Technological competency and outdated provisions are two areas refreshed by proposed regulations from the Treasury Department and the Internal Revenue Service for certain tax pros who practice before the IRS.

The proposed regulations, if finalized, would amend Circ. 230 “to account for changes in the law and the evolving nature of tax practice.” Among other changes, the proposed regs would remove or update the parts of Circ. 230 related to registered tax preparers and return preparation, as well as contingent fees to reflect changes in the law since the prior amendments to Circ. 230 in 2011 and 2014. The proposed regulations would also revise or eliminate other provisions that are out of date. 

The regulations would affect registered tax return preparers, CPAs, Enrolled Agents, enrolled retirement plan agents, enrolled actuaries, Annual Filing Season Program participants, attorneys, appraisers and other practitioners. These regulations propose to:

• Eliminate provisions related to registered tax preparers;
• Classify the use of certain contingent fee arrangements by practitioners as disreputable conduct;
• Establish new standards for appraisals and the disqualification of appraisers;
• Provide rules related to appraisers, including the standards for disqualification; and,
• Update certain provisions.

Additionally, the proposed regulations would incorporate new provisions that require practitioners to maintain technological competency and would clarify some provisions, such as confirming that the IRS Office of Professional Responsibility retains jurisdiction over practitioners who have been suspended or disbarred from practice. 

The proposed regs are slated for publication in the Federal Register on Dec. 26.

The Tax Foundation recently ranked the states with most and least competitive individual income taxes in 2025. 

Alaska, Florida, South Dakota, Tennessee, Texas and Wyoming have the most competitive individual income taxes, as they do not levy individual income tax at all. New York, with its complex tax system, is the least competitive.

Read more about the states with the most and least competitive individual income taxes in 2025.

10 least competitive states for individual income taxes in 2025

In 2020-2024, the rank of DC does not affect the rank of the states.

10 most competitive states for individual income taxes in 2025

The shadow knows; body of evidence; make a Note of it; and other highlights of recent tax cases.

Newark, New Jersey: Thomas Nicholas Salzano, a.k.a. Nicholas Salzano, of Secaucus, New Jersey, the shadow CEO of National Realty Investment Advisors, has been sentenced to 12 years in prison for orchestrating a $658 million Ponzi scheme and conspiring to evade millions in taxes.

Salzano previously pleaded guilty to securities fraud, conspiracy to commit wire fraud and conspiracy to defraud the U.S., admitting that he made numerous misrepresentations to investors while he secretly ran National Realty. From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I, a real estate fund operated by National Realty, of $650 million.

Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors, advertisements, and meetings and presentations to investors. Salzano led and directed the marketing campaign that was intended to mislead investors into believing that NRIA generated significant profits. It in fact generated little to no profits and operated as a Ponzi scheme.

Salzano stole millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA. He also orchestrated a separate, related conspiracy to avoid paying taxes on his stolen funds.

He was also sentenced to three years of supervised release and agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses and $6.46 million to the IRS.

Marina del Rey, California: Tax preparer Lidiya Gessese has been sentenced to 41 months in prison for preparing and filing false returns for her clients and for not reporting her income.

Gessese owned and operated Tax We R/Tax R Us and Insurance Services from 2013 through 2019 and charged clients $300 to $800. Gessese would then prepare returns that included claims to deductions and credits she knew her clients were not entitled to, including falsely claiming dependents, earned income credits, the American Opportunity Credit, Child Tax Credits, business deductions, education expenses or unreimbursed employee business expenses. The illegitimate claims led to some $1,135,554.64 issued by the IRS for 2010 through 2018.

She failed to report, or underreported, her own income for 2010 through 2018, some of which included improperly diverted funds from clients’ inflated or fraudulent refunds, causing a tax loss of $488,276.

Gessese, who pleaded guilty in April, was also ordered to pay $1,096,034.01 to the IRS and $53,526.95 to her other victims.

