Figures: tax year 2026
Circular 230 contains Treasury regulations governing practice before the Internal Revenue Service (IRS), including eligibility, professional conduct, and disciplinary enforcement.
Its organization helps candidates recall regulations governing distinct practice questions:
Practice before the IRS includes representing taxpayers in conferences, examinations, and other covered dealings concerning their federal tax rights or liabilities. Preparing submissions, corresponding for a taxpayer, and providing covered written tax advice can constitute practice.
- Merely preparing an ordinary tax return, even for compensation, does not itself constitute practice under the judicial limits on Treasury's authority.
- Preparing a protest and negotiating an examination adjustment for a taxpayer constitute representation, requiring an eligible representative and appropriate client authority.
- Covered written advice can constitute practice without an appearance before an IRS employee; an informal electronic format does not remove its professional requirements.
- Obsolete provisions describing mandatory registration of ordinary return preparers do not establish a current credential or representation right.
The regulations governing practice require evaluating both the actual service and the individual's status.
Common mistakes
- Identification becomes authority. A PTIN identifies a preparer; it does not establish the right to represent a taxpayer.
- Titles override current status. A current state CPA license does not cure an IRS suspension or an engagement outside the individual's permitted role.
- Confidentiality blocks every request. Withholding requires a supported privilege basis; missing records require inquiry and identification of the believed custodian.
Bottom line
- Circular 230 separately addresses practice eligibility, conduct, sanctions, disciplinary proceedings, and general administration.
- Ordinary return preparation and a PTIN do not independently create IRS representation authority.
- Current eligibility, client permission, and the applicable scope determine representation rights; limited-practice exceptions do not bypass suspension or disbarment.
- Practitioners must exercise diligence, maintain competence, respond properly to records requests, and promptly advise clients of discovered errors and consequences.
Exam shortcut
Identify the service first: ordinary preparation, examination representation, written advice, or court appearance. Then test current status, client authority, and scope. Mark the event attached to each clock: consent starts written confirmation, representation's conclusion starts consent retention, and government departure starts the applicable post-employment period. For records, ask who possesses or controls them and whether a supported privilege applies.
The full lesson (about 6,288 words, 42 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- I.A1
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