Section 4. Processing Circular 230 Disciplinary Cases

(1) This transmits new IRM 1.25.4, Practice Before the Service, Processing Circular 230 Disciplinary Cases.

Material Changes

(1) This Internal Revenue Manual (IRM) describes the uniform guidelines and techniques for processing disciplinary cases in the Office of Professional Responsibility (OPR). The purpose of these guidelines is to promote consistent application of the disciplinary rules under Circular 230 and of any sanctions that may be proposed. They are intended to assist in conducting investigations, developing issues, organizing case files, and making appropriate recommendations for discipline and sanctions. The professional judgment of the employee, however, is still paramount in determining the appropriate scope and depth of the investigation.

Effect on Other Documents

Some of the text contained in obsolete IRM 1.25.3, Case Development & Licensure (CD&L), is revised and incorporated into this IRM.

Audience

Effective Date

Stephen A. Whitlock
Director
Office of Professional Responsibility

Program Scope and Objectives

1. Purpose: This section provides technical information to employees of the Office of Professional Responsibility (OPR) and is used for establishing, evaluating and assessing the effectiveness of program operations within the Business unit.
2. Audience: This section applies to the OPR’s employees.
3. Policy Owner: The Director, OPR, is primarily responsible for administering and enforcing Treasury Department Circular No. 230, Regulations Governing Practice before the Internal Revenue Service (“Regulations” or “Circular 230”). The Director, Return Preparer Office (RPO), is responsible under Circular 230 for the policies and administration of the enrolled practitioner program. See IRM 1.25.2, Practitioner Enrollment, for more information.
4. Program Owner: The Director, OPR, is responsible for overseeing matters related to the conduct of practitioners and others before the IRS and for discipline, including disciplinary proceedings and sanctions.

Background

1. The OPR undertakes investigations and institutes proceedings pursuant to Title 31, United States Code section 330 and the implementing regulations in Treasury Department Circular No. 230. The OPR remains independent from the Title 26-based enforcement components of the IRS. The main objective of the OPR’s activities is to ensure that those who practice before the IRS on behalf of taxpayers have good character and reputation and the necessary qualifications and competency to provide valuable service to clients and assist them in presenting their cases or other matters to the IRS. The underlying issue in Circular 230 investigations and proceedings is the individual’s “fitness to practice” before the IRS.
2. Since 2012, the RPO, rather than the OPR, has operated the IRS program for the enrollment of individuals as enrolled agents, enrolled retirement plan agents and enrolled actuaries. The RPO processes applications for enrollment or reenrollment, administers the Special Enrollment Examination for enrolled agents, oversees compliance with continuing education requirements, and approves applications to become an IRS recognized continuing education provider.

Authority

1. The OPR’s Authority is listed in IRM 1.25.1.3I, Authorities Relating to Practice.

Roles and Responsibilities

1. The Director, OPR, is the executive responsible for this program.

Acronyms

1. The following table lists the acronyms used throughout this IRM section.

Overview

1. The Office of Professional Responsibility (OPR) is responsible for reviewing, investigating and resolving alleged violations of the professional standards of competence, conduct and integrity by tax practitioners who represent, or otherwise practice on behalf of, taxpayers before the Internal Revenue Service (IRS). In particular, OPR is responsible for identifying and resolving alleged violations of the applicable professional standards enumerated by Treasury Department Circular No. 230, Regulations Governing Practice before the Internal Revenue Service ("Circular 230" or "Regulations" ). These allegations are submitted to OPR by IRS employees, state-licensing authorities, and others. OPR oversees "practice" before the IRS. Evidence of a person practicing before the IRS includes, but is not limited to:

1. A valid Power of Attorney (POA) listed on the Centralized Authorization File (CAF).
2. A copy of a POA provided by the complainant or Treasury Inspector General for Tax Administration (TIGTA).
3. Evidence of written advice provided to a taxpayer.
4. Evidence or observations from an IRS employee that the practitioner was representing clients before the IRS.

This IRM chapter describes the uniform guidelines and techniques for processing disciplinary cases in OPR. The purpose of these guidelines is to promote consistent application of the disciplinary rules under Circular 230 and of any sanctions that may be proposed. The guidelines are intended to assist in conducting investigations, developing issues, organizing case files, and making appropriate recommendations for discipline and sanctions. The professional judgment of the employee is used in determining the appropriate scope and depth of an investigation.

Note:

As used in this chapter, "practitioner" means attorneys, certified public accountants (CPAs), enrolled agents (EAs), enrolled retirement plan agents, enrolled actuaries, appraisers, and other individuals subject to the regulations governing practice in Circular 230.

1. Screens all correspondence and referrals received in OPR.

1. Receives, reviews and investigates evidence of alleged misconduct by individuals covered by the Regulations.
2. Evaluates allegations to determine whether the action constitutes disreputable or incompetent conduct, or otherwise reflect violations of the Regulations.
3. When warranted, proposes and negotiates a level of discipline commensurate with the misconduct.
4. In the absence of a Reprimand or a voluntary settlement, initiates disciplinary proceedings before Administrative Law Judges (ALJs).
5. Initiates or responds to appeals of ALJ disciplinary decisions.
6. Pursuant to Delegation Order 25-16 (Rev. 2) (See IRM 1.2.2.15.16), receives, processes, and investigates referrals or allegations of misconduct under Rev. Proc. 81-38 and representational misconduct under Rev. Proc. 2014-42.
7. Serves as the Appellate Authority (AA) for enrollment appeals from the Return Preparer Office (RPO).
8. Interprets the Conference and Practice Requirements contained in 26 C.F.R. Part 601, Subpart E.
9. Acts in an advisory capacity with respect to IRS oversight and compliance initiatives for practitioners.
10. Manages the OPR referral mailbox.

1. Coordinates all postings of disciplinary actions.
2. Receives and reviews criminal convictions and injunctions for possible action under the Regulations.

Referrals to the Office of Professional Responsibility

1. Referrals are sent to OPR on Form 8484, Suspected Practitioner Misconduct Report for the Office of Professional Responsibility, via mail, fax, or email to the designated OPR mailbox.

1. The mailbox is checked several times a day to ensure that all incoming email is processed in a timely manner. Generally, a response to email is made within 24 hours of receipt in the OPR mailbox.
2. Any email appearing to be spam will be sent to *spam@irs.gov.

1. RPO flags a case to indicate that it is a referral for OPR. Additionally, RPO will provide any associated case documents (including Form 14157 referring a practitioner who potentially violated Circular 230).
2. TIGTA or Criminal Investigation (CI) submits an investigative memorandum referring a practitioner who potentially violated Circular 230.
3. The Tax Division of the Department of Justice (DOJ) informs OPR of a court order permanently enjoining a practitioner from preparing and filing tax returns or other documents or submissions to the IRS on behalf of taxpayers and from representing any taxpayer before the IRS. These referrals from DOJ are typically sent to OPR by email.
4. Business Operating Divisions (BODs) submit Form 8484 referring a practitioner who potentially violated Circular 230.
5. OPR may open a case on a practitioner who has lost his / her license, for cause based on a public informant or a notice from the licensing authority.

1. Section 6700 - Promoting abusive tax shelters
2. Section 6701(a) - Aiding and abetting understatement of a tax liability
3. Section 7407 - Injunction of a tax return preparer
4. Section 7408 - Injunction restraining specified conduct relating to tax shelters and reportable transactions

1. Section 6692 - Accuracy related penalty
2. Section 6694(a) - Understatement of liability due to an unreasonable position
3. Section 6695 - (a) Failure to furnish copy of return; (b) Failure to sign return; (d) Failure to keep a copy of tax return or list of taxpayer
4. Section 6702 - Frivolous tax returns or submissions

Note:

If any of the above penalty assessments appear to become a pattern across taxpayers, tax issues, or tax years, a referral should be made with regard to the practitioner involved.

