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 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1661

" (3) information specifically exempted from disclosure by any statute (other than this title) which is applicable to the I n t e r n a l Revenue Service; " (4) trade secrets and commercial or financial information obtained from a person and privileged or confidential; " (5) information the disclosure of which would constitute a clearly u n w a r r a n t e d invasion of personal p r i v a c y; " (6) information contained in or related to examination, operating, or condition reports prepared by, or on behalf of, or for use of an agency responsible for the regulation or supervision of financial institutions; and " (7) geological and geophysical information and data, including maps, concerning wells. The Secretary shall determine the appropriate extent of such deletions and, except in the case of intentional or willful disregard of this subsection, shall not be required to make such deletions (nor be liable for failure to make deletions) unless the Secretary has agreed to such deletions or has been ordered by a court (in a proceeding under subsection (f)(3)) to make such deletions. "(d)

PROCEDURES W I T H REGARD TO T H I R D P A R T Y CONTACTS.—

" (1) NOTATIONS.—If, before the issuance of a written determination, the I n t e r n a l Revenue Service receives any communication (written o r otherwise) concerning such written determination, any request for such determination, or any other matter involving such written determination from a person other than an employee of the I n t e r n a l Revenue Service or the person to whom such written determination pertains (or his authorized representative with regard to such written determination), the I n t e r n a l Revenue Service shall indicate, on the written determination open to public inspection, the category of the person making such communication and the date of such communication. " (2) EXCEPTION. — Paragraph (1) shall not apply to any communication made by the Chief of Staff of tl:e Joint Committee on Taxation. "(3)

DISCLOSURE OF I D E N T I T Y. — I n the case of

any

written

determination to which paragraph (1) applies, any person may file a petition i n the United States Tax Court or file a complaint in the United States District Court for the District of Columbia for an order requiring that the identity of any person to Avhom the written determination pertains be disclosed. The court shall order disclosure of such identity if there is evidence in the record from which one could reasonably conclude that an impropriety occurred or undue influence w a s exercised with respect to such written determination by or on behalf of such person. The court may also direct the Secretary to disclose any portion of any other deletions made in accordance with subsection (c) where such disclosure is in the public interest. I f a proceeding is commenced under this paragraph, the person whose identity is subject to being disclosed and the person about whom a notation is made under paragraph (1) shall be notified of the proceeding in accordance with the procedures described in subsection (f)(4)(B) and shall have the r i g h t to intervene in the proceeding (anonymously, if a p p r o p r i a t e). " (4) PERIOD I N W H I C H TO BRING ACTION.—Xo proceeding shall

be commenced under paragraph (3) unless a petition is filed before the expiration of 36 months after the first day that the written determination is open to public inspection.

89-194 O—78—pt. 2

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 90 STAT. 1662

PUBLIC LAW 94-455—OCT. 4, 1976 "(e)

BACKGROUND FILE DOCUMENTS.—Whenever the

Secretary

makes a written determination open to public inspection under this section, he shall also make available to any person, but only upon the written request of that person, any background file document relating to the written determination. "(f)

Regulations.

RESOLUTION OF DISPUTES RELATING TO DISCLOSURE.— "(1) NOTICE or INTENTION TO DISCLOSE.—The Secretary

shall upon issuance of any written determination, or upon receipt of a request for a background file document, mail a notice of intention to disclose such determination or document to any person to whom the written determination pertains (or a successor in interest, executor, or other person authorized by law to act for or on behalf of such person). " (2) ADMINISTRATIVE REMEDIES.—The Secretary shall prescribe regulations establishing administrative remedies with respect to— "(A) requests for additional disclosure of any written determination of any background file document, and "(B) requests to restrain disclosure. " (3) ACTION TO RESTRAIN DISCLOSURE.— "(A) CREATION OF REMEDY.—Any person—

"(i) to whom a written determination pertains (or a successor in interest, executor, or other person authorized by law to act for or on behalf of such person), or who has a direct interest in maintaining the confidentiality of any such written determination or background file document (or portion thereof), "(ii) who disagrees with any failure to make a deletion with respect to that portion of any written determination or any background file document which is to be open or available to public inspection, and "(iii) who has exhausted his administrative remedies as prescribed pursuant to paragraph (2), may, within 60 days after the mailing by the Secretary of a notice of intention to disclose any written determination or background file document under paragraph (1), together with the proposed deletions, file a petition in the United States Tax Court (anonymously, if appropriate) for a determination with respect to that portion of such written determination or background file document which is to be open to public inspection. "(B) NOTICE TO CERTAIN PERSONS.—The Secretary shall notify any person to whom a written determination pertains (unless such person is the petitioner) of the filing of a petition under this paragraph with respect to such written determination or related background file document, and any such person may intervene (anonymously, if appropriate) in any proceeding conducted pursuant to this paragraph. The Secretary shall send such notice by registered or certified mail to the last known address of such person within 15 days after such petition is served on the Secretary. No person who has received such a notice may thereafter file any petition under this paragraph with respect to such written determination or background file document with respect to which such notice was received. "(4)

