Disclosure & Use of Tax Return Information

Your tax return information is nobody's business but yours and the federal government's.

The United States' Internal Revenue Service allows taxpayers to decide whether they want their tax return information released to a third party. Consent must be given via written authorization, and a third party is considered to be anyone or any entity outside of the taxpayer, the tax document preparer and the IRS. Further, the consent form restricts disclosure of tax return information based on time lines issued by the taxpayer.

Governing Laws

The Freedom of Information Act, 5 U.S.C. 552, which allows any person access to federal agency records is trumped by several sections of the Internal Revenue Service' Internal Revenue Code (IRC). IRC 6103 specifically provides for the confidentiality of individual taxpayer return information. IRC 6104 specifies rules concerning public disclosure of annual returns of tax exempt organizations. IRC 6110 provides for the release of certain written determination rulings and technical advice memos.

Exceptions to IRC 6103

The following entities are authorized to receive tax return information: a taxpayer's representative or designee, an agent of a state body in commission of the administration of the state tax laws, persons having a material interest in a tax matter such as a spouse who jointly filed the return, the chairpersons of the House Ways and Means Committee, Senate Finance Committee, the Joint Committee on Taxation, the President, officers and employees of a federal agency in the enforcement of a federal criminal statute, the Dept. of Commerce, the Federal Trade Commission and the Dept. of Treasury.

Warning Against Improper Disclosure

According to IRC 6103(b), any government employee who improperly discloses tax return information may be found guilty of a felony which is punishable by a fine of up to $5,000 or imprisonment for five years, or both.

IRC 6104

IRC 6104 provides for the public disclosure of tax exempt organization returns such as Forms 990, 990EZ, and 990PF. These disclosure requirements apply only to organizations determined to be exempt from tax. When an organization's tax exemption has been revoked, the application is no longer subject to public inspection.

IRC 6110

IRC 6110 provides for the public inspection of written determinations and tax law rulings. The National Office Freedom of Information Reading Room is a literal reading area provided by the IRS' National Office to the public who are interested in reading legal discussions, letter rulings, written determinations and technical advice memoranda on specific tax returns.

References

• IRS: Disclosure of Tax Return Information
• Consent to Disclosure of Tax Return Information