Academic journal article Journal of Accountancy

Circular 230 Revisions Finalized

Academic journal article Journal of Accountancy

Circular 230 Revisions Finalized

Article excerpt

The Treasury Department issued final regulations amending a number of Circular 230 standards, including sections on conflicts of interest, contingent fees, conduct for which practitioners may be sanctioned and publicity of disciplinary hearings. Most of the changes became effective upon their issuance on Sept. 26.

The final regulations concerning conflicts of interest continue to allow clients to waive otherwise lawful conflicts, but the requirements have been tightened. Each affected client must waive the conflict and give informed consent, confirmed in writing within 30 days.

Although several commentators had criticized a proposal to curtail the use of contingent fees, the Treasury Department attempted to strike a balance on this issue. The final regulations allow contingent fees for services rendered in connection with an IRS examination of (1) original returns or (2) amended returns and refund claims filed within 120 days of a notice of examination or written challenge by the IRS: Contingent fees also are allowed for interest and penalty analyses and for services in connection with a judicial proceeding. These provisions apply to fee arrangements entered into after March 26, 2008.

Several commentators had questioned the appropriateness of making a practitioner's willful failure to sign a tax return a sanctionable offense under section 10. …

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