The Internal Revenue Code provision that criminalizes a tax preparer's unauthorized disclosure or use of taxpayer return information.
Internal Revenue Code Section 7216 makes it a misdemeanor for a tax return preparer to knowingly or recklessly disclose or use taxpayer return information for any purpose other than preparing the return, with penalties of up to $1,000 per violation and one year of imprisonment. Section 7216 requires written consent in a specific format before a preparer can share return information with third parties (other than the taxpayer), use it for non-return purposes, or send it offshore. IRS Revenue Procedure 2013-14 specifies the consent format.
Section 7216 is the criminal companion to the FTC's civil Safeguards Rule. It applies even without a data breach: simply using return data for an unauthorized purpose, such as marketing other services without proper consent, triggers it. Firms that offshore work, send returns to overseas preparers, or share data with affiliated businesses must follow the consent procedures precisely or face criminal exposure.
IRS guidelines outlining data security requirements and best practices for tax professionals handling taxpayer information.
A documented set of policies and procedures describing how your firm protects sensitive client data.
Any record about a consumer that is held by a financial institution, including tax returns, Social Security numbers, and financial account data.
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