1.25.1 Rules Governing Practice Before the IRS

Manual Transmittal

November 30, 2016


(1) This transmits revised IRM 1.25.1, Practice Before the IRS, Rules Governing Practice Before the IRS.

Material Changes

(1) Made editorial updates throughout.

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

Effect on Other Documents

IRM 1.25.1, dated June 1, 2010, is superseded.


Employees under the Deputy Commissioner, Services and Enforcement and Chief Counsel Attorneys

Effective Date


Related Resources


Stephen A. Whitlock
Director, Office of Professional Responsibility

Practice before the IRS Overview

  1. The Office of Professional Responsibility (OPR) supports the Internal Revenue Service’s (IRS’s) strategy to enhance enforcement of the tax laws by ensuring that tax professionals adhere to practice standards and follow the Internal Revenue Code, Treasury regulations, and other laws as they apply to an individual’s qualifications, competency, and ethical and professional fitness to practice before the IRS. The OPR is the office primarily responsible for interpreting and applying the Regulations Governing Practice before the Internal Revenue Service (Treasury Department Circular No. 230) (“Regulations” or “Circular 230”). 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.

  2. 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:

    1. Corresponding and communicating with the IRS.

    2. Representing a taxpayer at conferences, hearings, or meetings with the IRS.

    3. Preparing and filing documents with the IRS on behalf of a taxpayer.

    4. 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.


      Individuals who are not practitioners may appear as a witness for the taxpayer before the IRS or furnish information at the request of the IRS; however, they may not advocate for the taxpayer or dispute proposed adjustments. In general terms, these individuals are merely assisting with the exchange or communication of information, not practicing before the IRS. An example of an individual assisting with information exchange but not practicing before the IRS would be a taxpayer’s friend serving as a translator when the taxpayer does not speak English.

  3. The OPR is responsible for interpreting and applying the standards of tax practice in a fair and equitable manner. This includes communicating and enforcing standards of competence, integrity and conduct among those who represent taxpayers before the IRS:

    • Attorneys

    • Certified Public Accountants

    • Enrolled Agents

    • Enrolled Retirement Plan Agents

    • Enrolled Actuaries

    • Appraisers

    • Tax Return Preparers who engage in limited practice before the IRS


    Circular 230 contains the regulations governing practice before the IRS and should be consulted for the rules governing authority to practice. The regulations also apply to persons who have limited practice privileges, including tax return preparers who are eligible for limited practice in accordance with Rev. Proc. 81-38 and Rev. Proc. 2014-42 (or successor guidance).

Authorities Relating to Practice

  1. 31 USC 330 provides the statutory basis for the regulation of practice before the Department of the Treasury, including the IRS which is an agency within Treasury.

  2. Title 31 CFR Subtitle A, Part 10 contains the regulations governing practice, including the representation of taxpayers before the IRS. These regulations are republished in digital form as Treasury Department Circular No. 230, Regulations Governing Practice before the Internal Revenue Service.

  3. Circular 230 details a tax professional’s duties and obligations while representing taxpayers or otherwise practicing before the IRS. It authorizes specific sanctions for violations of any of the Circular’s requirements and restrictions and describes the procedures that apply to administrative disciplinary proceedings.

  4. The statute and the body of regulations are the source of OPR’s authority. Circular 230 seeks to ensure tax professionals possess the requisite character, reputation, qualifications, and competency to provide valuable service to clients in presenting their cases to the IRS. In short, Circular 230 consists of the “rules of engagement” for tax practice. The fundamental issue in all Circular 230 disciplinary cases is the tax professional’s fitness to practice before the IRS.

  5. The provisions in Circular 230 set forth who may practice/represent before the IRS, the process for becoming enrolled to practice, the duties and restrictions relating to practice, the process for resolving allegations of violations of those duties and restrictions or for disreputable conduct, and the sanctions available for confirmed violations.

  6. Rev. Proc. 81-38 and Rev. Proc. 2014-42 prescribe the standards of conduct, the scope of authority, and the conditions under which an individual preparer of tax returns may exercise, without enrollment, the privilege of limited practice as a taxpayer’s representative before the IRS.


