Tax opinion letters
When a position is large, unusual, or likely to be questioned, a written opinion documents the analysis before you file, not after the IRS asks.
What a tax opinion letter is
A tax opinion letter is a signed legal analysis of how the tax law applies to a specific transaction or position, stated at a defined level of confidence. Preparers rely on it to sign a return. Taxpayers rely on it to show reasonable cause and good faith if a penalty is proposed. Buyers, lenders, and investors rely on it in transactions.
When you need one
- A crypto cost basis or accounting method question with a large dollar difference between treatments
- Timing of income from staking, airdrops, or forks
- Entity structure or a restructuring with tax consequences
- A large sale, exchange, or exclusion, such as qualified small business stock under Section 1202
- Any position your preparer will not sign without written support
Levels of opinion, in plain English
Opinions come in recognized confidence levels: “will” (near certainty), “should” (high confidence), “more likely than not” (above 50 percent), and “substantial authority” (a meaningful basis in the law even if not the majority view). The level matters because penalty protection and disclosure requirements attach to it. We tell you at scoping which level your facts support.
Penalty protection
Accuracy-related penalties under Section 6662 can be avoided where the taxpayer had reasonable cause and acted in good faith, and reliance on the written advice of a qualified tax professional is one of the recognized ways to show that. The opinion letter is the evidence.
Questions we hear most
No. It means the position was analyzed by a qualified professional before you filed, which supports the position itself and your defense against penalties if the IRS disagrees.
Yes. Preparers may rely on advice from a tax attorney when signing a return, and many ask for it on unusual positions. We write the letter with the preparer as a named recipient when that is the purpose.
A consultation is a conversation. An opinion letter is a researched, signed document with a stated confidence level that you can hand to a third party. If your question only needs an answer, we will tell you that at scoping.
Results depend on the facts of each matter and are not a prediction of the outcome in your case.
Schedule a confidential consultation
Tell us what is going on. A member of our client success team will follow up, explain how we work, and match you with the right attorney.
