Important Notice Requirement by IRS Circular 230

Legal Ramifications of New IRS Circular 230, effective on June 21, 2005

The Circular was issued by the United States Government and sets forth new rules that all tax practitioners, including certified public accountants, must follow in providing written statements about certain federal tax issues.

The Circular addresses so called "cover Sopinions" involving the tax treatment of an item of income, gain, loss, deduction or credit, as well as written opinions as the existence of absence of a taxable transfer of property (such as whether a transfer to another is subject to federal gift tax) or as to the value of property for federal tax purposes. The primary goal of the Circular is to stop abusive tax shelters.

While the scope of the Circular remains the subject of debate among tax professionals, we have concluded that it may apply to any writing relating to any Internal Revenue Code matter, including e-mail messages. Moreover, practitioners who fail to comply with the Circular may be suspended or disbarred from practice before the Internal Revenue Service or be publicly censured or be fined.

Unfortunately, these rather severe penalties that we face can be avoided by including in our correspondence to you the following language:

“Any U.S. tax advice contained in the body of this e-mail was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.”

In no way should this disclosure be interpreted in any way to undermine the integrity of our opinion or your reliance on our tax advice. The problem the Internal Revenue Service seeks to avoid is having a taxpayer avoid penalties simply by showing the government that the action taken was based on an opinion or advice from a tax professional, regardless of whether the advice was without reasonable support.

As a result of the Circular, you will now see the disclosure in most letters, communications and messages for Feeley & Driscoll, P.C., including e-mail messages.

All responsible tax practitioners will follow the requirements of the Circular. Notwithstanding this, it is our intention to continue to deliver to you the highest quality services in a cost efficient manner.

Please contact Feeley & Driscoll's Boston CPA's by Email or call 1 (888) 875-9770 to explore ways to grow your business in a down economy.

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