DOES IRS CIRCULAR 230 ALLOW A PRACTITIONER TO ENGAGE IN ADVERTISING OR COMMERCIAL SOLICITATION?

Frequenly Asked Questions

One of the more obscure issues relating to practitioners who represent clients before the IRS is whether the practitioner may advertise or solicit such work. The general answer is that they may, but the guidelines generally limit the communication to such items as “their professional and educational credentials, employment history, years in practice, tax specialization(s) and experience, services offered, and fee information.”

The following is a list of frequently asked questions (FAQs) relating to advertisements or solicitations for practitioners before the IRS.

FAQ # 1 – What is the basic limitation imposed upon advertisements or solicitations by practitioners before the IRS?

The main limitation is that the advertisement may not violate prevailing law or the Rules of Professional Conduct. Indeed, according to the IRS website, “[a] practitioner also may not solicit employment from a taxpayer through an uninvited written or oral communication if it would violate federal or state law or rules of professional conduct.”

FAQ # 2 – Do the limitations on advertising or solicitation imposed by other professional licensing regimes apply to practitioners before the IRS?

There is no doubt that the answer to this is yes. Indeed, the IRS provides a wide-ranging series of examples in which licensing regimes of other professions would apply to practitioners before the IRS. Those examples are as follows:

• The American Bar Association’s (ABA) Model Rules of Professional Conduct, which all states have adopted with some jurisdiction-specific variations, have multiple rules on advertising and solicitation. They include prohibiting attorneys from stating or implying that they are certified as a specialist in a particular field of law, unless the attorney has been certified as a specialist by a state-approved organization or an ABA accredited organization and the certifying organization’s name is clearly identified in the communication (Rule 7.2(c)).

• California has a statute that prohibits an advertisement that contains a “guarantee or warranty regarding the outcome of a legal matter as a result of representation by” an attorney (Cal. Bus. & Prof. Code section 6157.2).

• Michigan’s Department of Licensing and Regulatory Affairs has adopted by reference in its rules applicable to accountancy several standards of practice (R 338.5102). These include standards of the American Institute of Certified Public Accounts (AICPA), under which certain “promotional efforts” of a member, such as creating an unjustified expectation of favorable results or the ability to influence a tribunal or agency, are prohibited as false, misleading or deceptive advertising or solicitation (see Rule 1.600.010, AICPA Code of Professional Conduct).

• Florida’s Board of Accountancy rules prohibit advertising by a CPA that, among other things, “Appeals primarily to a layperson’s fears, ignorance, or anxieties regarding his state of financial well-being” and require when using the term “specialty” or “specialist” a statement that the term is “a self-designation and is not sanctioned by the state or federal government” (R. 61H1-24.001).

Id.

FAQ # 3 – What are the advertising and solicitation requirements for an Enrolled Retirement Plan Agent (“ERPA”) or an Enrolled Agent (“EA”)?

Once again, as set forth on the IRS website, there are very specific guardrails for how ERPAs and EAs may advertise. Examples of what is allowed is as follows:

• For EAs
• “enrolled to represent taxpayers before the Internal Revenue Service”;
• “enrolled to practice before the Internal Revenue Service”; and
• “admitted to practice before the Internal Revenue Service”
• For ERPAs
• “enrolled to represent taxpayers before the Internal Revenue Service as a retirement plan agent”; and
• “enrolled to practice before the Internal Revenue Service as a retirement plan agent”

Indeed, the section goes on to state that “[e]nrolled agents are permitted to refer to themselves as such or as EAs or E.A.s.”

FAQ # 4 – Can ERPAs or EAs utilize the IRS seal in their signage?

The important limitation by which ERPAs and EAs must abide when utilizing signage is to always ensure that they are not utilizing the IRS seal or the Great Seal of the United States. Indeed, they are not allowed to utilize any such identifying intellectual property marks that even resemble those seals. Id.

The Nissenbaum Law Group Welcomes Potential Client Inquiries Regarding IRS Circular 230 Applicability and Compliance.

The Nissenbaum Law Group welcomes inquiries from attorneys, certified public accountants, or any other practitioner seeking representation in regard to IRS Circular 230 in Tri-State Ethics matters.