Rev. Proc. 68-29

SECTION 1. PURPOSE.

To outline the extent to which examining officers and other employees of the Internal Revenue Service may accord recognition to persons employed by taxpayers in connection with Federal tax matters, and to set forth guiding principles to assist in determining the extent of discussion of matters with such persons.

SEC. 2. IN GENERAL.

.01 Generally, any individual who has knowledge of the facts, or who can give information which will assist in establishing the facts, is a proper source of information in determining the tax liability and can be heard in the capacity of a `witness' whether he is acting at the request of the taxpayer or claims the taxpayer as his client. For example, a broker who represented the taxpayer in a sale of real estate may be a proper person to furnish the facts with respect to that particular transaction. Similarly, an accountant who has kept or audited the taxpayer's books and records or prepared his tax returns may be a proper person to supply information and assist in the factual development of the case. Likewise, an actuary, who prepared a proposed pension plan or computed the contribution to be made under an approved plan may be a proper person to furnish information and assist in the development of the facts. However, unless properly authorized to represent the taxpayer and qualified to practice before the Internal Revenue Service an individual may not be heard as the taxpayer's representative in advocating a particular position on issues or controversies arising during a tax examination.

The difference may be summarized by distinguishing activities in the capacity of witness-or one who assists in the factual development of a case-and activities in the capacity of advocate-or one who acts in behalf of the taxpayer in urging particular determinations with respect to issues or controversies. During the examination a taxpayer has the right to use the services of any person he may elect to explain his books, records, or returns to the examining agent; and the examining agent has not only the right but also the duty to receive information from anyone who has knowledge of the facts. Of course, if the taxpayer is not present or has not executed a Tax Information Authorization in favor of the witness, the examining officer must not disclose any confidential tax information to him.

.02 The foregoing pertains primarily to the furnishing of information during the factual development of a case. However, the taxpayer also has the right in cases involving issues or controversies to have any person who has knowledge of pertinent facts accompany him or his duly authorized representative to conferences (including the district conference in the Audit Division of an office of District Director). Such appearances are permitted only when the taxpayer or his duly authorized representative is present, and then only in the capacity of a witness.

.03 This Revenue Procedure is not an authorization to `practice' before the Internal Revenue Service by persons other than those described in section 10.3 of Department Circular No. 230, as revised C.B. 1966-2, 1171.

.04 The foregoing statements should assist in the exercise of sound administrative discretion in determining matters that may be discussed without violating the regulations relating to `practice', the Service's rules of conduct, and other instructions for employees of the Internal Revenue Service.

SEC. 3. INQUIRIES.

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

SEC. 4. EFFECT ON DOCUMENTS.

Revenue Procedure 59-4, C.B. 1959-1, 810, is hereby superseded.

SEC. 5. EFFECTIVE DATE.

This Revenue Procedure shall be effective August 12, 1968.