31 U.S.C. §330. Practice before the Department (a) Subject
to section 500 of title 5, the Secretary of the Treasury may — (1) regulate the
practice of representatives of persons before the Department of the Treasury;
and (2) before admitting a representative to practice, require that the
representative demonstrate — (A) good character; (B) good reputation; (C)
necessary qualifications to enable the representative to provide to persons
valuable service; and (D) competency to advise and assist persons in presenting
their cases. (b) After notice and opportunity for a proceeding, the Secretary
may suspend or disbar from practice before the Department, or censure, a
representative who — (1) is incompetent; (2) is disreputable; (3) violates
regulations prescribed under this section; or (4) with intent to defraud,
willfully and knowingly misleads or threatens the person being represented or a
prospective person to be represented. The Secretary may impose a monetary
penalty on any representative described in the preceding sentence
§ 10.1 Offices. (a) Establishment of office(s). The
Commissioner shall establish the Office of Professional Responsibility and any
other office(s) within the Internal Revenue Service necessary to administer and
enforce this part. The Commissioner shall appoint the Director of the Office of
Professional Responsibility and any other Internal Revenue official(s) to
manage and direct any office(s) established to administer or enforce this part.
Offices established under this part include, but are not limited to: (1) The
Office of Professional Responsibility, which shall generally have
responsibility for matters related to practitioner conduct and shall have
exclusive responsibility for discipline, including disciplinary proceedings and
sanctions;
(4) Practice before the Internal Revenue Service comprehends
all matters connected with a presentation to the Internal Revenue Service or
any of its officers or employees relating to a taxpayer’s rights, privileges,
or liabilities under laws or regulations administered by the Internal Revenue
Service. Such presentations include, but are not limited to, preparing
documents; filing documents; corresponding and communicating with the Internal
Revenue Service; rendering 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.
Subpart B — Duties and Restrictions Relating to Practice
Before the Internal Revenue Service § 10.20 Information to be furnished. (a) To
the Internal Revenue Service. (1) A practitioner must, on a proper and lawful
request by a duly authorized officer or employee of the Internal Revenue
Service, promptly submit records or information in any matter before the
Internal Revenue Service unless the practitioner believes in good faith and on
reasonable grounds that the records or information are privileged.
§ 10.21 Knowledge of client’s omission. A practitioner who,
having been retained by a client with respect to a matter administered by the
Internal Revenue Service, knows that the client has not complied with the
revenue laws of the United States or has made an error in or omission from any
return, document, affidavit, or other paper which the client submitted or
executed under the revenue laws of the United States, must advise the client
promptly of the fact of such noncompliance, error, or omission. The
practitioner must advise the client of the consequences as provided under the
Code and regulations of such noncompliance, error, or omission.
§ 10.23 Prompt disposition of pending matters. A
practitioner may not unreasonably delay the prompt disposition of any matter
before the Internal Revenue Service.
§ 10.27 Fees. (a) In general. A practitioner may not charge
an unconscionable fee in connection with any matter before the Internal Revenue
Service. (b) Contingent fees — (1) Except as provided in paragraphs (b)(2),
(3), and (4) of this section, a practitioner may not charge a contingent fee
for services rendered in connection with any matter before the Internal Revenue
Service. (2) A practitioner may charge a contingent fee for services rendered
in connection with the Service’s examination of, or challenge to — (i) An
original tax return; or (ii) An amended return or claim for refund or credit
where the amended return or claim for refund or credit was filed within 120
days of the taxpayer receiving a written notice of the examination of, or a
written challenge to the original tax return. (3) A practitioner may charge a
contingent fee for services rendered in connection with a claim for credit or
refund filed solely in connection with the determination of statutory interest
or penalties assessed by the Internal Revenue Service. (4) A practitioner may charge
a contingent fee for services rendered in connection with any judicial
proceeding arising under the Internal Revenue Code.
§ 10.29 Conflicting interests. (a) Except as provided by
paragraph (b) of this section, a practitioner shall not represent a client
before the Internal Revenue Service if the representation involves a conflict
of interest. A conflict of interest exists if — (1) The representation of one
client will be directly adverse to another client; or (2) There is a
significant risk that the representation of one or more clients will be
materially limited by the practitioner’s responsibilities to another client, a
former client or a third person, or by a personal interest of the practitioner.
(b) Notwithstanding the existence of a conflict of interest under paragraph (a)
of this section, the practitioner may represent a client if — (1) The
practitioner reasonably believes that the practitioner will be able to provide
competent and diligent representation to each affected client; (2) The
representation is not prohibited by law; and (3) Each affected client waives
the conflict
§ 10.31 Negotiation of taxpayer checks. (a) A practitioner
may not endorse or otherwise negotiate any check (including directing or
accepting payment by any means, electronic or otherwise, into an account owned
or controlled by the practitioner or any firm or other entity with whom the
practitioner is associated) issued to a client by the government in respect of
a Federal tax liability.
§ 10.35 Competence. (a) A practitioner must possess the
necessary competence to engage in practice before the Internal Revenue Service.
Competent practice requires the appropriate level of knowledge, skill,
thoroughness, and preparation necessary for the matter for which the practitioner
is engaged. A practitioner may become competent for the matter for which the
practitioner has been engaged through various methods, such as consulting an
expert or study.