ACTION TO OBTAIN ADDITIONAL DISCLOSURE.— " (A) CREATION OF REMEDY.—Any person who has

exhausted the administrative remedies prescribed pursuant to para-

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 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1663

graph (2) with respect to a request for disclosure may file a petition in the United States Tax Court or a complaint in the United States District Court for the District of Columbia for an order requiring that any written determination or background file document (or portion thereof) be made open or available to public inspection. Except where inconsistent with subparagraph (B), the provisions of subparagraphs (C), (D), (E), (F), and (G) of section 552(a)(4) of title 5, United States Code, shall apply to any proceeding under this paragraph. The Court shall examine the matter de novo and without regard to a decision of a court under paragraph (3) with respect to such written determination or background file document, and may examine the entire text of such written determination or background file document in order to determine whether such written determination or background file document or any part thereof shall be open or available to public inspection under this section. The burden of proof with respect to the issue of disclosure of any information shall be on the Secretary and any other person seeking to restrain disclosure. "(B) INTERVENTION.—If a proceeding is commenced under Notice, this paragraph with respect to any written determination or background file document, the Secretary shall, within 15 days after notice of the petition filed under subparagraph (A) is served on him, send notice of the commencement of such proceeding to all persons who are identified by name and address in such written determination or background file docimient. The Secretary shall send such notice by registered or certified mail to the last known address of such person. Ajiy person to whom such determination or background file document pertains may intervene in the proceeding (anonymously, if appropriate). If such notice is sent, the Secretary shall not be required to defend the action and shall not be liable for public disclosure of the written determination or background file document (or any portion thereof) in accordance with the final decision of the court. "(5) EXPEDITION OF DETERMINATION.—The Tax Court shall make a decision with respect to any petition described in paragraph (3) at the earliest practicable date and the Court of Appeals shall expedite any review of such decision in every way possible. "(6) PUBLICITY OF TAX COURT PROCEEDINGS.—Notwithstanding

sections 7458 and 7461, the Tax Court may, in order to preserve 26 USC 7458, the anonymity, privacy, or confidentiality of any person under 7461. this section, provide by rules adopted under section 7453 that portions of hearings, testimony, evidence, and reports in connection with pi-oceedings under this section may be closed to the public or to inspection by the public. "(g) TIME FOR DISCLOSURE.—

"(1) IN GENERAL.—Except as otherwise provided in this section, the text of any written determination or any background file document (as modified under subsection (c)) shall be open or available to public inspection— "(A) no earlier than 75 days, and no later than 90 days, after the notice provided in subsection (f)(1) is mailed, or, if later.

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 90 STAT. 1664

PUBLIC LAW 94-455—OCT. 4, 1976 "(B) within 30 days after the date on which a court decision under subsection (f)(3) becomes finaL " (2) POSTPONEMENT BY ORDER or COURT.—The court may extend the period referred to in paragraph (1)(B) for such time as the court finds necessary to allow the Secretary to comply with its decision. "(3)

POSTPONEMENT OF DISCLOSURE FOR UP TO 9O DAYS.—At the

written request of the person by whom or on whose behalf the request for the written determination was made, the period referred to in paragraph (1)(A) shall be extended (for not to exceed an additional 90 days) until the day which is 15 days after the date of the Secretary's determination that the transaction set forth in the written determination has been completed. "(4) ADDITIONAL I 8 0 DAYS.—If—

"(A) the transaction set forth in the written determination is not completed during the period set forth in paragraph (3), and "(B) the person by whom or on whose behalf the request for the written determination was made establishes to the satisfaction of the Secretary that good cause exists for additional delay in opening the written determination to public inspection, the period referred to in paragraph (3) shall be further extended (for not to exceed an additional 180 days) until the day which is 15 days after the date of the Secretary's determination that the transaction set forth in the written determination has been completed. "(5)

26 USC 412.

SPECIAL RULES FOR CERTAIN WRITTEN DETERMINATIONS,

ETC.—Notwithstanding the provisions of paragraph (1), the Secretary shall not be required to make available to the public— "(A) any technical advice memorandum and any related background file document involving any matter which is the subject of a civil fraud or criminal investigation or jeopardy or termination assessment until after any action relating to such investigation or assessment is completed, or "(B) any general written determination and any related background file document that relates solely to approval of the Secretary of any adoption or change of— "(i) the funding method or plan year of a plan under section 412, "(ii) a taxpayer's annual accounting period under section 442, "(iii) a taxpayer's method of accounting under section 446(e), or "(iv) a partnership's or partner's taxable year under section 706, but the Secretary shall make any such written determination and related background file document available upon the written request of any person after the date on which (except for this subparagraph) such determination would be open to public inspection. " (,h) DISCLOSURE OF PRIOR WRITTEN DETERMINATIONS AND RELATED BACKGROUND FILE DOCUMENTS.—

