[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Proposed Rules]
[Pages 76940-76943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31033]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 300

[REG-124018-10]
RIN 1545-BJ65


User Fees Relating to Enrolled Agents and Enrolled Retirement 
Plan Agents

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking and notice of public hearing.

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SUMMARY: This document contains proposed amendments to the regulations 
relating to the imposition of user fees for enrolled agents and 
enrolled retirement plan agents. The proposed regulations separate the 
enrolled retirement plan agent user fees from the enrolled agent user 
fees and lower the initial enrollment and renewal of enrollment fees 
for enrolled agents and enrolled retirement plan agents. The proposed 
regulations affect individuals who are or apply to become enrolled 
agents or enrolled retirement plan agents. The charging of user fees is 
authorized by the Independent Offices Appropriations Act of 1952.

DATES: Written or electronic comments must be received by January 10, 
2011. Outlines of topics to be discussed at the public hearing 
scheduled for January 14, 2011, at 10 a.m. must be received by January 
5, 2011.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-124018-10), room 
5205, Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
124018-10), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC or sent electronically via the Federal 
eRulemaking Portal at http://

[[Page 76941]]

www.regulations.gov (IRS REG-124018-10). The public hearing will be 
held in the IRS Auditorium, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Emily M. Lesniak at (202) 622-4570; concerning cost methodology, Eva J. 
Williams at (202) 435-5514; concerning submission of comments, the 
public hearing, or to be placed on the building access list to attend 
the public hearing, Richard A. Hurst at 
[email protected] or (202) 622-7180 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Section 330 of title 31 of the United States Code authorizes the 
Secretary of the Treasury to regulate the practice of representatives 
before the Treasury Department. Pursuant to section 330 of title 31, 
the Secretary has published regulations governing practice before the 
IRS in 31 CFR part 10 and reprinted the regulations as Treasury 
Department Circular No. 230 (Circular 230). Circular 230 is 
administered by the IRS Office of Professional Responsibility (OPR).
    Section 10.4(a) of Circular 230 authorizes the Director of OPR to 
grant status as an enrolled agent to applicants who demonstrate special 
competence in tax matters by passing a written examination administered 
by, or administered under the oversight of, the Director of OPR and who 
have not engaged in any conduct that would justify suspension or 
disbarment under Circular 230. Every year OPR develops and administers 
a Special Enrollment Examination (SEE) that individuals must pass to 
become an enrolled agent through examination.
    Section 10.4(b) of Circular 230 authorizes the Director of OPR to 
grant status as an enrolled retirement plan agent to applicants who 
demonstrate special competence in qualified retirement plan matters by 
passing a written examination administered by, or under the oversight 
of, the Director of OPR and who have not engaged in any conduct that 
would justify suspension or disbarment under Circular 230. Every year 
OPR develops and administers an Enrolled Retirement Plan Agent Special 
Enrollment Examination (ERPA-SEE) that individuals must pass to become 
an enrolled retirement plan agent through examination.
    Section 10.4(b) also authorizes the Director of OPR to grant full 
or limited enrollment as an enrolled agent or full enrollment as an 
enrolled retirement plan agent to a former IRS employee if the former 
employee has not engaged in any conduct that would justify the 
suspension or disbarment of any practitioner under the provisions of 
Circular 230 and the employee meets certain other requirements. These 
requirements include minimum length of employment with the IRS and 
substantive tax expertise. Application for enrollment based on former 
employment with the IRS must be made within three years from the date 
of separation from such employment and the applicant is not required to 
pass the SEE or the ERPA-SEE, unless a former employee who previously 
was granted limited enrollment status wants to qualify for full 
