11.3.3 Disclosure to Designees and Practitioners

Manual Transmittal

August 08, 2019

Purpose

(1) This transmits revised text for IRM 11.3.3, Disclosure of Official Information, Disclosure to Designees and Practitioners.

Material Changes

(1) Editorial changes have been made throughout to update IRM/statute/organizational references and terms and to correct outdated links.

(2) Revised the title of IRM 11.3.3.1 to Program Scope and Objectives to properly reflect the information communicated in this subsection. Included important information to conform to the new internal and management control standards under the following titles:

  1. IRM 11.3.3.1.1 Background - Added information about the circumstances surrounding the Disclosure to Designees and Practitioners process

  2. IRM 11.3.3.1.2 Authority - Added legal authorities which govern Disclosures to Designees and Practitioners.

  3. IRM 11.3.3.1.3 Roles and Responsibilities - This IRM applies to all IRS employees and contractors.

  4. IRM 11.3.3.1.4 Terms/Definitions/Acronyms - Compiled a list of frequently used terms and acronyms pertaining to the Designees and Practitioners process.

  5. IRM 11.3.3.1.5 Related Resources - Added related resources applicable to the Designees and Practitioners process.

.All other subsequent sections were renumbered accordingly.

(3) Updated references in IRM 11.3.3.2(7) governing authority to practice before the Service.

(4) Updated IRM 11.3.3.2.1 to reflect proper time for receipt of a non-tax authorization. Added note to (5) directing where to locate information regarding revocation of Power of Attorney. Changed language in (8) to direct employees to their Business Unit for guidance on authenticating signatures. Updated language in (9) for clarity.

(5) Added language to IRM 11.3.3.2.2(3) covering receipt of authorizations for third party designees in telephone contacts.

(6) Added IRM 11.3.3.2.4, Disclosure to a Spouse, included important information regarding consents and records relating to a joint return. All subsequent sections renumbered accordingly.

(7) Revised the title of IRM 11.3.3.2.5 to Disclosure to Other Relatives, added information to (2) covering lack of recognition of implied consents.

(8) Added procedures to IRM 11.3.3.2.7 addressing revocation procedures for an attorney-in-fact. Added note to (3) advising further information to be found in Form 2848 instructions. Added (8) listing family members that are allowed to represent a Taxpayer.

(9) Moved language from IRM 11.3.3.2.8(11) to (1) for ease of reading. Deleted paragraphs (1-10) as information is duplicated in other IRM sections.

(10) Updated language in IRM 11.3.3.3(1) to remove reference to FOIA request processing. Added language to (2) directing Congressional Inquiries to IRM 11.3.4. Added governing authority information to (5).

(11) Added IRM 11.3.3.3.1, Use of Interpreters in Tax Administration. Added information regarding policy and procedures for interpreters in tax and non-tax matters. All subsequent sections renumbered accordingly.

(12) Moved example contained within IRM 11.3.3.3.2(1) to a separate item after (2). Removed language in (3) referring to implied consents as that information is duplicated elsewhere.

(13) Added reference in IRM 11.3.3.3.2(2) identifying where to locate information for Disclosure to Other Relatives. Removed language from same paragraph that addressed implied consents as that is now addressed elsewhere.

(14) Removed language in 11.3.3.4(4) that explained the use of a now-obsolete version of Form 2848. Updated (4) to add reference to Exhibit 11.3.3-1 to assist in authorizations involving unenrolled return preparers (URP). Updated (5) to reflect proper time for receipt of a non-tax authorization. Added reference and example to (8) governing Disclosures to Corporations. Added note to (11) explaining use of Exhibit 11.3.3-1.

(15) Clarified titles and uses of Form 8821 in IRM 11.3.3.5(3).

(16) Added Exhibit 11.3.3-1 identifying specific examples of acceptable use of the various forms of authorization that may be received.

Effect on Other Documents

This material supersedes IRM 11.3.3 dated January 05, 2016

Audience

All Operating Divisions and Functions.

Effective Date

(08-08-2019)

Related Resources

The Privacy and Disclosure Virtual Library can be found at: https://portal.ds.irsnet.gov/sites/vl003/pages/home.aspx?bookshelf=disclosure



Phyllis T Grimes
Director, Governmental Liaison, Disclosure, and Safeguards

Program Scope and Objectives

  1. Purpose: This IRM covers Disclosures of tax information to Authorized Designees and Practitioners.

  2. Audience: These procedures apply to all IRS employees and contractors.

  3. Policy Owner: The Disclosure office, under Governmental Liaison, Disclosure and Safeguards (GLDS) is responsible for oversight of Disclosure policy.

