ArticleLast month, the Department of the Treasury and the Internal Revenue Service (“IRS”) issued proposed regulations updating the rules for tax professionals who practice before the IRS. These rules, which are contained in Treasury Department Circular 230 (“Circular 230”) and apply to attorneys, certified public accountants, and enrolled agents who practice before the IRS, set forth certain required actions as well as certain prohibitions by which such professionals must abide.
The IRS Office of Professional Responsibility has exclusive oversight for practitioner conduct and discipline and is tasked with applying the standards set forth in Circular 230. Among some of the most important provisions included in Circular 230 are the requirements that all practitioners must be competent and must exercise due diligence and use best practices in their representation of taxpayers. Tax practitioners who violate the provisions of Circular 230 may be subject to penalties and potential suspension from practice.
In a statement released on December 20, 2024, the IRS noted that the proposed changes, if finalized, will amend Circular 230 to account for changes in the law and the evolving nature of tax practice. This will include revising or eliminating portions of Circular 230 that are out of date with current law. It will also update Circular 230 to better align with the current practice environment, most notably, requiring practitioners to maintain technological competency as part of their practice before the IRS.
The proposed regulations were published in the Federal Register on December 26, 2024 and can be found here: Federal Register :: Regulations Governing Practice Before the Internal Revenue Service Any electronic or written comments must be received by February 24, 2025. The public hearing is being held on March 6, 2025.