"(1) IN GENERAL.—Except as otherwise provided in this subsection, a written determination issued pursuant to a request made

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 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1665

before November 1, 1976, and any background file document relating to such written determination shall be open or available to public inspection in accordance with this section. " (2) T I M E FOR DISCLOSURE.—In the case of any written determination or background file document which is to be made open or available to public inspection under paragraph (1) — " (A) subsection (g) shall not apply, but " (B) such written determination or background file document shall be made open or available to public inspection a t the earliest practicable date after funds for that purpose have been ai:)propriated and made available to the Internal Revenue Service. " (3) ORDER OF RELEASE.—Any written determination or background file document described in paragraph (1) shall be open or available to public inspection in the following order s t a r t i n g with the most recent written determination in each category: " (A) reference written determinations issued under this title; " (B) general written determinations issued after July 4, 1967 r and " (C) reference written determinations issued under the IiiL^nnal Revenue Code of 1939 or corresponding provisions 53 Stat. 1. of prior law. General written determinations not described in subparagraph (B) shall be open to public inspection on written request, b u t not until after the written determinations referred to in subparagraph s (A), (B), and (C) are open to public inspection. " (4) NOTICE THAT PRIOR WRITTEN DEn-:RMiXATioNS ARE OPEN TO

PUBLIC INSPECTION.—Notwithstanding the provisions of subsec- Publication in tions (f)(1) and (f)(3)(A), not less than 90 days before making Federal Register, any ^^ortion of a written determination described in this subsection open to public inspection, the Secretary shall issue public notice in the Federal Register that such written determination is to be made open to public inspection. The person who received a written determination may, within 75 days after the date of publication of notice under this jDaragraph, file a petition in the United States Tax Court (anonymously, if appropi-iate) for a determination with respect to that portion of such written determination ^ which is to be made open to public inspection. The provisions of subsections (f)(3)(B), (5), and (6) shall apply if such a petition is filed. I f no petition is filed, the text of any written determination shall be open to public inspection no earlier than 90 days, and no later than 120 days, after notice is published in the Federal Register. " (5) EXCLUSION.—Subsection (d) shall not apply to any written determination described in paragraph (1). " (i) CIVIL R E M E D I E S. —

" (1) CIVIL ACTION.—Whenever the Secretary—

" (A) fails to make deletions required in accordance with subsection (c), or " (B) fails to follow the procedures in subsection (g), the recipient of the written determination or any person identified in the written determination shall have as an exclusive civil remedy an action against the Secretary in the Court of Claims, which shall have jurisdiction to hear any action under this paragraph. " (2) DAMAGES.—In any suit brought under the provisions of paragraph (1)(A) in which the Court determines that an em-

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Page:United States Statutes at Large Volume 90 Part 2.djvu/198

 90 STAT. 1666

PUBLIC LAW 94-455—OCT. 4, 1976 ployee of the I n t e r n a l Revenue Service intentionally or willfully failed to delete in accordance with subsection (c), or in any suit brought under subparagraph (1)(B) in which the Court determines that a n employee intentionally o r willfully failed to act in accordance with subsection (g), the United States shall be liable to the person in an amount equal to the sum of— " (A) actual damages sustained by the person b u t in n o case shall a person be entitled to receive less than the sum of $1,000, and " (B) the costs of the action together with reasonable attorney's fees as determined by the Court, " (j) SPECIAL JERovisioNS.—

" (1) F E E S. — The Secretary is authorized to assess actual costs— " (A) for duplication of any written determination or background file document made open or available to the public under this section, and " (B) incurred in searching for and making deletions required under subsection (c) from any written determination or background file document which is available to public inspection only upon written request. The Secretary shall furnish any written determination o r background file document without charge or a t a reduced charge if he determines that waiver or reduction of the fee is in the public interest because furnishing such determination or background file document can be considered as primarily benefiting the general public. "(2)

RECORDS DISPOSAL PROCEDURES.—Nothing in t h i s section

shall prevent the Secretary from disposing of any general written determination or background file document described in subsection (b) in accordance with established records disposition procedures, b u t such disposal shall, except as provided in the following sentence, occur not earlier than 3 years after such written determination is first made open to public inspection. I n the case of any general written determination described in subsection (h), the Secretary may dispose of such determination and any related background file document in accordance with such procedures but such disposal shall not occur earlier than 3 years after such written determination is first made open to public inspection if funds are appropriated for such purpose before January 20, 1979, or not earlier than January 20, 1979, if funds are not appropriated before such date. The Secretary shall not dispose of any reference written determinations and related background file documents. "(3)

