Circ 230 proposed changes and this newsgroup MTM

The mutual intent to create a relationship is both necessary and sufficient. The exchange of cash is neither necessary nor sufficient.

Absolutely.

Yep.

Reply to
Bill Brown
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Not in and of itself. All it's saying is that authorization to practice under this part doesn't constitute a license to do anything other than what's necessary to file stuff with the IRS. If no other regulation limits your ability to do tax planning, you can still can do tax planning. If some other regulation restricts your abilty to do tax planning, then nothing in this part modifies that restriction.

Reply to
bill-deja

I could not find this in the new Circ 230. Where the hell is it from?

I read it as "does not include the authority to provide tax advice to a client or another person except as necessary to prepare a tax return, claim for refund, or other document intended to be submitted to the Internal Revenue Service."

Tax planning is tax advice.

Reply to
Dick Adams

I believe this restriction applies only to those that the Service now designates as Registered Tax Return Preparers, and not to credentialed tax advisors such as attorneys, CPAs, and EAs.

Reply to
paultry

T.D. 9527

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Reply to
Mark Bole

It makes sense to me. Saying "does not include the authority," doesn't say that the person may not have authority under other qualifications or for some other reason.

___ Stu

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Reply to
Stuart A. Bronstein

[...]

My main point (immediately preceding two sentences) has kind of gotten lost in the subsequent discussion.

If someone claims they are my client (or potential client) for purposes of IRS regulations, and I claim they are not, what happens? Does the IRS turn to the courts of the state where the dispute occurs for an answer? (I doubt it).

One faintly positive sign is that Form 14157 refers specifically to "PAID preparer" as the target for some of its complaints.

There is one philosophy that holds this: as long as I mean well and make a sincere effort to do the right thing, and most importantly, that I confess my errors, I probably won't get dinged (at least not the first time) by the IRS under return preparer regulations -- essentially the "go forth and sin no more" approach.

Then, there are all the other things in heaven and earth not dreamt of in that philosophy.... those are the ones I'm fretting about.

Reply to
Mark Bole

Thank you. That clarifies it.

I looked up Registered Tax Return Preparer on IRS.gov and now I see the light. If you want to prepare a tax return and you are not a CPA, an EA, an attorney or supervised by one of them, you must pass the RTRP exam.

Looks like the AICPA. the SEA, and the ABA got their way.

I've been behind on my reading since I returned from Australia five years ago.

Dick

Reply to
Dick Adams

As always, it depends of facts and circumstances. I suspect the IRS would require the person making such an assertion to prove it by preponderance of evidence at which time you could introduce State as well as professional association rules and regs.

Dick

Reply to
Dick Adams

For compenation. There are thousands of volunteer tax preparers in the VITA, AARP TaxAide and similar programs who must pass tests in order to prepare tax returns pro bono but they do not have to take the RTRP exam.

That's NAEA --

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Reply to
Arthur Kamlet

As long as they signed your engagement letter for this year, though they ought to but might not end up paying you, then they are your client. If you want to be safe, have a policy that they must pay you upfront before you even begin calculating their return; alternatively do their return and give them N days to pay.

The public newsgroups are just informational. Many people giving advice here are not professionals, or they are thinking out aloud and discussing issues, and presenting mistakes. MTM can have a disclaimer to make this clear, but it should be understood that this is the case. The unmoderated tax newsgroup probably has no disclaimer footnote.

Yes, this is a problem. Tax avoidance is legal and tex evasion is not. The expatriation tax seems like a penalty for tax avoidance, and is a consequence of big government.

Reply to
removeps-groups

The type of tax avoidance that the regs are addressing can be found at the bottom of the following page:

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They are not concerned with proposals such as how you may recommend a business be organized to reduce taxes or how switching from a SEP-IRA to a defined benefit plan can shelter a lot more income from taxes, etc., etc.

Reply to
Alan

Simply signing my engagement letter, by itself, without any follow through on the terms and conditions of same (such as providing me with all information I consider necessary to complete the return) does not make one forever my "client". At least, I'd fight it in court, with help from a lawyer.

Have you looked up the meaning of the word "retained"?

The real problem is that the IRS depends on the undefined term "client" in Circ 230, at best the meaning of this term is going to vary from state to state.

I will pass along some advice I received from a lawyer via a seminar I arranged for my local EA chapter: we should always send a DIS-engagement letter to the client at the appropriate time. I suppose that is what we'll all have to migrate toward, although it seems rather burdensome and unfriendly.

Doesn't matter whether non-professionals contribute here, or whether professionals try to remain anonymous, as you do. The IRS rules don't apply to non-professionals. As for disclaimers, that is what the IRS thinks everyone is going to stop using due to their new rules. I already mentioned that in my original post. I don't see any reason for eliminating disclaimers, especially since a disclaimer may serve legal purposes other than just dealing with IRS rules.

Incidentally, the rules aren't effective yet, so use of Circ 230 disclaimers at the present is still appropriate.

Reply to
Mark Bole

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why does the IRS refer to these as "tax avoidance" schemes, rather than "tax evasion" schemes?

Reply to
Pico Rico

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Tax evasion (statutory crime) is the willful attempt to avoid paying a lawful tax using an act or acts that go beyond what the law allows.

Tax avoidance is the lawful conduct designed to avoid the creation of a tax liability.

The regulations are designed to dissuade tax practitioners from promoting tax avoidance schemes that have no or very little economic substance. This may or may not lead to a criminal act by the taxpayer.

26 USC Chapter 75, Subchapter A - Crimes is where you will find the definitions and penalties of the tax crimes.
Reply to
Alan

More like a penalty for skipping town with investment assets. The expatration tax applies only those who are filing a "Renunciation of Nationality". Think of it as an estate tax on the wealthy who departed by a means other than death.

Dick

Reply to
Dick Adams

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Let me be clearer: why are "tax avoidance schemes that have no or very little economic substance. This may or may not lead to a criminal act by the taxpayer" called tax avoidance rather than tax evasion? And if it can possibly NOT lead to a criminal act by the taxpayer, then why should they NOT get advice?

Reply to
Pico Rico

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