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Revised rules of practice before IRS regarding fees.

The rules of practice before the IRS are set forth in Treasury Department Circular 230. The Service recently revised these rules to generally conform to the Sec. 6694 tax preparer regulations and the Sec. 6662 accuracy-related penalty regulations.

In addition, the revised rules contain the following new provisions on fees for tax returns:

Until now, a practitioner was barred from charging an "unconscionable fee." The rules of practice now have been expanded to specifically address contingent fees for tax returns. A contingent fee for preparing an original return is expressly barred. A contingent fee can be charged for an amended return if the preparer reasonably anticipates that the amended return will receive substantive review by the IRS, determined on a case-by-case basis. A contingent fee includes a fee based on - a percentage of the refund shown on a return; - a percentage of the taxes saved; or - the specific result attained.

Caution: Any contingent fee arrangement must also satisfy any ethical requirements that may be imposed by the practitioner's State Board of Accountancy, the AICPA and the relevant state society of CPAs.
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Author:Josephs, Stuart R.
Publication:The Tax Adviser
Article Type:Brief Article
Date:May 1, 1995
Words:181
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