PRECEDENTIAL STATUS.—Unless the Secretary otherwise

establishes by regulations, a written determination may not be used or cited as precedent. The preceding sentence shall not apply to change the precedential status (if any) of written determinations with regard to taxes imposed by subtitle D of this title, "(k)

26 USC 6104.

SECTION N O T To A P P L Y. — T h i s section shall not a p p l y to—

" (1) any matter to which section 6104 applies, or « (2) any— " (A) written determination issued pursuant to a request made before November 1, 1976, with respect to the exempt status under section 501(a) of a n organization described in section 501(c) or (d), the status of a n organization as a private foundation under section 5 0 9 (a), or the status of

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 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1667

an organization as an operating foundation under section 4942(j)(3), " (B) written determination described in subsection (g) (5)(B) issued pursuant to a request made before November 1, 1976, " (C) determination letter not otherwise described in subparagraph (A), (B), or (E) issued pursuant to a request made before November 1, 1976, " (D) background file document relating to any general written determination issued before July 5, 1967, or " (E) letter or other document described in section 6104 (a)(1)(B) (iv) issued before September 2, 1974. "(1) EXCLUSIVE REMEDY.—Except as otherwise provided in this title, or with respect to a discovery order made in connection with a judicial proceeding, the Secretary shall not be required by any Court to make any written determination or background file document open or available to public inspection, or to refrain from disclosure of any such documents." (b) E F F E C T U P O N P E X D IX G REQUESTS.—Any w r i t t e n determination

26 USC 6110

or background file document which is the subject of a judicial p r o - note, ceeding pursuant to section 552 of title 5, United States Code, commenced before January 1, 1976, shall not be treated as a written determination subject to subsection (h)(1), but shall be available to the complainant along with the background file document, if requested, as soon as practicable after July 1, 1976. (c) CLERICAL AMENDMENT. — The table of sections for subchapter B

of chapter 61 is amended by striking out the item relating to section 6110 and inserting in lieu thereof the following: ^"'c P- 1660. "Sec. 6110. Public inspection of written determinations. "Sec. 6111. Cross references." (d) LETTERS MADE P U B L I C. —

(1) Section 6 1 0 4 (a)(1)(A) (relating to inspection of applications for tax exemption) is amended— (A) by inserting after "such application," in the first sentence thereof the following: " and any letter or other document issued by the I n t e r n a l Revenue Service with respect to such application"; and (B) by inserting after "such application" in the second sentence thereof the following: "and such letter or document". (2) The amendments made by this subsection apply to any letter or other document issued with respect to applications filed after October 31, 1976. (e) EFFECTIVE D A T E. — E x c e p t as otherwise provided in this section, the amendments made by this section shall take effect on November 1, 1976. SEC. 1202. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION.

26 USC 6104.

t f''^ 26 USC 6104 note, 26 USC 6110 note.

(a) CONFIDENTIALITY.—

(1) IN GENERAL.—Section 6103 (relating to publicity of tax 26 USC 6103. returns and disclosure of information as to persons filing tax returns) is amended to read as follows: "SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION. " (a) GENERAL RULE. — R e t u r n s and return information shall be confidential, and except as authorized by this title—

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 90 STAT. 1668

"Officer or employee."

Ante, p. 1660.

PUBLIC LAW 94^55—OCT. 4, 1976 " (1) no officer or employee of the United States, "(2) no officer or employee of any State or of any local child support enforcement agency who has or had access to returns or return information under this section, and "(3) no other person (or officer or employee thereof) who has or had access to returns or return information under subsection (e)(1)(D) (iii) or subsection (n), shall disclose any return or return information obtained by him in any manner in connection with his service as such an officer or an employee or otherwise or under the provisions of this section. For purposes of this subsection, the term 'officer or employee' includes a former officer or employee. " (b) DEFINITIONS.—For purposes of this section— "(1) RETURN.—The term 'return' means any tax or information return, declaration of estimated tax, or claim for refund required by, or provided for or permitted under, the provisions of this title which is filed with the Secretary by, on behalf of, or with respect to any person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists which are supplemental to, or part of, the return so filed. "(2) RETURN INFORMATION.—The term 'return information' means— "(A) a taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense, and " (B) any part of any written determination or any background file document relating to such written determination (as such terms are defined in section 6110(b)) which is not open to public inspection under section 6110, but such term does not include data in a form which cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer. "(3) TAXPAYER RETURN INFORMATION.—The term 'taxpayer return information' means return information as defined in paragraph (2) which is filed with, or furnished to, the Secretary by or on behalf of the taxpayer to whom such return information relates. "(4) TAX ADMINISTRATION.—The term 'tax administration'— "(A) means— "(i) the administration, management, conduct, direction, and supervision of the execution and application of the internal revenue laws or related statutes (or equivalent laws and statutes of a State) and tax conventions to which the United States is a party, and "(ii) the development and formulation of Federal tax policy relating to existing or proposed internal revenue laws, related statutes, and tax conventions, and

