Paying taxes involves disclosing a vast amount of personal information about oneself, one’s family, and one’s business to the IRS. If you seek the assistance of an accountant or other tax preparer, your personal information makes an additional stopover on its way to the government. Unfortunately, the wealth of information included in tax returns is incalculably valuable to identity thieves and other scammers. As a result, federal law closely protects the privacy of taxpayer information. This protection relies on extensive security measures by both the government and the businesses that handle taxpayers’ returns. Our Los Angeles tax advisors want to take this opportunity to explain the scope of your protections.
Privacy of Taxpayer Information
Section 6103 of the Internal Revenue Code (IRC) establishes that the information in taxpayers’ returns is confidential. The IRS may not disclose taxpayer information to anyone without the taxpayer’s written consent, unless disclosure to other tax officials or law enforcement is specifically required by law.
Federal law holds the IRS to a high standard of accountability in this matter. An IRS employee or other person who accesses confidential taxpayer information in violation of § 6103 commits a criminal offense punishable by up to one year in prison and a fine of up to $1,000. The taxpayer whose information is accessed without authorization may bring a civil suit against the U.S. government for the greater of either $1,000 per violation, or the actual damages they suffered plus, in the event of a willful or grossly negligent violation, punitive damages.