What is Circular 230?
Short answer
Circular 230 is the Treasury regulation on practice before the IRS for attorneys, CPAs, enrolled agents and other practitioners: competence, diligence, fees, conduct.
What it is
Circular 230 is Title 31, Part 10 of the Code of Federal Regulations, published by the Treasury as Circular No. 230. It says who may practice before the IRS, what duties they owe clients and the system, and how the IRS Office of Professional Responsibility disciplines violations.
Its duties include competence, due diligence in preparing returns and advising clients, prompt handling of client matters, returning client records, avoiding conflicts of interest, and limits on fees and advertising. In 2026 the Office of Professional Responsibility explained how these existing duties apply when a practitioner uses generative AI.
Why it matters for a tax firm
A tool does not carry the practitioner's duties. If an AI drafts a position or reads a document, the practitioner is still the one responsible for verifying it, billing honestly, and keeping client data on systems the firm controls.
Related terms
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Sources
Questions about Circular 230
Does Circular 230 apply to unenrolled preparers?
Parts of it do. Anyone who prepares returns for pay must follow the rules on diligence and conduct for that work, and the IRS can pursue penalties under the tax code regardless of Circular 230 status.
Does Circular 230 have an AI rule?
Not a separate one. The IRS Office of Professional Responsibility has said the existing duties, such as competence, diligence and protecting client information, apply to AI use.
Last reviewed: October 16, 2026. This glossary explains terms; it is not legal or tax advice. Check the cited source for the current rule.
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