2015 Napa Williamsburg Special Topics Electronic

5. Similarly, examples of acceptable descriptions for enrolled retirement plan agents are “enrolled to represent taxpayers before the Internal Revenue Service as a retirement plan agent” and “enrolled to practice before the Internal Revenue Service as a retirement plan agent.”6. According to Circular 230 an example of an acceptable description for registered tax return preparers is designated as a registered tax return preparer by the Internal Revenue Service. However, since the IRS no longer acknowledges this designation it should be removed from Circular 230.7. A practitioner may not make, directly or indirectly, an uninvited written or oral solicitation of employment in matters related to the Internal Revenue Service if the solicitation violates Federal or State law or other applicable rule, e.g., attorneys are precluded from making a solicitation that is prohibited by conduct rules applicable to all attorneys in their State(s) of licensure.8. Any lawful solicitation made by or on behalf of a practitioner eligible to practice before the Internal Revenue Service must, nevertheless, clearly identify the solicitation as such and, if applicable, identify the source of the information used in choosing the recipient.9. §10.30(b) addresses the issues pertaining to fee information.10. A practitioner may publish the availability of a written schedule of fees and disseminate the following fee information: a. Fixed fees for specific routine services. b. Hourly rates. c. Range of fees for particular services. d. Fee charged for an initial consultation.11. Any statement of fee information concerning matters in which costs may be incurred must include a statement disclosing whether clients will be responsible for such costs.12. A practitioner may charge no more than the rate(s) published under paragraph (b)(1) of this section for at least 30 calendar days after the last date on which the schedule of fees was published.13. §10.30(c) addresses the issues pertaining to communication of fee information. 17

14. Fee information may be communicated in professional lists, telephone directories, print media, mailings, and electronic mail, facsimile, hand delivered flyers, radio, television, and any other method. The method chosen, however, must not cause the communication to become untruthful, deceptive, or otherwise in violation of this part. 15. A practitioner may not persist in attempting to contact a prospective client if the prospective client has made it known to the practitioner that he or she does not desire to be solicited. 16. In the case of radio and television broadcasting, the broadcast must be recorded and the practitioner must retain a recording of the actual transmission. 17. In the case of direct mail and e-commerce communications, the practitioner must retain a copy of the actual communication, along with a list or other description of persons to whom the communication was mailed or otherwise distributed. The copy must be retained by the practitioner for a period of at least 36 months from the date of the last transmission or use. 18. §10.30(d) addresses the issues pertaining to improper associations. 19. A practitioner may not, in matters related to the Internal Revenue Service, assist, or accept assistance from, any person or entity who, to the knowledge of the practitioner, obtains clients or otherwise practices in a manner forbidden under this section.K. §10.33 Best Practices for Tax Advisors 1. §10.33(a) addresses the issues pertaining to best practices. 2. Tax advisors should provide clients with the highest quality representation concerning Federal tax issues by adhering to best practices in providing advice and in preparing or assisting in the preparation of a submission to the Internal Revenue Service. 3. In addition to compliance with the standards of practice provided elsewhere in this part, best practices include the following: a. Communicating clearly with the client regarding the terms of the engagement. For example, the advisor should determine the client’s expected purpose for and use of the advice and should have a clear understanding with the client regarding the form 18

and scope of the advice or assistance to be rendered. b. Establishing the facts, determining which facts are relevant, evaluating the reasonableness of any assumptions or representations, relating the applicable law (including potentially applicable judicial doctrines) to the relevant facts, and arriving at a conclusion supported by the law and the facts. c. Advising the client regarding the import of the conclusions reached, including, for example, whether a taxpayer may avoid accuracy-related penalties under the Internal Revenue Code if a taxpayer acts in reliance on the advice. d. Acting fairly and with integrity in practice before the Internal Revenue Service. 4. §10.33(b) addresses the issues pertaining to procedures to ensure best practices for tax advisors. 5. Tax advisors with responsibility for overseeing a firm’s practice of providing advice concerning Federal tax issues or of preparing or assisting in the preparation of submissions to the Internal Revenue Service should take reasonable steps to ensure that the firm’s procedures for all members, associates, and employees are consistent with the best practices set forth under §10.33(a).L. §10.34(a) Standards for Tax Returns and Documents, Affidavits and Other Papers 1. The IRS has determined that the professional standards in Reg. §10.34(a) generally should be consistent with the civil penalty standards in §6694 for tax return preparers. As a result, the standards for tax returns were re-proposed to provide broad guidelines that are more appropriate for professional ethics standards. 2. Under the final regulations a practitioner could not willfully, recklessly, or through gross incompetence, sign a tax return or claim for refund, that he knows or reasonably should know contains a position that: a. lacks a reasonable basis; b. is an unreasonable position as described in §6694(a)(2) (including related regulations and other published guidance); or 19

c. is a willful attempt by the practitioner to understate the liability for tax or a reckless or intentional disregard of rules or regulations by the practitioner as described in section §6694(b)(2) (including related regulations and other published guidance).3. Also, a practitioner could not willfully, recklessly, or through gross incompetence, advise a client to take a position on a tax return or claim for refund, or prepare a portion of a tax return or claim for refund containing a position, that is described in a - c above, for signing a return or claim for refund.4. These final ethical guidelines will loosely mirror the civil penalty standards in §6694 with only a few minor differences as follows: a. A position on a return or claim for refund would always have to meet the minimum threshold standards of reasonable basis. There would be no exception merely because there is a final determination that no understatement of liability for tax exists. By contrast, under §6694(d), IRS must abate (or refund) a preparer penalty any time there is a final administrative determination or a final judicial decision that there was no understatement of liability by the taxpayer. Tax Professional Issue: As a result, a practitioner could still be subject to Circular 230 discipline for a position on a tax return or claim for refund even if other positions on the same tax return or claim for refund eliminate the understatement of liability. b. §6694 provides that a practitioner would be subject to discipline only after willful, reckless, or grossly incompetent conduct. A single, unintentional error that is not willful, reckless, or grossly incompetent may result in a §6694(a) penalty. Similarly, a return preparer may claim a reasonable cause defense to the imposition of §6694 penalties. Tax Professional Issue: Circular 230 does not provide such a defense but rather relies on the requirement that a practitioner must have acted willfully, recklessly, or through gross incompetence to ensure that sanctions are not imposed on a practitioner who acts reasonable and in good faith. c. Multiple practitioners from the same firm could be disciplined 20

if their conduct in connection with the same act(s) does notcomply with the standard of conduct required under Reg.§10.34. By contrast, only one person within a firm is subject tothe §6694 penalty. d. A pattern of conduct would be a factor taken into account in determining whether a practitioner acted willfully, recklessly, or through gross incompetence for Reg. §10.34 purposes. By contrast, under §6694, a penalty is imposed based on a single act in violation of the applicable provisions.§10.34 in Circular 230 vs. IRC 6694Circular 230 §10.34 I*RC §6694 Always needs to meet 6694(d) final minimum standard determination of no understatement Single unintentional error: not willful * Willful, reckless or Multiple practitioners can be grossly incompetent disciplined * Only one person subject to Pattern of conduct to determine the penalty willful, reckless or gross incompetence * Single Act of willful, reckless or incompetenceM. Other Changes 1. Other changes made by the amended regulations include: a. §10.36 Expanding procedures to ensure compliance to include practice involving tax return preparation activities. b. §10.51(a)(16) Providing that disreputable conduct includes willfully failing to file on magnetic or other electronic media a tax return prepared by the practitioner when he is required to do so by the federal tax laws (unless the failure is due to reasonable cause and not due to willful neglect). c. Providing that disreputable conduct also includes willfully preparing all or substantially all of, or signing as a compensated tax return preparer, a tax return or claim for refund when the practitioner does not possess a current or21

otherwise valid PTIN or other prescribed identifying number. (§10.51(a) (17)) d. Willfully representing a taxpayer before an officer or employee of the IRS unless the practitioner is authorized to do so pursuant to Circular 230. (§10.51(a) (18))N. Six Changes to Circular 230 in Final Regulations Effective June 12, 2014 and OPR’s Position on the Loving Case Decision 1. §10.31 Electronic Negotiations of Taxpayer Refunds (adds to rules discussing negotiation of taxpayer checks) 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. 2. §10.35 Covered Opinions was rescinded and revoked and replaced with an unrelated provision. 3. New §10.35 General Standard of Competence 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 with experts in the relevant area or studying the relevant law. 4. §10.36 Procedures to Ensure Compliance This addresses that a practitioner who shares the responsibility for tax practice of a firm has an obligation to take reasonable steps to ensure everyone in the firm is aware of their duties under Circular 230 and adheres to them. The final regulations deleted §10.36(a) which relates to the old §10.35 rule on covered opinions. 5. §10.37 Internal Revenue Service, Requirements for Written Advice This is similar to §10.36 and clarifies that a “reasonableness” standard 22

applies to written advice given by practitioners. Karen Hawkins stated in a June 17, 2014 Webcast that “a practitioner must make reasonable efforts” to determine the relevant facts. A practitioner must use “reasonable skill” to match up the facts and the law. ‘A practitioner may not use information provided by the taxpayer or another practitioner if this reliance is not reasonable.”6. §10.82 Expedited Suspension Procedures This section authorizes the OPR to use expedited proceedings to suspend a noncompliant practitioner from practice under certain limited circumstances. These circumstances include when that practitioner has shown a pattern of willful disreputable conduct by either failing to file four out of five tax returns for the five tax years immediately preceding the institution of an expedited suspension proceeding or failing to file five out of seven quarters’ worth of employment tax returns for the seven tax periods immediately before the institution of an expedited suspension proceeding. Karen Hawkins noted that a safe harbor provision exists under §10.82. “If you manage to get your tax returns or employment tax returns filed before OPR moves forward with actual suspension, OPR will back off from using expedited procedures.” “However, this does not mean that OPR will not proceed with a suspension action using the regular process.” OPR’s Position on Loving Case Decision Karen Hawkins also mentioned the outcome of the Loving case, which upheld a district court’s injunction against the IRS’s planned program to regulate registered tax return preparers. She stated that she and the OPR will interpret the ruling of Loving as narrowly as possible without violating the injunction. She said that, if a person is a mere tax return preparer, then they would clearly not be subject to Circular 230. In the webcast she stated, “If you choose to represent one of your taxpayers, whose return you have prepared and signed, before the IRS exam division, the national taxpayer advocate or IRS customer service, you have just turned yourself into a practitioner under Circular 230 as far as I am concerned, and I have jurisdiction over you.” 23

O. Issues of the PTIN and the Paid Preparer 1. The IRS launched an online application system for compensated tax return preparers. Return preparers need to obtain, or reapply for, a Preparer Tax Identification Numbers (PTIN) and pay a user fee. 2. All preparers were required to be registered on a new on-line registration system and need to obtain a PTIN before filing any return after December 31, 2010. 3. The system includes a series of steps planned to increase oversight of federal tax return preparation. 4. Under the regulations the requirement to sign up on the system applies to all compensated tax return preparers of federal tax returns regardless of whether they currently possess a PTIN. Return preparers who already have a PTIN generally are reassigned the same number. 5. Individuals who plan to prepare all or substantially all of a tax return for compensation have to obtain a PTIN even if they were not subject to the testing and continuing education requirements that would be required under Circular 230. Access to the online application system is through the Tax Professionals page of http://www.irs.gov. 6. The IRS issued paper Form W-12 IRS Paid Preparer Identification Number (PTIN) Application. The application system requires that the required fee is included with the request or it will be rejected. It is to be made payable to: IRS TAX PRO PTIN Fee. 7. Under the regulations, compensated tax return preparers are required to acquire or renew their PTINs annually and pay the associated user fee. Tax Professional Note: The IRS has stated that the amount of the fee might change in future years as the actual program costs are periodically re-evaluated. Currently the fee is $63.00 to renew and $64.25 for an initial registration 8. The application does inquire as to whether an applicant is current on both individual and federal taxes including any corporate and employment tax obligations. In addition, it requires the applicant to respond to the reason why they have never filed a U.S. individual return if one has never been filed. 9. There is also a question asking if the application has been convicted of a felony in the past 10 years and requires an explanation if the 24

response is yes.10. The application requires the normal identification data including: a. name, b. address, c. SSN, d. birth date, e. e-mail address, f. filing status and tax year of last tax return filed, g. business name and address with EIN and EFIN, h. business telephone number and website address, i. CAF number, and j. professional credentials, if any, with license number if applicable. Tax Professional Note: The form requires a signature under penalties of perjury.11. The IRS has also issued Form 8945 PTIN Supplemental Application for U.S. Citizens without a Social Security Number Due to Conscientious Religious Objection. The Form 8945 is to be used by U.S. Citizens who are members of certain recognized religious groups, which are defined in the instructions, that want to prepare tax returns for compensation.12. The Form 8945 is to be filed with the Form W-12 and the fee of $64.25 or $63.00 if a renewal. In addition to the applicant’s signature, the signature of an Authorized Representative of the religious group must certify that the applicant is a member of that group. 25

Supplements

Supplements:  Sample Engagement Letter  FTA In the News: New IRS Filing Season Program Announced for Tax Return Preparers, July 2014, by Nina Tross  Treasury Department Circular No. 230 (Rev. 6-2014)

Supplement: Sample Engagement Letter Your Firm Name Here(Date)Re: Engagement Letter for Year 2014 Income Tax Preparation and Consultation ServicesDear : Please read, sign and return this engagement letter as soon as possible. The purpose of this letter isto confirm our understanding of the terms and objectives of our engagement and the nature and limitationsof our services. We will prepare your 2014 federal and state income tax returns in compliance with the InternalRevenue Code and state laws based upon written and oral information you provide. Please provide thisinformation to us as soon as possible. The due date for your federal tax return is April 15, 2015. However,because of the time requirements for processing returns, no returns will be processed after April 8, 2015,thereupon, all returns will be put on extension and processed after April 15, 2015. If we do not receiveyour information by (Date), then your return will most likely be put on extension. We are furnishing you with a tax organizer which is composed of questions and worksheets toguide you in gathering the necessary information. Your use of our forms will assist us in keeping your feeto a minimum. If you use a different format, then it generally requires more preparation time and higherfees. Our minimum fee for preparation of your federal and state returns is $X. A retainer fee of $Y isdue at the time you first submit your information to us. The balance is due at the time we present you withthe completed returns. The hourly fee is $Z. The fee for this engagement does not include any fees incurredafter the preparation of the return is completed such as responses to IRS and/or state inquires and auditissues. The proper preparation of an income tax return and consultation services sometimes requiresresearch given the fact that each taxpayer’s financial circumstances differ. If services beyond those coveredby this letter are required, then the extent of such services and the basis for additional fees will be discussedwith you in advance of the performance of such work. We appreciate the confidence which you have placed in us and we will be pleased to discuss withyou any aspect of our services. Sincerely, Your NameApproved:By: X Date: X S-1

FTA IN THE NEWS: New IRS Filing Season Program Announced for Tax ReturnPreparers, by Nina Tross, Federal Tax Alert, July 2014The Internal Revenue Service announced on June 30, 2014 a new voluntary programdesigned to encourage education and filing season readiness for paid tax return preparers.The program will be in place to help taxpayers during the 2015 filing season.The Annual Filing Season Program (AFSP) will allow unenrolled return preparersto obtain a record of completion when they voluntarily complete a required amountof continuing education (CE), including a course in basic tax filing issues and updates,ethics and other federal tax law courses.\"This voluntary program will be a step to help protect taxpayers during the 2015 filingseason,” said IRS Commissioner John Koskinen. “About 60 percent of tax return preparersoperate without any type of oversight or education requirements. Our program will giveunenrolled return preparers a way to stay to up-to-date on tax laws and changes, whichwe believe will improve service to taxpayers.”Tax return preparers who elect to participate in the program and receive a recordof completion from the IRS will be included in a database on IRS.gov that will be availableby January 2015 to help taxpayers determine return preparer qualifications.The database will also contain information about practitioners with recognized credentialsand higher levels of qualification and practice rights. These include attorneys, certifiedpublic accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPAs)and enrolled actuaries who are registered with the IRS.“It’s also important to note this program is not to replace the important tax work doneby certified public accountants, enrolled agents and attorneys,” Koskinen said. “Taxprofessionals with recognized credentials will be publicly listed on IRS.gov, and we planto help inform taxpayers about the professional options available.”Anyone who prepares all, or substantially all, of any federal tax return or refund claimfor compensation is required to obtain a preparer tax identification number (PTIN).Tax return preparers with a valid PTIN who do not obtain a record of completion as partof the Annual Filing Season Program, or are not an attorney, CPA, enrolled agent,ERPA or enrolled actuary, may still prepare tax returns, but will not be included inthe public directory. S-2

Annual Filing Season Program — Record of Completion RequirementsIn general, non-exempt return preparers with a valid PTIN for the program year will needto complete 18 hours of CE annually from IRS-approved CE providers to obtain an IRSRecord of Completion. The hours will need to include:  6 hours of federal tax filing season refresher course (with a required comprehension test at completion)  10 hours of federal tax law topics  2 hours of ethicsFor the first year, a transition rule will apply to prorate the required hours. For a returnpreparer to obtain a record of completion for the 2015 filing season, a total of 11 hourswill need to be earned in 2014, including the six hour refresher course, three hours ofother federal tax law topics and two hours of ethics.IRS-approved CE providers will offer qualifying federal tax filing season refreshercourses. A list of all IRS-approved CE providers is available and includes a new columnto indicate which providers are planning to offer the qualifying courses. The list isupdated daily. For 2015, qualifying courses will be offered through Dec. 31, 2014.The IRS will begin issuing records of completion to those who have met the requirementsin mid-October 2014 after the 2015 PTIN renewal season starts.Consent to Circular 230 restrictionsAs a prerequisite to receiving a record of completion, an individual will be requiredto consent to the duties and restrictions relating to practice before the IRS in subpart Band section 10.51 of Treasury Department Circular No. 230.Modification to limited practice permissionsThe program also states that effective for tax returns and claims for refunds preparedor signed after Dec. 31, 2015, only unenrolled tax return preparers who have a recordof completion under the Annual Filing Season Program for the calendar year ofpreparation and the calendar year of representation will be permitted to representtaxpayers before the IRS during an examination of a return that they signed or prepared.Attorneys, CPAs and enrolled agents will continue to have unlimited representation rightsand can represent clients before any office of the IRS.Complete description of the AFSP is available in Rev. Proc. 2014-42. S-3

