109th CONGRESS
2d Session
S. 2484
To amend the Internal Revenue Code of 1986 to prohibit the disclosure
of tax return information by tax return preparers to third parties.
IN THE SENATE OF THE UNITED STATES
March 30, 2006
Mr. OBAMA (for himself, Mr. MENENDEZ, Mr. HARKIN, Mrs. CLINTON, and Mr.
LIEBERMAN) introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to prohibit the disclosure
of tax return information by tax return preparers to third parties.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Protecting Taxpayer Privacy Act'.
SEC. 2. PROHIBITION ON TAX PREPARERS DISCLOSING TAX RETURN INFORMATION
TO THIRD PARTIES.
(a) In General- Paragraph (3) of section 7216(b) of the Internal Revenue
Code of 1986 (relating to regulations) is amended to read as follows:
`(A) IN GENERAL- Subsection (a) shall not apply to a disclosure or use
of information which is permitted by regulations prescribed by the Secretary
under this section.
`(B) DISCLOSURE TO THIRD PARTIES- The regulations under this section
shall not permit the disclosure or use of information, with respect
to the return of any taxpayer, to or for any person unless such taxpayer
has granted consent to such disclosure or use and such person is--
`(i) a member of the same affiliated group (within the meaning of
section 1504) as the person preparing providing services in connection
with the return; or
`(ii) a corporate fiduciary with respect to the taxpayer.
`(C) OTHER DISCLOSURES- Notwithstanding subparagraph (B), the regulations
under this section may permit (subject to such conditions as such regulations
shall provide) the disclosure or use of information--
`(i) to a person related to the taxpayer with respect to whose return
the information was obtained, but only in connection with preparing,
or providing services in connection with the preparation of, the return
of such related taxpayer;
`(ii) to an attorney, an employee of the Internal Revenue Service,
or an officer of a court for use in revenue investigations or court
proceedings;
`(iii) to the fiduciary of the taxpayer with respect to whose return
the information was obtained if such taxpayer dies or becomes incompetent,
insolvent, or bankrupt;
`(iv) to another person engaged in the business of preparing, or providing
services in connection with the preparation of, a tax return for the
purposes of assisting with the preparation or processing of the tax
return;
`(v) to report the commission of a crime;
`(vi) for quality or peer reviews; and
`(vii) to another person for the purpose of assisting the operation
of the business of the person described in subsection (a) in the case
such person dies or becomes incapacitated.'.
(b) Conforming Amendment- Subparagraph (B) of section 7216(b)(1) of the
Internal Revenue Code of 1986 is amended by inserting `, a Federal agency,
or a State agency which regulates tax return preparers' after `court'.
(c) Effective Date- The amendment made by this section shall take effect
on the date of the enactment of this Act.
END