Other Cases Received in OPR

1. A practitioner’s appeal of RPO’s Notice of Revocation (NoR) of Preparer Tax Identification Number (PTIN) due to an injunction. An appeal may be submitted to OPR within 30 calendar days of the stamped date on RPO’s NoR.
2. A practitioner’s appeal of RPO’s decision to deny or potentially deny his / her Application for Enrollment to Practice before the IRS (Form 23) or Application for Renewal of Enrollment to Practice before the IRS (Form 8554). An appeal may be submitted to RPO within 30 calendar days of the stamped date on RPO’s Notice of Denial (NoD).
3. A practitioner’s appeal of RPO’s decision to deny a request to waive mandatory Continuing Professional Education requirements in connection with Enrollment to practice. An appeal may be submitted to RPO within 30 calendar days of the stamped date on RPO’s NoD.
4. A former employee’s appeal of RPO’s decision to deny a request to waive the Special Enrollment Exam. An appeal may be submitted to RPO within 30 calendar days of the stamped date on RPO’s NoD.
5. A former employee’s appeal of RPO’s decision to deny full Enrollment without examination. An appeal may be submitted to RPO within 30 calendar days of the stamped date on RPO’s NoD.
6. A practitioner’s request to OPR to be reinstated to practice, following a period of suspension or disbarment, directly.
7. A practitioner’s request to institute a proceeding under §10.60 of Circular 230 pursuant to §10.82(g).
8. The IRS CAF Unit’s submission of information regarding a practitioner’s misrepresentation of credentials.
9. A BOD’s referral, or information received by OPR from another source, about an unenrolled tax return preparer that indicates the preparer may have engaged in conduct that would render the preparer ineligible for limited practice under Rev. Proc. 81-38 and Rev. Proc. 2014-42 (may be subject to a referral to RPO).
10. An unenrolled return preparer’s appeal of OPR’s determination, made under Rev. Proc. 81-38, that the preparer is ineligible for limited practice, by submitting an appeal to OPR within 30 calendar days of the stamped date on the Determination of Ineligibility to Practice before the IRS.

Communication to Practitioners and their Representatives

1. OPR is committed to providing prompt, professional and quality service to practitioners, IRS employees and members of the public.
2. Quality service means adopting business practices that ensure the provisions of Circular 230 are applied fairly and that the rights of practitioners are respected and protected, while at the same time ensuring that the interests of the IRS and the protection of the public are considered.
3. Interactions and correspondence with a practitioner or his / her representative must be courteous and professional.
4. All cases will be worked timely and efficiently with case objectives being accomplished in the manner least intrusive and burdensome to the practitioner.
5. Adhere to timeframes established for completing actions on a case. Any delays in the investigation will be discussed with management and the practitioner or his / her representative notified. Delays and extensions will also be documented in OPR’s Case and Correspondence Management System (CCMS).
6. Prompt decisions are an essential part of providing quality service to tax practitioners. It is important that all employees monitor closely the progress of supervised employees’ work for which they are responsible. Managers will devote a substantial amount of their time to assure promptness in completing work. Managers will regularly, frequently and personally ascertain, from each of their employees, the status of work, estimated completion dates, progress made, and any reasons for delay.
7. Employees must document all contact and communications with a practitioner or his / her representative. Communications include telephone calls and conferences.
8. All written communications and work products, including correspondence, email, research memorandums, and recommendations must be maintained in the case file and uploaded to CCMS.
9. Requests for information filed pursuant to the Freedom of Information Act (FOIA) or IRC 6103 will be processed expeditiously and as much as feasible within established statutory or administrative timeframes.

Sorting and Controlling Incoming Mail

1. Incoming mail is date-stamped same day (weekend correspondence is stamped the next business day). Staple the original envelope to the back of the correspondence.
2. Review and screen all mail to determine if it belongs in OPR.
3. Acknowledge all Form 3210, Document Transmittal, received by signing for receipt and mailing one copy back to the originator.
4. For referrals / complaints, send an acknowledgement letter to the referent / complainant confirming receipt. External complaints will be acknowledged by letter (unless frivolous or repetitive of a complaint already received and acknowledged), and internal referrals (from IRS and other Treasury Department employees) will be acknowledged by email.
5. Route any misdirected mail (non-OPR) to the appropriate IRS functional area, via Form 3210.
6. Any misdirected Form 14157, Return Preparer Complaint, from IRS personnel or taxpayers will be referred to RPO. RPO tracks the receipt and ultimate distribution of these forms. The below addresses will be used to forward misdirected electronic or paper 14157 forms:

1. Email to *RPO Referrals, or
2. First class mail:
   Return Preparer Office
   401 W. Peachtree Street NW
   ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
   Atlanta, GA 30308

1. Internal Revenue Service
   AM – Preparer Complaints
   5333 Getwell Road
   ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
   Memphis, TN 38118

Intake

1. The Intake Process is the first step in the lifecycle of a case.
2. Review all mail addressed to a specific OPR employee or to the Director of OPR to determine how to proceed. This includes researching CCMS and legacy OPR systems (e-trak and DPACTS) .

• Input an activity / event to show the correspondence was received and forward the correspondence to the assigned employee.

• The new referral is entered into CCMS as a new case.
• Upload a copy of the referral into the new case.
• Associate the related case(s) and / or correspondence in CCMS.
• Immediately close the new case.
• The referral is given directly to the employee currently working the open case.

• Open a new case in CCMS.

• Open a new case in CCMS.
• Associate the related case(s) and / or correspondence in CCMS.
• Pull the prior case file(s) from either the file room or the Federal Records Center (FRC) and associate it with the new case file.

• Open a new correspondence in CCMS.

• Open a new case in CCMS.
• Associate the related case(s) and / or correspondence in CCMS.
• Assign the new case to the employee who worked the prior case, if the employee is still with the office.
• Pull the prior case file(s) from either the file room or the FRC and associate it with the new case file.

• Open a new case for each Circular 230 practitioner listed.
• If applicable, associate the related case(s) and / or correspondence in CCMS.
• If applicable, pull the prior case file(s) from either the file room or the FRC and associate it with the new case file.

Correspondence

1. Upon receipt, enter the referral or comparable information into CCMS.
2. Upload all correspondence documents into CCMS.
3. Correspondence will be categorized into one of the following types:

1. Bar and Board Notices - A notification from a State Board of Accountancy or State Bar advising that a CPA or attorney has lost his / her state license, for cause.
2. 6103 / FOIA Request - 6103 Request: A written request from a practitioner, a practitioner’s authorized representative, or both for tax and other information related to OPR’s investigation or inquiry into the practitioner’s conduct or tax compliance. A section 6103 request can include the practitioner’s own tax information as well as the information of third-party taxpayers (e.g., clients or former clients of the practitioner). A section 6103 request must conform to OPR’s standard section 6103 letter, available for the use of OPR personnel on the office’s share drive and accessible by practitioners and their authorized representatives on IRS.gov/. FOIA Request: A written request pursuant to the Freedom of Information Act (5 USC 552) for copies of non-exempt agency records. For example, members of the public, researchers, or the daily tax-news services can use the FOIA to request OPR statistics regarding Circular 230 disciplinary matters. FOIA requests are properly filed with Privacy, Governmental Liaison and Disclosure (PGLD). When a FOIA request involves OPR records, PGLD coordinates the processing of the request with OPR, in particular: OPR conducts a search for records responsive to the request, provides the results to PGLD, and proposes any withholding of information as exempt under one or more of the FOIA’s nine exemptions. Practitioners and their representatives should not use the FOIA to request records in connection with an OPR investigation or proceeding concerning the practitioner. See IRM 1.25.4.10.11, Procedures for Processing Practitioner File Requests in Disciplinary Cases, for additional information about handling FOIA and IRC 6103 access requests.
3. CAF Modification Request - A practitioner or unenrolled return preparer who was sent a CAF Notification letter but did not respond within the 10-day timeframe and is requesting to have their CAF reinstated.
4. Director’s Correspondence
5. Other- Non Case Related

Cases

1. Upon receipt, enter the referral information into CCMS.
2. Upload the referral and all supporting documents into CCMS.
3. Cases will be categorized into one of the following types:

1. Conduct - Allegation(s) of tax-practice misconduct (behavior) in violation of Circular 230.
2. Compliance - Case involving a practitioner’s personal tax noncompliance issues, relating to filing requirements (unfiled returns) or taxes due (evasion or attempted evasion of assessment or payment of personal or business taxes).
3. Hybrid - Part Conduct and part Compliance. Allegations of both misconduct (behavior) and personal / business tax noncompliance issues.
4. Expedited Suspension (XP) - Involves one or more of the five bases in §10.82(b) of Circular 230 for which an XP proceeding may be instituted: 1. Loss of license to practice law or loss of CPA or actuary license, when for cause (misconduct); 2. Convicted of a federal tax crime, a crime involving dishonesty or breach of trust, or any felony; 3. Sanctioned by a court (including an injunction) for taking frivolous positions or causing delay; 4. Failure to file practitioner’s own personal tax returns for 4 of the last 5 tax years (or five of the last seven quarters, in the case of employment-tax returns for practitioner’s business); or 5. Violated conditions on reinstatement that were imposed when the individual was reinstated to practice (after being suspended or disbarred from practice).
5. Enrollment Appeal - A practitioner appeals RPO’s decision to deny their Enrollment application or renewal.
6. Limited Practice - An unlicensed, unenrolled return preparer’s misconduct under Rev. Proc. 81-38 and Rev. Proc. 2014-42 that may be cause for loss of limited-practice rights (i.e., a formal determination by OPR of the return preparer’s ineligibility to represent a taxpayer in an audit of a tax return that the unenrolled return preparer prepared for the client and signed as the preparer).
7. Limited Practice Appeal - An unlicensed, unenrolled return preparer appeals OPR’s determination that the return preparer is ineligible for limited practice.
8. Limited Practice Reinstatement - An unlicensed, unenrolled return preparer looking to have his or her limited-practice rights reinstated after being determined ineligible for limited practice.
9. Reinstatement - A practitioner petitioning to be reinstated after being suspended or disbarred.
10. 10.60 Request - A practitioner requesting a 10.60 Hearing pursuant to §10.82(g).

