Chi-Yu Liang writes about new Circular 230 regs on Wealth Management.com.
Circular 230 is a portion of the federal regulations that governs the conduct of individuals who practice before the Internal Revenue Service. Practitioners who violate these rules of conduct are subject to disciplinary actions ranging in severity from monetary sanctions to suspension and disbarment from practice before the IRS.
Effective on June 12, 2014, the Treasury Department and the IRS issued final regulations (T.D. 9668, RIN 1545-BF96) on Circular 230 that significantly change the manner in which practitioners are required to advise on federal tax matters. While the new regulations make many changes affecting practice before the IRS, Chi-Yu Liang’s article focuses on the elimination of the covered opinion rules and the new requirements for written advice. These changes relieve practitioners of certain onerous requirements under Circular 230 and replace them with a more flexible standard of care requiring reasonableness given the specific facts and circumstances. As the penalties for overlooking these requirements can be severe, it’s important that practitioners be aware of and comply with the updated regulations.