Circular 230 Disclosure Information
Whelchel & Dunlap, LLP, is now including on many written communications involving tax advice the disclo-sure:
"IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any matters addressed herein. Please be assured that this new policy does not reflect any decrease in the quality of services or the amount of thought we put into our correspondence with you."
This is to ensure that we comply with new requirements imposed by the IRS in a publication called "Circular 230," which became effective June 21, 2005. In response to the inquiries of our clients, we provide many types of tax advice, from a quick once-over to a general "reaction" to a thorough review. Our advice is always carefully considered and well-researched, but is generally not provided as a formal opinion letter, unless you ask for such a letter.
Circular 230 makes clear that the IRS will not allow taxpayers to rely on less-formal advice for the purpose of avoiding tax penalties. Penalties are typically only imposed where the IRS challenges the position taken by a taxpayer and wins. In many cases, the penalties may be eliminated because the taxpayer relied on "substantial authority." Our communications with you may or may not discuss "substantial authority." In some cases, reli-ance on an opinion of counsel will also result in the elimination of penalties. Unless our written advice satisfies the IRS's new, very strict requirements for a formal opinion, it will not be considered such an independent ground for dismissing penalties.
In most cases, you will probably need less-formal advice which does not satisfy the Circular 230 requirements for a formal opinion. In those communications, you will see the above disclosure, which is required by the IRS but does not in any way decrease the care, thought, and preparation we put into our advice. If you believe you may need a formal opinion to avoid penalties, please discuss that with us.
Please do not hesitate to call any of our tax attorneys if you have questions about this or any other information we have provided to you.