On June 30, 2005, the United States Treasury Department issued regulations, commonly collectively referred to as “Circular 230,” governing the issuance of written tax advice.

Circular 230 contains certain content and disclosure requirements applicable to written communications containing opinions on and/or discussion of Federal tax issues. The regulations are designed to assist the Treasury Department and the IRS’ efforts in combating the use and marketing of abusive tax shelters and to bolster public confidence in the reliability and integrity of tax professionals, including attorneys. The regulations also are intended to discourage taxpayers from engaging in certain abusive transactions by limiting their ability to avoid penalties by inappropriately relying on the advice of a tax advisor.

Circular 230 requires that tax professionals conduct an extensive due diligence analysis of every Federal tax issue addressed by certain written communications. However, Treasury Department regulations do contain some exceptions for written communications that use certain disclaimer and disclosure language explaining such things as the purpose of such communications, the scope of the advice contained, and the extent to which a communication is not intended to be used and may not be used for the purpose of avoiding penalties under the Internal Revenue Code.

Sayles & Evans has adopted a policy requiring certain outgoing written communications to contain a cautionary legend with the disclaimer language required by Circular 230. This policy benefits our clients because it allows our attorneys to communicate with clients and provide informal or limited advice without conducting a Circular 230 due diligence analysis for each and every written communication that touches upon a Federal tax issue, which analysis would result in higher legal fees charged to our clients.

Our clients should feel free to contact any of our attorneys at Sayles & Evans should they have any questions or concerns about the Circular 230 rules or the policy adopted by our firm to address such rules.

Disclaimer: This web page is for informational purposes only. The content of this page is not intended as an advertisement or solicitation. Sayles & Evans makes no warranties or representations regarding the contents of this page concerning the suitability for any purpose of the information presented. Use of this web page and/or requesting information on Circular 230 from our offices does not constitute the creation of an attorney-client relationship.