What Is Circular 230 And Why Do I See It On Emails And Letters?

30 Jul What Is Circular 230 And Why Do I See It On Emails And Letters?

Internal Revenue ServiceThe Internal Revenue Service regulates what lawyers (including bankruptcy lawyers) and Certified Public Accountants can tell their clients, at least when they are giving advice about certain tax matters. Lawyers and CPAs and Enrolled Agents are allowed to represent taxpayers in their dealings with the IRS. A government publication, Circular 230, lists the rules that must be followed when representing taxpayers in front of the Internal Revenue Service; a failure to follow these rules exposes the practitioner to a possible fine or other sanctions.

IRS rules require that lawyers and other tax professionals tell the truth when talking to the IRS. They are also required to fully disclose possible penalties that may apply in gray areas when they advise clients to act in some ways that avoid tax. If a letter or email has the proper disclosure, it helps lawyers keep from making a mistake and breaking the rules.

The IRS sets high standards for tax professionals, including lawyers, CPAs and Enrolled Agents. Violation of IRS rules can result in a reprimand or even disbarment from practice before the IRS.

A Circular 230 disclaimer should say that any advice given to a taxpayer client is not intended and cannot be used for the purpose of avoiding penalties that are imposed by the IRS regarding the matters discussed in the letter or email. This statement is intended to eliminate the excuse that a taxpayer was following professional advice.

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I was admitted to practice in 1978. I am certified as a Consumer Bankruptcy Specialist by the American Board of Certification. I regularly speak on tax and bankruptcy issues at state, regional and national conferences. Years of experience in practice before the Internal Revenue Service and Oregon Department of Revenue have given me the background to resolve a large variety of consumer tax issues.
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