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 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1669

" (B) includes assessment, collection, enforcement, litigation, publication, and statistical gathering functions under such laws, statutes, or conventions. " (5) STATE.—The term 'State' means any of the 50 States, the District of Columbia, the Commonwealth of P u e r to Kico, the Virgin Islands, the Canal Zone, Guam, American Samoa, the Commonwealth of the Northern M a r i a n a Islands, and the T r u s t Territory of the Pacific Islands. " (6) TAXPAYER HJENTITY.—The term 'taxpayer identity' means the name of a person with respect to whom a return is filed, his mailing address, his taxpayer identifying number (as described in section 6109), or a combination thereof. 26 USC 6109. " (7) INSPECTION.—The terms 'inspected' and 'inspection' mean any examination of a return or return information. " (8) DISCLOSURE.—The term 'disclosure' means the making known to any person in any manner whatever a return or return information. " (9) FEDERAL AGENCY.—The term 'Federal agency' means a n agency within the meaning of section 551(1) of title 5, United States Code. " (c) DISCLOSURE o r R E T U R N S AND R E T U R N INFORMATION To DESIG-

NEE o r TAXPAYER.—The Secretary may, subject to such requirements Regulations. and conditions as he may prescribe by regulations, disclose the return of any taxpayer, or return information with respect to such taxpayer, to such person or persons as the taxpayer may designate in a written request for or consent to such disclosure, or to any other person a t the taxpayer's request to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person. However, return information shall not be disclosed to such person or persons if the Secretary determines that such disclosure would seriously impair Federal tax administration. " (d) DiscLOSLTiE TO STATE T A X OF F I C I A L S. — R e t u r n s and

return

information with respect to taxes imposed by chapters 1, 2, 6, 11, 12, 21, 23, 24, 44, 51, and 52 and subchapter D of chapter 36, shall be open to inspection by or disclosure to any State agency, body, or commission, or its legal representative, which is charged under the laws of such State with responsibility for the administration of State tax laws for the purpose of, and only to the extent necessary in, the administration of such laws, including any procedures with respect to locating any person who may be entitled to a refund. Such inspection shall be permitted, or such disclosure made, only upon written request by the head of such agency, body, or commission, and only to the representatives of such agency, body, or commission designated in such written request as the individuals who are to inspect or to receive the return or return information on behalf of such agency, body, or commission. Such representatives shall not include any individual who is the chief executive officer of such State or who is neither an employee or legal representative of such agency, body, or commission n o r a person described in subsection (n). However, such return information shall not be disclosed to the extent that the Secretary determines that such disclosure would identify a confidential informant or seriously impair any civil or criminal tax investigation. " (e) DISCLOSURE TO PERSONS H A VI N G MATERIAL INTEREST.—

" (1) IN GENERAL.—The return of a person shall, upon written request, be open to inspection by or disclosure to— " (A) in the case of the return of an individual—

26 USC 1, 1401, 1501, 2001, ^^^J' \^h p, ' 1754 26 USC 5001 5701, 4481.

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 90 STAT. 1670

Ante, p. 1578.

