Mandatory language for consents to disclose, use taxpayer information modified

In Rev. Proc. 2013-14, the IRS provided guidance to tax return preparers about the format and content of taxpayer consents to disclose and consents to use tax return information and modified the mandatory language required on each taxpayer consent. The guidance applies to individuals filing a return in the Form 1040 series. The revenue procedure also lists specific requirements for electronic signatures when a taxpayer executes an electronic consent to the disclosure or consent to the use of the taxpayer’s tax return information.

Rev. Proc. 2013-14 modifies and supersedes rules issued in 2008 (Rev. Proc. 2008-35) and was effective Jan. 14, 2013.

Taxpayers who do not file a return in the Form 1040 series may use language prescribed in the revenue procedure or may use consents whose formats and content do not conform to the revenue procedure, as long as those consents otherwise meet the requirements of Regs. Sec. 301.7216-3.

In the revenue procedure, the IRS said that some taxpayers have expressed confusion over whether they must complete consent forms to engage a tax return preparer to perform tax return preparation services. The modified language required in consent forms clarifies that a taxpayer does not need to complete a consent form to engage a tax return preparer to perform only tax return preparation services. One example in the revenue procedure provides that if a tax return preparer makes provision of tax preparation services contingent on the taxpayer’s signing a consent, the consent is not valid because it is not voluntary. However, a taxpayer must complete a consent form as described in the revenue procedure to allow a tax return preparer to disclose or use tax return information in providing services other than tax return preparation.

Each separate consent to disclosure or use of tax return information must be contained on a separate written document (either paper or electronic). The separate written document may be provided as an attachment to an engagement letter furnished to the taxpayer.

The revenue procedure prescribes formats for consents on paper and in electronic form, as well as general statements and statements that must be included in various circumstances. All consents must require the taxpayer’s affirmative consent to a tax return preparer’s disclosure or use of tax return information. An “opt-out” consent that requires the taxpayer to remove or deselect disclosures or uses that the taxpayer does not wish to be made is not permitted. For an electronic consent to be valid, it must be furnished in a manner that ensures the taxpayer’s affirmative, knowing consent to each disclosure or use. A tax return preparer may not alter a consent form after the taxpayer has signed the document, including by filling in blank spaces.

All consents to disclose or use tax return information must be signed by the taxpayer. Taxpayers may sign electronic consents by any method prescribed in the revenue procedure.