  4. Program Owner: The GLDS office under Privacy, Governmental Liaison and Disclosure (PGLD) is the program office responsible for oversight of the Servicewide Disclosure policy.

  5. Primary Stakeholders: All IRS business units and functions, that make disclosures of tax information to Authorized Designees.

Background

  1. The primary law governing the authority for disclosure of federal tax information is 26 USC §6103, commonly referred to as the Internal Revenue Code §6103. IRC 6103(a) establishes the confidentiality of returns and return information and prohibits any disclosure not authorized by the Code.

  2. IRC §6103(c) provides that 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 for information, or assistance made by the taxpayer to another person. The Treasury Regulation under IRC §6103(c), 26 CFR §301.6103(c)-1, sets out requirements for such disclosures.

Authority

  1. The following items govern the authority pertaining to Disclosures to Designees and Practitioners:

    • 26 USC §6103(e)(6)

    • 26 CFR §301.6103(c)-1

    • Delegation Order 11-2 found in IRM 1.2.2.11.2

Responsibilities

  1. This Internal Revenue Manual (IRM) is used by all IRS employees authorized under Delegation Order 11-2, found in IRM 1.2.2.11.2, who make disclosures of tax information to a designee or practitioner as part of their official duties.

Terms/Definitions/Acronyms

  1. The following is a list of the terms and acronyms that are used in this IRM section:

    Terms and Definitions

    Word Definition
    Consent (verb) An affirmative and voluntary act that communicates an agreement to, approval of, assent for, or permission, authorizing the disclosure of a taxpayer’s return or return information, or (noun) – A written document prepared and submitted in accordance with Treasury Regulation (TR) §301.6103(c)-1, agreeing to or authorizing the disclosure of a taxpayer’s return or return information. In both forms, the person authorized to consent to the disclosure of the taxpayer’s return or return information must be a person with a material interest defined in IRC §6103(e)(1) through (5), Treasury Regulation §301.6103(c)-1(e)(4), and IRM 11.3.2, Disclosure to Persons with a Material Interest.
    Designee An individual, trust, estate, corporation, partnership, or other third party entity that has the written consent of a taxpayer to receive specific tax information.
    Federal Tax Matter Matter between the taxpayer or their authorized representative and the Internal Revenue Service relating to the taxpayer's return or to a transaction concerning the application or interpretation of - (1) Any provision of law impacting a person's obligations under the internal revenue laws and regulations, including but not limited to the person's liability to pay tax or obligation to file returns; or (2) Any other law or regulation administered by the Internal Revenue Service
    Tax Professional An attorney, certified public accountant, enrolled agent, enrolled actuary, enrolled retirement plan agent, or tax return preparer. See Circular 230 or IRM 1.25.1, Practice Before the Service, for additional information.

     

    Acronyms

    Acronym Definition
    CAF Centralized Authorization File
    CFR Code of Federal Regulations
    CPA Certified Public Accountant
    GLDS Governmental Liaison, Disclosure and Safeguards
    IDRS Integrated Data Retrieval System
    IRC Internal Revenue Code
    IRMF Information Returns Master File
    IRP Information Returns Processing
    IVES Income Verification Express Service
    PGLD Privacy, Governmental Liaison and Disclosure
    POA Power of Attorney
    TDS Transcript Delivery Service
    TEFRA Tax Equity and Fiscal Responsibility Act of 1982
    TIA Tax Information Authorization
    TIN Taxpayer’s Identification Number
    W & I Wage and Investment

     

Related Resources

  1. The following table lists other sources of guidance on disclosures to Designees and Practitioners:

    Guidance Title Guidance
    IRM 1.25.1 Practice Before the Service Provides guidance on the requirements to practice before the IRS.
    IRM 11.3.2 Disclosure to Persons with a Material Interest Information on IRC §6103(e) disclosures to persons with a material interest, including an attorney-in-fact.
    IRM 11.3.4 Congressional Inquiries Information regarding release of Federal Tax Information to a member of Congress under IRC 6103(c)
    IRM 11.3.13 Freedom of Information Act (FOIA) Requests for access to IRS tax records under the FOIA
    IRM 11.3.31 Tax Check Reports on Federal Appointees Information regarding release of Federal Tax Information under IRC 6103(c) to Federal agencies to periodically perform background investigations
    Treasury Department Circular 230 Regulations Governing Practice before the Internal Revenue Service Contains rules governing the recognition of Circular 230 practitioners and other persons representing taxpayers before the IRS.
  2. Additional information may also be found at these related resources:

Introduction to IRC §6103(c)

  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 CFR §301.6103(c)-1, sets out requirements for such disclosures.

