Treasury & IRS Amend Regulations To Promote Ethical Tax Practices By Professionals
The US government has issued final regulations amending Treasury Department Circular
230 as part of the government’s efforts to curb abusive tax avoidance transactions
and improve ethical standards in the tax profession.
The Circular 230 regulations, which apply to attorneys, accountants and other
tax professionals who practice before the IRS, provide standards of practice
for written advice that reflect current best practices, and are intended to restore
and maintain public confidence in tax professionals. The revisions aim to ensure that tax professionals do not provide inadequate
advice, and to increase transparency by requiring tax professionals to make disclosures
if the advice is incomplete. Welcoming the new measures, IRS Commissioner Mark W. Everson commented: “These
new standards send a strong message to tax professionals considering selling
a questionable product to clients. The new provisions give us more tools to
battle abusive tax avoidance transactions and to rein in practitioners who disregard
their ethical obligations.” Ensuring that attorneys, accountants and other tax practitioners adhere to
professional standards is one of the IRS’s top four enforcement goals,
and the agency considers the Circular 230 revisions a key component of this
strategy. The final regulations provide best practices for all tax advisors, mandatory
requirements for written advice that presents a greater potential for concern,
and minimum standards for other advice. “These revisions to Circular 230 strike an appropriate balance between
tightening practitioner standards and minimizing burden on everyday advice,”
noted Assistant Secretary for Tax Policy Greg Jenner. “These rules target the types of written advice that present a significant
cause for concern and avoid undue interference with the practitioner-client
relationship,” he added. .
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