AFSP - FREQUENTLY ASKED QUESTIONS:What is the Annual Filing Season Program (AFSP) for return preparers?The Annual Filing Season Program is a voluntary program designed to encourage taxreturn preparers to participate in continuing education (CE) courses.Unenrolled return preparers can elect to voluntarily take continuing education each yearin preparation for filing season and receive an Annual Filing Season Program – Recordof Completion.The program is important for a number of reasons. It encourages unregulated returnpreparers who don’t have to meet continuing professional education requirements to stayup to date on tax laws and changes. It helps lessen the risk to taxpayers from preparers whohave no education in federal tax law or filing requirements. And it allows preparers withoutprofessional credentials to stand out from the competition by giving them a recognizablerecord of completion that they can show to their clients.Preparers who complete the AFSP will also be included in a new public directory that willbe added to IRS.gov by January 2015 for taxpayers to use in searching for qualifiedtax return preparers. The Directory of Federal Tax Return Preparers with Credentialsand Select Qualifications will only include attorneys, certified public accountants(CPAs), enrolled agents, enrolled retirement plan agents (ERPAs), enrolled actuariesand individuals who have received an Annual Filing Season Program – Record ofCompletion.Who can participate in the Annual Filing Season Program?The Annual Filing Season Program is intended to recognize and encourage the voluntaryefforts of unenrolled tax return preparers to increase their knowledge and improve theirfiling season competency through continuing education. The program is not directed ator necessary for credentialed preparers such as attorneys, CPAs, enrolled agents,enrolled retirement plan agents or enrolled actuaries. They are already in possession ofhigher level qualifications.What are the requirements for obtaining an Annual Filing Season Program – Recordof Completion for 2015?In general, to obtain an Annual Filing Season Program – Record of Completion a returnpreparer must obtain 18 hours of continuing education from an IRS-approved CE Provider.The hours must include a 6 credit hour Annual Federal Tax Refresher (AFTR) course thatcovers filing season issues and tax law updates. The AFTR course must include aknowledge-based comprehension test administered at the conclusion of the course bythe CE Provider. Unenrolled preparers who have passed recognized state or national S-4

tests qualify for an exemption from the AFTR course. See below for additionalinformation on course exemptions.The amount of CE required to obtain the Annual Filing Season Program – Recordof Completion is prorated for Filing Season 2015. A total of 11 hours must be obtainedfor Filing Season 2015, including the 6 hour AFTR course, 3 hours of federal tax lawtopics and 2 hours of ethics.Does the IRS administer the comprehension test given at the end of the AnnualFederal Tax Refresher Course?No, the IRS does not administer the comprehension test. IRS-approved ContinuingEducation Providers offer the Annual Federal Tax Refresher course and are responsiblefor the development and administration of the comprehension test associated with theAFTR course. The IRS does provide a course outline and test parameters which must befollowed by providers.Is there a fee to obtain an Annual Filing Season Program – Record of Completion?Just as for all CE courses, each IRS-approved CE provider will determine the courseparticipant fee.What does the AFTR course cover?The Annual Federal Tax Refresher course will cover tax law topics across three domains:New Tax Law/Recent Updates, General Review and Ethics, Practices and Procedures. TheIRS will publish course content guidelines annually for IRS-approved CE Providers. Itis the responsibility of CE Providers to ensure all course content is covered in theAnnual Federal Tax Refresher course.What does the AFTR test cover? What is the format and how long is it?The AFTR Course comprehension test will include all tax law topics covered in the AFTRcourse. The exam will consist of a minimum of 100 questions made up of multiple choiceand True/False style questions. Participants will have a maximum of 3 hours to completethe exam. Refer to the test parameters published by the IRS for more information.What if I take the course but do not pass the test?The course has not been satisfactorily completed until the comprehension test ispassed. CE Providers will not provide course completion information to the IRS until youpass the ATFR exam. Your provider’s policy will determine whether you must re-takethe course or just the course exam. S-5

Do I need to notify the IRS once I have completed the Annual Filing SeasonProgram’s Continuing Education requirements?No, following the completion of all Continuing Education requirements, return preparerswill receive a notice of their potential eligibility for the program. You will be asked tolog into your PTIN account for additional information on completing the process. Amongthe final steps will be a required consent to adhere to specific practice obligationsoutlined in Subpart B and section 10.51 of Treasury Department Circular No. 230.Following successful completion of these steps, you will be issued an Annual FilingSeason Program- Record of Completion.Please note that it may take up to four weeks following the completion of all requirementsfor return preparers to receive a Record of Completion and be placed on the Directoryof Federal Tax Return Preparers with Credentials and Select Qualifications. Additionally,you will not be issued a Record of Completion until your PTIN is renewed for theupcoming tax year.How do I find a provider offering the AFTR course?The IRS publishes a complete listing of all IRS-approved Continuing Education Providers.Refer to the Annual Federal Tax Refresher column under Program Categories Offeredfor providers who offer the AFTR course.Who is exempt from taking the AFTR course?Some unenrolled preparers are exempt from the AFTR course requirement because of theircompletion of other recognized state or national competency tests. These exempt groupsare still required to meet other program requirements, including 15 CE credits (10 FederalTax Law, 3 Federal Tax Law Updates, and 2 Ethics).Return preparers who can obtain the AFTR – Record of Completion without takingthe AFTR course are:  Anyone who passed the Registered Tax Return Preparer test administered by the IRS between November 2011 and January 2013.  Established state-based return preparer program participants currently with testing requirements: Return preparers who are active members of the Oregon Board of Tax Practitioners and/or the California Tax Education Council.  SEE Part I Test-Passers: Tax practitioners who have passed the Special Enrollment Exam Part I within the past two years as of the first day of the upcoming filing S-6

season.  VITA volunteers: Quality reviewers and instructors with active PTINs.  Other accredited tax-focused credential-holders: The Accreditation Council for Accountancy and Taxations Accredited Business Accountant/Advisor (ABA) and Accredited Tax Preparer (ATP) programs.How do I obtain an Annual Filing Season Program – Record of Completion if Iam exempt from the AFTR course?Those who are exempted from the AFTR course must meet the alternative requirements(15 hours of IRS-approved CE, consent to Circular 230 practice requirements and a validPTIN for the upcoming filing season) in order to receive an AFSP Record of Completion.Once all requirements are met, the exempted return preparer will automatically be issueda Record of Completion.A return preparer will not be required to notify the IRS of an exemption. The IRSis obtaining information about exemptions directly from the testing source (e.g.Oregon Board of Tax Practitioners).How and when will I get my Record of Completion?After PTIN renewal season begins in October 2014, a Record of Completion willbe generated to a return preparer once all requirements, including renewal of their PTINfor 2015, have been met.Tax return preparers with online PTIN accounts will receive an email [email protected] with instructions on how to complete the application process andreceive their certificates in their online secure mailbox.Tax return preparers without an online PTIN account will receive a letter with instructionsfor completing the application process and obtaining their certificates.Is there a deadline for taking the AFTR course? For obtaining a Record ofCompletion?To be eligible for an AFSP – Record of Completion, a return preparer must completeand pass the AFTR course and obtain their other CE by December 31 prior to the start ofthe tax season. As AFTR courses are offered by CE providers, return preparers aresubject to the schedule of courses offered by these providers.In no circumstance will the AFSP – Record of Completion be issued before a returnpreparer has registered or renewed their PTIN for the upcoming year. S-7

What is the Directory of Federal Tax Return Preparers with Credentials and SelectQualifications? When will it be available?By January 2015, the IRS will launch a public directory on the IRS website of tax returnpreparers with credentials and select qualifications. This will be a searchable, sortablelisting so that taxpayers can find a return preparer that carries their preferred credentialsor qualification(s).Who will be included in the Directory and what information will be shown?The Directory will include the name, city, state and zip code of all attorneys, CPAs,enrolled agents, enrolled retirement plan agents, enrolled actuaries and AFSP participantswho have obtained a Record of Completion and who have a valid PTIN.Are credentialed preparers precluded from participating in the AFSP?No, as indicated above, this program is not designed, directed or intended for credentialedpreparers who already possess a much higher level of qualification. However, if acredentialed preparer seeks to participate in the program, he or she would be requiredto meet the same requirements as those preparers in the exempt category.Will I still be able to represent clients before the IRS if I don’t participate inthe Annual Filing Season Program?Yes, as a PTIN holder you will continue to have limited representation rights before limitedoffices of the IRS with respect to clients whose return you prepared and signed for calendaryear 2015. However, beginning in 2016, only AFSP participants who obtain a Recordof Completion will have those limited representation rights before the IRS for clientswhose returns they prepared and signed. PTIN holders without an AFSP - Record ofCompletion or without other professional credentials will not be able to represent clientsbefore the IRS in any matters.Attorneys, CPAs and enrolled agents will continue to have unlimited representation rightsand can represent clients before any office of the IRS.Are preparers who participate in the Annual Filing Season Program subjectto Circular 230 regulations?To participate in the AFSP, unenrolled preparers must agree to adhere to the practicerequirements for tax practitioners outlined in Subpart B and section 10.51 of TreasuryDepartment Circular No. 230.Any return preparer who represents a taxpayer before the IRS is subject to Circular 230. S-8

Why is the IRS launching this voluntary program? Why not wait to see if Congresspasses legislation regarding return preparer oversight?The IRS believes in a mandatory competency standard for federal tax return preparers.To this end, legislation continues to be our priority. But until legislation is enacted, westill have a responsibility to taxpayers and to our tax system to keep moving forwardwith our efforts to improve service to taxpayers.In the interim, this new program recognizes the efforts of unenrolled return preparersto improve their professional competency through continuing education. Anyonewith a PTIN can prepare a federal tax return, but for those preparers with a PTIN whoalso work to ready themselves for the filing season through educational efforts, the IRSwill issue them a recognizable record of completion that they can show to their clients.Do return preparers have to participate in the Annual Filing Season Program?No, it’s a voluntary program. Anyone with a preparer tax identification number (PTIN)can prepare tax returns for compensation, but continuing education is encouraged forall tax return preparers. S-9



Treasury Department Regulations Governing Practice beforeCircular No. 230 the Internal Revenue Service(Rev. 6-2014)Catalog Number 16586Rwww.irs.govDepartment Title 31 Code of Federal Regulations,of teh Subtitle A, Part 10,Treasury published (June 12, 2014)InternalRevenueService

31 U.S.C. §330. Practice before the Department( a) S ubj ect to section 500 of title 5, t eh S ecretary of teh Treasury may — ( 1) reug l ate teh practice of representative s of persons eb f ore the Department of teh Treasury; and ( 2) eb f ore amd itting a representatiev to practice, r euq i re tha t teh representatiev de monstrate — ( A ) good c ha racter; ( B ) good r eputation; (C) necessary qualifications to enable the representative to provide to persons valuable service; and ( D) competency to adiv se and a ssist persons in presenting t he ir cases. ( b) A f ter notice and opportunity f or a proceeid ng, teh S ecretary may suspend or di sba r f rom practice eb f ore tehDepartment, or censure, a representative w oh — ( 1) is incompetent; ( 2) is id sreputalb e; ( 3) iv olates regul ations prescrieb d uned r tih s section; or ( )4 w ith intent to de f raud, w illf ully and know inlg y misleads or thr eatens the person be ing represented or aprospective person to eb represente.d Teh S ecretary may impose a monetary penalty on any representative de scrieb d in teh preceid ng sentence. I f therepresentative was acting on behalf of an employer or any firm or other entity in connection with the conductgiving rise to such penalty, the Secretary may impose a monetary penalty on such employer, firm, or entity ifit kne w , or reasonabl y shoul d ah ve nk ow n, of such conduc t. S uch penalty sah ll not ecx eed teh rg oss incomeed riev d ( or to eb de riev d) f rom teh conduc t gi iv ng rise to the penalty and may be in adi tion to, or in lieu of , anysuspension, id sba rment, or censure of the representatiev . ( c) A f ter notice and oppor tunity f or a eh aring to any appraiser, t he S ecretary may — ( )1 proiv ed tah t appraisals yb such appraiser sha ll not ha ev any proba tiev ef f ect in any amd inistrativeproceeid ng eb f ore the Department of teh Treasury or the I nternal R eev nue S ervi ce, a nd ( 2) ba r such a ppraiser f rom presenting e vi ed nce or testimony in any such pr oceedi ng. ( d) Nothi ng in thi s section or in any oteh r provi sion of law sha ll be construed to limit the autoh r ity of theS ecretary of teh Treasury to impose standa rsd applicalb e to teh rened ring of w ritten avdi ce w ith respect to anyentity, transaction plan or arraneg ment, or oteh r plan or arraneg ment, w hi ch is of a type w hi ch teh S ecretaryed termines as ha iv ng a potential f or tax a voi da nce or eva sion. ( P ub . L . 927– 5,8 S ept. 31 , 8219 , 69 S tat. 8 4; P ub. L . 938– 6,9 di v. A , title I , § 561( a) , J uly ,18 1 ,489 98 S tat.;695 P u.b L . 194,–518 S tat. ,8561 15;87 §2, O ct. 22, ,6198 01 0 S tat. 205;9 P u.b L . 10–8357, title V I I I , §822( a) ( )1 , ( )b , O ct. 22, 2004, P ub. L . 10–29 80, t itle X I I , §21 91( )d , A ug. 71, 200,6 120 S tat. 01 85.)Page 2 S-11 Treasury Department Circular No. 230

Table of ContentsParagraph 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5§ 10.0 Scope of part.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Subpart A — Rules Governing Authority to Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5§ 10.1 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5§ 10.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6§ 10.3 Who may practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6§ 10.4 Eligibility to become an enrolled agent, enrolled retirement plan agent, or registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8§ 10.5 Application to become an enrolled agent, enrolled retirement plan agent, or registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9§ 10.6 Term and renewal of status as an enrolled agent, enrolled retirement plan agent, or registered tax return preparer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10§ 10.7 Representing oneself; participating in rulemaking; limited practice; and special appearances. . . 16§ 10.8 Return preparation and application of rules to other individuals. . . . . . . . . . . . . . . . . . . . . . . . . . . 17§ 10.9 Continuing education providers and continuing education programs. . . . . . . . . . . . . . . . . . . . . . . . 17Subpart B — Duties and Restrictions Relating to Practice Before the Internal Revenue Service . . . . . . . 19§ 10.20 Information to be furnished. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19§ 10.21 Knowledge of client’s omission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19§ 10.22 Diligence as to accuracy.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19§ 10.23 Prompt disposition of pending matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20§ 10.24 Assistance from or to disbarred or suspended persons and former Internal Revenue Service employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20§ 10.25 Practice by former government employees, their partners and their associates. . . . . . . . . . . . . . . 20§ 10.26 Notaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21§ 10.27 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21§ 10.28 Return of client’s records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22§ 10.29 Conflicting inte ests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22§ 10.30 Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23§ 10.31 Negotiation of taxpayer checks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24§ 10.32 Practice of law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24§ 10.33 Best practices for tax advisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24§ 10.34 Standards with respect to tax returns and documents, affidavits and othe papers. . . . . . . . . . . 24§ 10.35 Competence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25§ 10.36 Procedures to ensure compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26§ 10.37 Requirements for written advice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26§ 10.38 Establishment of advisory committees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Treasury Department Circular No. 230 S-12 Page 3

Subpart C — Sanctions for Violation of the Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28§ 10.50 Sanctions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28§ 10.51 Incompetence and disreputable conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28§ 10.52 Violations subject to sanction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30§ 10.53 Receipt of information concerning practitioner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Subpart D — Rules Applicable to Disciplinary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31§ 10.60 Institution of proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31§ 10.61 Conferences.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31§ 10.62 Contents of complaint. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31§ 10.63 Service of complaint; service of other papers; service of evidence in support of complaint; filing of papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32§ 10.64 Answer; default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33§ 10.65 Supplemental charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33§ 10.66 Reply to answer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34§ 10.67 Proof; variance; amendment of pleadings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34§ 10.68 Motions and requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34§ 10.69 Representation; ex parte communication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34§ 10.70 Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35§ 10.71 Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35§ 10.72 Hearings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36§ 10.73 Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38§ 10.74 Transcript. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39§ 10.75 Proposed findings and conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39§ 10.76 Decision of Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39§ 10.77 Appeal of decision of Administrative Law Judge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40§ 10.78 Decision on review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40§ 10.79 Effect of disbarment, suspension, or censure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40§ 10.80 Notice of disbarment, suspension, censure, or disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41§ 10.81 Petition for reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41§ 10.82 Expedited suspension.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Subpart E — General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43§ 10.90 Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43§ 10.91 Saving provision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44§ 10.92 Special orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44§ 10.93 Effective date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Page 4 S-13 Treasury Department Circular No. 230