  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. Permissible designees under this section include "individuals; trusts; estates; corporations; partnerships; federal, state, local and foreign government agencies, or subunits of such agencies; or the general public" . 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 (see IRM 1.2.2.11.2) identifies Internal Revenue Service (IRS) employees who may make disclosures under IRC §6103(c) and the extent to which this authority may be re-delegated.

  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 applications include the checkbox on the Form 1040 series along with other Tax Return 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), which allows for expedited processing of certain types of transcripts. See the following link for more information: https://www.irs.gov/Individuals/Income-Verification-Express-Service. Taxpayers can also 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 Treasury Department Circular 230; Publication 947, Practice Before the IRS and Power of Attorney; IRM 1.25, Practice Before the Service; 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 IRC §6103(c) consents to allow the disclosure of federal tax information.

General Requirements for Disclosure to Designee of Taxpayer

  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, Taxpayer’s Identification Number (TIN), 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 2015 Form 1040, as well as any information returns related to his 2015 Form 1040. In this example the designee will be able to inspect or receive the taxpayer’s 2015 Form 1040, as well as any information returns of the taxpayer directly related to the 2015 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., 2013-2017 would cover 2013, 2014, 2015, 2016 and 2017), 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, "2012-2013" would cover all quarterly periods in the years 2012 and 2013.

    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 120 days following the date the authorization was signed and dated by the taxpayer. The 120 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 the IRS and otherwise meets Circular 230 Conference and Practice Requirements. See IRM 11.3.3.4, Distinction Between Disclosure to Designees and the Conference and Practice Requirements.

    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 Circular 230 Conference and Practice Requirements. Disclosures to the taxpayer are still authorized under IRC §6103(e). However, contacts in violation of IRC §6304 are subject to civil action under IRC §7433.

    Note:

    For information regarding revocation of Power of Attorney, see IRM 11.3.3.2.7(3) Disclosure to an Attorney-in-Fact, and Publication 947, Practice Before the IRS and Power of Attorney

  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 (see IRM 1.2.2.11.2) determines that disclosure of return information will seriously impair federal tax administration, the IRS must withhold disclosure of the 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 check the box to “Authorize disclosure to third parties”.

  8. If there is doubt concerning the authenticity of the signature, refer to your Business Unit for specific policies and guidelines.

  9. A taxpayer may provide consent on the record when they are a party to an administrative or judicial proceeding (such as an examination, collection or appeals hearing). If the proceeding is in a public venue (such as a court or Congressional hearing), secure a copy of a transcript of such proceeding that recorded the consent. See Treasury Regulation §301.6103(c)-1(e)(1)(i)(C).

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. Once a valid third party authorization is received from the taxpayer, the specific tax matters and tax years provided on the consent can be discussed with the third party. Disclosure and security rules must be followed when dealing with third party designees via telephone. Refer to your Business Unit for specific policies and guidelines on acquiring valid oral or written consent and communicating confidential information.

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 11.3.11.10Disclosure of Amount of Outstanding Lien.

Disclosure to a Spouse

  1. If a taxpayer is requesting information from their jointly filed return, IRC §6103(c) does not require consent from the other spouse. This includes any item listed on the jointly filed return.

  2. Where a joint return has not been filed and a spouse has been claimed as a dependent on a return, that spouse may not be given information without written authorization from the taxpayer.

  3. IRS employees cannot disclose information relating to the non-requesting spouse that is not attached to the jointly filed return without consent.

    Example:

    Upon receipt of a valid request, a jointly filed tax return may be disclosed with W-2s attached from both spouses. However, W-2s from the Information Returns Processing (IRP) system may not be disclosed without authorization.

Disclosure to Other 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. IRC §6103(c) and its regulation do not authorize implied consents. On occasion, taxpayers may bring relatives with them when meeting with the IRS. Their presence does not establish an implied consent by the taxpayer that can be honored by IRS personnel. Employees should obtain an 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 in IRM 11.3.3.3.2, Requirements for Oral Authorization, below.

    Note:

    For information on disclosures to certain family members, as an attorney-in-fact see IRM 11.3.3.2.7(8), Disclosure to an Attorney-in-Fact.

