Section 1: Practices and Procedures
Practice before the IRS
- What constitutes practice before the IRS
- Categories of individuals who may practice and extent of practice privileges
Requirements for Enrolled Agents
Sanctionable acts
Rules and penalties
- Information to be furnished to the IRS
- Omission or error on return, document, or affidavit
- Rules for employing or accepting assistance from former IRS employees or disbarred/suspended persons
- Rules for restriction on advertising, solicitation and fee information
- Fee rules (e.g., contingent, unconscionable)
- Due diligence requirements
- Conflict of interest
- Rules for refund check negotiation
- Standards for written advice, covered opinions, tax return positions and preparing returns
- CPE requirements
- Tax shelters
- Enrollment cycle and renewal
- Rules for prompt disposition of matters before the IRS
- Rules for returning a client’s records and documents
- PTIN requirements
- Practitioner supervisory responsibilities (Circular 230, Section 10.36)
Sanctionable acts
- Disreputable conduct that may result in a disciplinary proceeding
- Sanctions imposed by OPR
- Frivolous submissions (returns and documents)
- Fraudulent transactions (e.g., badges of fraud)
Rules and penalties
- Assessment and appeal procedures for preparer penalties
- Types of penalties (e.g., negligence, substantial understatement, overvaluation)
- Furnishing a copy of a return to a taxpayer
- Signing returns and furnishing identifying numbers
- Keeping copies or lists of returns prepared
- Employees engaged or employed during a return period (e.g., Section 6060)
- Preparer penalty involving the earned income credit
Section 2: Representation before the IRS
Power of attorney
Building the taxpayer's case - Preliminary work
Taxpayer financial situation
Supporting documentation
Related issues
- Purpose of power of attorney
- Signature authority (e.g., extension of assessment period, closing agreement)
- Authority granted by taxpayer
- Prohibition for negotiating taxpayer refund check (e.g. cannot cash or deposit)
- Limitations on signing tax returns on behalf of taxpayer
- Proper completion of power of attorney (Form 2848)
- Alternate forms of power of attorney (durable)
- Rules for client privacy and consent to disclose
- Distinctions between power of attorney (Form 2848) and tax information authorization (Form 8821)
- Requirements to be met when changing or dropping representatives or withdrawal of representative
- Purpose of a Centralized Authorization File number
- Conference and practice requirements (Pub 216)
Building the taxpayer's case - Preliminary work
- Tax issue(s) identification with supporting details
- Potential for criminal aspects
- Competence, expertise and time to handle issue
- Conflict of interest
- Transcripts from IRS
Taxpayer financial situation
- Taxpayer's ability to pay the tax (e.g., installment agreements, offer in compromise)
- General financial health (e.g., filed for bankruptcy, lawsuits, garnishments, cash flow and assets)
- Third-party research (e.g., property assessment for municipal taxes; asset values, state and local tax information)
- Discharge of the tax liability in bankruptcy
- IRS Collection Financial Standards
Supporting documentation
- Financial documents (e.g., cancelled checks or equivalent, bank statements, credit card statements, receipts, brokerage records)
- Legal documents (e.g., birth certificate, divorce decrees, lawsuit settlements)
- Prior and subsequent tax returns
- Other substantive and contemporaneous documentation (e.g., corporate minutes)
- Employment reimbursement policies
- Business entity supporting documents (e.g., partnership agreement, corporate bylaws)
- Expense records (e.g., deductible, allowable, personal, mileage log)
- Internal Revenue Code
- Treasury regulations
- Revenue rulings
- Revenue procedures
- IRS notices
- Case law
- IRS publications
- Private letter rulings
- Forms and instructions
- Internal Revenue Manual
- Authoritative versus non-authoritative source material
Related issues
- Statute of limitations
- Post-filing correspondence (e.g., math error notices, under reporting notices)
- Deadlines and timeliness requirements
- Third-party correspondence (e.g., witness communications, employment records)
- Freedom of Information Act requests
- Tax avoidance vs. tax evasion
- Tax return disclosure statements
- Taxpayer Advocate Service (e.g., criteria for requisition assistance)
- Identity Theft
- Higher levels of representation beyond the scope of EA representation (e.g., tax court, U.S. District Courts and U.S. Claims Court, U.S. Courts of Appeals and U.S. Supreme Court)
Section 3: Specific Types of Representation
Representing a taxpayer in the collection process
Penalties and/or interest abatement
Representing a taxpayer in audits/examinations
Representing a taxpayer before Appeals
- Extension of time to pay (e.g., Form 1127-A)
- Installment agreements
- Offer in compromise (e.g., doubt as to liability, collectability or effective tax administration)
- Collection appeals program (e.g., denial of installment agreements, discharge applications)
- Collection appeals and due process (e.g., lien and levy)
- Adjustments to the taxpayer’s account (e.g., abatements)
- Requesting an audit reconsideration (e.g., documents and forms)
- Decedent Issues
- Collection notice and Notice of Federal Tax Lien
- Levy and seizure of taxpayer’s property
- Case being reported Currently Not Collectable (e.g., reasons and reactivation)
- IRS Collection Summons (e.g., purposes)
- Collections statute of limitations
- Trust fund recovery penalty
Penalties and/or interest abatement
- Penalties subject to abatement
- Basis for having penalties abated, or refunded
- Reasonable cause
- Basis for having interest abated or refunded
- Interest recalculation
Representing a taxpayer in audits/examinations
- IRS authority to investigate
- Verification and substantiation of entries on the return
- IRS authority to fix time and place of investigation
- Steps in the process (e.g., initial meeting, submission of IRS requested information)
- Innocent spouse
- Interpretation of revenue agent report (RAR) (e.g., 30-day letter)
- Explanations of taxpayer options (e.g. agree or appeal)
- Special procedures for partnership audits (e.g., unified audit procedures for TEFRA)
Representing a taxpayer before Appeals
- Right to appeal revenue agent findings
- Request for appeals consideration (e.g., preparation, elements contained)
- Enrolled Agent appearance at appeals conference
- Settlement function of the appeals process
- Issuance of 90-day letter
Section 4: Completion of the Filing Process
Accuracy
- Use of tax software (e.g., review of results)
- Inconsistencies with the source data
- Miscalculations
- Recognition of duplicate entries
- Record-keeping requirements
- Significance of signature (e.g., joint and several liability, penalty of perjury)
- Consequences of dishonesty
- Length of time to retain returns and records
- List of returns prepared (name, social security number, and type of return)
- EITC due diligence requirements
- Application process to be an e-file provider (e.g., EFIN, e services)
- E-file mandate
- Advertising standards
- Definition and responsibilities of an ERO
- Levels of infractions
- Compliance requirements to continue in program (e.g. timely filing, timely payment, and absence of infractions)
- Appeal process
- E-file authorization and supporting documentation (e.g., Forms 8879 and 8453)
- Rejected returns and resolution (e.g. client notification)