TaxEar›Part 3

Part 3: Representation, Practices and Procedures

The IRS outline for this part has 4 domains. Each topic below is a page; those marked published have been written from primary sources and verified.

3.1 Practices and Procedures

3.1.1 Practice before the IRS

3.1.1.aWhat constitutes practice before the IRSpublished
3.1.1.bCategories of individuals who may practice and extent of practice privilegespublished

3.1.2 Requirements for Enrolled Agents

3.1.2.aInformation to be furnished to the IRSpublished
3.1.2.bOmission or error on return, document, or affidavitpublished
3.1.2.cRules for employing or accepting assistance from former IRS employees or disbarred/suspended personspublished
3.1.2.dRules for restrictions on advertising, solicitation and fee informationpublished
3.1.2.eFee rules (e.g., contingent, unconscionable)published
3.1.2.fDue diligence requirementspublished
3.1.2.gConflict of interestpublished
3.1.2.hRules for refund check negotiationpublished
3.1.2.iStandards for written advice, covered opinions, tax return positions and preparing returnspublished
3.1.2.jContinuing education requirementspublished
3.1.2.kTax shelterspublished
3.1.2.lEnrollment cycle and renewalpublished
3.1.2.mRules for prompt disposition of matters before the IRSpublished
3.1.2.nRules for returning a client's records and documentspublished
3.1.2.oPTIN requirementspublished
3.1.2.pPractitioner supervisory responsibilities (Circular 230 Section 10.36)published

3.1.3 Sanctionable acts

3.1.3.aIncompetence and disreputable conduct that may result in a disciplinary proceedingpublished
3.1.3.bSanctions imposed by the Office of Professional Responsibilitypublished
3.1.3.cFrivolous submissions (returns and documents)published
3.1.3.dFraudulent transactions (e.g., badges of fraud)published

3.1.4 Rules and penalties

3.1.4.aAssessment and appeal procedures for preparer penaltiespublished
3.1.4.bTypes of penalties (e.g., negligence, substantial understatement, overvaluation)published
3.1.4.cFurnishing a copy of a return to a taxpayerpublished
3.1.4.dSigning returns and furnishing identifying numberspublished
3.1.4.eKeeping copies or lists of returns preparedpublished
3.1.4.fEmployees engaged or employed during a return period (e.g. IRC Section 6060)published
3.1.4.gPreparer due diligence and penalties (e.g., refundable credits, head of household status)published

3.2 Representation before the IRS

3.2.1 Power of attorney

3.2.1.aPurpose of power of attorneypublished
3.2.1.bSignature authority (e.g., extension of assessment period, closing agreement)published
3.2.1.cAuthority granted by taxpayerpublished
3.2.1.dLimitations on signing tax returns on behalf of taxpayerpublished
3.2.1.eProper completion of power of attorney (Form 2848)published
3.2.1.fAlternate forms of power of attorney (durable)published
3.2.1.gRules for client privacy and consent to disclosepublished
3.2.1.hDistinctions between power of attorney (Form 2848) and tax information authorization (Form 8821)published
3.2.1.iRequirements to be met when changing or dropping representatives or withdrawal of representativepublished
3.2.1.jPurpose of a Centralized Authorization File (CAF) numberpublished
3.2.1.kConference and practice requirements (Publication 216)published

3.2.2 Building the taxpayer’s case - Preliminary work

3.2.2.aIdentification of tax issue(s) with supporting detailspublished
3.2.2.bPotential for criminal aspectspublished
3.2.2.cCompetence, expertise and time to handle issuepublished
3.2.2.dConflict of interest in regards to representationpublished
3.2.2.eTranscripts from IRS (e.g., access to and use of e-services)published

3.2.3 Taxpayer financial situation

3.2.3.aTaxpayer's ability to pay the tax (e.g., installment agreements, offer in compromise, currently not collectible)published
3.2.3.bGeneral financial health (e.g., filed for bankruptcy, lawsuits, garnishments, cash flow, assets, and insolvency)published
3.2.3.cThird-party research (e.g., property assessment for municipal taxes, asset values, state and local tax information)published
3.2.3.dDischarge of the tax liability in bankruptcypublished
3.2.3.eIRS Collection Financial Standardspublished

3.2.4 Supporting documentation

3.2.4.aFinancial documents and expense records (e.g., cancelled checks or equivalent, bank statements, credit card statements, receipts, brokerage records)published
3.2.4.bLegal documents (e.g., birth certificate, divorce decrees, lawsuit settlements)published
3.2.4.cPrior and subsequent tax returnspublished
3.2.4.dOther substantive and contemporaneous documentation (e.g., corporate minutes)published
3.2.4.eBusiness entity supporting documents (e.g., partnership agreement, corporate bylaws)published

