Attorney-at-Law

THE RULE OF REASON – CIRCULAR 230 REVISITED

In Uncategorized on 09/15/2012 at 13:14

 IRS Drops the §10.35 Cigarette Pack Warning

In a burst of realistic thinking, the IRS has finally decided to get rid of the §10.35 “don’t rely on this to avoid penalties” boilerplate warning in Circular 230. The good news is to be found in REG-138367-06, notice of proposed rulemaking and public hearing.

You can read all about it here.

Finally realizing that the “cigarette pack” warning was being pasted on every e-mail every practitioner sent, whether it had anything to do with taxes or not, IRS decided to dump the whole thing. Nobody understood what it meant outside the tax profession, anyway. And if I sent a non-professional friend an e-mail on my office stationery saying “let’s meet for drinks tomorrow”, he or she would ask me “what do you mean I can’t use this to avoid penalties on my taxes?”

IRS also wants to get rid of the reliance-marketed tax opinion conundrum, which made us try to figure out exactly into what pigeonhole our opinions fitted, wasting time and energy.

Best of all, the proposed regulations establish a reasonable standard of competency, taking all facts and circumstances into account before hanging us out to dry; but with a heightened standard in abusive situations.

I’ve written a bunch of marketed opinions under the present §10.35, with no ill effects to person or property. I’ve got the boilerplate in my word processing software. But I can’t say I’ll be sorry to get rid of the rigamarole. I’ll have to put in a simpler statement when the new regulation comes into effect, and, as always, concentrate on the facts and the law.

Oh, and a word of warning. If a practitioner fails to file four out of five annual returns the practitioner needs to file for self, or misses filing in five out of seven periods where returns are required more times than once annually (like 941s, 1040-ES) for self, then IRS can invoke expedited suspension. And reapplication for reinstatement, if you don’t win administratively or before an ALJ, can’t be made sooner than five years.

But read, heed and file your comments with Treasury electronically via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG-138367-06) by November 16, 2012. And if you want to attend the December 7, 2012 public hearing in the auditorium at 1111 Constitution in Our Nation’s Capital, get a hold of Oluwafunmilayo Taylor at (202) 622-7180, and give him (or her) your vital statistics.

It may not be as much fun as Laura Nyro’s 1968 hit “Stoned Soul Picnic”, but surry down anyway.

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