IRS Proposes to Let Tax Preparers Sell Tax Information (AccountingWeb.com)

A proposal by the Internal Revenue Service (IRS) to permit tax preparers to sell tax information to third parties for marketing purposes if the taxpayer has signed a consent, drew little attention when it was first published in December as part of a set of proposed changes to Section 6103 of the tax code. Section 6103 covers disclosure of taxpayer information. But now, some members of Congress and consumer groups are questioning the change.

It is hard to understand why any taxpayer would ever sign such a consent, CNNMoney.com says. Taxpayers have nothing to gain, an editorial in the Houston Chronicle says. “The only parties that stand to profit by the proposal are large tax preparers and the marketing firms who would buy and use the data.”

Consumer advocates fear that the consent could be buried in a pile of documents the taxpayers is asked to sign or could be presented in a hard-to-understand format. Jean Ann Fox of the Consumer Federation of America said that taxpayers could be duped into releasing their information and risk “having that information in a database somewhere,” according to the Washington Post. She said that the proposed change “essentially turns tax return information into a commodity for the highest bidder.”

The IRS says that the new rules were drafted to cover electronic transmission and other business practices, including “offshoring” of tax preparation work, that were not contemplated at the time current rules were adopted, the Post reports. (more…)

Advertisements