Academic journal article Journal of Accountancy

Tax Practice before the IRS: Treasury Proposes Changing the Rules

Academic journal article Journal of Accountancy

Tax Practice before the IRS: Treasury Proposes Changing the Rules

Article excerpt

Those who wish to represent taxpayers (other than themselves) before the IRS--that is, enrolled agents and actuaries, attorneys and CPAs--are subject to specific rules and procedures, embodied in Treasury Circular 230. This past January, the Treasury Department proposed changes to those rules.


Tax practice includes all matters connected with a presentation before the IRS (or any of its officers or employees) relating to a taxpayer's rights, privileges or liabilities under laws or regulations administered by the service. This includes corresponding and communicating with the IRS, preparing and filing documents, and representing clients at hearings, conferences and meetings.

Circular 230 covers all aspects of practice--among which are information that must be furnished to the IRS, charging contingent fees, practitioner advertising and returning a client's records.


The proposed changes include the following:

Information to be furnished to the IRS. After a proper and lawful request, a tax practitioner must submit information and records on any matter before the service. Even if neither the practitioner nor the client possesses or controls the requested documents or information, there is no exception. Practitioners who have "reasonable grounds" to believe "in good faith" that the information is privileged, however, may refuse to submit it. In addition, practitioners can refuse to comply if they believe "in good faith and on reasonable grounds", that the information or records requested are of "doubtful legality."

The current rules would be modified to clarify that a practitioner is required to promptly respond to a proper request by either submitting the requested information or advising the service why it cannot be provided. If neither the practitioner nor his or her client controls the documents, the practitioner would be required, to the extent possible, to identify any persons who may have the requested documents in their control. …

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