Circular 230 Regulations Governing Practice before IRS

Question 1

Circular 230 - Treasury Dept

Answer 1

Authority to practice
Duties and responsibilities
Sanctions for Violations
Rules for Disciplinary Proceeding

Question 2

Meaning of Practice before IRS

Answer 2

• Communicate
• Represent
• Prepare
• File

on or behalf of Clients before IRS

Question 3

Attorneys
CPA
Enrolled Agents

Answer 3

Unlimited Representation

They dont need to be the one who prepared your return they can always REPRESENT you regardless

Question 4

Enrolled Actuaries
Enrolled Retirement plan agents
Registered Tax preparers

Other persons officer full time employees trust of a corporation or trust

Answer 4

Limited representations before IRS

Question 5

Information to be furnished to IRS

Answer 5

1. yes unless practitioner think its PRIVILEGED no need to furnish IRS then csn withhold
2. Disclose with IRS if you know who has that information if its not you

Question 6

Knowledge of Client Omission

Answer 6

Inform client of the error and the consequences under tax law

Do not need to inform IRS

Do not need to Quit the engagement unless you see patterns of recurring client omissions

Question 7

Diligence as to Accuracy

Answer 7

Due diligence on relying with other person
But also do Reasonable Reliance

Question 8

Prompt disposition of Pending matters with IRS

Answer 8

You cannot unreasonably delay

Not allowed to rely with persons that were previously disbarred by IRS or in practice

Question 9

Former Govt employee being in private

Conflict of interest

Answer 9

No member of the firm- partners associates where the former govt employee works can represent a client that has conflict of interest

UNLESS

ISOLATE- then other members of the firm can represent the taxpayer with confilict of interest

1. Restrictive Isolation- Former govt employee CAN NEVER be involved
2. 2 year isolation - minimal exposure when on former govt function
3. 1 year isolation- assist in the tax rules when in IRS

Question 10

Notary

Answer 10

practitioner CANNOT act as NOTARY

NEVER!

Question 11

FEES

Answer 11

Always check the standard fees

Publish fees - Honor at least 30 days

Question 12

CONTINGENT FEES ALLOWED ON THE FF SITUATIONS

Answer 12

1. On going audit of Original return- filed 120 days from receiving written notice from IRS
2. Refund for penalties/ interest
3. Judicial proceedings

Question 13

Return of Client Records

Answer 13

Practitioner owe clients the confidentiality
Unless: PEER REVIEW

Records Must be promptly returned to the client even if there’s fee dispute

if its necessary for client to comply with IRS federal tax laws

CLIENT RECORDS:

1. Any documents prepared by the clients
2. Prepared by third party thats provided to the practitioner
3. documents prepared by the practitioner if necessary for the taxpayer to comply with the Federal tax laws

Question 14

Practitioner can retain CLIENT RECORDS

Answer 14

But always practice confidentiality

Question 15

State law allowing Practitioner to hold off client records if there’s dispute

Answer 15

practtitioner can do so UNLESS those documents are necessary to comply with Federal laws then you must provide CLIENTS

Reasonable access to REVIEW and Copy CLIENT records RETAINED BY practitioner

Question 16

CLIENTS with conflicts of interest- can they be represented by the practitioner both at the same time?

Answer 16

YES

as long as:

1. The practitioner believes that he or she can COMPETENTLY REPRESENT each of the clients
2. No state of federal law prohibits it
3. each affected client waives the conflict of interest and gives INFORMED CONSENT

WAIVER IN WRITING within 30 days after giving INFORMED CONSENT

Question 17

COMMUNICATING FEE INFORMATION

1. Radio and TV Broadcasting - keep record of Actual transmission
2. Direct mail and e- commerce communication
   retain copy of the actual communication, + list or other description of persons the communication was mailed/ distributed to

Answer 17

If you communicate thru ads, email, mailing list keep them for

36 MONTHS from the date of last transmission or USE

Practitioner must always retain COPY

Question 18

SOLICITATION and Advertising
YES YOU CAN

Can you publish fees , yes you CAN
Subject to the following

Answer 18

Don’t advertise if its false, misleading etc

Reducing tax guarantee
everyone are cpa

Advertised Fees

• Honor the fees AT LEAST 30 DAYS after they are publicized

Question 19

NEGOTIATION of Taxpayer’s Checks

Answer 19

NEVER NEGOTIATE OR ENDORSE CHECK issue to a CLIENT!!

NEVER!