TAP G04-039

Confidentiality of Information Provided to Tax Preparers

Statement of Issue:

The disclosure of taxpayers’ personal information by tax preparers has become a serious issue and may be a contributing factor in the rapid rise of identity theft.

Proposal:

1. Publicity to inform the public about the confidentiality laws, taxpayer rights, and the avenues provided by IRS, OPR, and DOJ to taxpayers to report violations of confidentiality and to pursue their cases with these agencies. This publicity could be as simple as an additional explanation in the FTC booklet, ID Theft: What's it All About?
2. Encourage OPR and the IRS' Return Preparer Program to seek out cases rather than wait for referrals. The new director of OPR has indicated that he would like OPR to take a more active role in identifying cases; in addition, he has begun a collaboration with 94 DOJ offices about cases the OPR can pursue.
3. Establish an IRS toll-free hotline with trained personnel who are able to refer cases to OPR or RPP. The Service could consider piggybacking on an existing toll-free line, thereby minimizing its costs. Information about the hotline and its number could be included in the 1040 Instructions under the section “Help with Unresolved Tax Issues: Office of the Taxpayer Advocate.” The information could also be available at Taxpayer Assistance Centers and other locations where tax information is disseminated.