On August 2, 2011, the recent amendments to Treasury Department Circular No. 230 will take effect. Every subpart—authority to practice, practice before the IRS, disciplinary proceedings, sanctions, and general provisions—will be affected. 35 rules will change. And one rule will be added. In less than two weeks, therefore, Circular 230 will consist of 60 rules, and 60% of those rules will in some way be new.
The amendments to Circular 230 address, among other things, the following topics:
- regulation of tax return preparers other than attorneys and certified public accountants;
- regulation of continuing education providers;
- standards for signing, preparing, and advising a client to take a position on a tax return;
- a firm's procedures for complying with Circular 230 and the potential liability for the person at the firm who is primarily responsible for observance of those procedures;
- advertising by registered tax return preparers;
- size, constitution, and purpose of advisory committees;
- additional conduct subject to sanction;
- IRS authority to accept a practitioner's consent to sanction;
- how to appeal an adverse disciplinary decision;
- sanctioning of appraisers who have been assessed a penalty and who have acted willfully, recklessly, or with gross incompetence;
- who may represent a taxpayer before the IRS;
- who may represent a respondent in a disciplinary proceeding;
- rosters for registered tax return preparers and qualified continuing education providers;
- the replacement of references to OPR with references to the IRS; and
- the effective date for the amendments.
I have provided an explanation of the amendments affecting each subpart behind the tab for that subpart. And behind the tab for each rule is a reproduction of the rule both before and after amendment. Also included behind each of those tabs is a redline comparison of the old and new versions of each rule. Last, for ease of reference, I have included a copy of the Federal Register announcing the 2011 amendments to Circular 230.
§ 10.0: Scope of part.
Before the amendment, the rule was as follows:
This part contains rules governing the recognition of attorneys, certified public accountants, enrolled agents, and other persons representing taxpayers before the Internal Revenue Service. Subpart A of this part sets forth rules relating to the authority to practice before the Internal Revenue Service; subpart B of this part prescribes the duties and restrictions relating to such practice; subpart C of this part prescribes the sanctions for violating the regulations; subpart D of this part contains the rules applicable to disciplinary proceedings; and subpart E of this part contains general provisions including provisions relating to the availability of official records.
On August 2, 2011, the rule will take effect as follows:
(a) This part contains rules governing the recognition of attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, registered tax return preparers, and other persons representing taxpayers before the Internal Revenue Service. Subpart A of this part sets forth rules relating to the authority to practice before the Internal Revenue Service; subpart B of this part prescribes the duties and restrictions relating to such practice; subpart C of this part prescribes the sanctions for violating the regulations; subpart D of this part contains the rules applicable to disciplinary proceedings; and subpart E of this part contains general provisions relating to the availability of official records.
(b) Effective/applicability date. This section is applicable beginning August 2, 2011.
The rule was modified as follows:
(a) This part contains rules governing the recognition of attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, registered tax return preparers, and other persons representing taxpayers before the Internal Revenue Service. Subpart A of this part sets forth rules relating to the authority to practice before the Internal Revenue Service; subpart B of this part prescribes the duties and restrictions relating to such practice; subpart C of this part prescribes the sanctions for violating the regulations; subpart D of this part contains the rules applicable to disciplinary proceedings; and subpart E of this part contains general provisions relating to the availability of official records.
(b) Effective/applicability date. This section is applicable beginning August 2, 2011.
The deletion is unfortunate because it results in a mischaracterization of subpart E, some of whose provisions do not relate to official records.
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This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.
