II 

109TH CONGRESS 

2D SESSION S. 2484 

To amend the Internal Revenue Code of 1986 to prohibit the disclosure 

of tax return information by tax return preparers to third parties. 

IN THE SENATE OF THE UNITED STATES 

MARCH 30, 2006 

Mr. OBAMA (for himself, Mr. MENENDEZ, Mr. HARKIN, Mrs. CLINTON, and 

Mr. LIEBERMAN) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to prohibit 

the disclosure of tax return information by tax return 

preparers to third parties. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting Taxpayer 

5 Privacy Act’’. 


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1 SEC. 2. PROHIBITION ON TAX PREPARERS DISCLOSING TAX 

2 RETURN INFORMATION TO THIRD PARTIES. 

3 (a) IN GENERAL.—Paragraph (3) of section 7216(b) 

4 of the Internal Revenue Code of 1986 (relating to regula5 tions) is amended to read as follows: 

6 ‘‘(3) REGULATIONS.— 

7 ‘‘(A) IN GENERAL.—Subsection (a) shall 

8 not apply to a disclosure or use of information 

9 which is permitted by regulations prescribed by 

10 the Secretary under this section. 

11 ‘‘(B) DISCLOSURE TO THIRD PARTIES.— 

12 The regulations under this section shall not 

13 permit the disclosure or use of information, 

14 with respect to the return of any taxpayer, to 

15 or for any person unless such taxpayer has 

16 granted consent to such disclosure or use and 

17 such person is— 

18 ‘‘(i) a member of the same affiliated 

19 group (within the meaning of section 

20 1504) as the person preparing providing 

21 services in connection with the return; or 

22 ‘‘(ii) a corporate fiduciary with re23 spect to the taxpayer. 

24 ‘‘(C) OTHER DISCLOSURES.—Notwith25 standing subparagraph (B), the regulations 

26 under this section may permit (subject to such 


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1 conditions as such regulations shall provide) the 

2 disclosure or use of information— 

3 ‘‘(i) to a person related to the tax4 payer with respect to whose return the in5 formation was obtained, but only in con6 nection with preparing, or providing serv7 ices in connection with the preparation of, 

8 the return of such related taxpayer; 

9 ‘‘(ii) to an attorney, an employee of 

10 the Internal Revenue Service, or an officer 

11 of a court for use in revenue investigations 

12 or court proceedings; 

13 ‘‘(iii) to the fiduciary of the taxpayer 

14 with respect to whose return the informa15 tion was obtained if such taxpayer dies or 

16 becomes incompetent, insolvent, or bank17 rupt; 

18 ‘‘(iv) to another person engaged in the 

19 business of preparing, or providing services 

20 in connection with the preparation of, a 

21 tax return for the purposes of assisting 

22 with the preparation or processing of the 

23 tax return; 

24 ‘‘(v) to report the commission of a 

25 crime; 


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1 ‘‘(vi) for quality or peer reviews; and 

2 ‘‘(vii) to another person for the pur3 pose of assisting the operation of the busi4 ness of the person described in subsection 

5 (a) in the case such person dies or becomes 

6 incapacitated.’’. 

7 (b) CONFORMING AMENDMENT.—Subparagraph (B) 

8 of section 7216(b)(1) of the Internal Revenue Code of 

9 1986 is amended by inserting ‘‘, a Federal agency, or a 

10 State agency which regulates tax return preparers’’ after 

11 ‘‘court’’. 

12 (c) EFFECTIVE DATE.—The amendment made by 

13 this section shall take effect on the date of the enactment 

14 of this Act. 

Æ 


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