Taxpayers can hire tax professionals (tax attorneys and tax accountants) to provide an opinion on the validity of a tax-advantaged program. The tax professional will follow the protocol provided by the IRS in Circular 230 and write what is known as a “Circular 230 Covered Opinion.” The tax professional will take into consideration the specific facts of each taxpayer as well as the applicable tax law.
The tax law recognizes the following five levels of opinion confidence, in descending order:
- More Likely than Not
- Substantial Authority
- Reasonable Basis
- Not Frivolous
To qualify as a Circular 230 Covered Opinion, the opinion must have a confidence of “More Likely than Not” or “Should.” A taxpayer who receives such an opinion is protected from underpayment penalties, even in the event of an adverse audit.
Optcapital’s Deferral Program (The CaR Trust Plan) carries a Should level tax opinion from multiple law firms, including K&L Gates. K&L Gates is the one of the largest law firms in the US with annual revenue in excess of $1 billion.
Optcapital’s Loan Program also carries Should level tax opinions from multiple law firms, including K&L Gates.
To the best of our knowledge, Optcapital is the only firm that offers a Should level tax opinion on both law firm deferral and loans to law firms.