    Rev. Proc. 2014-42 modifies and supersedes Rev. Proc. 81-38 for tax returns and claims for refund prepared and signed (or prepared if there is no signature space on the form) after 12/31/15. Thus, depending on when the tax return or claim for refund was prepared, it is important to refer to the applicable Revenue Procedure.

Power of Attorney and Form 2848

  1. A power of attorney is a taxpayer's written authorization for an individual to act on the taxpayers' behalf in specific tax matters. A power of attorney is submitted when a taxpayer wants to authorize an individual to advocate or otherwise represent him/her before the IRS. Most frequently, a power of attorney is submitted when a taxpayer wants to be represented at a conference with the IRS or to have a written response prepared and submitted to the IRS.

  2. Form 2848, Power of Attorney and Declaration of Representative, is used most often by a taxpayer to appoint an eligible person to represent the taxpayer before the IRS during inquiries and disputes in connection with tax obligations, in connection with requests for Letter Rulings and for any other purpose constituting advocacy of the taxpayer’s position. By signing the Form 2848, the taxpayer is authorizing the eligible representative to receive confidential tax information from the IRS and to perform the acts specified on the form, subject to any modifications made by the taxpayer, for the types of tax, tax forms, tax periods, and tax matters specified by the taxpayer on the form. See IRM, Essential Elements for Form 2848 and Form 8821, for the elements of a valid Form 2848.


    Taxpayers should use Form 8821, Tax Information Authorization, only to authorize an individual or organization to receive or inspect confidential tax return information. Taxpayers should use Form 4506, Request for Copy of a Tax Return, or Form 4506T, Request for Transcript of Tax Return, if the taxpayer wants to authorize disclosure of a tax return or transcript to a third party, but the taxpayer does not want to authorize the third party to represent him/her before the IRS.

  3. Form 2848 is also used to authorize limited taxpayer representation by others, including:

    1. Unenrolled tax return preparers, whose authority to represent cannot exceed that allowed under the special rules of limited practice described in Circular 230, Section 10.7; or in Revenue Procedures 81-38 and 2014-42. See IRM, Limited Practice Based on Relationship to the Taxpayer.

    2. Individuals who have been given a special appearance authorization pursuant to section 10.7(d) of Circular 230 - for example, students of a Low Income Taxpayer Clinic (see IRC 7526) or Student Tax Clinic Program, may represent taxpayers before the IRS if authorized pursuant to section 10.7(d) of Circular 230 (see Delegation Order 25-18 (Rev. 2), IRM

  4. Form 2848 (Part II) contains a number of designations under which individuals are authorized to practice before the IRS. If an individual does not qualify under one of those designations, an individual cannot represent taxpayers before the IRS. For example, a tax return preparer who is not an attorney, certified public accountant, enrolled agent, or who has not obtained an Annual Filing Season Program - Record of Completion cannot represent taxpayers before the IRS in connection with tax returns prepared after 2015. Similarly, certain individuals such as tribal court advocates and Social Security disability advocates should not declare themselves as attorneys on Forms 2848 unless they have been admitted to a bar of any state, territory, or possession of the United States (or the District of Columbia). These individuals, because they are not attorneys, cannot practice before the IRS unless they fall within one of the remaining designations.

  5. A valid appointment of a taxpayer’s representative has two requirements: (1) the taxpayer’s written authorization of an individual to act as the taxpayer’s representative before the IRS with respect to specified federal tax matters, and (2) the appointed individual’s written declaration that the individual is authorized to represent the taxpayer. Form 2848 includes both requirements (Parts I and II of the form), and should normally be used. The IRS will nevertheless accept a power of attorney other than a Form 2848 provided the document contains all the information needed to satisfy the requirements for a power of attorney. See Pub 216, Conference and Practice Requirements, Section 601.503(a). These alternative powers of attorney cannot, however, be recorded on the Centralized Authorization File (CAF) System unless a completed Form 2848 is attached. Taxpayers are not required to sign Form 2848 when it is attached to an alternative power of attorney that they have signed, but their representative must sign the Form 2848, Part II - Declaration of Representative for the representation to be recorded to the CAF. See Publication 216, Conference and Practice Requirements, Section 601.503(b)(2). To be recognized as the appointing taxpayer’s representative in the CAF system, the representative must complete and sign Part II of Form 2848 in all circumstances.

