11.3.3  Disclosure to Designees and Practitioners

11.3.3.1  (03-18-2008)
Introduction

  1. IRC §6103(c) provides that, subject to the requirements and conditions set forth by the Secretary in the regulations, returns and return information may be disclosed to persons designated by the taxpayer in a request for or consent to disclosure. It also provides for disclosures to any person at the taxpayer’s request to the extent necessary to comply with a request for information or assistance made by the taxpayer to another person. The Treasury Regulation under IRC §6103(c), 26 C.F.R. 301.6103(c)-1, sets out requirements for such disclosures. See IRM 11.3.3.1.1, below, concerning oral versus written authorization.

  2. Under the IRC §6103(c) regulation in combination with IRC §6103(e), Disclosure to Persons Having Material Interest, those persons with a material interest in returns and return information under IRC §6103(e)(1)-(5) (except for 1% shareholders) may authorize others to obtain information they are entitled to receive.

  3. The regulation indicates that permissible designees include among others "individuals; trusts; estates; corporations; partnerships." It is not necessary that a particular office or person within the organization be specified to receive the information. Under Treasury Regulation 301.6103(c)-1, the public may also be a permissible designee, as when disclosures are to be made in a public forum, such as in a courtroom or congressional hearing. In such instances, the request for or consent to disclosure must describe the circumstances surrounding the public disclosure, e.g., congressional hearing, judicial proceeding, media, and the date or dates of the disclosure.

    Note:

    An IRC §6103(c) consent cannot be used to authorize that federal tax information be sent to a taxpayer or his or her designated representative using unsecure electronic transmissions.

  4. Delegation Order 11-2 identifies Internal Revenue Service (IRS) employees who may make disclosures under IRC §6103(c) and the extent to which this authority may be redelegated.

  5. When a person with a material interest in tax information designates another to receive the information, satisfactory evidence of identity and the material interest, as defined in IRM 11.3.2, Disclosure to Persons with a Material Interest, must be shown in addition to satisfying the requirements of this section.

  6. The IRS has a number of different programs/applications where disclosure to a third party is predicated on the taxpayer's consent. Recent or proposed applications include the checkbox on the Form 1040 series along with other series and the Transcript Delivery System (TDS). The procedures for the particular program/application must be followed before disclosures may be made to third parties. The IRS has established the IRS Income Verification Express Service (IVES), that allows for expedited processing of certain types of transcripts. See the following link for more information http://www.irs.gov/individuals/article/0,,id=161649,00.html . In addition taxpayers can use Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return to authorize a third party to receive the identified information on those forms.

    Note:

    The authority granted by a 1040 filer using the checkbox option extends as well to any Form 1040-XAmended U.S. Individual Income Tax Return filed for the year in question as long as it is filed within the time period for the consent, which is one year from the required filing date with no extensions.

  7. An IRC §6103(c) consent does not constitute authority to practice before the Service. See Circular 230, Publication 976 and the Office of Professional Responsibility web page for more information.

  8. Any initiative where compliance with federal tax laws is required to obtain a business license requires §6103(c) consents to allow the disclosure of federal tax information.

11.3.3.1.1  (03-18-2008)
General Requirements for Disclosure to Designee

  1. IRC §6103(c) and Treasury Regulation 301.6103(c)-1 govern disclosure to designees generally.

  2. An authorization for disclosure of returns and return information to a designee that is not for the purpose of assisting in the resolution of a tax matter must be on a separate written document pertaining solely to the authorized disclosure. For example, a statement contained in a loan application authorizing the loan company to obtain return information would not be sufficient.

