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Rules Governing Practice before IRS

OPR: Frequently Asked Questions (FAQ's)

What is the Office of Professional Responsibility (OPR)?

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. OPR is the governing body responsible for interpreting and applying the Regulations Governing Practice before the Internal Revenue Service (Treasury Department Circular 230). 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.

What is Circular 230?

Circular 230 is a document containing the statute and regulations detailing a tax professional’s duties and obligations while practicing before the IRS; authorizing specific sanctions for violations of the duties and obligations; and, describing the procedures that apply to administrative proceedings for discipline. Circular 230 is the common name given to the body of regulations promulgated from the enabling statute found at Title 31, United States Code § 330. This statute and the body of regulations are the source of OPR’s authority. Title 31 seeks to insure 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 underlying issue in all Circular 230 cases is the tax professional’s “fitness to practice” before the IRS.

How is OPR organized?

OPR completed a significant organizational and operational reorganization effective February 13, 2012. OPR now includes three major segments: Office of the Director, Legal Analysis Branch (LAB), and Operations and Management Branch (O&M). The Director, who reports jointly to the Commissioner and the Deputy Commissioner, Services and Enforcement, has primary supervisory responsibility for OPR, including oversight and control of all policy decisions and implementation. The Director is the final decision-maker on all disciplinary recommendations. The LAB interprets and applies the standards of practice for tax professionals in a fair and equitable manner and applies the principles of due process to the analysis, investigation and disciplinary process involving allegations of practitioner misconduct. O&M manages all of OPR’s administrative, communications, budgetary and personnel functions.

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.

Who is subject to Circular 230 jurisdiction?

  • State licensed Attorneys and Certified Public Accountants authorized and in good standing with their state licensing authority who interact with tax administrative at any level and in any capacity.
  • Persons enrolled to practice before the IRS- Enrolled Agents, Enrolled Retirement Plan Agents, and Enrolled Actuaries.
  • Persons providing appraisals used in connection with tax matters (e.g., charitable contributions; estate and gift assets; fair market value for sales gain, etc.).
  • Unlicensed individuals who represent taxpayers before the examination, customer service and the Taxpayer Advocate Service in connection with returns they prepared and signed.
  • 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 purposes “written advice” contemplates all forms of written material, including the content of an email, given in connection with any law or regulation administered by the IRS.
  • Any person submitting a power of attorney in connection with limited representation or special authorization to represent before the IRS with respect to a specific matter before the Agency.

What is the extent of OPR’s authority?

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 speaking, this includes any individual who interacts with Federal tax administration, whether in person, orally, in writing or by the preparation and submission of documents.


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

OPR has oversight of practitioner conduct and exclusive responsibility with respect to practitioner discipline, including disciplinary proceedings and sanctions. OPR may, after notice and an opportunity for a conference, negotiate an appropriate level of discipline with a practitioner; or, initiate an administrative proceeding to Censure (a public reprimand), Suspend (one to fifty-nine months), or Disbar (five years) the practitioner. OPR may also, after notice and an opportunity for a conference, disqualify an appraiser from further submissions in connection with tax matters. OPR also may, after notice and an opportunity for a conference, 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 penalty may be up to the gross income derived or to be derived from the conduct giving rise to the penalty.

How does the disciplinary process work?

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

Following a preliminary investigation, OPR renders an independent determination as to the likelihood that a violation of Circular 230 has occurred. If a violation is identified, OPR communicates with the practitioner. This is done using a “Pre-Allegation Notice.” The notice consists of correspondence providing the practitioner with information regarding the conduct alleged, and the fact that OPR has initiated a disciplinary investigation. The notice gives the practitioner an opportunity to provide any evidence or documentation s/he believes is relevant to OPR’s determination. After a thorough investigation of the facts and an analysis/consideration of aggravating and mitigating circumstances, OPR determines the lowest level of discipline warranted for the violation(s).

Due process protections are incorporated throughout the disciplinary process. If OPR fails to reach agreement with the practitioner as to an appropriate sanction, a 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 hearing. If settlement is not reached, GLS files the complaint to commence a proceeding before an Administrative Law Judge (ALJ). The ALJ proceeding is a civil hearing during which the government and respondent present their evidence. The proceeding is conducted according to the provisions of the Administrative Procedures Act (5 USC § 500 et seq.). The case may be settled by concurrence of both parties at any time prior to the hearing.

