1.1.20  Office of Professional Responsibility

Manual Transmittal

June 30, 2015

Purpose

(1) This transmits revised IRM 1.1.20, Organization and Staffing, Office of Professional Responsibility (OPR).

Material Changes

(1) IRM 1.1.20.2(3) - Added the responsibilities for the OPR Deputy Director.

(2) IRM 1.1.20.2.1(3)(f) - Added information regarding liaisons with state boards and authorities.

(3) IRM 1.1.20.2.2(4) - Added information regarding how O&M meets the mission.

(4) IRM 1.1.20.3 - Clarified definitions to provide additional information.

(5) Reviewed and updated website addresses, legal references and IRM references, as necessary.

Effect on Other Documents

IRM 1.1.20, dated July 12, 2012, is superseded.

Audience

All Divisions and Functions.

Effective Date

(06-30-2015)

Karen L. Hawkins
Director, Office of Professional Responsibility

1.1.20.1  (07-12-2012)
Introduction to the Office of Professional Responsibility

  1. The Office of Professional Responsibility (OPR) is responsible for all matters related to practitioner misconduct, discipline and practice before the Internal Revenue Service (IRS) under 31 C.F.R. Subtitle A, Part 10 (Circular 230, Regulations Governing Practice before the Internal Revenue Service) (“Regulations” or “Circular 230”). In carrying out this responsibility, OPR administers the law and regulations governing the practice of tax professionals and other individuals who interact with the tax administration system on behalf of taxpayers, including, but not limited to, attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents, tax return preparers who represent clients before the IRS, and appraisers who provide valuations contained in documents submitted to the IRS.

  2. OPR:

    1. Receives, reviews and investigates evidence of alleged misconduct by individuals covered by the Regulations.

    2. Evaluates allegations to ascertain whether they evidence actions which constitute disreputable or incompetent conduct, or otherwise reflect violations of the Regulations.

    3. When warranted, proposes and negotiates a level of discipline commensurate with the misconduct.

    4. In the absence of a Reprimand or a voluntary settlement, initiates disciplinary proceedings before Administrative Law Judges (ALJs).

    5. Initiates or responds to appeals of ALJ disciplinary decisions.

    6. Pursuant to Delegation Order 25-16 (Rev 1), receives, processes, and investigates referrals on allegations of misconduct under Revenue Procedure 81-38.

    7. Serves as the Appellate Authority for enrollment appeals from the Return Preparer Office.

    8. Interprets the Conference and Practice Requirements contained in 26 C.F.R. Part 601, Subpart E.

    9. Provides education and outreach regarding a tax professional’s obligations and duties as enumerated in Circular 230.

    10. Acts in an advisory capacity with respect to IRS oversight and compliance initiatives for tax professionals.

1.1.20.1.1  (07-12-2012)
The Office of Professional Responsibility’s Mission

  1. The mission of OPR is to interpret and apply the standards of practice for tax professionals in a fair and equitable manner. OPR’s objective is to support effective tax administration by ensuring all tax professionals and other third parties interacting with the tax administration system on behalf of taxpayers adhere to the practice standards and ethics enumerated in Circular 230. To achieve its mission, OPR’s goals include:

    1. Increasing awareness and understanding of the tax practice standards contained in Circular 230 and OPR’s oversight responsibilities through outreach and educational activities.

    2. Applying the principles of due process to the investigation, analysis, resolution, and litigation of disciplinary cases.

    3. Applying agency precedent and principles of fairness when assessing a tax professional’s fitness to continue to practice before the IRS.

    4. Facilitating frequent and open communication with tax professional organizations.

    5. Conducting frequent and extensive outreach and educational activities for both internal and external audiences on all aspects of Circular 230 tax practice standards.

    6. Building, training, and motivating a cohesive OPR team.

  2. To achieve its goals and to carry out its mission, OPR is committed to:

    1. Ensuring independent, fair and equitable treatment of all tax practitioners consistent with its authority and principles of due process.

