Long-awaited final Circular 230 regulations, issued Dec. 17, 2004, govern the latest set of standards on attorneys, accountants and other professionals providing not only tax shelter opinions but also tax advice in general. It is how these standards relate to general tax advice that concerns the vast majority of tax practitioners. These regs are part of a multi-pronged effort on the part of the Internal Revenue Service to deter the involvement of promoters, advisors and investors in abusive transactions.

Key parts of the new rules of practice are more practitioner-friendly than the proposed rules had been. Unfortunately, other parts remain vague, especially in their application to aggressive or "cutting edge" tax planning. Ultimately, their impact will depend upon how the IRS chooses to interpret and enforce them.

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