Rev. Proc. 68-20

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to prescribe, pursuant to Section 10.7(a)(7) of Treasury Department Circular No. 230 revised effective after September 12, 1966, and with amendments dated September 27, 1966, C.B. 1966-2, 1171, and October 28, 1966 (31 CFR Part 10) C.B. 1967-1, 433, the standards of conduct, the extent of authority, and the circumstances and conditions under which an individual preparer of tax returns may exercise, without enrollment, the privilege of limited practice as a taxpayer's representative before the Internal Revenue Service.

SEC. 2. APPLICABILITY.

.01 This Revenue Procedure, issued pursuant to section 10.7(a)(7) of Circular 230, applies to all unenrolled individual preparers of returns who seek to represent taxpayers, within the United States, before revenue agents or examining officers in the Audit Division of an Office of a District Director of Internal Revenue or in the Office of International Operations. Any reference herein to the District Director will be construed, where appropriate, to include the Office of International Operations or the Director of International Operations.

.02 This Revenue Procedure does not apply to attorneys, certified public accountants, or agents who are enrolled to practice before the Internal Revenue Service. The rules governing the practice of such persons before the Service are contained in the previsions of Circular 230.

SEC. 3. SCOPE OF AUTHORITY.

.01 An unenrolled individual who signs a return as its preparer may act as the taxpayer's representative if accompanied by the taxpayer, or by filing a written authorization from the taxpayer as provided herein in section 5. Such representation is limited to practice before a revenue agent or an examining officer in the Field Audit or Office Audit Branch in the Audit Division of an Office of the District Director of Internal Revenue, and may only encompass matters concerning the tax liability of the taxpayer for the taxable year covered by that return, subject to the limitations herein prescribed.

.02 Privilege of limited practice before the Internal Revenue Service is limited to any person who is not under disbarment or suspension from practice before the Internal Revenue Service or from practice of his profession by any other authority (in the case of attorneys, certified public accountants, and public accountants).

.03 An unenrolled individual who prepared a return which provides no space on the prescribed form for signature of the preparer, or who prepared a return with respect to which the instructions or regulations do not require that it be signed by the preparer, may appear as the taxpayer's representative, if properly authorized, as set forth in 3.01.

.04 If the unenrolled preparer appears before the revenue agent or examining officer without the taxpayer, written authorization from the taxpayer for such representation must be filed with the revenue agent or examining officer. The unenrolled preparer may also be required to furnish satisfactory identification.

.05 The unenrolled preparer will be expected to remain alert to questions, issues and factual situations of such difficulty as to require the assistance of an attorney, a certified public accountant, or an enrolled agent and, when such assistance is required, to suggest to the taxpayer that he seek the advice or services of an attorney, certified public accountant, or an enrolled agent.

.06 Where a carryback or carryforward, or both, are involved in a tax return, the unenrolled preparer will not be recognized as the taxpayer's representative with respect to the taxable year in which the carryback or carryforward arose unless he prepared and signed a return for such year or years.

.07 The privilege to practice as a taxpayer's representative in accordance with this Revenue Procedure shall not constitute enrollment nor a finding of eligibility for enrollment.

SEC. 4. LIMITATIONS OF THE PRIVILEGE OF LIMITED PRACTICE.

.01 Privilege of limited practice without enrollment afforded an individual preparer of returns is restricted to representation before the examining officer stated in section 3. No unenrolled preparer shall represent or correspond as the taxpayer's representative at a district conference in the Audit Division, District Director's Office; nor as a taxpayer's representative before the Appellate Division, nor before officials in the National Office.

.02 In addition, the following acts on behalf of the taxpayer are beyond the scope of authority permitted an unenrolled preparer:

(a) Executing claims for refund.

(b) Receiving checks in payment of any refund of Internal Revenue taxes, penalties, or interest.

(c) Executing consents to extend the statutory period for assessment or collection of a tax.

(d) Executing closing agreements with respect to a tax liability or specific matter.

(e) Executing waivers of restriction on assessment or collection of a deficiency in tax.

SEC. 5. FORM OF AUTHORIZATION FROM THE TAXPAYER.

