IRS Revises Circular 230

The Internal Revenue Service and the Treasury Department today announced the issuance of revisions to the new Circular 230 standards for written tax advice that were announced late last year. Practitioners had asked for clarification in several areas and the…

The Internal Revenue Service and the Treasury Department today announced the issuance of revisions to the new Circular 230 standards for written tax advice that were announced late last year. Practitioners had asked for clarification in several areas and the revisions are apparently in response to those requests.

Three of the five revisions issued expand on the definition of “excluded advice” that is not subject to the detailed covered opinion standards of Circular 230. The revisions apply to:

  • Advice from in-house tax professionals to their employers;
  • Situations in which the advice is provided after the client files the relevant tax return; and
  • “Negative advice” wherein an advisor tells a client a transaction will not provide the purported tax benefit.

Advice that is excluded from the covered opinion standards by these revisions will continue to be subject to the general requirements for other written advice.

Read more about Circular 230 here and here.

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