IRS Circular 230 governs the practice of attorneys before the Internal Revenue Service. The Treasury Department and Internal Revenue Service have issued final regulations under IRS Circular 230. The purpose of these regulations is "… to restore, promote, and maintain the public's confidence in those individuals and firms …" who act as tax advisors.

The Circular 230 regulations require Larson & Bawden LLP to add certain standard language to many of its letters, e-mails, and other correspondence with clients concerning federal tax matters unless we undertake extensive analysis of the facts underlying a transaction and legal authorities that address the tax treatment of the transaction. This includes written advice concerning planning related to, or the application of, any federal tax to your business and personal tax planning including estate planning and estate tax matters. While the specific wording may vary depending on the circumstances, absent the thorough analysis of the facts, you can expect written advice from Larson & Bawden LLP to contain language similar to the following:

"IRS regulations require us to advise you that, unless otherwise specifically noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties; furthermore, this communication was not intended or written to support the promotion or marketing of any of the transactions or matters it addresses."

The new rules require such notices to be “prominently disclosed,” i.e., “readily apparent” to the reader. The notice must be in a separate section (but not in a footnote or as “fine print”) of the correspondence. The typeface used must be at least the same size as the typeface used in any discussion of facts or law.

Be assured that the Circular 230 disclosure does not reflect any decrease in the quality of our services or the amount of thought we put into our advice or correspondence with you. Larson & Bawden LLP provides this standard language as part of our effort to avoid fee increases; without the disclaimer, additional fees would often be required for us to fully ascertain and analyze factual matters underlying the advice.

In situations where we believe that the circumstances warrant the increased fee attributable to a communication that may provide you protection from the imposition of penalties, we will discuss the matter with you. In the event you desire a written communication on which you may rely for protection from the imposition of penalties, we encourage you to discuss the matter with us.

Please contact Charles A. Larson or Elizabeth A. Bawden if you have any questions or concerns about the new rules and their impact on the manner in which we communicate tax advice to you.

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