Academic journal article Journal of Accountancy

Practicing before the IRS

Academic journal article Journal of Accountancy

Practicing before the IRS

Article excerpt

CPAs play an important role in the U.S. tax system, providing a variety of tax services to their clients. In addition to advice on the proper treatment of the tax laws and tax return preparation and review, one of a CPA's major roles is representing a taxpayer's interests in disputes with the Internal Revenue Service. Therefore, CPAs must be aware of the rules and regulations that govern and limit this conduct.

Practice before the IRS includes all matters connected with a presentation to the service or to any of its officers or employees relating to a client's rights, privileges or liabilities under the laws or regulations the IRS administers This process is not limited to tax return preparation; it includes most aspects of federal tax practice, including the preparation and filing of documents, communications with the service and representation at conferences, hearings and meetings.


The actions of all individuals representing taxpayers before the IRS are governed by various rules promulgated by the service; the most important of these is Treasury Department Circular no. 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries and Appraisers Before the Internal Revenue Service.

Circular 230 is especially significant because it imposes numerous duties and restrictions on practitioners, as well as providing for sanctions for those who violate its provisions. (Note: Individuals involved only in return preparation are not subject to the circular 230 disciplinary rules; however, they are subject to various duties, restrictions and penalties under the Internal Revenue Code.)


Attorneys, CPAs and enrolled agents are entitled to represent taxpayers before the IRS; certain actuaries also are eligible regarding some employee plan issues. An attorney or CPA licensed to practice in one state is allowed to practice before the IRS in any state.

Following are some of the duties circular 230 imposes on practitioners:

* Furnishing information. A taxpayer's representative must furnish records or information the IRS requests and not interfere if the service attempts to obtain such information (unless the representative has a reasonable good-faith belief the information is privileged or the request is of doubtful legality). …

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