Source: https://www.irs.gov/tax-professionals/2016-irsac-opr-subgroup-report
Timestamp: 2019-04-25 14:02:51+00:00

Document:
IRSAC Office of Professional Responsibility (OPR) Subgroup (hereinafter “OPR Subgroup”) consists of a diverse group of tax professionals, including lawyers, an appraiser, an enrolled agent, a certified public accountant, and a law professor. This year the OPR Subgroup addressed the need for (i) legislation authorizing IRS oversight of tax return preparers and reaffirming IRS oversight of tax “practice” broadly defined, and (ii) revisions and updates to Circular 230.
The OPR Subgroup has always enjoyed a good working relationship with the Office of Professional Responsibility, and this year was no exception. Director Stephen Whitlock was our principal liaison within the office. Director Whitlock and the entire OPR staff were extremely helpful and cooperative in the subgroup’s working sessions, and they contributed data and insights that helped frame our Report.
In 2011, the IRS began administering a program requiring individuals who prepare tax returns for compensation (and who were not otherwise licensed) to meet certain minimum standards of competency, including undergoing testing and annual continuing education. The new program grew out of a rigorous study of the return preparer industry conducted by the IRS that revealed widespread return preparer incompetency and fraud. Three years later in Loving v. IRS, the U.S. Court of Appeals for the D.C. Circuit invalidated the IRS program on the ground that, while the IRS possessed statutory authority to “regulate the practice of representatives of persons before the Department of the Treasury,” that authority “cannot be stretched so broadly as to encompass authority to regulate tax-return preparers.” In so ruling, the court raised fundamental questions about whether the IRS can regulate the “practice” of tax professionals who “represent” taxpayers before the IRS beyond the narrowest sense of the terms “practice” and “represent,” that is, (i) as an agent possessing legal authority to act on the taxpayer’s behalf (and, furthermore, to bind the taxpayer to those representative actions), and (ii) only once the representation reaches the point where a taxpayer’s “return is selected for audit or the taxpayer appeals the IRS’s proposed liability adjustments.” Such a restrictive definition of “tax practice” and taxpayer “representation” ignores all forms of pre-filing tax advice and planning, and could effectively eviscerate the last 30 years of amendments and revisions to Circular 230, much of which Congress authorized or mandated through legislative action.
Following the decision in Loving v. IRS, considerable discussion and debate ensued within the tax practitioner and tax policymaking communities concerning (i) the establishment of minimum requirements for unlicensed individuals who prepare tax returns for compensation, and (ii) the extent to which the IRS can establish and enforce professional standards for tax “practice” and the “representation” of taxpayers in the way that tax practitioners (and, to a great degree, Congress) had come to understand and take for granted. The discussion of what constituted “tax practice” and taxpayer “representation” took place against the backdrop of widespread fraud perpetrated by tax return preparers, the disproportionate number of whom are unlicensed. Over the last two years, the IRS and the Department of Justice’s Tax Division have diligently publicized and prosecuted this fraud, warning both practitioners and taxpayers of the threats posed — to individual taxpayers as well as to the tax system — by unscrupulous tax return preparers. The IRS Taxpayer Advocate has engaged in similar outreach and publicity.
Given the proliferation of preparer fraud and abuse, IRSAC reaffirms its recommendation of the last two years that all tax return preparers be subject to the competency and ethical standards contained in Treasury Circular 230, and furthermore, that all tax return preparers not already subject to the standards of a bar, accounting, or enrolled agent license be required to demonstrate competency by successfully passing an appropriate test and completing annual continuing education requirements. More specifically, IRSAC recommends that (i) the Commissioner request that the IRS be granted explicit statutory authority to establish and enforce professional standards for tax return preparers at all stages of tax practice (including both pre-filing and post-filing advice and assistance), and (ii) the Commissioner request that “representation” of taxpayers be defined to include not just acting on a taxpayer’s behalf and in a legally binding manner nor only after the taxpayer’s return has been selected for audit or the taxpayer challenges proposed adjustments to the return, but also encompassing tax advice, tax planning, tax return preparation, tax return filing, and pre-audit correspondence with the IRS.
Following the D.C. Circuit’s decision in Loving v. IRS, the IRS halted its Regulated Tax Return Preparer (RTRP) program. After losing on appeal, the RTRP designation was abandoned by the IRS and no longer has any significance. The Regulations Governing Practice Before the Internal Revenue Service, published as Treasury Circular 230, has not been revised to reflect these changes and thus contains numerous provisions that are now unenforceable. Additionally, other sections of Circular 230 are outdated or incorrect. IRSAC recommends that these ministerial revisions be addressed through the issuance of proposed regulations. IRSAC further recommends that the IRS seek specific authority to address these kind of updates in the future through Revenue Procedures or other administrative guidance.
