What Constitutes Practice Before the IRS

The responsibility for the enforcement and administration of the regulations that govern practice before the IRS is conferred upon the Office of Professional Responsibility. The guidelines are issuedas part of Circular No. 230 of the Treasury Department.The Office of Professional Responsibility is tasked with making adetermination concerning enrollment applications for practice before the IRS, as well as to conduct disciplinary procedures that relate to individuals eligibility to practice.

According to Treasury Departments Circular No. 230, practice before the IRS encompasses any and all issues that relate to any of the following.

• Any Communication with the Internal Revenue Service on behalf of a taxpayer concerningthe rights and privileges of a taxpayer’s, or taxpayer’s obligations under laws overseen by the Internal Revenue Service.
• Stand in for a taxpayer at hearings, consultations, meetings, or sessions with agents of the Internal Revenue Service.
• Preparation and filing of documents with the Internal Revenue Serviceon behalf of a taxpayer.
• Any Correspondence and, or communication with the IRS.

Circular No. 230 of Treasury Department spells out that Preparation of tax returns, supplying any information or documentation at the direction of the Internal Revenue Service, or any appearance for a taxpayer as a witness is not considered as practice before the IRS. These undertakings can be carried out by any person.

Categories Of Individuals Who May Practice And Extent Of Practice Privileges

Various individuals falling under different designations can practice before the Internal Revenue Service. However, any person who is a recognized representative has to be authorized as a taxpayer’s power of attorney. The person must also present a written declaration to the Internal Revenue Service indicating and confirming that he or she has the prerequisite qualifications to represent particular taxpayers and has the prerequisite authorization from that taxpayer.Categories of persons who may legally practice before the Internal Revenue Service include Attorneys at Law, CPAs, Enrolled Agents, Actuaries, and Retirement Plan Agents, Student Attorneys, as well As Student CPA.

1. Attorneys: Any attorney who has not been disbarred from practice or is not presently suspended from practice and who is adjudged to be in good standing as a member of the bar of any territory, District of Columbia, or state’s highest court, may practice before the IRS.
2. CPAs: Any Certified Public Accountant who presently is not disbarred or suspended, and who is authorized to practice as a Certified Public Accountant in any state, in DC, or in any territory is allowed to practice before the IRS.
3. Enrolled agents: Any suchagent whose status isin force is allowed to practice.
4. Enrolled actuaries:any personsregistered by Joint Board for the Enrollment of Actuaries(JBEA) as Actuaries may practice. However, practice under this proviso is restricted to some specific Internal Revenue Code sections which are concerned with the actuaries particular fields of proficiency.
5. Enrolled Retirement Plan Agents: Any person who is an Enrolled Retirement Plan Agent and who has an active status may practice. However, their practice is restricted to prespecified Internal Revenue Code sections which are concerned with the plan agents particular fields of knowledge.
6. Student Attorney: A student may practice before the IRS if he or she has been allowed to practice under section 10.7(d) of Circular 230 by their being students studying law.
7. Student Certified Public Accountants: Student by being CPAs students may be permitted to practice before IRS under section 10.7(d) of Circular 230.

Unenrolled return preparers:this refers to any person who prepares a return and signs it as the return preparer, and he or she is not an attorney at law, CPA, enrolled actuary, or enrolled agent. On the other hand, any person who is involved in the preparation of tax returns, but does not sign the return documents as the preparer is regarded as an unenrolled preparer.An unenrolled return preparer is legally allowed to represent a taxpayerconcerning a tax liability or examination that relates to a return that he or she prepared, but this representation is allowed only before revenue agents, customer service representatives, and examination officers. The unenrolled return preparer is not allowed to represent a taxpayer before the Collection, Appeals, or any other IRS division.An unenrolled return preparer cannot:

1. Effect closing agreements that touch on tax liability;
2. Lengthen the legal period for tax collection and assessment;
3. Effect applications for refund;
4. Receive refund checks on behalf of the taxpayer;
5. Represent a taxpayer before IRS divisions such as Collection orAppeals; or
6. Effect abdications of restriction on assessment or collection of a tax deficiency.

References

Department of the Treasury_IRS. (1999). Practice Before the IRS and Powers of Attorney. Publication 947.

Department of the Treasury-IRS. (2014). Regulations Governing Practice before the Internal Revenue Service. Treasury Department Circular No. 230 (Rev. 6-2014).

Internal Revenue Service. (2015). Part 1. Organization, Finance, and Management_Chapter 25. Practice Before the Service_Section 1. Rules Governing Practice Before the IRS. Retrieved from Internal Revenue Service: https://www.irs.gov/irm/part1/irm_01-025-001.html

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