DOCSLIB.ORG

Scope and Use of Taxpayer Confidentiality and Disclosure Provisions – Volume 1

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Scope and Use of Taxpayer Confidentiality and Disclosure Provisions – Volume 1 Report to The Congress on Scope and Use of Taxpayer Confidentiality and Disclosure Provisions Volume I: Study of General Provisions Office of Tax Policy Department of the Treasury October 2000 Table of Contents Part One – Introduction, Background, and Executive Summary I. Introduction.......................................................................................................................... 1 II. Background .......................................................................................................................... 2 A. Congressional Mandate........................................................................................................2 B. Solicitation of Comments ....................................................................................................3 III. Executive Summary............................................................................................................. 3 A. History and Overview of Relevant Laws............................................................................. 3 1. Section 6103............................................................................................................ 3 2. Section 6110............................................................................................................ 4 3. The Freedom of Information Act ............................................................................ 4 4. The Privacy Act....................................................................................................... 4 B. Treasury’s Recommendations Relating to the Confidentiality of Returns and Return Information .......................................................................................................................... 5 Part Two - History and Overview of Relevant Laws I. Introduction........................................................................................................................ 15 II. Section 6103....................................................................................................................... 15 A. Introduction........................................................................................................................ 15 B. Summary of Events Leading to the 1976 Tax Reform Act Rules on Tax Information Confidentiality .................................................................................................................. 15 1. 1866 to 1913.......................................................................................................... 16 2. Revenue Act of 1913............................................................................................. 18 3. 1913 to 1976.......................................................................................................... 18 4. Developments in the 1970’s.................................................................................. 20 5. The Tax Reform Act of 1976 ................................................................................ 21 C. Structure of Section 6103................................................................................................... 22 1. General Rule and Definitions................................................................................ 22 2. Permissible Disclosures......................................................................................... 22 3. Recordkeeping, Safeguards, and Reporting .......................................................... 23 4. Criminal and Civil Enforcement Provisions .........................................................25 III. Section 6110....................................................................................................................... 26 IV. The Freedom of Information Act....................................................................................... 28 V. The Privacy Act ................................................................................................................. 29 v Part Three - Issues Relating to the Confidentiality of Returns and Return Information I. Introduction........................................................................................................................ 33 II. Policy Underlying Section 6103 ........................................................................................ 33 A. The Importance of Privacy................................................................................................. 33 B. The Relationship of Confidentiality to Voluntary Compliance......................................... 34 1. Confidentiality Promotes Compliance ..................................................................34 2. Publicizing Names of Non-filers Would Not Improve Compliance..................... 35 3. Disclosure of Taxpayer Identity Information Related to Accepted Offers-in- Compromise ..........................................................................................................35 4. Public Record Data/Publicity of Criminal Tax Cases........................................... 36 III. Interaction of Section 6103 with Other Statutes ................................................................ 37 A. Non-Title 26 Disclosure Provisions................................................................................... 37 B. Application of the FOIA to Returns and Return Information............................................ 38 C. Application of the Privacy Act to Returns and Return Information .................................. 40 IV. Disclosures Related to Tax Administration ....................................................................... 42 A. Definition of Tax Administration ...................................................................................... 42 B. Section 6103(h) Disclosures .............................................................................................. 42 1. Disclosures to Officers or Employees of the Department of the Treasury ........... 42 2. Disclosures to Justice Department and in Connection with Tax Proceedings ...... 43 C. Investigative Disclosures ................................................................................................... 51 D. Miscellaneous Tax Administration Disclosures ................................................................ 52 1. Disclosures of Levies on Government Employee Wages ..................................... 