    2. Rendering fair and independent determinations regarding alleged misconduct in violation of Circular 230.

    3. Educating and reinforcing tax professionals’ knowledge of relevant Circular 230 provisions.

    4. Providing guidance and feedback to field/agency personnel regarding essential referral criteria for each relevant Circular 230 provision.

    5. Strengthening partnerships with other divisions of the IRS and with external practitioner organizations.

    6. Maintaining procedures that ensure timely case resolution.

    7. Maintaining policies and regulations that ensure fair and equitable disposition of Circular 230 cases.

    8. Developing and implementing proactive strategies for identifying violations of Circular 230.

1.1.20.2  (06-30-2015)
Office of the Director

  1. OPR completed a significant organizational and operational restructuring effective February 13, 2012. In an effort to streamline its core work and foster a supportive team, OPR now includes the Office of the Director who supervises the following offices:

    • Legal Analysis Branch and

    • Operations and Management Branch.

  2. The Director, who reports to the Commissioner and to the Deputy Commissioner, Services and Enforcement, oversees administration and enforcement of Circular 230 provisions governing the conduct and discipline of the nation’s tax practitioners. As a high-profile, high-impact position, the Director initiates outreach activities directly with the tax practitioner community, to inform them of Treasury/IRS rules, regulations, policies, and procedures pertaining to standards of conduct, integrity, and ethics, in order to practice before the IRS.

  3. The Deputy Director, who reports to the Director, OPR, assists the Director in providing executive direction in matters relating to human capital management and labor relations, the OPR budget, performance measures, operation and maintenance of the case inventory system and strategic planning. The Deputy is the first level of executive supervision of the Branch Chiefs in OPR, providing advice and guidance on day-to-day operations.

1.1.20.2.1  (06-30-2015)
Legal Analysis Branch

  1. The mission of the Legal Analysis Branch (LAB) is to receive, review, investigate, analyze, and propose appropriate dispositions, including sanctions, with respect to violations of the Regulations.

  2. The Chief, LAB, reports to the Deputy Director, OPR. The LAB is comprised of two to four teams consisting of a Front Line Manager, Attorney-Advisors, Paralegals, Analysts, and administrative support staff.

  3. The teams accomplish the LAB mission by:

    1. Receiving, reviewing and evaluating referrals alleging violations of the Regulations from IRS field personnel, including the Return Preparer Office, and other relevant external federal and state agencies.

    2. Evaluating allegations of misconduct to ascertain whether they evidence actions which constitute disreputable or incompetent conduct, or otherwise reflect violations of the Regulations.

    3. When warranted, proposing and negotiating a level of discipline commensurate with the misconduct.

    4. In the absence of a voluntary settlement, initiating disciplinary proceedings before ALJs pursuant to Circular 230 Section 10.60 et seq.

    5. Acting on referrals from state and federal licensing authorities, and on conviction information from state and federal courts by instituting expedited suspension proceedings pursuant to Circular 230 Section 10.82.

    6. Engaging in proactive liaisons with state licensing authorities, including state boards of accountancy and state bars, to seek and obtain information on state disciplinary actions that have Circular 230 implications.

    7. Working closely with IRS Business Operating Divisions and Functions to thoroughly investigate, analyze and interpret the implications of a referral on a practitioner’s fitness to practice before the IRS.

1.1.20.2.2  (06-30-2015)
Operations and Management Branch

  1. The Operations and Management Branch (O&M) of OPR is responsible for providing program support to the organization’s mission through strategic planning, employee training, information technology, stakeholder outreach and communication, performance measures analysis, human capital planning and execution, and finance. O&M also collects and analyzes business performance data to develop operational improvement recommendations and to ensure strategic distribution of financial resources.

  2. The strategy function within O&M ensures proper execution and coordination of OPR’s strategy as set by the Office of the Director each year. The strategy function coordinates with the LAB to ensure OPR strategy is implemented consistently across the organization and that all strategic goals and objectives are properly and timely met. The strategy function is responsible for monitoring the execution of the Operational Plan, Continuity of Operations Plan, Business Resumption Plan, and the Concept of Operations.

  3. The Chief, O&M, reports to the Deputy Director, OPR. O&M is comprised of Management/Program Analysts and a Staff Assistant.

