Stop! Delete Circular 230 Disclaimer from Client Emails

Do you know all that gobbledygook typically included at the end of your emails to clients? The boilerplate language reflects the Circular 230 rules explaining how you're not offering any tax advice in the transmission. Of course, because this message is repeated verbatim and clients are basically ignoring it at this point, it serves very little, if any, purpose.

Now, according to a recent item from Going Concern, our sister site, new IRS regulations say that you no longer have to include the Circular 230 disclaimer in your client communications. What's more, you should "cease and desist" from using it, if you haven't already done so. Karen Hawkins, the director of the Office of Professional Responsibility at the IRS, first delivered this news on a Tax Talk Today webcast on June 17.

The IRS issued a formal announcement on June 18, and also has posted further details on Circular 230.

Formerly, Section 10.35 of the Circular 230 rules regarding "covered opinions" encouraged practitioners to provide a broad disclaimer to clients (see sidebar). But it quickly became a matter of form over substance as the protective phrasing was attached to each and every piece of paper or email that left the office. After revisiting the issue, the IRS determined that this wasn't really benefiting clients, and was simply adding a burden.

IRS Circular 230 Disclosure

Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.

The new regulations spelled out several other requirements to follow when providing tax advice to clients. But they nixed the unfettered use of the Circular 230 disclaimer. The IRS says that this will save practitioners (and their clients) at least $5,333,200. We're not sure where this figure comes from, but it's clear that you can avoid some hassle, and realize at least minimal monetary savings as a result of the changes.

Apparently, most tax practitioners still aren't aware of the new lay of the land. So Hawkins says that the IRS will be sending out notices to those who are still using the disclaimer without any compulsion. "My only concern and my message is, if a disclaimer says 'The Internal Revenue Service says' or 'I am required under Circular 230,' I can promise you that you will get a letter from my office asking you to cease and desist using that kind of language because I don't want taxpayers to be misinformed," said Hawkins. "We do not require that language after last week. "

Related articles:

Circular Logic: Making Sense of Circular 230 Changes
Editor's Picks: Circular 230 Confusion


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