52 2. Disclosures by TIGTA and Safeguarding ............................................................. 53 3. Disclosures in Connection With Levies on FMS Payments .................................54 4. TIN Matching........................................................................................................ 57 5. Disclosures to Organizations Regulating Tax Practitioners.................................. 57 6. Treasury Personnel and Claimant Representative Matters ................................... 58 E. Disclosure to States............................................................................................................ 59 1. In General.............................................................................................................. 59 2. Joint Filing Programs ............................................................................................60 3. Safeguarding Issues with Respect to States’ Use of Federal Tax Data................. 61 V. Disclosures to Congress..................................................................................................... 62 VI. Disclosures Not Related to Tax Administration ................................................................ 63 A. Nontax Criminal Cases ...................................................................................................... 63 1. In General.............................................................................................................. 63 2. Disclosure in Case of Imminent Threat of Death or Physical Injury.................... 65 3. Civil Forfeiture...................................................................................................... 65 4. Form 8300 Disclosures.......................................................................................... 66 B. Use of Tax Information for Federal Benefit and Loan Programs...................................... 67 vi C. Evaluating Specific Proposals for Governmental Disclosures .......................................... 68 D. Obtaining Returns and Return Information Pursuant to the Taxpayer’s Consent ............. 69 1. Section 6103(c) ..................................................................................................... 69 2. Overview of Consent Process and Proposed Transcript Delivery System............ 70 3. Use of Consents by Government Agencies........................................................... 72 4. Private Sector Uses of Consents............................................................................ 77 5. Treasury’s Recommendations Related to Consents.............................................. 77 E. Child Support Enforcement ............................................................................................... 78 1. Background ........................................................................................................... 78 2 Issues With Respect to Who May Receive Return Information for Section 6103(l)(6) and For What Purposes........................................................................ 81 3. Types of Information Disclosed
Load more

Recommended publications
  • A Brief Description of Federal Taxes
    A BRIEF DESCRIFTION OF FEDERAL TAXES ON CORPORATIONS SINCE i86i WMUAu A. SU. ND* The cost to the federal government of financing the Civil War created a need for increased revenue, and Congress in seeking new sources tapped theretofore un- touched corporate and individual profits. The Act of July x, x862, amending the Act of August 5, x86i, is the first law under which any federal income tax was collected and is considered to be largely the basis of our present system of income taxation. The tax acts of the Civil War period contained provisions imposing graduated taxes upon the gain, profits, or income of every person2 and providing that corporate profits, whether divided or not, should be taxed to the stockholders. Certain specified corporations, such as banks, insurance companies and transportation companies, were taxed at the rate of 5%, and their stockholders were not required to include in income their pro rata share of the profits. There were several tax acts during and following the War, but a description of the Act of 1864 will serve to show the general extent of the coiporate taxes of that period. The tax or "duty" was imposed upon all persons at the rate of 5% of the amount of gains, profits and income in excess of $6oo and not in excess of $5,000, 7Y2/ of the amount in excess of $5,ooo and not in excess of -$o,ooo, and io% of the amount in excess of $Sxooo.O This tax was continued through the year x87i, but in the last two years of its existence was reduced to 2/l% upon all income.
    [Show full text]
  • The Death of the Income Tax (Or, the Rise of America's Universal Wage
    Indiana Law Journal Volume 95 Issue 4 Article 5 Fall 2000 The Death of the Income Tax (or, The Rise of America’s Universal Wage Tax) Edward J. McCaffery University of Southern California;California Institute of Tecnology, [email protected] Follow this and additional works at: https://www.repository.law.indiana.edu/ilj Part of the Estates and Trusts Commons, Law and Economics Commons, Taxation-Federal Commons, Taxation-Federal Estate and Gift Commons, Taxation-State and Local Commons, and the Tax Law Commons Recommended Citation McCaffery, Edward J. (2000) "The Death of the Income Tax (or, The Rise of America’s Universal Wage Tax)," Indiana Law Journal: Vol. 95 : Iss. 4 , Article 5. Available at: https://www.repository.law.indiana.edu/ilj/vol95/iss4/5 This Article is brought to you for free and open access by the Law School Journals at Digital Repository @ Maurer Law. It has been accepted for inclusion in Indiana Law Journal by an authorized editor of Digital Repository @ Maurer Law. For more information, please contact [email protected]. The Death of the Income Tax (or, The Rise of America’s Universal Wage Tax) EDWARD J. MCCAFFERY* I. LOOMINGS When Representative Alexandria Ocasio-Cortez, just weeks into her tenure as America’s youngest member of Congress, floated the idea of a sixty or seventy percent top marginal tax rate on incomes over ten million dollars, she was met with a predictable mixture of shock, scorn, and support.1 Yet there was nothing new in the idea. AOC, as Representative Ocasio-Cortez is popularly known, was making a suggestion with sound historical precedent: the top marginal income tax rate in America had exceeded ninety percent during World War II, and stayed at least as high as seventy percent until Ronald Reagan took office in 1981.2 And there is an even deeper sense in which AOC’s proposal was not as radical as it may have seemed at first.
