We
have recently separated these services into a different suite. We
primarily decided to do so, because of the recent changes in law
affecting Lawyers, Certified Public Accountants, and Enrolled Agents
advising on tax matters.
Who may need tax research and opinion letters?
Any
business or personal transaction may lead to big or small tax
consequences. Most of the situations and issues have certain established
rules and are easily resolved. But quite often the complexity of a
transaction or lack of certainty in the law may require further research
by the tax adviser. If a client wants to use the results of the
research to justify a tax position on audit and avoid possible accuracy
related penalties, then an opinion letter is prepared for the client.
What are the recent changes and how do they impact the tax services?
Circular
230, the main document regulating the professional services of tax
advisers, now calls for any written advice concerning any plan or
arrangement, significant or principal purpose of which is the avoidance
or evasion of any tax, to meet a number of stringent requirements as to
its content and presentation. If written advice does not meet certain
requirements, the tax payer will not be able to rely on it to avoid
accuracy related penalties. There are also penalties for the advisers
who do not provide the written opinions in the required format.
Intended
primarily against the schemes abusing the tax system, these rules now
affect every adviser who advises a taxpayer in writing about a
legitimate tax minimization strategy or tax return position.
How clients are affected?
As
a result, it became more expensive for the consumer and risky for the
professional to write tax opinion letters even in seemingly harmless
situations. Many accounting firms have chosen to give
writing opinion letters. Our firm does write
opinion letters on any subject of the United States income tax law. We
are happy to work with other accounting firms on this as well.
