#Irc 6662 professional

A brief introduction to вЂњsubstantial authorityвЂќ tax opinions.ДЄ substantial authority opinion is one that concludes there is вЂњsubstantial authorityвЂќ as defined in IRC В§ 6662 supporting a taxpayerвЂ™s position on a federal tax return. There is no guaranty that the IRS or the courts will waive penalties because a taxpayer obtained a tax opinion, but it can be a mitigating factor in a facts and circumstances analysis. While a вЂњsubstantial authorityвЂќ opinion doesnвЂ™t entirely satisfy each of the items on this bucket list, it comes closer that a mere вЂњcomfortвЂќ opinion. The taxpayer wants an opinion that (i) reassures both the taxpayer and his return preparer that the position at issue is reasonable based on the available authority, (ii) substitutes for the need to disclose the position on Schedule 8275, and (iii) can help avoid the imposition of various penalties. In many cases, however, a taxpayerвЂ™s goals in considering obtaining a tax opinion go beyond merely being comforted that the position isnвЂ™t unreasonable.

This article is an introduction and вЂњconsumer guideвЂќ for business owners, investors and return preparers who are considering obtaining a tax opinion What kind of opinion should a taxpayer want?Дepending on the purpose for issuing a tax opinion, they come in different formats, each with different standards regarding the level of confidence the writer has with respect to the outcome under consideration.ДЄn opinion issued for tax planning purposes is sometimes called a вЂњcomfortвЂќ opinion because its role is to provide a level of assurance that a respected tax practitioner has thoughtfully addressed an issue and concluded with a reasonably high (at least 40% and often more than 50%) level of confidence that the taxpayerвЂ™s position has support in the tax authorities. In some cases, the most useful form for receiving this advice is a written вЂњsubstantial authorityвЂќ tax opinion.

#Irc 6662 professional

In particular, we are seeing business owners and investors struggling with the intricacies of IRC В§ 199AвЂ™s 20% deduction for qualified business income, the functioning of IRC В§ 1202вЂ™s exclusion of income from the sale of qualified small business stock (QSBS), and IRC В§ 1061вЂ™s new three year holding period requirement for carried interests.Д«usiness owners, investors and return preparers are looking to their professional tax advisors for help in navigating their way through these and other complicated tax law changes. Why are tax opinions especially relevant today? Recent changes in the tax laws have left taxpayers and return preparers grappling with challenging tax planning and return position issues.