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Written advice and tax return positions

SEE 3 Chapter 6 · IRS outline 1B9

Walt Brandt wants to deduct a $90,000 payment to his brother's company as consulting fees, and he wants Nadia's opinion in writing. Two questions follow every client like Walt: how sure must Nadia be before she advises a position or signs a return that takes it, and what must she tell him about penalties? Circular 230 §§10.34 and 10.37 and the penalty rules give the answers.

In this chapter

1. Written advice under §10.37
2. Reliance, marketed advice and the end of covered opinions
3. The ladder of return positions
4. What a practitioner may not sign or advise
5. Advising the client on penalties and disclosure
6. Putting it together: preparing returns with confidence

This chapter has 6 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Section 10.37 written advice
• standards for return positions
• reasonable basis, substantial authority and more likely than not
• disclosure on Form 8275
• advising on penalties

Chapter 5: Due diligence, competence and conflicts of interest · Chapter 7: Sanctionable conduct and the Office of Professional Responsibility