25.20.3. Return Preparer Suitability

(1) Perform research to identify a criminal history, OPR disciplinary action, or injunction that may make the applicant ineligible for participation in the Annual Filing Season Program. Research the following systems in the order listed:

1. TPPS

2. Office of Professional Responsibility (OPR)

3. Accurint

4. Public Access to Court Electronic Records (PACER)

(2) Print all research and provide to the clerk.

(1) To be eligible to participate in the Annual Filing Season Program, an applicant must not have been convicted of a felony resulting from a financial crime, a tax crime, or other violation of public trust within five years of the Annual Filing Season Program application date.

(2) Use the following table to determine Annual Filing Season Program eligibility:

(3) After determining Annual Filing Season Program eligibility, take the following action:

(1) If you need more information from the applicant to determine Annual Filing Season Program eligibility:

1. Send Letter 5211-A.

2. Print all research documents and provide to the clerk.

3. Update the Work Notes.

4. The case state will automatically update.

(1) Print all research and any correspondence from the applicant and provide it to the clerk.

(2) Update the Work Notes.

(3) Change the case state to Closed and select a case outcome.

(4)

(1) An applicant has the right to appeal denial of Annual Filing Season Program participation.

1. The applicant must file an appeal within 30 calendar days of the date on Letter 5494. A date stamp is required to show the appeal was received within the 30-day time frame.

2. The appeal must include the reason for and documentation to support the applicant’s claim that the denial should be reversed.

(2) When an appeal is received, create a new case in TPPS as CBC - Annual Filing Season Program and associate the originally disallowed case .

(3) Determine if the information in the appeal changes the original decision, then take the following actions:

(1) If the application does not contain both a SSN and domestic address, search for the missing item(s) using the Integrated Data Retrieval System (IDRS), Employee User Portal (EUP), Public Access to Court Electronic Records (PACER), the Return Preparer Database, Accurint, e-Trak, and the Tax Professional PTIN System (TPPS). Document all steps taken.

1. If you now have a SSN and domestic address, continue to paragraph (2) to perform additional research.

2. If you now have a domestic address but no SSN, continue to paragraph (2) to perform additional research.

3. If you now have a SSN but no domestic address, do not take any further actions.

4. If you have no SSN and no domestic address, do not take any further actions - reject the case.

(2) Perform the following online research to identify a felony conviction, OPR disciplinary action, or injunction that may make the applicant ineligible for enrollment or renewal. Include a narrative to indicate results for each site researched.

1. e-Trak

2. OPR website

3. Accurint

4. Public Access to Court Electronic Records (PACER)

5. Employee User Portal (EUP) Personal Suitability

6. Return Preparer Database

7. Federal Bureau of Prisons

8. State Department of Corrections

9. Victim Information and Notification Everyday Link (VINELink)

10. State or County court records (as available)

(3) Capture research results as a screenshot or printed as a PDF and combine into one document. Attach to your case in e-Trak.

(4) If working an initial enrollment case, add research and notes to the Case Processing Activity tab in e-Trak. If working an enrollment renewal case, add research and notes to the Renewal Documents tab in e-Trak.

(1) To be eligible for enrollment (including renewal), an applicant must not have been convicted of a felony for a crime listed in the Felony Seriousness Table (see IRM 25.20.3.4.2.2.1) within ten years of the application or renewal date.

(2) If the applicant was convicted of a felony, apply the criteria below before making a final determination of eligibility:

1. Seriousness of the felony - See the Felony Seriousness Table in IRM 25.20.3.4.2.2.1.

2. Time frame in which the felony occurred - See guidance in IRM 25.20.3.4.1.2.2 for the dates to use in computing the time frame.

   Note: Refer to the guidance only for a description of the dates associated with a court case. The reference to a five-year period is irrelevant for the CBC-EA.

3. Risk Level of the felony - See the Risk Level Determination Table in IRM 25.20.3.4.2.2.2 to determine the risk level of the crime.

4. Number (and type) of felonies - If the applicant has multiple felonies and they are all at risk level A or B, then use the Patterns of Convictions Table in IRM 25.20.3.4.2.2.3 to determine the overall risk level to assign to the case.

