The Office of Professional Responsibility: how referrals arrive, how a Circular 230 case proceeds, and the sanctions available

What OPR is and who it reaches

IRM 20.1.6.12 describes OPR as the office authorized to interpret and apply Circular 230, generally responsible for practitioner conduct and exclusively responsible for discipline. Its authority is 31 USC 330, implemented in 31 CFR part 10, known as Circular 230. The practitioners it reaches are attorneys, certified public accountants, enrolled agents, enrolled actuaries and enrolled retirement plan agents. Appraisers for federal tax purposes are also subject to the regulations and to disqualification. The IRS's current OPR pages add that it also issues non-disciplinary outcomes, including written reprimands and warning letters, including to people who attempt to represent taxpayers without being eligible to practice.

The companion guide on this site, Circular 230 duties, covers the subpart B obligations; this page is about enforcement.

Conduct that can be sanctioned

Section 10.50(a) states the grounds: a practitioner may be censured, suspended or disbarred “if the practitioner is shown to be incompetent or disreputable (within the meaning of § 10.51), fails to comply with any regulation in this part (under the prohibited conduct standards of § 10.52), or with intent to defraud, willfully and knowingly misleads or threatens a client or prospective client.” Section 10.52 supplies the mental state: a willful violation of any regulation other than section 10.33 (best practices), or a violation of sections 10.34, 10.35, 10.36 or 10.37 recklessly or through gross incompetence. The negligent breach of a Circular 230 duty is therefore not itself sanctionable; willfulness, recklessness or gross incompetence is.

Section 10.51(a) lists eighteen categories of incompetent and disreputable conduct. The ones that generate most cases:

IRM 1.25.1.4 gives the IRS's own list of examples, including inaccurate or unreasonable entries or omissions on returns, failing to ascertain the facts and law before filing or advising, cashing, diverting or splitting a client's refund by any means, patterns of violations across years, clients or IRS employees, and continuing to represent a client through an unresolved conflict of interest such as representing separated or divorcing spouses in an examination of their joint return. The practitioner's own tax compliance is a recurring ground under section 10.51(a)(6) and the expedited suspension rule below.

How matters reach OPR

Section 10.53(a) obliges every IRS officer or employee who has reason to believe a practitioner violated Circular 230 to make a prompt written report explaining the facts and reasons. Section 10.53(b) lets anyone else report orally or in writing. Inside the IRS the report is Form 8484, Suspected Practitioner Misconduct Report for the Office of Professional Responsibility, which IRM 1.25.1.4 says IRS employees are required to use when misconduct is suspected, routed with management approval through the area return preparer coordinator (IRM 4.11.55.5.2.3). OPR's address and eFax appear in IRM 1.25.1.4: Office of Professional Responsibility, Internal Revenue Service, SE:OPR Room 7238, 1111 Constitution Ave NW, Washington, DC 20224; EFax 855-814-1722. The IRS public complaint route for preparer misconduct is the Tax Return Preparer Misconduct page and Form 14157.

IRM 20.1.6.12.3 and IRM 4.11.55.5.2.1.2 describe when examiners refer:

Three rules in IRM 20.1.6.12.3 govern how examiners handle the possibility. “The potential for a matter to be referred to OPR should never be discussed with a taxpayer or a practitioner.” “OPR referrals may not be negotiated as a settlement item with respect to any IRS or Title 26 tax matter.” And the referral is prepared and closed as a separate package from the client's case, with the returns, the examination report, affidavits, penalty documents, the Form 2848 and an explanatory memorandum (IRM 4.11.55.5.2.2). A practitioner who receives a bypass letter should assume the referral question is live even though no one will say so.

OPR acknowledges a referral within 30 days. IRM 1.25.1.4 explains that handling matches the seriousness of the alleged misconduct, and that “Most cases are resolved at a point between the extremes of closure without further action and a disciplinary proceeding brought before an Administrative Law Judge.”

Before a complaint: the letter, the conference and consent

Section 10.60(c) requires that, except in expedited suspension cases, no proceeding is instituted “unless the proposed respondent previously has been advised in writing of the law, facts and conduct warranting such action and has been accorded an opportunity to dispute facts, assert additional facts, and make arguments (including an explanation or description of mitigating circumstances).” In practice this is OPR's allegation letter, and the response to it is the practitioner's best opportunity to end the matter: the record the practitioner builds here (engagement letters, the contemporaneous file, the client's instructions, the firm's review procedures, evidence of the practitioner's own compliance) is what OPR weighs in deciding between a closing letter, a reprimand, a consent and a complaint. Section 10.61(a) allows a conference whether or not a proceeding has been instituted.

Section 10.60(a) distinguishes a reprimand from a sanction: a practitioner found in violation may be reprimanded or made the subject of a section 10.62 complaint seeking a section 10.50 sanction. A reprimand is private; censure is the public version. Section 10.61(b) provides for a voluntary sanction: the practitioner may offer a consent to be sanctioned in lieu of a proceeding, and OPR may accept, decline, say what different terms it would accept, or counteroffer. A consent avoids the ALJ record and fixes the sanction by agreement.

