Are Tax Returns Confidential?

by Cam Merritt

Your tax return is packed with sensitive information, from personal details, such as your family's Social Security numbers, to a complete rundown of all your income and tax deductions. The government wants taxpayers to be able to trust that their returns will be kept confidential. So except under specific circumstances spelled out in the tax code, it's a federal crime for any government worker to disclose information on a citizen's tax return.

Law

Section 6103 of the Internal Revenue Code makes it a felony for current and former federal, state and local officials to disclose your tax information to anyone without authorization -- even other government officials. The ban on disclosure also extends to any non-government workers who may have access to tax returns. The protections of Section 6103 cover not only your annual tax returns, but also "information returns," such as W-2s, 1099s, 1098s and any other dealings between you and the Internal Revenue Service.

Penalties

Anyone convicted of disclosing tax return information without authorization can be sentenced to up to five years in federal prison and a fine of up to $5,000, as well as be made to pay the costs of prosecution. If the guilty party is a federal worker, the law requires that the worker be fired, although federal law doesn't have the authority to order the firing of workers for state or local government or private companies. Further, anyone found guilty of attempting to pay an official for unauthorized access to a taxpayer's confidential information faces the same penalties.

Exceptions

Section 6103 includes a lengthy list of situations in which government officials are authorized to disclose tax information to other agencies, such as for criminal or congressional investigations, background checks for federal appointees, child support enforcement, state tax enforcement or verification of eligibility for government benefits. In some situations, disclosure requires a court order. And there's one person who's allowed to see any tax return he wants: the president of the United States -- although any such request must be made in writing and personally signed by the president.

Authorizing Disclosure

The IRS will disclose your tax return information to someone else if you specifically ask it to. For example, if you're applying for a mortgage, the bank may insist on seeing your tax return to verify your income. To authorize the IRS to send someone a copy of your tax return, file Form 4506, "Request for Copy of Tax Return." Write the name, address and phone number of the intended recipient on Line 5. It costs money to order a copy of your return this way -- $57 as of 2013. For free, you can file Form 4506-T, which authorizes the IRS to send the information from your return, but not the return itself. In either case, the IRS warns that once you authorize it to send someone your return information, that person may disclose the information without penalty.

About the Author

Cam Merritt is a writer and editor specializing in business, personal finance and home design. He has contributed to USA Today, The Des Moines Register and Better Homes and Gardens"publications. Merritt has a journalism degree from Drake University and is pursuing an MBA from the University of Iowa.

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