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

Caroline Rule, JD

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.