Magazine article The CPA Journal

IRS Director of Practice Provides Examples of Disciplinary Action

Magazine article The CPA Journal

IRS Director of Practice Provides Examples of Disciplinary Action

Article excerpt

The IRS Director of Practice has started periodically publishing in the Internal Revenue Bulletin summaries of closed cases to provide information to tax practitioners regarding the types of activity that may result in disciplinary action under 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.

One case involved a practitioner who was convicted of aiding and assisting in the filing of a false tax return in violation of IRC Sec. 7206(2). He was found to have knowingly taken part in the preparation of a partnership's income tax return that understated by a material amount the proceeds received from a sale of property. The Director of Practice notified the practitioner that his conviction was a violation of Sec. 10.51(a) of Circular 230. In response, the practitioner claimed that his plea bargain with the U.S. Attorney's Office included a guarantee that he would not be the subject of further prosecution for any tax-related offense for certain specified years. An administrative law judge ruled that the bargain related only to criminal actions and ordered the practitioner disbarred.

Several other individuals were placed under consent suspensions from practice before the IRS, including a practitioner whose personal income tax returns, as well as those he prepared for several clients contained numerous errors, such as deducting personal expenses as business expenses; failing to report income; deducting the same business payments as both interest and insurance expense; and income averaging using income reported by the client instead of income as adjusted by the IRS after examination. …

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