Case File Assembly

1. Uniform guidelines exist for how case files are assembled.

• This helps ensure that a case receives proper and timely managerial review, and reduces administrative delays.
• A properly assembled case file promotes quality and consistency in employee work product, and provides transparency for IRS leadership as to case development and investigative techniques.
• A well-organized case file allows employees to demonstrate a quality work product.

• Referrals from TIGTA - Blue Folders
• XP Cases - Red Folders
• Reinstatements - Brown Folders
• Appeals - Yellow Folders
• All other cases - Green Folders

Example:

• Correspondence includes: Letters and emails to the practitioners and / or their representative, as well as internal correspondence– i.e., emails to OPR management or IRS field personnel. Place these items in reverse chronological order with most recent on top.
• All closed cases must contain a printout of any CAF, Practitioner Preparer Tax Identification Number (PTIN) System (TPPS), Enrolled Agent Policy & Management (EAP&M), and IRS e-file notifications on top of the Correspondence section. When applicable, TIGTA Form OI 2076, Referral Memorandum, must also be included on top.
• Referral / Form 8484 or external complaint; on the bottom.

• Work product includes: case research, Integrated Data Retrieval System (IDRS) printouts, Powers of Attorney, any notes from phone calls / conferences.
• All files submitted for review or closure must contain a recent CCMS Activity / Event printout on top.

Note:

During the gathering of documents, if there is not enough room in the case file, divide the file into two separate files. File 1 consists of the Intake and Correspondence Documents and File 2 will consist of the Work Product Documents file.

1. Hole punch and affix items to the folder (no loose documents EXCEPT the most recent draft of any correspondence to be reviewed and the original correspondence to be signed).
2. If any part of the case file needs to be divided and labeled use a tabbed index sheet- Oldest documentation on the bottom, newest documentation on the top. Make a notation on each tab of what the section includes (e.g. reinstatement, tax compliance, etc.).
3. Conduct Cases: Check for tax non-compliance. If no issues exist, place the transcripts on the bottom to show you have considered the issue.
4. Tax Non-Compliance Cases: 1. Section out income taxes and business and employment taxes separately. Earliest year or tax period on the bottom and the most current year or tax period on the top. 2. Each time transcripts are updated, the most recent update goes in the case file and the prior one can be shredded or put in a burn box. 3. Where returns are not filed, show facts supporting the practitioner had a filing requirement.
5. All memorandums, notes, etc. will be dated and contain name of author.
6. Small documents will be stapled to standard size paper and affixed to the case file.
7. CCMS Activity / Events sheet: Place on the right side of the case file, on top of all work papers. This document provides a road map to the case and the work papers that follow.
8. Include / Retain drafts of any documents edited by management until the case is in the closure process. During the closure process, discard any old drafts from the case file.
9. Include the final disposition- Soft-letter, reprimand, censure, suspension, disbarment, or ALJ / AA final decision on the left side; always scan and upload these to CCMS.
10. Additional items may be added on top of the final disposition, such as: a TIGTA coversheet, transmittal forms, email notifications to the CAF Unit, e-file, EAP&M and TPPS notifying them of the disposition, and any other items needed to close the case.

Case File Paper Work: Disclosure

1. Confidential information related to the case file must be secured from unauthorized disclosure. All IRS employees are responsible for the security of Federal government property and sensitive taxpayer information. See IRM 10.5.1, Privacy Policy, for handling instructions and IRM 11.3, Disclosure of Official Information.

1. Documents containing return information (as defined in section 6103) or other personally identifiable information and transmitted electronically must be encrypted.
2. Documents in paper format must be protected from authorized disclosure.

Case File Paper Work: Protection of Evidence

1. All documents in the case file are official government records, as well as potential evidence in an administrative hearing or any subsequent Federal District Court proceeding. They must be protected and maintained in their original, unaltered condition. Never write or use a highlighter pen on any documents received from a practitioner, his / her representative, or any third party. Even a minor pencil notation can render a document inadmissible due to the alteration. If an employee needs a work copy of a document, make a photocopy and return the original to the case file.
2. All written communication pertinent to the investigation is part of the official investigation, and must be maintained in the practitioner’s case file. This may include:

1. Assignment and Administrative Processing Sheets
2. Employee / Manager Memorandums
3. Correspondence
4. Emails
5. Research Results
6. Conference Notes
7. Written Recommendations

Case File Paper Work: Neat and Legible

1. Employees, managers, and other government agencies, may need to use the file after the investigation is closed. The work papers in the case file are an important aspect of the overall quality of case work.
2. The following are reasons that the work papers should be neat and legible:

1. Case review by management. Disorganized work papers adversely reflect on the professionalism of the employee.
2. Possible use in an administrative hearing or court of law. Poorly prepared work papers negatively impact credibility.
3. Possible FOIA request by practitioner.
4. Potential reviews or uses by TIGTA, Government Accountability Office or other IRS functions, including the Taxpayer Advocate Services.

1. Use a computer to minimize illegible handwritten paperwork.
2. Use spell-check and grammar-check functions to proofread work papers.
3. Do not overuse acronyms or abbreviations and avoid IRS jargon on correspondence to taxpayers or their representatives. Spell out the abbreviation or acronym the first time it is used.
4. During interviews, or conferences, it is preferable to take notes manually. Afterwards, the notes will be typed verbatim and the original handwritten version stapled to the typed version. For evidentiary purposes, the original manually written notes must be preserved.

Case Assignment

1. The Branch Chief will assign Limited Practice Appeals, and practitioner demands for a 10.60 complaint submitted pursuant to 10.82(g).
2. All other assignments will be made by the Section Manager.

Initial Case Review

1. A completeness check is done to ensure the referral includes the appropriate information and to confirm the source or basis. This includes, but is not limited to:

• Verification of license(s) (CPA, Attorney, EA)
• PTIN #
• CAF #
• Social Security Number (SSN) / Employer Identification Number (EIN)
• Tax Compliance Check
• History of practice before the IRS
• Subject matter of the complaint

1. If the referral or complaint is incomplete (i.e., it needs additional information from the referent), contact the referent immediately to request additional information. If additional information is not received, submit the case for closure.
2. If the referral or complaint does not meet OPR Parameters and there is no further action required, submit the case for closure.
3. If the referral or complaint does not meet OPR Parameters and it needs to be referred to another BOD, send an internal transmittal memorandum, along with the case memorandum and a copy of the referral or complaint to the appropriate BOD Analyst and submit the case for closure.
4. If the referral or complaint does meet OPR Parameters but also needs to be referred to another BOD, send an internal transmittal memorandum, along with the case memorandum and a copy of the referral or complaint to the appropriate BOD Analyst.

• Physically abusive behavior
• Criminal behavior
• Forgery
• Preparer diverted a refund
• Impersonation of an IRS employee
• Misuse of Treasury logo
• Submission of False Form 2848, Power of Attorney and Declaration of Representative
• Misrepresentation of Credentials (See IRM 1.25.4.10.3, Procedures for Misrepresentation of Credentials)
• Theft of refund

Note:

If the allegation involves only the theft of a taxpayer refund (Public Money), these referrals continue to go to TIGTA. These allegations are investigated / prosecuted under Title 18 USC 641 and do not involve DOJ Tax.