Fullerton, California: In Chun Jung of Anaheim, California, owner of an auto repair business, has pleaded guilty to filing false returns for 2015 to 2022, underreporting his income by at least $1,184,914.

He owned and operated JY JBMT INC., d.b.a. JY Auto Body, which was registered as a subchapter S corp. Jung was the 100% shareholder.

Jung accepted check payments from customers that he and his co-schemers then cashed at multiple area check cashing services; the cashed checks totaled some $1,157,462. Jung withheld the business receipts and income from his tax preparer and omitted them on his returns.

He will pay $300,145 in taxes due to the IRS and faces a $250,000 penalty and up to three years in prison. Sentencing is Jan. 31.

Tucson, Arizona: Tax preparer Nour Abubakr Nour, 34, has been sentenced to 30 months in prison.

Nour, who pleaded guilty a year ago, operated the tax prep business Skyman Tax and for tax years 2016 through 2018 prepared and filed at least 27 false individual federal income tax returns for clients.

These returns included falsely claimed business income that inflated refunds so that he could pay himself large prep fees. Nour’s clients had no knowledge that he was filing false tax returns under their names.

Nour was also ordered to pay $150,154 in restitution to the United States for the false tax refunds.

Farmington, Connecticut: Tax preparer Mark Legowski, 60, has been sentenced to eight months in prison, to be followed by a year of supervised release, for filing false returns.

From January 2015 through December 2017, Legowski was a self-employed accountant and tax preparer doing business as Legowski & Co. Inc. He prepared income tax returns for some 400 to 500 individual clients and some 50 to 60 businesses.

To reduce his personal income tax liability for 2015 through 2017, Legowski underreported his practice’s gross receipts by excluding some client payment checks. He then filed false personal income tax returns that failed to report more than $1.4 million in business income, which resulted in a loss to the IRS of $499,289.

Legowski, who pleaded guilty earlier this year, has paid the IRS that amount in back taxes but must still pay penalties and interest. He has also been ordered to pay a $10,000 fine.

Wheeling, West Virginia: Dr. Nitesh Ratnakar, 48, has been convicted of failing to pay nearly $2.5 million in payroll taxes.

Ratnakar, who was found guilty of 41 counts of tax fraud, owned and operated a gastroenterology practice and a medical equipment manufacturer in Elkins, West Virginia. He withheld payroll taxes from employees’ paychecks and failed to make $2,419,560 in required payments to the IRS. Ratnakar also filed false tax returns in 2020, 2021 and 2022.

He faces up to five years in prison for each of the first 38 tax fraud counts and up to three years for the remaining counts.

Orlando, Florida: Two men have been sentenced for their involvement in the “Note Program,” a tax fraud.

Jasen Harvey, of Tampa, Florida, was sentenced to four years in prison and Christopher Johnson, of Orlando, was sentenced to 37 months for conspiring to defraud the U.S.

From 2015 to 2018, they promoted a scheme in which Harvey and others prepared returns for clients that claimed that large, nonexistent income tax withholdings had been paid to the IRS and sought large refunds based on those purported withholdings. The conspirators charged fees and required the clients to pay a share of the fraudulently obtained refunds to them.

Overall, the defendants claimed more than $3 million in fraudulent refunds on clients’ returns, of which the IRS paid about $1.5 million.

Both were also ordered to serve three years of supervised release. Johnson was also ordered to pay $864,117.42 in restitution to the United States; Harvey was ordered to pay $785,858.42 in restitution. Co-defendant Arthur Grimes will be sentenced on Jan. 13.

Ft. Lauderdale, Florida: Tax preparer Jean Volvick Moise, 39, has been sentenced to three years in prison for filing false income tax returns.

Moise prepared false returns for clients to inflate refunds. He prepared returns which included, among other things, false dependents, false 1099 withholdings, false educational credits and false Schedule C expenses, often for businesses which did not exist. Moise’s fee was larger than the typical one charged by a tax preparer.

Moise filed hundreds of false returns that caused the IRS to issue more than $574,000 in fraudulent refunds.