IRS likely to clarify Section 7216 requirements before year-end
The AICPA’s Tax Team reports that the IRS is working to meet a year-end deadline to release clarifying guidance to help tax practitioners during the upcoming tax season meet the regulations under Section 7216.
Effective Jan. 1, 2009, Section 7216 limited tax return preparers’ use and disclosure of information obtained during the return preparation process to activities directly related to the preparation of the return. The regulations describe how preparers, with the informed written consent of taxpayers, may use or disclose return information for other purposes and describes specific and limited exceptions that allow a preparer to use or disclose return information without the consent of taxpayers.
The most troublesome aspect of the changes relates to the penalty provisions. The regulations carry a criminal penalty for “knowingly or recklessly” disclosing or using tax return information with each section 7216 violation resulting in a fine of up to $1,000, a one-year prison term or both.
Visit OSCPA’s Web site for more details on Section 7216 and resources on how to comply.
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