Protecting Taxpayer Privacy Act

Protecting Taxpayer Privacy Act - Amends the Internal Revenue Code to require Treasury regulations to prohibit tax return preparers from disclosing tax return information to third parties without taxpayer consent and unless such third parties are corporate affiliates of the tax return preparer or a corporate fiduciary with respect to the taxpayer. Authorizes the issuance of additional regulations permitting other limited disclosures of tax return information.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2484 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2484

 To amend the Internal Revenue Code of 1986 to prohibit the disclosure 
  of tax return information by tax return preparers to third parties.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 30, 2006

Mr. Obama (for himself, Mr. Menendez, Mr. Harkin, Mrs. Clinton, and Mr. 
  Lieberman) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to prohibit the disclosure 
  of tax return information by tax return preparers to third parties.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Taxpayer Privacy Act''.

SEC. 2. PROHIBITION ON TAX PREPARERS DISCLOSING TAX RETURN INFORMATION 
              TO THIRD PARTIES.

    (a) In General.--Paragraph (3) of section 7216(b) of the Internal 
Revenue Code of 1986 (relating to regulations) is amended to read as 
follows:
            ``(3) Regulations.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to a disclosure or use of information which is 
                permitted by regulations prescribed by the Secretary 
                under this section.
                    ``(B) Disclosure to third parties.--The regulations 
                under this section shall not permit the disclosure or 
                use of information, with respect to the return of any 
                taxpayer, to or for any person unless such taxpayer has 
                granted consent to such disclosure or use and such 
                person is--
                            ``(i) a member of the same affiliated group 
                        (within the meaning of section 1504) as the 
                        person preparing providing services in 
                        connection with the return; or
                            ``(ii) a corporate fiduciary with respect 
                        to the taxpayer.
                    ``(C) Other disclosures.--Notwithstanding 
                subparagraph (B), the regulations under this section 
                may permit (subject to such conditions as such 
                regulations shall provide) the disclosure or use of 
                information--
                            ``(i) to a person related to the taxpayer 
                        with respect to whose return the information 
                        was obtained, but only in connection with 
                        preparing, or providing services in connection 
                        with the preparation of, the return of such 
                        related taxpayer;
                            ``(ii) to an attorney, an employee of the 
                        Internal Revenue Service, or an officer of a 
                        court for use in revenue investigations or 
                        court proceedings;
                            ``(iii) to the fiduciary of the taxpayer 
                        with respect to whose return the information 
                        was obtained if such taxpayer dies or becomes 
                        incompetent, insolvent, or bankrupt;
                            ``(iv) to another person engaged in the 
                        business of preparing, or providing services in 
                        connection with the preparation of, a tax 
                        return for the purposes of assisting with the 
                        preparation or processing of the tax return;
                            ``(v) to report the commission of a crime;
                            ``(vi) for quality or peer reviews; and
                            ``(vii) to another person for the purpose 
                        of assisting the operation of the business of 
                        the person described in subsection (a) in the 
                        case such person dies or becomes 
                        incapacitated.''.
    (b) Conforming Amendment.--Subparagraph (B) of section 7216(b)(1) 
of the Internal Revenue Code of 1986 is amended by inserting ``, a 
Federal agency, or a State agency which regulates tax return 
preparers'' after ``court''.
    (c) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
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