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US Treasury And IRS To Release New Opinion Letter Standards,
by Leroy Baker, Tax-News.com, New York 09 December 2004
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The US Treasury Department and the Internal Revenue Service will shortly issue
new standards for lawyers, accountants and other tax professionals as part of
the government’s campaign to stamp out abusive tax sheltering activities,
the Wall Street Journal has reported.
The new standards, known officially as the Circular 230 revisions, will be
targeted particularly towards the use of ‘opinion letters’, documents which are
penned by lawyers or accountants, and vouch for the legitimacy of a particular
tax-planning scheme or transaction.
However, such opinion letters can be far from watertight when put under the
IRS’s microscope.
"The Treasury has been concerned that some practitioners may be providing
opinions based on unrealistic factual assumptions or without considering important
legal doctrines, and taxpayers might be misled into thinking that such opinions
protect them against the assertion of IRS penalties," observed one expert,
according to the WSJ.
The new standards are expected to include detailed requirements for opinions
issued by tax professionals, and will compel advisers to give overt warnings
to their clients over the level of protection they can expect to receive from
the opinion.
A comprehensive report in our Intelligence Report series
describing tax shelters for investors is available in the Lowtax Library at
http://www.lowtaxlibrary.com/asp/subs_reports.asp
and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report5.asp
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