Mark Loyd offers insight on Writing Opinion Letters for Uncertain Tax Issues
BGD partner Mark A. Loyd discussed uncertain tax positions and opinion letters in a recent interview with Law360. For those unaware of the procedures for tax positions, the IRS requires corporations to identify their uncertain tax positions, but those disclosures are putting companies at risk of being audited and are driving them to seek opinion letters supporting their positions.
Four basic tips about opinion letters were given for corporations: determine the scope, think about length, discuss economic substance and don’t forget the rules.
Loyd offered help with determining the scope of an opinion letter. He explained that if a corporation has multiple issues that could benefit from an opinion letter, then the corporation should split the issues into separate letters.
“That way if you need to disclose the letter, you’re only doing so for one issue, “said Loyd. “Otherwise, you could provide a neon sign for a nonissue.” He also explained that lawyers should only include issue determinative facts, as excess background often detracts from the letter.
To read the full article, please go to the Law360 website.