Getting Taxpayers' Consent to Disclose or Use Tax Return Information under IRC Section 7216

Abstract

Under Internal Revenue Code (IRC) section 7216 and its concomitant regulations, a tax preparer must obtain the consent of a taxpayer before disclosing or using the taxpayer's tax return information when that consent is required. Section 7216 makes it a crime for any preparer to knowingly or recklessly disclose any information that is furnished to the preparer in connection with preparing a client's tax return, or use tax return information other than to prepare or assist in preparing that return, thus establishing a prohibition on disclosure or use of a taxpayer's tax return information without the taxpayer's prior consent. Treasury Regulations section 301.7216-2 then sets forth a great many instances where disclosure or use is in fact permitted without consent, as discussed in last month's column.

Treasury Regulations section 301.7216-3, discussed in this column, sets forth requirements that apply when a tax return preparer must seek a taxpayer's consent for a disclosure or use not authorized by section 301.7216-2. Section 301.7216-3, as well as Revenue Procedure 2013-14, sets forth additional requirements in connection with consent from taxpayers who file returns in the 1040 series.