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) intro-
duced 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Taxpayer Privacy Act 
of 2006’’. 
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SEC. 2. CLARIFICATION OF RESTRICTION ON DISCLOSURES 
AND USE OF INFORMATION BY TAX RETURN 
PREPARERS. 
(a) RESTRICTION ON FOREIGN USE AND DISCLO-
SURE.—Section 7216 of the Internal Revenue Code of 
1986 (relating to disclosure or use of information by pre-
parers of returns) is amended by adding at the end the 
following new subsection: 
‘‘(c) RESTRICTION ON FOREIGN USE AND DISCLO-
SURE.— 
‘‘(1) IN
GENERAL.—Any disqualified foreign 
use or disclosure by a tax return preparer shall be 
treated as a violation of subsection (a). 
‘‘(2) DISQUALIFIED FOREIGN USE OR DISCLO-
SURE.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘disqualified 
foreign use or disclosure’ means— 
‘‘(i) any use by the tax return pre-
parer (or any officer or employee of such 
preparer) outside the United States of in-
formation described in subsection (a), and 
‘‘(ii) any disclosure by the tax return 
preparer of information described in sub-
section (a) to any person (including any of-
ficer or employee of any person) who is lo-
cated outside the United States. 
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‘‘(B) EXCEPTIONS.—Such term shall not 
include any use or disclosure of information 
if— 
‘‘(i) the taxpayer initially furnishes 
such information to a tax return preparer 
located outside the United States, or 
‘‘(ii) the taxpayer has significant busi-
ness activities outside the United States 
and use or disclosure is appropriate given 
such activities. 
‘‘(3) TAX RETURN PREPARER.—For purposes 
of this subsection, the term ‘tax return preparer’ 
means any person who is engaged in the business of 
preparing, or providing services in connection with 
the preparation of, returns of the tax imposed by 
chapter 1, or any person who for compensation pre-
pares any such return for any other person. 
‘‘(4) UNITED
STATES.—For purposes of this 
subsection, the term ‘United States’ includes any 
territory or possession of the United States.’’. 
(b) PROHIBITION ON TAXPAYER CONSENT TO DIS-
CLOSURE OR USE OF INFORMATION.—Paragraph (3) of 
section 7216(b) of such Code is amended to read as fol-
lows: 
‘‘(3) REGULATIONS.— 
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‘‘(A) IN
GENERAL.—Subsection (a) shall 
not apply to a disclosure or use of information 
which is permitted by regulations prescribed by 
the Secretary under this section. 
‘‘(B) QUALITY OR PEER REVIEWS.—Such 
regulations shall permit (subject to such condi-
tions as such regulations shall provide) the dis-
closure or use of information for quality or peer 
reviews. 
‘‘(C) PROHIBITION
ON
DISCLOSURE
AND 
USE BASED ON TAXPAYER CONSENT.— 
‘‘(i) IN GENERAL.—Such regulations 
may not permit the disclosure or use of 
any information on the basis of the tax-
payer’s consent to such disclosure or use. 
‘‘(ii) EXCEPTIONS.—Clause (i) shall 
not apply to any disclosure or use with re-
spect to tax administration, legal pro-
ceedings, related parties or fiduciaries of 
the taxpayer, the performance of account-
ing or legal services (other than the solici-
tation therefor), and other similar pur-
poses.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures and uses after the 
date of the enactment of this Act. 
Æ 
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