  3. An authorization for disclosure must contain the following items:

    1. The taxpayer’s identity (name, address, SSN/EIN, or any combination thereof), that enables the IRS to clearly identify the taxpayer

    2. The identity of the person to whom disclosure is to be made

    3. The type of return (or the specific portion of the return) or return information (including particular data) to be disclosed (use of Tax Class codes by themselves, taken from Document 6209, ADP and IDRS Information,does not satisfy this requirement)

      Note:

      Authorization to inspect or receive specific returns and return information will only permit a designee to inspect or receive the specified return and certain return information of the taxpayer directly related to the specified return. The authorization will not permit the designee to inspect or receive returns of other taxpayer or entities, even though the person executing the authorization may have authority to inspect or receive such returns and return information under IRC §6103(e). For example, assume a taxpayer is a partner in a TEFRA partnership. The taxpayer designates a third party to inspect or receive returns or return information related to his 2007 Form 1040, as well as any information returns and return information related to his 2007 Form 1040. In this example the designee will be able to inspect or receive the taxpayer’s 2007 Form 1040, as well as any information returns of the taxpayer directly related to the 2007 Form 1040, including Form 1099, Form W-2 or K-1. The designee will need a specific designation, however, to view or receive the TEFRA partnership returns, even though the taxpayer is generally entitled to view or receive these returns under IRC §6103(e)(1)(c). This would be accomplished by listing the specific partnership and Form 1065 on the authorization.

    4. The taxable period(s) covered by the return or return information (the periods may be separately stated or when a series of inclusive periods are involved, use of the word "through" , "thru" , or a hyphen may be used (e.g., 2004-2007 would cover 2004, 2005, 2006 and 2007), and

      Note:

      For returns where the period is not annual, e.g., quarterly, all periods within the stated range would be included. For example, for a Form 720 or Form 941, " 2006-2007" would cover all quarterly periods in the years 2006 and 2007.

    5. The signature of the taxpayer and the date the authorization was signed

  4. The date an authorization is received should be stamped or otherwise noted on the letter. This is important since Treasury Regulation 301.6103(c)-1(b) provides that returns and return information cannot be disclosed unless a request is received within 60 days following the date the authorization was signed and dated by the taxpayer. The 60 day requirement does not apply where taxpayers request information or assistance relating to their tax matters. See Treasury Regulation 301.6103(c)-1(c).

  5. The written authorization from the taxpayer, or other person with a material interest, does not have to be a Power of Attorney or any specific form, although Form 8821, Tax Information Authorization, may be used for this purpose. Form 2848, Power of Attorney and Declaration of Representative, may also be used to meet the requirements, but the Form 2848 may only be used if the designee intends to practice before IRS and otherwise meets conference and practice requirements. See IRM 11.3.3.3.

    Note:

    IRC §6304(a)(2), as revised by the Restructuring and Reform Act of 1998, generally prohibits IRS contact with the taxpayer if the IRS knows that the taxpayer is represented by a person duly authorized to practice before the IRS. Of course, this means that a valid Form 2848 or other Power of Attorney is on file and that the designated individual is in fact authorized to practice under the Conference and Practice standards. Disclosures to the taxpayer are still authorized under IRC §6103(e). However, contacts in contravention of IRC §6304 are subject to civil action under IRC §7433.

  6. The taxpayer may always authorize disclosure of his/her return, but may not compel disclosure of return information. If an official authorized in accordance with Delegation Order 11-2 determines that disclosure of return information will seriously impair Federal tax administration, the IRS must withhold disclosure of return information.

  7. A designee of the taxpayer may not execute an IRC §6103(c) consent on behalf of the taxpayer unless he/she is given that specific authority on a Power of Attorney (e.g., Form 2848) under IRC §6103(e)(6). On Form 2848, the taxpayers should add, " execute IRC §6103(c) consents" in the acts authorized if this authority is sought.

  8. Generally, Customer Service and other taxpayer contact personnel will not request returns from campuses or Federal Records Centers solely for verification of a taxpayer’s signature. If there is a serious doubt concerning the signature on an authorization, additional identification should be sought or an offer should be made to mail the information to the taxpayer’s address of record.