(3) Use this chart to make the final eligibility determination:

(1) Letter 5965, Notice of Potential Denial (NOPD), notifies the applicant of the potential denial of enrollment.

(2) Manually generate the letter and attach it to the case in e-Trak.

(3) Allow 30 days for a response ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

(1) An applicant has the right to appeal denial of enrollment or renewal. Appeals are decided by OPR.

1. The applicant must file an appeal within 30 calendar days of the date of the Notice of Denial. A date stamp is required to show when the appeal was received.

2. The appeal must include the reason and documentation to support the applicant’s claim that the denial should be reversed.

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(2) When an appeal is received, review the appeal letter and documentation, and prepare the Enrollment Determination Memorandum (EDM). The EDM includes the following sections:

• Summary

• Facts and Circumstances considered in RPO’s determination

• Conclusion

(3) Prepare an appeal package in PDF format and include the following:

• Table of Contents

• Enrollment Determination Memorandum (EDM)

• Applicant’s appeal letter

• Notice of Denial

• Response to NOPD (if any)

• NOPD

• The Form 23

• The originally compiled research file

• A copy of the Enrollment or Renewal Process Activity Listing from e-Trak

(4) Send the completed appeal package to the Lead via email.

(5) Take the following actions in e-Trak:

• Change the case activity to Appeal Period (30 Days).

• Attach appeal package to the case.

• Assign the case to the Lead.

(1) Attorneys are licensed by state courts, the District of Columbia or their designees, such as the state bar. Generally, they have earned a degree in law and passed a bar exam. Attorneys generally have on-going continuing education requirements and professional character standards. Attorneys may offer a range of services; some attorneys specialize in tax planning and return preparation. Attorneys may represent any taxpayer regarding any tax matter before any IRS office, also known as unlimited practice rights.

(2) Verify that an attorney’s license is valid and current by searching the state-specific Bar Association website, if a website is available.

(3) The following states provide limited or no public information; you must contact the Bar Association to complete the PDC check.

(1) Certified Public Accountants (CPAs) are licensed by state boards of accountancy, the District of Columbia, and U.S. territories, and have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education to maintain an active CPA license. CPAs may offer a range of services; some CPAs specialize in tax planning and return preparation. CPAs may represent any taxpayer regarding any tax matter before any IRS office, also known as unlimited practice rights.

(2) Confirm that a CPA license is valid and active by researching CPA Verify (https://cpaverify.org) or the state board of accountancy website.

(3) CPAs considered Active will contain one of the following statuses (this list is not all-inclusive; further research or contact with the board may be necessary):

• Issued

• Active

• Registered

• Clear

• License

• Permit

• CPA License

(4) CPAs considered Inactive will contain one of the following statuses (this list is not all-inclusive; further research or contact with the board may be necessary):

• Inactive

• Deceased

• Retired

• Expired

• Expired Late Renewal

• Voluntarily Surrendered

• Voluntary Resignation

• Not Registered

• Revoked

• Delinquent

• Lapsed

• Cancelled

• Suspended

• Probation

• Forfeited

(5) Search the National Association of the State Boards of Accountancy website (https://nasba.org/licensure/substantialequivalency/) to determine if the licensing jurisdiction has special circumstances, which are indicated by one or more asterisks next to the jurisdiction. Specifically, the jurisdiction may:

• be a two-tiered state.

• have more than one path to licensure.

• have both a current and historical path to licensure.

(6) If the accounting license is known by another designation (such as Public Accountant or Licensed Public Accountant), refer to IRM 25.20.3.5.1.2.1, Other Designations.

(1) Verify the current enrollment status of an EA or ERPA on e-Trak by searching for the person’s PTIN or SSN. If unable to locate a match by PTIN or SSN, search by the name, as not all records contain a PTIN or SSN. Verify any match with other data such as a middle initial or address.