    [Show full text]
  • Annual Plan Fiscal Year 2020
    Annual Plan Fiscal Year 2020 OIG-CA-20-008 Office of Inspector General Department of the Treasury Foreword This annual plan outlines the fiscal year (FY) 2020 Department of the Treasury (Treasury or the Department) Office of Inspector General (OIG) audit and investigative priorities. The planned work focuses on Treasury’s major initiatives and challenges, and takes into consideration OIG’s Strategic Plan for Fiscal Years 2018–2022. As this plan illustrates, we have prioritized our resources to provide oversight of the most significant and highest-risk Treasury programs and operations across our jurisdictional boundaries. For FY 2020, our oversight efforts will place top priority on: (1) operating in an uncertain environment; (2) cyber threats, (3) anti- money laundering/terrorist financing and Bank Secrecy Act enforcement, (4) efforts to promote spending transparency and to prevent and detect improper payments, and (5) information technology acquisition and project management. Areas of emphasis for FY 2020 include oversight mandated by law such as the Inspector General Act of 1978, as amended, the Government Management Reform Act of 1994, the Federal Information Security Modernization Act of 2014, the Federal Deposit Insurance Act, and the Improper Payments Elimination and Recovery Act of 2010. Additionally, we will continue to perform audit work related to Treasury’s responsibilities under the Digital Accountability and Transparency Act of 2014. The projects described in this plan address areas of known and emerging risk and vulnerabilities. As in the past, we encourage Department and bureau management to use this plan for areas of self-assessment. October 2019 Treasury Office of Inspector General Annual Plan—Fiscal Year 2020 i This page intentionally left blank.
    [Show full text]
  • Ways and Means Committee's Request for the Former President's
    (Slip Opinion) Ways and Means Committee’s Request for the Former President’s Tax Returns and Related Tax Information Pursuant to 26 U.S.C. § 6103(f )(1) Section 6103(f )(1) of title 26, U.S. Code, vests the congressional tax committees with a broad right to receive tax information from the Department of the Treasury. It embod- ies a long-standing judgment of the political branches that the tax committees are uniquely suited to receive such information. The committees, however, cannot compel the Executive Branch to disclose such information without satisfying the constitutional requirement that the information could serve a legitimate legislative purpose. In assessing whether requested information could serve a legitimate legislative purpose, the Executive Branch must give due weight to Congress’s status as a co-equal branch of government. Like courts, therefore, Executive Branch officials must apply a pre- sumption that Legislative Branch officials act in good faith and in furtherance of legit- imate objectives. When one of the congressional tax committees requests tax information pursuant to section 6103(f )(1), and has invoked facially valid reasons for its request, the Executive Branch should conclude that the request lacks a legitimate legislative purpose only in exceptional circumstances. The Chairman of the House Ways and Means Committee has invoked sufficient reasons for requesting the former President’s tax information. Under section 6103(f )(1), Treasury must furnish the information to the Committee. July 30, 2021 MEMORANDUM OPINION FOR THE ACTING GENERAL COUNSEL DEPARTMENT OF THE TREASURY The Internal Revenue Code requires the Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) to keep tax returns and related information confidential, 26 U.S.C.
