On March 6, 2018 the IRS Office of Professional Responsibility (OPR) issued an alert highlighting an important process change. The OPR modified its investigation procedures to give practitioners an opportunity to seek information about misconduct referrals before it closes the case.

The OPR issued this alert in response to a recent district court case (B.S. Waterman, DC D.C., 2018-1 ustc ¶50,141). In that case, the practitioner, a tax attorney, discovered the referral when he received a “soft letter” from the OPR. The “soft letter” described the allegations and informed the practitioner that the OPR would not take any action on the matter. The letter also stated that the OPR case was closed. In response to the letter, the practitioner sought further information about the allegations from the OPR. However, the OPR rejected his request because it may only disclose information to a practitioner while an investigation is open. Finally, the practitioner submitted a FOIA request and took the matter to court when the OPR continued to deny his request for specific information regarding the allegations.

Important Process Change
The OPR has modified its procedure to give a practitioner in situations like this an opportunity to seek information before it closes the case. Now, when the OPR receives a referral, it will send a letter advising the practitioner of the issues under investigation and give the practitioner an opportunity to comment. Then, when appropriate, OPR will send a second letter with the “soft” closing language. The two-letter procedure will let a practitioner who wants more information about the allegations to request it before OPR closes the matter. This revised “soft letter” process follows long-standing procedures used by the OPR in investigations that could result in action under Circular 230, such as a reprimand, censure, suspension or disbarment.

If you have questions regarding this process change, contact an MCB Tax Advisor at 703-218-3600.

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