IRS-Treasury Department Circular 230 Violations

IRS-Treasury Department Circular 230 Violations

IRS Circular 230 Section 10.50: Sanctions

Under §10.50, after notice and an opportunity to be heard, a practitioner may be censured (publicly reprimanded), suspended, or disbarred from practice before the IRS for incompetence, disreputable conduct (see the discussion of §10.51 below), failure to comply with Circular 230 regulations (§10.52), or intent to defraud or knowingly mislead or threaten a client or prospective client.

The third part of Circular 230 allows sanctions for violation of the Regulations. The Director of the ORIRS, after notice and an opportunity for a proceeding, may censure, suspend, or disbar any practitioner from practice before the Internal Revenue Service for the following:

The practitioner is incompetent or disreputable;
The practitioner fails to comply with Circular 230; or
The practitioner, with intent to defraud, willfully and knowingly misleads or threatens a client or prospective client.
Any discipline from the IRS is public and the IRS swill notify the practitioner’s professional association, such as a state bar association.

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EXAMPLE CIRCUMSTANCE:  Circular 230/IPRC-ABA violations; (1) Negative tax consequences for client on nature of “Majority-ruled” Revocable and Amendable Trust when Trustees are also Beneficiaries whom can control the Trusts asset disposition, the negative tax consequences, possible risk of asset seizure with having a foreigner on a domestic/US Trust (in relation to “secret”  Trust amendment that shifted substantial Trust assets to “majority-ruling” beneficiaries AND peculiar plan by tax strategist-estate planning Attorney recommending a TEDRA agreement signed by all beneficiaries to lock in pervious suspicious Trust asset disposition shifts to the majority-ruling beneficiaries but not to be signed by the Trust Grantor/owner of the assets so not to arouse scrutiny of the IRS for estate audits.

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