The disciplinary proceeding

Subpart D (sections 10.60 to 10.82) is a formal adjudication under 5 USC 556 before an administrative law judge. The stages:

1. Complaint (10.62, 10.63). Names the respondent, states the facts and law, is signed by the IRS's authorized representative and must specify the sanction sought; if suspension, its duration. It is served by certified mail to the last known address or by other listed means, and must give the time to answer, “which may not be less than 30 days from the date of service of the complaint.”
2. Answer (10.64). Filed with the ALJ and served on the IRS within the time stated unless the ALJ extends it. General denials are not permitted; each allegation must be admitted or denied, and an allegation not denied is deemed admitted and proved. Failure to answer is an admission of the allegations and a waiver of hearing, and the ALJ may decide by default. The answer is signed under an acknowledgment that false statements may be punishable under 18 USC 1001. Supplemental charges may be added if the answer denies in bad faith (10.65).
3. Hearing (10.72, 10.73). Scheduled to occur no later than 180 days after the time for answer absent an interest-of-justice finding; recorded and transcribed, testimony under oath, conducted under 5 USC 556. Reports and decisions become public within 30 days after the agency decision is final, subject to protective measures for third-party taxpayer information, which is coded in the decision.
4. Decision (10.76). Within 180 days after the hearing and post-hearing submissions, with findings, conclusions and an order of censure, suspension, disbarment, monetary penalty, disqualification or dismissal. Standard of proof: preponderance of the evidence for censure or a suspension of less than six months; for “a monetary penalty, disbarment or a suspension of six months or longer duration, an allegation of fact that is necessary for a finding against the practitioner must be proven by clear and convincing evidence in the record.” Absent appeal, the decision “will, without further proceedings, become the decision of the agency 30 days after the date of the Administrative Law Judge's decision.”
5. Appeal to Treasury (10.77, 10.78). Either party files a notice of appeal with a brief within 30 days of service of the decision; the other side has 30 days to respond; no further briefs as of right. The Treasury appellate authority should decide within 180 days. “The decision of the Administrative Law Judge will not be reversed unless the appellant establishes that the decision is clearly erroneous in light of the evidence in the record and applicable law,” with pure questions of law reviewed de novo and remand available.

The sanctions and what they mean

Section 10.50(e) requires that sanctions take into account all relevant facts and circumstances. Final orders are published in the Internal Revenue Bulletin and on the section 10.90 public roster, and section 10.80 provides for notice to IRS employees, other federal agencies and, at the IRS's discretion, the state licensing authority.

Expedited suspension

Section 10.82 allows suspension without a full proceeding for a practitioner who, within five years before a show cause order, has had a professional license suspended or revoked for cause; has been convicted of a Title 26 crime, a crime involving dishonesty or breach of trust, or a disqualifying felony (whether or not appealed); has violated conditions imposed under 10.79(d); has been sanctioned by a court for delay, frivolous arguments or failing to exhaust administrative remedies in a tax matter; or has shown a pattern of willful disreputable conduct by failing to file annual returns for four of the five preceding years, or more-frequent returns for five of the seven preceding periods, and remains noncompliant when the suspension notice issues.

The procedure is a show cause order, a response due within 30 calendar days that must request a conference if one is wanted, a conference no sooner than 14 days after the response date, and a written notice of expedited suspension that may issue after a missed response date, after the conference, or after a failure to appear. The practitioner's remedy is a written demand, within two years of the suspension, that the IRS institute a regular 10.60 proceeding; the IRS must issue the complaint within 60 days, and “If the Internal Revenue Service does not issue such complaint within 60 days of receiving the demand, the suspension is lifted automatically.” The filing-compliance ground requires both the pattern and current noncompliance, so curing the delinquencies before the notice issues removes the basis.

Publication, reinstatement and practicing while suspended

A suspended or disbarred practitioner may not appear before any IRS employee as a representative, with or without the taxpayer present (IRM 1.25.1.4), though the IRM says such a person may attend meetings with the taxpayer without advocating, may still prepare returns, and may appear as a fact witness. Section 10.24 bars other practitioners from knowingly accepting assistance from, or assisting, a suspended or disbarred person in practice before the IRS. A Form 2848 naming a suspended representative cannot be used; see why the CAF unit rejects a Form 2848.

Reinstatement under section 10.81 is by petition after five years following disbarment or suspension (or at the end of a shorter suspension), and only if the IRS is satisfied the petitioner is unlikely to violate the regulations again and reinstatement is not contrary to the public interest.

Points for the practitioner on the receiving end

• Own-compliance matters. Sections 10.51(a)(6) and 10.82(b)(5) make a practitioner's unfiled returns or unpaid tax a ground of discipline independent of client work, and the expedited route is available for the filing pattern.
• Section 10.21 and the ERC. OPR's 2023 bulletin on the Employee Retention Credit reminds practitioners that on learning a current client claimed an improper credit in a prior year, the practitioner “must, under section 10.21, promptly inform the client of the noncompliance, error, or omission and any penalty or penalties that may apply,” and that section 10.34(b) prohibits advising a position that lacks a reasonable basis or is unreasonable under IRC 6694(a)(2). See ERC examinations.
• Preparer penalties and OPR are separate tracks. An assessed IRC 6694(b) penalty is a mandatory referral, but an OPR case does not depend on a penalty, and settling the penalty does not settle the referral; the IRM forbids trading one for the other.

Questions practitioners ask