CIRCULAR 230 AND BEYOND - IRS ETHICAL STANDARDS

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CIRCULAR 230 AND BEYOND - IRS ETHICAL STANDARDS

Friday, March 20, 2020

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Course Details

Overview of Topics

Main outline of Circular 2303 mins
Who Can Practice Before the IRS?23 mins
Practitioner Definition24 mins
Who Has Any Rights At All? - Form 284827 mins
Representation Outside the United States34 mins
Failure to Meet Requirements -CPAs, EAs41 mins
Diligence as to Accuracy-Sec. 10.2269 mins
Conflicts –Married Couples, Preparer86 mins
Secure Your Client Records89 mins

Course Description

Although the IRS has not updated Circular 230 in over half a decade, it is still the foundation for the ethical standards of tax professionals. Circular is meant to insure that practitioners are fit to practice before the IRS. Learn the Rules that practitioners must be aware of as they work with clients and represent clients before the IRS in any tax issues. It is critical to know how these changes will set new standards for quality tax practice and how those standards will be enforced by the IRS.

This course covers the current rules for powers of attorney, information access, IRS interactions, client privacy issues, and guidelines for professional advertising.

Topics Covered

Overview of Circular 230
Filling in the missing updates
Annual Filing Season Program requirements (AFSP)
Interacting with OPR
Brief Glossary
Practitioners re: POA: Limitations, Special Rules, and No Longer Eligible
Advertising and Fees

This is designed for tax practitioners who want to learn to interact with clients professionally, avoid potential conflicts of interest issues between clients or between themselves and clients, to learn more about their rights and responsibilities with respect to powers of attorney and IRS representation.

Learning objectives

To identify IRS representation and privacy issues
To identify who may represent an individual or entity before personnel of the IRS
To understand how to use the AFSP when you are not an EA, CPA or Attorney
To identify what an unenrolled preparer may do
To understand continuing education and record retention requirements

About Presenter

Eva Rosenberg, EA, MBA

Owner,TaxMama.com

taxmama@gmail.com

Eva Rosenberg, EA, Your TaxMama® has been teaching Enrolled Agents exam review courses off and on since developing the program for UCLA Extension over 25 years ago.

Eva has a B.A. in Accounting and an M.B.A. in International Business. Your TaxMama® has been a TaxWatch columnist for Dow Jones' www.MarketWatch.com and author of award-winning best-sellers, including Small Business Taxes Made Easy. and Deduct Everything! You can hear her on various radio stations around the country on a regular basis.

As a speaker, TaxMama® is popular with both tax professionals and taxpayers. You can find her at www.TaxMama.com where you can subscribe to her free podcast. TaxMama is also the moderator of the U.S. Tax Court Group at LinkedIn and invites you to join.

TaxMama.com

taxmama.com

For the tax community, our mission is to educate tax professionals to be skilled, ethical and profitable in their chosen area of tax preparation and representation. We do this with courses, books, and newsletters.

Review Questions

Question 1 : 00:15
Question 2 : 00:32
Question 3 : 00:55
Question 4 : 01:10
Question 5 : 01:30
Question 6 : 01:50