It is in the public interest to safeguard the integrity of tax return preparation, tax advice and planning, and tax representation at all stages. The ability of the IRS to accomplish this critical task of tax administration has been hampered by recent court decisions. Thus, IRSAC recommends for the third year in a row that the Commissioner request that Congress affirm and clarify its support of the IRS’s authority to establish and enforce professional standards for tax “practice,” broadly defined, by strengthening 31 U.S.C. § 330.
31 U.S.C. § 330 authorizes the Secretary of the Treasury to “regulate the practice of representatives of persons before the Department,” including their character, reputation, qualifications, and competency. For decades, under regulations promulgated under Title 31 and published as Circular 230, the IRS has overseen the professional behavior of attorneys, certified public accountants, enrolled agents, and other credentialed professionals advising and representing taxpayers before the Internal Revenue Service. At times this oversight has been intense, as with respect to tax shelter opinions in the 1980s (see former section 10.33 of Circular 230) and the written advice standards in the mid-2000s (see former section 10.35 of Circular 230), while at other times it has been more watchful than assertive. At all times, however, IRS oversight of tax professionals has been guided by the principle that a sound tax system relies on the integrity and competency of tax practitioners.
The IRS Office of Professional Responsibility (OPR) administers all matters related to tax practitioner conduct, including the regulation of “practice” before the IRS and the oversight of all disciplinary proceedings pertaining to tax practitioners found to be in violation of Circular 230, the regulations governing practice before the IRS.
Until 1984, Circular 230 had provided that tax return preparation did not constitute practice before the IRS. However, revisions to Circular 230 that year removed the provision that explicitly omitted tax return preparation from “practice before the Internal Revenue Service.” As important, the 1984 revisions to Circular 230 began a thirty-year effort, much of it endorsed and authorized by Congress, to expand the nature and scope of tax practitioner conduct covered by Circular 230, particularly conduct related to pre-filing planning and advice. The 1984 amendments, for example, significantly increased the diligence requirements under Circular 230, specifically for practitioners issuing tax shelter opinions. Proposed amendments in 1986 recommended further extending enhanced diligence requirements to non-shelter advice pertaining to return positions. The 1986 amendments also proposed adding section 10.34 to Circular 230, requiring practitioners to advise taxpayer-clients on the recently enacted “substantial understatement penalty” (originally codified as section 6661, but re-codified as section 6662 in 1989), while at the same time prohibiting practitioners from advising on return positions that subjected taxpayers to penalty under the new provision. In 1992, the Treasury withdrew and reissued the proposed amendments, finalizing them two years later in 1994. New section 10.34(a)(1) prohibited practitioners from advising on return positions or signing returns reflecting return positions that did not meet the new “realistic possibility of success” standard in section 6662, unless the practitioner reasonably determined that the position was not frivolous and was adequately disclosed on the return. In addition, new section 10.34(a)(2) required practitioners to advise taxpayers on all potential penalties that might apply to return positions and, furthermore, to any opportunity to avoid penalty through disclosure to the IRS.
Two additional historical examples supporting the IRS authority to oversee tax practice, broadly defined, are worth mentioning. First, in 2004, Congress enacted the American Jobs Creation Act (“Jobs Act”), which, among other things, clarified that the Treasury Department and the IRS may impose disciplinary standards on practitioners for rendering pre-filing written advice relating to matters identified as having a potential for tax avoidance or evasion. The Jobs Act contained sweeping anti-shelter legislation — including new penalties as well as substantial revision to existing penalties — nearly all of which took aim at the tax shelter industry by targeting tax practitioners who advised taxpayer-clients on what the IRS and Congress viewed as abusive positions and transactions. The Treasury subsequently issued final regulations reflecting Congress’s intent to aggressively respond to abusive tax practice, including both pre- and post-filing practice. Second, in 2008, Congress enacted the Tax Extenders and Alternative Minimum Tax Relief Act, which, among other things, amended the standard of care that tax practitioners must achieve in order to avoid being subject to the tax preparer penalties contained in the Internal Revenue Code. Three years later, the Treasury Department updated Circular 230 respecting the standard of care that tax practitioners must meet when advising on and preparing tax returns.
