10.37—Requirements for other written advice.
(a) Requirements.
A practitioner
must not give written advice (including electronic
communications) concerning one or more Federal tax
issues if the practitioner bases the written
advice on unreasonable factual or legal
assumptions (including assumptions as to future
events), unreasonably relies upon representations,
statements, findings or agreements of the taxpayer
or any other person, does not consider all
relevant facts that the practitioner knows or
should know, or, in evaluating a Federal tax
issue, takes into account the possibility that a
tax return will not be audited, that an issue will
not be raised on audit, or that an issue will be
resolved through settlement if raised. All facts
and circumstances, including the scope of the
engagement and the type and specificity of the
advice sought by the client will be considered in
determining whether a practitioner has failed to
comply with this section. In the case of an
opinion the practitioner knows or has reason to
know will be used or referred to by a person other
than the practitioner (or a person who is a member
of, associated with, or employed by the
practitioner's firm) in promoting, marketing or
recommending to one or more taxpayers a
partnership or other entity, investment plan or
arrangement a significant purpose of which is the
avoidance or evasion of any tax imposed by the
Internal Revenue Code, the determination of
whether a practitioner has failed to comply with
this section will be made on the basis of a
heightened standard of care because of the greater
risk caused by the practitioner's lack of
knowledge of the taxpayer's particular
circumstances.