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IRS Protects Your Personal Tax Information

The IRS has issued new regulations intended to protect taxpayers who give professional tax return preparers access to their personal information.

Under the new regulations, a tax return preparer may not disclose or use tax return information for other purposes without the “knowing, informed and voluntary” consent of the taxpayer. The regulations also broaden the definitions of tax return preparer and tax return information, define the means for obtaining taxpayer consent to use or disclose tax return information, and add certain other requirements.

For this purpose, a “tax return preparer” includes a broad group of people, such as a secretary or an administrative assistant, who provide support to the return preparer. In addition to the “information” a taxpayer literally provides to the return preparer, the definition includes whether the taxpayer is entitled to a refund, the amount of any refund and the filing method.

Furthermore, the new regulations reflect the widespread use of computers in the tax preparation process. If a tax return preparer hires an outside contractor who must access tax return information—for example, to repair computers or data files—the tax return preparer must notify those contractors that they are subject to restrictions inthis area.

The new regulations replace long-standing rules implemented before the introduction of online filing.

 

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