Responses to Congressional Inquiries

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

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. Under 26 CFR §601.505 a taxpayer may revoke a power of attorney without authorizing a new representative by filing a statement of revocation with those offices of the Internal Revenue Service where the taxpayer has filed the power of attorney to be revoked. The statement of revocation must indicate that the authority of the first power of attorney is revoked and must be signed by the taxpayer. Also, the name and address of each recognized representative whose authority is revoked must be listed (or a copy of the power of attorney to be revoked must be attached).

    Note:

    See the instructions for Form 2848 for additional information on revocation using that form.

  4. 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.

  5. 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 Tax Information Authorization 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).

  6. 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 losses 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). Example: If a partner in a TEFRA partnership executes a POA for his 2015 Form 1040, the attorney will be able to inspect the taxpayer's 2015 Form 1040 as well as any information returns of that taxpayer directly related to the 2015 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)(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).

  7. An Attorney Ad Litem normally does not have the power to act for a taxpayer (e.g., 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. See IRM 11.3.2.4.9, Incompetents, for more information.

  8. An individual who is not a Circular 230 practitioner may represent a member of his or her immediate family. The family member representing the taxpayer should be a spouse, parent, child, brother, sister, grandparent, grandchild, step-parent, step-child, step-brother, or step-sister.

  9. Officials authorized in accordance with Delegation Order 11-2 (see IRM 1.2.2.11.2) must withhold return information requested by an attorney in fact to the extent disclosure would seriously impair federal tax administration.

Time-Frames for Processing IRC §§6103(c) and 6103(e) Requests

  1. Disclosure personnel processing requests pursuant to IRC §6103(e) and §6103(c) will ensure that an interim response letter or a status report is initiated by the 30th business date from the IRS received date. If a final response is not provided by the expected final response date of the initial interim response letter or status report, an additional status report must be provided every 30 business days until a final response is issued.

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.

  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. See IRM 11.3.4, Congressional Inquiries, for additional information on disclosures to Congress.

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

    • The taxpayer’s identity: (name, address, TIN, 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 under Treasury Regulation §301.6103(c)-1.

  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 reporting agents.

  7. Officials authorized in accordance with Delegation Order 11-2 (see IRM 1.2.2.11.2) must withhold requested return information to the extent disclosure would seriously impair Federal tax administration.

Use of Interpreters in Tax Administration

  1. Communication to resolve a Federal tax matter with a taxpayer who is hearing impaired, deaf, hard of hearing or does not speak English may involve the use of an interpreter. IRS employees should accept a taxpayer’s verbal consent to disclose tax information to an interpreter for help in resolving the Federal tax matter. (Treasury Regulation §301.6103(c)-1(c)(2) – Oral Consent regulations)

  2. 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 the IRS. The verbal consent must meet the requirements of Treasury Regulation §301.6103(c)-1(c)(2). The taxpayer’s verbal consent must be documented. That documentation must include:

    • The fact consent was received (date, location, circumstances)

    • The scope of the consent (type of tax or tax matter, tax periods)

  3. Interpreters in non-tax matters, including access to tax information for a non-tax purpose, such as needing a transcript to qualify for loans or other financial matters requires a written consent via Form 4506-T, Request for Transcript of Tax Return. Taxpayers can use Form 8821, Tax Information Authorization, (or an equivalent) to designate the interpreter as a person who can access confidential tax information.

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.

  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 26 CFR §601.509 and Treasury Department Circular 230, Regulations Governing Practice before the Internal Revenue Service.

    Example:

    For example, a taxpayer could call a Revenue Officer and request that the Revenue Officer call the taxpayer's Certified Public Accountant (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.

  3. IRC §6103(c) and its regulation do not authorize or recognize implied consents. See IRM 11.3.3.2.5, Disclosure to Other Relatives for additional information.

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 26 CFR §601.501, et. seq.). Treasury Department Circular 230, and all Conference and Practice requirements are overseen by IRS's Office of Professional Responsibility (OPR).

  2. Form 8821, Tax Information Authorization, 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 make the designations specified in 26 CFR §601.501(b)(10) and (13).

  3. Form 2848, Power of Attorney and Declaration of Representative, serves two functions. First, it authorizes a recognized representative to make designations specified in 26 CFR §601.501(b)(10) and (13), meaning, practice before the IRS. Second, it permits the holder of the power or authorization to receive returns and return information.

  4. The Form 2848 is used for representation purposes in Federal tax matters. 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, including a FOIA authorization.

