Circular 230 — Standards for Practice Before the IRS

Circular 230 (31 CFR Part 10) is the federal regulation governing who may represent taxpayers before the IRS and what professional conduct standards they must meet. It is the professional code for the entire federal tax practice community — attorneys, CPAs, enrolled agents (EAs), and appraisers — establishing duties to clients, restrictions on certain practices (contingent fees, delayed proceedings), and the disciplinary process through which the IRS can censure, suspend, or disbar practitioners. The IRS's Office of Professional Responsibility (OPR) enforces Circular 230, investigates complaints, and maintains the public roster of sanctioned practitioners searchable at irs.gov.

Current Rule (2026)

What This Rule Does

Circular 230 is the federal regulation governing who may represent taxpayers before the Internal Revenue Service and what professional standards they must meet. Published as 31 CFR Part 10, it is the professional conduct code for the entire federal tax practice community — covering attorneys, certified public accountants (CPAs), enrolled agents (EAs), enrolled retirement plan agents (ERPAs), registered tax return preparers, and appraisers. Circular 230 establishes the duties practitioners owe to clients and to the IRS, restricts certain practices (conflicting fees, delayed proceedings, solicitation), and defines the disciplinary process through which the IRS can censure, suspend, or disbar any practitioner from federal tax practice.

The term "Circular 230" is ubiquitous in tax professional circles — it is how attorneys and accountants commonly refer to this regulation, using the circular number the Treasury originally assigned when it issued the rules in pamphlet form. The IRS's Office of Professional Responsibility (OPR) is the enforcement arm: OPR investigates complaints, prosecutes disciplinary proceedings before Administrative Law Judges, and maintains the public roster of sanctioned practitioners. OPR also issues guidance, interpretive memoranda, and the annual "Circular 230 Hot Topics" used in continuing education programs.

The scope of Circular 230 is specifically "practice before the Internal Revenue Service" — which includes preparing and filing returns, representing taxpayers in examinations, appeals, and collection matters, and providing written tax advice. It does not govern all tax advice generally; state bars and CPA licensing boards have their own professional conduct rules that overlap with but are separate from Circular 230.

Key Provisions

• § 10.3 — Who may practice: attorneys admitted in good standing to any state bar; CPAs with a current, active state license; enrolled agents (EAs) who passed the IRS Special Enrollment Examination and maintain continuing education; enrolled retirement plan agents (ERPAs) for retirement plan matters only; and registered tax return preparers for the Form 1040 series
• § 10.7 — Limited practice: individuals may represent themselves without a practitioner; unenrolled return preparers may represent clients for returns they prepared in examinations conducted by correspondence; friends or family members may assist individuals as "friends of the taxpayer" in collection matters
• § 10.8 — PTIN requirement: anyone who prepares all or substantially all of a tax return for compensation must have a valid Preparer Tax Identification Number (PTIN); failure to obtain or maintain a current PTIN is grounds for sanction
• § 10.9 — Continuing education: EAs and ERPAs must complete 72 hours of continuing education every three years (including 2 hours of ethics); OPR approves CE providers and programs; failure to maintain CE requirements results in loss of enrolled status
• § 10.20 — Duty to provide information: on proper request by an authorized IRS employee, a practitioner must promptly submit records relevant to the matter; limited exception for good-faith, reasonable belief that production is not proper or lawful
• § 10.21 — Knowledge of client's omission: if a practitioner knows the client has not complied with tax laws or has made an error or omission, the practitioner must promptly advise the client of the noncompliance and the consequences; the practitioner has no duty to notify the IRS but cannot assist the client in concealing the error
• § 10.22 — Due diligence: practitioners must exercise due diligence in preparing or approving returns, documents, and representations to the IRS, and in determining the correctness of oral or written representations; reliance on a client's representations is permitted only if it is reasonable under the circumstances
• § 10.23 — Prompt disposition: a practitioner must not unreasonably delay the prompt disposition of any IRS matter; serial postponements of scheduled proceedings without genuine cause violate this provision
• § 10.27 — Fees: a practitioner may not charge an unconscionable fee; contingent fees (fees dependent on the outcome) are generally prohibited in tax matters but are permitted in limited circumstances — OPR audit challenges, CDP hearings, and judicial proceedings
• § 10.28 — Return of client's records: a practitioner must return all client documents, records, and work product regardless of a fee dispute or unpaid balance; practitioners may retain copies of returned documents; this rule is frequently cited because some practitioners mistakenly believe they can hold files hostage pending fee payment
• § 10.29 — Conflicts of interest: practitioners generally may not represent clients with conflicting interests; client consent (informed and in writing) may allow dual representation in limited circumstances; practitioners who previously worked for the IRS must be particularly attentive to former-employee conflict rules
• § 10.34 — Standards for returns: practitioners may not sign a return containing a position unless there is reasonable belief that the position has at least a reasonable basis and is adequately disclosed, or the position has at least substantial authority; practitioners may not recommend a position the practitioner knows is frivolous
• § 10.37 — Requirements for written advice: written tax advice (emails, memos, opinion letters) must be based on reasonable factual and legal assumptions, must reasonably consider all relevant facts, must use reasonable legal analysis, and cannot rely on representations known to be unreasonable; the "Circular 230 disclaimer" that once appeared on the bottom of tax emails ("This communication is not a 'covered opinion'...") was eliminated by the 2014 amendments, which substantially simplified the written advice rules