  6. The CAF is a computerized system of records that maintains authorization information from both powers of attorney and tax information authorizations. See IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF).

  7. If a non-IRS document is used as a power of attorney, it must contain the following information:

    1. name and mailing address of the taxpayer;

    2. taxpayer identification number (i.e., social security number, individual taxpayer identification number, or employer identification number);

    3. employee plan number, if applicable;

    4. name and mailing address of the representative(s);

    5. the description of the matter(s) for which representation is authorized which, if applicable, must include- the type of tax involved; the federal tax form number; the specific year(s)/period(s) involved; and in estate matters, decedent's date of death.

    6. the taxpayer's signature and date.


      Powers of attorney executed pursuant to state law may, or may not, be sufficient for IRS purposes, depending upon whether items (a) through (f) above are included in the non-IRS document.

  8. A signed and dated statement made by the representative should be attached to the non-IRS POA (or a Form 2848 with Part II completed and signed). The statement must contain the same declarations contained in Part II of Form 2848. If a statement is used in lieu of Form 2848, the status of the representative will not be reflected in the CAF system.


    The issuance of a CAF number is merely an administrative act for internal recordkeeping and does not confer any rights to represent upon an individual who is not otherwise eligible to do so.

Limited Practice Based on Relationship to the Taxpayer

  1. An individual may represent himself/herself before the IRS by presenting satisfactory identification. The individual does not need to file a written declaration of qualification and authority.

  2. Because of their special relationship with a taxpayer, the following individuals can represent the specified taxpayers before the IRS, provided they present satisfactory identification and a fully executed Form 2848, or valid substitute, as proof of authority to represent the taxpayer:

    1. A family member - An individual may represent members of his/her immediate family. Immediate family means a spouse, child, parent, brother, sister, grandparent, grandchild, step-parent, step-child, step-brother, or step-sister of the individual.

    2. A corporate officer - A bona fide officer of a corporation (including a parent, subsidiary, or other affiliated corporation), or an officer of an association or organized group, may represent the corporation, association or organized group. An officer of a governmental unit, agency, or authority, in the course of his/her official duties, may represent the entity before the IRS.

    3. A partner - A general partner may represent the partnership before the IRS.

    4. An employee - A regular full-time employee may represent his/her employer. An employer may be, but is not limited to, an individual, partnership, corporation (including a parent, subsidiary, or other affiliated corporation), association, trust, receivership, guardianship, estate, organized group, governmental unit, agency, or authority.

    5. A fiduciary – An individual acting in the capacity of a fiduciary (trustee, executor, personal representative, administrator, receiver, or guardian) stands in the position of a taxpayer and acts as the taxpayer, not as a representative. Therefore, no Form 2848 is required.

Referral to the Office of Professional Responsibility

  1. If practitioner misconduct is suspected, IRS personnel are required to make a referral to the OPR (See Section 10.53 of Circular 230). IRS employees should use Form 8484, Suspected Practitioner Misconduct Report for the Office of Professional Responsibility, for this purpose (See Exhibit 1.25.1-1 ).

  2. The OPR exercises oversight responsibility for practitioner conduct and maintains exclusive responsibility with respect to practitioner discipline, including disciplinary proceedings and sanctions. Through Delegation Orders and Memoranda of Understanding, the OPR also maintains responsibility with respect to the limited practice rights and discipline of unlicensed/unenrolled return preparers. The OPR may, after providing the practitioner with notice and an opportunity to respond and an opportunity for a conference, negotiate an appropriate level of discipline with the practitioner, or, initiate an administrative proceeding to Censure (a public reprimand), Suspend (one to fifty-nine months), or Disbar (minimum five years) the practitioner. The OPR may also, after notice and an opportunity to be heard, disqualify an appraiser from presenting testimony or evidence in any proceeding before the IRS, whether the underlying appraisal was made before or after the disqualification. The OPR may also, after notice and opportunity, 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 imposed on individuals. The penalty may be up to 100% of the gross income derived or to be derived from the conduct giving rise to the penalty. Finally, the OPR may seek Department of Justice action to obtain an injunction when a practitioner continues to violate the regulations.