• A tax or refund scam ($50,000 or under)
• Identify Theft (used another’s ID to commit a secondary crime)
• PTIN stolen
• Received someone else’s tax information

• Tax Fraud and there is evidence of a criminal investigation
• Identity Theft (preparer stole ID)
• False / Fake W-2’s
• Tax Scam (over $50,000)
• Criminal tax violations of Title 26

Note:

If the refund theft is associated with any fraudulent return or false claim, such as a preparer providing the taxpayer with a return copy reflecting one refund amount and then actually files a return with an inflated refund amount, these should be referred to CI. These may be investigated under Title 18 USC 287 or under Title 26; but, both must be worked through DOJ Tax.

• Preparer kept the taxpayers records
• Fraudulent deductions were taken on the return
• Refund Anticipation Loan issues
• Electronic Return Originator issues
• Quality of service issues
• Fee disputes
• Firm or company is conducting itself inappropriately
• Fraudulent Tax Return Preparation

Note:

When a tax practitioner, or any individual subject to Circular 230 may be using multiple business entities or complex transactions, or other similar arrangements to potentially divert income from assessment and / or payment of any tax, or as part of a pattern of abusive tax avoidance send to SB/SE using Form 14624, Office of Professional Responsibility (OPR) Referral. Refer to SB/SE’s Interim Guidance.)

• Free file complaint
• Refund Anticipation Loan fees charged by an Accounting firm

• Tax evasion and an award is requested

• Individual tax issues such as liens and levies, penalty abatement request, or missing Forms 1099 / W-2
• W-2 Complaint (ADP) / W-2 Corrected problems or issues
• Form 1099 problems or issues
• Request for copy of amended return
• Request for the abatement of interest and penalties

• E-file Issues
• Return e-filed without consent
• Refund Anticipation Loan
• False Return prepared by e-file provider
• Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return

• Ghost Preparers (Compensated return preparers who fail to identify themselves or fail to identify themselves properly on a tax return)
• Tax Preparation Non-Compliance
• Theft of Refund
• PTIN violations
• Return Preparer misconduct, such as failure to: remit employment taxes, provide services for which the client was charged, provide copies of returns, or return original records

Note:

No referrals will leave OPR without management approval.

Case Development

1. Although Intake will have completed an initial jurisdictional check, it is the employee’s responsibility to review and verify the basis for OPR jurisdiction.
2. Upon receipt of a new case, review the complaint to re-verify that OPR has jurisdiction over the practitioner, as well as the alleged misconduct.

1. Check the practitioner’s professional license status and whether the practitioner has practiced before the IRS.
2. Analyze the complaint / referral for any violation of Circular 230 and review the allegation(s) in the complaint / referral, to determine whether the conduct complained of is regulated or proscribed by Circular 230.
3. For tax-compliance issues, verify tax compliance by determining whether the practitioner: 1. Has filed all Federal tax and information returns that the practitioner is required to file, and 2. Has paid or remitted all Federal taxes for which the practitioner is liable, or is responsible for depositing.

Case Investigation

1. OPR investigates, analyzes, and proposes appropriate dispositions, including sanctions, with respect to violations of the Regulations.

Procedures for Bar and Board Notices

1. The notice is placed in a manila case folder and sent to management for assignment.
2. The manager assigns the correspondence to an employee.
3. Upon receipt of the physical case file, review the case information.
4. Obtain additional documents or other information that may be necessary to determine if a case should be opened on the practitioner, including, for example:

• The individual’s CAF status (if any).
• Relevant source material located through Internet research (such as the individual’s or associated firm’s commercial website).
• Professional directories, like Martindale-Hubbell and the National Directory of Certified Public Accountants.
• State bar- or board-specific rules of professional responsibility or conduct, disciplinary procedures, and guidance for bar/board members or the public.
• Background or explanatory information provided by bar or board personnel when contacted.
  Add the documentation to the file folder, and upload a copy to CCMS. Notate the file with (or otherwise enter) the details of telephonic inquiries.

1. An individual whose license to practice law or certified public accountancy has lapsed or who has otherwise lost whatever license(s) he or she had as an attorney or CPA is not authorized to practice before the IRS as an attorney or CPA, even though the loss of license was other than for “cause” (illegal, unethical, or unprofessional conduct).
2. These individuals will be sent a letter informing them of OPR’s intention to limit their power-of-attorney privileges, subject to a credible showing in a timely written response to the letter as to why CAF status should not be changed.
3. Absent a response or an adequate rebuttal, the CAF Unit will be notified to update the CAF to reflect that the individual is ineligible to represent taxpayers as an attorney or CPA, as applicable.

Procedures for Reinstatement Requests

1. Practitioners who are suspended or disbarred may request (petition for) reinstatement of their ability to practice before the IRS when:

• The petitioners have abided by the terms of the disciplinary sanctions imposed on them.
• The minimum time period of ineligibility to practice has been satisfied, whether under a suspension or disbarment agreement, an ALJ decision, or pursuant to an expedited suspension under section 10.82 of Circular 230.
• Any sentence resulting from a criminal conviction, or a period of suspension / disbarment from state practice, has been served, and the individual has been reinstated by the respective state board or bar.
• The petitioner has been tax compliant after being sanctioned under Circular 230, and is otherwise compliant with Circular 230.

• Current licensure status with state agencies.
• State Board and Bar reinstatement status, which is validated using state-agency websites, if suspended via a §10.82 XP disciplinary process.
• Conditions for reinstatement set forth in a suspension / disbarment agreement.
• Minimum length of suspension / disbarment required prior to any reinstatement as prescribed in a disciplinary agreement (5 years in the case of disbarment).
• A review of CCMS for misconduct subsequent to the suspension / disbarment date (e.g., attempts to “practice”).
• Practitioner’s current tax compliance status, which is validated using IDRS.
• Status of a sentence following criminal convictions or status of any probationary periods, which are determined using various court websites and systems (e.g., Public Access to Court Electronic Records (PACER)).
• Completion of any other non-OPR disciplinary action or sanction.

1. Notify the IRS CAF Unit by email to update a practitioner’s eligibility to represent taxpayers.
2. Only notify EAP&M by email to update an EA’s eligibility to practice.
3. Update the practitioner’s eligibility to practice status to the OPR intranet database after reinstatement is granted.
4. Only if requested by the practitioner, publish the reinstatement in the Internal Revenue Bulletin (IRB).

Procedures for Misrepresentation of Credentials

1. In situations involving false Forms 2848 on which a practitioner (or someone purporting to be a practitioner) misrepresents the individual’s credentials, request a CAF 77. A practitioner suspended or disbarred from practice before the IRS (and thus unauthorized to represent any taxpayers) may, for example, misrepresent on a Form 2848 that the practitioner is authorized to practice, or a practitioner who is a CPA but not an attorney may misrepresent on a Form 2848 that the practitioner has both credentials. Contact the TIGTA Special Agent-in-Charge (SAC) for the practitioner’s location only if the initial referral to OPR did not come from TIGTA. This notification will allow TIGTA to:

• Determine whether an investigation is already pending.
• Determine whether or not an investigation will be initiated on this matter.

• If a C&D Letter should be sent, indicate that the addressee must stop misrepresenting himself / herself and advise them that the CAF Unit will be notified accordingly.
• If no further action should be taken, close the case.

• Notify the IRS CAF Unit that it may no longer process Forms 2848 either: appointing the practitioner as a representative, or on which the practitioner has declared a certain practitioner designation.
• Notify IRS field personnel assigned to work on the taxpayer matter identified on the Form 2848 that the individual is not authorized to represent taxpayers, and that they should not honor any Forms 2848 from the individual.
• Notify the EAP&M by email to update an EA’s status.
• Post the practitioner to the OPR intranet database.

Procedures for Criminal Convictions and Injunctions

1. OPR receives information regarding a criminal conviction (such as a tax conviction) or a permanent injunction prohibiting tax return preparation and / or representation of any taxpayers before the IRS.

1. Criminal Convictions are received quarterly per an understanding with CI, which provides sentencing information from their Criminal Investigation Management Information System database involving crimes associated with practitioners. OPR learns of other convictions in the form of press releases that are matched against CI’s list.
2. Injunctions are forwarded in real time by the Lead Development Center and are also received contemporaneously in the form of press releases by DOJ.

• If an unlicensed, unenrolled return preparer (i.e., is NOT an attorney, CPA, enrolled person, or appraiser) has a PTIN, refer the case to RPO and close the case.
• If an unlicensed, unenrolled return preparer does not have a PTIN, add the unenrolled return preparer to the Prevent PTIN Upload Report (injunctions only) and close the case.
• If a Circular 230 practitioner (i.e., is an attorney, CPA, enrolled person, or appraiser) has a PTIN, send the practitioner a PTIN Notification Letter, e.g., Proposed Revocation.
  1. If the practitioner fails to respond to the notice within 10 calendar days, or responds in agreement that OPR’s information is accurate, revoke the practitioner’s PTIN in TPPS and forward all related information for LAB processing / case intake.
  2. If the practitioner disputes the accuracy of OPR’s information, forward all documentation to LAB for case processing / intake.
• If a Circular 230 practitioner has no PTIN, add the practitioner to the Prevent PTIN Upload Report (for injunctions only) and forward the case to LAB for processing / case intake.