In those same final regulations promulgated in 2011, the Treasury Department sought to include in its oversight the large group of tax return preparers who were unlicensed. Given the methodical and congressionally authorized advance over the previous three decades of IRS authority to require minimum standards for all forms of tax practice (described above), the Treasury reasonably believed that it already possessed that authority. Nonetheless, it felt compelled to enunciate its authority to address this group of tax return preparers after studies revealed that unlicensed preparers regularly committed simple and inexcusable errors on tax returns, which subjected taxpayers to unnecessary expense and liability and otherwise abused the tax compliance system. These studies showed, for example, that 55 percent of preparers were subject to no oversight (that figure has since jumped to 60 percent), and that tax returns prepared by all preparers had a higher estimated percent of errors (60 percent) than self-prepared returns (50 percent). Significantly, the studies also emphasized that tax return preparers are not required to have any minimum education, knowledge, training, or skill before they are allowed to prepare a tax return for a fee. Or, in the words of IRS Commissioner John Koskinen, “You get your hair cut by someone who has to pass a licensing exam, but [anyone] can prepare your tax return with no requirements at all, no certifications at all.” While unlicensed preparers charge and receive fees from taxpayers with both simple and sophisticated returns, the taxpayers most at risk to being misled and harmed by unlicensed preparers are low-income households possessing little financial literacy. Indeed, according to studies, 60 percent of taxpayers claiming the Earned Income Tax Credit (EITC) use a paid preparer, the same percentage as the general taxpaying population, but, unlike the general taxpayer population, more than 75 percent of EITC preparers are unlicensed and unregulated. All taxpayers should be able to rely upon competent and credible paid preparers who update their competency with respect to the nation’s tax laws on an annual basis, and who behave in accordance with the highest ethical and professional standards, namely those reflected in Circular 230.
Fraudulent tax return preparation has become an epidemic. According to the Treasury Inspector General for Tax Administration, the IRS identified more than two million returns from tax year 2014 reflecting fraudulently claimed refunds totaling more than $15.7 billion. In addition, the U.S. Department of Justice (DOJ) reports that it is seeking and being granted more injunction orders than ever before in its efforts to shut down fraudulent tax return preparers. In 2015, the DOJ permanently shut down more than thirty-five fraudulent operations, with 2016 on pace to easily surpass that figure. The defendants in these cases include large-scale return preparation franchises, independent return preparers, and everything in between.
For its part, the IRS has expended considerable resources and effort educating taxpayers about the malicious practices of fraudulent return preparers. During last year’s tax filing season, the IRS warned taxpayers “to be on the lookout for unscrupulous return preparers,” and identified incompetent and fraudulent preparers as one of the most common “Dirty Dozen” tax scams. Moreover, the IRS maintains (and regularly updates) websites that assist taxpayers in “choosing your tax preparer wisely”; that educate taxpayers on the credentials and qualifications of different categories of tax professionals; that provide searchable directories of credentialed federal tax return preparers located throughout the country; that explain how to register a complaint about return preparers or report suspected fraudulent conduct; and that list and describe the government’s investigations and convictions of abusive return preparers.
Reports of unscrupulous return preparers are common in conversations among licensed tax practitioners and members of the public. One recent example of the significant harm caused by unscrupulous and incompetent return preparers involved a group of Baltimore firefighters whose unlicensed and unregistered paid preparer fraudulently claimed hundreds of thousands of dollars in bogus business expenses on the firefighters’ tax returns. According to an investigation conducted by WBAL-TV 11 in March 2015, the firefighters never saw or signed the returns. In addition, the unlicensed return preparer did not list himself as the preparer of record on the returns and instead indicated that the returns were “self-prepared.” The firefighters only learned of the preparer’s misconduct after being contacted by the Comptroller of Maryland questioning the accuracy of the returns.
Cases like these illustrate the dire need for minimum and mandatory competency standards which all preparers must meet and maintain before they are permitted to render advice, prepare returns, or represent taxpayers at any stage of the pre-filing or post-filing process.
As noted in the Introduction/Executive Summary of the OPR Subgroup Report, Loving v. IRS  struck down the IRS’s expanded oversight of return preparers, holding that Title 31 did not explicitly grant such authority. In a subsequent case, Ridgely v. Lew, the court invalidated Circular 230’s contingent-fee restrictions as applied to “ordinary” refund claims; i.e., amended tax returns filed prior to an examination of the original return. The courts held, respectively, that preparers of tax returns and “ordinary” claims for refund are neither “representing” taxpayers nor “practicing” before the Internal Revenue Service as defined in 31 U.S.C. § 330.
In analyzing whether tax return preparers and refund claim preparers are “representatives” of taxpayers “practicing” before the IRS, the courts stated that tax professionals do not serve taxpayers in such a capacity until a live dispute arises between the IRS and a taxpayer. More specifically, the courts opined that in the normal course of return and claim submissions, before a return is being audited or there is otherwise a dispute between the taxpayer and the IRS, the tax professional is not “practicing” before the IRS in the sense of having a “case” before the IRS, another term of art contained in 31 U.S.C. § 330. According to the courts, a tax professional is not “representing” a taxpayer unless the representative has the power to bind the taxpayer as would an agent for a principal. Accordingly, even though 31 U.S.C. § 330(d) expressly states that nothing in section 330 nor in any other law prevents the IRS from regulating tax advice with respect to an activity that has the potential for tax avoidance or evasion, the court opinions suggest that most tax advice — including all pre-filing tax advice — is outside the scope of section 330 oversight. The courts restricted in this manner the forms of tax “practice” that the IRS could regulate even though Congress has affirmed on multiple occasions the Treasury Department’s authority to establish and enforce professional standards for pre-filing tax advice under the ambit of Circular 230 (see “Background” to Issue One of the OPR Subgroup Report).