26 USC 2513.

26 USC 1371.

PUBLIC LAW 94-455—OCT. 4, 1976 "(i) that individual, "(ii) if property transferred by that individual to a trust is sold or exchanged in a transaction described in Section 644, the trustee or trustees, jointly or separately, of such trust to the extent necessary to ascertain any amount of tax imposed upon the trust by section 644, or "(iii) the spouse of that individual if the individual and such spouse have signified their consent to consider a gift reported on such return as made one-half by him and one-half by the spouse pursuant to the provisions of section 2513; "(B) in the case of an income tax return filed jointly, either of the individuals with respect to whom the return is filed; "(C) in the case of the return of a partnership, any person who was a member of such partnership during any part of the period covered by the return; "(D) in the case of the return of a corporation or a subsidiary thereof— "(i) any person desi^ated by resolution of its board of directors or other similar governing body, "(ii) any officer or employee of such corporation upon written request signed by any principal officer and attested to by the secretary or other officer, "(iii) any bona fide shareholder of record owning 1 percent or more of the outstanding stock of such corporation, " (iv) if the corporation was a foreign personal holding company, as defined by section 552, any person who was a shareholder during any part of a period covered by such return if with respect to that period, or any part thereof, such shareholder was required under section 551 to include in his gross income undistributed foreign personal holding company income of such company, "(v) if the corporation was an electing small business corporation under subchapter S of chapter 1, any person who was a shareholder during any part of the period covered by such return during which an election was in effect, or "(vi) if the corporation has been dissolved, any person authorized by applicable State law to act for the corporation or any person who the Secretary finds to have a material interest which will be affected by information contained therein; " (E) in the case of the return of an estate— "(i) the administrator, executor, or trustee of such estate, and "(ii) any heir at law, next of kin, or beneficiary under the will, of the decedent, but only if the Secretary finds that such heir at law, next of kin, or beneficiary has a material interest which will be affected by information contained therein; and " (F) in the case of the return of a trust— "(i) the trustee or trustees, jointly or separately, and "(ii) any beneficiary of such trust, but only if the Secretary 'finds that such beneficiary has a material interest which will be affected by information contained therein.

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Page:United States Statutes at Large Volume 90 Part 2.djvu/203

 PUBLIC LAW 94-455—OCT. 4, 1976 " (2) INCOMPETENCY.—If an individual described in paragraph (1) is legally incompetent, the applicable return shall, upon written request, be open to inspection by or disclosure to the committee, trustee, or guardian of his estate. " (3) DECEASED INDIVIDUALS.—The r e t u r n of a decedent shall,

upon written request, be open to inspection by or disclosure to— " (A) the administrator, executor, o r trustee of h i s estate, and " (B) any heir a t law, next of kin, or beneficiary under the will, of such decedent, or a donee of property, but only if the Secretary finds that such heir a t law, next of kin, beneficiary, or donee has a material interest which will be affected by information contained therein. " (4) BANKRUPTCY.—If substantially all of the property of the person with respect to whom the return is filed is in the h and s of a trustee in bankruptcy or receiver, such return or returns for prior years of such person shall, upon written request, be open to inspection by or disclosure to such trustee or receiver, b u t only if the Secretary finds that such receiver or trustee, in h i s fiduciary capacity, has a material interest which will be affected by information contained therein. " (5) ATTORNEY IN FACT.—Any r e t u r n to which this subsection applies shall, upon written request, also be open to inspection by or disclosure to the attorney in fact duly authorized i n writing by any of the persons described in paragraph (1), (2), (3), or (4) to inspect the return or receive the information on h i s behalf, subject to the conditions provided in such paragraph s. "(6)

R E T U R N INFORMATION.—Return information with respect

to any tax p a y e r may be open to inspection by or disclosure to any person authorized by this subsection to inspect any return of such tax p a y e r if the Secretary determines that such disclosure would not seriously i m p a i r Federal tax administration. " (f)

DISCLOSURE TO COMMITTEES OF CONGRESS.— " (1) COMMITTEE ON WAYS AND MEANS, COMMITTEE O N FINANCE, AND JOINT COMMITTEE ON TAXATION.—Upon Written request from

the chairman of the Committee on W a y s and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any r e t u r n or return information specified in such request, except that any r e t u r n or return information which can be associated with, o r otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure. " (2) C H I E F OF STAFF OF JOINT COMMITTEE ON TAXATION.—Upon

written request by the Chief of Staff of the Joint Committee on Taxation, the Secretary shall furnish him with any return or return information specified in such request. Such Chief of Staff may submit such return or return information to any committee described in paragraph (1), except that any return o r return information which can be associated with, or otherwise identify, directly or indirectly, a particular tax p a v e r shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure. " (3) OTHER COMMITTEES.—Pursuant to an action by, and upon

90 STAT. 1671

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 90 STAT. 1672

PUBLIC LAW 94-455—OCT. 4, 1976 written request by the chairman of, a committee of the Senate or the House of Representatives (other than a committee specified in paragraph (1)) specially authorized to inspect any return or return information by a resolution of the Senate or the House of Representatives or, in the case of a joint committee (other than the joint committee specified in paragraph (1)) by concurrent resolution, the Secretary shall furnish such committee, or a duly authorized and designated subcommittee thereof, sitting in closed executive session, with any return or return information which such resolution authorizes the committee or subcommittee to inspect. Any resolution described in this paragraph shall specify the purpose for which the return or return information is to be furnished and that such information cannot reasonably be obtained from any other source. "(4) AGENTS or COMMITTEES AND SUBMISSION or INFORMATION TO SENATE OR HOUSE OF REPRESENTATIVES. " (A) COMMITTEES DESCRIBED I N PARAGRAPH ( D. — Any

