The IRS modified its final rules regarding the disclosure of a taxpayer’s Social Security number to a tax return preparer located outside the U.S. to allow disclosure under specified circumstances. Previously, the rules had generally required U.S. preparers to redact SSNs from tax return forms and other information transmitted to a foreign preparer.
The IRS decided, however, that if both domestic and foreign preparers’ programs and procedures adequately protect the numbers and other confidential information against unauthorized access or other misuse, redaction is not necessary. Treasury Decision 9409, which modifies TD 9375, was accompanied by Revenue Procedure 2008-35, which in turn supersedes Rev. Proc. 2008-12. Prop. Treas. Reg. § 301.7216-3 and Temp. Treas. Reg. § 301.7216-3T, both issued as part of the recent Treasury decision, allow the disclosure where a taxpayer gives consent and the U.S. preparer verifies “adequate data protection safeguards” are in place. They also clarify that the general prohibition against disclosure pertains only to the 1040 series of forms.