Notice Regarding Tax Regulations
The United States Treasury Department has recently issued regulations, known as Circular 230, that promise to have far-reaching effects on tax-related communications. Originally intended by the IRS and the Treasury to combat abusive tax shelters, Circular 230 will affect tax advice given to clients in connection with many different types of business and personal matters, including advice relating to common estate and income tax planning techniques. Under Circular 230, written communications (including e-mails) issued by lawyers, accountants, and other tax professionals may be in violation of Treasury Department standards if such communications contain federal tax advice without providing a full discussion of all relevant facts, and a discussion and an evaluation of each significant federal tax issue raised (regardless of whether a client has requested such advice and even if a client has specifically requested that such advice not be rendered).
In most cases, however, a written communication will be exempt from the requirements of Circular 230 if it expressly provides that it is not intended or written to be used, and that it cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in the communication. Tax practitioners will often need to include this language in written advice in order to avoid possible sanction under Circular 230 (which include censure, suspension and disbarment from practice before the IRS).
Accordingly, as of June 21, 2005, written communications (including e-mails) from Stone Pigman Walther Wittmann L.L.C. that potentially contain federal tax advice will generally include disclosure language similar to that described in the previous paragraph. In order to ensure that the required language is not inadvertently omitted from communications where it should appear, Stone Pigman Walther Wittmann L.L.C. has adopted a policy of automatically including this language on all e-mails sent by attorneys in our Business Section unless the writer specifically determines not to include it. As a result, you may see the disclosure language in e-mails from us that do not discuss tax issues.
In those cases where a client does not want written advice to state that it cannot be used for the purpose of avoiding tax-related penalties, Stone Pigman Walther Wittmann L.L.C. attorneys will often need to provide lengthy opinions which carefully scrutinize, discuss, and evaluate all potential federal tax issues. These opinions will likely require a time-consuming, independent investigation into the factual circumstances underlying the federal tax issues and a substantial amount of research of relevant statutes, regulations, and court cases to determine whether we can conclude at the required level of certainty for issuing such an opinion. Unfortunately, we and other tax practitioners anticipate that in those instances when it is possible to provide the required opinion, such an opinion will likely result in a significant increase in the cost to clients. Please call us if you have any questions about how Circular 230 may affect our representation of you.
Â© Stone Pigman Walther Wittmann L.L.C. 2002