Key Takeaways
- OPR is the IRS office that enforces Circular 230.
- Can investigate practitioners for violations of ethical standards.
- Sanctions include: censure, suspension, disbarment, and monetary penalties.
- Practitioners have the right to a hearing before an Administrative Law Judge.
- Disbarment means permanent loss of the right to practice before the IRS.
- Disbarred practitioners may apply for reinstatement after 5 years.
Office of Professional Responsibility (OPR)
Why This Matters for the Exam
OPR is the enforcement arm of Circular 230. The exam tests the types of sanctions, the disciplinary process, and practitioner rights.
Expect at least 2-3 questions on OPR and sanctions.
What Is OPR?
The Office of Professional Responsibility (OPR) is the IRS office responsible for:
| OPR Function | Description |
|---|---|
| Investigating | Alleged Circular 230 violations |
| Initiating proceedings | Disciplinary actions |
| Enforcing | Sanctions against practitioners |
| Monitoring | Practitioner conduct |
Sanctions Available to OPR
| Sanction | Description | Severity |
|---|---|---|
| Censure | Public reprimand | Least severe |
| Suspension | Temporary loss of practice rights | Moderate |
| Disbarment | Permanent loss of practice rights | Most severe |
| Monetary Penalty | Fine up to gross income from engagement | Variable |
Understanding Each Sanction
| Sanction | Effect | Duration |
|---|---|---|
| Censure | Public reprimand; can still practice | Permanent record |
| Suspension | Cannot practice during period | Specified time period |
| Disbarment | Cannot practice before IRS | Permanent (unless reinstated) |
| Monetary Penalty | Financial penalty | One-time payment |
Disreputable Conduct
OPR can sanction practitioners for disreputable conduct, including:
| Disreputable Conduct | Example |
|---|---|
| Fraud or willful evasion | Tax evasion conviction |
| Criminal convictions | Crimes of dishonesty |
| Willful failure to file/pay | Not filing own returns |
| Contingent fees for returns | Charging % of refund |
| Knowingly false statements | Lying to IRS |
| Frivolous positions | Positions with no legal basis |
The Disciplinary Process
| Step | What Happens |
|---|---|
| 1. Complaint/Referral | OPR receives allegation |
| 2. Investigation | OPR investigates the matter |
| 3. Complaint Filed | If violation found, formal complaint issued |
| 4. Response | Practitioner files answer |
| 5. Hearing | Before Administrative Law Judge (ALJ) |
| 6. ALJ Decision | Initial decision issued |
| 7. Appeal | To Secretary of the Treasury |
| 8. Final Decision | Sanction imposed or dismissed |
Practitioner Rights
| Right | Description |
|---|---|
| Notice | Written notice of charges |
| Hearing | Before an Administrative Law Judge |
| Representation | By counsel |
| Evidence | Present evidence, call witnesses |
| Cross-examination | Cross-examine IRS witnesses |
| Appeal | Appeal ALJ decision to Treasury Secretary |
Reinstatement
| Sanction | Reinstatement |
|---|---|
| Suspension | Automatic at end of period (if conditions met) |
| Disbarment | May apply after 5 years; not guaranteed |
| Censure | No reinstatement needed |
Expedited Suspension
In severe cases, OPR can seek expedited suspension without a full hearing:
| Basis for Expedited Suspension | Example |
|---|---|
| Criminal conviction | Tax fraud conviction |
| Sanction by another agency | State bar disbarment |
| Court injunction | Enjoined from tax practice |
Real-World Scenario
Scenario: An EA is caught charging contingent fees for original returns and willfully failing to file their own taxes for 3 years.
- Violations: Two counts of disreputable conduct.
- Likely outcome: Suspension or disbarment.
- Process: OPR investigates → complaint filed → EA can request hearing before ALJ → decision → possible appeal.
- If disbarred: Can apply for reinstatement after 5 years.
On the Exam
Expect 2-3 questions on OPR, typically:
- Role Questions: "What is the role of OPR?"
- Sanction Questions: "What is the most severe sanction OPR can impose?"
- Reinstatement Questions: "When can a disbarred practitioner apply for reinstatement?"
The key is to remember: OPR enforces Circular 230. Sanctions: censure < suspension < disbarment. Hearing rights before ALJ. Reinstatement after 5 years for disbarment.
What is the role of the Office of Professional Responsibility?
What is the most severe sanction OPR can impose?
How long must a disbarred practitioner wait before applying for reinstatement?