  3. Examples of practitioner misconduct include:

    1. Inaccurate or unreasonable entries or omissions on tax returns, financial statements and other documents for submission to the IRS.

    2. Failing to ascertain all relevant facts and applicable law before preparing documents prior to filing, making submissions, giving oral or written opinions in connection with a Federal tax matter, or giving tax advice to clients.

    3. Reckless disregard for the law and regulations administered by the IRS; or giving advice when incompetent to do so.

    4. Any willful attempt to evade either the payment or the assessment of any Federal tax, or aiding/abetting another in doing so.

    5. Cashing, diverting or splitting a taxpayer’s tax refund by any means, electronic or otherwise.

    6. “Patterns” of behavior in violation of the regulations that govern practice involving multiple years or multiple clients; or inappropriate/unprofessional conduct demonstrated to multiple IRS employees.

    7. Continuing to represent a taxpayer in the context of an unresolved conflict of interest, such as representation of separated or divorcing spouses during a tax examination of a jointly filed tax return, or when representation is hampered by practitioner self-interest.

  4. Potential criminal violations such as threats against IRS personnel or evasion of taxes should also be referred to the Treasury Inspector General for Tax Administration (TIGTA) or Criminal Investigation, respectively.

  5. Each referral to the OPR should describe and fully document the practitioner's actions in order to provide support in connection with the violations reasonably believed to have been committed. Employees should include a summary of the suspected misconduct that provides as much detail as practicable regarding the matter referred, supported with underlying documentation. Exhibit 1.25.1-1 provides instructions on how to make a referral that is “actionable," i.e., a referral that is complete and provides enough information to begin an investigation or inquiry.

  6. The OPR mailing address and fax number are:

    Office of Professional Responsibility
    Internal Revenue Service
    SE:OPR Room 7238
    1111 Constitution Ave, NW
    Washington, DC 20224
    Fax: 202-317-6338

  7. Once a referral is made, the OPR will acknowledge the referral within 30 days and may follow up with a request for additional information, if necessary. As the case progresses, the OPR may need additional information and cooperation from the referent, other field offices, or other parts of the IRS.

  8. OPR’s processing of the referral will correspond to the seriousness of the alleged misconduct. For example, under certain circumstances, the OPR may simply contact a tax practitioner to discuss the matter informally. Such an informal contact may stop the offending behavior. In other cases, the OPR will investigate the matter further, issue a more formal communication to the practitioner, attempt a mutually satisfactory settlement, and, when necessary, initiate an action for the practitioner’s censure or suspension/disbarment from practice before the IRS. Most cases are resolved at a point between the extremes of closure without further action and a disciplinary proceeding brought before an Administrative Law Judge. To proceed in any case, the OPR must have enough specific, detailed information to clearly frame the allegations, understand the severity of the misbehavior, prove the elements of each violation, and place the conduct within the framework of Treasury Department Circular No. 230.

  9. You may contact your Area Return Preparer Coordinators to assist you with the OPR referral issues since they may be aware of other issues involving the same practitioner. See http://mysbse.web.irs.gov/examination/tip/rp/contacts/12293.aspx.

  10. Announcements of censures, disbarments and suspensions are published in the Internal Revenue Bulletin. A practitioner who has been disbarred or suspended is not permitted to appear before any IRS employee as a representative, with or without the taxpayer present. A suspended/disbarred practitioner may attend IRS meetings with the taxpayer but is not allowed to dispute issues or otherwise advocate for the taxpayer’s position. A suspended or disbarred practitioner may prepare tax returns and may appear as a fact witness for the taxpayer under Rev. Proc. 68-29, 1968-2 CB 913, and Circular 230 section 10.8. An individual who is disbarred, suspended, or disqualified from practice before the IRS is ineligible to participate in the Annual Filing Season Program during the period of disbarment, suspension, or disqualification.


