Document Type

Article

Publication Title

Tax Notes (a publicaion of Tax Analysts)

Publication Date

4-28-2008

Abstract

Circular 230 sets forth ethical rules that lawyers and CPAs who practice before the IRS must follow. Violations of Circular 230 may result in severe disciplinary action, including disbarment from practice before the IRS and monetary penalties. Although the section of Circular 230 regarding written advice that constitutes a so-called covered opinion (section 10.35) has received much publicity, section 10.34 has received little publicity, even though it has much wider application and therefore poses a greater concern to practitioners. Unlike section 10.35, which applies only to a limited category of written advice, section 10.34 applies whenever advice (whether written or oral) is given on a position to be taken on a tax return or claim for refund. It also applies to any affidavit or other document that is submitted to the IRS. Historically, section 10.34 has closely mirrored section 6694 of the Internal Revenue Code. Section 6694 imposes penalties on those who for compensation prepare a return or claim for refund or give advice about a position to be taken on the return or claim. Until recently, section 6694, like section 10.34, had received little attention.

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