Sanctions and Disciplinary Proceedings

• § 10.50 — Available sanctions: the IRS may censure a practitioner (public reprimand, no practice restriction), suspend (temporary bar from IRS practice, typically 1-5 years), disbar (permanent bar, though reinstatement is possible after 5 years), or impose monetary penalties; all sanctions are published on OPR's publicly accessible practitioner database
• § 10.51 — Incompetence and disreputable conduct: the grounds for sanction include willful violation of Circular 230, criminal conviction (especially for tax crimes), fraud, misrepresentation to the IRS, failure to file personal tax returns, aiding and abetting tax evasion, and other conduct that demonstrates unfitness to practice
• § 10.60 — Institution of proceeding: OPR files a formal complaint; the practitioner is named and the factual and legal basis for the charges is stated
• § 10.64 — Answer and default: the practitioner must file an answer within the time stated in the complaint; failure to answer results in default, with the ALJ accepting OPR's factual allegations as true
• § 10.72 — Hearing: the ALJ presides; the IRS rules of evidence (not the formal Federal Rules) apply; parties may present evidence, call witnesses, and cross-examine; administrative law judges have broad procedural discretion
• § 10.76 — ALJ decision: the ALJ must issue a written decision within 180 days after the hearing closes and proposed findings are submitted; the decision must include findings of fact and conclusions of law
• § 10.77 — Appeal to the Secretary: either party may appeal the ALJ's decision to the Secretary of the Treasury (in practice, to a designated appeals officer); notice of appeal must be filed within 30 days of the ALJ decision
• § 10.82 — Expedited suspension: OPR may suspend a practitioner without a full hearing in specified situations: conviction of any crime under Title 26 (the Internal Revenue Code), conviction of any felony involving dishonesty or breach of trust, disbarment or suspension from state bar or CPA licensing board, or revocation of a CPA license — the connection between professional status and IRS practice eligibility is direct

How It Affects You

If you are a CPA, attorney, or enrolled agent who practices tax law: Circular 230 governs every interaction you have with the IRS on a client's behalf — from preparing a return to representing a client in audit to providing a tax opinion letter. The key practical points: you cannot charge contingent fees for most IRS matters; you must return client files even if unpaid; you must advise clients of noncompliance you discover (but not report it to the IRS without their consent); and your written tax advice — including emails — must be based on reasonable legal analysis. OPR investigates complaints from clients, former clients, and IRS employees; the public database of sanctioned practitioners is searchable and a disciplinary record follows a practitioner's career. Malpractice insurance and professional conduct coverage typically excludes Circular 230 disciplinary proceedings themselves (you pay your own defense), making proactive compliance essential.

If you are an enrolled agent (EA): Circular 230 is your primary governing professional conduct rule — unlike attorneys and CPAs who also answer to state bar associations and CPA licensing boards, your entire professional identity as a practitioner before the IRS rests on your enrolled status. Maintaining your PTIN and completing the required 72 hours of CE every three years (including 2 ethics hours) are threshold requirements. OPR can revoke your enrolled status for violations — and unlike state bar disbarment, there is no separate "reinstatement" appeal pathway to an independent body; OPR decides. The annual IRS CE and OPR "Hot Topics" guidance identify current enforcement priorities — reviewing these at annual CPE conferences is the standard way EAs stay current on Circular 230 expectations.

