Tax Reform Act of 1976

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Tax Reform Act of 1976

Postby Administrator » Fri Oct 03, 2014 12:55 pm

Tax Reform Act of 1976

The Internal Revenue Service (IRS) possesses the most comprehensive personal financial information. Individuals must report income from all sources, and there are incentives to itemize certain types of deductible expenditures such as home mortgage interest, charitable contributions, and other expenses.

Section 6103 of the Internal Revenue Code, as amended by the Tax Reform Act of 1976, prohibits unauthorized disclosure of tax returns and return information by employees of the federal government, state and local governments, or IRS contractors. Pub. L. No. 94-455 1202, 90 Stat. 1520, 1667, 26 U.S.C. 6103 (1994), 26 U.S.C. 6103(a). The statute permits disclosure to third parties under certain exceptions, including for tax administration purposes, to persons with material interest in the data and to federal, state, and local agencies under specified circumstances. 26 U.S.C. 6103(c)-(n). The statute covers virtually everything collected by or generated by the Internal Revenue Service related to a taxpayer's tax liability, including a taxpayer's identity, whether a return was, is being, or will be examined, any data submitted by the taxpayer or his or her representative, any data collected by the IRS from other sources, and any material generated by the IRS relating to any specific taxpayer's liability.

Unauthorized disclosure of tax information subjects the offender to criminal penalties and permits the wronged party to bring a civil action for damages. The statute provides for minimum damages of $1,000 per disclosure. 26 U.S.C. 6103.

It was widely reported that more than 1,300 IRS employees had been investigated for improperly accessing private taxpayer files. See Stephen Barr, IRS Vows 'Zero Tolerance" For Snooping in Tax Records, Wash. Post, July 20, 1994, at A4; Stephen Barr, Probe Finds IRS Workers Were 'Browsing" in Files; Security Review Points to Fraud, Wash. Post, Aug. 3, 1993, A1.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
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Chairman, Consumer Protection Section, Louisiana State Bar Association

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