Table of Contents. Practices and Procedures... 1

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1 Table of Contents Practices and Procedures... 1 Practice Before the IRS...1 Categories of Individuals Who May Practice...2 Eligibility to Become an Enrolled Agent....7 Application for Enrollment....8 Requirements for Enrolled Agents....8 Information to be Furnished....8 Client Omission....9 Accepting Assistance Solicitation and Advertising Fees Due Diligence...12 Conflicting Interests Negotiation of Taxpayer Check Standards for Tax Returns, Documents, and Affidavits...14 Requirements for Written Advice Enrollment Cycle and Renewal...17 Continuing Education Requirements Tax Shelter...21 Prompt Disposition Return Client Records PTIN Requirements Preparer Supervisory Responsibilities...28 Practice by Former Government Employees Notaries...28 Practice of Law Best Practices for Tax Advisors Competence Sanctionable Acts Sanctions Incompetence and Disreputable Conduct Frivolous Tax Submission...32 Fraudulent Transactions...32 Receipt of Information Concerning Preparer...39 Rules Applicable to Disciplinary Proceedings NATP ix

2 Institution of Proceeding Conferences Contents of Complaint...40 Service of Complaint Answering the Complaint...41 Supplemental Charges Motions and Representation Administrative Law Judge Decision of Administrative Law Judge Appeal of Decision of Administrative Law Judge Reinstatement Penalties Tax Return Preparer...45 Understatement of Taxpayer Liability Accuracy-related Penalty Furnishing a Copy of a Return to a Taxpayer Signing Returns...63 Furnishing Identifying Numbers Keeping Copies or Lists of Returns Record of Employees...64 Negotiate or Endorse a Taxpayer s Check from the IRS Preparer Penalty Involving Due Diligence Request for Refund Practices and Procedures Review Questions Practices and Procedures Review Answers Representation Before the IRS Power of Attorney...81 Requirements for Power of Attorney Alternate Forms of Power of Attorney Who Must Execute the Power of Attorney Rules for Client Privacy and Consent to Disclose Tax Information Authorization Changing or Dropping Representatives Centralized Authorization File System Conference and Practice Requirements...89 x NATP

3 Building the Taxpayer s Case Preliminary Work Taxpayer Financial Situation Supporting Documentation Legal Authority and References Related Issues Statute of Limitations Post-filing Correspondence Requests for Information Deadlines and Timeliness Third-party Correspondence Freedom of Information Act Requests Tax Avoidance v. Tax Evasion Tax Return Disclosure Statements Taxpayer Advocate Service Identity Theft Judicial Levels of Representation Beyond the Scope of an Enrolled Agent Representation Review Questions Representation Review Answers Specific Types of Representation Collection Process Extension of Time to Pay Installment Agreement Offer in Compromise Collection Appeal Process Understanding the Collection Process Adjustments to the Taxpayer s Account Audit Reconsideration Decedent Issues Notice of Federal Tax Lien Levy and Seizures of Taxpayer s Property Currently Not Collectible IRS Collection Summons Collection Statute of Limitations NATP xi

4 Trust Fund Taxes Amended Return Penalties and Interest Penalties Subject to Abatement Abatement of Penalties Interest Procedure for Requesting Abatement Bad Check Failure to File Tax Return or to Pay Tax Reportable Transactions Examinations and Audits Taxpayer Bill of Rights IRS Authority to Investigate Limited Preparer Privilege Examination of Returns Innocent Spouse Revenue Agent Report CP-2000 and Correspondence Audits Explanation of Taxpayer Options Special Procedures for Partnership Audits Preparer Conflict of Interest Appeals Appeal Rights Appeal Within the IRS Request for Appeals Consideration Representation at Appeals Conference Settlement Function of the Appeals Process Issuance of 90-day Letter Appeal to the Courts Specific Representation Review Questions Specific Representation Review Answers Completing the Filing Process Accuracy Using Tax Software Matching Inputs and Outputs xii NATP

5 Information Shared with Taxpayer Recordkeeping Requirements Significance of Signature Consequences of Dishonesty Preparer Records Length of Time to Retain Returns and Records Components of the List Employment Records Due Diligence Requirements Security of Taxpayer Data Electronic Filing Filing How to Apply to be an Authorized IRS e-file Provider e-file Mandate Waivers Advertising Standards Participating in IRS e-file Electronic Return Originator Monitoring Authorized IRS e-file Providers Compliance Requirements to Continue in Program EFIN Revocation Appeal Reconsideration e-file Authorization Rejected Returns and Resolution Identity Theft Procedures and Resolution Completing the Filing Process Review Questions Completing the Filing Process Review Answers Appendix Appendix A: Circular Appendix B: EA Renewal CE Requirements (Pub. 5186) NATP xiii