What is the Office of Professional Responsibility (OPR)?
The IRS Office of Professional Responsibility (OPR)
is the office within the Internal Revenue Service that regulates the practice of representatives before the Treasury Department, for violation of OPR regulations or "disreputable behavior." OPR only has the authority to regulate "practitioners" which are defined as CPAs, attorneys, enrolled agents, enrolled actuaries, appraisers and Enrolled Retirement Plan Agents. It does not regulate individuals who are solely tax preparers.
Up until 2002, it was known as the Office of the Director of Practice. I twas not known for vigorous enforcement of its mission. Then, IRS Commissioner Mark Everson renamed the office and tripled its staffing. Now, tax practitioners need to be careful that they don't run afoul of OPR since it has the authority to impose monetary fines, and to suspend or disbar tax attorneys and other practitioners from practice before the IRS. An unhappy IRS agent, or an unhappy client can trigger a referral to OPR. Indeed, if the IRS imposes certain tax preparer penalties it will result in a MANDATORY referral to OPR. For that reason, it is very important that tax preparers fight tooth and nail to avoid imposition for tax preparer penalties even though their immediate cost might be relatively small, the devastating impact on a preparer's livelihood is huge.
It is tempting for attorneys and the CPAs who are contacted by OPR, or who are facing penalties to attempt to explain their way out of the situation. This is almost always a mistake. Just like the criminal defendants who think they can talk their way out of a bad situation, they usually just make matters worse.
Tax practitioners representing clients on returns that they prepared need to be very careful to watch out for conflicts of interest. If the IRS threatens to impose an accuracy or fraud penalty against the client, and the IRS Appeals Division overturns that penalty is reliance on a preparer there may be an irreconcilable conflict which can lead to a client malpractice suit.
If you are a professional facing an OPR investigation, or even proposed preparer penalties, it is important that you engage tax counsel to assist you.
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