Representation of Attorneys Before IRS Office of Professional Responsibility
Attorneys at Thorn Law Group represent tax professionals before the IRS’s Office of Professional Responsibility (“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.
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.
A Public Censure is 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.
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.
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.
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.
If you are a tax professional and currently under investigation by the IRS’s Office of Professional Responsibility, contact Thorn Law Group Managing Partner Kevin E. Thorn today at 202 349-4033 for a confidential consultation.