Question About a Site For Tax Services

ok guys i need your help/input.

i'm trying to create a site, actually just a sales page for a service that my friend offers.
he does taxes, he use to only offer his services to the rich, but now he's extended his services to everyone.

basically he knows the irs tax code inside and out (like literally every page) and re-asses your taxes for the past 3 years. like expenses that people do not write off, that is totally legal to. he's a "white hat" kind of person. does all his business through referrals from church etc. straight and narrow guy, all legal. he actually got my friend's wife 17K back from the IRS for the past 3 years. all legit stuff.
he gets paid from a percentage of what you get back from taxes. and he pays me a finders fee for any referrals i send him.

so i'm setting up a sales page/site for this service.
my question is, do i have to have any kind of legal disclaimers i should use on my site? or ANY kind of legal things i need to take care of? and also what are some things i can do to be more legit official looking?
i've never done anything like this before.

I can't really help you but I'm gonna say what you probably don't want to hear: hire a lawyer. It's really the only safe way to go. Trust me, it will be probably one of the best $200 investments you have ever made.

I would say if your friend is offering a service people pay for he should have a privacy policy & legal disclaimers on there like any other legit business. Look a other independent tax advisors websites and see what they do.

Yea, this is just a small business anyway so no need to hire a lawyer. Just copy what his potential competitors have. Be sure to add copyright marks and what Tony said above. It helps to have a business email/phone/address too.

thanks guys. yes, it is a small little venture. maybe it will pick up steam with word of mouth, better selection of keywords etc...
keeps the thoughts coming. appreciated it.

Here's some advice from a tax professional currently working in the business.

First of all ... you mentioned that he is charging a percentage of any refund amount he is able to recover for his clients. This is considered somewhat unethical in the business. The Department of the Treasury publishes a document called Circular 230 which describes the ethical standards of tax professionals.

As amended in 1994, Section 10.28(b) of Circular 230 prohibits a practitioner from preparing an original tax return based on a contingent fee basis, i.e. based on a percentage of the refund or a percentage of the taxes saved or the specific result attained. There is some leeway with regard to contingency fees on amended returns or claims for refund based, but some additional research would be needed, most likely on a case by case basis. You can consult an additional document, RCI 302-1, Contingent Fees in Tax Matters for more information.

In my opinion (and it's only an opinion), I would only charge a flat fee for the amended return. It doesn't seem like a good business model to me anyway, as H&R Block advertises their "Double Check Challenge" which is essentially the same thing. If they find a mistake, they charge $50 or so for the amended return.

I would recommend that both you and your friend read Circular 230 so that you are aware of what ethical standards are imposed on tax practitioners.

Now, on to your role in his business. If you are simply referring people to his business, then you probably don't have too much to worry about. There could be a potential problem with disclosure requirements. The IRS is very picky about how taxpayer information is handled. There are strict guidelines as to how practitioners can present their clients' information to third parties. As long as you weren't handling tax returns or private information such as social security numbers, you probably won't run into any issues.

If all you do is collect a name and an email address of someone who is a potential client, there's no issue. If he shares any of his client information with you - even name, address, or phone number after they have become his client, then you have a problem. So, for reporting purposes, he could only tell you that he worked on 3 clients you referred to him and your referral fee is $x. He can't even tell you which clients he worked on.

This stuff is important. There are CRIMINAL penalties for improper disclosure of client information. Not just a fine - but jail time.

I'd keep the passing of any information as clean and sterile as possible. You send the potential client's information and rely on his high ethics to credit your account properly.

I don't see any problems with accepting a referral fee for sending a potential client. I do see a problem with the fee being a percentage of what the client receives as a refund.

Make sure you have verbiage on your website that indicates that results aren't guaranteed. As with any marketing, make sure you can back up your statements and indicate any results that aren't typical.

Here's the bottom line. There are some potential problems with your business model, but none that can't be overcome with a little research and work. I would advise you to consult with an attorney on getting the proper legal disclaimers. You might even want to consider talking with a tax attorney - one that specializes in taxation and understand the legal and ethical responsibilities of those in the profession.

I know it's probably not what you want to hear, but not only could you face problems with the normal authorities - FTC, attorneys general, etc., but you could have the Criminal Investigation Division of the IRS stopping by for a visit. And those guys don't mess around. Spend the extra money and time to make sure you get it right.

Take care and hope it goes well for you.