.01 Internal Revenue Service Form 2848-D, Tax Information Authorization (or any other properly executed written authorization), will be accepted as the unenrolled preparer's authorization to appear without the taxpayer under this Revenue Procedure.

.02 Tax Information Authorization forms may be obtained from local Internal Revenue Service offices.

.03 The authorization must be signed by the taxpayer. It may be revoked by the taxpayer at anytime, but such revocation shall not be effective so far as the Service is concerned prior to the receipt of written notification.

SEC. 6. ETHICS AND CONDUCT.

.01 An unenrolled preparer shall conduct himself in such manner as not to commit any act of disreputable conduct. Disreputable conduct includes, but is not limited to, the items contained in section 10.51 of Circular 230.

.02 An unenrolled preparer shall not charge an unconscionable fee for representation of a client in any matter before the Internal Revenue Service.

.03 An unenrolled preparer shall not neglect or refuse to submit records or information in any matter before the Internal Revenue Service upon proper and lawful request by a duly authorized officer or employee of the Service; and the unenrolled preparer shall not interfere, or attempt to interfere, with any proper and lawful efforts by the officers or employees of the Service to obtain information, unless he believes in good faith and on reasonable grounds that the request for, or effort to obtain, such record or information is of doubtful legality.

.04 Any unenrolled preparer who knows that the client has not complied with the law, or that he has made an error in or omission from any return, document, affidvit, or other paper which the client is required by law to execute in connection with any matter administered by the Service, shall advise the client promptly of the fact of such noncompliance, error, or omission.

.05 An unenrolled preparer shall exercise due diligence in preparing or assisting in the preparation, approving, and filing of returns, documents, affidavits, or other papers relating to Internal Revenue Service matters. He shall also exercise due diligence in determining: (1) The correctness of representation made by him to the Service, and (2) the correctness of representation made by him to his client with reference to any matter administered by the Service.

.06 An unenrolled preparer shall not unreasonably delay the prompt disposition of any matter before the Internal Revenue Service.

.07 An unenrolled preparer, as a Notary Public, shall not take acknowledgements, administer oaths, certify papers, or perform any official act in connection with matters relating to his client's tax liabilities, or in connection with any other matter in which he may in any way have given assistance or been employed. In addition, he may not take any acknowledgements, oaths, or certification as a Notary Public relating to any tax return, protest, or other document which he has prepared or which he has assisted in preparing. (26 OP.Atty.Gen. 236.)

.08 An unenrolled preparer shall not procure, or attempt to procure, directly or indirectly, from Government records or Government sources, information of any kind which is not made available by proper authority.

.09 An unenrolled preparer shall not represent conflicting interests in his limited practice before the Service, except by express consent of all directly interested parties after full disclosure has been made.

SEC. 7. SOLICITATION AND ADVERTISING.

.01 An unenrolled preparer shall not, in any manner whatsoever that is not warranted by personal relations, directly or indirectly, solicit employment in matters relating to the Internal Revenue Service; nor shall he advertise that he is authorized to represent taxpayers before the Service.

.02 An unenrolled preparer shall not use false or misleading representations with intent to deceive a client or prospective client in order to procure employment, or use signs, printing, or other written matter indicating some past or present connection with, or relationship to the Internal Revenue Service or otherwise intimating that the unenrolled preparer is able improperly to obtain special consideration or action from the Service or officer or employee thereof.

SEC. 8. PERSONS INELIGIBLE TO PRACTICE UNDER THIS REVENUE PROCEDURE

.01 The following persons shall be ineligible to exercise the privilege of limited practice before the Internal Revenue Service:

(a) Any individual who has been convicted of any criminal offense under the Revenue Laws of the United States or of any offense involving dishonesty or breach of trust;

(b) Any individual who is under disbarment or suspension from the practice of his profession as an attorney, certified public accountant, or public accountant by a state authority or the District of Columbia;

(c) Any individual who has been disbarred or suspended from practice before the Internal Revenue Service;

(d) Any individual whose application for enrollment to practice before the Internal Revenue Service has been denied;

(e) Any individual who refuses to comply with this Revenue Procedure;

(f) Any individual whose conduct or practices have been or are such as to constitute a violation of Sec. 6 or 7 of this Revenue Procedure;

(g) Any individual who is an officer or employee of the United States or of the District of Columbia; and

(h) Any individual who is an officer or employee of any state or any subdivision thereof, whose duties authorize him to investigate, pass upon, or act with respect to tax matters of such state or subdivision, if such employment may make available to him facts or information applicable to Federal tax matters.