  9. Consents under the §6103(c) regulation may also be made on the record in administrative or judicial proceedings, or made incident to public forums.

11.3.3.1.2  (05-20-2005)
Telephone Contacts

  1. In telephone contacts, IRS personnel are generally restricted as to the information they may furnish third parties in the absence of authorization from the taxpayer or other person with a material interest.

  2. Without authorization, only general information such as procedural information or the meaning of a particular bill, notice or letter may be given. The third party should be advised that he/she should obtain an authorization from the taxpayer in order to receive tax information. Depending on the circumstances, it may be desirable to mail the requested return information to the taxpayer’s address of record.

  3. See IRM 21.3.1, Taxpayer Contacts, for a more detailed discussion of disclosures to third parties during telephone contacts.

11.3.3.1.3  (05-20-2005)
Receipt of Information From Third Parties

  1. Even though a third party does not have written authority to request and receive tax information of the taxpayer, IRS employees may still accept information offered by third parties.

    Example:

    Canceled check information may be accepted to initiate a payment tracer on a bill, but no information relative to the balance due or nature of the assessment may be given to the third party. However, where the third party wants to pay another taxpayer's bill. Refer to IRM 11.3.11.10 (2), Disclosure of Amount of Outstanding Lien.

11.3.3.1.4  (04-30-2003)
Disclosure to Relatives

  1. For IRC §6103(c) consent purposes, generally relatives are third parties and the same rules apply to them as to any third party.

  2. The rules do not apply to a husband or wife when a joint return is filed and the return information directly relates to the jointly filed return. However, where a joint return has not been filed and a spouse has been claimed as an exemption on a return, that spouse may not generally be given information without written authorization from the taxpayer.

11.3.3.1.5  (03-18-2008)
Responses to Congressional Inquiries

  1. Specific instructions for responding to Congressional inquiries are contained in IRM 11.3.4, Congressional Inquiries.

11.3.3.1.6  (03-18-2008)
Disclosure to an Attorney-in-Fact

  1. IRC §6103(e)(6) permits any person described in IRC §6103(e)(1) through (5) and (e)(8) and (9) to authorize in writing an attorney in fact to request and receive such information on his or her behalf.

  2. An attorney-in-fact is a private attorney or other individual designated by another person pursuant to a written instrument to act on behalf of that person in the performance of any act or acts described in the written instrument.

  3. The written authorization from the person having a material interest under IRC §6103(e)(1) through (5), (8) or (9) should comply with the requirements for disclosure to designees set forth elsewhere in this section.

  4. In a bankruptcy proceeding involving the tax liabilities of a debtor-taxpayer, the IRS may disclose to the debtor-taxpayer’s attorney of record the debtor-taxpayer’s return information relevant to the resolution of those tax matters affected by the proceeding. The requirement under IRC §6103(e)(6) that the attorney in fact be "duly authorized in writing to inspect the return or receive the information" is considered to be met by the attorney’s entry of an appearance in the bankruptcy proceeding by signing the bankruptcy petition. This action qualifies the debtor-taxpayer’s attorney of record to act on the debtor’s behalf with respect to taxes subsumed by the bankruptcy proceeding, thus entitling the attorney, under IRC §6103(e)(6) to receive the debtor-taxpayer’s return information that is relevant to the resolution of tax issues in the bankruptcy proceeding prior to the filing of a proof of claim or other formal action by the IRS in the proceeding. If the firm of the attorney who made the "entry of appearance," substitutes another attorney to represent the debtor in court actions, disclosures to such attorney may only be made if that attorney has made a written entry of appearance or has a valid POA or TIA from the debtor. Once IRS has filed a proof of claim or other formal action bringing the matter into a tax administration proceeding, IRS may make disclosures consistent with IRC §6103(h)(4).