Paragraph 1. The autoh r ity citation f or 31 CF R , part Table of Contents10 c ontinues to read a s f ollow s:A uthor ity: S ec. 3, 23 S tat. 2,58 secs. 2- 12, 6 0 S tat. Subpart A — Rules Governing Authority to237 et. se.q ; 5 U .S .C. 30,1 05 0, -51 59; 31 U .S .C. Practice32;1 31 U .S .C. 330; R eor.g P lan No. 26 of 19 50, 15F R 94 35, 64 S tat. 1280, 3 CF R , 149- 1 953 Comp., § 10.1 Officesp. 10.71 ( a) Establishment of office(s). Th e Commissioner§ 10.0 Scope of part. shall establish the Office of Professional Responsibility and any other office(s) within the ( a) Th is part contains rules g ov erning th e I nternal R ev enue S erv ice necessary to ad ministerrecog nition of attorneys, certified public accountants, and enf orce th is part. Th e Commissioner sh allenrolled age nts, enrolled retirement plan age nts, appoint the Director of the Office of Professionalreig stered tax return preparers, and oteh r persons R esponsib ility and any oth er I nternal R ev enuerepresenting taxpa yers be f ore the I nternal R eve nue official(s) to manage and direct any office(s)S eriv ce. S ubpa rt A of tih s part sets f orth rules relating estab lish ed to ad minister or enf orce th is part.to the autoh r ity to practice b ef ore teh I nternal R eev nue Offices established under this part include, but areS ervi ce; subpa rt B of thi s part prescribe s the dut ies not limited to:and restrictions relating to such practice; subpa rt Cof tih s part prescribe s the sanctions f or vi olating teh (1) The Office of Professional Responsibility, whichregul ations; subpa rt D of thi s part contains teh rules sah ll eg nerally ah ve responsiib lity f or matters relatedapplicabl e to id sciplinary proceedi nsg ; and sub part E to practitioner conduc t and sah ll ah v e ecx lusiveof thi s part contains eg neral proiv sions relating to the responsiib lity f or di scipline, incluid ng id sciplinaryavailability of official records. proceeid ngs and s anctions; and ( )b Effective/applicability date. Thi s section is (2) An office with responsibility for matters relatedapplicabl e eb gi nning A ugus t 2, 201 .1 to author ity to practice eb f ore the I nternal R eev nue S ervi ce, includi ng acting on applications f or enrollment to practice be f ore the I nternal R eev nue S eriv ce and amd inistering competency testing and continuing e duc ation. (b) Officers and employees within any office establ iseh d unde r thi s part may perf orm acts necessary or appropriate to carry out the responsib ilities of teh ir office(s) under this part or as otherwise prescribed by the Commissioner. ( c) Acting. The Commissioner w ill ed signa te an officer or employee of the Internal Revenue Service to perf orm the ud t ies of an indi iv ud a l appointed uned r pararg aph ( a) of thi s section in the asb ence of that officer or employee or during a vacancy in that office. ( )d Effective/applicability date. Tih s section is applicabl e eb ig nning A ugus t 2, 201 1, ecx ept tah t paragr aph ( a) ( 1) is applicalb e be ig nning J une 12, 20.41Treasury Department Circular No. 230 S-14 § 10.1 — Page 5

Table of Contents§ 10.2 Definitions be f ore teh I nternal R eev nue S ervi ce may practice before the Internal Revenue Service by filing with ( a) A s used in thi s part, ecx ept w he re th e text teh I nternal R eev nue S ervi ce a w ritten ed clarationprovi ed s oteh rw ise — that the attorney is currently qualified as an attorney and is author iz ed to represent the party or parties. ( )1 Attorney means any person w oh is a memeb r Notw itsh tanid ng the preceid ng sentence, attorneysin og od stanid ng of teh ab r of teh hi hg est court of w oh are not currently unde r suspension or di sab rmentany state, territory, or possession of teh U nited f rom practice eb f ore the I nternal R eve nue S eriv ceS tates, incluid ng a Commonw ealt,h or th e District of are not required to file a written declaration with theColumbi a. I R S eb f ore rende ring w ritten advi ce coev red unde r §10.37, ub t teh ir rende ring of tih s avid ce is practice ( 2) Certified public accountant means any person eb f ore the I nternal R eve nue S eriv ce.who is duly qualified to practice as a certified publicaccountant in any state, territory, or possession of teh ( b ) Certified public accountants. Any certifiedU nited S tates, incluid ng a Commonw ealth, or the pub lic accountant w h o is not currently und erDistrict of Columbi a. suspension or d isb arment f rom practice b ef ore th e I nternal R ev enue S erv ice may practice b ef ore th e ( 3) Commissioner ref ers to the Commissioner of Internal Revenue Service by filing with the InternalI nternal R eev nue. R ev enue S erv ice a w ritten d eclaration th at th e certified public accountant is currently qualified as ( 4 ) Practice before the Internal Revenue a certified public accountant and is authorized toService compreh end s all matters connected w ith a represent th e party or parties. Notw ith stand ing th epresentation to teh I nternal R eve nue S ervi ce or any preceding sentence, certified public accountants whoof its officers or employees relating to a taxpayer’s are not currently und er suspension or d isb armentright s, priiv leeg s, or liaib lities uned r law s or f rom practice b ef ore th e I nternal R ev enue S erv iceregul ations adm inistered yb teh I nternal R eev nue are not required to file a written declaration with theS eriv ce. S uch presentations inclued , but are not I R S b ef ore rend ering w ritten ad v ice cov ered und erlimited to, preparing documents; filing documents; § 1 0.37 , b ut th eir rend ering of th is ad v ice is practicecorresponid ng and communicating w ith the I nternal b ef ore th e I nternal R ev enue S erv ice.R eev nue S ervi ce; rened ring w ritten avdi ce w ithrespect to any entity, transaction, plan or arrange ment, ( c) Enrolled agents. A ny inid vi dua l enrolled as anor oth er plan or arrange ment ha iv ng a potential f or aeg nt pursuant to thi s part w ho is not currently unde rtax avoi ad nce or ev asion; and representing a client at suspension or di sab rment f rom practice eb f ore theconf erences, he arings , a nd m eetinsg . I nternal R eev nue S ervi ce may practice be f ore the I nternal R eev nue S ervi ce. ( 5) Practitioner means any indi vi ud a l de scrieb din paragr aphs ( a) , ( b ) , ( c) , ( d) , ( e) , or ( f ) of 10§ .3. ( )d Enrolled actuaries. ( )1 A ny indi vi ud a l w oh is enrolled as an actuary ( 6) A tax return inclued s an amened d tax returnand a claim f or ref und. by the J oint B oard f or the E nrollment of A ctuaries pursuant to 29 U .S .C. 21 42 w ho is not currently ( )7 Service means teh I nternal R eev nue S eriv ce. uned r suspension or id sba rment f rom practice eb f ore ( 8) Tax return preparer means any inid iv dua l teh I nternal R eev nue S ervi ce may practice be f ore thew ithi n teh meaning of section 701( a) ( 36) and 26 Internal Revenue Service by filing with the InternalCF R 301.701- 5.1 R eev nue S ervi ce a w ritten ed claration stating tha t he ( )b Effective/applicability date. Tih s section is or she is currently qualified as an enrolled actuaryapplicabl e on A ugus t 2, 201 .1 and is autoh r iz ed to represent the party or parties on w hos e be ha lf eh or she acts.§ 10.3 Who may practice. ( 2) P ractice as an enrolled actuary is limited ( a) Attorneys. A ny attorney w ho is not currentlyuned r suspension or di sba rment f rom practice S-15 Treasury Department Circular No. 230Page 6 — § 10.2

Table of Contentsto representation w ith respect to issues invol iv ng ( )1 A ny indi v iud a l enrolled as a retirement planthe f ollow ing statutory proiv sions in title 26 of age nt pursuant to thi s part w ho is not currently unde rteh U nited S tates Code : sections 401 ( relating to suspension or di sab rment f rom practice eb f ore thequalification of employee plans), 403(a) (relating I nternal R eve nue S eriv ce may practice be f ore tehto w he the r an annuity plan meets the requi rements I nternal R eve nue S eriv ce.of section 04 (4 a) ( 2) ) , 404 ( relating to ed duc tiib lityof employer contriub t ions) , 04 5 ( relating to ( 2) P ractice as an enrolled retirement plan age ntqualification of bond purchase plans), 412 (relating is limited to representation w ith respect to issuesto f undi ng requi rements f or certain employee invol vi ng the f ollow ing progr ams: E mployee P lansplans), 413 (relating to application of qualification Determination L etter progr am; E mployee P lansrequi rements to collective ly ab rag ined plans and Compliance R esolution S ystem; and E mployeeto plans maintained yb more tah n one employer) , P lans M aster and P rototype and V olume S ubm itter414 (relating to definitions and special rules with progr am. I n aid tion, enrolled retirement plan age ntsrespect to teh employee plan area) , 4 91 ( relating are eg nerally permitted to represent taxpa yers w ithto treatment of funded welfare benefits), 419A respect to I R S f orms unde r teh 35 00 and 05 0 series(relating to qualified asset accounts), 420 (relating which are filed by retirement plans and plan sponsors,to transf ers of ecx ess pension assets to retiree he alth ub t not w ith r espect to actuarial f orms or sceh ud l es.accounts) , 1479 ( relating to ecx ise taxe s payabl e asa result of an accumulated funding deficiency under ( 3) A n inid vi ud a l w oh practices eb f ore thesection 142) , 2479 ( relating to tax on nonde ud c tibl e I nternal R eve nue S ervi ce pursuant to pararg aph ( e)contributions to qualified employer plans), 4976 ( 1) of tih s section is subj ect to the provi sions of tih s( relating to taex s w ith respect to f unde d w elf are part in the same manner as attorneys, certified publicbenefit plans), 4980 (relating to tax on reversion of accountants, enrolled aeg nts, enrolled actuaries, andqualified plan assets to employer), 6057 (relating reig stered t ax r eturn preparers.to annual reig stration of plans) , 6085 ( relating toinf ormation reuq i red in connection w ith certain plans ( f ) Registered tax return preparers.of de f erred compensation) , 6059 ( relating to perioid c ( )1 A ny indi iv dua l w ho is ed signa ted as areport of actuary) , 256 ( e) ( relating to the f ailureto file annual registration and other notifications reig stered tax return preparer pursuant to 0§1 .4( c)b y pension plan) , 6 6 5 2( f ) ( relating to th e f ailure to of thi s part w ho is not currently uned r suspensionfile information required in connection with certain or di sab rment f rom practice eb f ore the I nternalplans of d ef erred compensation) , 6 6 9 2 ( relating to R eev nue S ervi ce may practice be f ore teh I nternalthe failure to file actuarial report), 7805(b) (relating R eve nue S ervi ce.to th e ex tent to w h ich an I nternal R ev enue S erv iceruling or d etermination letter coming und er th e ( 2) P ractice as a reig stered tax return preparerstatutory prov isions listed h ere w ill b e applied w ith out is limited to preparing and signi ng tax returnsretroactiv e ef f ect) ; and 29 U .S .C. § 1 08 3 ( relating to and claims f or ref un,d and othe r od c uments f orthe waiver of funding for nonqualified plans). subm ission to teh I nternal R eve nue S ervi ce. A regi stered tax return preparer may prepare all or ( 3) A n indi vi ud a l w ho practices eb f ore teh susb tantially all of a tax return or claim f or ref und ofI nternal R eve nue S eriv ce pursuant to paragr aph ( )d ta.x Teh I nternal R eve nue S eriv ce w ill prescrieb yb( )1 of thi s section is sujb ect to teh provi sions of tih s f orms, instructions, or oteh r appropriate ug i da nce tehpart in the same manner as attorneys, certified public tax returns and claims f or ref und tah t a regi stered taxaccountants, enrolled age nts, enrolled retirement return preparer may prepare and s ing .plan age nts, a nd r eig stered t ax r eturn preparers. ( 3) A regi stered tax return preparer may represent ( e) Enrolled retirement plan agents — tapx a yers eb f ore reve nue age nts, customer seriv ce representatives, or similar officers and employees ofTreasury Department Circular No. 230 the I nternal R eve nue S eriv ce ( includi ng the Taxpa yer A vdoc ate S ervi ce) ud r ing an eax mination if the reig stered tax return preparer signe d the tax return S-16 § 10.3 — Page 7

Table of Contentsor claim f or ref und f or teh taxa lb e year or period § 10.4 Eligibility to become an enrolled agent,unde r eax mination. U nless oteh rw ise prescribe d by enrolled retirement plan agent, or registered taxregul ation or notice, tih s rihtg doe s not permit such return preparer.indi iv dua l to represent teh taxpa yer, reag rdl ess ofthe circumstances reuq i ring representation, eb f ore ( a) Enrollment as an enrolled agent uponappeals officers, revenue officers, Counsel or similar examination. The Commissioner, or de lega te, w illofficers or employees of the Internal Revenue gr ant enrollment as an enrolled aeg nt to an applicantS ervi ce or teh Treasury Department. A regi stered tax eitgh een years of age or olde r w oh ed monstratesreturn preparer’s authorization to practice under this special competence in tax matters yb w rittenpart also doe s not include teh author ity to provi de exa mination amd inistered yb , or amd inistered uned rtax aivd ce to a client or anoteh r person ecx ept as the ove rsihgt of , the I nternal R eve nue S eriv ce, w honecessary to prepare a tax return, claim f or ref un,d possesses a current or othe rw ise va lid preparer taxor oteh r doc ument intened d to eb sumb itted to teh identification number or other prescribed identifyingI nternal R eve nue S eriv ce. numeb r, and w ho ha s not enga eg d in any conduc t tah t w ould j ustif y the suspension or d isab rment of ( )4 A n inid iv ud a l w ho practices be f ore the any practitioner unde r the provi sions of tih s part.I nternal R eev nue S ervi ce pursuant to paragr aph ( f )( 1) of thi s section is sujb ect to teh provi sions of tih s ( )b Enrollment as a retirement plan agent uponpart in the same manner as attorneys, certified public examination. Teh Commissioner, or de leag te, w illaccountants, enrolled age nts, enrolled retirement rg ant enrollment as an enrolled retirement planplan age nts, a nd e nrolled a ctuaries. aeg nt to an applicant eihtg een years of aeg or olde r who demonstrates special competence in qualified ( g) Others. A ny inid vi d ual uq a lif ying uned r retirement plan matters by w ritten eax minationpararg aph §10.5( e) or 0§1 .7 is eliig lb e to practice adm inistered yb , or amd inistered unde r the oev rsitgheb f ore the I nternal R eev nue S eriv ce to the ext ent of , the I nternal R eev nue S eriv ce, w ho possesses aprovi d ed i n thos e sections. current or otherwise valid preparer tax identification numbe r or oteh r prescrieb d ide ntif ying numeb r, and ( h) Government officers and employees, and w oh ah s not enga ge d in any conud c t tha t w ould j ustif yothers. An individual, who is an officer or employee teh suspension or id sab rment of any practitionerof teh exe cutiev , legi slatiev , or j udi cial br anch of teh unde r teh provi sions of tih s part.United States Government; an officer or employeeof teh District of Columbi a; a M emeb r of Congr ess; ( c) Designation as a registered tax return preparer.or a R esid ent Commissioner may not practice eb f ore Th e Commissioner, or d eleg ate, may d esig natethe I nternal R eve nue S eriv ce if such practice v iolates an ind iv id ual eig h teen years of ag e or old er as81 U .S .C. § 203 or 20.5 a reg istered tax return preparer provi ed d an applicant d emonstrates competence in F ed eral tax ( i) State officers and employees. No officer or return preparation matters b y w ritten ex aminationemployee of any S tate, or suibd vi sion of any S tate, ad ministered b y, or ad ministered und er th e ov ersig h tw hos e ud t ies reuq ire ih m or eh r to pass upon, of , th e I nternal R ev enue S erv ice, or oth erw ise meetsinev stiga te, or ed al w ith tax matters f or such S tate th e req uisite stand ard s prescrib ed b y th e I nternalor sudib vi sion, may practice be f ore the I nternal R ev enue S erv ice, possesses a current or oth erw ise v alidR eev nue S erv ice, if such employment may id sclose preparer tax identification number or other prescribedf acts or inf ormation applicabl e to F eed ral tax matters. id entif ying numb er, and h as not eng ag ed in any cond uct th at w ould j ustif y th e suspension or d isb arment of any ( j ) Effective/applicability date. P aragr aphs ( a) , ( b) , practitioner und er th e prov isions of th is part.and ( g) of thi s section are applicabl e be ig nning J une21 , 204.1 P ararg apsh ( c) thr ouhg ( f ) , ( h) , and ( i) of ( d) Enrollment of former Internal Revenue Servicethi s section are applicabl e be ig nning A uug s t 2, 201 .1 employees. Teh Commissioner, or de lega te, mayPage 8 — § 10.3 S-17 Treasury Department Circular No. 230