• If an unlicensed, unenrolled return preparer has a PTIN and a CAF number, and is enjoined from preparation AND representation, send the practitioner a CAF Notification Letter, e.g,. Proposed Revocation.
  1. If the unenrolled return preparer fails to respond to the notice within 10 calendar days, or responds in agreement that OPR’s information is accurate, notify the IRS CAF Unit by email to update the preparer’s status and refer the order to RPO to revoke the preparer’s PTIN in TPPS.
  2. If the practitioner disputes the accuracy of OPR’s information, forward all documentation to LAB for case processing / intake.
• If a Circular 230 practitioner has a PTIN and a CAF number, is enjoined from preparation AND representation, and the injunction orders the practitioner suspended or disbarred from practice before the IRS and the order provides for the revocation of the practitioner’s CAF number(s) and PTIN, revoke the practitioner’s PTIN in TPPS (or refer the injunction to RPO to revoke the PTIN), notify the IRS CAF Unit to update the practitioner’s CAF status, notify the EAP&M by email to update an EA’s status, and forward all related information to LAB for processing / case intake. LAB will send the suspended or disbarred practitioner a letter informing the practitioner of the suspension or disbarment and the other actions taken by OPR pursuant to the injunction.
• If a Circular 230 practitioner has a PTIN and a CAF number, is enjoined from preparation AND representation, and the injunction permanently enjoins the practitioner from preparation and representation, but does not order the practitioner suspended or disbarred from practice before the IRS and does not provide for the revocation of the practitioner’s CAF number(s) and PTIN, send the practitioner a PTIN/CAF Notification Letter, e.g,. Proposed Revocation.
  1. If the practitioner fails to respond to the notice within 10 calendar days, or responds in agreement that OPR’s information is accurate, notify the IRS CAF Unit by email to update a practitioner’s status, notify the EAP&M by email to update an EA’s status, revoke the practitioner’s PTIN in TPPS (or refer the injunction to RPO to revoke the practitioner’s PTIN), and forward all related information to LAB for processing / case intake.
  2. If the practitioner disputes the accuracy of OPR’s information, forward all documentation to LAB for case processing / intake.

• If the preparer is unlicensed and unenrolled, close the case without action.
• If the preparer is licensed or enrolled, refer the case to LAB for processing / case intake.

Procedures for Limited Practice by Unenrolled Tax Return Preparers

1. Participants in the Annual Filing Season Program under Rev. Proc. 2014-42 are, in their limited practice before the IRS, subject to the duties and restrictions in Subpart B of Circular 230 and the incompetence and disreputable conduct provisions of §10.51(a). OPR will process alleged violations accordingly.

Processing Ineligibility Determinations

1. Review the referral, background material, and supporting evidence.
2. Prepare a recommendation and, if appropriate, a Notice of Proposed Determination of Ineligibility and Letter of Transmittal.
3. The unenrolled return preparer has 30 calendar days from the date of service to respond to the Notice of Proposed Determination of Ineligibility, unless the time for filing is extended based on the preparer’s request.
4. If the unenrolled return preparer requests a conference (under section 10.02 of Rev. Proc. 81-38), schedule, as soon as possible, a conference at a time convenient to the unenrolled return preparer and OPR.
5. After any conference, and after any receipt from the unenrolled return preparer of additional information as discussed during the conference (or the deadline has passed), review the evidence in the case file as a whole to determine whether to proceed with an ineligibility determination.
6. Draft either a Determination of Ineligibility or Determination Regarding Eligibility (as appropriate), and a Letter of Transmittal to the unenrolled return preparer and to the preparer’s representative (if applicable).
7. Assuming a preparer is determined ineligible for limited practice, then after expiration of the 30 day period for filing an appeal:

1. Notify the IRS CAF Unit by email to update the unenrolled return preparer’s status as a prospective representative.
2. Update the unenrolled return preparer’s status to the OPR intranet database and the IRB.

Processing Appeals of Ineligibility Determinations

1. An unenrolled return preparer served with a Determination of Ineligibility must appeal the Determination within 30 calendar days. An appeal must be written and signed by the preparer and includes the preparer’s reasons for appeal.
2. Under Rev. Proc. 81-38, an unenrolled return preparer may request, as part of an appeal, a conference. If the unenrolled return preparer requests a conference, schedule, as soon as possible, a conference at a time convenient to the unenrolled return preparer and OPR. If a request for a conference is not made in the appeal, or the unenrolled return preparer’s appeal is untimely, the unenrolled return preparer will be deemed to have waived the right to a conference.
3. After a conference (if any), make a preliminary determination on the appeal, incorporating into the record any additional information received from the unenrolled return preparer. The Director of OPR will grant or deny the appeal.
4. After the Decision on Appeal is rendered:

1. If applicable, notify the IRS CAF Unit by email of an update to an unenrolled return preparer’s status as a prospective representative.
2. Update the unenrolled return preparer’s status to the OPR intranet database and the IRB.

Reinstatement

1. Rev. Proc. 81-38 entitles an unenrolled return preparer to request reinstatement of the privilege of limited practice after one year following the effective date of the Determination of Ineligibility or Decision on Appeal, whichever is later. Per the revenue procedure, any decision as to reinstatement "will consider the nature of the violation that resulted in ineligibility, the period of ineligibility, and the preparer's current adherence to the standards of ethics and conduct established by this revenue procedure in evaluating the request for reinstatement to limited practice."

Procedures for Enrollment Appeals

1. RPO makes initial contact with the applicant notifying them of RPO’s decision to deny / limit enrollment. The applicant chooses whether to appeal the denial or limitation of their EA status.
2. For all appeals, review the appeal and supporting evidence, to include:

• RPO’s Determination Memorandum
• Applicant’s Appeal
• Any correspondence exchanged between the applicant and RPO
• Research on IDRS and Employee User Portal (EUP) databases for information on applicant's tax filing and payment history
• Research professional licenses and verifying status
• If applicable, judgment of criminal conviction or order of injunction

• Standard Position Description(s) of position(s) held by Former Employee
• Employment History
• TIGTA Results
• ALERTS (Automated Labor and Employee Relations Tracking System). As an IRS database in which information about labor- and employee-relations cases is maintained, ALERTS is a potential source of information for OPR’s use in reviewing Former Employee appeals.

• Form 23, Application for Enrollment to Practice Before the Internal Revenue Service

1. Return the case file to RPO for further development and submit the case for closure.
2. Contact RPO or applicant immediately by telephone or email for additional information.

Procedures for 10.82 Cases (Expedited Suspensions)

1. For practitioners, section 10.82 expedites the due process procedures detailed in section 10.60 of Circular 230 for specific kinds of legal or ethical misconduct (10.82(b)(1)-(5)), generally reflected in independent third-party adjudications such as those of a court or a state disciplinary authority.
2. Practitioners subject to section 10.82 are served with an Order to Show Cause (OSC) why that practitioner should not be indefinitely suspended from practice before the IRS. Practitioners are given an opportunity to respond to the allegations in writing, and to request a conference. Practitioners found to be in violation of section 10.82, who have been served with an OSC, may be suspended from practice before the IRS. Suspended practitioners have two years to demand the filing of a §10.60 complaint with an ALJ. Suspensions imposed under section 10.82 are indefinite and remain effective until either:

1. OPR lifts the suspension by granting a practitioner’s request for reinstatement; or
2. The suspension is lifted or modified by an ALJ in a subsequent proceeding brought pursuant to section 10.60 of Circular 230.

