Frequently Asked Questions | Internal Revenue Service

The OPR supports the IRS’s strategy to enhance enforcement of the tax law by ensuring that tax professionals adhere to tax practice standards and follow the law. The OPR is the governing body responsible for interpreting and applying the Regulations Governing Practice before the Internal Revenue Service (Treasury Department Circular 230 PDF). The OPR has exclusive responsibility for practitioner conduct and discipline, including instituting disciplinary proceedings and pursuing sanctions. It functions independently of the Title 26 enforcement components of the IRS.

Q2. What is Circular 230?

Circular 230 is the common name given to the body of regulations promulgated under the enabling statute found at Title 31, United States Code § 330. This statute and the body of regulations are the source of the OPR’s authority. Circular 230 defines “practice” and who may practice before the IRS; describes a tax professional’s duties and obligations while practicing before the IRS; authorizes specific sanctions for violations of the duties and obligations; and, describes the procedures that apply to administrative proceedings for discipline.

Q3. What does “practice before the IRS” entail?

“Practice before the IRS” comprehends all matters connected with a presentation to the IRS, or any of its officers or employees, relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the IRS. Such presentations include, but are not limited to, preparing documents; filing documents; corresponding and communicating with the IRS; rendering oral and written advice with respect to any entity, transaction, plan or arrangement, or other plan or arrangement having a potential for tax avoidance or evasion; and representing a client at conferences, hearings and meetings.

Q4. Who is subject to Circular 230 jurisdiction?

State-licensed Attorneys and Certified Public Accountants (CPAs) authorized and in good standing with their state licensing authority who interact with tax administration at any level.
Individuals enrolled to practice before the IRS: Enrolled Agents, Enrolled Retirement Plan Agents, and Enrolled Actuaries.
Individuals providing appraisals used in connection with federal tax matters (e.g., charitable contributions; estate and gift assets; fair market value for sales gain, etc.).
Individuals who are unenrolled and unlicensed (as attorneys or CPAs) and who represent taxpayers before IRS examination, customer service, and similar personnel, including the Taxpayer Advocate Service, in connection with returns they prepared and signed. For more information, go to the IRS Annual Filing Season Program page.
Licensed and unlicensed individuals who give written advice with respect to any entity, transaction, plan or arrangement, or other plan or arrangement, which is of a type the IRS determines as having a potential for tax avoidance or evasion. For this purpose, “written advice” means all forms of written material, including the content of an email, given in connection with any law or regulation administered by the IRS.
Any individual submitting a power of attorney in connection with limited representation of a taxpayer before the IRS with respect to a specific matter before the Agency.

Q5. What is the extent of the OPR’s authority?

The OPR’s oversight of the conduct of tax practice extends to all individuals who make a presentation to the IRS relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the IRS. Generally, this includes any individual who interacts with Federal tax administration, whether in-person, orally, in writing, or by the preparation and submission of documents.

Q6. Does the OPR administer the preparer tax identification number (PTIN) program; continuing education requirements; the Annual Filing Season Program; or enrollment of Enrolled Agents, Enrolled Actuaries, or Enrolled Retirement Plan Agents?

No, these programs are administered by the Return Preparer Office (RPO).

Q7. What sanctions are authorized by Circular 230 and to whom do they apply?

Circular 230 discipline includes Censure (essentially a public reprimand), Suspension of practice privileges and Disbarment. A suspension can be for a fixed term or may be indefinite, and a practitioner must request and be granted reinstatement by the OPR before practice privileges are restored. When a practitioner is suspended for a fixed term, the individual may not petition to be reinstated to practice before the end of the term. When a practitioner is disbarred, s/he may not petition for reinstatement for five years. The OPR also may propose a monetary penalty on any practitioner who engages in conduct subject to sanction. The monetary penalty may be proposed against the individual or a firm, or both, and can be in addition to any Censure, Suspension or Disbarment. The amount of the penalty may be up to the amount of gross income derived or to be derived from the conduct giving rise to the penalty.

Before any of the above sanctions is imposed, the practitioner (or firm‎) is provided with notice and an opportunity for a conference and an opportunity for a formal proceeding.

If formal discipline is not appropriate, the OPR may issue a private reprimand or a cautionary “soft letter.” The “soft letter” typically advises a practitioner of allegations and warns against noncompliance with obligations under Circular 230, but does not reach a conclusion as to whether a violation was actually committed.