Table of Contentsgr ant enrollment as an enrolled age nt or enrolled employment, or exc ise taex s.retirement plan aeg nt to an applicant w ho, yb iv rtue ( )6 A n applicant f or enrollment as an enrolledof past servi ce and tech nical expe rience in theInternal Revenue Service, has qualified for such retirement plan aeg nt w ho is reuq e sting suchenrollment and w oh ha s not enag ge d in any conduc t enrollment ba sed on f ormer employment w ith tehtha t w ould j ustif y teh suspension or di sba rment of I nternal R eve nue S ervi ce must ha ve ah d a minimumany practitioner unde r teh proiv sions of tih s part, of five years continuous employment with theuned r the f ollow ing c ircumstances: I nternal R eev nue S ervi ce ud r ing w ih ch teh applicant must ha ve eb en regul arly enag ge d in applying and ( 1) Teh f ormer employee applies f or enrollment interpreting teh proiv sions of teh I nternal R eve nueon an I nternal R eev nue S ervi ce f orm and supplies Code and the regulations relating to qualifiedteh inf ormation requ ested on the f orm and such oteh r retirement plan matters.inf ormation reag rid ng the expe rience and training ofteh applicant as may be releva nt. ( )7 F or the purposes of pararg aphs ( d) ( 5) and ( 6) of tih s section, an agr eag te of 01 or more years of (2) The appropriate office of the Internal Revenue employment in positions inov l vi ng the applicationS eriv ce proiv de s a ed tailed report of teh nature and and interpretation of teh provi sions of teh I nternalrating of the applicant’s work while employed by R eve nue Code , at least thr ee of w ih ch occurred w ithi nthe I nternal R eve nue S eriv ce and a recommenda tion the five years preceding the date of application, is thewhether such employment qualifies the applicant equivalent of five years continuous employment.techni cally or othe rw ise f or teh ed sired author iz ation. ( e) Natural persons. E nrollment to practice may be ( 3) E nrollment as an enrolled age nt ba sed on an rg anted onl y to natural persons.applicant’s former employment with the InternalR eev nue S ervi ce may eb of unlimited scope or it ( f ) Effective/applicability date. Tih s section ismay be limited to permit teh presentation of matters applicalb e be gi nning A ugus t 2, 201 1.only of the particular specialty or only be f ore tehparticular unit or id vi sion of teh I nternal R eve nue § 10.5 Application to become an enrolled agent,Service for which the applicant’s former employment enrolled retirement plan agent, or registered taxhas qualified the applicant. Enrollment as an enrolled return preparer.retirement plan agent based on an applicant’s formeremployment w ith teh I nternal R eev nue S eriv ce w ill ( a) Form; address. A n applicant to be come anbe limited to permit the presentation of matters only enrolled age nt, enrolled retirement plan aeg nt,with respect to qualified retirement plan matters. or reig stered tax return preparer must apply as requi red yb f orms or proceud r es establ iseh d and ( )4 A pplication f or enrollment as an enrolled pulb iseh d by the I nternal R eev nue S eriv ce, includi ngaeg nt or enrolled retirement plan age nt ba sed on an proper eex cution of reuq i red f orms unde r oath orapplicant’s former employment with the Internal affirmation. The address on the application will beR eve nue S eriv ce must be maed w ithi n thr ee years the ard ess unde r w ih ch a successf ul applicant isf rom the da te of separation f rom such e mployment. enrolled or reig stered and is teh ard ess to w hi ch all corresponde nce concerning enrollment or regi stration ( 5) A n applicant f or enrollment as an enrolled w ill be sent.age nt w oh is reque sting such enrollment ba sedon f ormer employment w ith the I nternal R eve nue ( b) Fee. A reasonalb e nonref unad bl e f ee may beService must have had a minimum of five years cha reg d f or each application to eb come an enrolledcontinuous employment w ith the I nternal R eev nue age nt, enrolled retirement plan age nt, or reig steredS eriv ce dur ing w hi ch the applicant must ha ve be en tax r eturn preparer. S ee 26 C F R part 300.regul arly enag ge d in applying and interpretingteh provi sions of teh I nternal R eve nue Code and ( c) Additional information; examination. Th e I nternalthe regul ations relating to income, estate, gi f t, R ev enue S erv ice may req uire th e applicant, as a condition to consideration of an application, to fileTreasury Department Circular No. 230 S-18 § 10.5 — Page 9

Table of Contentsadi tional inf ormation and to subm it to any w ritten if true, is not sufficient to warrant granting theor oral eax mination unde r oath or oteh rw ise. U pon application to practice, or the Commissioner,the applicant’s written request, the Internal Revenue or ed lega te, ah s inf ormation inid cating tha t theS eriv ce w ill af f ord the applicant teh opportunity to statements in teh application are untrue or tah t thebe he ard w ith r espect to teh application. applicant w ould not othe rw ise qua lif y to eb come an enrolled aeg nt, enrolled retirement plan age nt, or ( )d Compliance and suitability checks. reig stered tax return preparer. I ssuance of temporary ( )1 A s a condi tion to conside ration of an recogni tion od e s not constitute eiteh r a ed sing a tion or a finding of eligibility as an enrolled agent,application, teh I nternal R eev nue S ervi ce may enrolled retirement plan age nt, or regi stered taxconud c t a F eed ral tax compliance ceh ck and return preparer, and the temporary recogni tion maysuitaib lity che c.k The tax compliance che ck w ill be be w itrdh aw n at any time.limited to an inuq i ry rega rid ng w he the r an applicanthas filed all required individual or business tax ( f ) Protest of application denial. The applicantreturns and w he teh r the applicant ha s f ailed to pay, or w ill be inf ormed in w riting as to teh reason( s) f ormake proper arrange ments w ith teh I nternal R eve nue any de nial of an application. The applicant may,S ervi ce f or payment of , any F eed ral tax de bt s. w ithi n 30 ad ys af ter receipt of teh notice of de nial ofTeh suitabi lity ceh ck w ill be limited to an inqui ry the application, file a written protest of the denial asrega rid ng w he the r an applicant ha s eng aeg d in any prescribe d yb teh I nternal R eev nue S ervi ce in f orms,conduc t tah t w ould j ustif y suspension or id sba rment ug i da nce, or othe r appropriate gui da nce. A protestof any practitioner unde r teh proiv sions of th is part unde r tih s section is not og ev rned by supb a rt D ofon teh ad te teh application is subm itted, includi ng thi s part.w eh the r the applicant ah s enag ge d in di sreputalb econduct as defined in §10.51. The application will ( f ) Effective/applicability date. Th is section iseb de nied only if the results of teh compliance or applicab le to applications receiv ed on or af tersuitability check are sufficient to establish that the A ug ust 2, 201 1 .practitioner enag eg d in conud c t subj ect to sanctionsunde r 01§ .15 a nd 01 .52. § 10.6 Term and renewal of status as an enrolled agent, enrolled retirement plan agent, or ( 2) I f th e applicant d oes not pass th e tax registered tax return preparer.compliance or suitab ility ch eck , th e applicant w illnot b e issued an enrollment or reg istration card or ( a) Term. E ach inid vi d ual author iz ed to practicecertificate pursuant to §10.6(b) of this part. An eb f ore teh I nternal R eev nue S eriv ce as an enrolledapplicant w h o is initially d enied enrollment or age nt, enrolled retirement plan age nt, or reig steredreg istration f or f ailure to pass a tax compliance tax return preparer w ill eb accored d actiev enrollmentch eck may reapply af ter th e initial d enial if th e or reig stration status sujb ect to renew al of enrollmentapplicant b ecomes current w ith respect to th e or reig stration as proiv ed d i n tih s part.applicant’s tax liabilities. ( b) Enrollment or registration card or certificate. ( e) Temporary recognition. O n receipt of a properly Teh I nternal R eev nue S eriv ce w ill issue aneex cuted application, teh Commissioner, or ed lega te, enrollment or registration card or certificate to eachmay rg ant th e applicant temporary recong i tion to inid vi ud a l w oh s e application to practice be f ore thepractice pendi ng a d etermination as to w eh the r status I nternal R eve nue S ervi ce is approve d . E ach cardas an enrolled age nt, enrolled retirement plan age nt, or certificate will be valid for the period stated onor reig stered tax return preparer soh ul d eb rg ante.d the card or certificate. An enrolled agent, enrolledTemporary recong ition w ill be rg anted only in retirement plan age nt, or regi stered tax return preparerunusual circumstances and it w ill not eb gr anted, in may not practice eb f ore teh I nternal R eve nue S ervi ceany circumstance, if teh application is not reug l ar on if the card or certificate is not current or otherwiseits f ace, if the inf ormation stated in the application, S-19 Treasury Department Circular No. 230Page 10 — § 10.5

Table of Contentsvalid. The card or certificate is in addition to any ef f ective A pril 1, 200.4notification that may be provided to each individual ( iii) E nrolled aeg nts w oh ha ev a social securitywho obtains a preparer tax identification number. number or tax identification number that ends with ( c) Change of address. A n enrolled aeg nt, enrolled teh numbe rs ,4 ,5 or ,6 exc ept f or thos e inid iv ud a lsretirement plan age nt, or regi stered tax return preparer w oh receive d the ir initial enrollment af ter Noev meb rmust send notification of any change of address 1, 2004, must apply f or renew al eb tw een Nove meb rto the address specified by the Internal Revenue 1, 2004, and J anuary 31, 2005. The renew al w ill ebS ervi ce w ithi n 06 da ys of teh cha nge of adr ess. ef f ectiev A pril ,1 2005.This notification must include the enrolled agent’s,enrolled retirement plan agent’s, or registered tax ( i)v E nrolled age nts w ho ah ev a social securityreturn preparer’s name, prior address, new address, number or tax identification number that ends withtax identification number(s) (including preparer tax teh numeb rs 7, ,8 or ,9 exc ept f or thos e inid iv dua lsidentification number), and the date the change of w oh receiev d teh ir initial enrollment af ter Noev meb raddress is effective. Unless this notification is sent, ,1 200,5 must apply f or renew al eb tw een Noev meb rthe ard ess f or purposes of any corresponed nce ,1 200,5 and J anuary 31, 2006. The renew al w ill bef rom teh appropriate I nternal R eev nue S ervi ce ef f ectiev A pril ,1 200.6office responsible for administering this part shallbe the address reflected on the practitioner’s most ( v) Teh reaf ter, applications f or renew al as anrecent application f or enrollment or regi stration, or enrolled age nt w ill eb reuq i red be tw een Noev meb rapplication f or renew al of enrollment or reig stration. 1 and J anuary 31 of eve ry subs euq e nt tih rd year asA practitioner’s change of address notification specified in paragraph (d)(2)(i), (d)(2)(ii), or (d)uned r tih s part w ill not constitute a cha nge of the ( 2) ( iii) of tih s section accordi ng to the last numeb rpractitioner’s last known address for purposes of of the individual’s social security number or taxsection 6212 of teh I nternal R eve nue Cod e and identification number. Those individuals whoreug l ations the reunde r. receiv e initial enrollment as an enrolled ag ent af ter Nov emb er 1 and b ef ore A pril 2 of th e applicab le ( d) Renewal. renew al period w ill not b e req uired to renew th eir ( 1 ) In general. E nrolled ag ents, enrolled enrollment before the first full renewal period f ollow ing th e receipt of th eir initial enrollment.retirement plan ag ents, and reg istered tax returnpreparers must renew th eir status w ith th e I nternal ( 3) Renewal period for enrolled retirement planR ev enue S erv ice to maintain elig ib ility to practice agents.b ef ore th e I nternal R ev enue S erv ice. F ailure toreceive notification from the Internal Revenue ( i) A ll enrolled retirement plan age nts mustS erv ice of th e renew al req uirement w ill not b e renew their preparer tax identification number asjustification for the individual’s failure to satisfy this prescribe d yb teh I nternal R eev nue S ervi ce in f orms,req uirement. instructions, or othe r appropriate gui da nce. ( 2) Renewal period for enrolled agents. ( ii) E nrolled retirement plan ag ents w ill eb ( i) A ll enrolled aeg nts must renew teh ir preparer reuq i red to renew teh ir status as enrolled retirement plan aeg nts eb tw een A pril 1 and J une 30 of eev rytax identification number as prescribed by forms, tih rd ye ar susb euq e nt to the ir initial enrollment.instructions, or oteh r appropriate ug i ad nce. ( )4 Renewal period for registered tax return ( ii) E nrolled age nts w oh ha ve a social security preparers. R egi stered tax return preparers mustnumber or tax identification number that ends with renew their preparer tax identification number andthe numeb rs 0, 1, 2, or 3, exc ept f or thos e indi iv dua ls teh ir status as a regi stered tax return preparer asw oh receiev d the ir initial enrollment af ter Nove mbe r prescribe d yb the I nternal R eve nue S ervi ce in f orms,1, 2003, must apply f or renew al eb tw een Nov emeb r instructions, or oteh r appropriate ug i ad nce.1, 2003, and J anuary 3,1 2004. The renew al w ill eb ( )5 Notification of renewal. A f ter reiv ew andTreasury Department Circular No. 230 approav l, teh I nternal R eev nue S ervi ce w ill notif y S-20 § 10.6 — Page 11

Table of Contentsteh inid iv ud a l of th e renew al and w ill issue teh ( A ) In general. S ujb ect to pararg aph ( e) ( 2) ( iii)individual a card or certificate evidencing current ( B ) of tih s section, an inid iv ud a l w oh receive s initialstatus as an enrolled age nt, enrolled retirement plan enrollment dur ing an enrollment cycle must completeage nt, or regi stered t ax r eturn preparer. tw o hour s of qua lif ying continuing educ ation credi t f or each month enrolled dur ing the enrollment cycle. ( )6 Fee. A reasonabl e nonref unda bl e f ee may b e E nrollment f or any part of a month is consied redcharged for each application for renewal filed. See 26 enrollment f or teh entire month.CF R part 300. ( B ) Ethics. A n ind iiv d ual w oh receiev s ( 7) Forms. F orms reuq i red f or renew al may eb initial enrollment dur ing an enrollment cycle mustotb ained b y sendi ng a w ritten reque st to the ard ess complete tw o oh ur s of etih cs or prof essional conud c tspecified by the Internal Revenue Service or from f or each enrollment year dur ing the enrollment cycle.such othe r source as teh I nternal R eve nue S eriv ce E nrollment f or any part of an enrollment year isw ill pulb ish in the I nternal R eev nue B ulletin ( see conside red e nrollment f or the entire year.26 CF R 601.60(1 )d ( 2) ( ii) ( )b ) and on teh I nternalR eev nue S eriv ce w epb a eg ( w w w .irs.gov) . ( 3) Requirements for renewal as a registered tax return preparer. A minimum of 15 oh ur s of ( e) Condition for renewal: continuing eud c ation. continuing eud c ation creid t, includi ng tw o hour s ofI n ored r to uq a lif y f or renew al as an enrolled aeg nt, etih cs or prof essional conud c t, thr ee oh ur s of F ede ralenrolled retirement plan aeg nt, or reig stered tax tax law upda tes, and 10 hour s of F ed eral tax lawreturn preparer, an indi iv d ual must certif y, in teh topics, must be completed dur ing each reig strationmanner prescrieb d yb teh I nternal R eve nue S ervi ce, year.that the individual has satisfied the requisite numberof continuing e ud c ation hour s. ( f ) Qualifying continuing education — ( )1 General — ( )1 Definitions. F or purposes of thi s section — ( i) Enrolled agents. To qua lif y f or continuing ( i) Enrollment year means J anuary 1 to educ ation creid t f or an enrolled age nt, a course ofDecembe r 31 of each ye ar of an enrollment cycle. learning m ust — ( ii) Enrollment cycle means the thr ee successive ( A ) B e a qu alif ying continuing eud c ationenrollment years preceid ng teh ef f ectiev da te of progr am de signe d to enah nce prof essionalrenew al. nk ow ledeg in F eed ral taax tion or F ede ral tax related matters ( prorg ams comprised of current subj ect ( iii) Registration year means each 21 - month matter in F eed ral taax tion or F eed ral tax relatedperiod teh regi stered tax return preparer is author iz ed matters, includi ng accountin,g tax return preparationto practice eb f ore th e I nternal R eve nue S ervi ce. sof tw are, t axa tion, or ethi cs) ; and ( i)v The effective date of renewal is the first day ( B ) B e a uq a lif ying continuing educ ationof the f ourth month f ollow ing teh close of the period progr am consistent w ith teh I nternal R eve nue Codef or renew al de scrieb d in pararg aph ( d) of tih s section. and e f f ectiev tax a md inistration. ( 2) For renewed enrollment as an enrolled agent ( ii) Enrolled retirement plan agents. To uq a lif yor enrolled retirement plan agent — f or continuing eud c ation credi t f or an enrolled retirement plan age nt, a course of learning m ust — ( i) Requirements for enrollment cycle. Aminimum of 27 hour s of continuing eud c ation creid t, ( A ) B e a qua lif ying continuing eud c ationincluid ng six oh ur s of etih cs or prof essional conud c t, progr am de signe d to enha nce prof essional know leegdmust eb completed ud r ing e ach e nrollment cycle. in qualified retirement plan matters; and ( ii) Requirements for enrollment year. A ( B ) B e a uq a lif ying continuing educ ationminimum of 16 oh ur s of continuing educ ation creid t, prorg am consistent w ith the I nternal R eve nue Coedincluid ng tw o hour s of etih cs or prof essional conduc t, and e f f ective tax a dm inistration.must eb completed dur ing each enrollment year of anenrollment cycle. ( iii) Registered tax return preparers. To S-21 Treasury Department Circular No. 230 ( iii) Enrollment during enrollment cycle —Page 12 — § 10.6

