IRS and Tax Practice Symposium - Virtual-1 - McElligot

1 - McElligot - Circular 230 Decoded

Pdf Summary

The presentation explains Circular 230, the rules governing tax professionals who practice before the IRS. Its authority stems from 31 U.S.C. § 330, which empowers the Treasury Department to regulate representatives, assess practitioner fitness, and impose discipline. Circular 230 sets practice rules, professional duties, sanctions, and disciplinary procedures.<br /><br />The IRS Office of Professional Responsibility (OPR) administers these standards, investigates alleged misconduct, and imposes sanctions when warranted. Referrals may come from outside sources or from specified penalty-related cases. OPR may review a practitioner’s personal and business tax compliance, investigate allegations, offer an opportunity to respond and settle, and—if a case proceeds—pursue a hearing and appeal. Outcomes range from closure or reprimand to censure, suspension, disbarment, appraiser disqualification, or monetary penalties. Expedited suspension is possible in certain circumstances, including licensing actions, convictions, court sanctions, or tax noncompliance.<br /><br />Circular 230 obligations include acting with due diligence and competence; promptly addressing client errors; providing requested information unless properly privileged; returning client records; managing conflicts; following solicitation and fee restrictions; and never negotiating clients’ IRS refund checks. Practitioners must not advise frivolous or unsupported tax positions, must inform clients about relevant penalty risks, and must use reasonable factual and legal analysis in written advice. They may rely in good faith on client information or others’ work, but must make reasonable inquiries when information appears incomplete, inconsistent, or incorrect.<br /><br />Practitioners must not provide false or misleading information, assist tax evasion, or willfully fail to meet their own tax obligations. Those overseeing a firm’s practice must establish reasonable compliance procedures, including appropriate technological safeguards and competence.<br /><br />The presentation encourages clear engagement terms, careful fact-gathering, sound legal analysis, fair conduct, and ongoing use of IRS guidance and resources to support compliant practice.

Keywords

Circular 230

IRS Office of Professional Responsibility

tax practitioners

31 U.S.C. § 330

professional conduct

disciplinary procedures

sanctions

due diligence

tax compliance

penalty risks