Which office has exclusive responsibility for disciplining practitioners, including disciplinary proceedings and sanctions?
Based on: IRS Publication 947 (02/2018), Practice Before the IRS
Enrolled Agent Exam (SEE) · Circular 230
Circular 230 Explained: Who May Practice, and the Rules That Bind Them
Circular 230 is Treasury's regulation governing practice before the IRS, published in the Code of Federal Regulations at 31 C.F.R. Subtitle A, Part 10 and reissued as a pamphlet under the Circular 230 name. It is the single densest source on Part 3 of the SEE: Practices and Procedures is 26 of the 85 scored questions, and most of them come straight out of these sections.
Practice
Free practice questions
Which office is responsible for issuing PTINs, acting on enrollment applications, and administering competency testing and continuing education?
Based on: IRS Publication 947 (02/2018), Practice Before the IRS
Where are the regulations governing practice before the IRS officially published?
Based on: IRS Publication 947 (02/2018), What Are the Rules of Practice?
Which of the following is treated as practice before the IRS under Circular 230?
Based on: IRS Publication 947 (02/2018), What Is Practice Before the IRS?
Under Circular 230, providing which of the following to a client is considered practice before the IRS?
Based on: IRS Publication 947 (02/2018), What Is Practice Before the IRS?
May a person who is not otherwise authorized to practice still prepare a tax return for compensation?
Based on: IRS Publication 947 (02/2018), What Is Practice Before the IRS?
For purposes of Circular 230, the term 'tax return' includes which of the following?
Based on: Treasury Circular No. 230 (Rev. 6-2014), section 10.2 Definitions
Who is a 'practitioner' as defined in Circular 230?
Based on: Treasury Circular No. 230 (Rev. 6-2014), section 10.2 Definitions
How does an attorney who is not under suspension or disbarment establish the right to represent a specific taxpayer before the IRS?
Based on: Treasury Circular No. 230 (Rev. 6-2014), section 10.3 Who may practice
Must an attorney file a written declaration before merely rendering written advice covered by section 10.37?
Based on: Treasury Circular No. 230 (Rev. 6-2014), section 10.3 Who may practice
What counts as practice before the IRS?
Practice before the IRS means representing a taxpayer at conferences, hearings or meetings, corresponding and communicating with the IRS on a taxpayer's behalf, filing documents for them, and providing written tax advice on one or more federal tax matters. What it does not include is just as heavily tested. Preparing a return for compensation is not, by itself, representation. Neither is appearing as a witness, nor furnishing information at the IRS's request. Any individual may do those three things without being a practitioner at all.
Who may practice, and with what limits?
Section 10.3 lists the practitioners: attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents and registered tax return preparers. An enrolled agent in active status, not under suspension or disbarment, has unlimited practice rights. The others do not. Enrolled actuaries are confined to the Code sections that govern employee retirement plans. ERPAs may represent on the 5300 and 5500 series forms but not on actuarial forms or schedules. A registered tax return preparer may represent during an examination only if they signed the return for the period under examination, and never before appeals officers, revenue officers or Counsel.
- An attorney or CPA in good standing practises by filing a written declaration that they are currently qualified and authorised, with no enrollment application needed
- Enrollment may be granted only to natural persons; corporations, partnerships and other non-individuals are never eligible
- Appraisers are subject to Circular 230 and can be sanctioned under it, but they have no representation rights and may only appear as witnesses
- A fiduciary is treated as being the taxpayer, not as representing the taxpayer, so no power of attorney is needed
- A state officer or employee whose work may disclose facts applicable to federal tax matters may not practise before the IRS
Limited practice under section 10.7
Section 10.7 lets certain unenrolled people represent in narrow circumstances: an individual may represent themselves, a member of their immediate family, a partnership in which they are a general partner, or a corporation, association or organised group of which they are a bona fide officer or full-time employee. Immediate family, for this purpose, means only a spouse, child, parent, brother or sister. Nobody under suspension or disbarment may use limited practice at all, which is the trap version of this question.
Enrollment, renewal and continuing education
Enrollment by examination requires you to be 18 or older, to demonstrate competence by passing the written exam, to hold a valid PTIN and to have no disqualifying conduct. The compliance check on your application is narrow: it asks only whether you have filed all required returns and paid, or arranged to pay, any federal tax debts. There is a second route for former IRS employees, which requires five years of continuous qualifying employment, or an aggregate of ten years with three of them in the last five, and the application must be made within three years of separation. Once enrolled, you must complete 72 hours of continuing education per enrollment cycle including six hours of ethics, with a floor of 16 hours per enrollment year including two hours of ethics. You must notify the IRS of a change of address within 60 days, and not receiving the renewal notice is expressly not an excuse for failing to renew.
Sanctions and who imposes them
The Office of Professional Responsibility has exclusive responsibility for discipline, including disciplinary proceedings and sanctions. The Return Preparer Office is a different body: it issues PTINs, acts on enrollment applications and administers competency testing and continuing education. Confusing the two is a common exam error. The sanctions themselves run from censure, which is a public reprimand, through suspension to disbarment, with monetary penalties available on top. Section 10.51 lists disreputable conduct, and being disbarred or suspended as an attorney or CPA by any state authority is on that list whatever the underlying reason was. Section 10.52 makes a wilful violation of any regulation in the part sanctionable, with the single exception of section 10.33, the best practices provision, which is aspirational.
| Office | What it does | What it does not do |
|---|---|---|
| Office of Professional Responsibility (OPR) | Exclusive responsibility for practitioner discipline: proceedings, censure, suspension, disbarment, monetary penalties, and reinstatement decisions | Does not issue PTINs or process enrollment applications |
| Return Preparer Office (RPO) | Issues PTINs, acts on enrollment applications, administers competency testing and continuing education, runs the Annual Filing Season Program | Does not run disciplinary proceedings or impose sanctions |
FAQ
Frequently asked questions
Is preparing a tax return practice before the IRS?
No. Preparing a return for compensation is not, by itself, practice before the IRS. Neither is appearing as a witness for the taxpayer nor furnishing information at the IRS's request. Any individual may do those things. Practice begins when you represent the taxpayer, correspond on their behalf, file documents for them, or give written advice on a federal tax matter.
How many hours of continuing education does an enrolled agent need?
72 hours per enrollment cycle, of which six must be ethics, with a minimum of 16 hours in each enrollment year including two hours of ethics. Circular 230 section 10.6(e) sets both the cycle total and the annual floor, so meeting one without the other is not enough.
What is a censure under Circular 230?
A public reprimand. Censure is the lightest of the sanctions listed in section 10.50, sitting below suspension and disbarment, and unlike a private letter it is public.
Can a suspended practitioner still use limited practice under section 10.7?
No. Section 10.7(c) expressly bars an individual under suspension or disbarment from engaging in limited practice, so the family, partnership and employer routes are all closed to them.
Which Circular 230 rule can be violated without a sanction?
Section 10.33, best practices. Section 10.52 makes wilful violation of any regulation in the part sanctionable except section 10.33, which sets out aspirational standards rather than binding duties.
How long does a former IRS employee have to apply for enrollment?
Three years from the date of separation. The applicant also needs five years of continuous qualifying employment, and an aggregate of ten years with three of them falling in the last five is treated as equivalent.