    [Show full text]
  • Federal Income Tax Returns--Confidentiality Vs
    Federal Income Tax Returns--Confidentiality vs. Public Disclosure* by Boris I. Bittker* * I. INTRODUCTION This article will examine the relationship between the individual's interest in privacy, reflected in such recent statutes as the Privacy Act of 1974, I and the public's right to know, which underlies legislation like the Freedom of Information Act. 2 The subject is of intrinsic impor­ tance, but it is particularly appropriate for an article in this lecture se­ ries, since privacy3 and disclosure4 were values of special interest to Justice Douglas. Neither the individual's right to privacy5 nor the pub­ lic's right to know6 is explicitly protected by the Constitution, but both do have constitutional overtones, and both are protected by various statutory provisions. Using federal income tax returns as the centerpiece of the discus­ sion, I propose to show how privacy and disclosure can come into con­ flict-a possibility that has been insufficiently recognized by the courts and the commentators. The leading treatise on political and civil rights,7 for example, treats the two subjects in separate chapters with virtually no acknowledgement that they are related, let alone that they • Copyright 1981 by Boris I. Bittker. •• Sterling Professor of Law. Yale University. This article is the modified text of a speech delivered at the Fifth Annual William O. Douglas Lecture Series. October 30. 1980. I. Pub. L. No. 93-579, § 3, 88 Stat. 1897 (amended 1975 & 1977) codified at 5 U.S.C § 552a (1976». 2. Pub. L. No. 89-554, 80 Stat. 383 (1966) (amended 1967, 1974, 1976 & 1978) (codified at 5 U.S.C § 552 (1976».
    [Show full text]
  • Sixteenth Amendment
    The Sixteenth Amendment 100 Years of the Federal Income Tax “The hardest thing in the world to understand is the income tax.” ~ Albert Einstein Americans have now been grappling with the income tax for 100 years. Since the 16th Amendment was ratified by Congress in 1913, U.S. citizens have been attempting to accurately complete Form 1040. While the annual income tax exercise is fresh in our minds, we thought it would be informative and somewhat gratifying to look back at the process that brought us here, and the tax rates that confronted tax payers on this anniversary in prior years. History of the Sixteenth Amendment Prior to 1913, the main source of revenue for the federal government was tariffs. Tariffs, it was argued, disproportionately affected the poor and were unpredictable. It was felt by many that the solution was a federal income tax. The resolution proposing the Sixteenth Amendment was passed by Congress on July 12, 1909 and ratified in 1913. The Amendment stated “Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.” What followed was The Revenue Act of 1913, also called the Tariff Act, since its purpose was to lower basic tariff rates and compensate for lost revenues by imposing a federal income tax. The first tax filing in 1914 The federal income tax started at 1% on personal income of more than $3,000 (over $71,000 in today’s dollars1) for single filers or $4,000 for couples, with a surtax of 6% on incomes over $500,000.
    [Show full text]
  • RESTORING the LOST ANTI-INJUNCTION ACT Kristin E
    COPYRIGHT © 2017 VIRGINIA LAW REVIEW ASSOCIATION RESTORING THE LOST ANTI-INJUNCTION ACT Kristin E. Hickman* & Gerald Kerska† Should Treasury regulations and IRS guidance documents be eligible for pre-enforcement judicial review? The D.C. Circuit’s 2015 decision in Florida Bankers Ass’n v. U.S. Department of the Treasury puts its interpretation of the Anti-Injunction Act at odds with both general administrative law norms in favor of pre-enforcement review of final agency action and also the Supreme Court’s interpretation of the nearly identical Tax Injunction Act. A 2017 federal district court decision in Chamber of Commerce v. IRS, appealable to the Fifth Circuit, interprets the Anti-Injunction Act differently and could lead to a circuit split regarding pre-enforcement judicial review of Treasury regulations and IRS guidance documents. Other cases interpreting the Anti-Injunction Act more generally are fragmented and inconsistent. In an effort to gain greater understanding of the Anti-Injunction Act and its role in tax administration, this Article looks back to the Anti- Injunction Act’s origin in 1867 as part of Civil War–era revenue legislation and the evolution of both tax administrative practices and Anti-Injunction Act jurisprudence since that time. INTRODUCTION .................................................................................... 1684 I. A JURISPRUDENTIAL MESS, AND WHY IT MATTERS ...................... 1688 A. Exploring the Doctrinal Tensions.......................................... 1690 1. Confused Anti-Injunction Act Jurisprudence .................. 1691 2. The Administrative Procedure Act’s Presumption of Reviewability ................................................................... 1704 3. The Tax Injunction Act .................................................... 1707 B. Why the Conflict Matters ....................................................... 1712 * Distinguished McKnight University Professor and Harlan Albert Rogers Professor in Law, University of Minnesota Law School.
