I 

109TH CONGRESS 

2D SESSION H. R. 5075 

To amend the Internal Revenue Code of 1986 to clarify the restriction 

on disclosures and use of information by tax return preparers. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 4, 2006 

Mr. STARK (for himself, Mr. MCDERMOTT, Ms. BEAN, and Mr. INSLEE) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to clarify 

the restriction on disclosures and use of information 

by tax return preparers. 

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 ‘‘Taxpayer Privacy Act 

5 of 2006’’. 


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1 SEC. 2. CLARIFICATION OF RESTRICTION ON DISCLOSURES 

2 AND USE OF INFORMATION BY TAX RETURN 

3 PREPARERS. 

4 (a) RESTRICTION ON FOREIGN USE AND DISCLO5 SURE.—Section 7216 of the Internal Revenue Code of 

6 1986 (relating to disclosure or use of information by pre7 parers of returns) is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(c) RESTRICTION ON FOREIGN USE AND DISCLO10 SURE.— 

11 ‘‘(1) IN GENERAL.—Any disqualified foreign 

12 use or disclosure by a tax return preparer shall be 

13 treated as a violation of subsection (a). 

14 ‘‘(2) DISQUALIFIED FOREIGN USE OR DISCLO15 SURE.—For purposes of this subsection— 

16 ‘‘(A) IN GENERAL.—The term ‘disqualified 

17 foreign use or disclosure’ means— 

18 ‘‘(i) any use by the tax return pre19 parer (or any officer or employee of such 

20 preparer) outside the United States of in21 formation described in subsection (a), and 

22 ‘‘(ii) any disclosure by the tax return 

23 preparer of information described in sub24 section (a) to any person (including any of25 ficer or employee of any person) who is lo26 cated outside the United States. 


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1 ‘‘(B) EXCEPTIONS.—Such term shall not 

2 include any use or disclosure of information 

3 if— 

4 ‘‘(i) the taxpayer initially furnishes 

5 such information to a tax return preparer 

6 located outside the United States, or 

7 ‘‘(ii) the taxpayer has significant busi8 ness activities outside the United States 

9 and use or disclosure is appropriate given 

10 such activities. 

11 ‘‘(3) TAX RETURN PREPARER.—For purposes 

12 of this subsection, the term ‘tax return preparer’ 

13 means any person who is engaged in the business of 

14 preparing, or providing services in connection with 

15 the preparation of, returns of the tax imposed by 

16 chapter 1, or any person who for compensation pre17 pares any such return for any other person. 

18 ‘‘(4) UNITED STATES.—For purposes of this 

19 subsection, the term ‘United States’ includes any 

20 territory or possession of the United States.’’. 

21 (b) PROHIBITION ON TAXPAYER CONSENT TO DIS22 CLOSURE OR USE OF INFORMATION.—Paragraph (3) of 

23 section 7216(b) of such Code is amended to read as fol24 lows: 

25 ‘‘(3) REGULATIONS.— 


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

2 not apply to a disclosure or use of information 

3 which is permitted by regulations prescribed by 

4 the Secretary under this section. 

5 ‘‘(B) QUALITY OR PEER REVIEWS.—Such 

6 regulations shall permit (subject to such condi7 tions as such regulations shall provide) the dis8 closure or use of information for quality or peer 

9 reviews. 

10 ‘‘(C) PROHIBITION ON DISCLOSURE AND

11 USE BASED ON TAXPAYER CONSENT.— 

12 ‘‘(i) IN GENERAL.—Such regulations 

13 may not permit the disclosure or use of 

14 any information on the basis of the tax15 payer’s consent to such disclosure or use. 

16 ‘‘(ii) EXCEPTIONS.—Clause (i) shall 

17 not apply to any disclosure or use with re18 spect to tax administration, legal pro19 ceedings, related parties or fiduciaries of 

20 the taxpayer, the performance of account21 ing or legal services (other than the solici22 tation therefor), and other similar pur23 poses.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to disclosures and uses after the 

3 date of the enactment of this Act. 

Æ 


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