Review Questions
Final Quiz

When documenting conversations with the Internal Revenue Service (IRS), what information should you note that may help persuade the contact to be more polite and/or pleasant?
- An abbreviated list of discussion points.
  When conversing with IRS agents or clients, it is important for you to summarize the key points that you discuss. One way to write this summary is simply by listing the discussion points. Noting these issues will most likely not encourage an IRS agent to be kinder to you. She probably expects that you will note these issues in some way.
- The contact’s email or fax information.
  Getting your contact’s email or fax information can may help you continue a conversation with your contact and to follow up your phone call or visit with a brief email or fax summarizing your discussion. Knowing that you have her email may make the contact a bit concerned, but not necessarily kinder
- The contact’s employee number.
  When you ask for your contact’s employee number, you let your contact know that you know who he or she is. When you speak to someone who is anonymous, that person does not have to be accountable for any bad behavior or disrespect displayed. However, you will likely discover that the disposition of the employee becomes more pleasant when you have the tool to identify him or her or report him or her to a supervisor.
- The date and time of the conversation.
  Noting the dates and times of conversations with a contact is crucial, especially if those dates mark the start of a grace period. Not knowing what date begins a grace period could result in not following through with your end of the deal. A follow-up letter to the contact should indicate what you discussed on such and such a date and at such and such time.
Of the following, whose signatures are non-compulsory even though they might prepare tax returns for taxpayers?
- Certified Public Accountants
  A Certified Public Accountant is a practitioner who is “authorized to practice before the IRS.” CPAs are licensed professionals who engage in preparing taxes for their clients and, as a requirement, execute the tax forms of their clients.
- Enrolled agents.
  An enrolled agent has unlimited practice rights, meaning that he may prepare taxes for clients. If an EA does prepare taxes, that EA has to sign, as the tax preparer, the tax forms of the clients.
- Government officers.
  Government officers and employees are forbidden to practice before the IRS. Thus, a government officer would not be legally authorized to prepare tax returns for clients.
- Volunteers in VITA and student tax clinics.
  Volunteers in VITA and student tax clinics are people other than a regular tax practitioner who might prepare a return and not be required to execute the return. Volunteers can typically be found at VITA and TCE sites, or at a variety of low-income tax clinics, often staffed by college students.
Who may represent an individual or entity before personnel of the IRS?
- An individual, anytime the IRS issues a CAF number.
  The issuance of a Centralized Authorization File (CAF) number does not make a person eligible to represent an individual or an entity before the IRS. The CAF number is an identification number that the IRS assigns representatives to confirm that a file for authorization has been established for the representative. An individual may represent an individual or an entity when they fit certain categories of relationships, or when the Office of Professional Responsibility (OPR) issues an authorization letter for extremely compelling circumstances.
- Any corporation, firm, association, or partnership that has not lost eligibility to practice.
  Corporations, firms, associations, and partnerships are not eligible to practice before the IRS because these entities are not individuals. Only individuals may be eligible to obtain a power of attorney for a client to practice before IRS personnel. This means that if a CPA owns a firm, the POA must be in the name of the CPA or any other staff representing a client. The POA may not be in the name of the firm.
- Only certain qualified individuals, when representation occurs inside the United States.
  Many restrictions apply to individuals who want to represent another individual or entity before the IRS. However, when representation occurs outside the United States, ANY individual may represent either an individual or an entity. This is permissible is that few enrolled agents or CPAs work outside the United States.
- Students working in Student Tax Clinic Program, when representation occurs under a special order.
  Students working in Student Tax Clinic Program may be given a special order by the Office of Professional Responsibility (OPR) to represent an individual or entity. Another program in which students may participate is the Qualified Low Income Taxpayer Clinic which may allow them to represent others before the IRS.
What is a consequence of enrolled agents requesting to be placed in an inactive retirement status?
- During the time that they are inactive, they may practice before the IRS in a limited capacity
  During the time that they are inactive, an enrolled agent will be altogether ineligible to practice before the IRS. Being inactive means they cannot practice in any capacity until they comply with reinstatement rules.
- During the time that they are inactive, they do not have to complete the continuing education requirements.
  While they are inactive, an enrolled agent must continue to meet the continuing education requirements. The education is not necessary if they have no intention of being reinstated. However, if the EA wants to be reinstated, it’s necessary to catch up on all educational requirements, as well personal tax compliance – like filing and paying all relevant taxes.
- They may be reinstated as active by submitting a renewal application and proving their completion of continuing education.
  Being reinstated to active enrollment status requires that the enrolled agent file an application of renewal of enrollment. They must also prove that he has completed all required continuing education.
- They may be reinstated as active upon written request to the Office of Professional Responsibility (OPR).
  An inactive enrolled agent may be reinstated as active by adhering to all renewal requirements. Being reinstated is not as simple as writing a letter to the Office of Professional Responsibility (OPR). Certain requirements must be met.
With regard to tax return fees, what is generally allowable according to Circular 230? [Note: CPA societies and Bar associations may have different rules.]
- Basing a fee on a percentage of a re
  Basing a fee on a percentage of a refund is called a contingent fee, and practitioners may not receive contingent fees for preparing original tax returns. They may receive contingent fees for audits, claims for refunds and most representation cases.
- Disseminating a schedule of fees.
  Practitioners may publish and disseminate a schedule of fees, including fixed fees for routine services, hourly rates, a range of fees for specified services, and the fee charged for an initial consultation.
- Providing assurances that taxpayers will get relief from tax liability.
  In general, practitioners are prohibited from providing assurances that taxpayers will get relief from tax liability. Recently, States are filing suits against those practitioners and entities that offer premature assurances of relief, and for taking fees from clients for offers in compromise, when they are not able eligible for offers in compromise.
- Publishing incomplete fees for particular services.
  Practitioners may not publish incomplete fees for particular services. Instead, practitioners must include a statement disclosing whether clients will responsible for costs that may be incurred in addition to the stated fees.
For security purposes, what is a recommended practice for tax preparers?
- Mail or email completed returns to clients.
  It is not a recommended practice to mail or email completed returns with social security numbers to clients. The best practice is to hand them to clients or to use a secure file sharing like SecureDrawer.com or your favorite service.
- Maintain client records in a secure location in the office
  It is a recommended practice that practitioners maintain client records in a secure location in the office. Take proper precautions when transporting files from home to office, as these files with critical client information could be compromised.
- Shred all records upon completion of the returns.
  When practitioners finish with returns, they should return all records to the clients rather than shred them. Some documents would be difficult, if not impossible, to get back, and the clients need to maintain some of these documents for a number of years.
- Throw away all documents upon completion of returns.
  Practitioners should not throw away any documents with clients’ personal information on them. If practitioners wind up with copies or other documents that the clients no longer need, these documents should be shredded.

