to obtain, such record or information is of doubtful legality.

(b) To the Director of Practice. It shall be the duty of an attorney or certified public accountant, who practices before the Internal Revenue Service, or enrolled agent, when requested by the Director of Practice, to provide the Director with any information he may have concerning violation of the regulations in this part by any person, and to testify thereto in any proceeding instituted under this part for the disbarment or suspension of an attorney, certified public accountant, or enrolled agent, unless he believes in good faith and on reasonable grounds that such information is privileged or that the request therefor is of doubtful legality.

§ 10.21

Knowledge of client's omission. Each attorney, certified public accountant, or enrolled agent who, having been retained by a client with respect to a matter administered by the Internal Revenue Service, knows that the client has not complied with the revenue laws of the United States or has made an error in or omission from any return, document, affidavit, or other paper which the client is required by law to execute in connection with such matter, shall advise the client promptly of the fact of such noncompliance, error, or omission. [35 F.R. 13205, Aug. 19, 1970]

§ 10.22 Diligence as to accuracy.

Each attorney, certified public accountant, or enrolled agent shall exercise due diligence:

(a) In preparing or assisting in the preparation of, approving, and filing returns, documents, affidavits, and other papers relating to Internal Revenue Service matters;

(b) In determining the correctness of oral or written representations made by him to the Internal Revenue Service; and

(c) In determining the correctness of oral or written representations made by him to clients with reference to any matter administered by the Internal Revenue Service.

[35 F.R. 13205, Aug. 19, 1970]

$10.23 Prompt disposition of pending

matters.

No attorney, certified public accountant, or enrolled agent shall unreasonably

No attorney, certified public accountant, or enrolled agent shall in any Internal Revenue Service matter knowingly and directly or indirectly:

(a) Employ or accept assistance from any person who is under disbarment or suspension from practice before the Internal Revenue Service, or who to the knowledge of the attorney, certified public accountant, or enrolled agent solicits business, obtains clients, or otherwise conducts his practice in a manner forbidden under the regulations of this part; or

(b) Accept employment as associate, correspondent, or subagent from, or share fees with, any such person.

(c) Accept assistance in a specific matter from any person who participated personally and substantially in such matter as an Internal Revenue Service officer or employee.

[31 F.R. 10773, Aug. 13, 1966, as amended at 35 F.R. 13205, Aug. 19, 1970]

§ 10.25 Practice by partners of Government employees.

No partner of an officer or employee of the executive branch of the U.S. Government, of any independent agency of the United States, or of the District of Columbia, shall represent anyone in any matter administered by the Internal Revenue Service in which such officer or employee of the Government participates or has participated personally and substantially as a Government employee or which is the subject of his official responsibility.

[31 F.R. 10773, Aug. 13, 1966, as amended at 35 FR. 13205, Aug. 19, 1970]

§ 10.26 Practice by former Government employees.

(a) In General. No former officer or employee of the U.S. Government, of any independent agency of the United States, or of the District of Columbia, shall represent anyone in any matter administered by the Internal Revenue Service if the representation would violate any of the laws of the United States.

(b) Personal and substantial participation. No former officer or employee of the executive branch of the U.S.

Government, of any independent agency of the United States, or of the District of Columbia, shall represent anyone in any any matter administered by the Internal Revenue Service, involving a specific party or parties, in which he participated personally and substantially as an officer or employee.

(c) Official responsibility. No former officer or employee of the executive branch of the U.S. Government, of any independent agency of the United States, or of the District of Columbia, shall, within 1 year after his employment has ceased, appear personally as agent or attorney for anyone before the Internal Revenue Service in any matter administered by the Internal Revenue Service, involving a specific party or parties, which was under his official responsibility as an officer or employee of the Government at any time within a period of 1 year prior to the termination of such responsibility.

(d) Aid or assistance. No former officer or employee of the Internal Revenue Service, who is eligible to practice before the Service, shall aid or assist any person in the representation of a specific party or parties in any matter in which the former officer or employee participated personally and substantially as an officer or employee of the Internal Revenue Service.

[31 F.R. 10773, Aug. 13, 1966, as amended at 35 F.R. 13205, Aug. 19, 1970]

No attorney, certified public accountant, or enrolled agent shall solicit employment, directly or indirectly, in matters related to the Internal Revenue Service. For the purposes of this section, solicitation includes, but is not limited to the advertising of professional attainments or services, the employment of, or the forming of an association or partnership with, any person, partnership, corporation or other organization which solicits in a manner prohibited to attorneys, certified public accountants, and enrolled agents by the provisions of this part, or the use of signs, printing, or other written matter indicating some past or present connection with, or relationship to the Internal Revenue Service. In the case of an enrolled agent, the phrase "enrolled to practice before the Internal Revenue Service," when appearing on the stationery, letterhead or professional card of such enrolled agent is not considered to violate this prohibition. The customary biographical insertions in approved law lists and in reputable professional directories and journals, as well as the use of professional cards and announcements, are permissible providing that they do not violate the standards of ethical conduct adopted by the American Bar Association, the American Institute of Certified Public Accountants, and the National Society of Public Accountants.

