Circular 230

[Linda]

What are your thoughts on the impact of Circular 230 on the types of materials often prepared in connection with cafeteria plans? For example, do you think we might need a disclaimer on an SDP for a medical FSA?

[Ron Snyder]

My opinion is "no", with the caveat that you should review the SPD and make sure that you don't go anywhere near to offering anything that could be construed as an opinion. Also review all other materials and communications with respect to the plan.

[Linda]

My concern is that, in describing FSAs, you have to describe the tax advantages. The tax advantages are after all the point of FSAs. So, what if the SPD says something like “your contributions will be made on a pre-tax basis” or “you can be reimbursed for anything classified as a medical expense by the IRS”? Or how about a table demonstrating the tax savings from participating in an FSA? Of course, these points are not controversial but still could these be seen as covered opinions?

[Kirk Maldonado]

Linda:

What about putting the Circular 230 disclaimer in the transmittal letter that you use to send the SPD to the client?

I've not researched this point, so I could be waaay off base here. I'd appreciate anybody who has some familiarity with Circular 230 commenting on whether or not this approach is viable.

[mbozek]

230 does not apply to materials that state tax benefits permitted under the tax law, e.g., max deferral under 401k is $14,000. Second 230 only applies to opinions by persons authorized to practice before the IRS, e.g., attorneys, CPAs, actuaries and enrolled agents.