A taxpayer must give written consent before the preparer discloses or uses the information on their tax return; there can be no retroactive consent. In addition, the preparer cannot seek consent to the disclosure or use of tax return information for the purpose of obtaining a business that has nothing to do with preparing tax returns after the preparer has submitted a completed tax return to the taxpayer for signature. Finally, if the taxpayer rejects an application for consent, the preparer cannot request another consent for a purpose substantially similar to that of the rejected application [Treasury Regulations section 301.7216-3(b)]. Disclosure of tax return information is “the act of disseminating information on a person`s tax return in any way,” and the use of tax return information is “any circumstance in which a tax preparer refers to or relies on the information on the tax return as the basis for taking or approving action” [Treasury Regulations sections 301.7216-1 (b) (4), (5)). All consents to the use of tax return information must state that “we cannot use your tax return information for any purpose other than preparing and filing your tax return without your consent, and then use language similar to that used for disclosures [Revenue Procedure 2013-14, section 5.04(1)(c)]. The 2013-2014 tax procedure requires that a taxpayer`s consent to any separate disclosure or use be included in a separate consent document [sections 5.01 and 6.02]. It also contains several mandatory declarations that must be included verbatim in a declaration of consent. For example, if a preparer must obtain consent to disclose a taxpayer`s tax return information as part of the preparation of the taxpayer`s tax return, the consent must state the following: “Unless permitted by law, we cannot disclose your tax return information to third parties without your consent for purposes other than preparation and filing your tax return. The required language continues as follows: Use this form to give Mennenga Tax & Financial permission to send a copy of your tax return to you or a bank, lawyer, etc. The 2013-2014 tax procedure allows taxpayers` consent documents to be paper or electronic, but offers different detailed requirements for each medium. Physical consent forms must – In accordance with section 7216 of the Internal Revenue Code (IRC) and related regulations, a tax advisor must obtain a taxpayer`s consent before disclosing or using the taxpayer`s tax return information where such consent is required.

Section 7216 makes it an offence for any preparer to knowingly or recklessly disclose any information provided to the preparer in connection with the preparation of a client`s income tax return, or to use tax return information that is not intended to prepare or assist in the preparation of that return, thereby prohibiting the disclosure or use of information on a taxpayer`s income tax return without the taxpayer`s prior consent is justified. Section 301.7216-2 of the Treasury Regulations then establishes a variety of cases where disclosure or use is actually authorized without consent, as noted in last month`s column. A taxpayer must give written consent before the preparer discloses or uses the information on their tax return; there can be no retroactive consent. You do not have to fill out this form. Because our ability to share your tax return information with another tax preparer affects the tax preparation services we offer and their (their) costs, we may refuse to provide you with tax preparation services or change the terms (including costs) of the tax preparation services we provide to you, if you do not sign this form. If you consent to the disclosure of your tax return information, your consent will be valid for the period you specify. If you do not specify the duration of your consent, your consent is valid for one year from the date of signature. [Revenue Procedure 2013-2014, Section 5.04(1)(b).] If the preparer obtains consent to disclose information about the income tax return in a context other than the preparation of the tax return, the consent must include the same introductory wording and provide as follows: Section 301.7216-3 of the Treasury Regulations, explained in this column, sets out the requirements that apply when a tax preparer must obtain a taxpayer`s consent for the disclosure or use, which is not permitted by section 301.7216-2. Section 301.7216-3 and the 2013-2014 tax procedure set out additional requirements for the consent of taxpayers filing tax returns in the 1040 series.

For the purposes of section 7216 of the IRC and its regulations, “tax preparer” means any person who works in the preparation or assistance in preparing tax returns, any employee of such a person, or any person providing ancillary services related to the preparation of tax returns (e.g., B a provider of electronic files). “Tax Return Information” means “any information, including, but not limited to, a taxpayer`s name, address or identification number, provided in any form or manner for or in connection with the preparation of a tax return” [Sections 301.7216-1(b)(2) and (3) of the Treasury Regulations]. In addition, consent to the disclosure or use of tax return information may be in any format, including a letter of commitment, and may permit disclosure to a descriptive class of companies to which information is shared or in connection with which information is used, including audited financial statements, other financial statements or financial information required by a government agency. Municipality or regulatory body [Treasury By-law section 301.7216-3(a)(3)(iii)]. Use this form to give permission to a third party to help you prepare your tax returns. Before disclosing tax return information to a preparer outside the United States, a taxpayer`s consent is always required [Treasury Regulations Section 301.7216-3(a)(3)(i)(D)]. Consent to Disclosure or Use of Taxpayer Tax Return Information – A taxpayer may consent to multiple uses in the same written document or multiple disclosures in the same written document, but may not authorize both use and disclosure in a single document. A document that authorizes multiple disclosures or multiple uses must specifically and separately identify each disclosure or use [Treasury Regulation section 301.7216-3(c)].

To date, the government does not appear to have sued tax preparers under section 7216 of the IRC, but no CPA will want to be first. In addition, Article 6713 of the IRC provides for civil fines and does not require that infringements be well informed or reckless. The unintentional unauthorized disclosure of information on a tax return also subjects a tax advisor to the disciplinary measures set out in Circular 230(C), sections 10.50, 10.51(a)(15). A taxpayer`s consent to the disclosure or use of their tax return information must be known and voluntary. Tax preparers may not make the provision of services subject to the taxpayer`s consent, with the exception of disclosing information from the taxpayer`s tax return to another preparer for the purpose of assisting in the preparation of the income tax return [Treasury Regulations section 301.7216-3 (a)]. The tax procedure also provides specific language that must be used when obtaining consent to disclose a taxpayer`s Social Security number outside the United States, as well as language that must be used if a taxpayer`s information without their Social Security number is to be disclosed in this way [Revenue Procedure 2013-14, Section 5.04(e)]. Stricter rules apply to the consents of taxpayers who file tax returns in the 1040 series of forms. In addition, paragraph 301.7216-3(ii) of the Treasury Regulations provides that the Minister of Finance may issue directives describing the additional requirements applicable to such consents. The Secretary did so as part of the 2013-2014 tax process, which includes detailed requirements for taxpayer approval on Form 1040. Tax preparers should familiarize themselves with the provisions of section 301.7216-3 of the Treasury Regulations and Tax Procedure 2013-14 […].