Holders of Tax Preparer License Subject to OPR Disciplinary Actions
The Office of Professional Responsibility (OPR) is the agency responsible for administering and enforcing the legal requirements imposed on tax practitioners. With the implementation of tax preparer certification by the IRS, OPR oversight covers an expanded number of professionals. Treasury Department Circular 230 addresses the code of conduct for individuals engaged in the tax industry.
Among the provisions of Circular 230 are two types of disciplinary proceedings. Anyone with a tax preparer license could now face such proceedings. A tax practitioner may have a representative at these proceedings as long as OPR is provided with an acceptable power of attorney confirmation, such as execution of form 2848. Certain information from these actions is made publicly available by OPR.
Any tax practitioner who fails to comply with Circular 230 requirements is subject to sanctions. This includes the possibility of private reprimand, public censure, suspension, or disbarment from paid tax business before the IRS. In addition, a person in a tax preparation career may incur a monetary penalty for conduct contrary to Circular 230 regulations.
One step in OPR disciplinary matters is an informal process prior to any detailed proceedings. This may cause individuals with tax preparer jobs to receive written notice about the law, facts, and conduct that warrant OPR disciplinary measures. At that time, a tax practitioner may dispute facts, assert additional facts, and provide explanations or descriptions of mitigating circumstances. The tax preparer response may include an offer of consent to sanction as settlement of the disciplinary action. The receipt of notice from OPR also affords a Registered Tax Return Preparer with the opportunity to request a conference.
Innovations introduced in 2010 by OPR were designed to give tax practitioners earlier notice of misconduct allegations and expeditiously resolve the matters. This changed the nature of written correspondence initially received by a tax professional. These letters now invite the tax practitioner to submit relevant information before further investigation occurs.
Adequate responses are expected to resolve the situations entirely. If OPR determines that the complaint against the tax practitioner is valid, consent to censure is suggested. Alternatively, OPR may simply conclude the case by reprimand of the tax professional.
Alternative disciplinary approaches are most commonly enforced for tax non-compliance. These are often situations where a tax practitioner has failed to file a tax return on time but self-corrected prior to OPR intervention. A similar circumstance is when the tax pro is delinquent for tax payment but is given 60 days to cure the matter.
A gentler OPR approach may also apply to conduct cases against a tax practitioner. This is likely when the tax professional has little or no history of disciplinary complaints and has expressed intention to refrain from the misconduct. A deferred disciplinary agreement is generally given in such instances. It only becomes effective if the tax practitioner continues the misconduct action.
A formal proceeding is possible when the informal process fails to resolve the issue. The Office of the Associate Chief Counsel is called upon to represent OPR before an administrative law judge in unresolved disciplinary cases.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.