September 21st, 2010 | 
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An enrolled agent ethics course is required annual CPE. This field of study is a serious matter for enrolled agents and any other tax professionals subject to IRS rules for practice. These standards are described in Circular 230, which applies to any Enrolled Agent, attorney, Certified Public Accountant, and Registered Tax Return Preparer RTRP.
Ethics in tax matters focuses upon the requirement of professionals assisting taxpayers to thoroughly assess the accuracy of details that affect taxable income. Circular 230 contains a mandate for tax practitioners to carefully avoid reporting amounts for taxpayers that understate income.
The Office of Professional Responsibility enforces the provisions in Circular 230. A judicial decision last year upheld a complaint by this agency that led to an earlier ruling to disbar a provider of tax services. The finding against a CPE by the name of Kaskey provides important insight about the value of ethics CPE.
The issue that affected Kaskey most involved his due diligence responsibilities. The opinion of the Office of Professional Responsibility, the Administrative Law Judge, and the Appellate Authority is that Kaskey failed to exercise due diligence in preparing tax returns for a corporation and the married couple that are shareholders.
The initial allegations against Kaskey by the Office of Professional Responsibility involved violation of Circular 230 provisions. Specifically, the charge against Kaskey was failure to determine the accuracy of representation made to the IRS on tax returns of the corporation and its married shareholders. An additional allegation against Kaskey was failure to comply with the requirement to advise the clients of potential penalties as well as opportunities to avoid such penalties.
The Kaskey case highlights the ethical duty that tax practitioners have to the system of internal revenue as well as to their taxpayer clients. Kaskey defended the charge against him of failing to exercise proper due diligence. He argued that his clients had misrepresented their income to him. The ruling of the Appellate Authority pointed out that information presented to Kaskey by his clients demanded further inquiry. The written decision observed that it was inconceivable that the taxpayers could pay the expenses of their lifestyle with the income reported on their tax returns.
Many tax practitioners find that online EA CPE is easy because it is self-paced and convenient. When taking an ethics course online, every tax pro should carefully study the messages and implement them into their practices. The penalties for not doing so are severe.
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