If a hearing is conducted, and after post-hearing briefs are submitted, the ALJ issues an Initial Decision and Order as to the alleged misconduct and the appropriateness of OPR’s proposed sanction. The ALJ may accept OPR’s recommendations as to the fact of violation and as to the proposed sanction; may accept the fact of violation but increase or reduce the recommended sanction; or, may reject OPR’s recommendations both as to facts and sanctions, and thus dismiss the case.

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

A practitioner who wishes may file a complaint in U.S. District Court to contest the Final Agency Decision when rendered by the Treasury Appellate Authority. This proceeding is also conducted according to the Administrative Procedures Act during 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.

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 OPR, you may decide that you want to use a representative to interface with OPR. If so, then you must provide some form of documentation authorizing that representation. The type of documentation needed will depend on what allegations are being raised in the correspondence from OPR.

a. Tax Compliance

If the OPR correspondence only discusses your personal tax compliance issues, for example, not filing a return, or not paying the taxes applicable to a return, then the correct representation documentation is a Form 2848. A separate Form 2848 is required for each person/entity referenced in the correspondence from OPR.

For example, assume you receive correspondence from OPR that states you have failed to file your personal returns for tax years 2010, 2011, and 2012, and you have failed to file S Corporation returns for your 2011 and 2012 tax years. Under this example, OPR would require two separate Forms 2848. The first Form 2848 would be for your 2010, 2011, and 2012 Forms 1040 returns. The second Form 2848 would be for the 2011 and 2012 S Corporation returns. 

b. Conduct

If the OPR correspondence only discusses different types of alleged misconduct, such as failure to exercise due diligence, loss of state license, or false/misleading advertising, then the correct representation documentation is a letter of representation from the person you wish to represent you.

The letter of representation must include the following:

 i.  An affirmation that the representative is authorized to represent people before the IRS;
 ii.  An affirmation that the representative has the appropriate state or federal license, such as an attorney, CPA, or EA;
iii.  A statement that the representative has been authorized by you to represent you; and
iv.  A statement of where to send correspondence, i.e. solely to the representative, or to you and the representative. (Note that in some instances OPR will send certain correspondence directly to you with a copy to your representative regardless of any other instruction.)

c. Both Tax Compliance and Conduct Cases

If the OPR correspondence refers to both tax compliance and conduct, as referenced above, then you must submit both Forms 2848 and a letter of representation. The same rules apply for each Form 2848, where you must submit one for each entity that the correspondence discusses. The same rules also apply for the requirements in a letter of representation, listed above.

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

Yes. See Restrictions on Practitioners Disciplined by OPRon

Can Disciplined Practitioners represent clients before IRS?

No. They can submit Form 8821 to obtain tax returns and transcripts from the IRS. If a taxpayer wants the disciplined practitioner to accompany him/her to a conference or meeting with the Service, s/he may do so. However, the practitioner may only respond to questions and provide facts and/or documents; the practitioner may not advocate for the taxpayer or argue the merits of any issue raised.

Are IRS employees required to refer suspected practitioner misconduct to OPR?

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


What Preparer Penalties require a referral to OPR?

Referrals are mandatory following the assessment of any IRC 6694(b) penalty, e.g. a willful attempt to understate the liability for tax. The referral should be made to OPR regardless of any appeal taken by the practitioner.

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

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

What Preparer Penalties are discretionary referrals to OPR?

  • 6662     - Accuracy related penalty
  • 6694(a) - Understatement of liability due to an unreasonable position
  • 6695     - (a) Failure to furnish copy of return; (b) Failure to sign return; (d) Failure to
                    keep a copy of tax return or list of taxpayer
  • 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 OPR should be made.


What are other examples of misconduct typically referred to 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/assessment of any Federal tax.
  • Cashing, diverting or splitting a taxpayer’s refund by any means, electronic or otherwise.
  • “Patterns” of misconduct involving multiple years, multiple clients or inappropriate/unprofessional conduct demonstrated to multiple IRS employees.
  • Potential conflict of interest situations, such as representation of both spouses who have a joint liability or when representation is affected by competing interests of the practitioner.
  • Any willful violation of Circular 230 provisions.


What is OPR’s burden of proof?

For OPR to prevail in a disciplinary proceeding, OPR must prove by “clear and convincing evidence” that the practitioner willfully violated one or more provision of Circular 230. Willful is defined as a voluntary, intentional violation of a known legal duty.

How can I learn more about OPR and Circular 230?

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


How can I contact OPR if I have questions?

You may contact OPR by 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