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Circular 230 Disclosure

edited April 2009 in Stupid Questions
Circular 230 Disclosure: This advice is not intended or written to be used, and it cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

What the heck is a Circular 230 and why write it if it isn't intended to be used? :shock:


  • Treasury Department Circular No. 230 (Rev. 4-2008) Cat. Num. 16586R

    Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents, and Appraisers before the
    Internal Revenue Service

    § 10.0 Scope of part.
    This part contains rules governing the recognition of attorneys, certified public accountants, enrolled agents, and other persons representing taxpayers before the Internal Revenue Service. Subpart A of this part sets forth rules relating to the authority to practice before the Internal Revenue Service; Subpart B of this part prescribes the duties and restrictions relating to such practice; Subpart C of this part prescribes the sanctions for violating the regulations; Subpart D of this part contains the rules applicable to disciplinary proceedings; and Subpart E of this part contains general provisions including provisions relating to the availability of official records.

    It is not that Circular 230 is not intended to be used - it is that under Circular 230 regulations, I have to advise you that you can't use my advice. :roll:
  • OK, that makes perfect sense.

    NOT! :roll:
  • The problem was that people were going in and requesting waivers for penalties based on "My Tax Guy said this in a letter". The problem was, what the tax guy said was not documented fully, did not state that and what penalties might apply if the advice was not correct, and may not have actually been giving advice. The disclaimer/disclosure essentially means that the writing does not have all the elements required to be "relied upon" or "reliable" advice with regard to penalty provisions. If the tax guy does what the tax guy is supposed to do and includes all the stuff that is supposed to be included in the advice, the taxpayer then has all the facts - AND if the stuff is hooey, and the taxpayer relies on it, the taxpayer does not have an excuse because the taxpayer should have been aware of all the relevant facts and had gone ahead anyway. This sort of thing is why Wesley Snipes and his "tax guys" ended up in so much trouble. See, they either did not tell him everything and/or he chose to ignore the bad news.
    So when the S hit the F, he was SOL on the "reliance on tax advisor" defense.

    All the disclosure says is that you can't rely on my e-mails and discussion posts to get you off the hook for penalties if you do something I might have suggested in a moment of sarcastic abandon.
  • But Patrick SAID...................... :P
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