Table of Contentsuq a lif y f or continuing eud c ation creid t f or a regi stered examination), including the issuance of a certificatetax r eturn preparer, a course of learning m ust — of completion by t eh continuing e duc ation provi de r; ( A ) B e a qua lif ying continuing eud c ation ( C) P rovi de a w ritten outline, tetx book, orprorg am ed sing e d to enah nce prof essional suitabl e electronic educ ational materials; andknow legde in F ede ral taxa tion or F eed ral tax relatedmatters ( progr ams comprised of current sujb ect ( D) S atisf y teh requi rements estalb iseh d f or amatter in F ede ral taax tion or F eed ral tax related qualified continuing education program pursuant tomatters, incluid ng accounting, tax return preparation 0§1 .9.sof tw are, t aax tion, or ethi cs) ; and ( iii) Serving as an instructor, discussion leader ( B ) B e a q ualif ying continuing eud c ation or speaker.prorg am consistent w ith teh I nternal R eev nue Codeand e f f ectiev tax a dm inistration. ( A ) O ne hour of continuing edu cation credi t w ill eb aw arde d f or each contact oh u r completed ( 2) Qualifying programs — as an instructor, id scussion leaed r, or speake r at ( i) Formal programs. A f ormal progr am an educ ational prog ram tah t meets the continuing eud c ation reuq i rements of pararg aph ( f ) of thi squalifies as a continuing education program if it — section. ( A ) R equi res attend ance and provi de s each ( B ) A maxi mum of tw o hour s of continuingattendee with a certificate of attendance; eud c ation creid t w ill eb aw arde d f or actual subj ect (B) Is conducted by a qualified instructor, preparation time f or each contact hour completed as an instructor, id scussion leade r, or speake r at suchid scussion leade r, or speaek r ( in oteh r w orsd , a prorg ams. I t is teh responsiib lity of th e inid vi dua lperson w oh s e ba ck rg ound, trainin,g educ ation, and claiming such creid t to maintain recorsd to ev rif yepx e rience is appropriate f or instructing or leadi ng preparation time.a di scussion on teh subj ect matter of the particularprorg am) ; ( C) The maxi mum continuing eud c ation credi t f or instruction and preparation may not ecx eed f our ( C) P rovi de s or reuq i res a w ritten outline, hour s annually f or reig stered tax return preparers andtext book, or suitalb e electronic educ ational materials; six oh ur s annually f or enrolled age nts and enrolledand retirement plan aeg nts. (D) Satisfies the requirements established for ( D) A n instructor, di scussion leade r, ora qualified continuing education program pursuant to speaek r w ho make s more tah n one presentation10§ .9. on teh same sujb ect matter ud r ing an enrollment cycle or reig stration year w ill receiev continuing ( ii) Correspondence or individual study educ ation credi t f or only one such presentation f orprograms (including taped programs). Q ualif ying teh enrollment cycle or regi stration year.continuing educ ation progr ams includecorresponed nce or indi vi ud a l stuyd progr ams tha t ( 3) Periodic examination. E nrolled A ge nts andare conduc ted yb continuing educ ation proiv ed rs E nrolled R etirement P lan A ge nts may estalb ishand completed on an indi vi dua l ba sis yb teh enrolled eliig ib lity f or renew al of enrollment f or anyinid iv dua l. The allow abl e creid t hour s f or such enrollment cycle yb —prorg ams w ill be measured on a ba sis comparabl e toteh measurement of a seminar or course f or credi t in ( i) A chi evi ng a passing score on each part ofan accreid ted educ ational institution. S uch prorg ams the S pecial E nrollment E xa mination adm inistereduq a lif y as continuing eud c ation prorg ams only if uned r thi s part ud r ing the thr ee year period prior tothe y — renew al; and ( A ) R euq i re reig stration of the participants yb ( ii) Completing a minimum of 61 oh ur s ofteh continuing e ud c ation provi de r; uq a lif ying continuing educ ation dur ing teh last year of an enrollment cycle. ( B ) P rovi ed a means f or measuring successf ulcompletion by the participants ( f or exa mple, a w ritten S-22 § 10.6 — Page 13Treasury Department Circular No. 230

Table of Contents ( )g Measurement of continuing education ( ii) Teh location of teh progr am;coursework. ( iii) Teh title of teh progr am and copy of its content; ( )1 A ll continuing eud c ation progr ams w ill be ( i)v Teh ad tes of the prorg am; andmeasured in terms of contact oh ur s. The shor test ( )v The creid t oh ur s claime.drecong i z ed pr org am w ill be one contact oh ur . ( i) Waivers. ( 1) W aiv er f rom the continuing educ ation ( 2) A contact h our is 5 0 minutes of continuous requi rements f or a gi ev n period may b e gr anted f orparticipation in a prog ram. Cred it is g ranted only f or teh f ollow ing r easons —a f ull contact h our, w h ich is 5 0 minutes or multiples ( i) H ealt,h w ih ch preev nted compliance w ithth ereof . F or ex ample, a prog ram lasting more th an teh continuing e duc ation requi rements;5 0 minutes b ut less th an 1 00 minutes w ill count as ( ii) E tx ened d a ctiev military ud t y;only one contact h our. ( iii) A sb ence f rom teh U nited S tates f or an ext ende d period of time due to employment or oteh r ( 3) I nid iv ud a l semg ents at continuous reasons, provi ed d th e indi iv ud a l doe s not practiceconf erences, conve ntions and teh like w ill eb eb f ore the I nternal R eve nue S ervi ce ud r ing suchconsied red one total prorg am. F or ex ample, tw o asb ence; and90- minute semg ents ( 108 minutes) at a continuous ( iv) O the r compelling reasons, w ih ch w ill beconf erence w ill count as thr ee contact hour s. conside red on a case- by- case ba sis. ( 2) A reque st f or w aiev r must eb accompanied ( 4) F or uniev rsity or college courses, each by appropriate od c umentation. Teh indi iv dua l issemester oh ur credi t w ill euq a l 15 contact oh ur s and requi red to f urnish any adi tional od cumentationa qua rter hour creid t w ill equa l 01 c ontact oh ur s. or expl anation de emed necessary. E ax mples of appropriate od c umentation could eb a medi cal ( h) Recordkeeping requirements. certificate or military orders. ( )1 E ach inid vi dua l applying f or renew al must (3) A request for waiver must be filed no later tha n teh last ad y of the renew al application period.retain f or a period of f our years f ollow ing the ad te ( 4) I f a reuq e st f or w aive r is not approev ,d tehof renew al the inf ormation reuq i red w ith reg ard to inid vi ud a l w ill eb placed in inactiev status. Thequa lif ying continuing eud c ation creid t hour s. S uch individual will be notified that the waiver was notinf ormation inclued s — approve d and tah t teh indi vi dua l ha s eb en placed on a roster of inactive enrolled age nts, enrolled retirement ( i) The name of the sponsoring or ga niz ation; plan aeg nts, or reig stered t ax r eturn preparers. ( ii) Teh location of teh prog ram; ( 5) I f the reuq e st f or w aive r is not approve ,d teh (iii) The title of the program, qualified program individual may file a protest as prescribed by thenumbe r, a nd de scription of its content; I nternal R eve nue S eriv ce in f orms, instructions, or ( iv) W ritten outlines, course syllibi , tex tboo,k other appropriate guidance. A protest filed under thisand/ or electronic materials provi ed d or requi red f or section is not og ev rned yb s upb a rt D of thi s part.the course; ( 6) I f a reuq e st f or w aive r is approve d, the ( v) Teh ad tes attened ;d individual will be notified and issued a card or ( vi ) Teh creid t hour s claimed; certificate evidencing renewal. ( iv i) The name( s) of teh instructor( s) , id scussion ( )7 Toh s e w ho are rg anted w aive rs are requi redleade r( s) , or speaek r( s) , i f appropriate; and to file timely applications for renewal of enrollment (viii) The certificate of completion and/or or reig stration.signe d statement of teh hour s of attenda nce otb ained ( j ) Failure to comply.f rom the continuing e ud c ation provi ed r. S-23 Treasury Department Circular No. 230 ( 2) To receiev continuing educ ation cred it f orseriv ce completed as an instructor, di scussion leaed r,or speaek r, the f ollow ing inf ormation must bemaintained f or a period of f our years f ollow ing theda te of renew al — ( i) Teh name of teh sponsoring or ag niz ation;Page 14 — § 10.6

Table of Contents ( )1 Compliance yb an indi iv ud a l w ith teh are eliig lb e to practice eb f ore teh I nternal R eve nuereuq i rements of tih s part is de termined by the I nternal S ervi ce, or use teh terms enrolled ag ent, enrolledR eev nue S ervi ce. Teh I nternal R eev nue S eriv ce retirement plan ag ent, or regi stered tax returnw ill proiv ed notice to any inid vi dua l w oh f ails to preparer, the ed signa tions “ E A ” or “ E R P A ” or othe rmeet the continuing educ ation and f ee requi rements f orm of ref erence to eligi ib lity to practice eb f ore theof eliig ib lity f or renew al. The notice w ill state the I nternal R eev nue S ervi ce.ab sis f or teh de termination of noncompliance andw ill proiv ed teh indi vi dua l an opportunity to f urnish ( 5 ) A n ind iv id ual placed in inactiv e statusthe reque sted inf ormation in w riting relating to may be reinstated to an active status by filing anthe matter w ithi n 6 0 da ys of teh ad te of teh notice. application f or renew al and proiv id ng eiv ed nce ofS uch inf ormation w ill be consied red in maki ng a teh completion of all reuq i red continuing eud c ationfinal determination as to eligibility for renewal. The oh ur s f or teh enrollment cycle or reig stration year.inid iv dua l must be inf ormed of teh reason( s) f or any Continuing eud c ation credi t unde r thi s pararg aph ( j )ed nial of a renew al. Teh indi iv ud a l may, w ithi n 30 ( 5) may not eb used to satisf y teh req uirements ofad ys af ter receipt of the notice of de nial of renew al, teh enrollment cycle or regi stration year in w ih ch thefile a written protest of the denial as prescribed by inid iv dua l ah s eb en placed ba ck on t he actiev roster.the I nternal R eev nue S eriv ce in f orms, instructions,or oth er appropriate ug i da nce. A protest unde r tih s ( )6 A n inid vi dua l placed in inactive statussection is not goev rned by s upb a rt D of tih s part. must file an application for renewal and satisfy the reuq i rements f or renew al as set f orth in thi s section ( 2) The continuing educ ation record s of an w ithi n thr ee years of eb ing placed in inactiveenrolled age nt, enrolled retirement plan age nt, or status. O the rw ise, the name of such ind iiv dua l w illregi stered tax return preparer may be revi ew ed to be remove d f rom teh inactive status roster and thede termine compliance w ith the reuq i rements and individual’s status as an enrolled agent, enrolledstanad rsd f or renew al as provi ed d in pararg aph ( f ) retirement plan ag ent, or regi stered tax returnof th is section. A s part of th is rev iew , th e enrolled preparer w ill terminate. F uture eligi ib lity f or actievag ent, enrolled retirement plan aeg nt or regi stered tax status must teh n eb reestabl ishe d yb teh inid iv dua l asreturn preparer may eb reuq i red to provi de the I nternal proiv ed d i n thi s section.R eve nue S ervi ce w ith copies of any continuingeduc ation recorsd reuq i red to be maintained unde r ( )7 I nactiv e status is not aav ilabl e to an inid iv dua lthi s part. I f the enrolled age nt, enrolled retirement w oh is teh sujb ect of a pendi ng di sciplinary matterplan aeg nt or reig stered tax return preparer f ails be f ore the I nternal R eve nue S ervi ce.to comply w ith th is reuq i rement, any continuingeud c ation hour s claimed m ay eb id sallow e.d ( )k Inactive retirement status. A n indi iv ud a l w ho no longe r practices eb f ore teh I nternal R eve nue S eriv ce (3) An individual who has not filed a timely may reuq e st to be placed in an inactiev retirementapplication f or renew al, w oh ha s not maed a timely status at any time and such inid iv ud a l w ill be placedresponse to teh notice of noncompliance w ith the in an inactiev retirement status. The inid iv dua l w illrenewal requirements, or who has not satisfied be ineligi bl e to practice be f ore the I nternal R eve nueteh reuq i rements of eligi b ility f or renew al w ill eb S eriv ce. A n inid vi dua l w oh is placed in an inactievplaced on a roster of inactiev enrolled indi v idua ls retirement status may be reinstated to an activeor inactiev regi stered inid iv dua ls. During thi s time, status by filing an application for renewal andthe indi vi ud a l w ill be ineligi lb e to practice be f ore teh provi di ng evi de nce of teh completion of teh requi redI nternal R eve nue S eriv ce. continuing eud c ation oh ur s f or teh enrollment cycle or regi stration year. I nactive retirement status is not ( 4) I nid vi ud a ls placed in inactive status and aav ilalb e to an indi vi ud a l w oh is ineligi lb e to practiceinid vi ud a ls ineligi lb e to practice eb f ore teh I nternal be f ore teh I nternal R eve nue S ervi ce or an inid iv dua lR eve nue S ervi ce may not state or imply tha t the y w ho is teh sujb ect of a penid ng id sciplinary matter uned r tih s part.Treasury Department Circular No. 230 S-24 § 10.6 — Page 15

Table of Contents ( l) Renewal while under suspension or disbarment. parent, subsidiary, or other affiliated corporation),A n indi iv ud a l w ho is ineligi lb e to practice eb f ore the association, or orag niz ed gr oup may represent tehI nternal R eev nue S ervi ce by iv rtue of di sciplinary corporation, a ssociation, or orga niz ed g roup.action und er thi s part is requi red to conf orm to tehrequi rements f or renew al of enrollment or reig stration ( v) A reug l ar f ull- time employee of a trust,before the individual’s eligibility is restored. receiev rshi p, gua rdi anshi p, or estate may represent the trust, r eceive rshi p, gua rdi ansih p, or estate. ( m) Enrolled actuaries. Teh enrollment and renew alof enrollment of actuaries autoh r iz ed to practice (vi) An officer or a regular employee ofunde r pararg aph ( d) of 0§1 .3 are gove rned by the a og ev rnmental unit, aeg ncy, or author ity mayreug l ations of teh J oint B oard f or teh E nrollment of represent teh og ve rnmental unit, age ncy, or autoh r ityA ctuaries at 20 CF R 901.1 t rh ouhg 09 .1 72. in the course of his or her official duties. ( n) Effective/applicability date. Tih s section is ( iv i) A n inid iv ud a l may represent any indi iv ud a lapplicabl e to enrollment or regi stration ef f ective or entity, w oh is outside teh U nited S tates, be f oreeb ig nning A uug s t 2, 201 .1 personnel of the I nternal R eev nue S ervi ce w eh n such representation taek s place outsied the U nited S tates.§ 10.7 Representing oneself; participatingin rulemaking; limited practice; and special ( 2) Limitations.appearances. ( i) A n inid iv d ual w ho is uned r suspension or ( a) Representing oneself. I ndi iv ud a ls may appear on di sba rment f rom practice eb f ore teh I nternal R eev nuethe ir ow n be h alf eb f ore teh I nternal R eev nue S ervi ce S eriv ce may not enag ge in limited practice eb f ore tehprovided they present satisfactory identification. I nternal R eev nue S ervi ce unde r pararg aph ( c) ( )1 of thi s section. ( b) Participating in rulemaking. I ndi vi ud a lsmay participate in rulemaki ng as proiv ed d by teh ( ii) Teh Commissioner, or ed lega te, may,A md inistratiev P roceud r e A ct. S ee 5 U .S .C. § 53. af ter notice and opportunity f or a conf erence, de ny eligi bi lity to enga eg in limited practice be f ore the ( c) Limited practice — I nternal R eev nue S eriv ce uned r pararg aph ( c) ( )1 of ( 1) In general. S ujb ect to teh limitations in thi s section to any indi iv dua l w oh ha s enga ge d in conduc t tah t w ould j ustif y a sanction unde r §10.50.pararg aph ( c) ( 2) of tih s section, an inid iv dua l w hois not a practitioner may represent a taxpa yer eb f ore ( iii) A n inid vi dua l w oh represents a taxpa yerthe I nternal R eev nue S ervi ce in the circumstances unde r teh author ity of pararg aph ( c) ( )1 of thi s sectionde scrieb d in tih s pararg aph ( c) ( 1) , eve n if teh is sujb ect, to teh ext ent of hi s or eh r auth ority, to suchtaxpa yer is not present, provi de d teh inid iv dua l rules of eg neral applicab ility reag rdi ng stanad rsdpresents satisfactory identification and proof of of conduc t and othe r matters as prescrieb d yb theih s or eh r author ity to represent the tapx a yer. The I nternal R eev nue S ervi ce.circumstances de scrieb d in thi s paragr aph ( c) ( )1 areas f ollow s: ( d ) Special appearances. Th e Commissioner, or d eleg ate, may, sub j ect to cond itions d eemed ( i) A n inid iv d ual may represent a membe r of hi s appropriate, auth oriz e an ind iv id ual w h o is notor eh r immeid ate f amily. oth erw ise elig ib le to practice b ef ore th e I nternal R ev enue S erv ice to represent anoth er person in a ( ii) A regul ar f ull- time employee of an inid iv ud a l particular matter.employer may represent the employer. ( e) Fiduciaries. F or purposes of tih s part, a ( iii) A ge neral partner or a regul ar f ull- time fiduciary (for example, a trustee, receiver, guardian,employee of a partnershi p may represent teh personal representatiev , adm inistrator, or exe cutor) ispartnersih p. conside red to eb teh taxpa yer and not a representative of the taxpa yer. (iv) A bona fide officer or a regular full-time employee of a corporation ( includi ng a ( f ) Effective/applicability date. Thi s section is applicalb e be ig nning A ugus t 2, 201 .1Page 16 — § 10.6 S-25 Treasury Department Circular No. 230

