[Federal Register: December 19, 2002 (Volume 67, Number 244)]
[Proposed Rules]
[Page 77724-77725]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19de02-14]
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DEPARTMENT OF THE TREASURY
Office of the Secretary
31 CFR Part 10
[REG-122380-02]
RIN 1545-BA72
Regulations Governing Practice Before the Internal Revenue
Service
AGENCY: Office of the Secretary, Treasury.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: This document provides advance notice of proposed rulemaking
to amend the regulations governing practice before the Internal Revenue
Service, which appear in the Code of Federal Regulations and in
pamphlet form as Treasury Department Circular No. 230, Regulations
Governing the Practice of Attorneys, Certified Public Accountants,
Enrolled Agents, Enrolled Actuaries, and Appraisers before the Service.
This document invites individuals and organizations to submit comments
on revising Circular No. 230 to address certain issues regarding
standards of practice of attorneys, certified public accountants,
enrolled agents, enrolled actuaries, and appraisers who represent
taxpayers before the Service.
DATES: Submit comments on or before February 18, 2003.
ADDRESSES: Send submissions to: CC:ITA:RU (REG-122380-02), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m. to: CC:ITA:RU (REG-122380-02),
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. Alternatively, persons may submit comments
electronically via the IRS Internet site at: http://www.irs.gov/regs.
FOR FURTHER INFORMATION CONTACT: Concerning issues for comment, Richard
Goldstein at (202) 622-7820 or Brinton T. Warren (202) 622-4940;
concerning submissions of comments, LaNita Van Dyke, (202) 622-7180;
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 330 of title 31 of the United States Code authorizes the
Secretary of the Treasury to regulate the practice of representatives
before the Treasury Department and, after notice and an opportunity for
a proceeding, to suspend or disbar from practice before the Treasury
Department those representatives who are incompetent, disreputable, or
who violate regulations prescribed under section 330. Pursuant to
section 330, the Secretary, in Circular No. 230 (31 CFR part 10),
published regulations that authorize the Director of Practice to act
upon applications for enrollment to practice before the Service, to
institute proceedings for suspension or disbarment from practice before
the Service, to make inquiries with respect to matters under the
Director's jurisdiction, and to perform such other duties as are
necessary to carry out these functions.
The regulations were most recently amended on July 26, 2002, (67 FR
48760) to clarify the general standards of practice before the Service.
In the preamble to those amendments to the regulations, the Treasury
Department and the Service stated their intention to issue a second
notice of proposed rulemaking to re-propose amendments to regulations
governing standards for tax shelter opinions. The Treasury Department
and the Service also stated their intention to issue an advanced notice
of proposed rulemaking covering additional nonshelter matters
pertaining to practice before the Service.
Contemporaneously with the efforts to address issues affecting
practice, the Treasury Department and the Service are reorganizing the
Office of the Director of Practice to enhance its
[[Page 77725]]
effectiveness. As part of the reorganization, the authority to
supervise the Office of the Director of Practice has been delegated to
the Office of the Senior Counselor to the Commissioner. The authority
to make the agency decision in disciplinary proceedings when decisions
by Administrative Law Judges are appealed has also been delegated to
the Senior Counselor to the Commissioner. The Office of Senior
Counselor to the Commissioner observes an ``ethical wall'' ensuring
that the official who makes the agency decision in such disciplinary
proceedings is not exposed to these cases prematurely. Another step in
the reorganization is the possible renaming of the Office of the
Director of Practice to the Office of Professional Responsibility. It
also is contemplated that the Office of Senior Counselor to the
Commissioner will have a centralized role in the selection of the
Director of Practice. The Treasury Department and the Service are
seeking public comment on this reorganization.
Special Analyses
It has been determined that this advance notice of proposed
rulemaking is not a significant regulatory action as defined in
Executive Order 12866.
Request for Comments
The Treasury Department and the Service invite comments on the
following matters.
Director of Practice
1. Whether Sec. 10.1 should be revised to rename the Director of
Practice as the Director of the Office of Professional Responsibility.
2. Whether the authority to appoint the Director of Practice should
be delegated to the office or person who supervises the Director of
Practice. If not, to whom should the Secretary delegate the authority
to appoint the Director of Practice?