• Reading any transmittal and / or referral memorandums or comments;
• Reviewing the supporting evidence for the XP Proceeding;
• Ensuring for cases involving a loss of license under section 10.82(b)(1), that any orders, decisions, finding of facts, etc., issued by the corresponding licensing authority are in the case file. This includes researching any loss of license in a reciprocal jurisdiction and / or contacting any licensing authorities if there are concerns that a loss of license was not for cause;
• Ensuring for cases involving convictions under section 10.82(b)(2), that any plea agreements, judgments, sentencing memorandum, etc., issued by the presiding court are in the case file;
• Ensuring for cases involving section 10.82(b)(3), that any documents supporting the section 10.79(d) conditions purportedly violated are in the case file;
• Ensuring for cases involving section 10.82(b)(4), that any judgments, orders, stipulations, etc., of the court are in the case file;
• Ensuring for 10.82(b)(5) cases that current tax transcripts are in the case file;
• Checking for additional conduct potentially in violation of section 10.82 such as loss of other professional licenses for cause, criminal convictions for either Title 26 violations or crimes involving fraud or dishonesty, or noncompliance with tax-return-filing requirements;

Note:

Gather the supporting documentation necessary to substantiate any supplemental violations outside of section 10.82 should the practitioner subsequently request a section 10.60 administrative complaint pursuant to section 10.82(g) after an Order for Indefinite Suspension is issued.

Note:

The above are not all-inclusive, but are meant to provide a framework for investigating possible ancillary Circular 230 misconduct, including tax noncompliance that is not a basis for suspension under section 10.82(b)(5). Employees are encouraged to develop each case based on the relevant facts and circumstances.

• Drafting an OSC that alleges facts supporting all appropriate section 10.82(b) paragraphs with relevant documents attached as exhibits to the draft OSC. For example, any OSC based on 10.82(b)(2), should allege whether the crime involved was a Title 26 violation, was a crime involving dishonesty or breach of trust, and / or was a felony for which the conduct involved renders the practitioner unfit to practice before the IRS.
• Drafting a Letter of Transmittal to the practitioner for the OSC.
• Drafting a file memorandum supporting the recommendation to pursue an XP Proceeding and why an injunction is an appropriate basis for an XP Proceeding.
• Both documents, along with the Rights and Responsibilities document are mailed to the practitioner.

Note:

• If an Order for Indefinite Suspension is appropriate.
• If there is not enough information, based on the evidence in the case file, to issue an Order for Indefinite Suspension.
• If the practitioner has shown good cause why the practitioner should not be indefinitely suspended.

1. Notify the IRS CAF Unit by email to update a practitioner’s status.
2. Notify the EAP&M by email to update an EA’s status.
3. Update the practitioner’s disciplinary action to the OPR intranet database.
4. Publish the practitioner’s disciplinary action in the IRB.

Procedures for Cases Forwarded to GLS for Litigation (10.60 Hearing)

1. When a request for a section 10.60 Proceeding pursuant to section 10.82(g) of Circular 230 is made to OPR, a new case is opened in CCMS. If possible, the employee who worked the XP Case, or the Attorney that attended the XP Case conference with a Paralegal, will be assigned the section 10.82(g) request for a section 10.62 Complaint.
2. Immediately determine if the section 10.82(g) request is timely. Once an Order for Indefinite Suspension has been mailed, the practitioner has two years from the action effective date to request in writing a section 10.60 Proceeding / 10.62 Complaint pursuant to section 10.82(g) of Circular 230.

• If the 10.60 Request is timely, OPR has 60 calendar days from the date of receipt to prepare and coordinate with General Legal Services (GLS) for filing and service of the requested section 10.62 Complaint.
• If the 10.60 Request is received after the deadline (i.e., is submitted more than 2 years after the effective date of the practitioner’s expedited suspension), the request will not normally be honored. However, any request believed to be untimely should immediately be discussed with management. If there is concurrence that the request is untimely and should not otherwise be honored, draft a letter to the practitioner advising that the demand for a 10.60 proceeding will not be honored because it is untimely.

Note:

The Memorandum of Understanding (MOU) between OPR and GLS provides that OPR performs litigation support and acts as the point of contact for GLS. An Attorney from GLS litigates the case.

• Check the status of the practitioner’s professional credentials.
• Check PACER for criminal convictions.
• Check for civil penalties on IMFOLI.
• Check CCMS and legacy OPR systems for referrals / allegations subsequent to the Order of Indefinite Suspension.
• Check for DOJ Injunctions.
• Run a tax non-compliance check for individual and business returns (with a search for business entities).
• Check the practitioner’s return preparation and PTIN status.

1. If there is a lack of information or material issues remain unsolved, use section 10.20 to expeditiously direct the practitioner’s attention to these issues with specific requests for information. Consider the available information, unresolved issues, and the practitioner’s response to determine whether pursuing a new allegation is warranted. Consultation with management is required.
2. If or when there is proof to support a new allegation, determine whether to include the new allegation in the draft Complaint. This decision depends on whether a supplemental allegation can be developed and included in the final Complaint before the 60 calendar day filing deadline.

Note:

A minimum 10 calendar day response time should be provided to the practitioner whenever possible. This may be extended depending on the extent of the alleged violation(s).

• Panel 1: OPR memorandums and internal documentation and correspondence (not to the practitioner or to GLS).
• Panel 2: Correspondence to / from the Practitioner (including email exchanges).
• Panel 3: Correspondence between OPR and GLS, including the transmittal memorandum and matrix (as well as email exchanges).
• Panel 4: Formal litigation documents from GLS (all legal documents and documents filed with the ALJ).
• Panel 5: Documented proof of jurisdiction.
• Panel 6: OPR's documentary evidence to prove all elements of the violation(s) alleged (e.g., tax transcripts, referrals, TIGTA reports, and results of case investigation). Panel 6 is effectively the draft evidentiary file without redactions, without a redaction key, and without Panels 2 and 5.

• If the draft Complaint was submitted to GLS without the supplemental allegation, begin revising the draft Complaint to include the supplemental allegations.

• For tax compliance allegations, all tax transcripts must be printed within two weeks of the expected filing date of the Complaint. Certify hardcopies of EUP transcripts through use of a seal. Be sure the Director is available in order to have the official transcripts certified in a timely manner.

• Email the approved final Complaint (or Revised Complaint), final GLS Matrix, and a Cover Memorandum to the GLS Attorney.
• Mail two of the redacted evidentiary files to the GLS Attorney (via certified mail, overnight delivery with return receipt requested).
• Email the redaction key for the evidentiary files to the GLS Attorney.

• If the practitioner does not file a proper response (pursuant to section 10.64(b)) within 30 calendar days of service and does not request an extension of time from the ALJ, a Motion for Default Judgment may be warranted and can be filed with the ALJ, and served on the practitioner.
• If the practitioner files a proper response (pursuant to section 10.64(b)) to the Complaint within 30 calendar days of service, or within an extension period as provided by the ALJ, then, in lieu of a motion for default decision, discovery may be appropriate, such as in anticipation of a Motion for Summary Adjudication. Section 10.66 provides that OPR may file a reply, but that, without a reply, any new matters raised in the response are deemed denied.

• When applicable, prepare a press release and / or Business Unit News (BUN) article.
• Draft a Letter of Transmittal to the practitioner that summarizes the FAD, along with a copy of the ALJ decision, or the ALJ and AA decisions, and a copy of the Guidance on Restrictions During Suspension or Disbarment should a suspension or disbarment be imposed.
• Per OPR / GLS MOU, GLS should return to OPR all evidentiary materials upon the issuance of a FAD.
• Only if appropriate (cases involving suspensions or disbarments), notify the IRS CAF Unit to update the practitioner’s status.
• Only if appropriate (cases involving suspensions or disbarments), notify the EAP&M to update an EA’s status.
• Update the practitioner’s disciplinary action to the OPR intranet database.
• Publish the practitioner’s disciplinary action in the IRB.
• Post the finalized press release to OPR’s OPR Press webpage on IRS.gov/.
• Post the finalized BUN to the OPR’s Business Units News webpage on OPR’s internal website and IRWeb’s homepage under News From the Business Units.

Procedures for 10.60 Disciplinary Cases (Conduct, Compliance, Hybrid)

1. Disciplinary Cases that include both practitioner personal tax compliance and issues of misconduct in practice before the IRS are considered Hybrid Cases. If the potential Circular 230 violations of a case are confined to personal tax compliance (within section 10.51(a)(6)), then the case is a Compliance Case. If the potential violations do not include failures of personal tax compliance, then the case is a Conduct Case.
2. Section 10.60 Disciplinary Cases conclude in one of three ways:

• OPR determines that non-disciplinary action is appropriate and closes the case accordingly.
• The practitioner offers, and OPR accepts, a proposed disciplinary action under section 10.61(b)(1) to settle the case.
• OPR refers the case to GLS for filing of an administrative complaint with an ALJ, who decides the case (with any appeal decided by the AA).

