Question

Do you think Firms and other entities such as investment and retirement should be included in Circular 230 outlines ? Why?

Firms and other entities such as investment and retirement should be included in Circular 230 outlines. These firms also have an obligation to their clients that the information that they are providing them is free of events that could lead to misrepresentation of tax paperwork. For example, with the new secure act for a qualified individual retirement accounts of a non-spouse beneficiary, it is the obligation of the receiving company for the incoming funds and the individual’s agent to inform them that funds will need to be liquidated within ten years to avoid tax implications. Providing necessary information to clients is essential to help them avoid unnecessary audits from the IRS.

Answer 1

Answer :-

· Circular 230 outlines the duties and restrictions relating to practice before the IRS and the rules regarding disciplinary proceedings for violations.

· A practitioner charged by the Office of Professional Responsibility with a violation of Circular 230 is entitled to a hearing before an administrative law judge; if the practitioner or the OPR is not satisfied with the decision, it can be appealed to the Secretary of the Treasury and subsequently to the federal courts.

· A practitioner who has been found guilty of violating Circular 230 may be censured, suspended, or disbarred from practice before the IRS. Monetary penalties can be assessed in addition to or instead of these sanctions.

· A disbarred practitioner may petition for reinstatement to practice before the IRS five years after the date of his or her disbarment.

Firms and other entities such as investment and retirement should be included in Circular 230 outlines because of the following reason :-

It contains rules governing the recognition of attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, registered tax return preparers, and other persons representing taxpayers before the Internal Revenue Service.

An individual who practices before the Internal Revenue Service pursuant to paragraph (d) (1) of this section is subject to the provisions of this part in the same manner as attorneys, certified public accountants, enrolled agents, enrolled retirement plan agents, and registered tax return preparers

Any individual enrolled as a retirement plan agent pursuant to this part who is not currently under suspension or disbarment from practice before the Internal Revenue Service may practice before the Internal Revenue Service

Practice as an enrolled retirement plan agent is limited to representation with respect to issues involving the following programs: Employee Plans Determination Letter program

Any partnership or other entity, any investment plan or arrangement, or any other plan or arrangement, a significant purpose of which is the avoidance or evasion of any tax imposed by the Internal Revenue Code if the written advice (1) Is a reliance opinion;

(2) Is a marketed opinion;

(3) Is subject to conditions of confidentiality; or

(4) Is subject to contractual protection

These firms also have an obligation to their clients that the information that they are providing them is free of events that could lead to misrepresentation of tax paperwork

A Federal tax issue is a question concerning the Federal tax treatment of an item of income, gain, loss, deduction, or credit, the existence or absence of a taxable transfer of property, or the value of property for Federal tax purposes. For purposes of this subpart, a Federal tax issue is significant if the Internal Revenue Service has a reasonable basis for a successful challenge and its resolution could have a significant impact, whether beneficial or adverse and under any reasonably foreseeable circumstance, on the overall Federal tax treatment of the transaction(s) or matter(s) addressed in the opinion.

Written advice is subject to conditions of confidentiality if the practitioner imposes on one or more recipients of the written advice a limitation on disclosure of the tax treatment or tax structure of the transaction and the limitation on disclosure protects the confidentiality of that practitioner’s tax strategies, regardless of whether the limitation on disclosure is legally binding. A claim that a transaction is proprietary or exclusive is not a limitation on disclosure if the practitioner confirms to all recipients of the written advice that there is no limitation on disclosure of the tax treatment or tax structure of the transaction that is the subject of the written advice.

In evaluating the significant Federal tax issues addressed in the opinion, the practitioner must not take into account the possibility that a tax return will not be audited, that an issue will not be raised on audit, or that an issue will be resolved through settlement if raised.