3.2.5 Legal authority and references

3.2.5.aInternal Revenue Code and income tax regulationspublished
3.2.5.bRevenue rulings and revenue procedurespublished
3.2.5.cCase lawpublished
3.2.5.dIRS forms, instructions and publicationspublished
3.2.5.ePrivate letter rulingpublished
3.2.5.fInternal Revenue Manualpublished
3.2.5.gAuthoritative versus non-authoritative source materialpublished
3.2.5.hTax treatiespublished

3.2.6.aStatute of limitationspublished
3.2.6.bPost-filing correspondence (e.g., math error notices, under-reporting notices)published
3.2.6.cDeadlines and timeliness requirementspublished
3.2.6.dThird-party correspondence (e.g., witness communications, employment records)published
3.2.6.eFreedom of Information Act (FOIA) requestspublished
3.2.6.fTax avoidance vs. tax evasionpublished
3.2.6.gTax return disclosure statementspublished
3.2.6.hTaxpayer Advocate Service (e.g., criteria for requesting assistance)published
3.2.6.iIdentity Theftpublished
3.2.6.jJudicial levels of representation beyond the scope of EA representationpublished

3.3 Specific Types of Representation

3.3.1 Representing a taxpayer in the collection process

3.3.1.aExtension of time to pay (e.g., Form 1127)published
3.3.1.bInstallment agreementspublished
3.3.1.cOffer in compromisepublished
3.3.1.dCollection appeals program (e.g., denial of installment agreements, discharge applications)published
3.3.1.eCollection appeals and due process (e.g., lien, levy, and Form 12153)published
3.3.1.fAdjustments to the taxpayer’s account (e.g., abatements and refund offsets)published
3.3.1.gRequesting an audit reconsideration (e.g., documents and forms)published
3.3.1.hRepresenting a decedentpublished
3.3.1.iCollection notice and Notice of Federal Tax Lienpublished
3.3.1.jLevy and seizure of taxpayer's propertypublished
3.3.1.kCurrently Not Collectable (e.g., reasons and reactivation)published
3.3.1.lIRS Collection Summons (e.g., purposes)published
3.3.1.mCollections statute of limitationspublished
3.3.1.nTrust fund recovery penaltypublished
3.3.1.oAmended returns and claims for refund (e.g., Form 1040X, Form 843, effect on statute of limitations)published
3.3.1.pPassport revocationpublished

3.3.2 Penalties and/or interest abatement

3.3.2.aPenalties subject to abatementpublished
3.3.2.bBasis for having penalties abated or refundedpublished
3.3.2.cBasis for having interest abated or refundedpublished
3.3.2.dInterest recalculationpublished
3.3.2.eProcedures for requesting abatementpublished

3.3.3 Representing a taxpayer in audits/examinations

3.3.3.aIRS authority to investigatepublished
3.3.3.bLimited practitioner privilege (e.g., IRC Section 7525)published
3.3.3.cVerification and substantiation of entries on the returnpublished
3.3.3.dIRS authority to fix time and place of investigationpublished
3.3.3.eSteps in the process (e.g., initial meeting, submission of IRS requested information)published
3.3.3.fInterpretation and analysis of Revenue Agent Report (RAR) (e.g., 30-day letter)published
3.3.3.gInterpretation and analysis of CP-2000 notice and correspondence auditspublished
3.3.3.hExplanations of taxpayer options (e.g. agree or appeal)published
3.3.3.iTaxpayer’s burden of proofpublished

3.3.4 Representing a taxpayer before appeals

3.3.4.aRight to appealpublished
3.3.4.bRequest for appeals consideration (e.g., preparation, elements contained)published
3.3.4.cEnrolled Agent appearance at appeals conferencepublished
3.3.4.dSettlement function of the appeals processpublished
3.3.4.eIssuance of 90-day letterpublished

3.4 Completion of the Filing Process

3.4.1 Accuracy

3.4.1.aReliance on software (e.g. review of results)published
3.4.1.bMiscalculations and recognition of duplicate entriespublished

3.4.2 Record maintenance

3.4.2.aLength of time to retain returns and recordspublished
3.4.2.bData security (e.g., electronic, systems, paper)published

3.4.3 Electronic filing

3.4.3.aApplication process to be an e-file provider (e.g., e-services, EFIN)published
3.4.3.bE-file mandate and exceptions (Form 8948)published
3.4.3.cAdvertising standardspublished
3.4.3.dDefinition and responsibilities of an EROpublished
3.4.3.eLevels of infractionspublished
3.4.3.fCompliance requirements to continue in programpublished
3.4.3.gEFIN revocation appeal processpublished
3.4.3.hE-file authorization and supporting documentation (e.g. Form 8879 and Form 8453)published
3.4.3.iRejected returns and resolution (e.g. client notification, IP PIN)published