Tax practitioners who self-report Circular 230 violations may avoid harsher sanctions and qualify for favorable settlements, the IRS’ Office of Professional Responsibility (OPR) said. (Alerts from the Office of Professional Responsibility 2025-12, 8/6/2025)
Circular 230
Circular 230, Regulations Governing Practice before the Internal Revenue Service, limits the eligibility to represent taxpayers and to otherwise practice before the IRS to “practitioners,” defined as attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, and enrolled actuaries.
Appraisers who perform appraisals and prepare valuation reports for federal tax filings and matters are also regulated under Circular 230, although they are not classified in the regulations as “practitioners.”
Circular 230 violations are subject to prescribed sanctions, such as censure, suspension from practice, disbarment, monetary penalty, or appraiser disqualification.
The circular also includes provisions on disreputable conduct for which a practitioner can be sanctioned, including criminal convictions (notably, any state or federal felony conviction), and disbarment or suspension from practice.
Self-Reporting
Practitioners — in particular, attorneys and CPAs — convicted of crimes or found to have engaged in misconduct by a government entity are usually required to report the matter to their state bar, board of accountancy, or other licensing authority. They also may be required to report civil judgments, court-imposed sanctions, or other adverse actions.
Self-reporting requirements vary by state or comparable jurisdiction. While Circular 230 does not impose any explicit self-reporting requirement, other requirements can still effectively compel a practitioner to report unlawful acts or other misdeeds. For instance, tax professionals applying to obtain or renew their preparer tax identification number (PTIN) will be asked if they have past felony convictions.
Additionally, the OPR warned that it routinely discovers disreputable conduct through its own investigations or through reports by various internal and external sources. So while practitioners are not required to self-report misconduct, the office said it may be in their best interest to do so since “the OPR will virtually always be notified” of violations regardless.
The OPR identified benefits from voluntary disclosure. For one, it said practitioners who self-report to the OPR early can potentially arrange to serve twin suspension periods simultaneously or as concurrently as possible. Otherwise, when the OPR discovers the violation after the state suspension has already been served or is nearly finished, the practitioner may still face a separate reciprocal Circular 230 suspension or the expedited suspension.
The office also said that when investigating possible Circular 230 violations, the OPR provides the practitioner an opportunity to respond and considers self-reporting and cooperation as mitigating factors when negotiating or pursuing a sanction.
The OPR stressed that when practitioners choose to self-report, accept responsibility for their conduct, and express intent to reform their behavior, they become “prime potential candidates for a deferred discipline agreement or other settlement.”
For more information on Circular 230 sanctions, see Checkpoint’s Federal Tax Coordinator 2d ¶ T-10930.
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