Tax Return Information Should Remain Confidential, TEI Tells Justice, Treasury Departments.

A district court's order to produce tax return information of unrelated third parties to plaintiffs involved in a tax refund suit "threatens to undermine the promise of confidentiality that undergirds the tax system," according to a June 14 letter from TEI President Lester D. Ezrati to Attorney General Janet Reno and Treasury Secretary Robert Rubin. The court's order in a case involving the section 936 affiliate of a pharmaceutical company grew out of the efforts to prove that the IRS had improperly denied the company the favorable treatment accorded similarly situated taxpayers. The IRS resisted production of the information under section 6103, which prohibits the disclosure of tax returns and tax return information. The United States District Court for the District of Puerto Rico, however, ordered the IRS to release the information.

In its letter, TEI called the plaintiffs' "disparate treatment" claim worthy of adjudication, but asserted that the claim, even if wholly meritorious, is not sufficient reason to vitiate the protections of the Internal Revenue Code's privacy provisions. The Institute urged both the Treasury Department and the Department of Justice to...