IRS proposes allowing contingent fees in more circumstances.

• Author: Nevius, Alistair M.

The IRS has issued proposed regulations that would amend Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents and Appraisers Before the Internal Revenue Service (31 C.F.R. part 10), to allow practitioners to charge clients on a contingent basis in more circumstances (REG-113289-08).

Circular 230, [section]10.27(b), generally prohibits practitioners from charging contingent fees for services rendered in connection with any matter before the IRS. There is an exception for services rendered in connection with the Service's examination of, or challenge to, an original tax return or an amended return or claim for refund if the amended return or claim for refund was filed within 120 days of the taxpayer's receiving a written notice of the examination or a written challenge to the original return.

The proposed regulations would amend [section]10.27 to also allow practitioners to charge contingent fees in connection with the IRS's examination of, or challenge to, an original tax return or an amended return or claim for refund or credit before the taxpayer received a written notice of...