In addition, both the Loving and Ridgely courts felt that the existing return preparer penalty provisions of the Internal Revenue Code make IRS oversight of tax return preparers surplusage in any event. According to the Loving court, the Code already contains a “carefully articulated existing system for regulating tax return preparers,” a system that the Ridgely court considered a “comprehensive scheme of penalties to curb the potential abuse in the preparation and filing of both original returns and refund claims.” Whether or not the current penalty system reflects a “carefully articulated” and “comprehensive scheme” for regulating tax return preparers is certainly debatable and subject to specific factual contexts. Unscrupulous practitioners, for example, may simply consider the penalty regime’s monetary sanctions a cost of doing business rather than, say, penalties that should be avoided or, if breached, a sign that a practitioner has violated an authoritative standard of care. There can be no debate, however, that the current penalty system has been ineffective in “curb[ing] the potential abuse in the preparation and filing of both original returns and refund claims.” Furthermore, if Circular 230 applies only to practice in the narrow adversarial sense described by the courts in Loving and Ridgely, then the whole tax opinion arena is conceivably beyond the scope of OPR scrutiny. Such a result is flatly at odds with congressional intent reflected in multiple statutes enacted over the last three decades (see discussion above in “Background” to Issue One of the OPR Subgroup Report).
IRSAC believes that decisions in Loving and Ridgely are inconsistent with the last 30 years of tax practice standards as understood by Congress, the Treasury Department, and tax practitioners who are licensed. As such, and to mitigate the damage caused by these cases with respect to tax administration, tax compliance, and taxpayer rights, IRSAC recommends that the Commissioner request Congress to amend 31 U.S.C. § 330 to grant the IRS express authority to oversee all phases of federal tax advice, return and document preparation, and dispute resolution.
In the wake of Loving and Ridgely, and recognizing the need for IRS oversight of unlicensed tax return preparers, members of Congress have introduced a number of bills designed to clarify and expand the scope of 31 U.S.C. § 330. In particular, the legislative efforts have sought to include “tax return preparers” in 31 U.S.C. § 330 as defined in section 7701(a)(36) of the Internal Revenue Code, and to grant the IRS explicit authority to sanction tax return preparers who run afoul of Circular 230. To date, none of the bills has become law. In fact, none of them even got out of Committee. But the proposal sponsored by Senators Ron Wyden (D-OR) and Ben Cardin (D-MD) nearly received enough votes in the Senate Finance Committee in April 2016 to proceed to the full Senate for consideration. The “Wyden Amendment” (attached to a bill preventing identity theft and tax refund fraud) lost 12-13 with two members who voted against the amendment expressing qualified support for future legislative action on minimum standards for tax return preparers.
IRSAC applauds the intent of this legislation particularly to the extent it clarifies and expands the scope of 31 U.S.C. § 330 to include unlicensed tax return preparers as professionals practicing before the Internal Revenue Service and thus subject to Circular 230’s standard of conduct. The income tax is generally self-assessed, and paid return preparers are critical to assisting taxpayers in understanding and fulfilling their self-assessment obligations. Given the meager 0.8 percent audit rate for all returns, more than 99 percent of tax return data go unexamined by the IRS, a fact that means the nation’s income tax system is overwhelmingly dependent upon the accuracy of the information originally submitted by taxpayers and their tax professionals.
All paid tax return preparers have an important role in tax administration because they assist taxpayers in complying with their obligations under the tax laws. Incompetent and dishonest tax return preparers increase noncompliance and undermine confidence in the tax system. Equally important, unscrupulous return preparers who prey on unsuspecting clients subject those clients to significant penalties and interest on additional income taxes. Many of these taxpayers cannot afford to incur further costs resulting from a preparer’s grossly negligent or fraudulent conduct.
Practice before the Internal Revenue Service comprehends all matters connected with a presentation to the Internal Revenue Service or any of its officers or employees relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service. Such presentations include, but are not limited to, preparing documents; filing documents; corresponding and communicating with the Internal Revenue Service; rendering written advice with respect to any entity, transaction, plan or arrangement, or other plan or arrangement having a potential for tax avoidance or evasion; and representing a client at conferences, hearings, and meetings.
Circular 230 governs all persons who practice before the Internal Revenue Service. It is relied upon by attorneys, certified public accountants, enrolled agents, and others who represent taxpayers before the Internal Revenue Service as well as by taxpayers who hire these tax professionals.
