Well actually it may be a bit of a rant.
I am still seeing something in my inbox that does not belong there: it is usually called a “Circular 230 Notice,” and generally says, in words or in substance, that “the IRS requires me to tell you that you cannot rely on what I am writing to avoid penalties.” It is a bit of boilerplate that is past its best by date.
The background: Circular 230 is a regulation promulgated by the Department of the Treasury that regulates practice before the IRS. 31 C.F.R. §§ 10.0-10.93. In a nutshell, it imposes standards of professional conduct on those of us who represent clients before the IRS.
Historically, Circular 230 divided the world of tax advice into two parts: “covered opinions” and everything else, technically, “other written advice.” 31 C.F.R. §§ 10.35, 10.37 (2013). “Covered opinions” related to tax avoidance transactions. 31 C.F.R. §§ 10.35(a)(2) (2013). As you might expect Circular 230 imposed some fairly robust professional standards on professionals who write a tax opinion blessing a tax shelter. And if the opinion was a “marketed opinion” that was used to promote a tax shelter the standards were ratcheted up another level.
The standards for “marketed opinions” could be avoided through “prominent” disclosure of various things, including a statement that “the advice was not intended or written by the practitioner to be used, and that it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.” 31 C.F.R. §§ 10.35(b)(5)(ii)(A) (2013).
This language gave rise to the Circular 230 Notice that was in the verbiage at the bottom of thousands of emails, usually introduced with a statement that “the IRS requires that we say this,” even though that was not true: the IRS only required that tax advice say this if it related to a tax avoidance transaction and the author of the opinion did not want to deal with the standards for marketed opinions.
With that as background, Circular 230 was amended in 2014. The current version does away with the entire concept of covered opinions. Instead there is now a flexible standard that focuses upon a “reasonable practitioner” standard. 31 C.F.R. §§ 10.35(c)(1), (2). These changes went into effect as of June 12, 2014. 31 C.F.R. §§ 10.35(e).
In light of the changes to Circular 230 the reason for the disclaimer is gone. Moreover, the head of the IRS Office of Professional Responsibility considers disclaimers based upon the old version of Circular 230 that indicate that “the IRS requires us to tell you . . .” to be misleading.
So clean up those emails, please.