Introduction

Most people recognize that the IRS is responsible for the collection of federal taxes from individuals, businesses, and other entities. Various professionals are involved in assisting with the preparation of such tax information, such as tax preparers, certified public accountants, and enrolled agents.

Whenever it appears that a tax professional has not performed his or her duties in accordance with applicable standards, the matter will be sent to the Office of Professional Responsibility (OPR). The OPR is a division within the IRS responsible for ensuring all tax professionals and other third parties in the tax system adhere to professional standards and follow the law.

OPR’s goals include the following: (i) increase awareness and understanding of Circular 230 and OPR through outreach activities; (ii) apply the principles of due process to the investigation, analysis, enforcement and litigation of Circular 230 cases; and (iii) build, train and motivate a cohesive OPR team. Circular 230 includes the rules governing practice before the IRS. OPR’s organizational structure includes three major segments: Office of the Director, Legal Analysis Branch, and Operations and Management Branch.

Almost all OPR complaints are referred from an outside source. If the preliminary investigation reveals a violation, the practitioner is sent a “Pre-Allegation Notice” giving the practitioner an opportunity to provide evidence on his behalf. After the investigation is completed, the practitioner is given an opportunity to reach a settlement. If no settlement is reached, the complaint is sent to the Office of Chief Counsel, General Legal Services, where a complaint is filed to bring a formal civil hearing before an administrative law judge. After a hearing, the Judge will enter a Final Agency Decision. Either party may appeal the Final Agency Decision to the US District Court.

Enforcement Process

Several disciplinary sanctions are available to the OPR when a tax practitioner has violated Circular 230.

  • Censure – a public reprimand
  • Suspension – from one to fifty-nine months
  • Disbarment – five years
  • Monetary Penalty – alone or in addition to any censure, suspension or disbarment

Any discipline issued by the OPR only affects the practitioner’s ability to practice before the IRS and does not impact his ability to continue to practice as a CPA if he is otherwise licensed to do so. Due to this limitation of disciplinary power by the IRS, it is important that boards be aware of any discipline issued by the IRS against a licensed CPA so that the licensing board can proceed to take its own disciplinary action against the CPA’s license if appropriate.

Information Sharing

The IRS is unable to share much information with the public, including boards of accountancy, due to privacy restrictions in their laws and rules. Therefore, there is not a standard form for requesting information on an OPR disciplinary matter.

In order to assist the boards in gathering as much information as may be available on a particular licensee, contact information for verification of a practitioner’s current status to practice is provided below in the Helpful Links section for easy reference. Also, the IRS is able to share information with other tax collecting agencies, so we recommend that you contact your state tax office to see if they can assist you in gathering information about an IRS disciplinary matter.

When a disciplinary action is taken against a tax practitioner, the final disposition will include an admission or finding of fault. The IRS does not enter consent orders where there is a no fault plea. This is useful information because many boards of accountancy are able to take disciplinary action against a licensee upon a finding of fault by another state or federal regulatory agency. The final dispositions are posted by the IRS in their Final Agency Decisions and also in their Announcements of Disciplinary Sanctions published in their Bulletins. Both of these web pages are available on the IRS website. For easy reference, these links are also provided in the Helpful Links section.

A listserv is now available which will allow a board to subscribe to an email list and receive information directly from the IRS. OPR’s Listserv will provide up-to-date information to IRS enforcement personnel, who deal with practitioners/representatives as part of their assigned duties, and to the tax professional community. Subscribers will be notified by email regarding:

  • OPR disciplinary actions
  • Press releases
  • New items
  • Rules governing those who practice before the IRS and related updates
  • Educational info about OPR, its mission and priorities

In order to subscribe to the Listserv, click this link and select “Subscribe/Unsubscribe” and then follow the directions to enter your email information. The link is also provided in the Helpful Links section below for easy reference.

Information regarding disciplinary action by federal agencies is typically available on the internet, but the difficulty lies in locating such information for each agency that has the authority to discipline licensees. In order to assist boards, NASBA now publishes a Quarterly Enforcement Report which is emailed to the Executive Directors. The Quarterly Enforcement Report compiles information from the Securities & Exchange Commission, Internal Revenue Service, PCAOB and AICPA, and then utilizes the Accounting Licensing Database (ALD) to help identify the jurisdictions which may be involved in each matter. All issues of the Quarterly Enforcement Report can be located on the Quarterly Enforcement Reports page.

Helpful Links for IRS

> Final Agency Decisions
> Announcements of Disciplinary Sanctions
> Link to subscribe to IRS Listserv

Contacts

To verify a practitioner’s current status to practice, please contact:

Internal Revenue Service, Office of Professional Responsibility
Attention: SE:OPR
Room 7238/IR, 1111 Constitution Avenue NW
Washington, DC 20224

To obtain information regarding Final Agency Decisions, please contact:

Stephen Whitlock, Director
Office of Professional Responsibility
Internal Revenue Service
Stephen.A.Whitlock@irs.gov

Quick Links

Accountancy Licensee Database
Becoming an Investigator or Expert Witness
Communicating with Federal Agencies
Enforcement Newsletter
Enforcement Resource Guide
Enforcement Tools Home
Investigator Training Series
Quarterly Enforcement Reports
Retaining an Investigator or Expert Witness