• Review the referral and accompanying evidence.
• Determine if additional cases should be opened against any other practitioners mentioned in the referral. If other practitioners are found, additional cases may be opened.
• Confirm the practitioner’s SSN.
• Confirm the practitioner’s INOLE / 26 USC 6212 address.
• Check CCMS and legacy OPR systems for prior cases involving the practitioner, as well as the OPR internal database for prior discipline.
• Run a comprehensive report in Accurint with the practitioner’s SSN that excludes family members, neighbors, and associates (unless necessary) to minimize third-party information in the case file.
• Confirm a nexus between the practitioner and Circular 230.
• Determine that the individual is or appears to be a Circular 230 practitioner - an attorney, CPA, enrolled professional, appraiser, or unenrolled return preparer subject to Circular 230.
• Check for a PTIN and return preparation activity (RPVUE - IMF and BMF returns prepared in the current and three prior years).
• Search IDRS RPINK to find all practitioner CAF numbers. The practitioner’s address history in Accurint may be used to verify additional CAF numbers. CFINK and CFINKH reports are printed for each CAF number.
• Research professional licenses and verifying the status of each. The practitioner’s address history in Accurint should be used to check for both attorney and CPA licenses in each state where the practitioner resided.
• Notify the person making the referral (if an internal source) regarding the case assignment. If the referral is external, then contact the person making the referral only to verify or seek additional information.

• For civil penalty referrals, request the examiner’s workpapers and copies of the underlying tax returns, and verify the assessment of the civil penalty(ies) in IDRS IMFOLT;
• For allegations of loss of professional license or for criminal tax or felony convictions, request copies of the orders or judgments;
• Check for other civil penalties assessed against the practitioner; for example, run an IDRS IMFOLI and IMFOLT search, and then research the penalty reference code, or contact a RPC (this includes requesting penalty files where appropriate);
• For allegations of unauthorized practice, research CAF records and request copies of the Forms 2848 filed with the IRS;
• Verify the tax non-compliance issues that were referred and conduct further research for additional tax non-compliance.

• Check the practitioner’s IMFOLI for unfiled Forms 1040 and IRS prepared substitutes for return (SFRs) under the authority of IRC 6020(b). You must verify a filing requirement for each unfiled return and verify each unfiled return with IMFOLT for years with SFRs, to see if the practitioner either accepted the SFR or subsequently filed a return amending the SFR.
• Treat unaccepted or un-amended SFRs as unfiled returns.
• Check the practitioner’s IMF and BMF accounts for outstanding balances, not currently under an installment agreement or an offer in compromise. For indications of an ability to pay, review several recent years of tax return data (EUP / TDS - Tax Return Transcripts for the three most recent years, also check IDRS TRDBV for prior years beyond the three), as to trends regarding total income, expenses, or gross receipts. Chart the number of returns prepared per year with both PTIN and EIN to track business activity.
• Print five prior years of either EUP Wage and Income Transcripts or IDRS IRPTR Transcripts.
• Search for business entities owned or controlled by the practitioner.
• Use NAMEE to search for EINs for businesses listed on the practitioner’s Accurint report. Run an additional Accurint business entity report with the practitioner’s name and location (state).
• Check EUP Wage and Income Transcripts (or IDRS IRPTR Transcripts) for connections to business entities, such as K1s, Forms 1099, and Forms W-2.
• Check for entity information the practitioner self-reported on a PTIN application using IDRS RPVUE with definer ’P’.
• Check CAF histories (using CFINKH) for evidence of business entities.
• For EINs, with possible practitioner ownership or control, print out BMFOLE to determine the practitioner’s relationship to the entity, as well as BMFOLI to check for unfiled returns and possible civil penalties.
• Investigate the practitioner’s return-preparation activity in connection with all business entities. This expands the RPVUE research (current and 3 prior years for both IMF and BMF returns) to include each EIN linked to the practitioner.
• Run the OPR-IAT tool to search for late-filed returns with both the practitioner’s SSN and all linked EINs. IAT allows the manual entry of 2 EINs with each report. For practitioners with > 2 EINs, run the IAT tool multiple times.

• A non-disciplinary case closing, such as closing without sanction and without further action (or returning the case to the field for any Title 26 consideration).
• If sufficient information is received, developed, and reviewed, a determination may be made that with regard to the allegations a non-disciplinary closure action should be taken, such as sending an initial Soft Letter (soliciting a response) should be sent to the practitioner, followed by a closing Soft Letter (which acknowledges the practitioner’s response, if any, to the initial letter).
• Splitting the conduct and compliance issues, then proceeding with two different letters. For example, the conduct allegations may close with an initial and then final Soft Letter or with a Reprimand (after an allegation or pre-allegation letter), while the compliance issues may merit moving forward toward a section 10.60 disciplinary proceeding.
• If the practitioner cures or offers satisfactory mitigation for any tax non-compliance identified in a letter from OPR to the practitioner that provides, for example, a 60-day opportunity for the practitioner to remedy the return-filing and / or tax-payment delinquencies, send a closing letter for the tax compliance allegations. Either continue investigating any conduct allegations or, if those allegations were also resolved by the practitioner’s response, then include appropriate closing language for the conduct allegations within the tax-compliance closing letter.

1. Pre-Allegation Letter: If the case requires further investigation and an Allegation Letter is not expected to be drafted for 60 calendar days or more, consider drafting a Pre-Allegation Letter. If the practitioner has correctable lapses in tax compliance, such as outstanding balances or unfiled returns, then language from a standard 60 Day Letter should be included within the Pre-Allegation Letter (in essence affording the practitioner 60 days to correct delinquencies).
2. Section 10.20 Letter: If information is missing from the case file that is material to whether a violation occurred, and unavailable through IRS sources, draft a Section 10.20 request letter to the practitioner for the needed information. If the Section 10.20 information request is the first correspondence from OPR to the practitioner, 60 Day Letter language can be added for any compliance problems.
3. Allegation Letter: If the investigation, including after review of any information responsive to a Section 10.60 information request, indicates a sanction is warranted, draft an Allegation Letter reciting potential violations of Circular 230 with specific facts supporting each alleged violation.

• Retains Counsel: Obtain a Form 2848 appointing the representative for the Circular 230 matter, or obtain a letter of representation if the case does not involve any tax non-compliance on the practitioner’s part.
• Requests additional time to respond to a Section 10.20 information request or to provide documents: One extension may be granted, up to 30 calendar days, from any specified deadline. Communicate in writing the new deadline by either fax or email.

• Open by describing the nature and basis of the proceeding, the practitioner’s rights and responsibilities, and ask the practitioner to present any oral response to the conduct and tax-compliance allegations.
• Ask the practitioner questions in an attempt to better understand the circumstances surrounding the allegations.
• For all claims or statements made by the practitioner during the conference that were not already included in a written response to OPR, request that the practitioner submit the new information in a supplemental written response and provide supporting documentation.
• Set a deadline for the practitioner to provide a supplemental response and any additional information. Deadlines should be confirmed in writing (email or fax) to the practitioner immediately after the conference and should not exceed 30 calendar days from the date of the conference, absent management approval.
• If the practitioner’s tax non-compliance (unfiled returns or unpaid balances) remains unresolved at the time of the conference, inquire as to the reasons for the delay and set a deadline for the practitioner to address the issues.

• Determine if a sanction or DDA may be appropriate.
• Determine if there is not enough information to support a sanction or DDA.

• Outline the various closing options available for the case.
• Set a deadline for the practitioner to make an offer, if an offer is not presented during the conversation.
• Communicate that any offers must be sent in writing and set a deadline for such submission.
• If the practitioner does not submit a settlement proposal by the deadline, or within 30 calendar days after a conference if a deadline was not set, or if the practitioner does not respond, prepare the case for forwarding to GLS.

• Draft the settlement agreement, reflecting either the practitioner’s offer (if recommended for acceptance) or the proposed OPR counter-offer.
• Draft a Letter of Transmittal to the practitioner that notates a 15 calendar-day deadline to accept the settlement agreement.

Note:

Draft settlement agreements involving suspensions or disbarments ordinarily should contain conditions for reinstatement to practice that are customized to the practitioner’s situation.

• Notify the IRS CAF Unit by email to update the practitioner’s status.
• Notify the EAP&M by email to update an EA’s status.
• Update the practitioner’s disciplinary action to the OPR intranet database.
• Publish the practitioner’s disciplinary action in the IRB.

