Circular 230 Final Rules Align Advice Standards, Add New Preparers

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Long-awaited final rules (T.D. 9527) governing practice before IRS for certified public accountants, attorneys, and enrolled agents align the professional standards in Section 10.34 of Circular 230 with the civil penalty standards in Section 6694 for tax preparers. In addition, the final rules bring a whole new class of unlicensed tax preparers—newly registered under an IRS oversight program—under the jurisdiction of the Office of Professional Responsibility for the first time in that Treasury circular's history. While IRS revised its guidance on standards of practice in 2007, it left open the question of how it would define appropriate advice on tax liabilities under Section 10.34. Instead, IRS and Treasury issued proposed rules that attempted to conform the two standards.