Authorized DisclosureMs. Greta P. Hicks
August 14, 2013 — 1,755 views
What can Internal Revenue Service (IRS) employees release to taxpayers or their authorized representatives? The IRS Restructuring and Reform Act of 1998 invokes severe penalties against IRS employees who release taxpayer information to unauthorized persons or the wrong taxpayer. The related Code sections are Sec. 7217, Civil Damages for Unauthorized Disclosure; Sec. 7213, Unauthorized Disclosure and Sec. 6103, Confidentiality and Disclosure of Returns and Return Information.
All employees have since had training in the proper methods of identifying the “correct” or “authorized” person and training in what types of documents the IRS can release without the taxpayer or representative using a Freedom of Information Act (FOIA) request.
Authorized disclosure is covered in the Internal Revenue Manual at “IRM 126.96.36.199.10, Routine Established Agency Procedures.” The manual states: “Requests for records that can be processed routinely in accordance with the established procedures set forth in 26 CFR 601.702(d) are specifically excluded from the processing requirements of the FOIA. Requests should be analyzed to determine if the request should be handled according to these procedures…”
What Kinds of Requests Can Be “Processed Routinely?”
Example: CPA1, authorized representative, was working with an appeals officer to resolve an innocent spouse claim. CPA1 requested a transcript of the years in question, copies of the original forms 1040 and a copy of the form 8857. To both requests made by CPA1, the employee replied that an FOIA request was required. After much conversation, in frustration CPA1 called the Disclosure Officer and explained the situation. He replied: “This happens often, and we try to train employees to keep it from happening.” He offered to call the employee. CPA1 requested a Cod Section or an IRM section and was given the IRM discussed above. It further states: “Routine established agency procedures will apply to requests for tax returns and attachments or transcripts. Requests for access to open case files directed to compliance personnel may be processed outside of FOIA, if in the best interests of customer service…”
Never give up. An FOIA request is a lengthy process and the ones made through the court system are given priority.
Always ask the IRS worker who has the “open and active case file” to provide you with needed documents, such as: record of account, transcript of account, transcript of returns, copies of auditor or agents work papers, or copies of documents in the taxpayer’s active case file. If you are refused, talk to the group manager. If all else fails, talk tko the Disclosure Officer. IRS headquarters offices in Dallas, Austin and Houston have Disclosure Officers that are a part of the SBSE Operating Division.
If you need records where an FOIA is required, read IRM 188.8.131.52 or go to www.irs.gov/foia/index.html for guidance. The FOIA, 5 U.S.C. 552, provides public access to agency records unless protected from disclosure by one of the FOIA’s nine exemptions or three exclusions. The FOIA applies to records created by federal agencies and does not cover records held by Congress, the courts or state and local government agencies.
Mandatory Employee Terminations
The IRS must terminate an IRS employee for certain proven violations committed by the employee in performing official duties. The violations, commonly called “The 10 Deadly Sins,” include:
- Willfully failing to obtain the required approval signatures on documents authorizing the seizure of a taxpayer’s home, personal belongings or business assets;
- Providing a false statement under oath that is material to a matter involving a taxpayer;
- Falsifying or destroying documents to conceal mistakes made by any employee with respect to a matter involving a taxpayer or taxpayer representative;
- Committing an assault or battery on a taxpayer or other IRS employee, but only if there is a criminal conviction or a final judgment by a court in a civil case, with respect to the assault or battery;
- Violating a taxpayer, taxpayer representative or other IRS employee of any right under the U.S. Constitution or certain civil rights;
- Violating the Internal Revenue Code, Treasury Regulations or IRS policies (including the Internal Revenue Manual) to retaliate or harass a taxpayer or other IRS employee;
- Willfully misusing Code Sec 6103 to conceal data from a Congressional inquiry;
- Willfully failing to file any tax return required under the Code on or before the due date (including extensions) unless the failure is due to a reasonable cause;
- Willfully understating federal tax liability, unless the understatement is due to a reasonable cause; and
- Threatening to audit a taxpayer to extract personal gain or benefit.
Ms. Greta P. Hicks
Greta P Hicks CPA
Greta P Hicks is a former IRS Examination manager and Ms Hicks currently serves on the Editorial Board of the Texas Society of CPAs and is Tax Editor of Today’s CPA. Greta is active on the TSCPA IRS Relations Committee and teaches seminars on IRS.