I have been told that -
“the regulations governing the practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents and Appraisers before the Internal Revenue Service are published in 31 CFR Part 10 and reprinted in Treasury Department Circular 230. As for the statute itself, the legal cite for Attorneys and CPAs is:
Section 500(b) and (c) of title 4 of the United States Code, which provides:
(b) An individual who is a member in good standing of the bar of the highest court of a State may represent a person before an agency on filing with the agency a written declaration that he is currently qualified as provided by this subsection and is authorized to represent the particular person in whose behalf he acts.
(c) An individual who is duly qualified to practice as a certified public accountant in a State may represent a person before the Internal Revenue Service of the Treasury Department on filing with that agency a written declaration that he is currently qualified as provided by this subsection and is authorized to represent the particular person in whose behalf he acts.”
It seems to me the problem arises with the definition of the term “practice”. The IRS, it seems, has proposed that the term “practice” include not only representing clients before the IRS and in Tax Court, but also “preparing” tax returns. The Service, under the new regime, would extend the right of limited “practice”, limited to the specific practice component of “tax return preparation”, to those who will eventually be the newly designated Registered Tax Return Preparers. But Attorneys and CPAs have been previously permitted the right to apparent unlimited “practice” before the IRS based solely on their state credentials.
However, the wording I was quoted does not say that attorneys and CPAs are authorized to “practice before the Internal Revenue Service” but “may represent a person before an agency” or “may represent a person before the Internal Revenue Service of the Treasury Department” and are “authorized to represent the particular person in whose behalf he acts”. So I see no problem here with requiring attorneys and CPAs who want to prepare 1040s to take the test and the annual CPE in federal taxation.
If the “statutory exemption” is found elsewhere in federal law, perhaps buried in the humongous Administrative Procedure Act as has been suggested, I would appreciate it if someone could tell me exactly where (chapter and verse, so to speak).
If CPAs and attorneys are exempt due to statutory language I certainly hope that the IRS, in its public education campaign, emphasizes the fact that only Enrolled Agents and the new Registered Tax Return Preparers have proven competence and currency in 1040 preparation by being tested and required to maintain mandatory annual CPE in federal taxation.