    [Show full text]
  • Taxing the System with Public Employees' Tax Obligations Kenneth H
    The University of Akron IdeaExchange@UAkron Akron Law Review Akron Law Journals July 2015 Of Taxes and Duties: Taxing the System With Public Employees' Tax Obligations Kenneth H. Ryesky Please take a moment to share how this work helps you through this survey. Your feedback will be important as we plan further development of our repository. Follow this and additional works at: http://ideaexchange.uakron.edu/akronlawreview Part of the Labor and Employment Law Commons, and the Tax Law Commons Recommended Citation Ryesky, Kenneth H. (1998) "Of Taxes and Duties: Taxing the System With Public Employees' Tax Obligations," Akron Law Review: Vol. 31 : Iss. 3 , Article 1. Available at: http://ideaexchange.uakron.edu/akronlawreview/vol31/iss3/1 This Article is brought to you for free and open access by Akron Law Journals at IdeaExchange@UAkron, the institutional repository of The nivU ersity of Akron in Akron, Ohio, USA. It has been accepted for inclusion in Akron Law Review by an authorized administrator of IdeaExchange@UAkron. For more information, please contact [email protected], [email protected]. Ryesky: Of Taxes and Duties OF TAXES AND DUTIES: TAXING THE SYSTEM WITH PUBLIC EMPLOYEES' TAX OBLIGATIONS by Kenneth H. Ryesky* I. INTRODUCTION Clearly, the tax laws in America are growing increasingly complex.' The tax system has steadily become more intricate despite Presidential acknowledgment more than a decade ago that "[t]he system is too complicated." 2 Yet, the tax laws * B.B.A., Temple University, 1977; M.B.A., La Salle University, 1982; J.D., Temple University, 1986; M.L.S. degree candidate, Queens College CUNY; currently a solo practitioner Attorney in East Northport, NY; Adjunct Assistant Professor, Department of Accounting & Information Systems, Queens College CUNY, Flushing, NY and Adjunct Assistant Professor, Department of Business Management, Molloy College, Rockville Centre, NY; formerly Estate Tax Attorney, Internal Revenue Service, Manhattan District.
    [Show full text]
  • Administration's Fiscal Year 2014 Revenue Proposals
    General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals Department of the Treasury April 2013 General Explanations of the Administration’s Fiscal Year 2014 Revenue Proposals Department of the Treasury April 2013 This document is available online at: http://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2014.pdf TABLE OF CONTENTS ADJUSTMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT (BBEDCA) BASELINE .......................................... 1 Permanently Extend Increased Refundability of the Child Tax Credit ............................... 2 Permanently Extend Earned Income Tax Credit (EITC) for Larger Families and Married Couples ................................................................................................................... 4 Permanently Extend the American Opportunity Tax Credit (AOTC) ................................. 6 RESERVE FOR REVENUE-NEUTRAL BUSINESS TAX REFORM ............. 9 INCENTIVES FOR MANUFACTURING, RESEARCH, CLEAN ENERGY, AND INSOURCING AND CREATING JOBS ............................................................................. 10 Provide Tax Incentives for Locating Jobs and Business Activity in the United States and Remove Tax Deductions for Shipping Jobs Overseas ........................................... 10 Provide New Manufacturing Communities Tax Credit .................................................... 12 Enhance and Make Permanent the Research and Experimentation (R&E) Tax Credit ... 13 Extend Certain Employment Tax
    [Show full text]
  • Critical Tax Policy: a Pathway to Reform? Nancy J
    Northwestern Journal of Law & Social Policy Volume 9 | Issue 2 Article 2 2014 Critical Tax Policy: a Pathway to Reform? Nancy J. Knauer Recommended Citation Nancy J. Knauer, Critical Tax Policy: a Pathway to Reform?, 9 Nw. J. L. & Soc. Pol'y. 206 (2014). http://scholarlycommons.law.northwestern.edu/njlsp/vol9/iss2/2 This Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of Law & Social Policy by an authorized administrator of Northwestern University School of Law Scholarly Commons. Copyright 2014 by Northwestern University School of Law Vol. 9, Issue 2 (2014) Northwestern Journal of Law and Social Policy CRITICAL TAX POLICY : A PATHWAY TO REFORM ? ∗ Nancy J. Knauer TABLE OF CONTENTS INTRODUCTION .................................................................................................... 207 I. THE COSTS OF FALSE NEUTRALITY ............................................................... 214 A. All Part of a Larger “Blueprint” ............................................................ 215 B. Hidden Choices and Embedded Values .................................................. 218 Taxpayer neutrality ..................................................................................... 219 Equity and efficiency .................................................................................. 221 C. Critical Tax Theory and Scholarship ...................................................... 223 II. CHOOSING A CRITICAL
