CUNA Regulatory Comment Call
October 25, 1999
[Federal Register: October 8, 1999 (Volume 64, Number 195)]
[Notices]
[Page 54960-54961]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08oc99-188]
DEPARTMENT OF THE TREASURY
Solicitation for Comment in Connection With a Study Being Conducted by the Department of the Treasury Relating to the Scope and Use of Provisions Regarding Taxpayer Confidentiality
AGENCY: Department of the Treasury.
ACTION: Solicitation for comment.
SUMMARY: This is a solicitation for public comment in connection with a study being conducted by the Department of the Treasury relating to the scope and use of provisions regarding taxpayer confidentiality. This study is required by section 3802 of the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206, 112 Stat. 782).
DATES: Written comments must be submitted by November 15, 1999.
ADDRESSES: Send comments to: Elizabeth P. Askey, Office of Tax Legislative Counsel, Department of the Treasury, 1500 Pennsylvania Avenue, NW, Room 1321A, Washington, DC 20220. Comments may also be submitted to: taxpolicy@do.treas.gov--the subject line should contain the phrase "Confidentiality Study." All comments will be available for public inspection and copying.
FOR FURTHER INFORMATION CONTACT: Elizabeth Askey at 202-622-0224 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
Section 6103 of the Internal Revenue Code (Code) prohibits the
disclosure of tax returns or returns information except as otherwise
authorized by the Code. Permitted disclosures include:
(1) Disclosures to a taxpayer or the taxpayer's designee pursuant
to the taxpayer's consent;
(2) Disclosures for purposes of tax administration (including state
tax administration);
(3) Disclosures to federal state, or local governmental agencies
for nontax purposes such as child support enforcement and verifying
taxpayers' eligibility for certain designated needs based programs,
including food stamps, and certain Social Security benefits; and (4)
Disclosures for nontax law enforcement purposes. Permitted disclosures
generally are subject to strict procedural safeguards. Unauthorized
disclosure or inspection of returns and return information may result
in civil damages against the United States and/or criminal penalties
against individuals who unlawfully disclose or inspect tax information.
Section 6104 makes available to the public certain tax information
related to tax-exempt organizations and certain other entities. In the
case of any tax exempt organization, section 6104 generally provides
that the organization's application for tax exemption and supporting
documents, IRS determination letter, and annual information returns
filed under section 6033 are available for public inspection at certain
IRS offices and at the organization's principal office (and certain
regional and district offices). In addition, copies of such documents
are generally available upon request made to the organization or the
IRS. Section 6104 also authorizes the Secretary to disclose to certain
state officials charged with overseeing charitable organizations
described in section 501(c)(3) information relating to any
organization's failure to qualify for, or subsequent loss of, section
501(c)(3) status, or the mailing of certain notices of tax deficiency.
Section 3802 of the IRS Restructuring and Reform Act of 1998
requires the Secretary of the Treasury to study the scope and use of
provisions regarding taxpayer confidentiality Specifically, the study
is to examine:
1. The present protections for taxpayer privacy,
2. Any need for third parties to use tax reform information,
3. Whether greater levels of voluntary compliance may be achieved by allowing the public to know who is legally required to file tax returns, but does not file tax returns,
4. The interrelationship of the taxpayer confidentiality provisions in the Internal Revenue Code of 1986 with provisions in other Federal law, including 5 U.S.C. 552a (commonly known as the Freedom of Information Act),
5. The impact on taxpayer privacy of the sharing of incoming tax return information for purposes of enforcement of state and local tax laws other than income tax laws, including the impact on the taxpayer privacy intended to be protected at the Federal, state, and local levels under Public Law 105-35, the Taxpayer Browsing Protection Act of 1997, and,
6. Whether the public interest would be served by greater disclosure of information relating to tax-exempt organizations described in section 501 of the Internal Revenue Code of 1986.
Request for Public Comment
The Department of the Treasury invites comments relative to the six
topics described. In particular, the Department of the Treasury invites
comments with respect to the following:
1. How is the privacy protection provided by section 6103
beneficial to taxpayers?
2. How is the section 6103 statutory scheme burdensome for
taxpayers? Does section 6103 affect the IRS's ability to deliver
quality customer service and, if so, in what ways?
3. Is the statutory structure and/or administration of section 6103
consistent, simple, administrable, and fair? What changes, if any,
should be made to the content and/or administration of section 6103?
4. What is the relationship between taxpayer confidentiality as
provided by
[[Page 54961]]
section 6103 and compliance with the internal revenue laws? What
effect, if any, might publishing the names of nonfilers have on
compliance with the internal revenue laws? What effect, if any, might
broadening the scope of permissible disclosures have on compliance with
the internal revenue laws?
5. What impact has technology had on the protection of taxpayer
privacy and what, if any, additional safeguards may be necessary as a
result? As the IRS moves toward electronic filing and maintenance of
tax records, what, if any, changes should be made to the
confidentiality rules under section 6103?
6. What impact have taxpayer privacy protections had on the ability
of federal, state, and local agencies to receive information critical
to their operation, particularly information not easily obtainable from
other sources?
7. Should tax information be used for nontax purposes? If so, what
factors should influence whether agencies and others should be
permitted direct access under section 6103 to taxpayer information for
nontax purposes? What factors should influence whether agencies and
others should be allowed to obtain such information by consent from the
taxpayer, for example, as a condition to approval of mortgages or other
loans, or for obtaining government benefits? Should there be any
conditions or restrictions on the recipient's use of tax information
obtained by consent?
8. What factors should influence whether federal, state, or local
agencies that receive tax information to carry out particular programs,
and who use private contractors for data processing and other services,
should be permitted to disclose tax information to those contractors
for the purpose of performing those programs?
9. What changes, if any, should be made to either the safeguard
program or the consent process?
10. What, if any, additional restrictions should be placed on the
ability of those who receive tax information to redisclose the
information to other parties? What means should be used to implement
any such redisclosure protections?
11. How can taxpayer privacy concerns and a desire for more
information-sharing within government be balanced?
12. Would the public interest be served by allowing greater sharing
of information between the IRS and other federal and state agencies for
joint investigations relating to the enforcement of federal and state
laws affecting tax-exempt organizations? What restrictions, if any,
should be imposed on use of the information by those agencies?
13. Do the public inspection provisions of section 6104 and section
6110 provide adequate disclosure of IRS determinations affecting tax-
exempt organizations? If not, what additional information should be
made available?
14. Is the information currently reported by tax-exempt
organizations to the IRS adequate to ensure effective oversight? If
not, what additional information should be reported? Should there be
more detailed disclosure regarding transactions between tax-exempt
organizations and their subsidiaries or other affiliates?
Joseph Mikrut,
Tax Legislative Counsel.
[FR Doc. 99-26228 Filed 10-7-99; 8:45 am]
BILLING CODE 4810-25-M