  4. The branch accomplishes the O&M mission by:

    1. Packaging and disseminating strategic plan information across OPR. O&M acts as liaison between the Office of the Director and LAB regarding strategic planning and implementation. Other key activities associated with this function include review of the IRS strategic plan every five years to identify and implement necessary changes.

    2. Meeting with OPR senior leadership to discuss shifts in strategic direction at the organizational level and updating OPR’s Standard Operating Procedures and Internal Revenue Manuals to reflect necessary changes.

    3. Monitoring OPR’s goals, performance and accomplishments to ensure that each supports accurate and current objectives.

    4. Developing employee training programs and directing the analysis, development, and method of delivery necessary to achieve and maintain optimal employee knowledge, skills and job performance.

    5. Ensuring processes, technology, and other mechanisms are in place to effectively track referrals, referral issues, Circular 230 determinations, disciplinary recommendations and final case dispositions. Analyze and utilize technology driven data to better inform and educate operating divisions and IRS personnel regarding referral obligations under Section 10.53 of Circular 230.

    6. Developing and distributing communications to both internal and external stakeholders as well as OPR employees.

    7. Providing guidance to employees and members of the general public regarding OPR's mission, vision, goals and processes and maintaining liaison with the IRS Business Operating Divisions and Functions and external agencies.

    8. Developing and analyzing data needed to evaluate organizational efficiency, and performing advanced data analysis when necessary to inform training needs, performance improvement activities and the bases for business results reporting.

    9. Directing human capital planning, execution and finance by ensuring that OPR's current staffing levels are sufficient to meet the identified workload and agency needs.

    10. Responding to oversight inquiries from the Treasury Inspector General for Tax Administration and the U.S. Government Accountability Office.

    11. Operationalizing a Risk Management Program.

    12. Requesting contractor support, managing the contract financials, and acting as a liaison between the contracting agency and the IRS for interagency contracts with other government agencies and blanket purchase agreement contracts for external parties.

1.1.20.3  (06-30-2015)
Definition of Terms

  1. Attorney: Any person who is an active member in good standing of the bar of the highest court of any State, territory or possession of the United States, including a Commonwealth, or the District of Columbia. Attorneys may, subject to certain limitations, perform all acts the taxpayer can perform with respect to the tax matters authorized.

  2. Certified Public Accountant (CPA): Any person who is duly qualified to practice as a CPA in any State, territory or possession of the United States, including a Commonwealth, or the District of Columbia. CPAs may, subject to certain limitations, perform all acts the taxpayer can perform with respect to the tax matters authorized.

  3. Enrolled Agent (EA): Any individual who has demonstrated special competence in tax matters by passing the three-part Special Enrollment Exam (SEE) and has been issued an enrollment card by the IRS, or for whom the SEE was waived by virtue of past employment and requisite technical experience with the IRS. An EA must be knowledgeable in all major aspects of the Internal Revenue Code, the ethical and practice provisions contained in Circular 230, and must complete a minimum of 72 hours of continuing education, including six hours of ethics, every 3 years. Except in specific circumstances involving certain former IRS employees as enumerated in Circular 230, EAs may, subject to certain limitations, perform all acts the taxpayer can perform with respect to the tax matters authorized.

  4. Enrolled Actuary (EAc): Any individual who has demonstrated competence in specific matters under the internal revenue laws, as enumerated in Circular 230, has applied for enrollment and been issued an enrollment card by the Joint Board for the Enrollment of Actuaries. EAc's are required to pass two Joint Board examinations: the basic EA-1 examination and the pension EA-2 examination, and must complete 36 hours of continuing education every 3 years. Practice as an EAc is limited to the specific competency areas enumerated in Circular 230.