(1) A preparer or practitioner has 10 days to respond to Letter 5122-A. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(2) After issuing Letter 5122-A, use this table to determine the next steps:

(3) When issuing Letter 5273, take the following actions in TPPS:

1. Attach to the TPPS case any response to Letter 5122-A received from the preparer or practitioner,

2. Create a new Work Note indicating whether a response to Letter 5122-A was received and, if so, the date and type of response, and whether it validated the credential,

3. If the response does not validate the credential, print and mail Letter 5273. The follow-up date will auto-populate.

(1) After issuing Letter 5273, use this table to determine the next steps:

(2) Follow guidance in IRM 25.20.3.5.2.3 to close the case.

(3) Consider whether a referral outside of RPO is warranted. See IRM 25.20.3.5.3.

(1) Take the following actions in TPPS:

1. Mark the credential as valid or invalid, as applicable, and complete the associated fields.

   Exception: This step does not apply to a case in which the PTIN status is Deceased or Expired, or the only credential is a CAA or SRTP.

2. Attach the practitioner’s response to the case, if applicable.

3. Create a new Work Note indicating if a letter was sent and a response received. If a response was received, note the date and type of response, and whether it validated the credential.

4. Change the state to Closed and select a case Outcome.

(2) Use the following Outcomes:

(3) Consider whether a referral outside of RPO is warranted. See IRM 25.20.3.5.3.

(1) If a response to any letter issued to the preparer or practitioner is received after the case has been closed, review the response for any additional information and, if necessary, research the appropriate website to determine if the credential can now be considered valid.

(2) If, based on the response, the credential is valid, take the following actions:

1. Create a new TPPS Ad-Hoc case.

   Note: The case type (PDC-AFSP or PDC-Revalidation) will be the same as the original case.

2. Upload the new documentation.

3. Create a new Work Note.

4. Mark the credential as valid.

5. Issue Letter 5070.

6. Set the case state to CLOS-Closed and enter a case Outcome.

7. Select a case Outcome to valid/5070 Letter sent.

8. Update the disposition to PDC2-Resolved/Credential(s) valid/ 5070 Letter Sent and enter the new disposition date.

(3) If the response and/or research does not verify the credential, take the following actions:

1. In the original TPPS case, create a new Work Note and upload the new documentation, and

2. Call the preparer or practitioner and explain why the response did not validate the credential or send an ad hoc Letter.

(1) Refer a case to OPR when any of the following PDC issues apply:

1. The credential is suspended or revoked (even if the person has other active credentials).

2. The practitioner is disbarred or in probation status.

   Caution: Retired, inactive, expired or deceased cases should not be referred to OPR.

3. If there are multiple credentials, only send to OPR the credential that is suspended, disbarred, revoked, or on probation for cause.

(2) The Suitability Analyst will:

• Process the case as appropriate for the situation.

• Add a new Work Note in TPPS.

• Reassign the case in TPPS to the Lead.

• Send an email notification to the Lead and notify them a case was reassigned and meets OPR transfer criteria.

(3) The Lead will confirm that the referral is appropriate.

• If the referral is not appropriate, close the case in TPPS with notes overriding the transfer to OPR and inform the Suitability Analyst and their manager that the referral did not meet the referral criteria.

• If the referral is appropriate, close the case in TPPS and complete the OPR spreadsheet on SharePoint.

(1) Refer a case to TIGTA when:

• the credential is not found, and it appears the preparer or practitioner has made a false representation, or

• the copy of the provided credential appears to have been altered, manipulated or shows any indications of fraud.

Exception: Do not refer any credential that the preparer or practitioner indicates was a mistake.

(2) Create a new Work Note with the reason why the case meets TIGTA referral criteria.

(3) Mark the credential invalid in TPPS and reassign the case to your Lead. Notify your Lead via email that the case meets TIGTA referral criteria. Include the TPPS case number.

(4) If the Lead agrees with the referral, the Lead will:

• select a TPPS Final Action that indicates referral to TIGTA.

• gather the supporting documentation and email it to the Suitability TIGTA liaison, and

• close the case and add case information to TIGTA Referral spreadsheet on SharePoint.

(5) If the Lead disagrees with the referral, the Lead will:

• close the case in TPPS with notes overriding the transfer to TIGTA, and

• inform you and your manager that the referral did not meet the referral criteria.

