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

Section 10.21  Knowledge of client's omission.

The Section supports the expansion of this provision so that it applies to any document submitted under the revenue laws as opposed to only those documents required to be submitted under the revenue laws.

The Section supports the additional requirement that a practitioner who knows of the fact of a noncompliance, error or omission must advise the client regarding the manner in which corrective action can be taken and the possible consequences of not taking corrective action. However, the Section believes that a practitioner should also be required to advise the client of the possible consequences of taking corrective action as well. There may be circumstances in which it would violate a practitioner’s duty of competence to fail to advise a client of the consequences of taking such corrective action.

Further, there may be circumstances in which it is not appropriate for a practitioner to advise a client regarding the possible consequences of taking or not taking corrective action. These circumstances may arise if the practitioner is not sufficiently experienced, has a conflict of interest, or for some other reason. Accordingly, the Section suggests that this provision should include a phrase directing that, when appropriate, a practitioner must advise the client to consult with another practitioner who is competent and disinterested for purposes of advising a client regarding the possible consequences of taking or not taking corrective action.