3. Whether the review of an Administrative Law Judge's decision
under Sec. 10.78 should be delegated to the office or person who
supervises the Director of Practice. If not, to whom should the
Secretary delegate the authority under Sec. 10.78 to review the
Administrative Law Judge's decision in disciplinary proceedings when
these decisions are appealed.
Definition of Practice and Who May Practice
1. Whether the definition of practice before the Service and the
definition of practitioner in Sec. 10.2 should be modified to
specifically provide that return preparation by an individual not
described in Sec. 10.3(a) through (d) (``unenrolled return preparer'')
is practice before the Service and that an unenrolled return preparer
is a practitioner under Circular 230.
2. Whether Sec. 10.3(b) should be revised to permit licensed
accountants, and certified internal auditors, who are not certified
public accountants, to practice before the Service.
3. Whether Sec. 10.7(c)(1)(viii) should be revised to authorize
the Director of Practice to modify the scope of limited practice by
unenrolled return preparers, without further amendment to the
regulations.
4. Whether the regulations should specifically provide the Director
of Practice with authority to determine eligibility for limited
practice by unenrolled return preparers under Sec. 10.7(c)(1)(viii).
Enrolled Agents and Eligibility for Enrollment
1. Whether Enrolled Agents should be allowed to refer to themselves
as ``Licensed Tax Professionals'' or another specified designation
determined by the Service, in addition to or instead of the Enrolled
Agent designation, to more fully describe the nature of the
professional services that they provide.
2. Whether the regulations should set forth specific examples of
acceptable descriptions of an Enrolled Agent's practice for
advertisements.
3. Whether the Director of Practice should be authorized to
determine, without requiring further amendment of the regulations,
standards for the continuing professional education requirements of
Enrolled Agents.
Sanctions and Disciplinary Proceedings
1. Whether the regulations should be amended to authorize a
practitioner and the Director of Practice to enter into settlement
agreements, with such agreements enforceable through the expedited
procedures of Sec. 10.82.
2. Whether the definition in the regulation of disreputable conduct
should be amended to specifically include the willful failure of a
practitioner who is a preparer to sign a return.
3. Whether, in order to facilitate the timely adjudication of
disciplinary proceedings instituted under Sec. 10.60, the regulations
should be amended to provide that the failure of a practitioner to
answer a complaint constitutes an automatic default in the proceeding,
subject to a showing of good cause.
4. Whether the regulations should be amended to provide the parties
to a proceeding instituted under Sec. 10.60 the opportunity to obtain
discovery through means such as interrogatories, requests for
production of documents, and requests for admissions, in addition to
depositions. Whether the regulations should define what discovery
should be permitted. Whether the regulations should place limits on
discovery.
5. Whether the protection afforded in the current regulation--that
a party in a disciplinary proceeding is entitled to present his case or
defense by oral or documentary evidence, to submit rebuttal evidence,
and to conduct such cross examination as may be required for a full and
true disclosure of the facts--is sufficient, or whether changes should
be made to afford greater protection in a disciplinary proceeding,
including the opportunity to question, in the presence of the
Administrative Law Judge, any person whose statement is offered by the
opposing party.
Contingent Fees
1. Whether contingent fees should be permitted in conjunction with
a request for a private letter ruling or other prefiling document.
2. Whether the regulations should continue to permit a practitioner
to charge a contingent fee for preparing, or for any advice rendered in
connection with a position taken or to be taken on, an amended return
or claim for refund.
3. Whether the prohibition on contingent fees should be expanded to
permit contingent fees only for amended returns or claims for refund
when the client's taxable income on the amended return or claim for
refund is less than $50,000 (or another amount determined with
reference to financial need).
Confidentiality Agreements
1. Whether the regulations should prohibit practitioners from
entering into agreements with clients that, in violation of applicable
state professional rules or applicable state law, restrict a
practitioner from providing relevant tax advice to other similarly
situated taxpayers.
2. Whether the regulations should prohibit, irrespective of
applicable state professional rules or applicable state law, the
agreements identified above.
Pamela F. Olson,
Assistant Secretary for Tax Policy.
[FR Doc. 02-31989 Filed 12-18-02; 8:45 am]
BILLING CODE 4830-01-P