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Impact of IRS
Circular 230 Written Advice Standards
Dear Client:
I am required to comply with Treasury Department
rules relating to written tax advice, which became effective on June 21,
2005. Under these rules, if I provide you with tax advice on which you
can rely for purposes of avoiding tax penalties, I am required to
prepare a formal opinion that satisfies rigorous factual and legal
diligence standards. Failure to satisfy those requirements will subject
me to potential penalties. Any advice that fails to comply with the
formal opinion requirements mentioned above must include a disclaimer
along the following lines:
"IRS Circular 230 disclosure: To ensure compliance
with requirements imposed by the IRS, I inform you that any tax advice
contained in this communication (including any attachments) was not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding
tax-related penalties under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any matters addressed
herein."
Effective June 21, 2005, unless you specifically request an opinion
that satisfies the requirements of Circular 230, you will see the above
disclaimer in most of my communications to you.
In the past, I have provided you with tax advice in a format that was
most appropriate for your inquiry and your needs. Through my course of
dealings with you, I have earned your trust and you have been able to
rely on my advice in whatever form delivered. I will continue to serve
you to the best of my ability and provide advice that is cost-effective
and consistent with your needs. The required disclaimer does not
reduce the logic of my tax analysis or the force of the relevant tax
authorities. The IRS now holds me to a higher set of standards and will not permit you to rely on that less
formal advice for purposes of avoiding tax penalties.
I encourage you to discuss with me the situations where you may need
formal opinions and analyses for purposes of avoiding penalties.
However, I believe that in most transactions and day-to-day advice you
will not need such formal opinions. Therefore, you can expect to see the
above disclaimer in my written communications, unless you specifically
ask me for a formal opinion that satisfies the requirements of Circular
230.
If you are interested in Circular 230 here is a link to the IRS web
site:
http://www.irs.gov/pub/irs-pdf/pcir230.pdf or
http://www.irs.gov/businesses/small/article/0,,id=134317,00.html. Do not hesitate to call me if you have questions about this matter.
Sincerely, Robert W. Leimena |
