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Circular 230


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Should any attorney, CPA, appraiser, enrolled agent or enrolled actuary registered to practice before the Internal Revenue Service include a disclaimer on any correspondence or email produced even though some of these practitioners do not actually provide "tax" advice (such as TPA firms)?

It is my understanding that the Circular 230 requirements apply to all written forms of Federal tax advice, and thus apply not only to formal legal opinions, but also to written advice contained in emails, private offering memoranda, draft contracts, letters, memos and other documents. It is also my understanding that practitioners who fail to comply with the requirements of the Circular 230 provisions may be suspended or disbarred from practice before the Internal Revenue Service, be publicly censured or be fined.

I work for a TPA firm and I am an ERPA. I do not provide actual tax advice but the more I read the requirements, the more I am leaning toward the opinion that all practitioners listed above are required to include a disclaimer.

Anyone have any thoughts on this? If you could, please provide the authority for your opinion.

I appreciate any feedback. Thanks.

edit: typo

"Great thoughts reduced to practice become great acts." William Hazlitt

CPC, QPA, QKA, ERPA, APA

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Circular 230 is the name of a publication that reprints the Treasury department’s rules governing practice before the Internal Revenue Service [31 C.F.R. Part 10]. Since 1884, a Federal statute grants the Secretary of the Treasury power to regulate practice before the Internal Revenue Service. See 31 U.S.C. § 330. In late 2004, Congress amended the statute so that the Treasury department may impose standards for written advice, and may censure or fine a practitioner and his or her employer. See 31 U.S.C. § 330(d).

To make it hard for a taxpayer to assert that he, she, or it reasonably relied on tax advice, the rules impose professional standards. For a writing that’s a covered opinion, a practitioner must meet these IRS standards – even if a practitioner and her client otherwise would agree to a different scope or standard of care. Those IRS standards call for much more care than a client ordinarily is willing to pay for. Instead, many practitioners use warnings that explain how a writing can’t be used.

If a retirement-plans business truly doesn’t provide tax advice, there might be no advice that needs to be excused from whatever IRS standard would apply to the advice that isn’t rendered. But how confident are you that everything in all of your writings would be understandable to whoever reads it as NOT tax advice?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Circular 230 is the name of a publication that reprints the Treasury department’s rules governing practice before the Internal Revenue Service [31 C.F.R. Part 10]. Since 1884, a Federal statute grants the Secretary of the Treasury power to regulate practice before the Internal Revenue Service. See 31 U.S.C. § 330. In late 2004, Congress amended the statute so that the Treasury department may impose standards for written advice, and may censure or fine a practitioner and his or her employer. See 31 U.S.C. § 330(d).

To make it hard for a taxpayer to assert that he, she, or it reasonably relied on tax advice, the rules impose professional standards. For a writing that’s a covered opinion, a practitioner must meet these IRS standards – even if a practitioner and her client otherwise would agree to a different scope or standard of care. Those IRS standards call for much more care than a client ordinarily is willing to pay for. Instead, many practitioners use warnings that explain how a writing can’t be used.

If a retirement-plans business truly doesn’t provide tax advice, there might be no advice that needs to be excused from whatever IRS standard would apply to the advice that isn’t rendered. But how confident are you that everything in all of your writings would be understandable to whoever reads it as NOT tax advice?

This is exactly the type of feedback that I needed to make my decision. Thank you for taking the time to respond. I am going to be safe rather than sorry and include the disclaimer on my emails and correspondence. Thanks again.

"Great thoughts reduced to practice become great acts." William Hazlitt

CPC, QPA, QKA, ERPA, APA

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  • 2 months later...
Do you have sample disclaimer language you are using as an ERPA? Do you think it only applies to the actual ERPA or any employees within the ERPA's firm (if the ERPA is the owner of said firm)?

U.S. TREASURY DEPARTMENT NOTICE/CIRCULAR 230 DISCLAIMER: Pursuant to regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents and appraisers before the Internal Revenue Service, unless otherwise expressly stated, any U.S. federal or state tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of (i) avoiding penalties that may be imposed under federal or state tax law or (ii) promoting, marketing or recommending to another party any transaction or tax-related matter(s) addressed herein.

"Great thoughts reduced to practice become great acts." William Hazlitt

CPC, QPA, QKA, ERPA, APA

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Thanks. That is the same language many of the CPAs we work with use. But do you think everyone in the TPA Firm should be using it, or just the ERPAs?

I would imagine only those that are subject to the rules of Circular 230 which are listed in the blurp. The attorney's and actuaries here at our firm use that language as well.

"Great thoughts reduced to practice become great acts." William Hazlitt

CPC, QPA, QKA, ERPA, APA

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Ours is very similar too. We are all either ERPAs (there are 4 of us here) and we also have en enrolled actuary, so it pretty much covers everyone in the office anyway....

It is at the bottom of 99% of our letters (I think some old templates don't have it, we use ACT) and each of us has it in our signature for emails.

QKA, QPA, ERPA

 

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  • 2 weeks later...
Guest Spock

Does anyone value the ERPA designation? I have my CPC, QPA, QKA and CEBS, but what good is the ERPA? I also saw something that the ERPA might be done away with. Has anybody heard anything about the ERPA being discontinued?

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Does anyone value the ERPA designation? I have my CPC, QPA, QKA and CEBS, but what good is the ERPA? I also saw something that the ERPA might be done away with. Has anybody heard anything about the ERPA being discontinued?

I haven't heard anything about a discontinuance of the ERPA designation. I'd be very interested to know if there is something in the works, though.

"Great thoughts reduced to practice become great acts." William Hazlitt

CPC, QPA, QKA, ERPA, APA

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Does anyone value the ERPA designation? I have my CPC, QPA, QKA and CEBS, but what good is the ERPA? I also saw something that the ERPA might be done away with. Has anybody heard anything about the ERPA being discontinued?

Like all those credentials, I find that the biggest benefit to me of the ERPA designation is marketing. As a CPC, I've long ignored other credentials that have come along because I didn't feel like they gave me any improvement over "CPC" from a marketing standpoint. I wasn't very excited about taking exams after all these years, but I ultimately decided to do the ERPA thing because I felt like being "licensed to practice before the IRS" was a worthy characteristic of the credential. I've had the credential (ERPA) for about a year, and I do feel like it is worthwhile in that regard.

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The CPC, QPA, QKA, etc are ASPPA credentials which are not well known to sponsors outside our industry. The ERPA is an IRS credential and therefore, in my opinion, even more valuable to outsider (though the ASPPA credentials mean more to those in our industry and offer better education).

ERPA, QPA, QKA

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