Consent to Use and Disclose Tax Information (Section 7216 Regulations Effective January 1, 2009)
Members who are engaged in tax return preparation and tax planning services need to become familiar Sec. 7216 Regulations and Revenue Procedure 2008-35, the authoritative guidance with respect to a preparer’s “disclosure” or “use” of tax return information. In general, a “disclosure” of tax return information involves a disclosure by the preparer of a client’s return information to a third party. A “use” of tax return information generally involves the use of the return information by the preparer potentially for the purposes of offering non-tax services to the taxpayer.
The AICPA Tax Center developed a practice guide for members, which provides guidance on the new regulation as well as several examples of consent forms including:
· Consent to disclose tax return information to be used for disclosure of the return information to (among others) your client’s banker or mortgage broker.
· Consent to disclose tax return information to a specific financial planning/investment firm.
· Consent to permit a U.S. preparer to disclose tax return information (including the taxpayer’s SSN as long as adequate data protection safeguards are in place) to a foreign-based preparer.
· Consent form covering the use of the tax return information by the preparer to disseminate firm newsletters, press releases, webcasts, and hiring announcements to individual clients.
NOTE: The Specialized Community Teams (PFP, FVS, IT & PCPS) are working closely with the AICPA Tax Section to provide additional guidance to our members in response to specific questions/situations that have arisen regarding the regulation’s requirements.
· Journal of Accountancy Video (2/6) - In this video, the AICPA's Vice President-Taxation Tom Ochsenschlager provides some insight to the new regulations under Section 7216 governing disclosure of taxpayer information and obtaining taxpayers’ consent for disclosure. To view Click Here.
· Web Seminar (3/11) - Section 7216 Regulations: Practical Responses to CPA Questions on Safeguarding Tax Return Information- This Web Seminar assists CPAs in their understanding of when they will need to obtain written consents from their clients in providing tax preparation, tax planning, accounting, and other traditional firm services.
o To playback or download the recording, Click Here
o To download the presentation slides (PDF), Click Here
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