The practitioner must— (i) Base the written advice on
reasonable factual and legal assumptions (including assumptions as to future
events); (ii) Reasonably consider all relevant facts and circumstances that the
practitioner knows or reasonably should know; (iii) Use reasonable efforts to
identify and ascertain the facts relevant to written advice on each Federal tax
matter; (iv) Not rely upon representations, statements, findings, or agreements
(including projections, financial forecasts, or appraisals) of the taxpayer or
any other person if reliance on them would be unreasonable;
§ 10.51 Incompetence and disreputable conduct. (a)
Incompetence and disreputable conduct. Incompetence and disreputable conduct
for which a practitioner may be sanctioned under §10.50 includes, but is not
limited to —
(1) Conviction of any criminal offense under the Federal tax
laws. (2) Conviction of any criminal offense involving dishonesty or breach of
trust. (3) Conviction of any felony under Federal or State law for which the
conduct involved renders the practitioner unfit to practice before the Internal
Revenue Service. (4) Giving false or misleading information, or participating
in any way in the giving of false or misleading information to the Department
of the Treasury or any officer or employee thereof, or to any tribunal
authorized to pass upon Federal tax matters, in connection with any matter
pending or likely to be pending before them, knowing the information to be
false or misleading. Facts or other matters contained in testimony, Federal tax
returns, financial statements, applications for enrollment, affidavits,
declarations, and any other document or statement, written or oral, are
included in the term “information.” (5) Solicitation of employment as prohibited
under §10.30, the use of false or misleading representations with intent to
deceive a client or prospective client in order to procure employment, or
intimating that the practitioner is able improperly to obtain special
consideration or action from the Internal Revenue Service or any officer or
employee thereof. (6) Willfully failing to make a Federal tax return in
violation of the Federal tax laws, or willfully evading, attempting to evade,
or participating in any way in evading or attempting to evade any assessment or
payment of any Federal tax. (7) Willfully assisting, counseling, encouraging a
client or prospective client in violating, or suggesting to a client or
prospective client to violate, any Federal tax law, or knowingly counseling or
suggesting to a client or prospective client an illegal plan to evade Federal
taxes or payment thereof. (8) Misappropriation of, or failure properly or
promptly to remit, funds received from a client for the purpose of payment of
taxes or other obligations due the United States. (9) Directly or indirectly
attempting to influence, or offering or agreeing to attempt to influence, the official
action of any officer or employee of the Internal Revenue Service by the use of
threats, false accusations, duress or coercion, by the offer of any special
inducement or promise of an advantage or by the bestowing of any gift, favor or
thing of value. (10) Disbarment or suspension from practice as an attorney,
certified public accountant, public accountant, or actuary by any duly
constituted authority of any State, territory, or possession of the United
States, including a Commonwealth, or the District of Columbia, any Federal
court of record or any Federal agency, body or board. (11) Knowingly aiding and
abetting another person to practice before the Internal Revenue Service during
a period of suspension, disbarment or ineligibility of such other person. (12)
Contemptuous conduct in connection with practice before the Internal Revenue
Service, including the use of abusive language, making false accusations or
statements, knowing them to be false, or circulating or publishing malicious or
libelous matter. (13) Giving a false opinion, knowingly, recklessly, or through
gross incompetence, including an opinion which is intentionally or recklessly
misleading, or engaging in a pattern of providing incompetent opinions on
questions arising under the Federal tax laws. False opinions described in this
paragraph (a)(l3) include those which reflect or result from a knowing
misstatement of fact or law, from an assertion of a position known to be
unwarranted under existing law, from counseling or assisting in conduct known
to be illegal or fraudulent, from concealing matters required by law to be
revealed, or from consciously disregarding information indicating that material
facts expressed in the opinion or offering material are false or misleading.
For purposes of this paragraph (a)(13), reckless conduct is a highly
unreasonable omission or misrepresentation involving an extreme departure from
the standards of ordinary care that a practitioner should observe under the
circumstances. A pattern of conduct is a factor that will be taken into account
in determining whether a practitioner acted knowingly, recklessly, or through
gross incompetence. Gross incompetence includes conduct that reflects gross
indifference, preparation which is grossly inadequate under the circumstances,
and a consistent failure to perform obligations to the client. (14) Willfully
failing to sign a tax return prepared by the practitioner when the
practitioner’s signature is required by Federal tax laws unless the failure is
due to reasonable cause and not due to willful neglect. (15) Willfully
disclosing or otherwise using a tax return or tax return information in a
manner not authorized by the Internal Revenue Code, contrary to the order of a
court of competent jurisdiction, or contrary to the order of an administrative
law judge in a proceeding instituted under §10.60. (16) Willfully failing to
file on magnetic or other electronic media a tax return prepared by the
practitioner when the practitioner is required to do so by the Federal tax laws
unless the failure is due to reasonable cause and not due to willful neglect.
(17) Willfully preparing all or substantially all of, or signing, a tax return
or claim for refund when the practitioner does not possess a current or
otherwise valid preparer tax identification number or other prescribed
identifying number. (18) Willfully representing a taxpayer before an officer or
employee of the Internal Revenue Service unless the practitioner is authorized
to do so pursuant to this part.
