|
As explained below, under recent IRS rules, Claybrook & Associates (“C
& A”) is now required to include a disclaimer with its emails and other
written communications that provide tax advice, unless the advise is in
the form of a formal opinion that complies with the requirements of IRS
Circular 230.
On June 1, 2005, regulations issues by the Treasury Department amending
Circular 230 became effective. Circular 230 sets forth rules that govern the
conduct of tax professionals, such as lawyers and accountants that practice
before the IRS. The new rules set forth in Circular 230 are intended to
combat the proliferation of abusive tax shelters; however, the rules are
much broader in scope and have an impact on the advice rendered by our firm
on a wide range of tax matters.
Circular 230 sets forth requirements for certain types of written advice
provide by a tax practicitioner to a client. Pursuant to Circular 230,
written communications (including e-mails, letters and memos) that contain
U. S. federal income or estate tax advice generally will need to include a
full discussion of all relevant facts as well as an evaluation of all of the
significant federal tax issues, whether the client has requested such advice
or not. However, a written communication generally will be exempt from such
requirements provided it expressly states that it is not written to be used,
intended, or it cannot be used, for the purpose of avoiding penalties
imposed under the Internal Revenue Code (the “Disclosure Language”).
In order to comply with the requirements of Circular 230, C & A has
adopted a policy of generally including the Disclosure Language in all
written communications (including e-mails) sent by professionals and support
staff. As a result, you may see the Disclosure Language in e-mails and
written correspondence from us that do not discuss any tax issues.
The inclusion of the Discloure Language in no way indicates that
tax-related penalties would, or could, be asserted.
In those cases where a client does not want written advice to state that
it cannot be used for the purpose of avoiding tax-related penalties,
accountants, attorneys and other practitioners will generally need to
provide formal opinions that comply with the standards of Circular 230.
Additionally, with respect to certain types of transactions, the Disclosure
Language will not exempt tax advice from the Circular 230 requirements.
Unfortunately, we and other tax practitioners anticipate that complying with
Circular 230 in providing such tax advice may substantially increase costs
to clients.
Since this requirement is new, we will monitor developments in this area
and revise our compliance efforts accordingly.
Please contact Montague S. Claybrook (monty.claybrook@msclaybrook.com) if
you have any questions regarding this topic. He can be reached at (302)
661-1804.
|