The OPR may also disqualify an appraiser from further submissions in connection with tax matters. A taxpayer may not rely for a federal tax purpose on an appraisal from a disqualified appraiser that was rendered after the disqualification.

Q8. How does the disciplinary process work?

The OPR’s authority and case determinations are independent of the enforcement functions performed by the general IRS population. Referrals to the OPR alleging violations of Circular 230 are received from a variety of sources both internal and external. Only rarely does the OPR initiate its own projects to identify specific matters for investigation. When a referral is received, the OPR independently determines, based on all available pertinent facts and circumstances, whether the alleged violation is one which calls into question a practitioner’s fitness to continue to practice.

If the OPR determines that an alleged violation warrants investigation, the OPR provides the practitioner with information regarding the conduct alleged, and the fact that the OPR has initiated a disciplinary investigation. The letter informing the practitioner of the allegations gives the practitioner an opportunity to provide any evidence or documentation s/he believes is relevant to the OPR’s determination. The practitioner may also have a conference with the OPR. After a thorough investigation of the facts and an analysis/consideration of aggravating and mitigating circumstances, the OPR decides whether it will seek corrective action, including possible discipline.

Due process protections are incorporated throughout the disciplinary process. During the investigation, the practitioner may propose a resolution of the matter, which may include discipline or other corrective action. If the OPR and the practitioner cannot agree on a resolution of the matter and the OPR believes discipline is appropriate, a formal “complaint” is drafted and the case is referred to the Office of Chief Counsel, General Legal Services (GLS). GLS sends a letter to the practitioner offering a final opportunity to resolve the matter without a proceeding. If settlement is not reached, GLS files the complaint to commence a civil proceeding before an Administrative Law Judge (ALJ). The ALJ presides over the proceeding and decides the merits of the case against the practitioner (the “respondent”). The proceeding is generally governed by the Administrative Procedures Act (5 USC § 500 et seq.). The ALJ may order a hearing to be held, during which the government and respondent present their evidence and arguments. The case may be settled by concurrence of both parties at any time prior to a decision.

If a hearing is conducted, and after post-hearing briefs are submitted, the ALJ issues an Initial Decision and Order. The ALJ may find the OPR has proven the allegations of the complaint and conclude the respondent committed violations of Circular 230 for which the respondent should be sanctioned. The ALJ may then go on to impose the ‎sanction which the OPR proposed. Alternatively, the ALJ may rule in the OPR's favor on the facts and law but increase or reduce the recommended sanction. Or the ALJ may reject both the OPR’s version of events and its recommendation of a sanction, and thus dismiss the case.

Following the ALJ’s Decision and Order, either party may appeal the case to the Treasury Appellate Authority. If neither party appeals within 30 days, the ALJ’s Initial Decision and Order becomes the Final Agency Decision. If either party appeals, the Treasury Appellate Authority will, after receiving briefs from both parties and reviewing the record, render the Final Agency Decision. For the OPR, a decision by the Appellate Authority is a final determination in the case.

A practitioner who is not satisfied with the Treasury Appellate Authority’s Final Agency Decision may file a complaint in U.S. District Court to contest it. This proceeding is also conducted according to the Administrative Procedures Act, under which the Federal district judge will review findings of facts based only on the administrative record and will set aside agency action only if arbitrary or capricious, contrary to law, or an abuse of discretion. The proceeding is not a trial de novo.

Q9. What documents are required for practitioners electing to be represented during a Circular 230 Investigation?

If you receive an allegation, or other investigative, letter from the OPR, you may decide that you want to use a representative to interface on your behalf with the OPR. If so, then you must provide some form of documentation authorizing that representation. The OPR will accept:

A Form 2848, Power of Attorney and Declaration of Representative with an appropriate description of the scope of the representation; or
A letter of representation containing the essential elements of a Form 2848. The letter of representation must include the following:
1. An affirmation that the representative is authorized to represent persons before the IRS;
2. An affirmation that the representative has the appropriate state or federal license, such as that of an attorney, CPA, or EA;
3. A statement that the representative has been authorized by you to represent you before the OPR; and
4. A statement of where to send correspondence, i.e., solely to the representative, or to both you and the representative. (Note that in some instances the OPR will send certain correspondence directly to you with a copy to your representative regardless of any other instruction, because doing so is legally required.)