(1) For security purposes, tax data cannot be stored in TPPS. The following codes must be used in TPPS Work Notes in place of personal tax data. Add the two-digit tax period after the code when it is necessary to specify a year.

(1) Upon case assignment, check for other Suitability cases on TPPS for the practitioner.

(2)

(3) To close a duplicate case:

1. Create a Work Note for that case stating the reason for closure.

2. Set case state to Closed.

3. Select Outcome-No Action Taken.

(1) Perform research to determine if an individual is in tax compliance. To be considered compliant, the individual must meet these criteria:

1. Has filed all required tax returns for both personal and business accounts. See IRM 25.20.3.6.1.3.1, for a description of the specific research to perform.

2. Has a total outstanding balance ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for all accounts/tax years. See IRM 25.20.3.6.1.3.2, for a description of the specific research to perform.

(2) An individual who does not meet the above criteria may still be compliant if meeting any conditions listed in IRM 25.20.3.6.1.3.3. Consider the criteria to be met if any of those conditions apply to otherwise unmet criteria. Consider each tax year separately; do not consider the individual to be fully compliant because one out of multiple years meets a condition in IRM 25.20.3.6.1.3.3.

(3) Use this table to determine the next actions:

(1) This section describes the sequence of letters Suitability issues to a practitioner who has not met the tax compliance criteria in IRM 25.20.3.6.1.3. The letters are sent in the order listed, when applicable, according to guidance in the following subsections.

1. Letter 4911-A. This letter notifies the practitioner of a tax compliance issue that could affect the ability to practice before the IRS and requests they resolve it.

2. Letter 4912-A. This letter notifies the practitioner of a tax compliance issue that may affect their ability to participate in the Annual Filing Season Program.

3. Letter 5284. Send this letter if the practitioner has still not resolved the issue after an additional 35 days, and the case meets OPR criteria.

4. Letter 5070. Send this letter if the practitioner’s response or additional research determines that the practitioner is now in compliance.

(2) Before issuing any letter, determine if the tax account has a condition that delays issuance of a letter according to IRM 25.20.3.6.1.4.4.

(3) If, at any time while the case is open, the practitioner responds to a letter by submitting information that resolves the compliance issue or if IDRS research finds that the practitioner is now in compliance, send Letter 5070 immediately and close the case following instructions in IRM 25.20.3.6.1.8.

(4) All letters give the recipient 30 calendar days to respond ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

(5) Once the response period for a letter has elapsed, research IDRS to determine if the practitioner has resolved all tax compliance issues on all tax accounts.

(6) Any subsequent tax compliance issue that arises after initial research needs to be addressed and resolved as well. Do not restart the letter sequence.

(1) If a practitioner responds to a letter with information that resolves the tax compliance issue, issue Letter 5070 and close the case according to IRM 25.20.3.6.1.8.

(2) If the practitioner responds to the letter, but the response does not resolve the tax compliance issue and there are more than five business days until the follow-up date expires, call the practitioner or send an ad hoc letter advising that the response was not sufficient and to contact IRS Customer Service at (800) 829-1040 to determine the exact tax compliance issue. Also take the following actions in TPPS:

1. Create a new Work Note.

2. Attach any documents received to the case.

3. Take the next action on the follow-up date.

(3) If the practitioner responds to the letter, but the response does not resolve the tax compliance issue and there are five or less business days until the follow-up date expires, wait until the follow-up date and take the appropriate case actions.

(4) See IRM 25.20.3.6.3 for guidance on how to handle common preparer responses.

(5) Consider a referral to OPR as outlined in IRM 25.20.3.6.1.6, even if a practitioner responds to a letter.

(1) Refer a case to OPR when either of the following PTC issues exist:

1. A credentialed preparer has failed to file two or more tax returns in violation of the federal tax laws.

   Note: For quarterly returns, the practitioner has failed to file four quarterly returns, whether or not the unfiled quarters are consecutive.

2. A credentialed preparer has an outstanding balance due ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

(2) The Suitability Analyst will:

• Process the case as appropriate for the situation.

• Add a new Work Note in TPPS.

• Reassign the case in TPPS to their Lead.

