Who Is Not Eligible to Practice Before the IRS?

Representing a taxpayer before the Internal Revenue Service is a regulated activity. Federal guidelines determine who can communicate with the IRS, negotiate on a taxpayer’s behalf, or submit documents for a client. Understanding these rules helps taxpayers ensure the person they hire is qualified and in good standing. This article details the categories of individuals not eligible to practice before the IRS.

Defining Practice Before the IRS

“Practice before the IRS” encompasses representing a taxpayer in dealings with the agency. This includes corresponding with the IRS, representing a client at conferences, and preparing and filing documents. It also covers providing written advice on transactions with potential tax consequences. These rules protect taxpayers and ensure a standard of quality among representatives.

The primary regulations are in Treasury Department Circular 230, which outlines the duties of tax professionals. It establishes who is authorized to practice, sets ethical conduct provisions, and details disciplinary procedures. The IRS Office of Professional Responsibility (OPR) enforces these regulations to ensure practitioners are competent and act with integrity.

Individuals Lacking Required Credentials

Professionals like attorneys, Certified Public Accountants (CPAs), and Enrolled Agents (EAs) have unlimited representation rights for any tax matter. An individual who does not fall into one of these categories, or another authorized group like Enrolled Retirement Plan Agents, lacks the credentials for full practice. They are not eligible to represent taxpayers in all matters.

A notable distinction exists for unenrolled tax return preparers. While anyone with a Preparer Tax Identification Number (PTIN) can be paid to prepare a federal tax return, this does not grant them broad practice rights. Unenrolled preparers who participate in the IRS’s Annual Filing Season Program have limited practice rights. Their representation is restricted to clients whose returns they prepared and signed, and they can only appear before revenue agents and customer service representatives, not in more complex matters before appeals or collection offices.

Disqualified Individuals Due to Conduct or Status

Even individuals with professional credentials can become ineligible to practice before the IRS due to their conduct or status. These disqualifications are enforced by the IRS Office of Professional Responsibility (OPR) to maintain the integrity of the tax system.

Suspension or Disbarment

The OPR can suspend or disbar practitioners for “disreputable conduct.” This includes a range of violations of Circular 230, such as incompetence, providing false information, or failing to exercise due diligence. Once suspended or disbarred, an individual cannot represent clients until formally reinstated by the OPR, a process separate from any reinstatement by a state licensing board.

Criminal Convictions

Certain criminal convictions will automatically make an individual ineligible to practice before the IRS. This applies to any felony conviction that renders the practitioner unfit to practice. It also includes convictions for any offense under the Internal Revenue Code or any crime involving dishonesty or a breach of trust.

Former Government Employees

Strict conflict-of-interest rules apply to former employees of the federal government, particularly those from the IRS or Treasury Department. These individuals are permanently barred from representing a taxpayer on any “particular matter” in which they participated “personally and substantially” as a government employee. Temporary restrictions may also apply to matters that were under their official responsibility, even if they did not handle them personally.

Failure to Meet Personal Tax Obligations

A tax professional’s own compliance with tax laws is a reflection of their fitness to practice. Practitioners who have willfully failed to file their own federal tax returns or have been found to have engaged in tax evasion are not eligible to represent others before the IRS. The OPR can initiate an investigation based on a practitioner’s failure to meet their personal tax duties.

Verifying a Representative’s Eligibility

Taxpayers should verify the credentials of any tax professional they hire. The IRS provides an online “Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.” This database helps find local preparers with recognized credentials like attorneys, CPAs, and Enrolled Agents, or those who have completed the Annual Filing Season Program.

A taxpayer can search the directory by location or the preparer’s last name, with results showing their name, city, and credential. The directory only includes those with specific qualifications, not all individuals with a PTIN. An absence from the directory may indicate the preparer lacks credentials that grant representation rights.

For further verification, a taxpayer can check with state licensing authorities. An attorney’s status can be confirmed with the state bar association. A CPA’s license and disciplinary history can be checked with the state board of accountancy.