23.7 Office of Professional Responsibility (OPR)
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.
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?