IRS Limited Practice Exceptions | Tax Lawyer St Paul Minnesota
Generally, only attorneys, CPAs, enrolled agents and enrolled actuaries can act as taxpayer representatives before the IRS. However, Circular 230 §10.7 contains several limited exceptions to this general requirement. Let’s explore these IRS limited practice exceptions.
IRS Limited Practice Exceptions: Standard of Conduct
Before we discuss the exceptions, I would like to point out that all non-practitioners who engage in limited practice before the IRS must follow the same standards of conduct as those applicable to practitioners. Circular 230 §10.7(c)(2)(iii). Moreover, the IRS reserves the right to deny eligibility to engage in limited practice to any individual who has engaged in conduct that may be subject to a sanction under Circular 230 §10.50. See Circular 230 §10.7(c)(2)(ii).
It should be kept in mind that an individual can represent before the IRS not only a taxpayer in the United States, but also any individual or entity who is outside of the United States.
IRS Limited Practice Exceptions: Self-Representation
Obviously, every taxpayer has a basic right to represent himself before the IRS without any enrollment into IRS practice. This right can be found in Circular 230 §10.7(a). Circular 230 §10.7(e) explains that a fiduciary such as a trustee, receiver, guardian, personal representative, administrator, or executor is considered to be the taxpayer, not a representative of a taxpayer.
IRS Limited Practice Exceptions: Relationship-Based Representation
The IRS would permit an individual to represent another taxpayer before the IRS if this individual has some type of a close relationship to the taxpayer (whether the taxpayer is an individual or an entity). Circular 230 §10.7(c)(1) specifically lists the following exceptions:
(i) An individual may represent a member of his or her immediate family.
(ii) A regular full-time employee of an individual employer may represent the employer.
(iii) A general partner or a regular full-time employee of a partnership may represent the partnership.
(iv) A bona fide officer or a regular full-time employee of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group may represent the corporation, association, or organized group.
(v) A regular full-time employee of a trust, receivership, guardianship, or estate may represent the trust, receivership, guardianship, or estate.
(vi) An officer or a regular employee of a governmental unit, agency, or authority may represent the governmental unit, agency, or authority in the course of his or her official duties.
It is important to point out that subclause (iv) does not clash with Form 4764 (Large Case Examination Plan) which allows a corporate taxpayer to designate an employee to discuss tax matters, provide information, discuss adjustments, et cetera. The reason for it is that the Form 4764 authorization only allows an employee to simply accept materials, deliver materials, provide general explanation. If the employee advocates, negotiates, disputes or does anything else, then he engages in taxpayer representation that requires the filing of Form 2848.
Another important note concerning subclause (iv) is that an employee of a corporation may represent a corporate subsidiary in a tax matter concerning the subsidiary if the parent corporation owns, directly or indirectly, 50% or more of the subsidiary’s voting stock and if the employee’s services are not rendered in a manner that might misrepresent his professional status.
IRS Limited Practice Exceptions: Specific Matter Representation
Circular 230 §10.7(d) allows the IRS to authorize any individual to represent another person without enrollment for a specific matter. Circular 230 does not really describe what are the requirements for such a specific matter representation. Given past practice, however, we can deduce that Circular 230 is most likely referring to persons who are not active tax practitioners but may possess certain competency in tax matters (such an attorney without a license, a retired CPA, a law student representing his clients through a tax clinic in a law school, etc.).
Sherayzen Law Office Is Auhorized to Practice Before the IRS
Mr. Eugene Sherayzen, the owner of Sherayzen Law Office, is an attorney licensed to practice in the State of Minnesota. Hence, he is authorized to represent taxpayers before the IRS.
Contact Sherayzen Law Office for professional help with all matters concerning US international tax laws.