The move by the Internal Revenue Service to further limit contingent fees for Circular 230 tax practitioners has drawn opposition from virtually every group of tax professionals.Representatives from the American Institute of CPAs, the American Bar Association Tax Section, the American Association of Attorney-CPAs, the National Association of Enrolled Agents and the National Association of Tax Professionals, along with others, opposed the change at recent IRS hearings.

Section 10.27 of Circular 230 defines a contingent fee as any fee that is based, in whole or in part, on whether or not a position taken on a tax return or other filing avoids challenge by the IRS or is sustained either by the IRS or in litigation. It includes any fee arrangement in which the practitioner will reimburse the client for all or a portion of the client's fee in the event that a position taken on a tax return or other filing is challenged by the IRS or is not sustained.

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