As discussed in the OPR Subgroup Issue 1, because of the decision in Loving v. IRS, the IRS’s mandatory program for regulating unlicensed tax return preparers was halted in 2014. Separate and apart from the potential for legislative action authorizing the IRS to impose minimum standards for individuals who provide tax preparation services — legislation that IRSAC very much supports — parts of Circular 230 are currently outdated and unenforceable.
IRSAC recommends updating these outdated parts of Circular 230. The Appendix to this report identifies the specific parts of Circular 230 that need updating. These updates are purely ministerial, and pertain to parts of the Circular that reflect programs no longer in existence, outmoded procedures, and antiquated dates and deadlines. As such, IRSAC further recommends that the IRS seek specific authority to address these kind of updates in the future through Revenue Procedures or other administrative guidance.
Before the 2014 appellate court decision in Loving, the IRS had instituted a mandatory program requiring all tax return preparers who were not otherwise licensed to become “Registered Tax Return Preparers” (RTRPs). Following the Loving decision, the IRS shut down the program and abandoned the RTRP designation. Thus, the RTRP classification no longer has any significance, and the IRS has announced that the RTRP credential is no longer valid and serves no purpose when dealing with the IRS.
Because Circular 230 has not been revised to reflect the IRS’s termination of the RTRP program, the regulation still contains numerous references to RTRPs — 54 by our count. In other words, the current version of the Regulations Governing Practice Before the Internal Revenue Service reflects provisions that are unenforceable and potentially misleading for practitioners (and others). The Appendix to this report contains the current version of Circular 230, with the sections that need updating marked with strikethrough text.
This recommendation is not driven simply by aesthetic concerns. Circular 230 addresses conduct subject to sanction. But it also contains useful guidance for tax practitioners regarding their prevailing standard of care, best practices, enrolled agent renewals, and continuing education, as well as other information relating to practice before the IRS. When this information is outdated or incorrect, it detracts from the credibility and usefulness of the overall regulations and could affect compliance adversely.
Apart from the now-moribund RTRP program, Circular 230 does not refer to a temporary and voluntary program that the IRS has instituted for return preparers. The “Annual Filing Season Program” (AFSP) offers a record of completion and other benefits not available to tax return preparers who do not participate in the program. In addition to the registration, education, and testing requirements to participate in the AFSP, tax preparers must consent to being subject to Subpart B and section 10.51 of Circular 230 (pertaining to sanctions for “incompetence and disreputable conduct”). Because these requirements are similar to and overlap with some aspects of the RTRP program, the advent of this new category of “AFSP Record of Completion Holders” might confuse tax preparers who still encounter Circular 230’s multiple references to the defunct RTRP designation.
Appraisers should be added as a profession to the other listed practitioners authorized to practice before the IRS in section10.0, 10.2(a) and 10.3. Appraisers are specifically mentioned in 31 U.S.C. § 330 and are subject to the rules and “Sanctions for Violation of Regulations” in Subpart C.
The language in section 10.6(d)(2) regarding Renewal for Enrolled Agents should be updated. Thus, the rolling renewal schedule which dates to July 2002 should instead be a simple reference to where information on renewal cycles can be found on the IRS website or in other published guidance.
Sections 10.6(f)(1) & (2) pertaining to Continuing Education (CE) are outdated, because enrolled agents no longer determine the validity of their own CE. Rather, a valid Course Approval Number issued by the IRS is the only criterion for valid CE for enrolled agents. Outdated language in this section should be removed (or moved to §10.9) with the exception of §10.6(f)(2)(ii)(D) pertaining to qualified continuing education programs.
Seek specific authority to address ministerial updates to Circular 230 through Revenue Procedures or other administrative guidance. By “ministerial updates,” IRSAC contemplates updates of the same order as those recommended in this report; that is, those that address outmoded programs or procedures rather than those that expand the Treasury Department’s oversight of tax practitioners.
Add references to appraisers in section 10.0, the definitions in section 10.2(a), and the list of “Who may practice” in section 10.3.
Remove outdated language regarding renewal periods for enrolled agents from section 10.6(d)(2).
Remove outdated language from the requirements for continuing education programs from sections 10.6(f)(1) & (2).
 See 76 Fed. Reg. 32286 (2011). See also 75 Fed. Reg. 60309 (2010) and 75 Fed. Reg. 60316 (2010).
 See IRS Publication 4832, “Return Preparer Review” (December 2009).
 742 F.3d 1013 (D.C. Cir. 2014), affg, 920 F. Supp. 2d 108 (D.D.C. 2013).
 See “Background” to Issue One of the OPR Subgroup Report.