[35 F.R. 13205, Aug. 19, 1970] § 10.31

Practice of law.

Nothing in the regulations in this part shall be construed as authorizing persons not members of the bar to practice law. Subpart C-Rules Applicable to Disciplinary Proceedings

§ 10.50 Authority to disbar or suspend.

Pursuant to section 3 of the Act of July 7, 1884, 23 Stat. 258 (31 U.S.C. 1026), the Secretary of the Treasury, after due notice and opportunity for hearing, may suspend or disbar from practice before the Internal Revenue Service any attorney, certified public accountant, or

enrolled agent shown to be incompetent, disreputable or who refuses to comply with the rules and regulations in this part or who shall, with intent to defraud, in any manner willfully and knowingly deceive, mislead, or threaten any claimant or prospective claimant, by word, circular, letter, or by advertisement.

[31 F.R. 10773, Aug. 13, 1966, as amended at 35 F.R. 13205, Aug. 19, 1970]

§ 10.51 Disreputable conduct.

Disreputable conduct for which an attorney, certified public accountant, or enrolled agent may be disbarred or suspended from practice before the Internal Revenue Service includes, but is not limited to:

(a) Conviction of any criminal offense under the revenue laws of the United States, or of any offense involving dishonesty, or breach of trust.

(b) Giving false or misleading information, or participating in any way in the giving of false or misleading information, to the Internal Revenue Service or any officer or employee thereof, or to any tribunal authorized to pass upon Federal tax matters, in connection with any matter pending or likely to be pending before them, knowing such information to be false or misleading. Facts or other matters contained in testimony, Federal tax returns, financial statements, applications for enrollment, affidavits, declarations, or any other document or statement, written or oral, are included in the term "information."

(c) Solicitation of employment as prohibited under § 10.30 of this part, the use of false or misleading representations with intent to deceive a client or a prospective client in order to procure employment, or intimating that the practitioner is able improperly to obtain special consideration or action from the Internal Revenue Service or officer or employee thereof.

(d) Willfully failing to make Federal tax return in violation of the revenue laws of the United States, or evading, attempting to evade, or participating in any way in evading or attempting to evade any Federal tax or payment thereof, knowingly counseling or suggesting to a client or prospective client an illegal plan to evade Federal taxes or payment thereof, or concealing assets of himself

or another to evade Federal taxes or payment thereof.

(e) Misappropriation of, or failure properly and promptly to remit funds received from a client for the purpose of payment of taxes or other obligations due the United States.

(f) Directly or indirectly attempting to influence, or offering or agreeing to attempt to influence, the official action of any officer or employee of the Internal Revenue Service by the use of threats, false accusations, duress or coercion, by the offer of any special inducement or promise of advantage or by the bestowing of any gift, favor or thing of value.

(g) Disbarment or suspension from practice as an attorney, certified public accountant, or public account by any duly constituted authority of any State, possession, territory, Commonwealth, the District of Columbia, or by any Federal Court of record.

(h) Knowingly aiding and abetting another person to practice before the Internal Revenue Service during a period of suspension, disbarment, or ineligibility of such other person. Maintaining a partnership for the practice of law, accountancy, or other related professional service with a person who is under disbarment from practice before the Service shall be presumed to be a violation of this provision.

(i) Contemptuous conduct in connection with practice before the Internal Revenue Service, including the use of abusive language, making false accusations and statements knowing them to be false, or circulating or publishing malicious or libelous matter.

[Dept. Circ. 230, Rev., 31 F.R. 10773, Aug. 13, 1966, as amended at 35 F.R. 13205, Aug. 19, 1970]

accountant, or enrolled agent has violated any provision of this part, or if any such officer or employee receives information to that effect, he shall promptly make a written report thereof, which report or a copy thereof shall be forwarded to the Director of Practice. If any other person has information of such violations, he may make a report thereof to the Director of Practice or to any officer or employee of the Internal Revenue Service.

§ 10.54 Institution of proceeding.

Whenever the Director of Practice has reason to believe that any attorney, certified public accountant, or enrolled agent has violated any provision of the laws or regulations governing practice before the Internal Revenue Service, he may reprimand such person or institute a proceeding for disbarment or suspension of such person. The proceeding shall be instituted by a complaint which names the respondent and is signed by the Director of Practice and filed in his office. Except in cases of willfulness, or where time, the nature of the proceeding, or the public interest does not permit, a proceeding will not be instituted under this section until facts or conduct which may warrant such action have been called to the attention of the proposed respondent in writing and he has been accorded opportunity to demonstrate or achieve compliance with all lawful requirements. § 10.55

Conferences.

(a) In general. The Director of Practice may confer with an attorney, certified public acountant, or enrolled agent concerning allegations of misconduct irrespective of whether a proceeding for disbarment or suspension has been instituted against him. If such conference results in a stipulation in connection with a proceeding in which such person is the respondent, the stipulation may be entered in the record at the instance of either party to the proceeding.