  5. Enrolled Retirement Plan Agents (ERPA): Any individual who has demonstrated competence in specific matters under internal revenue laws, as enumerated in Circular 230, has applied for enrollment, and has been issued an enrollment card by the IRS. An ERPA must be knowledgeable in two areas: the Internal Revenue Code requirements that apply to qualified plans, and the ethical requirements under Circular 230 for practicing before the IRS. An ERPA must pass both parts of the ERPA Special Enrollment Examination (ERPA SEE) or have qualifying experience as a former IRS employee. ERPAs must complete a minimum of 72 hours of continuing education, including six hours of ethics, every 3 years. Practice as an ERPA is limited to the specific competency areas enumerated in Circular 230.

  6. Tax Return Preparer: Any individual who is compensated to prepare tax returns for others and who has applied for and maintains a valid Preparer Tax Identification Number (PTIN) issued by the IRS. Practice as a tax return preparer is limited to representing taxpayers before revenue agents, customer service representatives and the Taxpayer Advocate Service during an examination of returns or claims for refund prepared and signed by the tax return preparer. Effective January 1, 2016, only tax return preparers who also earn an IRS Annual Filing Season Program Record of Completion pursuant to Revenue Procedure 2014-42 may engage in the aforementioned limited representation practice before the IRS.

  7. Appraiser: Any individual who provides opinions or other documentation supporting valuations contained in submissions to the IRS.

  8. Others who interact with the tax administration system: Any individual except those described in 26 C.F.R. 301.7701-15(f), who for compensation prepares, or assists in preparing, all or a substantial portion of a document pertaining to any taxpayer’s tax liability for submission to the IRS. These individuals include appraisers, opinion writers, tax return preparers engaging in limited practice before the IRS, and individuals engaging in limited practice before the IRS under Section 10.7(c) of Circular 230.

  9. Annual Filing Season Program Participants: The IRS issues an Annual Filing Season Program Record of Completion to tax return preparers who successfully complete an annual federal tax filing season refresher course and completed a specified number of continuing education hours in tax law and ethics for a specific tax year, obtain a PTIN and consent to adhere to the tax practice standards outlined in Subpart B and Subpart C Section 10.51 of Circular 230. Effective January 1, 2016, only tax return preparers who earn an IRS Annual Filing Season Program Record of Completion may engage in limited practice before the IRS.

1.1.20.4  (06-30-2015)
Resources

  1. Internal OPR Website: http://irweb.irs.gov/AboutIRS/bu/opr/default.aspx

  2. External OPR Website: http://www.irs.gov/Tax-Professionals/Circular-230-Tax-Professionals

  3. Treasury Department Circular No. 230 (Rev. 6-2014), Regulations Governing Practice before the Internal Revenue Service: http://core.publish.no.irs.gov/othergov/pdf/td_circular_230--2014-06-00.pdf

  4. Announcements of Disciplinary Sanctions in the Internal Revenue Bulletin (IRB): http://www.irs.gov/portal/site/irspup/menuitem.143f806b5568dcd501db6ba54251a0a0/?vgnextoid=8272cd489f916310VgnVCM100000351f0a0aRCRD&vqnextchannel=8a9246d964264310VgnVCM1000004e0d010a____

  5. Final Agency Decisions: http://www.irs.gov/Tax-Professionals/Enrolled-Actuaries/Final-Agency-Decisions

  6. Title 31 United States Code Section 330: http://uscode.house.gov/search/criteria.shtml

  7. Title 5 United States Code Section 500: http://uscode.house.gov/search/criteria.shtml

  8. Title 26 Code of Federal Regulations, Part 601, Subpart E: http://www.law.cornell.edu/cfr/text/26/601/subpart-E

  9. Revenue Procedure 81-38, Limited Practice Without Enrollment: https://team.ds.irsnet.gov/sites/OPR/OPR%20Website/Rev_Proc_81_-_38.pdf

  10. Revenue Procedure 2014–42, Annual Filing Season Program: http://www.irs.gov/irb/2014-29_IRB/ar14.html

  11. Notice 2007-39, IRB 2007–20, Disciplinary Actions Under Section 822 of the American Jobs Creation Act of 2004: http://www.irs.gov/irb/2007-20_IRB/ar07.html

  12. News and Updates from OPR: http://www.irs.gov/Tax-Professionals/Subscribe-to-News-and-Updates-from-OPR


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