Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has issued final, temporary and proposed regulations providing guidance to tax return preparers regarding the disclosure and use of tax return information. Specifically, the final and temporary regulations modify the rule prohibiting disclosure of the taxpayer's Social Security number (SSN) in Reg. § 301.7216-3(b)(4), effective on or after January 1, 2009. The final and temporary regulations are effective on July 1, 2008, and apply to disclosures or uses of tax return information occurring on or after January 1, 2009, and on or before January 1, 2012.

  CCH Comment. The rule prohibiting disclosure of the taxpayer's social security number (SSN), effective on or after January 1, 2009, requires a U.S. tax return preparer to redact the taxpayer's SSN from a return for which the taxpayer has consented to disclosure to a preparer located outside the U.S.

  The final and temporary regulations allow a tax return preparer located within the U.S. to disclose a taxpayer's Social Security number with the taxpayer's consent to a tax return preparer located outside of the U.S. in limited circumstances. A tax return preparer located within the U.S., including any territory or possession of the U.S., may obtain consent to disclose the taxpayer's SSN to a tax return preparer located outside of the U.S. or any territory or possession of the U.S. if the tax return preparer discloses the SSN through the use of an adequate data protection safeguard as described in Rev. Proc. 2008-35 (TAXDAY, 2008/07/02, I.3), which was issued concurrently to these regulations. This new rule only applies to a tax return preparer's request for consent to disclose tax return information, including an SSN, from a taxpayer filing a return in the Form 1040 series.

  CCH Comment. The intent of these regulations is to facilitate the needs of qualified tax preparers. For example, a situation may require a preparer inside the U.S. to disclose a SSN to a preparer outside the U.S. (1) who is a signing preparer, (2) who requires an unredacted SSN to file a return, or (3) who needs a copy of the entire return to assist an expatriated U.S. taxpayer in efforts to secure treaty benefits.

  The text of the temporary regulations also serves as the text of the proposed regulations A public hearing on the proposed regulations is scheduled for October 6, 2008. Persons wanting to make oral comments at the hearing must submit written comments and an outline of topics to be discussed by September 15, 2008. Written or electronic comments must be received by September 30, 2008.

T.D. 9409, 2008FED ¶47,044

Proposed Regulations, NPRM REG-121698-08, 2008FED ¶49,813

Other References:

 
Code Sec. 7216

  CCH Reference - 2008FED ¶41,368C

  CCH Reference - 2008FED ¶41,368F

  Tax Research Consultant

  CCH Reference - TRC IRS: 6,114.10
CCH Reference - TRC IRS: 66,360.15