  5. An attorney in fact will be able to inspect or receive all returns and return information of the taxpayer contained in the POA on file, as well as certain other returns and return information of the taxpayer directly related to the matters listed in the POA, e.g., the returns in which loses were carried forward to a year listed in the POA. However, the attorney in fact must have express authorization to inspect or receive returns and return information of another taxpayer or entity, even if the taxpayer him or herself would be entitled to inspect or receive the returns or return information under IRC §6103(e). For example: If a partner in a TEFRA partnership executes a POA for his 2007 Form 1040, the attorney will be able to inspect the taxpayer's 2007 Form 1040 as well as any information returns of that taxpayer directly related to the 2007 Form 1040, including the taxpayer's Form 1099, Form W-2, or K-1. The attorney in fact will need specific authorization, however, to view or receive the TEFRA partnership returns, even though the taxpayer is generally entitled to view these returns under IRC §6103(e)(1)(1)(C). This would be accomplished by listing the specific partnership and Form 1065 on the POA. See Treasury Regulation 301.6223(c)-1(e)(2) and (3). Under the facts and circumstances of any particular case, the attorney in fact may also have access to third party returns and return information pursuant to IRC §6103(h)(4).

  6. An Attorney Ad Litem normally does not have the power to act for a taxpayer (i.e., the person he/she is representing) in such a way that he/she can access or authorize access to tax information of the person he/she represents. However, state law is controlling in such circumstances. For example, if state law deems that the Attorney Ad Litem represents an incompetent and considers the Attorney to be the guardian, IRC §6103(e)(2) would apply. Of course, in such a situation the Attorney would have to submit proof of appointment.

  7. Officials authorized in accordance with Delegation Order 11-2 must withhold return information requested by an attorney in fact to the extent disclosure would seriously impair Federal tax administration.

11.3.3.2  (03-18-2008)
Disclosure to Third Parties Based Upon Taxpayer Request for Assistance

  1. IRC §6103(c) and Treasury Regulation 301.6103(c)-1 govern disclosure to designees based upon a request for information or assistance by a taxpayer when his/her tax matters are involved. This provision does not apply to FOIA requests. See IRM 11.3.13, Freedom of Information Act, for the requirements for consents in FOIA requests involving tax information.

  2. Taxpayers sometimes write to a member of Congress or other person, such as a friend or relative, with a tax question or problem they are having with the IRS. The member of Congress or other person generally forwards such letters to the IRS and requests that the IRS response be made directly to him/her.

  3. In this context, the taxpayer’s letter is a tax information authorization provided it contains the following:

    • The taxpayer’s identity: (name, address, SSN/EIN, or any combination thereof), that enables the IRS to clearly identify the taxpayer

    • The identity of the person to whom disclosure is to be made (any information that enables the IRS to clearly identify to whom disclosure is to be made will suffice)

    • Sufficient facts about the request for information or assistance to enable the IRS to determine the nature and extent of the information or assistance requested and the tax information to be disclosed and

    • The signature of the taxpayer and the date of the letter

  4. In determining the authorized scope of the consent, use of such terms as "all years" or "all returns" or equivalent phrases will be acceptable in describing the returns involved. However, sufficient facts must be presented in the request so the IRS can comply with a specific request for information or assistance in a tax matter. By authorizing disclosure of "all years" or "all returns," the taxpayer has specified that all information is available to the designee. Coupled with the designee’s explanation which supplies specificity as to the matter involved, authorization can be considered valid.

  5. A third party inquiry which attaches a courtesy copy of a letter from a taxpayer to another will not be honored as a valid waiver of the taxpayer’s confidentiality. An exception to this rule will be made when the taxpayer includes a signed addendum requesting the third party’s assistance in the matter, and the letter otherwise meets the above requirements for a valid disclosure authorization.

  6. IRS currently uses embedded consents designed to resolve Federal tax issues. Examples of Forms where the consents are a part of the form itself include the checkbox on certain tax returns and Form 8655, Reporting Agent Authorization for Magnetic Tape/Electronic Filers, for reporting agents.

