Comments Regarding Proposed Amendments to the Regulations
Governing Practice Before the Internal Revenue Service
(Title 31, Code of Federal Regulations, Subtitle A, Part 10)
April 23, 2001

Subpart D  Rules Applicable to Disciplinary Proceedings.

Circular 230 fails to prescribe any standard of proof for the Administrative Law Judge to apply in making determinations. The gravity of disciplinary charges warrants that the Director of Practice be held to a standard of proof higher than preponderance of the evidence. As is common in other disciplinary proceedings, a determination that a respondent has violated standards of conduct should be made only upon a showing by "clear and convincing evidence." See In re Medrano, 956 F.2d 101 (5th Cir. 1992); Calvert v. California State Bar, 819 P.2d 424 (Cal. 1991); In re Jenkins, 816 P.2d 335 (Idaho 1991).

Further, Circular 230 does not contain any provisions for discovery by a practitioner who is involved in a disciplinary proceeding. The proposed amendments to section 10.64(b) realistically contemplate the circumstances in which a practitioner is not fully aware of the allegations against him or her. Although section 10.20(b) enunciates a practitioner's duty to produce information requested by the Director of Practice, Circular 230 provides no rules for governing a respondent’s access to information held by the Director or others on which the Director based a determination of a violation under section 10.60.

A respondent should be entitled to obtain all evidence against him or her. Section 10.20(b) requires a practitioner to produce information to the Director. This requirement should be balanced with a provision for disclosure by the Director of Practice to the practitioner. Subpart D of Circular 230 should explicitly state that no evidence may be admitted in the proceeding for censure, suspension or disbarment (or disqualification of an appraiser) that has not been first produced to the respondent. The new provision should also provide a time frame, e.g., 30 days after the answer has been filed, within which the evidence must be produced. Production should be comprehensive and made without specific request for it.

Finally, Circular 230 does not prescribe any limitation on the period within which the Director must bring charges. A violation of the standards of conduct should be determined and prosecuted within a reasonable period of time after the conduct has been discovered. For example, the Director of Practice could be required to determine that a violation of the standards of Circular 230 has occurred for purposes of section 10.60 within one year of learning of the occurrence. Further, the Director of Practice could be required to institute a proceeding pursuant to section 10.62 within a specific period, for example, 90 days of the determination, absent a consent to extend the period by the practitioner.