If you are a taxpayer who hired a practitioner: Circular 230 establishes minimum duties your practitioner owes you. Your practitioner must return your documents if you fire them or change firms, even if fees are unpaid. If you find a mistake in your old returns, you can expect your current practitioner to advise you about it — but your practitioner is not required to turn you in to the IRS. OPR's practitioner database (available at irs.gov) lets you verify your practitioner's current status and check for prior disciplinary history. If you believe a practitioner violated Circular 230 duties to you, OPR accepts complaints — though OPR represents the interests of the tax administration system, not individual clients, and Circular 230 is not a substitute for civil malpractice claims in state court.

Statutory Authority

This rule implements:

• 31 U.S.C. § 330 — Treasury Secretary's authority to regulate and oversee practice before Treasury; authorizes the Secretary to prescribe rules governing the recognition of practitioners and to suspend or disbar those who are incompetent, disreputable, or violate the regulations

Recent Rulemakings

• 79 FR 43628 (July 28, 2014) — The most significant Circular 230 revision since 2011. Eliminated the "covered opinion" rules (§§ 10.35–10.36) that had produced the ubiquitous "Circular 230 disclaimer" on law firm email footers; replaced them with streamlined §10.37 (Requirements for Written Advice) applying a single reasonableness standard to all written tax advice; added an affirmative competence requirement; strengthened the continuing education requirements for enrolled agents.
• 77 FR 19621 (April 2, 2012) — Added the competence standard (§10.35 as renumbered), which requires practitioners to possess the legal knowledge, skill, thoroughness, and preparation necessary for the representation.

Recent Developments

• No major revision since 2014: The last comprehensive Circular 230 revision (July 2014) remains the operative framework. The elimination of the "covered opinion" rules and replacement with the unified written advice standard under §10.37 settled the most contested area of the prior version. No further major amendments have been finalized as of 2026.
• IRS PTIN enforcement and fee litigation: IRS began requiring all paid preparers to obtain a Preparer Tax Identification Number (PTIN) and pay annual fees. Federal courts struck down the voluntary continuing education requirement (Loving v. IRS, D.C. Cir. 2014) as exceeding IRS statutory authority, limiting IRS's ability to impose credentials on preparers who are not attorneys, CPAs, or enrolled agents. IRS has explored legislative or regulatory fixes within the statutory constraints.
• Enrolled agent exam and credential demand: Enrolled agent (EA) credentialing has grown substantially as a professional designation for tax preparers not holding CPA or JD credentials. The SEE (Special Enrollment Examination) has attracted more candidates in recent years. EAs have unlimited practice rights before IRS — the same scope as CPAs and attorneys — making the credential increasingly valuable for tax professionals who focus exclusively on federal tax work.
• Circular 230 penalties and malpractice: The Office of Professional Responsibility (OPR) pursues disciplinary actions under Circular 230 for incompetent or disreputable conduct. Practitioners facing OPR proceedings also often face state bar or CPA board proceedings simultaneously; a federal Circular 230 sanction can trigger reciprocal state discipline. The interaction between federal and state practitioner discipline systems is not formally coordinated.
• AI and tax advice disclosure questions: The emergence of AI-assisted tax research and drafting tools has prompted professional responsibility discussions about whether AI-generated advice requires new disclosure frameworks under §10.37's written advice standard. The AICPA and ABA tax sections have issued guidance that human practitioners remain responsible for AI-assisted work product — but Circular 230 has not yet been amended to address AI tools explicitly.

Pending Action

IRS's Office of Professional Responsibility has signaled interest in guidance addressing AI-assisted tax advice and practitioners' responsibilities under §10.37's written advice standard when AI tools are used in research, drafting, or tax position analysis. No formal proposed rule has been published, but AICPA, ABA Tax Section, and NAEA have submitted comments requesting clarification. Congressional legislation to restore IRS authority to impose continuing education requirements on unregulated paid preparers — authority struck down in Loving v. IRS (D.C. Cir. 2014) — has been periodically introduced and may be included in tax reform discussions. Practitioners should watch for IRS guidance on AI disclosure requirements and any movement on preparer regulation legislation.