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IRS Circular 230

Circular 230 Information for Our Clients

Treasury Department regulations effective June 12, 2014 govern standards for written advice provided by tax practitioners to taxpayers.  These rules contained in Circular 230 may have a substantial effect on the form and content of customary tax advice provided to taxpayers by practitioners.  As a firm which practices before the Internal Revenue Service, Tanner LLC (“Tanner”) and its professionals are subject to these rules and will fully comply with them. 

When providing written advice to our clients, Tanner must:

  • Base the written advice on reasonable factual and legal assumptions, including assumptions as to future events;

  • Reasonably consider all relevant facts that we know or reasonably should know;

  • Use reasonable efforts to identify and ascertain the facts relevant to written advice on each federal tax matter;

  • Not rely on representations, statements, findings, or agreements (including projections, financial forecasts, or appraisals) of the taxpayer or any other person if reliance on them would be unreasonable;

  • Relate applicable law and authorities to facts; and

  • In evaluating a federal tax matter, not take into account the possibility that a tax return will not be audited or that a matter will not be raised on audit.

In applying these rules, we will consider the scope of the engagement, the type and specificity of the advice our clients seek, and other appropriate facts and circumstances.  We will always provide our thoughtful analysis and conclusions to all tax advice that we provide.

As taxpayers usually will not rely on the great majority of day-to-day tax communications for penalty protection and often desire advice which will not require the time and expense necessary to establish a reasonable-cause penalty defense, our advice will not be prepared with the intent of providing penalty protection.  However, if you inform us that you specifically wish to rely on our advice as a basis for a reasonable-cause defense against penalties under IRC Section 6694, or against substantial-understatement penalties attributable to a tax shelter as defined in IRC Section 6662(d)(2)(C)(ii), we will discuss with you the amount of time, effort and cost that will be required for us to reach a level of comfort that there is a greater than 50-percent likelihood that the tax treatment of the item will be upheld if challenged.  We will only proceed with such extra work with your approval.

If you have any questions about these Circular 230 rules, please contact your engagement partner or you may email us at info@tannerco.com.