    [Show full text]
  • Report No. 82-156 Gov Major Acts of Congress And
    REPORT NO. 82-156 GOV MAJOR ACTS OF CONGRESS AND TREATIES APPROVED BY THE SENATE 1789-1980 Christopher Dell Stephen W. Stathis Analysts in American National Governent Government Division September 1982 CONmGHnItNA^l JK 1000 B RE filmH C SE HVICA^^ ABSTRACT During the nearly two centuries since the framing of the Constitution, more than 41,000 public bills have been approved by Congress, submitted to the President for his approval and become law. The seven hundred or so acts summarized in this compilation represent the major acts approved by Congress in its efforts to determine national policies to be carried out by the executive branch, to authorize appropriations to carry out these policies, and to fulfill its responsibility of assuring that such actions are being carried out in accordance with congressional intent. Also included are those treaties considered to be of similar importance. An extensive index allows each entry in this work to be located with relative ease. The authors wish to credit Daphine Lee, Larry Nunley, and Lenora Pruitt for the secretarial production of this report. CONTENTS ABSTRACT.................................................................. 111 CONGRESSES: 1st (March 4, 1789-March 3, 1791)..................................... 3 2nd (October 24, 1791-March 2, 1793)................................... 7 3rd (December 2, 1793-March 3, 1795).................................. 8 4th (December 7, 1795-March 3, 1797).................................. 9 5th (May 15, 1797-March 3, 1799)....................................... 11 6th (December 2, 1799-March 3, 1801)................................... 13 7th (December 7, 1801-Marh 3, 1803)................................... 14 8th (October 17, 1803-March 3, 1805)....... ........................... 15 9th (December 2, 1805-March 3, 1807)................................... 16 10th (October 26, 1807-March 3, 1809)..................................
    [Show full text]
  • Vol. 6, No. 2: Full Issue
    Denver Journal of International Law & Policy Volume 6 Number 2 Spring Article 11 May 2020 Vol. 6, no. 2: Full Issue Denver Journal International Law & Policy Follow this and additional works at: https://digitalcommons.du.edu/djilp Recommended Citation 6 Denv. J. Int'l L. & Pol'y This Full Issue is brought to you for free and open access by the University of Denver Sturm College of Law at Digital Commons @ DU. It has been accepted for inclusion in Denver Journal of International Law & Policy by an authorized editor of Digital Commons @ DU. For more information, please contact [email protected],dig- [email protected]. DENVER JOURNAL OF INTERNATIONAL LAW AND POLICY VOLUME 6 1976-1977 Denver Journal OF INTERNATIONAL LAW AND POLICY VOLUME 6 NUMBER 2 SPRING 1977 INTERNATIONAL ASPECTS OF THE TAX REFORM ACT OF 1976 TAXING BoYcorrs AND BRIBES ........................................... G. C . Hufbauer J. G. Taylor 589 The authors examine the tax penalty provisions of the Tax Reform Act of 1976 and the Export Administration Act Amendments of 1977 in relation to U.S. persons who "participate in or cooperate with" international boycotts or bribery. The article discusses the various types of international boycotts and the penalty, computational, and reporting requirements imposed on participants as clarified by the Treasury Guidelines and Revenue Proce- dures. The authors conclude with a discussion of the novelty, complexity, and potential impact of the legislation. TAKING SIDES: AN OVERVIEW OF THE U.S. LEGISLATIVE RESPONSE TO THE ARAB BOYCOTT ............................................ John M . Tate Ralph B. Lake 613 The current legislative scheme in opposition to the Arab boycott is generally directed against the Arab League countries' secondary and tertiary, indirect forms of boycott.
    [Show full text]