  1. Publication 1, Your Rights as a Taxpayer: http://core.publish.no.irs.gov/pubs/pdf/p1--2014-12-00.pdf

  2. Revenue Procedure 81-38, Limited Practice Without Enrollment: https://www.irs.gov/pub/irs-utl/rev_proc_81_-_38_2.pdf

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

  4. 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

  5. Form 2848, Power of Attorney and Declaration of Representative: http://core.publish.no.irs.gov/forms/public/pdf/f2848--2014-07-00.pdf

  6. Form 8821, Tax Information Authorization: http://core.publish.no.irs.gov/forms/public/pdf/f8821--2015-03-00.pdf

  7. Publication 216, Conference and Practice Requirements: http://core.publish.no.irs.gov/pubs/pdf/p216--1992-03-00.pdf

  8. Revenue Procedure 68-29, Recognition to Be Accorded to Persons Employed by Taxpayers: http://core.publish.no.irs.gov/pubs/pdf/p499--1968-08-00.pdf

  9. Form 8484, Suspected Practitioner Misconduct Report for the Office of Professional Responsibility: http://core.publish.no.irs.gov/forms/internal/pdf/f8484--2013-12-00.pdf

How to Make a Referral to the Office of Professional Responsibility

(1) To make a referral to OPR, complete Form 8484, Suspected Practitioner Misconduct Report for the Office of Professional Responsibility. A fillable (Adobe Acrobat) Form 8484 is available: http://core.publish.no.irs.gov/forms/internal/pdf/f8484--2013-12-00.pdf. Mail or fax your referral and supporting documentation to:

Office of Professional Responsibility
Internal Revenue Service
SE:OPR Room 7238
1111 Constitution Ave, NW
Washington, DC 20224

Fax: 202-317-6338

Email: *OPR Referrals

Also note that OPR’s webpage at http://irweb.irs.gov/AboutIRS/bu/opr/default.aspx contains additional information on how to make a referral.

(2) For purposes of assessing whether a practitioner before the IRS may have violated the regulations in Circular 230 or for how to describe on Form 8484 conduct believed to be in violation of Circular 230, you can review the various sections of the Circular that are listed below for more information on the standards to which tax professionals are held. Use the following questions and suggestions to help you:

Did the Practitioner-- For Example-- Your referral should include--
1. Fail to exercise due diligence? Was the conduct:
  • More than a simple error, but rather resulting from willful or reckless conduct?

  • Mere Negligence?

All of the entity information and explain why you believe the practitioner’s submission was below the expected standard. See Circular 230 Section 10.22(a).
2. Have a conflict of interest? A practitioner may not represent a client before the IRS when the representation involves a conflict of interest unless the affected parties have given informed consent. A conflict of interest exists if either: (1) the representation of one client is directly adverse to the interests of another client; or (2) because of the practitioner’s own personal interests or the practitioner’s responsibilities to a current or former client (or to a third person), there is a significant risk that the representation of another client before the IRS will be materially limited. Exception (consult with the OPR as to whether it applies) -Representation is not prohibited, notwithstanding a conflict, if: (1) the representation is not prohibited by other law; (2) the practitioner reasonably believes that each affected client can be diligently and competently represented; and (3) each affected client waives the conflict and gives informed consent, confirmed in writing. A detailed description of the conflict of interest and information as to whether (and when) IRS personnel informed the practitioner of the apparent conflict, what steps were taken with the practitioner to address the conflict, and whether the practitioner resolved (or failed to resolve) the conflict, such as by providing written assurance that the affected clients executed waivers/consents and the other elements of the exception are satisfied. See Circular 230 Section 10.29.
3. Divert payments intended for IRS or a refund due the taxpayer? This must also be reported to TIGTA. Tax refund electronically split deposited into taxpayer account and preparer account. Tax refund deposited into preparer “trust account”. Documentation to support diversion of funds such as cancelled checks and tax account transcripts. See Circular 230 Section 10.31.
4. Fail to comply with standards for tax returns or other submissions to the IRS? Preparing or signing a tax return that contains a position, or advising a taxpayer to take a position on a return, that lacks a reasonable basis or is an unreasonable position (as described in I.R.C. § 6694(a)(2)), or reflects an understatement of tax or disregard of rules and regulations (as described in I.R.C. § 6694(b)(2)). Advising a client to take a position in any other document submitted to the IRS that is a frivolous position, is one intended to delay or impede tax administration, or is an intentional disregard of a rule or regulation (and not a good-faith challenge to the rule or regulation). All of the entity information relevant to the preparation or submission of, or the position claimed on, the tax return, including whether a section 6694(a) or (b) penalty was assessed. The referral should also include a copy of the return or other submission containing the position at issue. See Circular 230 Section 10.34.
5. Lack the basic competence necessary to practice before the IRS? The practitioner’s representation of a taxpayer was adversely affected by the practitioner’s deficient knowledge or skill level, or as a result of inadequate preparation. Information explaining how and in what manner the practitioner did not have the competence necessary to handle the client’s tax matter(s) before the IRS. See Circular 230 Section 10.35.
6. Give written tax advice that was materially incomplete or involved unreasonable assumptions or reliance on unrealistic representations of the taxpayer or a third party? A practitioner may violate the requirements that pertain to written advice on a federal tax matter if the advice was:
  • based on unreasonable factual or legal assumptions;

