Effective April 1, 2009 the Internal Revenue Service (IRS) Office of Professional Responsibility (OPR) will have a new Director- tax controversy attorney Karen Hawkins, Esq. Having known Karen professionally for a number of years I am confident that she will bring a well needed dose of practicality to OPR. Karen has worked tireless in many areas of tax litigation including most notably the innocent spouse arena where she successfully persuaded Congress to pass legislation clarifying (someone would say expanding) the availability of judicial review for innocent spouse cases under IRC Section 6015(f).
OPR has the responsibility for enforcing standards of competence, integrity and conduct for tax attorneys, CPAs, and enrolled agents who practice before the IRS. It enforces Circular 230, the rules and regulations which govern tax lawyers, CPAs, enrolled agents and others who practice before the IRS. Tax lawyers, CPAs and enrolled agents who violate Circular 230 are subject to discipline which may include suspension of practice before the IRS, and/or monetary fines.
Tax practitioners may run afoul of OPR if, for example, tax preparer penalties are imposed against them pursuant to IRC Section 6694 which provides for monetary penalties against tax preparers for various types of incorrect tax returns. Sometimes tax preparers agree to pay what in some instances is a small penalty under IRC Section 6694 rather than fight to have it set aside. This is generally a mistake since agreeing to an IRC Section 6694 penalty will almost always lead to an investigation by OPR, and possibly a suspension from practice.