(b) Resignation or voluntary suspension. An attorney, certified public accountant, or enrolled agent, in order to avoid the institution or conclusion of a disbarment or suspension proceeding, may offer his consent to suspension from practice before the Internal Revenue

Service. An enrolled agent may also offer his resignation. The Director of Practice, in his discretion, may accept the offered resignation of an enrolled agent and may suspend an attorney, certified public accountant, or enrolled agent in accordance with the consent offered.

[31 F.R. 10773, Aug. 13, 1966, as amended at 35 F.R. 13206, Aug. 19, 1970]

§ 10.56 Contents of complaint.

(a) Charges. A complaint shall give a plain and concise description of the allegations which constitute the basis for the proceeding. A complaint shall be deemed sufficient if it fairly informs the respondent of the charges against him so that he is able to prepare his defense.

(b) Demand for answer. In the complaint, or in a separate paper attached to the complaint, notification shall be given of the place and time within which the respondent shall file his answer, which time shall not be less than 15 days from the date of service of the complaint, and notice shall be given that a decision by default will be rendered against the respondent in the event he fails to file his answer as required.

(a) Complaint. The complaint or a copy thereof may be served upon the respondent by certified mail, or first-class mail as hereinafter provided; by delivering it to the respondent or his attorney or agent of record either in person or by leaving it at the office or place of business of the respondent, attorney or agent; or in any other manner which has been agreed to by the respondent. Where the service is by certified mail, the return post office receipt duly signed by or on behalf of the respondent shall be proof of service. If the certified matter is not claimed or accepted by the respondent and is returned undelivered, complete service may be made upon the respondent by mailing the complaint to him by first-class mail, addressed to him at the address under which he is enrolled or at the last address known to the Director of Practice. If service is made upon the respondent or his attorney or agent of record in person or by leaving the complaint at the office or place of business of the respondent, attorney or

agent, the verified return by the person making service, setting forth the manner of service, shall be proof of such service.

(b) Service of papers other than complaint. Any paper other than the complaint may be served upon an attorney, certified public accountant, or enrolled agent as provided in paragraph (a) of this section or by mailing the paper by first-class mail to the respondent at the last address known to the Director of Practice, or by mailing the paper by firstclass mail to the respondent's attorney or agent of record. Such mailing shall constitute complete service. Notices may be served upon the respondent or his attorney or agent of record by telegraph.

(c) Filing of papers. Whenever the filing of a paper is required or permitted in connection with a disbarment or suspension proceeding, and the place of filing is not specified by this subpart or by rule or order of the Examiner, the paper shall be filed with the Director of Practice, Treasury Department, Washington, D.C. 20220. All papers shall be filed in duplicate.

[Dept. Circ. 230, Rev., 31 F.R. 10773, Aug. 13, 1966, as amended at 31 F.R. 13992, Nov. 2, 1966]

(a) Filing. The respondent's answer shall be filed in writing within the time specified in the complaint or notice of institution of the proceeding, unless on application the time is extended by the Director of Practice or the Examiner. The answer shall be filed in duplicate with the Director of Practice.

(b) Contents. The answer shall contain a statement of facts which constitute the grounds of defense, and it shall specifically admit or deny each allegation set forth in the complaint, except that the respondent shall not deny a material allegation in the complaint which he knows to be true, or state that he is without sufficient information to form a belief when in fact he possesses such information. The respondent may also state affirmatively special matters of defense.

(c) Failure to deny or answer allegations in the complaint. Every allegation in the complaint which is not denied in the answer shall be deemed to be admitted and may be considered as proved,

and no further evidence in respect of such allegation need be adduced at a hearing. Failure to file an answer within the time prescribed in the notice to the respondent, except as the time for answer is extended by the Director of Practice or the Examiner, shall constitute an admission of the allegations of the complaint and a waiver of hearing, and the Examiner may make his decision by default without a hearing or further procedure.

§ 10.59

Supplemental charges.

If it appears that the respondent in his answer, falsely and in bad faith, denies a material allegation of fact in the complaint or states that the respondent has no knowledge sufficient to form a belief, when he in fact possesses such information, or if it appears that the respondent has knowingly introduced false testimony during proceedings for his disbarment or suspension, the Director of Practice may thereupon file supplemental charges against the respondent. Such supplemental charges may be tried with other charges in the case, provided the respondent is given due notice thereof and is afforded an opportunity to prepare a defense thereto.

§ 10.60 Reply to answer.

No reply to the respondent's answer shall be required, and new matter in the answer shall be deemed to be denied, but the Director of Practice may file a reply in his discretion or at the request of the Examiner.

§ 10.61 Proof; variance; amendment of pleadings.

In the case of a variance between the allegations in a pleading and the evidence adduced in support of the pleading, the Examiner may order or authorize amendment of the pleading to conform to the evidence: Provided, That the party who would otherwise be prejudiced by the amendment is given reasonable opportunity to meet the allegations of the pleading as amended; and the Examiner shall make findings on any issue presented by the pleadings as so amended. § 10.62 Motions and requests.

Motions and requests may be filed with the Director of Practice or with the Examiner.