Disclosure Consent - Sharing Return Information

Technical topics regarding tax preparation.
#1
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I have a client who, for some reason or another, needs a buddy of his roped into communications back and forth regarding often sensitive tax information. The buddy is also a client of mine.

Last year, I was aware of the potential exposure and to cover my butt I asked him to sign a "consent to disclosure of tax return information" which specified who I could disclose info to and what I would be disclosing. He signed with no fuss.

I'm sure I'll be in a similar situation again this year. In this situation would you just send over a consent to disclosure along with the engagement letter annually? Sounds slightly unorthodox I know, however I'm just trying to limit my exposure while simultaneously meeting his needs.
 

#2
makbo  
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The default duration of consent under Sec 7216 is 1 year, which I normally use, so yes for the clients where it applies, I re-send the consent every year. You could alternately specify a different duration, you'd have to look up if there is an allowed maximum. [edit - apparently not, see following post]
Last edited by makbo on 31-Jan-2019 7:30pm, edited 1 time in total.
 

#3
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As far as the consent period is concerned, the longer the better. Saves time having to go back to the well again and again.

Reg. Sec. 301.7216-3(b)(5):

"Duration of consent. A consent document may specify the duration of the taxpayer's consent to the disclosure or use of tax return information. If a consent agreed to by the taxpayer does not specify the duration of the consent, the consent to the disclosure or use of tax return information will be effective for a period of one year from the date the taxpayer signed the consent."
 

#4
Chay  
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Similar question: is it possible to put an indefinite range of tax years on a disclosure form? Something like "all tax years for which the firm has been engaged to prepare my returns".

What makes me think this may not be possible is the following: "a consent that authorizes multiple disclosures or multiple uses must specifically and separately identify each disclosure or use" (Reg. § 301.7216-3(c)(1)).
 


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