Final regulations under section 7216 of the Code update the rules regarding the disclosure and use of tax return information by tax preparers. Among other things, the regulations finalize rules for taxpayers to consent to the disclosure or use of their tax return information by tax return preparers. The regulations either modify or clarify (i) the scope of the circumstances to which the rule apply, (ii) the circumstances in which an income tax return preparer may disclose or use tax return information without taxpayer consent, and (iii) the circumstances in which an income tax return preparer may rely upon a taxpayer’s consent to disclose or use information that the income tax return preparer obtains in connection with the preparation of a return. The regulations are applicable to disclosures or uses of tax return information occurring on or after January 1, 2009.

This procedure provides guidance to tax return preparers regarding the format and content of consents to disclose and consents to use tax return information with respect to taxpayers filing a return in the Form 1040 series (e.g., Form 1040, Form 1040NR, Form 1040A, or Form 1040EZ) under regulations section 301.7216-3. This procedure also provides specific requirements for electronic signatures when a taxpayer executes an electronic consent to the disclosure or use of the taxpayer's tax return information.

This announcement contains changes in filing procedures for Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, filed electronically or magnetically. These changes are effective immediately.

This document provides advance notice that the Treasury Department and the IRS are considering issuing rules in proposed regulations (REG-136596-07) regarding the disclosure and use of tax return information by tax return preparers. The rules would apply to the marketing of refund anticipation loans (RALs) and certain other products in connection with the preparation of a tax return and, as an exception to the general principle that taxpayers should have control over their tax return information that is reflected in final regulations published in T.D. 9375, provide that a tax return preparer may not obtain a taxpayer’s consent to disclose or use tax return information for the purpose of soliciting taxpayers to purchase such products. This document invites comments from the public regarding these contemplated rules.