IRS Circular No. 230 Notice
IRS regulations require my use of the so-called "Circular No. 230 Notice" that will affect all of my communications with clients.
A "circular" could be something round. On the other hand, it could connote paradoxical thinking, such as in "circular reasoning." Or, it could be a notice disseminated to a large group of people.
In the latter context, "IRS Circular No. 230" is a very important publication regulating tax professionals. It states that written tax advice must include either:(1) all relevant and potentially relevant legislation, regulations, court cases and IRS rules relating to the subject of the tax advice, or (2) a prominent disclosure notice stating that the advice cannot be relied upon for tax penalty purposes.
Practically speaking, almost every tax issue potentially involves the assessment of a tax penalty, so these regulations would pertain to all written communications that could be construed as tax advice, which, in my practice, is basically all written communications—in whatever form—to clients.Clients, click here for our current "IRS Circular No. 230 Notice" (Revised January 1, 2014).
IRS Circular No. 230 requires me to add a certain disclosure notice to most of my letters, memos, e-mails, spreadsheets and other correspondence to you concerning your federal tax matters. That is unless I am willing to undertake an extensive analysis of the facts underlying one or more transaction(s) and analyze the legal authorities that address the federal tax treatment of the transaction(s). These regulations are extremely burdensome, and would require a significant additional fee for such compliance.
Therefore, I adopt a policy by default to include a disclosure notice as part of my effort to charge you an affordable fee. You can expect written advice from me and my law firm to contain a disclosure notice similar to the following:
"IRS regulations require me to advise you that, unless otherwise specifically noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding tax penalties; furthermore, this communication was not intended or written to support the promotion, marketing or recommendation of any of the transactions or matters it addresses."
IRS Circular No. 230 requires such notice to be “prominently disclosed” and “readily apparent” to the reader. It must be set forth in a separate section (but not in a footnote or as “fine print”) of the communication. The typeface used must be at least the same size as the typeface used in any discussion of facts or law.
I want to assure you that this policy does not reflect any decrease in the quality of my services, or the amount of thought that I put into my communications with you.
In situations where I believe that your particular circumstances warrant an increased fee attributable to a communication that may provide you protection from the imposition of penalties, I will initiate a discussion about this situation with you. In the event that you desire a written communication upon which you may rely for protection from the imposition of penalties, I encourage you to initiate such a discussion with me.
Please contact me if you have any questions or concerns about IRS Circular No. 230, or my policies relative to these regulations and their impact upon the manner in which I would communicate federal tax advice to you.
Revised: January 1, 2014
David N. Stonehill, Attorney-at-law
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It is very important for my clients to understand why I insert the IRS Circular No. 230 Notice in all of my communications, and how it may affect my advice to clients. I want to answer your questions and respond to your comments about why and how I comply with the requirements set forth in IRS Circular No. 230.
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David N. Stonehill, Attorney-at-Law
David N. Stonehill Co., LPA
4901 Hunt Road, Suite 103
Cincinnati, OH 45242-6990
1099advisor on the Radio
These are David's most recent appearances on Lewis Gatch's "Everybody's Planning Hour" radio show. Dave talks about what creates cancellation of debt income, why it's taxed, and how to avoid paying too much tax on it.