See e.g., William Hoffman, “EAs May Hold Keys to Preparer Regulation Post-Loving,” 142 Tax Notes 809 (2014); William R. Davis, and Jaime Arora, “Legislation Needed to Strengthen Circular 230, Hawkins Says,” 145 Tax Notes 492 (2014); Michelle Lyon Drumbl, “When Helpers Hurt: Protecting Taxpayers from Preparers,” 145 Tax Notes 1365 (2014); Steve R. Johnson, “How Far Does Circular 230 Exceed Treasury’s Statutory Authority?” 146 Tax Notes 221 (2015); Amanda Athanasion, “OPR Suffering from Circular 230 Challenges, Hawkins Says,” 146 Tax Notes 596 (2015); Lee Sheppard, “Does the IRS Have the Power to Regulate Preparers?” 147 Tax Notes 1225 (2015); Dennis Drapkin, “Loving and Ridgely: Implications for Practitioners,” 148 Tax Notes 319 (2015); Bryan T. Camp, “How the IRS Can Regulate Return Preparers without New Law,” 148 Tax Notes 1335 (2015); Nathan Richman, “IRS Officials See Annual Filing Season Program as Steppingstone,” 151 Tax Notes 851 (2016); William Hoffman, “IRS Brings ID Theft War to Small Tax Return Preparers,” 152 Tax Notes 472 (2016).
 See William Hoffman, “Koskinen Urges Senate Finance to Reconsider Preparer Regulation,” 143 Tax Notes 171, 171 (2014) (quoting Commissioner Koskinen as reporting that lawyers, CPAs, and Enrolled Agents make up only 40 percent of the paid preparer community, leaving “60 percent [of paid preparers] preparing returns with little or no federal oversight”).
 See, e.g., IRS, “Examples of Abusive Return Preparer Investigations, Fiscal Year 2016,” available at /uac/examples-of-abusive-return-preparer-investigations-fiscal-year-2016 (describing hundreds of investigations and convictions of abusive return preparers, including links to fiscal years 2014 and 2015); IRS Press Release, “Identify Theft an Ongoing Concern on the IRS Annual ‘Dirty Dozen’ List of Tax Scams to Avoid,” IR 2016-16 (February 4, 2016), available at /uac/newsroom/identity-theft-an-ongoing-concern-on-the-irs-annual-dirty-dozen-list-of-tax-scams-to-avoid; IRS, “Choose Your Tax Preparer Wisely,” IRS Tax Tip 2016-06 (January 26, 2016, updated February 2016), available at /uac/choose-your-tax-preparer-wisely; IRS, “General IRS Guidance on Choosing a Tax Professional” (updated September 1, 2016), available at /tax-professionals/e-file-providers-partners/choose-a-tax-professional; IRS, “Tax Time Guide: Online Tools Help Taxpayers Choose a Qualified Tax Professional,” IR-2016-46 (March 22, 2016), available at /uac/newsroom/tax-time-guide-online-tools-help-taxpayers-choose-a-qualified-tax-professional; IRS, “Understanding Tax Return Preparer Credentials and Qualifications” (updated March 2016), available at /tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications; IRS, “Who Can Represent You Before the IRS?” IRS Special Edition Tax Tip 2016-02 (January 15, 2016, updated February 12, 2016), available at /uac/who-can-represent-you-before-the-irs; IRS, “Directory of Federal Tax Return Preparers with Credentials and Select Qualifications” (updated almost daily), available at http://irs.treasury.gov/rpo/rpo.jsf; USDOJ, Office of Public Affairs, “Justice Department Warns Public to Beware of Fraudulent Tax Return Preparers and Tax Scheme Promoters, Urges Taxpayers to Pay Federal Income Taxes on Time and in Full” (March 31, 2016), available at https://www.justice.gov/opa/pr/justice-department-warns-public-beware-fraudulent-tax-return-preparers-and-tax-scheme; USDOJ, Tax Division, “Tax Division Press Releases,” available at https://www.justice.gov/tax/tax-division-press-releases (listing over 3,000 press releases dating to 2009 with the vast majority pertaining to fraudulent tax return preparers); USDOJ, “Program to Shut Down Schemes and Scams,” available at https://www.justice.gov/tax/program-shut-down-schemes-and-scams (listing hundreds of injunctions obtained between 2004-16 shutting down fraudulent tax return preparers, with more recent years reflecting a marked increase in the number of injunctions).
 See e.g., National Taxpayer Advocate, Return Preparer Fraud, available at http://taxpayeradvocate.irs.gov/get-help/return-preparer-fraud.
 In January 2003, the Treasury Department established the Office of Professional Responsibility, before which time (and since 1954) the Director of Practice administered the regulations governing practice before the IRS. See 71 Fed. Reg. 6421, 6422 (2006).
 See 31 C.F.R. §§ 10.0-.93 (2014).
 See e.g., 31 Fed. Reg. 10773, 10774 (1966) (stating in 31 U.S.C. § 10.2(a), “Neither the preparation of a tax return, nor the appearance of an individual as a witness for the taxpayer, nor the furnishing of information at the request of the IRS or any of its officers or employees is considered practice before the IRS”).
