Academic journal article Journal of Accountancy

Confidentiality Protection Introduced in the House

Academic journal article Journal of Accountancy

Confidentiality Protection Introduced in the House

Article excerpt

Recent House legislation would curtail the unwarranted use of summons authority by the Internal Revenue Service. The Taxpayer Confidentiality Act of 1997 (HR 2563), sponsored by Jennifer Dunn (R-Wash.) and John S. Tanner (D-Tenn.), is intended to provide more balance between the level of authority the IRS requires to enforce the tax code and the right of taxpayers to confidentiality for personal information and tax advice.

Currently, the IRS has the authority not only to obtain factual information necessary to determine taxpayer compliance but also nonfactual personal and proprietary information such as advice, analysis and opinions taxpayers receive from their tax advisers. Taxpayers can protect nonfactual information if they have legal counsel; however, this practice results in unequal treatment of taxpayers based on their financial resources or choice of tax professional.

HR 2563 would limit the IRS's scope of authority to the factual information on which a return is based and information used to document gross income in routine audits. …

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