enrollment.
    Once eligible for enrollment as an enrolled agent or enrolled 
retirement plan agent, whether by examination or former employment with 
the IRS, an individual must file an application for enrollment with the 
Director of OPR. An individual granted status as an enrolled agent or 
enrolled retirement plan agent as provided in Sec.  10.6(d) must renew 
enrollment every three years to maintain active enrollment and be able 
to practice before the IRS. In order to qualify for renewal, an 
applicant must certify the completion of the continuing education 
requirements set forth in Sec.  10.6(e) of Circular 230 and compliance 
with certain ethical standards in Circular 230 and State regulatory 
agencies.
    As part of the application to become an enrolled agent or enrolled 
retirement plan agent, an individual must currently pay a nonrefundable 
user fee of $125. This user fee is authorized under Sec.  300.5. An 
individual also must pay a $125 nonrefundable user fee to renew 
enrollment, which is authorized under Sec.  300.6. An individual must 
renew enrollment every three years. In addition, a user fee of $11 per 
part is currently imposed to take the SEE or the ERPA-SEE. The user fee 
to take the SEE and ERPA-SEE is currently authorized under Sec.  300.4.
    The proposed regulations coordinate the user fees imposed on 
enrolled agents and enrolled retirement plan agents with the new user 
fee to apply for or renew a preparer tax identification number (PTIN). 
The Treasury Department and the IRS are implementing recommendations in 
Publication 4832, ``Return Preparer Review,'' which was published on 
January 4, 2010. Based on these recommendations, the Treasury 
Department and the IRS recently published final regulations under 
section 6109 (TD 9501, 75 FR 60309, September 30, 2010) that require 
tax return preparers who prepare all or substantially all of a tax 
return or claim for refund for compensation to obtain a PTIN. 
Individuals applying for or renewing a PTIN are required to pay a $50 
IRS user fee and a $14.25 vendor fee. The final regulations 
establishing the IRS user fee to apply for or renew a PTIN were 
published on September 30, 2010 (TD 9503).
    The process for reviewing an enrolled agent or an enrolled 
retirement plan agent initial enrollment or renewal of enrollment 
application is, in some ways, duplicative of the new process for 
reviewing a PTIN application. For example, the tax compliance checks 
and suitability checks conducted as part of a PTIN application are the 
same tax compliance checks and suitability checks currently performed 
as part of the process for becoming an enrolled agent or enrolled 
retirement plan agent. To avoid any potential duplication and 
unnecessary expense for individuals applying to become an enrolled 
agent or an enrolled retirement plan agent, the Treasury Department and 
the IRS intend to require all enrolled agents and enrolled retirement 
plan agents to obtain a PTIN. The Treasury Department and the IRS 
further intend to eliminate the tax compliance checks and suitability 
checks from the initial enrollment and renewal of enrollment process 
for enrolled agents and enrolled retirement plan agents because these 
checks will be performed as part of the requirement to obtain a PTIN. 
Thus, the Treasury Department and the IRS are eliminating the portion 
of the initial enrollment and renewal of enrollment user fees that 
recover the costs to perform the tax compliance checks and suitability 
checks (and any other review conducted as part of the PTIN application 
process).
    Accordingly, the proposed regulations separate the initial 
enrollment and renewal of enrollment user fees imposed on enrolled 
agents from the initial enrollment and renewal of enrollment user fees 
imposed on enrolled retirement plan agents, which are all currently 
imposed in Sec. Sec.  300.5 and 300.6. (The proposed regulations also 
separate the user fee to take the ERPA-SEE to become an enrolled 
retirement plan agent from the user fee to take the SEE to become an 
enrolled agent, which are both currently imposed in Sec.  300.4.)
    The proposed regulations also reduce both the enrolled agent and 
enrolled retirement plan agent initial enrollment and renewal of 
enrollment user fees to reflect that the review procedures (including 
tax compliance checks and suitability checks), previously conducted as 
part of the enrolled agent and enrolled retirement plan agent

