If the registrant is organized in a jurisdiction outside the area of expertise of the lead counsel, he or she may engage a local attorney to express an opinion that the registrant validly exists, has the authority to establish the obligation, and has taken the necessary steps to approve the performance of the undertaking under the law of the jurisdiction of the organization. In turn, senior counsel may presume that the registrant validly exists, has the authority to establish the undertaking, and has taken the necessary steps to authorize the performance of the undertaking under the law of the organization`s jurisdiction. Both bids must be submitted as evidence and comply with all applicable requirements. Both senior counsel and local counsel would be named in the registration statement because they prepared or certified an opinion for the purposes of section 509(b) of Regulation S-K and would be required to file consents under Rule 436(a) of the Securities Act.21 Taxpayers and tax preparers must have a basic understanding of how the IRS criminal provisions work. to fully understand where tax opinions fit into the process. A taxpayer may be subject to penalties for fraud, negligence or non-compliance with rules or regulations, significant understatement of federal income tax, and understatement related to reportable transactions. This article does not deal with criminal provisions that apply to fraud or tax havens (listed or reportable transactions) or criminal tax penalties. 14 For example, if the jurisdiction of the registered firm does not use the term “non-taxable,” counsel must nevertheless indicate whether an equity interest is not taxable within the meaning of that term for purposes of U.S. law. However, the lawyer is not obliged to use the term “non-taxable”. If the term “non-taxable” has a meaning under the laws of the registrant`s jurisdiction that is different from that term under U.S. law, the prospectus should disclose all material information relating to that meaning, but the notice of legality should only state whether the shares of the share capital are not taxable under U.S.
law because of the meaning of that term. If the notice of legality also indicates whether the shares are not taxable under the laws of the registrant`s jurisdiction because of their materiality, the notice should explain the meaning of that term under applicable foreign law and how the term “non-taxable” is used in the notice.