Table of Contents§ 10.8 Return preparation and application of § 10.9 Continuing education providers andrules to other individuals. continuing education programs. ( a) Preparing all or substantially all of a tax return. ( a) Continuing education providers —A ny ind iv id ual w h o f or compensation prepares or ( )1 In general. Continuing educ ation proiv ed rsassists w ith th e preparation of all or sub stantiallyall of a tax return or claim f or ref und must h av e are thos e responsibl e f or presenting continuinga preparer tax identification number. Except as educ ation progr ams. A continuing eud c ation proiv ed roth erw ise prescrib ed in f orms, instructions, or oth er must —appropriate g uid ance, an ind iv id ual must b e anattorney, certified public accountant, enrolled agent, ( i) B e an accredi ted e ud c ational institution;or reg istered tax return preparer to ob tain a preparer ( ii) B e recogni z ed f or continuing educ ationtax identification number. Any individual who for purposes by the licensing ob dy of any S tate, territory,compensation prepares or assists w ith th e preparation or possession of the U nited S tates, includi ng aof all or sub stantially all of a tax return or claim f or Commonw ealth, or the District of Columib a;ref und is sub j ect to th e d uties and restrictions relating ( iii) B e recong i z ed and approve d yb a qua lif yingto practice in sub part B , as w ell as sub j ect to th e orag niz ation as a provi ed r of continuing eud c ationsanctions f or v iolation of th e reg ulations in sub part C. on sujb ect matters w itih n 10§ .(6 f ) of thi s part. The I nternal R eev nue S eriv ce may, at its di scretion, ( b ) Preparing a tax return and furnishing ied ntif y a prof essional orag niz ation, society orinformation. A ny ind iv id ual may f or compensation bus iness entity tha t maintains minimum educ ationprepare or assist w ith th e preparation of a tax return stanad rds comparabl e to toh s e set f orth in thi s part asor claim f or ref und ( prov id ed th e ind iv id ual prepares a qua lif ying orag niz ation f or purposes of thi s part inless th an sub stantially all of th e tax return or claim f or appropriate f orms, instructions, and othe r appropriateref und ) , appear as a w itness f or th e tax payer b ef ore ug i ad nce; orth e I nternal R ev enue S erv ice, or f urnish inf ormation ( iv) B e recogni z ed by teh I nternal R eev nueat th e req uest of th e I nternal R ev enue S erv ice or any S eriv ce as a prof essional orag niz ation, society, orof its officers or employees. ub s iness w oh s e prorg ams inclued of f ering continuing prof essional educ ation opportunities in sujb ect ( c) Application of rules to other individuals. A ny matters w ithi n §10.6( f ) of thi s part. The I nternalind iv id ual w h o f or compensation prepares, or assists R eev nue S ervi ce, at its di scretion, may reuq i re suchin th e preparation of , all or a sub stantial portion of a prof essional orga niz ations, societies, or ub s inessesdocument pertaining to any taxpayer’s tax liability for to file an agreement and/or obtain Internal Revenuesub mission to th e I nternal R ev enue S erv ice is sub j ect Service approval of each program as a qualifiedto th e d uties and restrictions relating to practice in continuing educ ation prorg am in appropriate f orms,sub part B , as w ell as sub j ect to th e sanctions f or instructions or othe r appropriate gui ad nce.v iolation of th e reg ulations in sub part C. U nless ( 2) Continuing education provider numbers —oth erw ise a practitioner, h ow ev er, an ind iv id ual ( i) In general. A continuing educ ation proiv de rmay not f or compensation prepare, or assist in th e is reuq i red to otb ain a continuing eud c ation proiv ed rpreparation of , all or sub stantially all of a tax return numeb r and pa y any applicalb e user f ee.or claim f or ref und , or sig n tax returns and claims f or ( ii) Renewal. A continuing ed ucation prov id erref und . F or purposes of th is parag raph , an ind iv id ual maintains its status as a continuing ed ucation prov id erd escrib ed in 26 CF R 301 .7 7 01 - 1 5 ( f ) is not treated d uring th e continuing ed ucation prov id er cycle b yas h av ing prepared all or a sub stantial portion of th e renew ing its continuing ed ucation prov id er numb er asd ocument b y reason of such assistance. prescrib ed b y f orms, instructions or oth er appropriate g uid ance and paying any applicab le user f ee. ( d ) Effective/applicability date. Th is section isapplicab le b eg inning A ug ust 2, 201 1 . S-26 § 10.9 — Page 17Treasury Department Circular No. 230

Table of Contents ( 3) Requirements for qualified continuing ( ii) Update programs. U pda te prorg ams mayeducation programs. A continuing eud cation use teh same numbe r as the progr am sujb ect toprovider must ensure the qualified continuing upad te. A n upda te prorg am is a progr am tah t instructseud c ation prorg am complies w ith all the f ollow ing on a cha nge of eix sting law occurring w itih n onereuq i rements — year of teh upad te progr am of f erin.g Th e qua lif ying eud c ation prorg am sujb ect to upad te must ah ev eb en ( i) P rogr ams must eb ed ev loped by indi iv d ual( s) of f ered w itih n the tw o year time period prior to thequalified in the subject matter; cha neg in eix sting l aw . ( ii) P rogr am subj ect matter must eb current; ( iii) Change in existing law. A cah neg in ( iii) I nstructors, id scussion leaed rs, and speake rs exi sting law means the ef f ective da te of teh statute ormust be qualified with respect to program content; reug l ation, or ad te of entry of j udi cial de cision, tah t ( iv) P rorg ams must inclued some means f or is teh subj ect of teh upad te.eva luation of teh tecnh i cal content and presentationto eb eav luate;d ( b ) Failure to comply. Compliance b y a continuing (v) Certificates of completion bearing a current ed ucation prov id er w ith th e req uirements of th is partqualified continuing education program number is d etermined b y th e I nternal R ev enue S erv ice. Aissued by the I nternal R eve nue S eriv ce must be continuing ed ucation prov id er w h o f ails to meet th eprovi ed d to the participants w ho successf ully requirements of this part will be notified by the Internalcomplete the prorg am; and R ev enue S erv ice. Th e notice w ill state th e b asis f or ( v i) R ecord s must b e maintained b y th e th e d etermination of noncompliance and w ill prov id econtinuing ed ucation prov id er to v erif y th e th e continuing ed ucation prov id er an opportunity toparticipants w h o attend ed and completed th e f urnish th e req uested inf ormation in w riting relating toprog ram f or a period of f our years f ollow ing th e matter w ith in 6 0 d ays of th e d ate of th e notice. Th ecompletion of th e prog ram. I n th e case of continuous continuing ed ucation prov id er may, w ith in 30 d ays af terconf erences, conv entions, and th e lik e, record s must receipt of the notice of denial, file a written protest asb e maintained to v erif y completion of th e prog ram prescrib ed b y th e I nternal R ev enue S erv ice in f orms,and attend ance b y each participant at each seg ment instructions, or oth er appropriate g uid ance. A protestof th e prog ram. und er th is section is not g ov erned b y sub part D of th is ( )4 Program numbers — part. ( i) In general. E ve ry continuing eud cationprovi de r is requi red to otb ain a continuing eud c ation ( c) Effective/applicability date. Tih s section isprovi de r progr am numeb r and pay any applicalb e applicabl e eb gi nning A ugus t 2, 201 .1user f ee f or each progr am of f ered . P rorg amnumbe rs sah ll be otb ained as prescrieb d by f orms,instructions or othe r appropriate gui da nce. A lthoug,hat teh id scretion of teh I nternal R eve nue S ervi ce, acontinuing eud c ation proiv ed r may be requi red toed monstrate tha t teh progr am is ed sing e d to enha nceprof essional know legde in F ede ral taax tion orF eed ral tax related matters ( prorg ams comprisedof current subj ect matter in F eed ral taax tion orF ede ral tax related matters, incluid ng accounting, taxreturn preparation sof tw are, taxa tion, or etih cs) andcomplies w ith teh requi rements in pararg aph ( a) ( 2) ofthi s section eb f ore a progr am numeb r is issued.Page 18 — § 10.9 S-27 Treasury Department Circular No. 230

Table of ContentsSubpart B — Duties and Restrictions Relating to f aith and on reasonabl e rg ounds tha t the record orPractice Before the Internal Revenue Service inf ormation is privi leeg d.§ 10.20 Information to be furnished. ( c) Effective/applicability date. Tih s section is applicabl e be gi nning A ugus t 2, 201 .1 ( a) To the Internal Revenue Service. § 10.21 Knowledge of client’s omission. ( 1) A practitioner must, on a proper and law f ul A practitioner w h o, h av ing b een retained b y arequest by a duly authorized officer or employee client w ith respect to a matter ad ministered b y th eof the I nternal R eve nue S eriv ce, promptly subm it I nternal R ev enue S erv ice, k now s th at th e client h asrecords or inf ormation in any matter be f ore teh not complied w ith th e rev enue law s of th e U nitedI nternal R eve nue S eriv ce unless the practitioner S tates or h as mad e an error in or omission f rom anybe lieve s in good f aith and on reasonabl e gr ounds tha t return, document, affidavit, or other paper whichthe records or inf ormation are priiv leeg d. th e client sub mitted or ex ecuted und er th e rev enue law s of th e U nited S tates, must ad v ise th e client ( 2) W h ere th e req uested record s or inf ormation promptly of th e f act of such noncompliance, error,are not in th e possession of , or sub j ect to th e control or omission. Th e practitioner must ad v ise th e clientof, the practitioner or the practitioner’s client, the of th e conseq uences as prov id ed und er th e Cod epractitioner must promptly notif y th e req uesting and reg ulations of such noncompliance, error, orInternal Revenue Service officer or employee and the omission.practitioner must prov id e any inf ormation th at th epractitioner h as reg ard ing th e id entity of any person § 10.22 Diligence as to accuracy.w h o th e practitioner b eliev es may h av e possession orcontrol of th e req uested record s or inf ormation. Th e ( a) In general. A practitioner must exe rcise duepractitioner must mak e reasonab le inq uiry of h is or h er di lieg nce —client reg ard ing th e id entity of any person w h o mayh av e possession or control of th e req uested record s ( )1 I n preparing or assisting in the preparationor inf ormation, b ut th e practitioner is not req uired to of, approving, and filing tax returns, documents,mak e inq uiry of any oth er person or ind epend ently affidavits, and other papers relating to Internalverify any information provided by the practitioner’s R eev nue S ervi ce matters;client reg ard ing th e id entity of such persons. ( 2) I n ed termining teh correctness of oral or ( 3) W he n a proper and law f ul reque st is maed w ritten representations made yb teh practitioner toby a duly authorized officer or employee of the the Department of teh Treasury; andI nternal R eev nue S eriv ce, concerning an inqui ryinto an alleeg d vi olation of the regul ations in tih s ( 3) I n ed termining the correctness of oral orpart, a practitioner must provi de any inf ormation teh w ritten representations maed by teh practitioner topractitioner ah s concerning the alleeg d vi olation and clients w ith ref erence to any matter amd inistered bytestif y rega rid ng th is inf ormation in any proceedi ng teh I nternal R eve nue S ervi ce.instituted uned r th is part, unless the practitionereb lieev s in og od f aith and on reasonalb e rg ounsd tha t ( b ) Reliance on others. Except as modified byteh inf ormation is priiv leeg .d § § 1 0.34 and 1 0.37 , a practitioner w ill b e presumed to h av e ex ercised d ue d ilig ence f or purposes of ( )b Interference with a proper and lawful request th is section if th e practitioner relies on th e w orkfor records or information. A practitioner may not prod uct of anoth er person and th e practitioner usedinterf ere, or attempt to interf ere, w ith any proper reasonab le care in eng ag ing , superv ising , training ,and law f ul ef f ort b y teh I nternal R eev nue S ervi ce, and ev aluating th e person, tak ing proper account ofits officers or employees, to obtain any record or th e nature of th e relationsh ip b etw een th e practitionerinf ormation unless teh practitioner be lieve s in good and th e person. S-28 § 10.22 — Page 19Treasury Department Circular No. 230

Table of Contents ( c) Effective/applicability date. P aragr aph ( a) of ( 4) Particular matter involving specific parties isthi s section is applicalb e on S eptembe r 2,6 200.7 defined at 5 CFR 2637.201(c), or superseding post-P aragr aph ( b) of tih s section is applicalb e be ig nning employment regulations issued by the U.S. Office ofJ une 1 2, 20.41 G ove rnment E thi cs.§ 10.23 Prompt disposition of pending matters. ( 5) Rule inclued s Treasury reug l ations, w eh teh r issued or unde r preparation f or issuance as noticesA practitioner may not unreasonabl y ed lay the of proposed rulemaki ng or as Treasury de cisions,prompt id sposition of any matter be f ore teh I nternal reve nue rulinsg , and reve nue proceud r es publ ishe dR eev nue S ervi ce. in the I nternal R eve nue B ulletin ( see 26 CFR 601.601(d)(2)(ii)(b)) .§ 10.24 Assistance from or to disbarred orsuspended persons and former Internal Revenue ( )b General rules —Service employees. ( )1 No f ormer G oev rnment employee may,A practitioner may not, know ingl y and di rectly or susb euq e nt to G oev rnment employment, representindi rectly: anyone in any matter adm inistered yb teh I nternal R eev nue S eriv ce if teh representation w ould vi olate ( a) A ccept assistance f rom or assist any person 18 U.S.C. 207 or any oteh r law s of the U nited S tates.w oh is uned r di sba rment or suspension f rom practicebe f ore the I nternal R eev nue S ervi ce if teh assistance ( 2) No f ormer G ove rnment employee w ohrelates to a matter or matters constituting practice personally and subs tantially participated in abe f ore teh I nternal R eev nue S ervi ce. particular matter involving specific parties may, susb euq e nt to G ove rnment employment, represent ( )b A ccept assistance f rom any f ormer goev rnment or know inlg y assist, in tah t particular matter, anyemployee w he re the proiv sions of § 1 0.25 or any person who is or was a specific party to that particularF ede ral law w ould eb vi olated. matter.§ 10.25 Practice by former government employees, ( 3) A f ormer G ov ernment employee w h o w ith intheir partners and their associates. a period of one year prior to th e termination of Government employment had official responsibility ( a) Definitions. F or purposes of tih s section — for a particular matter involving specific parties may ( 1) Assist means to act in such a w ay as to aivd se, not, w ith in tw o years af ter G ov ernment employment is end ed , represent in th at particular matter any personf urnish inf ormation to, or oteh rw ise aid anoteh r who is or was a specific party to that particular matter.person, di rectly, or inid rectly. ( )4 No f ormer G ove rnment employee may, w itih n ( 2) Government employee is an officer or one year af ter G ove rnment employment is ened ,demployee of the U nited S tates or any age ncy of communicate w ith or appear eb f ore, w ith teh intent tothe U nited S tates, incluid ng a special G oev rnment influence, any employee of the Treasury Departmentemployee as defined in 18 U.S.C. 202(a), or of the in connection w ith the pulb ication, w itdhr aw al,District of Columbi a, or of any S tate, or a memeb r of amendment, modification, or interpretation of a ruleConrg ess or of any S tate leig slature. teh ed ev lopment of w hi ch teh f ormer G ove rnment employee participated in, or f or w ih c,h w ithi n a period ( 3) Member of a firm is a sole practitioner or of one year prior to the termination of G ove rnmentan employee or associate th ereof , or a partner, employment, the f ormer og ve rnment employee ha dstockholder, associate, affiliate or employee of a official responsibility. This paragraph (b)(4) doespartnersh ip, j oint v enture, corporation, prof essional not, oh w eev r, preclued any f ormer employee f romassociation or other affiliation of two or more appearing on one’s own behalf or from representingpractitioners w h o represent nong ov ernmental a tapx a yer be f ore teh I nternal R eve nue S eriv ce inparties. connection with a particular matter involving specificPage 20 — § 10.22 S-29 Treasury Department Circular No. 230

Table of Contentsparties inov l iv ng th e application or interpretation of matter ad ministered b y th e I nternal R ev enue S erv icea rule w ith respect to tha t particular matter, provi de d and f or w h ich h e or sh e is employed as counsel,tha t th e representation is othe rw ise consistent w ith attorney, or ag ent, or in w h ich h e or sh e may b e in anyteh othe r proiv sions of tih s section and teh f ormer w ay intereste.demployee does not utilize or disclose any confidentialinf ormation acuq i red yb teh f ormer employee in teh § 10.27 Fees.ed ev lopment of teh rule. ( a) In general. A practitioner may not cha reg an ( c) Firm representation — unconscionalb e f ee in connection w ith any matter (1) No member of a firm of which a former be f ore teh I nternal R eve nue S eriv ce.G ove rnment employee is a membe r may represent ( b) Contingent fees —or knowingly assist a person who was or is a specific ( 1) E cx ept as provi de d in paragr aph s ( b) ( 2) , ( 3) ,party in any particular matter w ith respect to w ih chthe restrictions of paragr aph ( )b ( 2) of thi s section and ( 4) of thi s section, a practitioner may not cah regapply to the f ormer G ove rnment employee, in tah t a continge nt f ee f or seriv ces rened red in connectionparticular matter, unless the firm isolates the former w ith any matter be f ore the I nternal R eve nue S eriv ce.G ove rnment employee in such a w ay to ensure tha tthe f ormer G oev rnment employee cannot assist in ( 2) A practitioner may ch arg e a conting entteh representation. f ee f or serv ices rend ered in connection w ith th e Service’s examination of, or challenge to — ( 2) W he n isolation of a f ormer G ove rnmentemployee is requi red uned r pararg aph ( c) ( 1) of ( i) A n oriig nal tax r eturn; orthis section, a statement affirming the fact of such ( ii) A n amend ed return or claim f or ref und orisolation must be ex ecuted uned r oath yb the f ormer credi t w he re the amened d return or claim f or ref undG ove rnment employee and yb anothe r membe r of teh or credit was filed within 120 days of the taxpayerfirm acting on behalf of the firm. The statement must receivi ng a w ritten notice of teh eax mination of , or aclearly identify the firm, the former Government w ritten cah llenge to the origi nal tax r eturn.employee, and the particular matter( s) reuq i ring ( 3) A practitioner may cah rge a contineg nt f eeisolation. The statement must be retained by the firm f or seriv ces rende red in connection w ith a claimand, upon request, provided to the office(s) of the for credit or refund filed solely in connection withI nternal R eev nue S eriv ce adm inistering or enf orcing teh ed termination of statutory interest or penaltiesthi s part. assessed yb t eh I nternal R eve nue S ervi ce. ( 4) A practitioner may cha reg a contineg nt f ee ( )d Pending representation. The provi sions of f or servi ces rened red in connection w ith any j udi cialtih s regul ation w ill og ve rn practice yb f ormer proceeid ng arising unde r the I nternal R eve nue Coed .G oev rnment employees, the ir partners and ( c) Definitions. F or purposes of thi s section —associates w ith respect to representation in particular ( )1 Contingent fee is any f ee tah t is ba se,d inmatters involving specific parties where actual w oh l e or in part, on w eh the r or not a position taek nrepresentation commenced be f ore the ef f ectiev da te on a tax return or other filing avoids challenge byof thi s regul ation. the I nternal R eev nue S ervi ce or is sustained eiteh r by the I nternal R eve nue S eriv ce or in litiag tion. ( e) Effective/applicability date. Tih s section is A continge nt f ee inclued s a f ee tah t is ab sed on aapplicabl e eb ig nning A uug s t 2, 201 1. percentage of teh ref und reported on a return, tha t is ba sed on a percentaeg of teh taex s saev d, or tha t§ 10.26 Notaries. otherwise depends on the specific result attained. A contineg nt f ee also inclued s any f ee arrange mentA practitioner may not tak e ack now led g ments, in w ih ch the practitioner w ill reimub r se the clientad minister oath s, certif y papers, or perf orm any for all or a portion of the client’s fee in the eventofficial act as a notary public with respect to any S-30 § 10.27 — Page 21Treasury Department Circular No. 230

