Thursday, August 29, 2019

Why President Trumps Tax Return SHOULD NOT BE AN ISSUE


September 1997
FS-97-12
CONFIDENTIALITY OF TAX RETURN INFORMATION

By law, information about your tax return is strictly confidential.
This means that
no one at the Internal Revenue Service may tell anyone -- whether your relative, a
neighbor, a reporter, or another government employee -- anything about your tax return
or your relationship with the IRS, unless the law allows such a disclosure. Section
6103 of the Internal Revenue Code lists specific circumstances when disclosures may
be made -- for example, when the taxpayer gives written authorization.
Confidentiality extends not only to the tax returns you file and the data these
returns contain, but also to all information related to those returns. This includes such
things as reviews or audits of your return, efforts to collect unpaid tax, or an IRS
determination of your tax liability if you did not file a return.
Confidentiality rules apply to all information the IRS has about your tax return,
whether that information comes from you or from some other source. Unless allowed
by law, an IRS employee cannot tell someone whether you even filed a tax return, let
alone what is in your return or whether the IRS may be acting upon it in some way.
Unauthorized disclosure of tax information is a felony crime, with a maximum
penalty of a $250,000 fine and five years in prison. The law also requires the firing of
any federal employee convicted of this crime. If someone improperly reveals your tax
information, you may sue for civil damages of at least $1,000 for each such action.
The laws on confidentiality of tax information are designed to balance the
government’s need for the information to be disclosed against the taxpayer’s right to
privacy and the impact of a disclosure on tax administration. In striking this balance,
Congress, not the IRS, determines what can be disclosed by the laws it passes.
The IRS takes its responsibilities to protect tax information most seriously. In
training materials, agency guidelines and manual, it stresses to its employees both the
need to respect taxpayers’ rights to confidentiality and the penalties for violating the
law.


(more)
- 2 -
Responding to Public Statements
Taxpayers may make public anything they want about their own tax matters. For
example, you may talk with reporters, speak in a public forum, or even testify before a
Congressional committee. The IRS does not have the same freedom to respond.
Without authorization, the IRS cannot confirm, deny, clarify or correct any statements
you make about your tax return.
Disclosure to Committees of Congress
The law allows congressional committees to receive tax information, but only in
a closed executive session, unless the taxpayer consents in writing otherwise. The
heads of three committees may request tax information from the IRS -- the House
Committee on Ways and Means, the Senate Committee on Finance, and the Joint
Committee on Taxation. Other committees may request tax information only when
specifically authorized by their respective body of Congress, or, for a joint committee,
by a concurrent resolution of the House and Senate. Congressional members or
staffers who receive taxpayer information must maintain its confidentiality unless the
taxpayer consents in writing to its disclosure.
Taxpayer’s Consent to Disclosure
The law allows the government to disclose your tax information to anyone you
designate. However, the government cannot go beyond the terms of your consent. For
example, suppose you sign a consent for the IRS to give information about your tax
return to a Congressional committee in an open session. After the hearing, the IRS
official who testified is asked to repeat the answer given to a question during the
hearing. Since the consent extended only to the hearing, the IRS official could not
answer the question. Likewise, the official could not explain or add to the statements
given during the hearing, even at the request of someone, such as a reporter, who was
present at the hearing.
If a tax matter involved several taxpayers, each taxpayer would have to consent
to disclosure before the IRS could reveal information it had about that taxpayer. For
example, if three companies were involved in related transactions and only one
company gave a disclosure consent, the IRS would be severely limited in what it could
say about the matter. The IRS could not disclose any tax information of the other two
companies, which could result in misleading or incomplete testimony.
(more)
- 3 -
When a married couple files a joint tax return, either spouse may grant a valid
consent to disclose information about that return. However, neither spouse may
authorize disclosure of the other’s tax matters for a year for which they did not file
jointly. For example, if a couple married in 1996 and filed jointly for that year, either
spouse could consent to the IRS explaining to a reporter the results of an audit of that
return. However, if the IRS audited the husband’s 1995 return -- before they were
married -- the wife could not authorize the IRS to disclose anything regarding that year.
Similarly, if the couple filed separate returns while married -- or if they divorced and
each filed as a single person -- neither spouse could authorize disclosure of the other
spouse’s tax information for any year they did not file a joint return

No comments:

Post a Comment

Comments are moderated, and will appear after approval..Anonymous comments will not be approved.