"In accordance with IRS rules, we hereby advise you that any tax advice contained in this correspondence or attachments is not intended or written to be used, and it cannot be used, by any taxpayer, for the purpose of avoiding penalties that may be imposed upon the taxpayer by the Internal Revenue Service."
Here's Why:
The IRS has issued new documentation rules that require tax professionals to include detailed background and legal analysis in certain written correspondence. Compliance with these new rules by a tax professional may allow a taxpayer to rely on the written advice for purposes of avoiding certain IRS penalties. In our practice, we often communicate tax planning ideas to our clients in a manner less formal and certainly less detailed than required by the new rules.
In recognition of the common practice of providing informal advice, the IRS allows an exception to the significant documentation requirements as long as it is clear that the advice is not intended to be relied upon for the purposes of avoiding penalties. To give our clients options regarding the degree of reliance they wish to place on our written advice, we will use the above IRS-prescribed language in our informal tax advice.
If you wish to rely on our advice to avoid the imposition of IRS penalties, we would be pleased to discuss expanding the scope of our correspondence. Please contact your Berry Dunn tax advisor for more information or send us an e-mail at info@bdmp.com and will get in touch with you.