Table of Contentsthat a position taken on a tax return or other filing materials prov id ed to th e practitioner, or ob tainedis cha llenge d yb teh I nternal R eev nue S ervi ce or by the practitioner in the course of the practitioner’sis not sustaine,d w eh the r pursuant to an inde mnity representation of th e client, th at preex isted th earg eement, a gua rantee, rescission rigth s, or any retention of th e practitioner b y th e client. Th e term alsoothe r arrange ment w ith a similar ef f ect. includ es materials th at w ere prepared b y th e client or a th ird party ( not includ ing an employee or ag ent of th e ( 2) Matter before the Internal Revenue Service practitioner) at any time and prov id ed to th e practitionerincludes tax planning and advice, preparing or filing w ith respect to th e sub j ect matter of th e representation.or assisting in preparing or filing returns or claims Th e term also includ es any return, claim f or ref und ,f or ref und or cred it, and all matters connected w ith schedule, affidavit, appraisal or any other documenta presentation to th e I nternal R ev enue S erv ice prepared b y th e practitioner, or h is or h er employee oror any of its officers or employees relating to a ag ent, th at w as presented to th e client w ith respect totaxpayer’s rights, privileges, or liabilities under a prior representation if such d ocument is necessarylaw s or reg ulations ad ministered b y th e I nternal f or th e tax payer to comply w ith h is or h er currentR ev enue S erv ice. S uch presentations includ e, b ut F ed eral tax ob lig ations. Th e term d oes not includ e anyare not limited to, preparing and filing documents, return, claim for refund, schedule, affidavit, appraisalcorrespond ing and communicating w ith th e I nternal or any oth er d ocument prepared b y th e practitionerR ev enue S erv ice, rend ering w ritten ad v ice w ith or the practitioner’s firm, employees or agents if therespect to any entity, transaction, plan or arrang ement, practitioner is w ith h old ing such d ocument pend ing th eand representing a client at conf erences, h earing s, client’s performance of its contractual obligation to payand meeting s. f ees w ith respect to such d ocument. ( d) Effective/applicability date. Thi s section is § 10.29 Conflicting inte ests.applicabl e f or f ee arraneg ments entered into af terM arch 2,6 2008.§ 10.28 Return of client’s records. ( a) E xc ept as provi ed d by paragr aph ( )b of thi s section, a practitioner sha ll not represent a ( a) I n g eneral, a practitioner must, at th e req uest of client be f ore teh I nternal R eve nue S ervi ce if teha client, promptly return any and all record s of th e representation involves a conflict of interest. Aclient th at are necessary f or th e client to comply w ith conflict of interest exists if —h is or h er F ed eral tax ob lig ations. Th e practitionermay retain copies of th e record s returned to a client. ( )1 Teh representation of one client w ill beTh e ex istence of a d ispute ov er f ees g enerally d oes di rectly aevd rse to anoteh r client; ornot reliev e th e practitioner of h is or h er responsib ilityund er th is section. Nev erth eless, if applicab le state law (2)There is a significant risk that the representationallows or permits the retention of a client’s records by of one or more clients w ill eb materially limited bya practitioner in th e case of a d ispute ov er f ees f or the practitioner’s responsibilities to another client,serv ices rend ered , th e practitioner need only return a f ormer client or a tih rd person, or b y a personalthose records that must be attached to the taxpayer’s interest of teh practitioner.return. Th e practitioner, h ow ev er, must prov id e th eclient w ith reasonab le access to rev iew and copy (b) Notwithstanding the existence of a conflictany ad d itional record s of th e client retained b y th e of interest uned r pararg aph ( a) of thi s section, tehpractitioner und er state law th at are necessary f or th e practitioner may represent a client if —client to comply w ith h is or h er F ed eral tax ob lig ations. ( 1) The practitioner reasonalb y eb lieve s tha t teh ( b ) F or purposes of th is section — R ecord s of th e practitioner w ill eb alb e to provi ed competent andclient includ e all d ocuments or w ritten or electronic di lieg nt representation to each a f f ected c lient;Page 22 — § 10.27 ( 2) Th e representation is not proh ib ited b y law ; and (3) Each affected client waives the conflict of S-31 Treasury Department Circular No. 230

Table of Contentsinterest and gives informed consent, confirmed of employment in matters related to teh I nternalin w riting by each af f ected client, at teh time the R eve nue S eriv ce if teh solicitation vi olates F ede ralexistence of the conflict of interest is known by the or S tate law or oteh r applicabl e rule, e..g , attorneyspractitioner. The confirmation may be made within a are preclude d f rom maik ng a solicitation tha t isreasonalb e period of time af ter teh inf ormed consent, proih bi ted by conduc t rules applicalb e to all attorneysbut in no eve nt later tha n 30 da ys. in teh ir S tate( s) of licensure. A ny law f ul solicitation maed yb or on be ah lf of a practitioner eligi bl e to ( c) Copies of teh w ritten consents must b e retained practice eb f ore teh I nternal R eve nue S ervi ce must,yb teh practitioner f or at least 36 months f rom the neev rthe less, clearly ied ntif y teh solicitation asad te of th e conclusion of the representation of the such and, if applicalb e, ied ntif y teh source of theaf f ected clients, and teh w ritten consents must eb inf ormation used i n choos ing t eh recipient.provided to any officer or employee of the InternalR eev nue S ervi ce on reque st. ( )b Fee information. ( 1) ( i) A practitioner may pulb ish th e ava ilaib lity ( )d Effective/applicability date. Tih s section isapplicabl e on S eptemeb r 2,6 2007. of a w ritten sceh ud l e of f ees and id sseminate the f ollow ing f ee inf ormation —§ 10.30 Solicitation. (A) Fixed fees for specific routine services. ( a) Advertising and solicitation restrictions. ( B ) H ourly rates. ( )1 A practitioner may not, w ith respect to ( C) R aneg of f ees f or particular servi ces. ( D) F ee cah rge d f or an initial consultation.any I nternal R eve nue S eriv ce matter, in any w ay ( ii) A ny statement of f ee inf ormation concerninguse or participate in the use of any f orm of pulb ic matters in w ih ch costs may be incurred must includecommunication or priav te solicitation containing a a statement di sclosing w he the r clients w ill ebf alse, f rauud l ent, or coercive statement or claim; or a responsilb e f or such c osts.misleaid ng or ed ceptiev statement or claim. E nrolled ( 2) A practitioner may cha reg no more tah n theaeg nts, enrolled retirement plan age nts, or reg istered rate( s) publ ishe d uned r paragr aph ( b) ( 1) of thi stax return preparers, in ed scriib ng teh ir prof essional section f or at least 30 calenad r da ys af ter teh last da tedesignation, may not utilize the term “certified” or on w hi ch t he sceh dul e of f ees w as publ iseh d.imply an employer/ employee relationsih p w ith the ( c) Communication of fee information. F eeI nternal R eev nue S eriv ce. E ax mples of acceptalb e inf ormation may eb communicated in prof essionaled scriptions f or enrolled age nts are “ enrolled to lists, telephon e di rectories, print med ia, mailinsg ,represent tapx a yers be f ore the I nternal R eev nue and electronic mail, f acsimile, ah nd ed live redS ervi ce”, “ enrolled to practice eb f ore the I nternal flyers, radio, television, and any other method.R eve nue S ervi ce”, and “ amd itted to practice be f ore Teh method coh s en, how eev r, must not cause tehth e I nternal R ev enue S erv ice.” S imilarly, ex amples communication to eb come untruthf ul, de ceptive ,of acceptab le d escriptions f or enrolled retirement or oteh rw ise in vi olation of thi s part. A practitionerplan ag ents are “ enrolled to represent tax payers may not persist in attempting to contact a prospectievb ef ore teh I nternal R eev nue S ervi ce as a retirement client if teh prospectiev client ah s maed it nk ow nplan age nt” and “ enrolled to practice be f ore the to teh practitioner tah t eh or seh od e s not ed sireI nternal R eve nue S eriv ce as a retirement plan to be solicited. I n teh case of raid o and teleiv sionage nt.” A n eax mple of an acceptalb e de scription f or br oacd asting, teh br oacd ast must eb recored dregi stered tax return preparers is “ de signa ted as a and the practitioner must retain a recordi ng of thereig stered tax return preparer by teh I nternal R eev nue actual transmission. I n the case of di rect mail andS ervi ce.” e- commerce communications, teh practitioner must retain a copy of the actual communication, along ( 2) A practitioner may not make , di rectly or w ith a list or oteh r ed scription of persons to w hom theindi rectly, an uninvi ted w ritten or oral solicitation S-32 § 10.30 — Page 23Treasury Department Circular No. 230

Table of Contentscommunication w as mailed or othe rw ise di striub t e.d reag rid ng teh terms of the enga ge ment. F or eax mple,Teh copy must be retained yb teh practitioner f or a the advisor should determine the client’s expectedperiod of at least 36 montsh f rom the ad te of the last purpose f or and use of teh aivd ce and shoul d ha vetransmission or use. a clear uned rstanid ng w ith teh client rega rid ng the f orm and scope of the advi ce or assistance to be ( )d Improper associations. A practitioner may not, rende re.din matters related to teh I nternal R eev nue S ervi ce,assist, or accept assistance f rom, any person or entity ( 2) E stabl ish ing the f acts, ed termining w ih chw oh , to the nk ow legde of teh practitioner, otb ains f acts are releva nt, eav luating the reasonalb enessclients or othe rw ise practices in a manner f orbi de n of any assumptions or representations, relating theuned r tih s section. applicabl e law ( includi ng potentially applicabl e j udi cial doc trines) to the releav nt f acts, and arrivi ng ( e) Effective/applicability date. Thi s section is at a conclusion supported yb t eh law and t eh f acts.applicabl e eb ig nning A ugus t 2, 201 .1 ( 3) A d v ising th e client reg ard ing th e import of(Approved by the Office of Management and Budget th e conclusions reach ed , includ ing , f or ex ample,uned r Control No. 1 5-4 217 6) w h eth er a tax payer may av oid accuracy- related penalties und er th e I nternal R ev enue Cod e if a§ 10.31 Negotiation of taxpayer checks. tax payer acts in reliance on th e ad v ice. ( a) A practitioner may not enod r se or oth erw ise ( 4) A cting f airly and w ith integr ity in practiceneog t iate any che ck ( incluid ng di recting or accepting be f ore the I nternal R eve nue S eriv ce.payment yb any means, electronic or othe rw ise, intoan account ow ned or controlled yb the practitioner or ( b ) Procedures to ensure best practices for taxany firm or other entity with whom the practitioner advisors. Tax ad v isors w ith responsib ility f oris associate)d issued to a client yb teh gove rnment in overseeing a firm’s practice of providing advicerespect of a F ede ral tax l iaib lity. concerning F ed eral tax issues or of preparing or assisting in th e preparation of sub missions to th e ( b) Effective/applicability date. Tih s section is I nternal R ev enue S erv ice sh ould tak e reasonab le stepsapplicabl e eb gi nning J une 21 , 20.14 to ensure that the firm’s procedures for all members, associates, and employees are consistent w ith th e b est§ 10.32 Practice of law. practices set f orth in parag raph ( a) of th is section.Nothi ng in the regul ations in tih s part may be ( c) Applicability date. Thi s section is ef f ective af terconstrued as author iz ing persons not membe rs of the J une 20, 2005.ba r to practice law . § 10.34 Standards with respect to tax returns and documents, affidavits and othe papers.§ 10.33 Best practices for tax advisors. ( a) Tax returns. ( 1) A practitioner may not w illf ully, reckl essly, or ( a) Best practices. Tax aivd sors soh ul d proiv edclients w ith teh hi ehg st uq a lity representation trh ouhg rg oss incompetence —concerning F ede ral tax issues yb ahde ring to eb st ( i) S ing a tax return or claim f or ref und tah tpractices in provi d ing avdi ce and in preparing orassisting in teh preparation of a sumb ission to teh the practitioner know s or reasonalb y soh ul d knowI nternal R eev nue S ervi ce. I n aid tion to compliance contains a position tah t —w ith teh standa rds of practice provi ed d elsew eh re inthi s part, be st practices include the f ollow in:g ( A ) L acks a reasonalb e ba sis; ( B ) I s an unreasonabl e position as ed scribe d ( 1) Communicating clearly w ith th e client in section 964( a) ( 2) of teh I nternal R eev nue Coed ( Coed ) ( includi ng the related reug l ations and othe rPage 24 — § 10.30 publ iseh d ug i da nce) ; or S-33 Treasury Department Circular No. 230

Table of Contents ( C) I s a w illf ul attempt yb the practitioner ( A ) The practitioner aidv sed teh client w ithto und erstate teh liaib lity f or tax or a reckl ess or respect to teh position; orintentional id srega rd of rules or regul ations by thepractitioner as ed scribe d in section 4(69 b) ( 2) of the ( B ) The practitioner prepared or signe d the taxCoed ( incluid ng the related regul ations and othe r return; andpulb ishe d gui ad nce) . (ii) Any document, affidavit or other paper ( ii) A vdi se a client to take a position on a tax subm itted t o teh I nternal R eev nue S ervi ce.return or claim f or ref un,d or prepare a portion of atax return or claim f or ref und containing a position, ( 2) The practitioner also must inf orm the clienttha t — of any opportunity to avoi d any such penalties by di sclosure, if releav nt, and of teh reuq i rements f or ( A ) L acks a reasonabl e ba sis; aed uq a te di sclosure. ( B ) I s an unreasonab le position as d escrib edin section 6 6 9 4 ( a) ( 2) of th e Cod e ( includ ing th e ( 3) Thi s paragr aph ( c) applies eve n if tehrelated reg ulations and oth er pub lish ed g uid ance) ; or practitioner is not sujb ect to a penalty unde r the ( C) I s a w illf ul attempt by teh practitioner I nternal R eev nue Coed w ith respect to teh positionto und erstate teh liaib lity f or tax or a reclk ess or or with respect to the document, affidavit or otherintentional di srega rd of rules or reug l ations by the paper sumb itte.dpractitioner as ed scrieb d in section 694( )b ( 2) of tehCode ( includi ng teh related reug l ations and othe r ( d ) Relying on information furnished bypubl ishe d gui ad nce) . clients. A practitioner ad v ising a client to tak e ( 2) A pattern of conud c t is a f actor tha t w ill a position on a tax return, document, affidavit orbe tak en into account in de termining w eh the r a oth er paper sub mitted to the I nternal R eev nuepractitioner acted w illf ully, reckl essly, or thr ough S ervi ce, or preparing or signi ng a tax return as arg oss incompetence. preparer, eg nerally may rely in og od f aith w itoh ut ( )b Documents, affidavits and other papers — verification upon information furnished by the ( )1 A practitioner may not avid se a client to taek client. Th e practitioner may not, h ow ev er, ig nore th ea position on a document, affidavit or other paper implications of inf ormation f urnishe d to, or actuallysumb itted to the I nternal R eve nue S eriv ce unless the nk ow n by , teh practitioner, and must make reasonabl eposition is not f riov l ous. inqui ries if teh inf ormation as f urniseh d appears to ( 2) A practitioner may not aivd se a client to eb incorrect, inconsistent w ith an important f act orsubmit a document, affidavit or other paper to the anothe r f actual assumption, or incomplete.I nternal R eve nue S ervi ce — ( i) The purpose of w hi ch is to ed lay or impede ( e) Effective/applicability date. P aragr aph ( a) ofteh amd inistration of the F ede ral tax l aw s; tih s section is applicalb e f or returns or claims f or ( ii) Tha t is f riov l ous; or refund filed, or advice provided, beginning August 2, ( iii) Th at contains or omits inf ormation in a 201 .1 P ararg apsh ( )b trh ouhg ( d) of tih s section aremanner th at d emonstrates an intentional d isreg ard applicable to tax returns, documents, affidavits, andof a rule or reg ulation unless th e practitioner also other papers filed on or after September 26, 2007.ad v ises th e client to sub mit a d ocument th at ev id encesa g ood f aith ch alleng e to th e rule or reg ulation. § 10.35 Competence. ( c) Advising clients on potential penalties — ( 1) A practitioner must inf orm a client of any ( a) A practitioner must possess teh necessarypenalties tha t are reasonalb y liek ly to apply to teh competence to enag eg in practice be f ore teh I nternalclient w ith r espect to — R eev nue S eriv ce. Competent practice reuq i res teh ( i) A position taek n on a tax r eturn if — appropriate leev l of know leedg , ski ll, thor ounhg e ss, and preparation necessary f or teh matter f or w hi ch theTreasury Department Circular No. 230 practitioner is enga ge d. A practitioner may eb come competent f or the matter f or w ih ch the practitioner ha s be en enag ge d thr ouhg va rious methods , such S-34 § 10.35 — Page 25

