Publications

• 30 Second Ideas
• Accounting Updates
• Alerts
• Articles
• Business Surveys
• Construction Edge
• Healthcare Edge
• Insurance Edge
• Legal Talent
• Manufacturing Edge
• Not-for-Profit Edge
• Quick Links & Good Ideas
• SEC Edge
• Strategy Insights Blog
• Surviving the Upturn
• Tax Highlights

Strict New Rules Regarding Disclosure and/or Use of Tax Information by Tax Return Preparers

The IRS has issued new rules regarding the disclosure and/or use of tax information by tax return preparers. These new rules apply to disclosures and/or use of tax information after December 31, 2008. The rules are designed to protect confidential financial and contact information obtained during the tax preparation process (including e-mail addresses and telephone numbers). Overall, we believe these rules are beneficial since some tax return preparers might not fully disclose how they used taxpayer information.

How will these new rules affect tax preparers and taxpayers?

Tax preparers cannot disclose and/or use tax return information without the taxpayer's advance, written consent. Consent must be given knowingly, voluntarily and before such information is disclosed and/or used. There are some narrow exceptions such as an IRS or state tax audit, a subpoena from a court and certain related parties who have not been expressly prohibited from such disclosure. In addition, disclosure of taxpayer information outside the U.S. is of particular concern to the IRS. Consent is required even if the information is disclosed to a tax return preparer who is located overseas and employed by the U.S. firm engaged to prepare the return. Blackman Kallick does not utilize the services of any overseas parties for U.S. or state income tax return preparation. Violating these new disclosure rules could potentially result in criminal and civil penalties.

The new rules define a tax return preparer as any person who is engaged in the business of preparing or assisting with tax return preparation. This includes any person who performs auxiliary services in connection with tax return preparation. Such auxiliary services include, but are not limited to, assemblying, e-filing, copying, storage or other services provided in the office of a tax return preparer (whether or not provided by the tax return preparer or the tax return preparer's employees or independent contractors).

How will this affect me?

In most situations, there will be no effect. However, taxpayers sometimes ask us to send a copy of their return to their banker or other creditor. Going forward, we are required to obtain written consent from you before we may send any portion of your tax information to any party other than you. Please note that although we may not send your tax information to third parties without your consent, we are allowed to send you copies of your return, which you may then send to any party you wish.

The intention of these rules is to keep confidential taxpayer information secure. Please bear with us when we request your written consent prior to sending out tax information to anyone other than you.

For further information, please contact Kristen Baehl at 312-980-3238 or Mike Calahan at 312-980-2996 or your Blackman Kallick tax advisor.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.