Minimum 70% Questions answer should be right.

Which of these topics is not a Subpart of Circular 230? (slide 7)
- Rules Governing Authority to Practice
- Duties and Restrictions Relating to Practice Before the Internal Revenue Service
- Special Rights Reserved for Practitioners
- Rules Applicable to Disciplinary Hearings
What are your main goals with respect to the OPR?
- Behave ethically.
- Guide your clients towards the lowest tax liability possible.
- Stay informed about changes to the tax law and procedures. D. Learn shortcuts to the tax maze.
- All of the above
What information will you not typically get during a conversation with the IRS?
- Name of person (if IRS or state, get employee number)
- Date and Time
- Summary of key points of discussion – especially agreements, or “to-do”s with deadlines.
- Email address of the ACS contact
A power of attorney that is not subject to a time limit and is specifically meant to continue in force after the incapacitation or incompetence of the grantor (the taxpayer) – is which kind of POA?
- Durable power of attorney.
- IRS power of attorney.
- Limited power of attorney.
- Special power of attorney.
Who can practice before IRS? All of these, EXCEPT
- Certified public accountants (CPAs).
- Enrolled retirement plan agents
- Enrolled auditors
- Enrolled actuaries.
An individual, who is an officer or employee of the executive, legislative, or judicial branch of the United States Government; an officer or employee of the District of Columbia; a Member of Congress; or a Resident Commissioner
- May not practice before the Internal Revenue Service if such practice violates 18 U.S.C. §§ 203 or 205
- May always practice before the Internal Revenue Service
- May never practice before the Internal Revenue Service
- None of the above
Unenrolled preparers
- May never practice before the IRS in any capacity?
- May practice before the IRS only in the area of collections representation.
- May practice before the IRS by calling the Automated Collections System.
- May practice before the IRS Examination Division with respect to a tax return they have prepared – but only if they have their AFSP Certificate of Completion.
We all know that EAs and CPAs may represent taxpayers. But other people are also allowed to do so. Which of these folks may not be a power of attorney?
- An individual may represent a member of his or her immediate family.
- A part-time bookkeeper for a business may represent the business.
- A regular full-time employee of an individual employer may represent the employer
- A general partner or a regular full-time employee of a partnership may represent the partnership.
When a taxpayer living outside the United States, and needs representation
- Any individual may represent an individual or entity before personnel of the IRS
- Only Chartered Accountants may represent an individual or entity before personnel of the IRS
- Only Enrolled Agents may represent an individual or entity before personnel of the IRS
- The taxpayer must hire someone in the U.S. to get representation.
What kind of authority does the issuance of a CAF number provide? It is
- an indication that an individual is authorized to practice before the IRS.
- Merely an indication that an individual is listed in the IRS Central Authorization File database.
- limited only to attorneys.
- A rare and special privilege.

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Cost $40
CPE Credits 2
CE Credits 2
IRS Course ID GEHNZ-E-00125-20-O
Subject Area Ethics (Regulatory)
Course Level Basic
Instructional Method QAS Self Study
Prerequisites None
Advanced Preparation None
Recorded Date March 20 ,2020
Published Date March 20 ,2020
Who should attend? Enrolled Agent CPA - Small Firm CPA - Mid Size Firm CPA - Large Firm CPA (Industry) CPA in Business Entrepreneurial CPA
Handout Material Download
Key Terms Download

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DOES YOUR CLIENT OWN SHARES IN FOREIGN CORPORATION? IMPACT OF TJCA

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BIGGEST DISRUPTION IN STAFFING FOR ACCOUNTING FIRMS

Friday, September 13, 2019 View Details/Register

INTERNATIONAL TAX: CONCEPTS IN A GLOBAL SOCIETY

Friday, September 13, 2019 View Details/Register

INTERNATIONAL TAX FOR THE GROWING BUSINESS

Friday, September 13, 2019 View Details/Register

PRE-IMMIGRATION TAX PLANNING STRATEGIES

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CYBERSECURITY – DO’S AND DON’TS in 2019

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