.02 In addition corporations, associations, partnerships, or other business entities are ineligible to practice before the Internal Revenue Service.

SEC. 9. RULES GOVERNING RECOGNITION OF UNENROLLED PREPARERS.

.01 Any revenue agent, examining officer, or other Service officer or employee who has reason to believe that an unenrolled preparer's conduct has been or is such as would render him ineligible to appear as the taxpayer's representative before the Internal Revenue Service, shall communicate such information to the District Director. Pending instructions, such Service employees may continue to recognize, or in the exercise of sound administrative discretion, may decline to recognize the unenrolled preparer as a taxpayer's representative.

.02 In administering this Revenue Procedure, each District Director exercises original jurisdiction in determining whether an unenrolled preparer is eligible to appear as a taxpayer's representative. When the District Director receives information, either before or after an unenrolled preparer has been recognized, indicating that the preparer's conduct, practice, or employment has been or may be such as to render him ineligible to represent taxpayers, the District Director will issue a written notice to the unenrolled preparer of proposed determination of ineligibility. This notice will contain information sufficient to apprise the unenrolled preparer of the basis for the proposed determination of ineligibility and will contain a request for a written reply within 30 days, and advice as to whether a conference is desired with the District Director or his delegate. If the unenrolled preparer fails to reply, or upon review if a reply is filed, or after a conference if one is held, the District Director will notify the unenrolled preparer in writing of his final determination. Where warranted, the determination will state that the unenrolled preparer is ineligible to exercise the privilege of limited practice before the Service and his determination may be appealed to the Director, Audit Division. A copy of each final determination of ineligibility issued by the District Director will be forwarded to the Director, Audit Division, National Office, Internal Revenue Service, together with copies of the notice of proposed determination of ineligibility, the unenrolled preparer's reply, if one is filed, and any other related papers or documents.

.03 An unenrolled preparer who wishes to appeal a District Director's final determination of ineligibility may, within 30 days of receipt of such final determination, submit a signed, written appeal together with his reasons in support thereof, to the Director, Audit Division (CP:A:PO-E), Internal Revenue Service, Washington, D.C. 20224. Upon filing of the written appeal, and the reasons in support thereof, the unenrolled preparer, upon request, will be afforded the opportunity of a conference with the Director, Audit Division or his designee. A decision will then be rendered by the Director, Audit Division or his designee affirming, reversing, or modifying the decision of the District Director upon such terms and conditions as seem warranted under the facts and circumstances of the particular appeal. The decision of the Director, Audit Division or his designee on such appeal will be final.

SEC. 10. SPECIAL ORDERS.

.01 The Director, Audit Division may issue such special orders as he may deem proper in any matter within the purview of this Revenue Procedure.

.02 The unenrolled preparer who has been determined ineligible for limited practice before the Internal Revenue Service may request, after one year following the notice of final determination of ineligibility or decision on appeal thereto, that his eligibility for limited practice be reinstated. The request for reinstatement will be made to the District Director who may modify or revoke the previous determination. The District Director will consider the nature of the violation that resulted in ineligibility, the period of ineligibility, and the preparer's current adherence to the standards of ethics and conduct established by this Revenue Procedure in evaluating the request for reinstatement to limited practice. The consideration of such request for reinstatement will not be a re-evaluation of the original determination of ineligibility.

SEC. 11. INQUIRIES.

Inquiries from unenrolled preparers and Service personnel regarding this Revenue Procedure should be addressed to the Director, Audit Division (CP:A:PO-E) Internal Revenue Service, Washington, D.C. 20224.

SEC. 12. EFFECT ON OTHER DOCUMENTS.

Revenue Procedure 64-47, CB 1964-2, 988 is hereby superseded.

SEC. 13. EFFECTIVE DATE.

This Revenue Procedure shall be effective April 29, 1968.