The Taxation and Regulation (REG) section is one of the three core sections of the Uniform CPA Examination, the licensing exam developed by the AICPA and administered with NASBA. REG tests a newly licensed CPA's grasp of U.S. ethics and professional responsibilities in tax practice, U.S. business law, and federal tax compliance for individuals and entities, framed around the routine, recurring transactions a CPA actually handles when preparing and reviewing returns. The 2026 blueprint weights five content areas: Ethics and Federal Tax Procedures (10 to 20 percent), Business Law (15 to 25 percent), Property Transactions (5 to 15 percent), Taxation of Individuals (22 to 32 percent), and Taxation of Entities (23 to 33 percent). One framing that saves real study time: REG never tests inflation-indexed dollar amounts or rate percentages, so master the rules, the ordering, and the why behind each computation rather than memorizing thresholds. Treat the Internal Revenue Code and the body's preferred answer, not general industry practice, as the final word on every question.
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This topic spans 52 focused tables and 449 indexed concepts, 429 flashcards, 17 practice tests with 544 questions. Below is a complete table-by-table outline of this topic, spanning foundational concepts through advanced details.
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Table 1: Circular 230: Practice Before the IRS
REG Area I.A.1, Ethics and responsibilities in tax practice, recall and apply the regulations governing practice before the IRS (Treasury Department Circular 230, codified at 31 CFR Part 10). Circular 230 is issued by the Treasury and enforced by the IRS Office of Professional Responsibility (OPR), not the AICPA.
| Concept | Example | Description | |
|---|---|---|---|
Attorney, CPA, enrolled agent, enrolled actuary, ERPA file a written declaration to represent a taxpayer | • Attorneys, CPAs, and enrolled agents have unlimited practice rights • Enrolled actuaries and ERPAs are limited to retirement-plan matters; registered tax return preparers are limited to returns they signed | ||
Client omitted income on a filed return, you must promptly tell the client, not the IRS | • Must advise the client promptly of any known noncompliance, error, or omission and its consequences • There is no duty to disclose it to the IRS or to correct it without the client's consent | ||
Fee = 30 percent of the refund on an original return is barred; fee tied to an IRS exam of that return is allowed | • Contingent fees are generally prohibited for matters before the IRS • Narrow exceptions: IRS examination or challenge of a return, claims tied to interest or penalties, and judicial proceedings. Unconscionable fees are also barred | ||
Cross-check figures before signing a return and before stating facts to the IRS or the client | • Must exercise due diligence in preparing returns and documents and in the correctness of representations made to the Treasury and to clients • Reasonable supervision of staff work satisfies it | ||
Do not sign a return with a position lacking a reasonable basis; warn the client of likely penalties | • May not willfully, recklessly, or through gross incompetence sign or advise a return position that is unreasonable under IRC 6694 • Must inform the client of penalties reasonably likely to apply and any disclosure that avoids them | ||
Client requests records to file this year's return, return them promptly even if fees are unpaid | • Must promptly return client records needed to meet federal tax obligations on request • A fee dispute generally does not excuse this, though state law may permit holding firm-prepared work product over unpaid fees | ||
Representing both spouses in a dispute, get each one's written, informed consent within 30 days | • May not represent a client where a conflict of interest exists, unless competent representation is still possible, it is not barred by law, and each client gives written informed consent • Retain the consents for 36 months | ||
Take a new estate-tax engagement only after studying the law or consulting an expert | • Must possess the knowledge, skill, thoroughness, and preparation a matter requires • Competence can be acquired by study or by consulting experts, not just by prior experience | ||
Clarify engagement scope, establish facts, and advise on the import of conclusions | Aspirational guidance for tax advisors phrased as should, not must. Failing to follow best practices is not by itself a sanctionable violation, unlike the mandatory duties elsewhere in the part | ||
A firm's tax-practice lead must put adequate procedures in place for all staff | The individual with principal authority over a firm's tax practice must take reasonable steps to ensure adequate firm-wide compliance procedures, and is disciplined for willful or reckless failure tied to a pattern of staff noncompliance | ||
OPR can disbar a CPA from federal practice even while the state CPA license stays valid | • The Treasury, through the IRS Office of Professional Responsibility, may censure (public reprimand), suspend, disbar, or impose a monetary penalty • This federal sanction is separate from any state board action on the CPA license |