Federal Tax Day - Current,I.2Paid Return Preparers Will Be Subject to Circular 230, IRS OPR Director Says, (Jun. 3, 2010)

Once paid tax return preparers register, test and receive personal identification numbers (PTINs), they will "indeed…be subject to all of the provisions of Circular 230," including the procedural and due process provisions, according to Karen L. Hawkins, director, IRS Office of Professional Responsibility (OPR). Hawkins spoke on current issues regarding Circular 230 during an American Bar Association (ABA) teleconference on June 2. In addition to paid return preparers and Circular 230, Hawkins also addressed sanction issues and the OPR’s current priorities.

Sanctions
The OPR does not use a "black and white checklist-oriented approach" when deciding whether to reprimand a practitioner, issue a private letter or make a public reprimand, Hawkins clarified. The OPR "takes into account an individual practitioner’s facts and circumstances, and the magnitude of the violation," she said.

In addition, Hawkins noted that the OPR has not yet used monetary penalties to sanction a practitioner. According to Hawkins, the OPR has not yet found a case where such penalties would be appropriate. She added that she would be more inclined to use monetary penalties with respect to a firm as opposed to an individual "in part because that’s the only sanction OPR can use against a firm". If the OPR "sees culture in a firm encouraging inappropriate conduct, monetary sanctions would be an effective tool," she said. Hawkins also cautioned that, in addition to the sanctions that the OPR can impose, the office also has the authority to disqualify an appraiser from submitting appraisals to be used in presentations before the IRS.

Paid Return Preparers
According to Hawkins, under the "current thinking and drafting of Circular 230 provisions," paid return preparers who register, test and receive their PTINS will be "subject to all the provisions of Circular 230." She reiterated that the IRS plans to begin issuing PTINs in September 2010. Consequently, those who prepare returns for 2011 should have PTINs, Hawkins said.

Regulations
Hawkins told practitioners that the OPR has a number of regulations "to get out." She added that the Circular 230 regulations have "gone through a number of iterations" and that the OPR hopes to have "something out this summer."