OPR (Office of Professional Responsibility) Disbars a CPA, and an Enrolled Agent under Circular 230 for Failure to File Tax Returns

The IRS Office of Professional Responsibility (OPR) alleged that Joseph Kozelsky did not file timely tax returns for 2001 through 2007 and did not timely pay his federal tax liability. As a result of his tax problems he was disbarred from practice before the Internal Revenue Service. Mr. Kozelsky didn’t help himself very much, since he failed to respond to the IRS’s complaint within 30 days. As a result the facts alleged by the IRS were deemed admitted, and the administrative law judge (“ALJ”) issued an order that Mr. Kozelsky engaged in disreputable conduct and should be disbarred.

The IRS publishes rules for professionals practicing before the IRS, and those rules are set forth in Circular 230. We have previously published an article on the procedures involved in an OPR disciplinary matter. Circular 230 includes rules for individuals preparing tax returns, providing tax advice, and representing individuals before the IRS. Failure to timely file tax returns constitutes disreputable conduct under Circular 230 and subjects the offender to sanctions. In the case of Mr. Kozelsky, the IRS proposed disbarment from practice before the IRS and the ALJ presiding over the case agreed and ordered disbarment on November 17, 2010 since Mr. Kozelsky failed to respond to the OPR’s complaint.

If no appeal is filed within 30 days of the ALJ’s default order, the default order becomes final. Since Mr. Kozelsky appealed the ALJ decision to the IRS’s Appellate Authority on December 23, 2010, 6 days after the 30 day deadline, his appeal was not considered, and his disbarment became final.

Enrolled Agents are subject to the same Circular 230 rules as CPAs, and in a separate case, an Enrolled Agent was also disbarred from practice before the IRS. OPR filed a complaint against Susan Tomsha-Miguel alleging her failure to file timely tax returns, she failed to respond within 30 days, and the ALJ presiding over the case entered a default judgment for the IRS. The ALJ determined that the appropriate sanction was disbarment from practice before the IRS. In addition to CPAs and Enrolled Agents, Circular 230 rules and sanctions regarding failure to file tax returns also apply to tax attorneys (see post titled “Attorney Disbarred under Circular 230 Rules for Failure to File Tax Returns”).

Tax professionals including tax attorneys, CPAs and Enrolled Agents with unresolved tax problems, or who have been contacted by OPR should contact Brager Tax Law Group, A P.C., at 800-380-Tax Litigator for a confidential consultation to discuss their options.

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