Table of Contentsas consulting w ith epx e rts in teh relev ant area or pattern or practice, in connection w ith the ir practicestudyi ng t eh releva nt law . with the firm, of failing to comply with this part, as applicabl e; or ( )b Effective/applicability date. Tih s section isapplicabl e eb gi nning J une 21 , 20.14 ( 3) Teh inid vi ud a l nk ow s or soh ul d nk ow tha t one or more indi vi ud a ls w oh are memeb rs of , associated§ 10.36 Procedures to ensure compliance. with, or employed by, the firm are, or have, engaged in a pattern or practice, in connection w ith the ir ( a) A ny inid iv dua l subj ect to teh provi sions of thi s practice with the firm, that does not comply withpart w oh ha s ( or indi iv du als w ho ah ev or sha re) thi s part, as applicalb e, and teh inid iv ud a l, thr ouhgprincipal author ity and responsiib lity f or ove rseeing w illf ulness, reclk essness, or gr oss incompetence f ailsa firm’s practice governed by this part, including the to take prompt action to correct the noncompliance.provi sion of advi ce concerning F eed ral tax mattersand preparation of tax returns, claims f or ref und, ( c) Effective/applicability date. Tih s section isor othe r od c uments f or sumb ission to teh I nternal applicabl e eb ig nning J une 12, 2014.R eve nue S ervi ce, must take reasonab le steps toensure that the firm has adequate procedures in § 10.37 Requirements for written advice.ef f ect f or all memeb rs, associates, and employeesf or purposes of complying w ith supb a rts A , B , and ( a) Requirements.C of tih s part, as applicabl e. I n teh asb ence of a ( 1) A practitioner may ig ve w ritten avdi ceperson or persons identified by the firm as havingthe principal autoh r ity and responsiib lity de scrieb d ( includi ng yb means of electronic communication)in th is pararg ap,h the I nternal R eve nue S eriv ce concerning one or more F eed ral tax matters sujb ect tomay ied ntif y one or more inid iv dua ls sujb ect to the teh requi rements in pararg aph ( a) ( 2) of thi s section.proiv sions of thi s part responsilb e f or compliance G oev rnment sumb issions on matters of eg neralw ith t h e reuq i rements of tih s section. policy are not consied red w ritten aidv ce on a F ede ral tax matter f or purposes of tih s section. Continuing ( )b A ny such indi iv ud a l w oh ha s ( or such eud c ation presentations provi de d to an auid enceindi iv dua ls w ho ha ve or sha re) principal author ity solely for the purpose of enhancing practitioners’as ed scribe d in pararg aph ( a) of thi s section w ill be prof essional nk ow leedg on F eed ral tax matterssubj ect to di scipline f or f ailing to comply w ith the are not conside red w ritten aivd ce on a F eed ral taxreuq i rements of thi s section if — matter f or purposes of thi s section. The preceid ng sentence doe s not apply to presentations marke ting ( 1) The indi vi d ual thr ough w illf ulness, or promoting t ransactions.reckl essness, or gr oss incompetence doe s not taekreasonable steps to ensure that the firm has adequate ( 2) Teh practitioner must—proced ures to comply w ith thi s part, as applicalb e, ( i) B ase teh w ritten adiv ce on reasonabl e f actualand one or more inid vi ud a ls w oh are memb ers of ,associated with, or employed by, the firm are, or and leag l assumptions ( includi ng assumptions as toah ev , enag eg d in a pattern or practice, in connection f uture eve nts) ;with their practice with the firm, of failing to complyw ith t h is part, a s applicalb e; ( ii) R easonabl y consied r all releav nt f acts and circumstances tah t the practitioner know s or ( 2) Teh inid vi d ual trh ouhg w illf ulness, reasonalb y shoul d know ;reckl essness, or gr oss incompetence doe s not takereasonable steps to ensure that firm procedures ( iii) U se reasonalb e ef f orts to ied ntif y andin ef f ect are properly f ollow e,d and one or more ascertain teh f acts releva nt to w ritten advi ce on eachindi iv dua ls w oh are membe rs of , associated w it,h F ede ral tax m atter;or employed by, the firm are, or have, engaged in a ( iv) Not rely upon representations, statements,Page 26 — § 10.35 findings, or agreements (including projections, financial forecasts, or appraisals) of the taxpayer or any othe r person if reliance on teh m w ould eb unreasonabl e; S-35 Treasury Department Circular No. 230

Table of Contents ( v) R elate applicabl e law and autoh r ities to f acts and circumstances, w ith empha sis gi ve n to tehf acts; and additional risk caused by the practitioner’s lack of knowledge of the taxpayer’s particular circumstances, ( iv ) Not, in eav luating a F ede ral tax matter, taek w eh n de termining w eh teh r a practitioner ah s f ailedinto account teh possiib lity tha t a tax return w ill not to comply w ith t ih s section.be audi ted or tah t a matter w ill not be raised on audi t. ( )d Federal tax matter. A F eed ral tax matter, as ( 3) R eliance on representations, statements, used in thi s section, is any matter concerning thefindings, or agreements is unreasonable if the application or interpretation of - - -practitioner nk ow s or reasonalb y soh ul d nk o w tah tone or more representations or assumptions on w hi ch (1) A revenue provision as defined in sectionany representation is ba sed are incorrect, incomplete, 16 10( i) ( 1) ( B ) of teh I nternal R eve nue Coed ;or inconsistent. (2) Any provision of law impacting a person’s ( b) Reliance on advice of others. A practitioner olb iga tions unde r the internal reve nue law s andmay only rely on the adiv ce of anothe r person if teh regulations, including but not limited to the person’saidv ce w as reasonalb e and teh reliance is in og od liability to pay tax or obligation to file returns; orf aith consied ring all the f acts and circumstances.R eliance is not reasonabl e w eh n— ( 3) A ny oteh r law or regul ation adm inistered yb the I nternal R eve nue S ervi ce. ( )1 The practitioner know s or reasonalb y shoul dnk ow tha t teh opinion of teh othe r person soh ul d not ( e) Effective/applicability date. Th is section iseb relied on; applicab le to w ritten ad v ice rend ered af ter J une 1 2, 201 4 . ( 2) Teh practitioner nk ow s or reasonabl y soh ul dnk ow tha t the oteh r person is not competent or lacks § 10.38 Establishment of advisory committees.the necessary qualifications to provide the advice; or ( a) Advisory committees. To promote and maintain ( 3) The practitioner know s or reasonalb y shoul d the public’s confidence in tax advisors, the Internalknow that the other person has a conflict of interest in R eve nue S eriv ce is autoh r iz ed to estalb ish one orvi olation of teh rules de scribe d i n tih s part. more avid sory committees composed of at least six indi vi dua ls author iz ed to practice be f ore teh ( c) Standard of review. I nternal R eve nue S ervi ce. M emeb rsih p of an ( )1 I n eav luating w he the r a practitioner gi vi ng adiv sory committee must be ab lanced among toh s e w oh practice as attorneys, accountants, enrolledw ritten advi ce concerning one or more F eed ral aeg nts, enrolled actuaries, enrolled retirement plantax matters complied w ith teh reuq i rements of tih s aeg nts, and regi stered tax return preparers. U nde rsection, the Commissioner, or ed leag te, w ill apply a proceud r es prescribe d by the I nternal R eve nuereasonalb e practitioner stanad rd, conside ring all f acts S eriv ce, an aivd sory committee may revi ew and maekand circumstances, incluid n,g ub t not limited to, teh ge neral recommenad tions rega rid ng teh practices,scope of the engagement and the type and specificity procedures, and policies of the offices described inof teh adiv ce southg yb t he client. §10..1 ( 2) I n teh case of an opinion teh practitioner ( b) Effective date. Thi s section is applicalb enk ow s or h as reason to nk ow w ill be used or ref erred be ig nning A ugus t 2, 201 1.to by a person oteh r tah n the practitioner ( or a personw oh is a membe r of , associated w ith, or employed yb S-36 § 10.38 — Page 27the practitioner’s firm) in promoting, marketing, orrecommenid ng to one or more taxpa yers a partnersih por othe r entity, inev stment plan or arraneg menta significant purpose of which is the avoidance oreva sion of any tax imposed by teh I nternal R eev nueCoed , teh Commissioner, or ed lega te, w ill apply areasonalb e practitioner stanad rd, consied ring allTreasury Department Circular No. 230

Table of ContentsSubpart C — Sanctions for Violation of the paragr aph ( a) of thi s section.Regulations ( ii) I f the practitioner de scrieb d in pararg aph§ 10.50 Sanctions. ( c) ( )1 ( i) of tih s section w as acting on be ah lf of an employer or any firm or other entity in connection ( a) Authority to censure, suspend, or disbar. Teh w ith the conud c t gi vi ng rise to the penalty, tehS ecretary of teh Treasury, or de leag te, af ter notice S ecretary of the Treasury, or de leag te, may imposeand an opportunity f or a proceedi n,g may censure, a monetary penalty on the employer, firm, or entitysuspen,d or id sab r any practitioner f rom practice if it nk e w , or reasonabl y soh ul d ha ev nk ow n of sucheb f ore teh I nternal R eve nue S ervi ce if teh practitioner conud c t.is show n to be incompetent or id sreputabl e ( w itih nthe meaning of 0§1 .)51 , f ails to comply w ith any ( 2) Amount of penalty. Teh amount of teh penaltyregul ation in thi s part ( unde r the prohi b ited conud c t sah ll not exc eed the gr oss income ed riev d ( or to ebstanda rsd of §10.25 ) , or w ith intent to ed f raud, de riev d) f rom the conduc t gi iv ng r ise to the penalty.w illf ully and nk ow inlg y misleads or thr eatens a clientor prospectiev client. Censure is a publ ic reprimand. ( 3) Coordination with other sanctions. S ubj ect to pararg aph ( c) ( 2) of thi s section — ( )b Authority to disqualify. The S ecretary of theTreasury, or de leag te, af ter due notice and opportunity ( i) A ny monetary penalty imposed on af or eh aring, may id suq a lif y any appraiser f or a practitioner unde r thi s paragr aph ( c) may eb iniv olation of the se rules as applicalb e to appraisers. aid tion to or in lieu of any suspension, d isba rment or censure and may eb in adi tion to a penalty imposed (1) If any appraiser is disqualified pursuant on an employer, firm or other entity under paragraphto th is sub part C, th e appraiser is b arred f rom ( c) ( 1) ( ii) of tih s section.presenting ev id ence or testimony in anyad ministrativ e proceed ing b ef ore th e Department ( ii) A ny monetary penalty imposed on anof Treasury or th e I nternal R ev enue S erv ice, employer, firm or other entity may be in addition tounless and until auth oriz ed to d o so b y th e I nternal or in lieu of penalties imposed unde r paragr aph ( c)R ev enue S erv ice pursuant to § 1 0.8 1 , reg ard less of ( 1) ( i) of tih s section.w h eth er th e ev id ence or testimony w ould pertainto an appraisal mad e prior to or af ter th e ef f ectiv e ( d) Authority to accept a practitioner’s consent todate of disqualification. sanction. Teh I nternal R eev nue S ervi ce may accept a practitioner’s offer of consent to be sanctioned (2) Any appraisal made by a disqualified unde r §01 .05 in lieu of instituting or continuing aappraiser after the effective date of disqualification proceeid ng uned r 0§1 .60( a) .w ill not h av e any prob ativ e ef f ect in anyad ministrativ e proceed ing b ef ore th e Department ( e) Sanctions to be imposed. Teh sanctions imposedof th e Treasury or th e I nternal R ev enue S erv ice. by thi s section sah ll take into account all releva ntA n appraisal oth erw ise ab rred f rom adm ission into f acts and c ircumstances.eiv ed nce pursuant to thi s section may be adm itted intoeiv ed nce solely f or the purpose of de termining the ( f ) Effective/applicability date. Thi s section istaxpayer’s reliance in good faith on such appraisal. applicalb e to conduc t occurring on or af ter A uug s t 2, 201 1, exc ept tha t paragr aphs ( a) , ( b) ( 2) , and ( e) apply ( c) Authority to impose monetary penalty — to conud c t occurring on or af ter S eptemeb r 26, 200,7 ( 1) In general. and paragr aph ( c) applies to proih bi ted conud c t tah t ( i) Teh S ecretary of the Treasury, or de leag te, occurs af ter O ctoeb r 22, 2004.af ter notice and an opportunity f or a proceeid ng, § 10.51 Incompetence and disreputable conduct.may impose a monetary penalty on any practitionerw oh enag eg s in conud c t subj ect to sanction unde r ( a) Incompetence and disreputable conduct. I ncompetence and di sreputalb e conud ct f or w ih chPage 28 — § 10.50 a practitioner may be sanctioned uned r §10.50 inclued s, but is not limited t o — S-37 Treasury Department Circular No. 230

Table of Contents ( )1 Coniv ction of any criminal of f ense uned r the official action of any officer or employee of theF eed ral tax l aw s. I nternal R eev nue S eriv ce yb the use of thr eats, f alse accusations, dur ess or coercion, yb teh of f er of any ( 2) Coniv ction of any criminal of f ense invol vi ng special inud c ement or promise of an adv antaeg or ybdi shone sty or br each of trust. the eb stow ing of any ig f t, f avor or thi ng of av lue. ( 3) Convi ction of any f elony uned r F eed ral or ( 01 ) Disab rment or suspension f rom practiceS tate law f or w ih ch teh conud c t invol ve d rened rs as an attorney, certified public accountant, publicthe practitioner unfit to practice before the Internal accountant, or actuary yb any dul y constitutedR eev nue S eriv ce. autoh r ity of any S tate, territory, or possession of teh U nited S tates, includi ng a Commonw ealth, or teh ( 4) G iiv ng f alse or misleaid ng inf ormation, or District of Columib a, any F eed ral court of record orparticipating in any w ay in the gi vi ng of f alse or any F ede ral age ncy, body or ob a rd.misleaid ng inf ormation to teh Department of tehTreasury or any officer or employee thereof, or to any ( 1 1 ) K now ing ly aid ing and ab etting anoth ertriub na l author iz ed t o pass upon F eed ral tax m atters, person to practice b ef ore th e I nternal R ev enuein connection w ith any matter pendi ng or like ly to be S erv ice d uring a period of suspension, d isb armentpenid ng eb f ore teh m, know ing the inf ormation to be or inelig ib ility of such oth er person.f alse or misleadi n.g F acts or oteh r matters containedin testimony, Federal tax returns, financial statements, ( 1 2) Contemptuous cond uct in connectionapplications for enrollment, affidavits, declarations, w ith practice b ef ore th e I nternal R ev enue S erv ice,and any oteh r od c ument or statement, w ritten or oral, includ ing th e use of ab usiv e lang uag e, mak ing f alseare include d i n teh term “ inf ormation.” accusations or statements, k now ing th em to b e f alse, or circulating or pub lish ing malicious or lib elous ( 5 ) S olicitation of employment as proh ib ited matter.und er § 1 0.30, th e use of f alse or mislead ingrepresentations w ith intent to d eceiv e a client or ( 1 3) G iv ing a f alse opinion, k now ing ly,prospectiv e client in ord er to procure employment, reck lessly, or th roug h g ross incompetence, includ ingor intimating th at th e practitioner is ab le improperly an opinion w h ich is intentionally or reck lesslyto ob tain special consid eration or action f rom th e mislead ing , or eng ag ing in a pattern of prov id ingInternal Revenue Service or any officer or employee incompetent opinions on q uestions arising und er th eth ereof . F ed eral tax law s. F alse opinions d escrib ed in th is paragraph (a)(l3) include those which reflect or result ( 6) W illf ully f ailing to make a F ede ral tax return f rom a k now ing misstatement of f act or law , f rom anin iv olation of teh F ede ral tax law s, or w illf ully assertion of a position k now n to b e unw arranted und ereva di ng, attempting to eav ed , or participating in any ex isting law , f rom counseling or assisting in cond uctw ay in eav id ng or attempting to eav de any assessment k now n to b e illeg al or f raud ulent, f rom concealingor payment of any F ede ral tax. matters req uired b y law to b e rev ealed , or f rom consciously d isreg ard ing inf ormation ind icating th at ( )7 W illf ully assistin,g counseling, encouragi ng a material f acts ex pressed in th e opinion or of f eringclient or prospectiev client in iv olatin,g or sueg sting material are f alse or mislead ing . F or purposesto a client or prospectiev client to iv olate, any F eed ral of th is parag raph ( a) ( 1 3) , reck less cond uct is atax law , or nk ow inlg y counseling or sug eg sting to a h ig h ly unreasonab le omission or misrepresentationclient or prospectiv e client an illega l plan to eva ed inv olv ing an ex treme d eparture f rom th e stand ard sF ede ral taex s or payment teh reof . of ord inary care th at a practitioner sh ould ob serv e und er th e circumstances. A pattern of cond uct is a ( )8 M isappropriation of , or f ailure properly or f actor th at w ill b e tak en into account in d eterminingpromptly to remit, f unds receiev d f rom a client f or w h eth er a practitioner acted k now ing ly, reck lessly,the purpose of payment of taxe s or oteh r olb iag tions or th roug h g ross incompetence. G ross incompetenceud e teh U nited S tates. S-38 § 10.51 — Page 29 (9) Directly or indirectly attempting to influence,or offering or agreeing to attempt to influence, theTreasury Department Circular No. 230