committee described in paragraph (1) or the Chief of Staff of the Joint Committee on Taxation shall have the authority, acting directly, or by or through such examiners or agents as the chairman of such committee or such chief of staff may designate or appoint, to inspect returns and return information at such time and in such manner as may be determined by such chairman or chief of staff. Any return or return information obtained by or on behalf of such committee pursuant to the provisions of this subsection may be submitted by the committee to the Senate or the House of Representatives, or to both. The Joint Committee on Taxation may also submit such return or return information to any other committee described in paragraph (1), except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure. " (B) OTHER COMMITTEES.—Any committee or subcommittee

described in paragraph (3) shall have the right, acting? directly, or by or through no more than four examiners or agents, designated or appointed in writing in equal numbers by the chairman and ranking minority member of such committee or subcommittee, to inspect returns and return information at such time and in such manner as may be determined by such chairman and ranking minority member. Any return or return information obtained by or on behalf of such committee or subcommittee pursuant to the provisions of this subsection may be submitted by the committee to the Senate or the House of Representatives, or to both, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer, shall be furnished to the Senate or the House of Representatives only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure. " (g) DISCLOSURE TO PRESIDENT AND CERTAIN OTHER PERSONS.—-

"(1) IN GENERAL.—Upon written request by the President, signed by him personally, the Secretary shall furnish to the Presi-

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 90 STAT. 1673

PUBLIC LAW 94-455—OCT. 4, 1976

dent, or to such employee or employees of the W h i t e House Office as the President may designate by name in such request, a return or return information with respect to any taxpayer named in such request. Any such request shall state— " (A) the name and address of the taxpayer whose return or return information is to be disclosed, " (B) the kind of return or return information which is to be disclosed, " (C) the taxable period or periods covered by such return or return information, and " (D) the specific reason why the inspection or disclosure is requested. " (2) DISCLOSURE OF RETURN INFORMATION AS TO PRESIDENTIAL APPOINTEES AND CERTAIN OTHER FEDERAL GOVERNMENT APPOINT-

EES.—The Secretary may disclose to a duly authorized representative of the Executive Office of the President or to the head of any Federal agency, upon written request by the President or head of such agency, or to the Federal Bureau of Investigation on behalf of and upon written request by the President or such head, return information with respect to an individual who is designated as being under consideration for appointment to a position i n the executive or judicial branch of the Federal Government. Such return information shall be limited to whether such individual— " (A) has filed returns with respect to the taxes imposed under chapter 1 for not more than the immediately preceding 26 USC 1. 3 years; " (B) has failed to pay any tax within 10 days after notice and demand, or has been assessed any penalty under this title for negligence, in the current year or immediately preceding 3 years; " (C) has been or is under investigation for possible criminal offenses under the internal revenue laws and the results of any such investigation; or " (D) has been assessed any civil penalty under this title for fraud. W i t h i n 3 days of the receipt of any request for any return infor- Notification. mation with respect to any individual under this paragraph, the Secretary shall notify such individual in writing that such information has been requested under the provisions of this paragraph. "(3)

RESTRICTION ON DISCLOSURE.—The employees to

whom

returns and return information are disclosed under this subsection shall not disclose such returns and return information to any other person except the President or the head of such agency without the personal written direction of the President or the head of such agency. " (4) RESTRICTION ON DISCLOSURE TO CERTAIN EMPLOYEES.—Dis-

closure of returns and return information under this subsection shall not be made to any employee whose annual rate of basic pay is less than the annual rate of basic p a y specified for positions subject to section 5316 of title 5, United States Code. " (5) REPORTING REQUIREMENTS.—Within 30 d a y s after the close

of each calendar quarter, the President and the head of any agency requesting returns and return information under this subsection shall each file a report with the Joint Committee on Taxation sett i n g forth the taxpayers with respect to whom such requests were

Report to congressional committee.

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 90 STAT. 1674

PUBLIC LAW 94-455—OCT. 4, 1976 made during such quarter under this subsection, the returns or return information involved, and the reasons for such requests. The President shall not be required to report on any request for returns and return information pertaining to an individual who was an officer or employee of the executive branch of the Federal Government at the time such request was made. Reports filed pursuant to this paragraph shall not be disclosed unless the Joint Committee on Taxation determines that disclosure thereof (including identifying details) would be in the national interest. Such reports shall be maintained by the Joint Committee on Taxation for a period not exceeding 2 years unless, within such period, the Joint Committee on Taxation determines that a disclosure to the Congress is necessary. "(h) DISCLOSURE TO CERTAIN FEDERAL OFFICERS AND EMPLOYEES FOR PURPOSES OF TAX ADMINISTRATION, ETC.— "(1) DEPARTMENT OF THE TREASURY.—Returns and return