Procedures for Cases Forwarded to GLS for Litigation (10.60 Hearing)

1. If settlement cannot be reached, a complaint, described in section 10.62, will be filed to initiate an administrative hearing before an ALJ. Attorneys from the IRS Office of Chief Counsel - GLS file the administrative complaint and represents OPR at an administrative hearing before the ALJ. The ALJ issues a decision that may be appealed by either OPR or the practitioner to the Treasury AA, who will then render the FAD.
2. The MOU between OPR and GLS provides that OPR performs litigation support and the assigned OPR attorney acts as the OPR point of contact for GLS. GLS litigates the case.
3. OPR will consider settlement negotiations with a practitioner throughout the 10.60 hearing process.
4. A final check should be completed of the existing allegations, as detailed in the Allegation Letter, and a final check done for additional Circular 230 misconduct outside the scope of the original case. Request and obtain supporting documents for any possible supplemental Circular 230 misconduct. If additional provable misconduct is discovered, a superseding Allegation Letter must be sent to the practitioner in order to provide proper notice and opportunity to respond.
5. For tax-compliance allegations, update the compliance history by checking both the existing allegations (of unfiled returns and balances) as well as any recent filing requirements of the practitioner not reflected in the Allegation Letter. Tax transcripts should be checked within two weeks after sending the file to GLS for recent filings or other account activity. Additional counts of tax non-compliance (for other tax years or quarters), of the same basic type previously included in the Allegation Letter, may be included for the first time in the GLS Last Chance Letter to provide the practitioner notice and opportunity to respond before the additional allegations are included in the Administrative Complaint.
6. If substantial recent tax non-compliance is found, such as involving business entities with which the practitioner is associated, then a superseding Allegation Letter must be sent. Generally, for cases that at the time of the Allegation Letter were limited to conduct as a practitioner, a superseding allegation letter is mandatory to newly raise any tax-compliance allegations.
7. Prepare the case file for GLS. Review the original case file, particularly the file memorandum, and determine whether all supporting documentation for the proceeding is present. If not, supplement the file as soon as possible.
8. Organize the original case file into a six-panel red case folder. The six-panel red case folder will be kept at OPR and used throughout the 10.60 process. Documents not relevant to the allegations in the 10.60 proceeding may be retained in the original green case file . The six-panel red case folder is organized as follows starting with panel 1 on the inside of the left cover of the case file:

• Panel 1: OPR memorandums and internal documentation and correspondence (not to the practitioner or to GLS).
• Panel 2: Correspondence to / from the Practitioner (including email exchanges).
• Panel 3: Correspondence between OPR and GLS, including the transmittal memorandum and matrix (as well as email exchanges).
• Panel 4: Formal litigation documents from GLS (all legal documents and documents filed with the ALJ).
• Panel 5: Documented proof of jurisdiction.
• Panel 6: OPR's documentary evidence to prove all elements of the violation(s) alleged (e.g., tax transcripts, referrals, TIGTA reports, and results of case investigation). Panel 6 is effectively the draft evidentiary file without redactions, without a redaction key, and without Panels 2 and 5.

1. The GLS Cover Memorandum should be addressed to the GLS Area Counsel for the region in which the practitioner resides.
2. The GLS Matrix must list the documents that will be used as the evidentiary file, including: all jurisdictional documents, correspondence with the practitioner, and documents evidencing the elements of the alleged misconduct. The list of documents in the GLS Matrix is a draft version of the evidentiary file to be produced after the counts in the Administrative Complaint are finalized with GLS.
3. Use the practitioner’s INOLE / 26 USC 6212 address for proper service of the Administrative Complaint.
4. Case numbers for GLS complaints are provided by OPR’s O&M Branch. O&M maintains a litigation log and assigns a unique number to each complaint.

Note:

Case numbers are only assigned immediately prior to the filing of a complaint. Draft complaints are sent to GLS without case numbers.

1. If additional conduct in apparent violation of Circular 230 is discovered during the final check, and a superseding Allegation Letter was not mailed, discuss with GLS the need for such conduct to be included in the GLS Last Chance Letter.
2. The draft Administrative Complaint is subject to editing and reediting, and certain counts in the draft Administrative Complaint ultimately may be excluded from the final version, such as if sufficient evidence to support the count or counts is not available, or because other hazards of litigation are anticipated.

Note:

1. Additional allegations, such as recent tax non-compliance may be included in the Last Chance Settlement Letter for the first time to meet the notice and response requirements of section 10.60(c) (see paragraph 1, above).
2. Per the GLS-OPR MOU, any grant of an extension of time to respond to the GLS Last Chance Letter must be approved by OPR.

1. A settlement reached between the parties is reduced to a written agreement.
2. OPR’s Director signs the written settlement agreement after the practitioner has signed the agreement. Once signed by the Director, associate the original agreement with the file and prepare a Letter of Transmittal to the practitioner summarizing the terms of the agreement, along with a copy of the fully executed agreement and the Guidance on Restrictions During Suspension or Disbarment (if applicable).

1. The practitioner responds to the Last Chance Settlement Letter and offers mitigation as to certain proposed counts but does not make a settlement offer
2. The practitioner responds to the Last Chance Settlement Letter and denies the allegations, but does not establish the absence of violations or offer sufficient mitigation as to the lack of willful violations, and the practitioner does not propose a settlement offer.
3. The practitioner does not respond to the Last Chance Settlement Letter.
4. Despite a settlement offer, and any counter-offers, a settlement is not reached.

Note:

Paragraphs 21 through 27 include descriptions of procedures, motions and ALJ actions that are typical in OPR cases before ALJs. These descriptions are intended to illustrate the process and identify the role of OPR in these proceedings, and should not be read as binding upon the ALJ or as establishing the rights and obligations of parties before the ALJ.

• GLS and OPR discuss the practitioner’s response as soon as possible and any questions raised by the response, including whether a deposition may be necessary in anticipation of a Motion for Summary Adjudication.
• Section 10.66 provides that OPR may file a reply, but that, without a reply, any new matters raised in the response are deemed denied.

• The NoA must include a brief that states exceptions to the ALJ’s decision and supporting reasons for such exceptions.
• Per the OPR-GLS MOU, GLS provides assistance to OPR during any appeal. OPR maintains responsibility for filing all documents associated with an appeal with the AA.

• When applicable, prepare a press release and / or BUN article.
• Draft a Letter of Transmittal to the practitioner that summarizes the FAD, along with a copy of the ALJ decision, or the ALJ and AA decisions, and a copy of the Guidance on Restrictions During Suspension or Disbarment should a suspension or disbarment be imposed.
• Per OPR / GLS MOU, GLS should return to OPR all evidentiary materials upon the issuance of a FAD.
• Only if appropriate (cases involving suspensions or disbarments), notify the IRS CAF Unit to update the practitioner’s status.
• Only if appropriate (cases involving suspensions or disbarments), notify the EAP&M to update an EA’s status.
• Update the practitioner’s disciplinary action to the OPR intranet database.
• Publish the practitioner’s disciplinary action in the IRB.
• Post the finalized press release to OPR’s OPR Press webpage on IRS.gov/.
• Post the finalized BUN to the OPR’s Business Units News webpage on OPR’s internal website and IRWeb’s homepage under News From the Business Units.

Procedures for Publicity

1. OPR conducts the publicity process following the conclusion of every case to ensure significant results are shared and explained to Internal Stakeholders, the Practitioner Community and the public. Based upon the type of case, there are five kinds of publicity actions that can take place: press releases, BUN articles, OPR intranet updates, IRS.gov/ posts, and notifications via OPR’s Bulletin (i.e., IRB posts). For any case, one action or any combination of the five, may be taken depending on OPR’s guidelines and the Director’s discretion.

Press Releases and Business Unit News Articles

1. In order to ensure timely and relevant publicity, it is imperative that the Office of the Director be notified of all ALJ and AA decisions immediately upon receipt. For noteworthy cases, the Director will request a preliminary draft press release.
2. For press releases, consent agreements, suspensions, disbarments, or practitioner reinstatements are the only potential instances when publicity may be issued. For BUN articles, consent agreements in which a press release has been negotiated and practitioner reinstatements are the only instances when publicity may be issued. Both are given the following requirements:

• If the practitioner does not agree to a consent-agreement result being published (for a non-adjudicated case), a press release will not be issued.
• If the practitioner agrees to a press release during settlement negotiations, the Director will determine the appropriate press release action. In this instance, the press release is provided to the practitioner or his / her representative for approval or further negotiation.
• If a case has been adjudicated, the Director will make the decision to issue a press release based on relevance of the case to other practitioners and the public.

Note:

Remember that the practitioner can only consent to the disclosure of the practitioner’s own return information. The practitioner cannot consent to the disclosure of the return information of any other taxpayer, including the practitioner’s clients whose return information may be in the practitioner’s case file.