A possible merger of the IRS’s Office of Professional Responsibility with the agency’s Return Preparer Office is being criticized by the American Institute of CPAs, which believes a consolidation of the two offices would bring negative consequences to the nation’s tax system.
Tax Notes reported in September that RPO Director Kimberly Rogers was designated acting director of the OPR, effective July 30. Rogers replaced former acting OPR Director Elizabeth Kastenberg, who was among several IRS executives who have been put on paid administrative leave after calls for their removal by conservatives.
Thomas Curtin Jr. has since been named acting OPR director, according to an IRS overview of that office, last updated on Sept. 30.
But according to the Tax Notes report, Rogers has been tasked with combining the RPO and OPR.
The RPO’s responsibilities include registering tax professionals to practice before the IRS, managing the enrolled practitioner program, and processing complaints against return preparers. OPR is responsible for overseeing tax practitioner conduct and disciplining tax practitioners.
Former OPR Director Sharyn Fisk told Tax Notes in an email that she was concerned about the potential conflicts of interest for an office—OPR—that serves as the ethical oversight function for tax practitioners.
“Given OPR’s role as the appellate authority for RPO enrollment decisions, enrolled agents need absolute confidence that these decisions are made with complete independence,” Fisk told Tax Notes. “The appearance of conflict, even when safeguards exist, undermines the credibility essential to OPR’s mission of maintaining integrity in the tax practitioner community.”
The AICPA shares her concerns. In a letter dated Nov. 14 to Rogers and Curtin Jr., the AICPA said it strongly opposes any effort to combine OPR and RPO “because it would inappropriately consolidate credentialed and uncredentialed return preparers under OPR, create potential conflicts of interest, and divert resources from the primary role of OPR.”
“Ultimately, this would sow confusion among taxpayers trying to understand the differing qualifications and practice rights of preparers, which would harm taxpayers and erode taxpayer confidence in our tax system,” the AICPA states.
The letter notes that OPR has the authority to interpret and enforce the regulations in Treasury Department Circular No. 230, which governs tax practitioners interacting with the tax administration system. The office’s responsibilities include investigating referrals of alleged misconduct, instituting disciplinary proceedings, and exercising disciplinary authority for violations of Circular 230. RPO administers the Preparer Tax Identification Number (PTIN) program, manages the enrolled agent practitioner program, encourages enrollment in the Annual Filing Season Program, and processes some complaints against return preparers.
“RPO’s responsibilities are compliance focused, while OPR’s responsibilities are supervisory and regulatory,” the AICPA letter says. “The two offices perform dissimilar government functions, oversee different types of preparers, and, therefore, should remain separate to avoid potential conflicts of interest.”
Combining OPR and RPO would also divert resources from the primary role of OPR, which is to execute its mandate as prescribed under Circular 230, the AICPA wrote.
“The diversion of resources to incorporate new functions into OPR would hinder OPR’s ability to enforce professional standards and to maintain the integrity of tax professionals,” the letter states.
In addition, the potential merger of OPR and RPO could undermine the credibility of OPR’s objective to enforce professional standards by integrating the processing of complaints against return preparers with the enforcement function and by collapsing the application process for enrolled agents and OPR’s separate appellate authority for enrollment appeals, the AICPA says.
In the letter, the CPA group wrote:
The AICPA has a long-standing record of establishing enforceable professional standards for our members, including a Code of Professional Conduct and Statements on Standards for Tax Services. Such standards inform the public of the professionalism associated with Certified Public Accountants (CPAs) and the AICPA. CPAs are also subject to state professional licensing regimes, continuing education requirements, and Circular 230, as are lawyers. However, uncredentialed preparers are not subject to any of these regimes that monitor professional conduct and enforce ethical standards. Uncredentialed preparers need only to obtain a PTIN to engage in federal tax return preparation.
The different qualifications and practice rights of tax return preparers can confuse taxpayers. Combining OPR and RPO would significantly increase that confusion and would cause harm to taxpayers. A combined OPR unit would give the dangerous and false impression to taxpayers that all return preparers have the authority to practice before the IRS and are subject to the standards of conduct under Circular 230. This would blur the public’s ability to perceive the distinction between credentialed, uncredentialed, and unenrolled preparers.
Under a combined OPR unit, unscrupulous and incompetent preparers could readily misrepresent that they are subject to ethical obligations overseen by the “Office of Professional Responsibility,” which would give such preparers a foothold to abuse taxpayers and undermine public trust and accountability in the tax profession. These negative effects of a combined OPR unit could have the unintended consequence of diluting the credibility and public benefit of credentialed preparers licensures and diminishing the professional standards adhered to by credentialed preparers, which would harm our entire tax system without providing any corresponding benefit.
The letter, signed by Cheri Freeh, CPA, CGMA, chair of the AICPA Tax Executive Committee, concluded, “The AICPA strongly opposes the consolidation of OPR and RPO because the negative consequences to our tax system eclipse any nominal efficiencies arising from a combined OPR unit. Ultimately, now is not the time to reorganize these two units.”
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