[[Page 76942]]

initial enrollment and renewal of enrollment processes, will now be 
conducted as part of the PTIN application and renewal process. In 
particular, the proposed regulations amend Sec.  300.5 to reduce the 
enrolled agent initial enrollment user fee to $30 and Sec.  300.6 to 
reduce the enrolled agent renewal of enrollment user fee to $30. The 
enrolled retirement plan agent initial enrollment user fee is found in 
proposed Sec.  300.10 and is $30. The enrolled retirement plan agent 
renewal of enrollment user fee is found in proposed Sec.  300.11 and 
also is $30.
    The initial enrollment and renewal of enrollment user fees imposed 
on enrolled agents and enrolled retirement plan agents in the proposed 
regulations reflect only the costs of the review processes that are not 
conducted as part of the PTIN application or renewal processes. The 
costs include processing the enrolled agent and enrolled retirement 
plan agent initial enrollment and renewal of enrollment applications, 
processing the accompanying user fees, and conducting a search for any 
violations of professional rules and standards of conduct.

Authority

    The Independent Offices Appropriations Act (IOAA) of 1952, which is 
codified at 31 U.S.C. 9701, authorizes agencies to prescribe 
regulations that establish charges for services provided by the agency, 
which includes charging user fees. The charges must be fair and must be 
based on the costs to the government, the value of the service to the 
recipient, the public policy or interest served, and other relevant 
facts. The IOAA provides that regulations implementing user fees are 
subject to policies prescribed by the President; these policies are 
currently set forth in the Office of Management and Budget Circular A-
25, 58 FR 38142 (July 15, 1993) (the OMB Circular).
    The OMB Circular encourages user fees for government-provided 
services that confer benefits on identifiable recipients over and above 
those benefits received by the general public. Under the OMB Circular, 
an agency that seeks to impose a user fee for government-provided 
services must calculate the full cost of providing those services. In 
general, a user fee should be set at an amount that allows the agency 
to recover the full cost of providing the special service, unless the 
Office of Management and Budget grants an exception.
    Pursuant to the guidelines in the OMB Circular, the IRS has 
calculated its cost of providing services under the enrolled agent and 
enrolled retirement plan agent program and PTIN application process. 
The full cost of administering these programs will be charged and the 
proposed user fees will be implemented under the authority of the IOAA 
and the OMB Circular.

Proposed Effective/Applicability Date

    The Administrative Procedure Act provides that substantive rules 
will not be effective until thirty days after the final regulations are 
published in the Federal Register (5 U.S.C. 553(d)). Final regulations 
may be effective prior to thirty days after publication if the 
publishing agency finds that there is good cause for an earlier 
effective date.
    The Treasury Department and the IRS recently finalized regulations 
that require all tax return preparers who prepare all or substantially 
all of a tax return or claim for refund for compensation to use a PTIN 
as their identifying number (TD 9501). The Treasury Department and the 
IRS also finalized regulations that require tax return preparers to pay 
a $64.25 user fee to apply for or renew a PTIN (TD 9503, 75 FR 60316, 
September 30, 2010). Tax return preparers who prepare all or 
substantially all of a tax return or claim for refund must obtain or 
renew their PTIN for the 2011 tax season.
    Circular 230 requires that, to maintain active enrollment to 
practice before the IRS, enrolled agents must renew enrollment every 
third year after initial enrollment is granted. The renewal schedules 
are staggered with approximately one third of enrolled agents renewing 
every year. Enrolled agents with social security numbers or tax 
identification numbers ending in 4, 5, or 6 are currently scheduled to 
renew their enrollment beginning on November 1, 2010 and ending on 
January 31, 2011. To enable these enrolled agents to renew their 
enrollment at the reduced fee, the IRS issued Announcement 2010-81 on 
October 14, 2010, which delayed the renewal period for enrolled agents 
with social security numbers or tax identification numbers ending in 4, 
5, or 6. The renewal process cannot be reinstated until this regulation 
is finalized; otherwise, these enrolled agents will pay twice for the 
IRS to perform the compliance and suitability checks. To minimize the 
disruption to the enrolled agent program caused by the delay of 
renewal, the renewal process must be reinstated as quickly as possible. 
Thus, the Treasury Department and the IRS find that there is good cause 
for these regulations to be effective upon the publication of a 
Treasury decision adopting these rules as final regulations in the 
Federal Register.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, a regulatory flexibility analysis is not required. This 
certification is based upon the information that follows. The proposed 
regulation does not place an additional filing requirement on enrolled 
agents or enrolled retirement plan agents and decreases the enrollment 
costs already in effect. Thus, this regulation should reduce the 
economic impact imposed by the current enrolled agent and enrolled 
retirement plan agent user fees.
    Pursuant to section 7805(f) of the Code, this notice of proposed 
rulemaking has been submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and eight 
(8) copies) or electronic comments that are submitted timely to the 
IRS. The Treasury Department and the IRS request comments on the 
clarity of the proposed regulations and how they can be made easier to 
understand. All comments will be available for public inspection and 
copying.
    A public hearing has been scheduled for January 14, 2011, beginning 
at 10 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 
Constitution Avenue, NW., Washington, DC. Due to building security 
procedures, visitors must enter at the Constitution Avenue entrance. 
All visitors must present photo identification to enter the building. 
Because of access restrictions, visitors will not be admitted beyond 
the immediate entrance area more than 30 minutes before the hearing 
starts. For information about having your name placed on the building 
access list to attend the hearing, see the FOR FURTHER INFORMATION 
CONTACT section of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit written or 
electronic comments and an outline of the topics to be discussed and 
the time to be devoted to each topic by January 5, 2011. A period of 10 
minutes will be allocated to each person for making comments.

[[Page 76943]]

    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed. Copies of the 
agenda will be available free of charge at the hearing.

