Is the IRS Circular 230 Email Disclosure Still Required?

The Circular 230 email disclosure is no longer required. The Treasury Department eliminated the rule behind it in June 2014, and the then-director of the IRS Office of Professional Responsibility has said that practitioners who keep pasting the old paragraph at the bottom of their emails are making a misstatement, because it implies an IRS mandate that no longer exists.¹

What Changed in June 2014

The disclaimer existed because of former Section 10.35 of Circular 230, added in 2005 to address abusive tax shelters. That section created a category called a “covered opinion” and imposed heavy procedural requirements on any written advice that fell into it. The problem was breadth: even a short email answering a client’s question could theoretically trip the threshold. Practitioners responded by attaching boilerplate to every message stating that the communication was not intended or written to be used to avoid IRS penalties, which kept the message outside the covered opinion definition.²

On June 12, 2014, final regulations (T.D. 9668) removed Section 10.35 entirely and replaced the covered opinion framework with a single principles-based standard for all written tax advice in Section 10.37. In the preamble, Treasury said it expected the change to “eliminate the use of a Circular 230 disclaimer in email and other writings.” Public comments had complained that the former rules drove “overuse, as well as misleading use, of disclaimers on most practitioner communications even when those communications did not constitute tax advice.”³

Why Keeping the Old Boilerplate Is a Problem

Shortly after the rule change, then-OPR director Karen Hawkins told practitioners she did not want to see language claiming “the Internal Revenue Service requires that I tell you” or “under Circular 230 I am obliged to say,” because those statements are no longer true. IRS Chief Counsel William Wilkins put it more bluntly, saying the “Circular 230 legend is not merely dead, it’s really most sincerely dead.”¹

A disclaimer that invokes a regulation which no longer exists tells clients and opposing parties one of two things: that the practitioner has not kept up with the rules, or that the practitioner is being deliberately misleading. Neither is a good look, and the OPR views the practice unfavorably.

The Standard That Replaced It

Written tax advice now sits under Section 10.37, which does not prescribe any disclosure language. It measures the practitioner’s work by its substance. When giving written advice on a federal tax matter, a practitioner must:⁴

Base the advice on reasonable factual and legal assumptions, including assumptions about future events.
Consider all facts and circumstances the practitioner knows or reasonably should know.
Make reasonable efforts to identify and verify the relevant facts.
Avoid unreasonable reliance on a client’s representations, projections, or appraisals.
Relate the applicable legal authorities to those facts.
Ignore the likelihood that a return will be audited or that a particular issue will be raised.

That last point catches people off guard. A practitioner who tells a client “this position is aggressive, but they’ll probably never look at it” has violated Section 10.37. The standard measures the quality of the advice, not the odds of getting caught.

The rule applies to written advice delivered by any means, including email, text messages, and communications through client portals. Two narrow exclusions exist: submissions to the government on matters of general policy, and continuing education presentations given solely for professional development rather than to market transactions.⁴

If You Want to Limit Scope or Reliance

Nothing stops a practitioner from limiting the scope of an engagement or telling a client that a particular email should not be relied on for penalty protection. What has changed is that no specific regulatory language is required to do it. A short, plain statement that the advice is limited in scope and should not be relied upon to avoid accuracy-related penalties does the job. It does not need to cite Circular 230, and it should not claim the IRS requires it.

If you want penalty protection to be available, the reliance defense under the accuracy-related penalty rules has its own requirements: the taxpayer must give the advisor all relevant facts, the advice must rest on reasonable assumptions, and the taxpayer must not know or have reason to know the advice is flawed. Those elements come from the penalty regulations, not from anything a signature block can add or remove.⁵

Enforcement Still Bites

Dropping the disclaimer rule did not soften enforcement generally. The OPR retains authority to discipline practitioners who violate Section 10.37 or any other part of Circular 230. Available sanctions include censure (a public reprimand on the practitioner’s record), suspension for a set period, disbarment, and monetary penalties that cannot exceed the gross income the practitioner earned from the conduct at issue. Monetary penalties can be imposed alongside or instead of the other sanctions.²

Circular 230 itself is Title 31, Part 10 of the Code of Federal Regulations, and it governs attorneys, CPAs, enrolled agents, and other representatives who practice before the IRS.⁶ The rules on competence, diligence, and honesty are still there. What is gone is the covered opinion machinery that made the email disclaimer a practical necessity. If your signature block still cites Circular 230, delete it, and replace it with a plain scope or reliance statement only if the message actually calls for one.