Q10. Are there any restrictions on practitioners once they are disciplined by the OPR?

Yes. See Guidance on Restrictions During Suspension or Disbarment from Practice Before the Internal Revenue Service PDF on IRS.gov.

Q11. Can disciplined practitioners represent clients before IRS?

A practitioner who has been suspended or disbarred may not represent clients before the IRS, unless and until s/he petitions the OPR for reinstatement and the OPR grants that petition. If a suspension or disbarment is based in whole or in part on action by a State licensing authority (typically a State Board of Accountancy or lawyer disciplinary authority), reinstatement by the State is NOT sufficient to permit practice before the IRS. The same rule applies when a suspension is based in whole or in part on a criminal conviction. Satisfaction of sentencing provisions, such as a term of incarceration or probation, still requires a petition for reinstatement to be made to and approved by the OPR. The OPR will grant reinstatement only when the OPR determines that the petitioner is not likely to engage again in conduct in violation of the rules of practice and that reinstatement would not harm the public interest.

A suspended or disbarred practitioner can submit Form 8821, Tax Information Authorization signed by a taxpayer to the IRS, authorizing the suspended or disbarred practitioner to obtain copies of the taxpayer’s tax returns and transcripts of account from the IRS. If a taxpayer wants the disciplined practitioner to accompany the taxpayer to a conference or meeting with the IRS, the individual may do so. However, the suspended or disbarred practitioner may only respond to questions and provide factual information and documents; the practitioner may not advocate for the taxpayer or argue the merits of any issue raised.

Q12. Are IRS employees required to refer suspected practitioner misconduct to the OPR?

Yes. Any IRS employee who believes a practitioner has violated any provision in Circular 230 is required to make a written report to the OPR (31 C.F.R. Section 10.53 (a)).

Q13. What penalties require a referral to the OPR?

Referrals are mandatory following the assessment of any IRC 6694(b) penalty, e.g., a willful attempt to understate the liability for tax.

A referral to the OPR should also be made when any of the following penalties or sanctions are imposed:

6700 - Promoting abusive tax shelters
6701 - Aiding and abetting understatement of a tax liability
7407 - Injunction of a tax return preparer
7408 - Injunction for specified conduct relating to tax shelters and reportable transactions

Q14. What penalties are discretionary referrals to the OPR?

6662 - Accuracy related penalty
6694(a) - Understatement of liability due to an unreasonable position
6695 - (a) Failure to furnish copy of return;
6695 - (b) Failure to sign return;
6695 - (d) Failure to keep a copy of tax return or list of taxpayers
6702 - Frivolous tax returns or submissions

Note: If any of the above penalties appear to become a pattern across taxpayers, tax issues or tax years, a referral to the OPR should be made.

Q15. What are other examples of misconduct typically referred to the OPR?

Other circumstances for referral include, but are not limited to:

Inaccurate or unreasonable entries/omissions on tax returns, financial statements and other documents.
A lack of due diligence exercised by the practitioner.
A willful attempt by the practitioner to evade the payment or assessment of any Federal tax.
Cashing, diverting or splitting a taxpayer’s refund by any means, electronic or otherwise.
“Patterns” of misconduct under Circular 230 involving multiple years, multiple clients or unprofessional conduct demonstrated to multiple IRS employees.
Potential conflict-of-interest situations, such as representation of both spouses who have a joint income tax liability or when representation is affected by competing interests of the practitioner.
Any willful violation of Circular 230 provisions.

Q16. What is the OPR’s burden of proof?

For the OPR to prevail in a disciplinary proceeding, the OPR generally must prove by “clear and convincing evidence” that a practitioner willfully violated one or more provisions of Circular 230. Willful is defined as a voluntary, intentional violation of a known legal duty. Recklessness or gross incompetence may also provide a basis for discipline for violations of sections 10.34, 10.35, 10.36 or 10.37.

Q17. How can I learn more about the OPR and Circular 230?

The IRS video portal provides webinars about the OPR and Circular 230.

Q18. How can I contact the OPR if I have questions?

You may contact the OPR by EEFax at 855-814-1722, or by mail at:

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

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