Why doesn’t the IRS just prohibit tax preparers from sharing taxpayer information with any third party?
The general rule expressed in both the 1974 regulation and the 2007 regulation is that taxpayers – not the government – control their tax information. No tax information can be disclosed or used without taxpayer consent. For example, a taxpayer may benefit from an Individual Retirement Account being offered by a third party financial institution and therefore may want their return preparer to disclose return information to that financial institution. Or, a taxpayer applying for a mortgage loan may need a preparer to disclose tax data to a bank. But again, informed consent by the taxpayer is the key.
Related Questions
- If the taxpayers spouse owes any back taxes from before her marriage, can and will the IRS take her tax refunds each year?
- Why doesn’t the IRS just prohibit tax preparers from sharing taxpayer information with any third party?
- Does the IRS ever contact a taxpayer or the tax preparer via e-mail to initiate an audit?
