The Internal Revenue Service is considering a proposal to loosen the privacy standards of federal income tax returns. The change could allow accountants and other tax return preparers to sell information from individual returns to marketers and data brokers, according to published reports.
The change was originally included in the Dec. 8 Federal Register as part of a set of proposed rules from the Treasury Department and the IRS. The IRS later separately announced the change as a proposed regulation to safeguard taxpayer information, but the announcement did not mention the potential sale of tax information.
The statement said that the proposed rules were guided by the principle that, "Tax return preparers may not disclose or use tax return information for purposes other than tax return preparation without the knowing, informed and voluntary consent of the taxpayer."
According to a report in The Philadelphia Inquirer, a spokesman for the IRS said that the proposal would require a tax preparer to obtain written consent before selling tax information. The spokesman said that the proposal was part of housecleaning to update regulations dating back to the 1970s, and that the agency had only received about a dozen comments on the proposal.
The formal comment period ended March 8 and the IRS will hold a hearing on April 4 over the proposal.IRS rules currently prohibit tax preparers from selling returns to third parties for marketing purposes, and require written consent if preparers want to use them for marketing by companies under their own corporate umbrella.
