New Rules Change Written Federal Tax Advice
New IRS regulations have changed the manner in which we will communicate with you when giving tax advice. The new rules are found in Treasury Department Circular 230, which governs our practice before the IRS.
In the past, many taxpayers who participated in aggressive tax shelters defended themselves against penalties by claiming reliance on the advice of a lawyer or accountant regarding the tax shelter. The IRS now prohibits taxpayers from using that defense unless they receive a specific type of formal opinion letter from the lawyer or accountant. In some cases a formal opinion will be required. However, in most instances, our advice on tax matters will not require a formal opinion so long as we inform you that our tax advice may not be used as a defense against the imposition of penalties.
You therefore should expect to see in many of our written communications, particularly those from our tax, trusts and estates and transaction attorneys, a short statement such as:
IRS CIRCULAR 230 DISCLOSURE: This communication is not intended and has not been written to be used, and may not be used or relied upon, by a client or any other person or entity for the purpose of avoiding any penalties that may be imposed.
If our tax advice is used in promoting, marketing or recommending a transaction or arrangement, an additional disclosure will be included.
The foregoing statement is not intended to imply that a lesser degree of care has been provided on your matter. It allows us to provide prompt advice without the need to evaluate each written communication to determine whether it requires a lengthy formal opinion. Questions?
If you have questions about these new IRS rules, please contact the attorney with whom you regularly work.
For information, contact:
Michael H. Bate – 602-257-7406 – firstname.lastname@example.org