• Notify the Lead of the reassignment.

(3) The Lead will determine if the referral is appropriate.

• If the referral is appropriate, the Lead will close the case in TPPS, complete the OPR spreadsheet on SharePoint, and notify the appropriate Suitability Program Analyst of the referral.

• If the referral is not appropriate, the Lead will close the case in TPPS as "Disallowed" and document the work notes.

(1) Managerial approval is required to suspend a case or extend the suspension.

(2) To suspend a case, take the following actions in TPPS:

1. Upload an approved Group Management Concurrence Form.

2. Create a new Work Note to document why the case is being suspended.

3. Set case Outcome to SUSP-Suspense.

4. The follow-up date will auto-populate.

5. Every 30 days, review the case until the account is resolved, the suspense condition has ended, or the Annual Filing Season Program deadline has passed.

(1) After all PTC case processing is complete, and if the case was not referred to OPR, follow the procedures in this subsection to close the case.

(2) Take the following actions in TPPS:

1. Update the Work Notes.

2. Set case state to Closed.

3. Select the case Outcome as follows:

If the practitioner...	and...	then change Case Outcome to...
passed the PTC check,	no letters were sent,	Approve and select Tax Compliance Case Outcome Exempt TCC
passed the PTC check,	a Letter 5070 was sent,	Approve and select Tax Compliance Outcome Exempt TCC
did not pass the PTC check,	there is a condition that delays letter issuance, and the Annual Filing Season Program deadline has passed,	Disallowed and select Tax Compliance Outcome Not Exempt TCC
did not pass the PTC check,	a Letter 4912-A or Letter 5284 was sent, and the case does not meet OPR referral criteria,	Disallowed and select Tax Compliance Outcome Not Exempt TCC

(3) In certain circumstances, the Lead may direct the analyst to close a case without completing the normal case processing procedures (managerial approval is required). For these cases, take the following actions in TPPS:

1. Upload an approved Group Managerial Concurrence Form.

2. Create a new Work Note and document why the case is being closed.

3. Set case state to Closed.

4. Select case Outcome - No Action Taken.

(1) If a practitioner submits a response after the case is closed, review the response for any additional information and research IDRS to determine if the practitioner is now in compliance.

(2) If the practitioner is now in compliance (and the Annual Filing Season Program deadline has not passed), then take the following actions in TPPS:

1. Forward the case to the Lead. The Lead will create a new case. Input RPO Suitability as the Source, and PTC-Referral as the Subcategory.

2. Create a new Work Note.

3. Issue Letter 5070.

4. Set the case state to Closed.

5. Select the case Outcome - Approve and select Tax Compliance Outcome Exempt TCC.

(3) If the response does not verify that the practitioner is now in compliance, or the Annual Filing Season Program deadline has passed, the Suitability Analyst will:

1. Upload the new response.

2. Create a new Work Note.

3. Call the practitioner to inform them of the determination.

4. Go into the existing closed case and follow steps above.

(1) Send Letter 5130 as the initial step in the case. Do not perform any research.

(2) After sending Letter 5130, take the following actions in TPPS:

1. Update the Work Notes.

2. Click start working, go to Outcome, select requires preparer input, then click pending.

3. The case state will automatically go to awaiting info. The follow-up date will auto-populate.

(3) Use the following table to determine the next steps:

(1) Send Letter 5131 if no response was received to Letter 5130, or the response is not sufficient to confirm that the PTIN holder is not currently incarcerated.

(2) After sending Letter 5131, take the following actions in TPPS:

1. Attach any documents received from the PTIN holder.

2. Update the Work Notes.

3. Click start working, go to Outcome, select requires preparer input, then click pending.

4. The case state will automatically go to awaiting info. The follow-up date will auto-populate.

(3) Use the following table to determine the next steps:

(4) Take the following actions in TPPS to revoke a PTIN:

• From the Closure Information tab, select ‘PTIN Revoked’ from the Outcome dropdown.

• Select the ‘Close’ button from the top right-hand corner of the page. This will automatically close the case and populate all of the appropriate fields. The Preparer’s PTIN status will be automatically set to ‘Revoked’.