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Table of Contents
GENERAL REPORT
MICHELE J. ALEXANDER
JOHN G. AMS
TARA S. ANTHONY
RONALD D. AUCUTT
F. ROBERT BADER
CHERI H. FREEH
LINDA S. HARDING
JENNIFER MACMILLAN
TIMOTHY J. MCCORMALLY
MARK S. MESLER, SR.
FRED F. MURRAY, VICE-CHAIR
PAUL OCONNOR, CHAIRMAN
LUIS R. PARRA
DAVID M. PENNEY
ANDRE L. RE
JANEEN RYAN
KAREN SALEMI
NEIL D. TRAUBENBERG
SHERRILL L. TROVATO
INTRODUCTION/EXECUTIVE SUMMARY
The IRSAC OPR Subgroup (hereafter "Subgroup") is comprised of a diverse
group of tax professionals, including lawyers, enrolled agents and a certified public
accountant. This year the OPR Subgroup addressed the regulation of tax professionals,
the application of return preparer standards and ethics obligations to marijuana
businesses, and continued participating in the promulgation of new and expanded
guidance for practitioners.
The Subgroup has always enjoyed a very good working relationship with the
Director of the Office of Professional Responsibility and this year was no exception as all
the personnel from the Office of Professional Responsibility were extremely cooperative
and forthcoming, even in a difficult budget environment and as they addressed various
court challenges.
IRSAC was asked to provide feedback and recommendations on the following
three topics included in this report.
1. Statutory authority of the IRS to regulate tax return preparers
In 2010, the IRS instituted a program requiring all individuals who prepare tax
returns for compensation to meet certain minimum standards including testing and annual
continuing education. Earlier this year, the U.S. Court of Appeals for the D.C. Circuit
invalidated this program because the IRS does not have the statutory authority to make
this program mandatory. The Courts decision also raised questions about the extent to
which the IRS can regulate any tax return preparer who is not acting as a taxpayers
representative. We believe all tax return preparers should be required to demonstrate
competency by successfully passing an appropriate test, taking annual continuing
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education, and being subject to the competency and ethical standards in Treasury Circular
230. We therefore recommend the IRS be granted the explicit statutory authority to
regulate tax return preparers.
2. Tax assistance to marijuana businesses
Marijuana businesses that are now legal in some states but still illegal under
federal law need ethical and competent professional tax advice. Tax professionals who
give that advice need assurance that they will not be adversely affected by the fact
that the business is illegal under federal law.
3. Guidance to practitioners regarding professional obligations
Following up on the recommendations in the 2012 and 2013 OPR
Subgroup reports concerning guidance regarding the obligations of practitioners under
Treasury Circular 230, we recommend that the IRS address additional guidance as part of
a multi-phase project. We also offer suggested Frequently Asked Questions for this
guidance at Appendix A.
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