IRS Circular 230 – Limited Scope Opinions

Sec. 10.35 Covered Opinions – “Limited Scope Opinions”

Sec. 10.35(c)(3)(v). The practitioner may provide an opinion that considers less than all of the significant federal tax issues if:

1. The tax practitioner and the taxpayer agree that the scope of the opinion and the taxpayer’s potential reliance on the opinion for purposes of avoiding penalties that may be imposed on the taxpayer are limited to the federal tax issues addressed in the opinion:

(i) The opinion is not advice concerning: listed transactions, principal purpose of avoidance or evasion, a marketed opinion.

Sec. 10.35(c)(4). Overall Conclusion:

(i) The opinion must provide the practitioner’s overall conclusion as to the likelihood that the federal tax treatment of the transaction or matter that is subject of the opinion is the proper treatment and the reasons for that conclusion. If the practitioner is unable to reach an overall conclusion, the opinion must state that the practitioner is unable to reach an overall conclusion and describe the reasons for the practitioner’s inability to reach a conclusion.

Sec. 10.35(c)(4). Overall Conclusion:

(ii) In the case of a marketed opinion, the opinion must provide the practitioner’s overall conclusion that the federal tax treatment of the transaction or

matter that is the subject of the opinion is the proper treatment at a confidence level of at least more likely than not.

Sec. 10.35(d)(1). Competence to Provide Opinion:

The practitioner must be knowledgeable in all of the aspects of federal tax law relevant to the opinion being rendered, except that the practitioner may rely on the opinion of another practitioner with respect to one or more significant federal tax issues, unless the practitioner knows or should know that the opinion of the other practitioner should not be relied on.

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