What’s your Circular 230 Feeling Like?

by admin

IRS Circular 230If you’ve ever emailed a lawyer, you’ve probably seen a lengthy tax disclaimer at the footer of the email.  Like any good disclaimer, it protects your lawyer.  Still, you wonder: why is my lawyer including a disclaimer about tax advice when I’m not asking him for any?

Circular 230 is a regulation that governs how lawyers practice before the IRS.  It gives harsh penalties for lawyers who violate the rules.  One requirement of Circular 230 is that if a lawyer gives a covered opinion (essentially tax advice on which you can rely), he must undergo a series of steps that involve fact gathering and legal analysis.

A lawyer can avoid having casual tax advice being treated as a covered opinion by putting a disclaimer that says the advice was can’t be used for the purpose of seeking relief from Federal tax penalties.  Your lawyer is probably American and most Americans fear the IRS.  Therefore, to be safe, Circular 230 disclaimers are put on just about anything.  Just to be safe.

Oh, and before I forget:

As required by United States Treasury Regulations, you should be aware that this communication is not intended or written by the sender to be used, and it cannot be used, by any recipient for the purpose of avoiding penalties that may be imposed on the recipient under United States federal tax laws.

(photo courtesy of: http://flic.kr/p/68bB8P)

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