  7. Officials authorized in accordance with Delegation Order 11-2 must withhold requested return information to the extent disclosure would seriously impair Federal tax administration.

11.3.3.2.1  (05-20-2005)
Requirements for Oral Authorization

  1. Treasury Regulation 26 CFR 301.6103(c)-1, authorizes IRS employees to accept a taxpayer's verbal consent to disclose return information to parties assisting the taxpayer in resolving a Federal tax matter. The regulation also clarifies that the taxpayer can verbally approve IRS disclosures to someone accompanying the taxpayer at in-person meetings with the IRS, or participating in a telephone conversation between the taxpayer and IRS. It is not necessary for the taxpayer to stay in the room or on the telephone after giving a verbal authorization to disclose his/her return information, nor does the designee have to be present or on the telephone when the taxpayer gives consent. For example, a taxpayer could call a Revenue Officer and request that the Revenue Officer call the taxpayer's CPA to resolve a tax matter. In this case, the Revenue Officer should verify the taxpayer's identity and clarify exactly what would be discussed with the CPA (type of tax, tax year(s), etc.). The Revenue Officer may then call the CPA and discuss the tax matter after verifying that the person is the designee.

  2. Details of the oral consent should be recorded on a history sheet or history screen whenever possible. Remember that the IRS must take reasonable steps to confirm the identity of the taxpayer and the designee before disclosing any return information to the third party. The disclosure of return information must be limited to the information covered in the verbal consent and disclosure can only be made to third parties helping taxpayers resolve a federal tax matter. A written consent that meets all requirements of the regulation is still required when the issue is not tax related. Each operating and functional division is responsible for determining how it incorporates the verbal authorization regulation into its procedures. Verbal requests or consents for disclosure do not take the place of a Power of Attorney authorizing the third party to represent the taxpayer before the IRS. A proper Power of Attorney must be secured. Practice before the IRS is still governed by the regulations at 26 CFR 601.501 to 601.509 and Treasury Department Circular 230, Conference and Practice.

  3. IRC §6103(c) and its regulation do not authorize implied consents. On occasion, taxpayers may bring other individuals with them when meeting with IRS. Their presence does not establish an implied consent by the taxpayer that can be honored by IRS. Employees should obtain a power of attorney or IRC §6103(c) consent prior to discussing confidential tax matters before these individuals, even when the taxpayer is present. This consent can be an oral consent as described.

11.3.3.3  (05-20-2005)
Distinction Between Disclosure to Designees and the Conference and Practice Requirements

  1. A taxpayer’s designation of a third party (such as an accountant who is not acting as a taxpayer’s representative) to request and receive returns and return information is sometimes confused with the Conference and Practice Requirements (Treasury Regulation 601.502, et.seq.) and Treasury Department Circular 230, Conference and Practice, requirements are overseen by IRS's Office of Professional Responsibility.

  2. Form 8821 permits a designated third party to receive returns and return information. It does not permit the third party to represent the taxpayer before the IRS. The third party cannot perform the acts specified in Treasury Regulations 601.502(c)(1) and (2).

  3. Form 2848 serves two functions. First, it authorizes a representative to perform the acts specified in Treasury Regulations 601.502(c)(1) and (2), meaning, practice before the IRS. Second, it permits the holder of the power or authorization to receive returns and return information.

  4. Although a Power of Attorney (or authorization and declaration) may not be valid for representation purposes, in very limited situations it still may be a valid tax information authorization. For example, if a husband signs a joint return, a power of attorney authorization is not valid with respect to representation of the husband and wife, in the absence of written authorization from the wife to the husband, because both spouses must sign. However, the power of attorney may be a valid tax information authorization for the husband’s representative to request and receive returns and return information of the taxpayer. IRS has revised the Form 2848 (Rev. 3/2004) which now only allows use for representation purposes. If the person being given the power is not authorized to practice or the form is submitted relative to a non-practice matter, then the 2848 will not be honored as a disclosure authorization.

