii) Update programs. Update programs may
use the same number as the program subject to
update. An update program is a program that instructs
on a change of existing law occurring within one
year of the update program offering. The qualifying
education program subject to update must have been
offered within the two year time period prior to the
change in existing law.
(iii) Change in existing law. A change in
existing law means the effective date of the statute or
regulation, or date of entry of judicial decision, that
is the subject of the update.
(b) Failure to comply. Compliance by a continuing
education provider with the requirements of this part
is determined by the Internal Revenue Service. A
continuing education provider who fails to meet the
requirements of this part will be notified by the Internal
Revenue Service. The notice will state the basis for
the determination of noncompliance and will provide
the continuing education provider an opportunity to
furnish the requested information in writing relating to
the matter within 60 days of the date of the notice. The
continuing education provider may, within 30 days after
receipt of the notice of denial, file a written protest as
prescribed by the Internal Revenue Service in forms,
instructions, or other appropriate guidance. A protest
under this section is not governed by subpart D of this
part.
(c) Effective/applicability date. This section is
applicable beginning August 2, 2011.
Treasury Department Circular No. 230
Table of Contents
Subpart B — Duties and Restrictions Relating to
Practice Before the Internal Revenue Service
§ 10.20 Information to be furnished.
(a) To the Internal Revenue Service.
(1) A practitioner must, on a proper and lawful
request by a duly authorized officer or employee
of the Internal Revenue Service, promptly submit
records or information in any matter before the
Internal Revenue Service unless the practitioner
believes in good faith and on reasonable grounds that
the records or information are privileged.
(2) Where the requested records or information
are not in the possession of, or subject to the control
of, the practitioner or the practitioner’s client, the
practitioner must promptly notify the requesting
Internal Revenue Service officer or employee and the
practitioner must provide any information that the
practitioner has regarding the identity of any person
who the practitioner believes may have possession or
control of the requested records or information. The
practitioner must make reasonable inquiry of his or her
client regarding the identity of any person who may
have possession or control of the requested records
or information, but the practitioner is not required to
make inquiry of any other person or independently
verify any information provided by the practitioner’s
client regarding the identity of such persons.
(3) When a proper and lawful request is made
by a duly authorized officer or employee of the
Internal Revenue Service, concerning an inquiry
into an alleged violation of the regulations in this
part, a practitioner must provide any information the
practitioner has concerning the alleged violation and
testify regarding this information in any proceeding
instituted under this part, unless the practitioner
believes in good faith and on reasonable grounds that
the information is privileged.
(b) Interference with a proper and lawful request
for records or information. A practitioner may not
interfere, or attempt to interfere, with any proper
and lawful effort by the Internal Revenue Service,
its officers or employees, to obtain any record or
information unless the practitioner believes in good
Treasury Department Circular No. 230
faith and on reasonable grounds that the record or
information is privileged.
(c) Effective/applicability date. This section is
applicable beginning August 2, 2011.
§ 10.21 Knowledge of client’s omission.
A practitioner who, having been retained by a
client with respect to a matter administered by the
Internal Revenue Service, knows that the client has
not complied with the revenue laws of the United
States or has made an error in or omission from any
return, document, affidavit, or other paper which
the client submitted or executed under the revenue
laws of the United States, must advise the client
promptly of the fact of such noncompliance, error,
or omission. The practitioner must advise the client
of the consequences as provided under the Code
and regulations of such noncompliance, error, or
omission.
§ 10.22 Diligence as to accuracy.
(a) In general. A practitioner must exercise due
diligence —
(1) In preparing or assisting in the preparation
of, approving, and filing tax returns, documents,
affidavits, and other papers relating to Internal
Revenue Service matters;
(2) In determining the correctness of oral or
written representations made by the practitioner to
the Department of the Treasury; and
(3) In determining the correctness of oral or
written representations made by the practitioner to
clients with reference to any matter administered by
the Internal Revenue Service.
(b) Reliance on others. Except as modified by
§§10.34 and 10.37, a practitioner will be presumed
to have exercised due diligence for purposes of
this section if the practitioner relies on the work
product of another person and the practitioner used
reasonable care in engaging, supervising, training,
and evaluating the person, taking proper account of
the nature of the relationship between the practitioner
and the person.
§ 10.22 — Page 19
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(c) Effective/applicability date. Paragraph (a) of
this section is applicable on September 26, 2007.
Paragraph (b) of this section is applicable beginning
June 12, 2014.
§ 10.23 Prompt disposition of pending matters.
A practitioner may not unreasonably delay the
prompt disposition of any matter before the Internal
Revenue Service.
§ 10.24 Assistance from or to disbarred or
suspended persons and former Internal Revenue
Service employees.
A practitioner may not, knowingly and directly or
indirectly:
(a) Accept assistance from or assist any person
who is under disbarment or suspension from practice
before the Internal Revenue Service if the assistance
relates to a matter or matters constituting practice
before the Internal Revenue Service.
(b) Accept assistance from any former government
employee where the provisions of § 10.25 or any
Federal law would be violated.
§ 10.25 Practice by former government employees,
their partners and their associates.
(a) Definitions. For purposes of this section —
(1) Assist means to act in such a way as to advise,
furnish information to, or otherwise aid another
person, directly, or indirectly.
(2) Government employee is an officer or
employee of the United States or any agency of
the United States, including a special Government
employee as defined in 18 U.S.C. 202(a), or of the
District of Columbia, or of any State, or a member of
Congress or of any State legislature.
(3) Member of a firm is a sole practitioner or
an employee or associate thereof, or a partner,
stockholder, associate, affiliate or employee of a
partnership, joint venture, corporation, professional
association or other affiliation of two or more
practitioners who represent nongovernmental
parties.
Page 20 — § 10.22
(4) Particular matter involving specific parties is
defined at 5 CFR 2637.201(c), or superseding postemployment regulations issued by the U.S. Office of
Government Ethics.
(5) Rule includes Treasury regulations, whether
issued or under preparation for issuance as notices
of proposed rulemaking or as Treasury decisions,
revenue rulings, and revenue procedures published
in the Internal Revenue Bulletin (see 26 CFR
601.601(d)(2)(ii)(b)).
(b) General rules —
(1) No former Government employee may,
subsequent to Government employment, represent
anyone in any matter administered by the Internal
Revenue Service if the representation would violate
18 U.S.C. 207 or any other laws of the United States.
(2) No former Government employee who
personally and substantially participated in a
particular matter involving specific parties may,
subsequent to Government employment, represent
or knowingly assist, in that particular matter, any
person who is or was a specific party to that particular
matter.
(3) A former Government employee who within
a period of one year prior to the termination of
Government employment had official responsibility
for a particular matter involving specific parties may
not, within two years after Government employment
is ended, represent in that particular matter any person
who is or was a specific party to that particular matter.
(4) No former Government employee may, within
one year after Government employment is ended,
communicate with or appear before, with the intent to
influence, any employee of the Treasury Department
in connection with the publication, withdrawal,
amendment, modification, or interpretation of a rule
the development of which the former Government
employee participated in, or for which, within a period
of one year prior to the termination of Government
employment, the former government employee had
official responsibility. This paragraph (b)(4) does
not, however, preclude any former employee from
appearing on one’s own behalf or from representing
a taxpayer before the Internal Revenue Service in
connection with a particular matter involving specific
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parties involving the application or interpretation of
a rule with respect to that particular matter, provided
that the representation is otherwise consistent with
the other provisions of this section and t…