 See 49 Fed. Reg. 6719, 6722 (1984) (removing the third sentence in 31 U.S.C. § 10.2(a), which previously stated that tax return preparation was not considered practice before the IRS).
 51 Fed. Reg. 29113, 29113-14 (1986).
 See 57 Fed. Reg. 46356 (1992).
 See 59 Fed. Reg. 31523 (1994).
 See Pub. L. 108-357, 118 Stat. 1418, 1587 (2004).
 See e.g., I.R.C. § 6707A (penalty for failure to disclose reportable transactions); § 6662A (accuracy-related penalty on understatements with respect to reportable transactions); § 6700 (promoter penalty); § 6707 (penalty for failure to furnish information respecting reportable transactions); § 6708 (list maintenance penalty respecting taxpayer-clients invested in reportable transactions); § 6111 (requirement that “material advisors” disclose information respecting reportable transactions); § 6112 (list maintenance requirement for material advisors with respect to potentially abusive tax shelters).
 See 69 Fed. Reg. 75839, 75842-44 (2004); 70 Fed. Reg. 28824 (2005) (revising final regulations based on public comments received prior to effective date of final regulations issued in December 2004); 72 Fed. Reg. 54540, 54545 (2007) (finalizing regulations respecting the clarified authority and including such authority in section 10.2(a)(4), “Practice Before the Internal Revenue Service”).
 See Pub. L. 110-343 (Division C), 122 Stat. 3765, 3880 (2008). See also 73 Fed. Reg. 78430 (2008) (issuance of final regulations to reflect the legislative changes to paid preparer penalties).
 76 Fed. Reg. 32286, 32307-08 (2011).
 Government Accountability Office, “Paid Tax Return Preparers: In a Limited Study, Preparers Made Significant Errors,” GAO-14-467T (April 8, 2014) (testimony before the Senate Finance Committee); IRS Tax Return Preparer Review in 2009 and 2010; IRS Publication 4832, “Return Preparer Review” (December 2009). See also IRS, “Return Preparer Review Leads to Recommendations for New Requirements of Paid Tax Return Preparers,” FS-2010-1 (January 2010).
 See William Hoffman, “Koskinen Urges Senate Finance to Reconsider Preparer Regulation,” 143 Tax Notes 171, 171 (2014) (quoting Commissioner Koskinen as saying that lawyers, CPAs, and Enrolled Agents make up only 40 percent of the paid preparer community, leaving “60 percent [of paid preparers] preparing returns with little or no federal oversight”).
 Kat Lucero, “IRS Launches Online Directory of Tax Return Preparers,” 146 Tax Notes 715, 716 (2016).
 See Alexandra Thornton and Rebecca Vallas, “Three Reasons Why We Should Certify All Paid Tax Preparers” (Apr. 20, 2016), available at https://www.americanprogress.org/issues/tax-reform/news/2016/04/20/136022/3-reasons-why-we-should-certify-all-paid-tax-preparers/.
 USDOJ, Office of Public Affairs, “Justice Department Warns Public to Beware of Fraudulent Tax Return Preparers and Tax Scheme Promoters, Urges Taxpayers to Pay Federal Income Taxes on Time and in Full” (March 31, 2016), available at https://www.justice.gov/opa/pr/justice-department-warns-public-beware-fraudulent-tax-return-preparers-and-tax-scheme.
 See USDOJ, “Program to Shut Down Schemes and Scams,” available at https://www.justice.gov/tax/program-shut-down-schemes-and-scams (listing hundreds of injunctions obtained between 2004-16 shutting down fraudulent tax return preparers, with more recent years reflecting an explosion in the number of injunctions). See also USDOJ, Tax Division, “Tax Division Press Releases,” available at https://www.justice.gov/tax/tax-division-press-releases (listing over 3,000 press releases dating to 2009 with the vast majority pertaining to fraudulent tax return preparers).
 IRS Press Release, “Identify Theft an Ongoing Concern on the IRS Annual ‘Dirty Dozen’ List of Tax Scams to Avoid,” IR 2016-16 (February 4, 2016),available at /uac/newsroom/identity-theft-an-ongoing-concern-on-the-irs-annual-dirty-dozen-list-of-tax-scams-to-avoid.
 See IRS, “Choose Your Tax Preparer Wisely,” IRS Tax Tip 2016-06 (January 26, 2016, updated February 2016), available at /uac/choose-your-tax-preparer-wisely; IRS, “General IRS Guidance on Choosing a Tax Professional” (updated September 1, 2016), available at /tax-professionals/e-file-providers-partners/choose-a-tax-professional (includes a tutorial video on “How to Use the Tax Return Preparer Directory”); IRS, “Tax Time Guide: Online Tools Help Taxpayers Choose a Qualified Tax Professional,” IR-2016-46 (March 22, 2016), available at /uac/newsroom/tax-time-guide-online-tools-help-taxpayers-choose-a-qualified-tax-professional; IRS, “IRS Urges Taxpayers to Choose a Tax Preparer Wisely for the Filing Season Ahead,” FS-2014-11 (December 2014, updated December 2, 2015),available at /uac/newsroom/irs-urges-taxpayers-to-choose-a-tax-preparer-wisely-for-the-filing-season-ahead.
