IRS Issues Proposed Regulations On Use Of Taxpayer Information

by Glen Shapiro, LawAndTax-News.com, New York

04 January 2010

The Internal Revenue Service (IRS), on December 30, announced the issuance of proposed and temporary regulations and related revenue rulings addressing the use or disclosure of tax return information by tax return preparers.

The regulations and related revenue rulings under Section 7216 – "Disclosure or Use of Information by Preparers of Returns" enable tax return preparers to more effectively provide a range of services that taxpayers would ordinarily expect from tax return preparers. According to the IRS, these services generally benefit taxpayers, increase voluntary compliance and improve tax administration.

The proposed and temporary regulations enable tax return preparers to use or disclose tax return information without explicit taxpayer consent in certain limited circumstances. Tax preparers can contact their clients regarding tax law developments that may affect the clients. They can also disclose information in connection with the potential sale or purchase of a tax return preparer’s business and during the process of conducting client conflict-of-interest checks.

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department request comments on the clarity of the proposed rules, how they can be made easier to understand, and the administrability of the rules in the proposed regulations. All comments will be made available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments.

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