IRS Office of Professional Responsibility (OPR) Issues Penalty Guidelines

In May, the IRS Office of Professional Responsibility (OPR) issued penalty guidelines, sometimes referred to as a “penalty grid” for imposing penalties on tax preparers, and others who are tax attorneys, CPAs, or enrolled agents who fail to file timely income tax returns. The late filing of an income or employment tax return by a CPA, tax attorneys, or enrolled agent is considered a violation of IRS Circular 230, punishable by suspension from practice before the IRS. The guidelines issued by OPR first point out that sanctions are determined on a fact specific basis, and the penalty grid is not intended to establish a rigid standard. The guidelines including the actual penalty grid made be found at the OPR website.

The penalty grid imposes a guideline penalty of two to four months for each late filed tax return, even though no tax was due. If the tax return is still not filed at the time OPR contacts the tax preparer then the guideline is four to six months for each non-filed tax return. If the late filings continue for four or more years than the baseline can be doubled! Thus a simple late filing of tax returns for four years can result in a suspension from practice for 32 months even though no tax is due.

If you are CPA, tax lawyer, or enrolled agent who has not filed his tax returns you have a serious tax problem, and you may wish to contact the tax controversy attorneys at Brager Tax Law Group, A P.C.