Circular 230 contains the regulations governing practice before the Internal Revenue Service.
Practice before the IRS includes all matters connected with a presentation to the IRS relating to a taxpayer’s rights, privileges or liabilities under laws or regulations administered by the IRS. Practice includes, but is not limited to, preparing or filing documents, corresponding and communicating with the IRS, rendering written tax advice and representing a client at conferences, hearings and meetings. Tax return preparation is not “practice” as currently defined by case law.
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Circular 230 is a publication that provides guidance on practicing before the IRS. Examples of practice before the IRS include:
- Corresponding and communicating with the IRS on behalf of a taxpayer
- Representing a taxpayer at conferences, hearings, or meetings with the IRS
- Preparing and submitting a response to an IRS notice or inquiry
- Signing agreements, such as those in which the taxpayer agrees to extend the statute of limitations for the assessment of tax
- Providing tax advice
Under Circular 230, power of attorney authorizations (Form 2848 authorization) are reserved for individuals authorized to practice before the IRS. These professionals mainly fall into these categories:
- Enrolled agents
- Annual Filing Season Program (AFSP) Record of Completion
The AFSP designation has limited representation rights. If your tax preparer has the AFSP designation he or she can represent you during an audit of a return he or she prepared and signed. However, he or she cannot represent you for issues regarding an unpaid balance or before the IRS Office of Appeals. Only CPAs, enrolled agents, and attorneys can represent you before any department of the IRS.
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