Tax Practitioners – IRS OPR
Tax Practitioners -IRS OPR is actually comprised to two topics that can be intertwined tax related identity theft and Circular 230 Tax Practitioner discipline.
Identity theft presents a challenge to businesses, organizations and governments, including the Internal Revenue Service. The IRS meets the challenge of tax-related identity theft and is making progress against it with an aggressive strategy of prevention, detection and victim assistance.
Tax-related identity theft remains a top priority for the IRS in 2015. This year, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.
Tax-related identity theft occurs when someone uses a stolen Social Security number to file a tax return to claim a fraudulent refund. A taxpayer’s SSN can be stolen through a data breach, a computer hack or a lost wallet. Although identity theft affects a small percentage of tax returns, it can have a major impact on victims by delaying their refunds.
Steps for Victims of Tax-Related Identity Theft
- All victims of identity theft should follow the recommendations of the Federal Trade Commission: File a report with the local police.
- File a complaint with the Federal Trade Commission at www.consumer.ftc.gov or the FTC Identity Theft hotline at or TTY 866-653-4261.
- Contact one of the three major credit bureaus to place a “fraud alert’ on your account:
- Close any accounts that have been tampered with or opened fraudulently.
If your SSN has been compromised and you know or suspect you may be a victim of tax-related identity theft, take these additional steps:
- Respond immediately to any IRS notice; call the number provided.
- Complete IRS Form 14039, Identity Theft Affidavit. Use a fill-able form at IRS.gov, print, then mail or fax according to instructions.
- Continue to pay your taxes and file your tax return, even if you must do so by paper.
- If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 800-908-4490. We have teams available to assist.
The IRS has greatly reduced the time it takes to resolve identity theft cases but please know these are extremely complex cases, frequently touching on multiple issues and multiple tax years. It can be time consuming. A typical case can take about 120 days to resolve.
If you are unable to get your issue resolved and are experiencing financial difficulties, contact the Taxpayer Advocate Service toll-free at 877-777-4778.
Practitioner Representation with IRS Office of Professional Responsibility [“OPR”]
We represent tax professionals before the OPR. Congress has granted OPR broad authority to regulate the conduct of tax representatives, including Attorneys, before the Department of the Treasury for incompetence, disreputable behavior, or for violation of the regulations found at 31 CFR Title 10, or more commonly known as “Circular 230.”
The Jobs Act of 2004 vastly expanded the jurisdiction of OPR through the Act’s interpretation of what exactly “practice before the IRS” encompassed. In many respects, the language of the Jobs Act clarified the jurisdictional questions that once existed for OPR. As a result, the range of cases that OPR has jurisdiction to investigate has expanded to include:
- practitioners who provide written advice to clients, as well as, practitioners who actually submit documents directly to the IRS or make personal appearances before to the IRS;
- Law Firms, Accounting Firms and other types of entities.
Statute of Limitations
OPR’s statute of limitations (“SOL”) deserves some attention at the onset of the representation of any practitioner or other entity before OPR. The quick and easy answer concerning OPR’s SOL is OPR has five years from the date of the alleged misconduct to bring a complaint against a practitioner. However, over the years, IRS executives have explained in public forums that the office may have up to 10 years to bring a complaint against a practitioner. By all accounts, OPR’s current policy concerning the statute of limitations is that it will generally not pursue allegations which the IRS knew of or should have known of if the misconduct occurred more than five years prior to the date upon which OPR can reasonably expect to institute a proceeding. Generally, OPR considers the statute of limitations’ application on a case-by-case basis.
- Reprimand– the least severe sanction available is the Reprimand. This sanction can be issued unilaterally against a practitioner by the Director of OPR. Essentially, a Reprimand is a letter from the Director of OPR to a practitioner stating that the Director has found that the practitioner has committed some misconduct under Circular 230. What differentiates a Reprimand from all of the other sanctions is that a Reprimand is private – only the practitioner and the Director have knowledge of its existence. Although the issuance of a Reprimand is not publicized, it does stay on the practitioner’s record.
- Public Censureis a Reprimand that OPR and the practitioner agree will be made public. When a practitioner receives a Public Censure, the practitioner’s name is published in the Internal Revenue Bulletin (“I.R.B.”). The facts which gave rise to the Public Censure are not published in the I.R.B, but the Public Censure is a form of sanction that has been receiving more attention in recent years and, in certain situations, can be used in conjunction with provisions which permit OPR to place conditions on a practitioner after he or she has been either suspended or censured by the Office.
- Suspension– A practitioner who receives a Suspension is prohibited from practicing before the IRS for a specified period of time. However, the practitioner will still be able to prepare tax returns during his or her Suspension since the Suspension only prohibits the ability of the practitioner to represent clients before the IRS. The tax practitioner’s name will be published in the I.R.B. along with the fact that he or she was suspended from practice before the IRS. Presently, the facts which gave rise to the Suspension are not published in the I.R.B.
- Disbarment– The most severe sanction is Disbarment. Generally, practitioners are only disbarred for egregious violations of Circular 230. When a practitioner is disbarred, he or she is permanently prohibited from practicing before the IRS. A practitioner may petition the Director of OPR for reinstatement after a period of five years has passed. The Director may decline to reinstate the practitioner if she thinks the practitioner will not abide by the regulations under Circular 230 and if such reinstatement would be contrary to the public interest. In most situations, the Disbarment of a practitioner only results from the final decision of an Administrative Law Judge.
- Monetary Sanctions– The Jobs Act expanded OPR’s authority to permit it to impose monetary penalties on any tax professional that engages in misconduct. OPR can seek to impose a monetary penalty either in lieu of or in addition to the Public Censure, Suspension or Disbarment of the practitioner. Not only can OPR fine the individual practitioner, but it can also fine the practitioner’s employer, firm or other related entity if the employer, firm or entity knew, or reasonably should have known, of the conduct giving rise to the penalty. The penalty can be up to the entire gross income derived (or to be derived) from the conduct giving rise to the penalty.