The Honorable Mark W. Everson

Commissioner of Internal Revenue

CC:PA:LPD:PR (REG-122380-02)

1111 Constitution Avenue, NW

Washington, DC

Dear Commissioner Everson:

As you know, the Treasury Department and Internal Revenue Service (IRS), in REG 122380-02, have proposed amendments to Circular 230, the regulations governing practice of certified public accountants, attorneys, enrolled agents, enrolled actuaries, and appraisers before the IRS. These proposed revisions, and other recent changes to Circular 230, reflect a great deal of effort by Treasury and the IRS to generally enhance standards of tax practice for all tax practitioners.

The AICPA has a longstanding track record of establishing high professional standards for our CPA members, including the AICPA Code of Professional Conduct and our enforceable Statements on Standards for Tax Services (SSTSs). These standards provide meaningful guidance to CPA members in the performance of their professional responsibilities. These standards also provide the foundation for many states’ ethical rules for CPAs which, as a practical matter, extends the application of our rules to many CPAs regardless of AICPA membership.

While the AICPA supports the goals of the Treasury and IRS in revising practitioner standards, the proposed changes in REG 122380-02 raise some general concerns that we believe are held by a large segment of the practitioner community. Unfortunately, many of the proposed Circular 230 revisions appear to reflect a lack of balance that may undercut both the goal of enhanced standards and compromise fundamental fairness. The proposed regulations also create additional grounds for sanction without any explanation of why the additional provisions are necessary or when they might be satisfied in a particular case. The net effect of these changes, if adopted without elaboration or examples, unfortunately may be to unnecessarily subject practitioners to discipline and sanction. Our attached comments detail our concerns and recommendations on these and other issues.

The AICPA respectfully requests the opportunity to testify at the June 21, 2006 hearing on REG 122380-02 to communicate our concerns and recommendations, and to answer any questions that may arise. I will be the AICPA witness.

If you have any questions or wish to discuss our comments, please feel free to contact me at tpurcell@creighton.edu; Eve Elgin, Chair of the AICPA Tax Practice Responsibilities Committee at eelgin@kpmg.com; or Carol Ferguson, AICPA Technical Manager-Tax at cferguson@aicpa.org.

Sincerely,

Thomas J. Purcell III

Chair, Tax Executive Committee

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