Vindicated: IRS Tells Practitioners to Remove Circular 230 Disclaimers

Ever since Circular 230 was issued, I have been laughing up my sleeve at the supposed tax experts who have been putting messages like this on everything that emanates from their offices:

Circular 230 Disclaimer: This communication was not intended or written to be used nor can it be used or relied upon by recipient (or any other taxpayer) for the purpose of avoiding penalties that may be imposed on recipient (or any other taxpayer) under the Internal Revenue Code of 1986, as amended.

Some of these Circular 230 disclaimers from major law firms run as high as 200 words.  I researched the issue and determined that these disclaimers were silly.  On many of my emails I put this non-disclaimer:

NOT A CIRCULAR 230 DISCLAIMER

Based on the definitions set forth in 31 C.F.R. § 10.35, Circular 230 warnings are only necessary for tax advice that makes claims of legitimacy for transactions that equate to, or approach, tax evasion. Since any tax advice in this email is at least arguably sound, no Circular 230 disclaimer is necessary. Any communication that includes a Circular 230 disclaimer should be read with caution, since the presence of the disclaimer is an admission that the tax advice is unsound.

I have been vindicated.  According to this news release by the New Jersey Society of Certificed Public Accountants, the IRS agrees with me:

On June 9, the IRS issued final regulations (T.D. 9668) that eliminate the requirement to include Circular 230 disclaimers in documents and transmissions. According to an article on TaxLawRoundup.com, the final regulations have replaced the prior detailed “covered opinion” with a more flexible approach, eliminating the need for banner disclaimers.

The new regulations adopt a single standard for all written tax advice. Practitioners must base all written advice on reasonable factual and legal assumptions, exercise reasonable reliance, and consider all relevant facts the practitioner knows (or should know). The final regulations are effective as of June 12, 2014.

New Jersey Society of Certified Public Accountants.
425 Eagle Rock Avenue | Roseland, NJ 07068 | 973-226-4494 | njscpa@njscpa.org

Let’s see how long it takes for these silly disclaimers to stop wasting bandwidth.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2014 John B. Payne, Attorney

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