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EVERSON, TAXPAYER ADVOCATE OLSON DEFEND DISCLOSURE REGS

March 30, 2006

When the kerfuffle over the proposed new regulations on return disclosures arose, I was puzzled. It seemed to me that the danger of preparers marketing taxpayer information already exists.

In testimony before Congress yesterday, Taxpayer Advocate Nina Olson agreed with me (Tax Analysts free link):

Expanding on earlier comments she posted to a tax e-mail discussion group, Olson said complaints from consumer groups are unfounded. Although the groups have correctly pointed out that the new regs partly relax how return preparers can “use” information taxpayers have consented to share, Olson said preparers are already allowed to “disclose” return information freely.

“The current regulations allow tax [return] preparers to disclose taxpayer information to anybody once [they] have consent,” she said. “And once that information’s disclosed, it can be used and redisclosed to anybody.”

I think it's wrong for preparers to sell taxpayer information. Maybe the solution is a 200% excise tax on revenues received by preparers for selling tax return data.

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