    Example:

    A Form 2848 is submitted for tax year 2007 in favor of an unenrolled return preparer (URP) (Category II). However the URP did not prepare the 2007 return. The Form 2848 in such a case would not be honored for disclosure authorization purposes.

  5. The 60-day requirement discussed above, See IRM 11.3.3.1.1(4), does not apply with respect to disclosures to taxpayer’s representatives if a valid power of attorney or tax information authorization is on file for a tax matter.

  6. Non-IRS powers of attorney, such as general, limited, and durable powers of attorney are acceptable if the non-IRS power of attorney satisfies the requirements of Treasury Regulation 601.503(a). In some instances, defects in a non-IRS power of attorney may be cured by a Form 2848 executed by the authorized party and submitted to the IRS with a copy of the non-IRS Power of Attorney.

  7. A Power of Attorney or tax information authorization code on IDRS is not sufficient to disclose tax information to a third party requester. The CAF (Centralized Authorization File on IDRS) system should be reviewed to determine the extent of the authority of the third party requester to receive information.

  8. The only requirement for execution of a Power of Attorney authorization for a corporation is that it must be executed by an officer of the corporation who has authority to bind the corporation and who certifies that he or she has such authority. Thus, where any corporate officer signs a power of attorney in accordance with these requirements. The IRS may rely upon the corporate officer's certification that he/she has the authority to bind the corporation.

  9. The declaration on Form 706, U.S. Estate Tax Return, when executed by an attorney, accountant or enrolled agent representing a person described in IRC §6103(e)(1)(E)(l), meets the "duly authorized in writing" requirement of IRC §6103(e)(6). A separately executed Form 2848 is not required in order to make disclosures to the attorney, accountant or enrolled agent representing the executor or administrator of the estate when the attorney, accountant or enrolled agent has executed the declaration on Form 706. The Form 706 designation does not give the person named the power to authorize disclosures to other third parties. It also only applies to the Form 706. It does not authorize the disclosure e.g., of the decedent's income tax returns. However, depending on the context of an inquiry, other code sections for disclosure may apply.

  10. While the Conference and Practice Requirements, 26 C.F.R. § 601.501-601.509, do not address whether the IRS may recognize a Form 2848 executed by a minor, state law should be consulted to see whether a minor is capable of entering into an agency relationship. If so, then the IRS should recognize a power of attorney signed by a minor.

  11. Additional information concerning powers of attorney and tax information authorizations can be found in IRM 21.3.7, Processing Third Party Authorizations on the Centralized File, and Publication 947, Practice Before the IRS and Power of Attorney.

    Note:

    See IRM 11.3.3.1.1(5), above, regarding taxpayer contacts where the taxpayer has a duly authorized representative.

11.3.3.4  (12-31-2001)
Nature of Tax Information Disclosed Under A Tax Information Authorization

  1. IRS employees should review tax information authorizations, including powers of attorney, very carefully to ensure that only information authorized to be disclosed is disclosed.

  2. Sometimes it is difficult to determine what information may be released. For example, consider the situation in which a taxpayer provides a tax information authorization to his accountant with respect to one specific tax year. If a net operating loss form filed for that year results in refunds being issued for other years, information concerning these refunds may be disclosed to the holder of the tax information authorization. Even though the refund information is for other years, since the refunds are issued because of the net operating loss, the refund information is also tax information for the year of the tax information authorization.

  3. Column d of line 3 on the Form 8821, permits the taxpayer to limit access. If there is nothing entered, then by construction the Form 8821 allows the disclosure of all (to the extent requested by the designee) confidential tax information for the tax/form/year(s) entered on line 3.

  4. Under IRC §6103(c) , if the designee has authorization to receive all tax information for a particular year, then nonfiling information for the year in question is covered and IRP documents for that year (including an IRMF transcript) may be disclosed regardless of whether or not a Form 1040 type return was filed.


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