    Example:

    A Form 2848 is submitted for tax year 2016 designating an unenrolled return preparer (URP). However the URP did not prepare the 2016 return. The Form 2848 in such a case would not be honored for disclosure authorization purposes. See Exhibit 11.3.3-1, Quick Guide to the Powers of Attorney and Tax Information Authorizations, for instances where an URP may receive information using Form 2848.

  5. The 120 day requirement discussed above - see IRM 11.3.3.2.1(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 26 CFR §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 the Integrated Data Retrieval System (IDRS) is not sufficient to disclose tax information to a third party requester. The Centralized Authorization File (CAF) system on IDRS 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. (See IRM 11.3.2.4.3, Corporations) 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.

    Example:

    A corporate officer authorized to legally bind the corporation includes, but is not limited to, the president or other chief executive officer of the corporation. The corporate officer can authenticate his or her standing with a written statement on corporate letterhead stationery, that he or she has authority to legally 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 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 CFR §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 Authorization File (CAF), and Publication 947, Practice Before the IRS and Power of Attorney.

    Note:

    See IRM 11.3.3.2.1(5) above, regarding taxpayer contacts where the taxpayer has a duly authorized representative.

    Note:

    See Exhibit 11.3.3-1 Quick Guide to the Powers of Attorney and Tax Information Authorizations, for examples of specific tasks authorized.

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. The Specific Tax Matter item found in Column d of line 3 on the Form 8821, permits the taxpayer to limit disclosure to the matter specified on the Form. 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 non-filing information for the year in question is covered and income documents for that year (including an Information Returns Master File (IRMF) transcript) may be disclosed regardless of whether or not a Form 1040 series return was filed.

Quick Guide to the Powers of Attorney and Tax Information Authorizations

Task Checkbox Designee –This permission can coexist with power of attorney and tax information authorization Tax Information Authorization Designee –Form 8821 (or equivalent) or oral consent tax information authorization Power of Attorney who is Non-Credentialed (Unenrolled) Tax Return Preparer –Form 2848 (or equivalent) Power of Attorney who is Attorney, CPA, Enrolled Agent, Enrolled Actuary, Enrolled Retirement Plan Agent, Full-Time Employee, Officer, Student Attorney/Accountant (QLITC), etc. - Form 2848 (or equivalent)
Be consulted in connection with the processing of tax returns and tax forms Yes, but only in connection with the tax return or tax form on which the individual was designated and only during the time that the designation is effective (e.g., for Form 1040 series returns, 1 year from the date the tax return was due) Yes No, unless the unenrolled return preparer has a tax information authorization or checkbox designation in connection with the return or form that is being processed (see columns 1 and 2), or the processing issue arises during an examination of the tax period covered by the return prepared and signed by the unenrolled return preparer Yes
Be advised of a Balance Due Yes, but only through a return processing notice or if included in a transcript Yes Yes, but only in connection with the examination of a tax return prepared and signed by this unenrolled return preparer Yes
Represent the taxpayer before revenue agents, customer service representatives or similar officers and employees of the Internal Revenue Service during an examination of the taxpayer’s liability for tax No No Yes, but only if this unenrolled return preparer prepared and signed the tax return that is under examination Yes
Represent the taxpayer before TAS personnel No No Y es, but only during the examination of the taxpayer’s liability for a tax and only if this unenrolled return preparer prepared and signed the tax return that is under examination Yes
Represent the taxpayer before Collection personnel No No No Yes
Represent the taxpayer before Appeals, Chief Counsel personnel or similar officers of the Internal Revenue Service No No No Yes
Negotiate Deadlines No No Yes, but only in connection with the examination of a tax return prepared and signed by this unenrolled return preparer Yes
Negotiate a delay of action No No Yes, but only in connection with the examination of a tax return prepared and signed by this unenrolled return preparer Yes
Negotiate a payment No No No Yes
Be advised of an OIC acceptance (or rejection) No No No Yes
Execute an OIC No No No Yes
Execute a payment agreement No No No Yes
Execute waivers of restrictions No No No Yes
Execute a statute extension No No No Yes
Execute a closing agreement No No No Yes
Receive or review transcripts Yes, provided the checkbox authority has not expired Yes No, except in the context of an examination in connection with a tax return that this unenrolled return preparer prepared and signed Yes
Receive information about taxpayer accounts Yes, provided the checkbox authority has not expired Yes No, except in the context of an examination in connection with a tax return that this unenrolled tax return preparer prepared and signed Yes
Be advised of conditions or status of existing payment agreement No Yes No Yes