 See IRS, “Understanding Tax Return Preparer Credentials and Qualifications” (updated March 2016), available at /tax-professionals/understanding-tax-return-preparer-credentials-and-qualifications; IRS, “Who Can Represent You Before the IRS?” IRS Special Edition Tax Tip 2016-02 (January 15, 2016, updated February 12, 2016), available at /uac/who-can-represent-you-before-the-irs.
 IRS, “Directory of Federal Tax Return Preparers with Credentials and Select Qualifications” (updated almost daily), available at http://irs.treasury.gov/rpo/rpo.jsf.
 See IRS, “Make a Complaint About a Tax Return Preparer” (March 8, 2016), available at /tax-professionals/make-a-complaint-about-a-tax-return-preparer.
 See IRS, “How Do You Report Suspected Tax Fraud Activity” (January 11, 2016), available at /individuals/how-do-you-report-suspected-tax-fraud-activity.
 IRS, “Examples of Abusive Return Preparer Investigations, Fiscal Year 2016,” available at /uac/examples-of-abusive-return-preparer-investigations-fiscal-year-2016 (includes links to fiscal years 2014 and 2015).
 See Barry Simms, “Firefighters: Tax Preparer Lied on Forms, Now We Owe,” WBAL-TV11 (March 1, 2015), available at http://www.wbaltv.com/news/firefighters-tax-preparer-lied-on-forms-now-we-owe/31474772. See also Barry Simms, “More Taxpayers Claim Tax preparer Filed Bogus Claims,” WBAL-TV11 (March 19, 2015),available at http://www.wbaltv.com/money/more-taxpayers-claim-tax-preparer-filed-bogus-claims/31868422 (reporting additional Maryland taxpayers having been defrauded by the same unregistered preparer).
 For a tip-of-the-iceberg view of the fraudulent tax preparation epidemic, see IRS, “Examples of Abusive Return Preparer Investigations, Fiscal Year 2016,” available at /uac/examples-of-abusive-return-preparer-investigations-fiscal-year-2016 (describing in detail hundreds of cases pertaining to abusive return preparer investigations and convictions from fiscal years 2014, 2015, and 2016).
 55 F. Supp. 3d 89 (D.D.C. 2014).
 55 F. Supp.3d at 96.
See e.g., S. 137, Taxpayer Protection and Preparer Proficiency Act of 2015 (introduced and co-sponsored by Sens. Wyden and Cardin); H.R. 1609, Tax Return Preparer Accountability Act of 2015 (co-sponsored by Cohen, Scott, Norton, Maloney); H.R. 1778, Tax Refund Protection Act of 2015 (introduced by Bonamici); S. 935 (companion bill to H.R. 1778), Tax Refund Protection Act of 2015 (introduced by Booker); H.R. 4141, Tax Return Preparer Competency Act of 2015 (introduced by Black).
 William Hoffman and Jonathan Curry, “Senate Finance Passes ID Theft, Tax Administration Bills,” 151 Tax Notes 436 (2016). For the multi-year odyssey undertaken by Wyden and Cardin to enact legislation explicitly authorizing the IRS to regulate tax return preparers, see William Hoffman, “Wyden, Cardin Introduce Bill to Regulate Paid Return Preparers,” 146 Tax Notes 345 (2015); Kat Lucero, “Finance Democrats Push Return Preparer Standards,” 2016 TNT 767 (2015).
 See Hoffman and Curry, supra note 51, at 436 (Chair Orrin Hatch (R-UT) stated after the vote, “While I support minimum standards for paid tax return preparers, I will vote against this amendment today because I want to work with my Republican colleagues to assuage some of their well-founded concerns about the broad scope of authority provided to the Treasury Department in this proposal.” Meanwhile, Dan Coats (R-IN) said, “The decision today doesn’t take this issue off the table, at least from my perspective. But it’s clear to me that adoption of this would undermine our ability to take this all the way through the Senate and move it to statutory approval.”). For an explanation of the Wyden Amendment, see “Wyden Amendment to the Second Modification to a Bill to Prevent Identify Theft and Tax Refund Fraud” (co-sponsored by Cardin, Carper, Wyden) Tax Analysts Doc. 2016-8272.
 See IRS, IRS Data Book 21 (2015).
 See Registered Tax Return Preparer (RTRP) Test Fee Refunds – Frequently Asked Questions (updated May 11, 2016), available at /tax-professionals/registered-tax-return-preparer-test-refunds.
(2) bar such appraiser from presenting evidence or testimony in any such proceeding.

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