Regulations under Internal Revenue Code Section 7216, Disclosure or Use of Tax Information by Preparers of Returns, became effective January 1, 2009. This regulation updated previous regulations that had been substantially unchanged since the 1970s, giving taxpayers greater control over their personal tax return information. The statute limits tax return preparers’ use and disclosure of information obtained during the return preparation process to activities directly related to the preparation of the return. The regulations describe how preparers, with the informed written consent of taxpayers, may use or disclose return information for other purposes. The regulations also describe specific and limited exceptions that allow a preparer (through use of Form 7216) to use or disclose return information without the consent of taxpayers.
The IRS website provides assistance for preparing Section 7216 Consent Forms. These examples may not satisfy your legal obligations pursuant to IRC 7216. We strongly suggest that you use these examples as a guide in creating your own 7216 disclosures and that you have them reviewed by a lawyer to ensure that they comply with IRC 7216. For additional information, please contact the IRS Practitioner Hotline at 1.866.860.4259.
If you are offering any services in addition to tax preparation (Bank Products, Insurance, Investments, etc.), Form 7216 must be signed by each taxpayer prior to you discussing these services or sharing any of their information with another party. This includes ALL clients who apply for a bank product.
Though it is not recommended, you do have the option to skip this question in the program. To default the answer to the 7216 question to ‘NO’, or to turn it off completely, from the Main Menu of Keystone Tax Solutions select:
- Printer/Copies Setup
- Main Menu 7216 Question Default
- Select ‘Default Answer to No’ or ‘Skip Question’