  • omitted relevant facts that the drafter knew or reasonably should have known;

  • neglected to relate applicable law to facts;

  • relied upon representations or other information from a client or another person when it was unreasonable to rely on their statements; or

  • accounted for the chance that a tax return will not be audited or an issue will not be raised on audit.

When rendering written advice, a practitioner may rely upon the advice of another professional (such as an appraiser), as long as the reliance is reasonable and in good faith.
The written advice that is the subject of the referral and information explaining why the advice is contrary to the applicable standards. See Circular 230 Section 10.37.
7. Demonstrate incompetence and disreputable conduct? Give false or misleading information or participate in any way in the giving of false or misleading information in connection with any matter pending or likely to be pending before the IRS. Encouraging clients to violate tax law, marketing a tax scheme. Information about where in the material the legal argument that was put forth by the practitioner is patently false, or information pointing out where or how there was a clear misstatement of fact made to IRS personnel. Demonstrate why the argument is false or why the statement made was egregious in nature. See Circular 230 Section 10.51(4) & (7).
8. Did the practitioner fail to file a Federal tax return or evade the payment or assessment of any Federal tax or assist clients in doing so? Omit income from his/her own or a client’s Federal income tax return. Appearing to disguise unallowable deductions by using inappropriate forms and characterizations. All of the entity information for the subject accounts, highlighting the relevant information (income omitted, penalties assessed and ultimate outcome), if the issues pertain to omitted or underreported income. Consider notifying Criminal Investigation (contact your area Fraud Referral Specialist to assist you in evaluating and developing your case). See Circular 230 Section 10.51(6).
9. Did the practitioner engage in contemptuous conduct? Willful use of abusive language or any other inappropriate conduct. Make false accusations and statements knowing them to be false. Circulate or publish malicious or libelous matter about an IRS employee. This conduct will require a pattern before being actionable. All of the entity information surrounding the instances of contemptuous conduct and a complete narrative account of the conduct. Actual language used, copies of any correspondence employed to falsely accuse an employee of misconduct and a thorough recitation of the facts leading up to the situation. (It is important that the practitioner’s exact language be reported.) See Circular 230 Section 10.51(12).
10. Directly or indirectly attempt to influence the official action of any officer or employee of the IRS? Use threats, false accusations, duress or coercion. Offer a gift, favor or thing of value to influence the outcome of a case. First, report these cases to TIGTA. Once the TIGTA investigation is completed, TIGTA should make a referral to OPR. You can assist both offices by ensuring your referral includes: a complete narrative account of the improper or wrongful conduct, and all of the documentary information directly related to the conduct. A report of the practitioner’s exact language should be provided. See Circular 230 Section 10.51(9).