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Dear Client:
We are required to comply
with Treasury Department rules relating to written tax
advice, which became effective on June 21, 2005. Under these
rules, if we provide you with tax advice on which you can
rely for purposes of avoiding tax penalties, we are required
to prepare a formal opinion that satisfies rigorous factual
and legal diligence standards. Failure to satisfy those
requirements will subject us to potential penalties. Any
advice that fails to comply with the formal opinion
requirements mentioned above must include a disclaimer along
the following lines:
"IRS Circular 230
disclosure: To ensure compliance with requirements imposed
by the IRS, we inform you that any tax advice contained in
this communication (including any attachments) was not
intended or written to be used, and cannot be used, for the
purpose of (i) avoiding tax-related penalties under the
Internal Revenue Code or (ii) promoting, marketing or
recommending to another party any matters addressed herein."
Effective June 21, 2005, unless you specifically request an
opinion that satisfies the requirements of Circular 230, you
will see the above disclaimer in most of our communications
to you.
In the
past, we have provided you with tax advice in a format that
was most appropriate for your inquiry and your needs.
Through our course of dealings with you, we have earned your
trust and you have been able to rely on our advice in
whatever form delivered. We will continue to serve you to the
best of our ability and provide advice that is cost-effective
and consistent with your needs. The required disclaimer does
not reduce the logic of our tax analysis or the force of the
relevant tax authorities. The IRS now holds us to a higher
set of standards and will not permit you to rely on that
less formal advice for purposes of avoiding tax penalties.
We
encourage you to discuss with us the situations where you
may need formal opinions and analyses for purposes of
avoiding penalties. However, we believe that in most
transactions and day-to-day advice you will not need such
formal opinions. Therefore, you can expect to see the above
disclaimer in our written communications, unless you
specifically ask us for a formal opinion that satisfies the
requirements of Circular 230.
Do not hesitate to call us if you have questions about this
matter.
Sincerely,
Baker & Company, PC
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