IRS Update: Circular 230 and Registered Federal Tax Return Preparers

Remember registered Federal tax return preparers must follow the due diligence and ethical conduct requirements in IRS Circular 230 (Regulations Governing Practice before the Internal Revenue Service) when preparing tax returns. Enforcement of these regulations is performed by the IRS Office of Professional Responsibility (OPR).

As a registered Federal tax return preparer you will need to become familiar with all of Circular 230, however the following sections are especially important:

• Definition of practice before the IRS and what this means to registered Federal tax return preparers who are not CPAs, EAs or Attorneys:
• Section 10.2 – Definition of practice before IRS, Practitioner, and Tax Return Preparer.
• Section 10.3 (f) – What practice means for registered tax return preparers.
• Section 10.22 (Diligence as to accuracy) emphasizes that you must exercise due diligence when preparing all Federal tax returns.
• Section 10.27 (Fees) covers rules surrounding contingent fees and how a practitioner may not charge these types of fees for any services rendered in connection with any matter before the IRS which includes preparing a tax return.
• Section 10.30 (Solicitation) explains the rules covering advertising, solicitations and how and what fee information may be published.
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Click here to read the entire CrossLink Tax Update that includes further information regarding Circular 230 and how it affects Registered Federal Tax Return Preparers.