IRS Proposes Modernized Rules For Tax Professionals Under Circular 230

Last month, the Department of the Treasury and the Internal Revenue Service ("IRS") issued proposed regulations updating the rules for tax professionals who practice before the IRS. These rules, which are contained in Treasury Department Circular 230 ("Circular 230") and apply to attorneys, certified public accountants, and enrolled agents who practice before the IRS, set forth certain required actions as well as certain prohibitions by which such professionals must abide.

The IRS Office of Professional Responsibility has exclusive oversight for practitioner conduct and discipline and is tasked with applying the standards set forth in Circular 230. Among some of the most important provisions included in Circular 230 are the requirements that all practitioners must be competent and must exercise due diligence and use best practices in their representation of taxpayers. Tax practitioners who violate the provisions of Circular 230 may be subject to penalties