Education is your best defense in guarding against professional liability claims. Sign up for our Email Newsletter and receive Alerts, Articles, and White Papers on protecting and managing your practice.
Sample Consent Forms & Statements
Guidance on IRC 7216 and revised Regulations
IRS SEC 7216 - Disclosure or use of Tax Information
Effective 1/1/09, revised regulations under IRC 7216 limits tax return preparers' use and disclosure of information obtained during the return preparation process. These revised regulations provide for criminal (and civil) penalties for unauthorized disclosure of tax information.
Many states have strict accountant-client privilege and a court order may not be sufficient to override the need for consent. A subpoena is not a court order and you should contact NAPLIA and/or local legal counsel before complying with any request for information gathered or produced in connection with tax services.
- Unless section IRC 7216 specifically permits the disclosure or use of tax information, a tax return preparer may not disclose or use a a taxpayer's tax return information prior to obtaining a consent from the taxpayer.
- Consent must be knowing and voluntary
- There are form and content requirements that all consents must adhere to
- There are limitations up on consents to disclose a taxpayer's social security number to a tax return preparer located outside the United States
Form & Content:
- A taxpayer's consent to each separate disclosure or use of tax information must be contained on a separate written document, which can be furnished on paper or electronically. It may not be part of an engagement letter, but may be provided as an attachment to such.
- Special rules apply for multiple disclosures or uses within a single consent form.
- A consent furnished to the taxpayer on paper must be provided on one or more sheets of 8 1/2" x 11" paper. All of the text one each sheet must pertain solely to the disclosure and must be in at least 12-point type.
- If a taxpayer furnishes consent to disclose or use tax return information electronically, the taxpayer must furnish the tax return preparer with an electronic signature that will verify that the taxpayer consented to the disclosure or use. Regulations require the consent be knowing and voluntary. Therefore, for an electronic consent to be valid, it must be furnished in a manner that ensures affirmative, knowing consent to each disclosure or use.
4 Types of Consents:
- Consent to disclose tax return information in context other than tax preparation or auxiliary service
- Consent to disclose tax return information in tax preparation or auxiliary services context
- Consent for disclosure of tax return information to a tax return preparer outside the US with no Social Security number
- Consent for disclosure of tax return information to a tax return preparer outside the US with Social Security number
Permitted Disclosures without consent (partial list):
Accountants must review their state regulations
- pursuant to other provisions of IRS Code or regulations
- officers or employees of the IRS
- for the preparation of a taxpayer's tax return
- to other preparers
- related taxpayers
- court & regulatory bodies
- attorney for the purpose of securing legal advice
- officer of the court
- corporate fiduciaries
- taxpayer's fiduciary
- employee of the Treasury dept for use in investigation of the tax return preparer
- quality or peer reviews
- to report the commission of a crime
- due to tax return preparer's incapacity or death
The information contained on this page is based on generalizations and may not include all relevant information necessary for you and/or your clients. It is not intended for the purpose of providing specific legal, accounting, or other professional advice to any particular recipient or with respect to any particular jurisdiction. The author, publisher, and distributor of this document (1) make no representations, warranties, or guarantees as to its technical accuracy or compliance with any law ( federal, state, or local) or professional standard; and, (2) assume no responsibility to any recipient of this document to correct or update its contents for any reason, including changes in any law or professional standard. Before using any consent letter in your practice, you should formally retain the counsel of an attorney knowledgeable as to the accounting industry, your practice, and the laws of any jurisdiction(s) within which you conduct your practice to ensure the document's maximum usefulness and compliance with applicable laws and professional standards.