Tax Information is Confidential

Protect Your Privacy

Reviewing confidential information
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Your tax return information is confidential. The IRS and your tax professional cannot disclose your tax information to anyone else without your explicit consent.

If you find out that the IRS or your tax preparer has disclosed your tax information without your consent, you may bring a civil lawsuit for damages. The IRS has steep penalties against tax preparers who disclose tax return information without your permission. Your tax preparer cannot release your confidential tax information to anyone without your explicit permission. If your tax preparer asks you if it is OK for him to share your information with third-parties, it is your right to say No.

Your tax professional also cannot release your information to the IRS unless you give him or her your permission. Likewise, the IRS cannot release any information to your tax professional unless you give the IRS permission. You can grant permission to release your tax information by using Tax Information Authorization (Form 8821) or Power of Attorney (Form 2848). If you want your tax preparer, a family member, or other trusted person to handle your affairs with the IRS, you should use the Power of Attorney form.

If you want your tax preparer to receive information from the IRS about your taxes, but not to act on your behalf, then use only Form 8821.

Action Plan Item

Get a written copy of your tax professional's privacy policy. If you feel the privacy policy is too lenient, you can ask about how your tax information will be shared among employees and other company officials. You can also ask for a stricter privacy policy if you feel you need one.

Many tax professionals have a very strict privacy policies, but not all do. Be sure to ask. For example, here's a copy of my privacy policy.