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The Reaction to the 1980 Proposed Amendments to Circular 230

9 Pages Posted: 1 Mar 2007  

Dennis J. Ventry Jr.

University of California, Davis - School of Law


The Treasury Department dropped a bombshell on the tax practitioner world in September 1980. Only eight months after indicating that it was willing to wait a reasonable period for the organized bar to offer guidance regulating the issuance of tax shelter opinions and the participation of tax lawyers in the thriving tax shelter market, Treasury released its own guidelines. Proposed amendments to Circular 230 set new standards for legal opinions used in the promotion of tax shelters and outlined punitive disciplinary criteria for practitioners failing to meet the new rules. Treasury's actions incensed the tax bar, which had responded to Treasury's solicitation by beginning to formulate new ethical guidelines for tax lawyers. The American Bar Association Section of Taxation had set about drafting a suggested ethics opinion for the ABA's Standing Committee on Ethics and Professional Responsibility, while the New York State Bar Association Tax Section established a committee to recommend standards for the issuance of tax shelter opinions. However, the organized bar's longstanding reluctance to regulate--and punish--the misconduct of members providing legal opinions enabling and fueling the tax shelter industry suggested that Treasury's preemptive move was more than justified.

Suggested Citation

Ventry, Dennis J., The Reaction to the 1980 Proposed Amendments to Circular 230. Tax Notes, Vol. 111, p. 1141, June 5, 2006 . Available at SSRN:

Dennis Ventry (Contact Author)

University of California, Davis - School of Law ( email )

UC Davis School of Law
400 Mrak Hall Drive
Davis, CA 95616-5201
United States
530-752-4566 (Phone)

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