By Megan L. Brackney and Daniel Q. Flesch
Tax Notes Federal; Tax Notes State
July 2021
Abstract: In this article, Brackney and Flesch examine the lack of transparency in the IRS Office of Professional Responsibility’s sanctions process and explore recently released administrative law judge and Treasury appellate authority decisions relevant to that process.
Decisions handed down by administrative law judges or by the Treasury appellate authority (AA) can provide valuable windows into the often opaque world of the IRS’s disciplinary proceedings. When the agency’s Office of Professional Responsibility charges a practitioner with a sanctionable offense, she has the right to request a hearing before an ALJ appointed according to 5 U.S.C. section 3105. If she disagrees with the result of the ALJ hearing, the practitioner can appeal to the Treasury secretary, who will review the decision, applying a clearly erroneous standard to findings of fact, while examining legal issues de novo. If the crusading practitioner objects to the AA’s decision, she can seek judicial review under the Administrative Procedure Act.
These various levels of appeal do not end up making for a robust public record — the ALJ and AA proceedings aren’t always easy to investigate — and we were able to find only a handful of cases from the last 30 years in which a practitioner appealed the AA’s final decision to the federal courts. While OPR publishes regular bulletins of disciplinary actions, the tax practitioner interested in the nuances of ALJ hearings and AA appeals must rely on the final decisions published on its website.
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