Key Takeaways
- Communications must not be false, fraudulent, misleading, or deceptive.
- Uninvited solicitations must identify themselves as such.
- Must disclose source of information used to select recipient.
- May advertise professional credentials, services, and fees.
- Cannot use coercive tactics.
- Cannot assist those who violate solicitation rules.
Advertising & Solicitation (Section 10.30)
Why This Matters for the Exam
Advertising rules protect the public from false and misleading claims. The exam tests whether you know what's prohibited, what's permitted, and the specific disclosure requirements for solicitations.
Expect at least 2-3 questions on advertising and solicitation.
The General Standard
All advertising and solicitation must be truthful and not misleading.
| Prohibited | Description |
|---|---|
| False statements | Claims that are untrue |
| Fraudulent claims | Intentionally deceptive statements |
| Misleading statements | True but deceptive in context |
| Coercive tactics | Pressuring potential clients |
| Deceptive practices | Creating false impressions |
Uninvited Solicitations: Disclosure Requirements
When sending uninvited written or electronic solicitations, you must:
| Requirement | Description |
|---|---|
| Identify as solicitation | Clearly state it's an advertisement/solicitation |
| Disclose source | Explain how you obtained the recipient's information |
| Comply with laws | Follow all federal and state advertising laws |
"Uninvited" Means: The recipient did not request the communication and is not an existing client.
Permitted Advertising Content
| Permitted | Examples |
|---|---|
| Professional credentials | EA, CPA, Attorney, designations |
| Employment history | Prior employers, experience |
| Services offered | Tax preparation, audit representation, etc. |
| Fee information | Hourly rates, flat fees, payment terms |
| Years in practice | "20 years of experience" |
| Jurisdictions licensed | "Licensed in California and Nevada" |
Prohibited Content and Practices
| Prohibited | Examples |
|---|---|
| Guaranteed outcomes | "We guarantee a refund" |
| False success rates | "We win 100% of audits" |
| Misleading comparisons | "Better than the IRS's own auditors" |
| Unverified testimonials | Claims that can't be substantiated |
| Coercive language | "Act now or lose your rights" |
Obtaining Clients Through Others
You cannot:
- Assist anyone who obtains clients through prohibited methods.
- Accept clients obtained through prohibited solicitation.
- Pay for referrals obtained through improper means.
Real-World Scenario
Scenario: You purchase a mailing list of people who filed for bankruptcy and send them letters offering tax help.
- Required: The letter must clearly identify itself as a solicitation and disclose that you obtained their names from public bankruptcy records.
- Prohibited: Cannot claim "guaranteed tax relief" or use threatening language.
On the Exam
Expect 2-3 questions on advertising, typically:
- Disclosure Questions: "What must uninvited solicitations clearly disclose?"
- Permitted Content Questions: "Which advertising content is permitted?"
- Prohibited Content Questions: "Which advertising claim is prohibited?"
The key is to remember: Truthful, not misleading. Uninvited solicitations must identify as such and disclose source. No guarantees or coercion.
What must uninvited solicitations clearly disclose?
Which advertising content is permitted under Circular 230?
Which advertising claim is prohibited?