Final regs. govern release of taxpayer information by preparers.

• Author: Nevius, Alistair M.

On January 3, 2008, the IRS released final regulations that govern the handling and release of taxpayer information by return preparers (TD 9375). The final regulations are the first update to the rules governing preparer disclosure and privacy requirements since 1974. Return preparers will have until January 1,2009, to implement the new requirements.

The new rules affect only return preparers; they do not affect the strict rules governing how the IRS handles taxpayer information.

Under the new rules, preparers generally must obtain taxpayer consent, either by paper or electronically depending on how the return is being filed, before tax return information can be disclosed to any third party or used for any purpose other than filing the return. Such consent must identify the intended purpose of the disclosure, identify the recipients, and describe the particular authorized disclosure or use of the information.

The regulations include mandatory language that must be included in the consent informing individual taxpayers that (1) they are not required to sign the consent; (2) if they sign the consent, federal law may not protect their information from further disclosure; and (3) if they sign the...