Drafting Information

    The principal author of these regulations is Emily M. Lesniak, 
Office of the Associate Chief Counsel (Procedure and Administration).

List of Subjects in 26 CFR Part 300

    Reporting and recordkeeping requirements, User fees.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 300 is proposed to be amended as follows:

PART 300--USER FEES

    Paragraph 1. The authority citation for part 300 continues to read 
in part as follows:

    Authority: 31 U.S.C. 9701.

    Par. 2. Section 300.0 is amended by:
    1. Redesignating paragraph (b)(9) as paragraph (b)(12).
    2. Adding new paragraph (b)(9).
    3. Adding paragraphs (b)(10) and (b)(11).
    The additions and revisions read as follows.


Sec.  300.0  User fees; in general.

* * * * *
    (b) * * *
    (9) Taking the special enrollment examination to become an enrolled 
retirement plan agent.
    (10) Enrolling an enrolled retirement plan agent.
    (11) Renewing the enrollment of an enrolled retirement plan agent.
* * * * *
    Par. 3. Section 300.4 is amended by revising the heading to read as 
follows:


Sec.  300.4  Enrolled agent special enrollment examination fee.

* * * * *
    Par. 4. Section 300.5 is amended by revising paragraphs (b) and (d) 
to read as follows:


Sec.  300.5  Enrollment of enrolled agent fee.

* * * * *
    (b) Fee. The fee for initially enrolling as an enrolled agent with 
the IRS Office of Professional Responsibility is $30.
* * * * *
    (d) Effective/applicability date. This section is applicable the 
date that final regulations are published in the Federal Register.
    Par. 5. Section 300.6 is amended by revising paragraphs (b) and (d) 
to read as follows:


Sec.  300.6  Renewal of enrollment of enrolled agent fee.

* * * * *
    (b) Fee. The fee for renewal of enrollment as an enrolled agent 
with the IRS Office of Professional Responsibility is $30.
* * * * *
    (d) Effective/applicability date. This section is applicable the 
date that final regulations are published in the Federal Register.


Sec.  300.9  [Redesignated as Sec.  300.12]

    Par. 6. Redesignate Sec.  300.9 as Sec.  300.12.
    Par. 7 Add new Sec.  300.9 to read as follows:


Sec.  300.9  Enrolled retirement plan agent special enrollment 
examination fee.

    (a) Applicability. This section applies to the special enrollment 
examination to become an enrolled retirement plan agent pursuant to 31 
CFR 10.4(b).
    (b) Fee. The fee for taking the enrolled retirement plan agent 
special enrollment examination is $11 per part, which is the cost to 
the government for overseeing the examination and does not include any 
fees charged by the administrator of the examination.
    (c) Person liable for the fee. The person liable for the enrolled 
retirement plan agent special enrollment examination fee is the 
applicant taking the examination.
    (d) Effective/applicability date. This section is applicable the 
date that final regulations are published in the Federal Register.
    Par. 7. Section 300.10 is added to read as follows:


Sec.  300.10  Enrollment of enrolled retirement plan agent fee.

    (a) Applicability. This section applies to the initial enrollment 
of enrolled retirement plan agents with the IRS Office of Professional 
Responsibility pursuant to 31 CFR 10.5(b).
    (b) Fee. The fee for initially enrolling as an enrolled retirement 
plan agent with the IRS Office of Professional Responsibility is $30.
    (c) Person liable for the fee. The person liable for the enrollment 
fee is the applicant filing for enrollment as an enrolled retirement 
plan agent with the IRS Office of Professional Responsibility.
    (d) Effective/applicability date. This section is applicable the 
date that final regulations are published in the Federal Register.
    Par. 8. Section 300.11 is added to read as follows:


Sec.  300.11  Renewal of enrollment of enrolled retirement plan agent 
fee.

    (a) Applicability. This section applies to the renewal of 
enrollment of enrolled retirement plan agents with the IRS Office of 
Professional Responsibility pursuant to 31 CFR 10.5(b).
    (b) Fee. The fee for renewal of enrollment as an enrolled 
retirement plan agent with the IRS Office of Professional 
Responsibility is $30.
    (c) Person liable for the fee. The person liable for the renewal of 
enrollment fee is the person renewing enrollment as an enrolled 
retirement plan agent with the IRS Office of Professional 
Responsibility.
    (d) Effective/applicability date. This section is applicable the 
date that final regulations are published in the Federal Register.

 Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2010-31033 Filed 12-7-10; 4:15 pm]
BILLING CODE 4830-01-P