26 USC 7421.

information shall, without written request, be open to inspection by or disclosure to officers and employees of the Department of the Treasury whose official duties require such inspection or disclosure for tax administration purposes. "(2) DEPARTMENT OP JUSTICE.—^A return or return information shall be open to inspection by or disclosure to attorneys of the Department of Justice (including United States attorneys) personally and directly engaged in, and solely for their use in, preparation for any proceeding (or investigation which may result in such a proceeding) before a Federal grand jury or any Federal or State court in a matter involving tax administration, but only if— (A) the taxpayer is or may be a party to such proceeding; " (B) the treatment of an item reflected on such return is or may be related to the resolution of an issue in the proceeding or investigation; or "(C) such return or return information relates or may relate to a transactional relationship between a person who is or may be a party to the proceeding and the taxpayer which affects, or may affect, the resolution of an issue in such proceeding or investigation. "(3) FORM OF REQUEST.—In any case in which the Secretary is authorized to disclose a return or return information to the Department of Justice pursuant to the provisions of this subsection— " (A) if the Secretary has referred the case to the Department of Justice, or if the proceeding is authorized by subchapter B of chapter 76, the Secretary may make such disclosure on his own motion, or " (B) if the Secretary receives a written request from the Attorney General, the Deputy Attorney General, or an Assistant Attorney General for a return of, or return information relating to, a person named in such request and setting forth the need for the disclosure, the Secretary shall disclose return or return the information so requested. "(4)

DISCLOSURE

IN

JUDICIAL

AND

ADMINISTRATIVE TAX

PROCEEDINGS.—A return or return information may be disclosed in a Federal or State judicial or administrative proceeding pertaining to tax administration, but only— "(A) if the taxpayer is a party to such proceeding;

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 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1675

" (B) if the treatment of an item reflected on such return is directly related to the resolution of a n issue i n the proceeding; " (C) if such return or r e t u r n information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer which directly affects the resolution of an issue in the proceeding; or " (D) to the extent required by order of a court pursuant to section 3500 of title 18, United States Code, or rule 16 of the Federal Rules of Criminal Procedure, such court being authorized in the issuance of such order to give due consideration to congressional policy favoring the confidentiality of returns and r e t u r n information as set forth in this title. However, such return or return information shall not be disclosed as provided in subparagraph (A), (B), or (C) if the Secretary determines that such disclosure would identify a confidential informant or seriously i m p a i r a civil or criminal tax investigation. " (5) PROSPECTIVE JURORS.—In connection with any judicial proceeding described in paragraph (4) to which the United States IS a party, the Secretary shall respond to a written inquiry from an attorney of the Department of Justice (including a United States attorney) involved i n such proceeding or any person (or his legal representative) w h o is a party to such proceeding as to whether an individual who is a prospective j u r o r in such proceeding has or has not been the subject of any audit or other tax investigation by the I n t e r n a l Revenue Service. The Secretary shall limit such response to an affirmative or negative reply to such inquiry, " (i) DISCLOSURE TO FEDERAL OFFICERS OR EMPLOYEES FOR ADMINISTRATION OF FEDERAL L A W S N O T RELATING TO T A X ADMINISTRATION.— " (1) NONTAX CRIMINAL INVESTIGATION.— " (A) INFORMATION FROM TAXPAYER.—A r e t u r n

or

tax-

payer return information shall, pursuant to, and upon the g r a n t of, an ex part e order by a Federal district court judge as provided by this paragraph, be open, but only to the extent necessary as provided in such order, to officers and employees of a Federal agency personally and directly engaged in and solely for their use in, preparation for any administrative or judicial proceeding (or investigation which may result in such a proceeding) pertaining to the enforcement of a specifically designated Federal criminal statute (not involving tax administration) to which the United States or such agency is or may be a party. " (B) APPLICATION FOR ORDER.—The head of any Federal aarency described in subparagraph (A) or, in the case of the Department of Justice, the Attornev General, the Deputy Attorney General, or an Assistant Attornev General, may authorize an application to a Federal district court judge for the order referred to in subparagraph (A^. Upon such application, such judge may grant such order if he dptermines on the basis of the facts submitted by the applicant that — " (i) there is reasonable cause to believe, based upon information believed to be reliable, that a specific criminal act has been committed; "(ii)_ there is_ reason to believe that such return or return information is probative evidence of a matter in

18 USC app.

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 90 STAT. 1676

PUBLIC LAW 94-455—OCT. 4, 1976 issue related to the commission of such criminal act; and " ( i i i) the information sought to be disclosed cannot reasonably be obtained from any other source, unless it is determined that, notwithstanding the reasonable availability of the information from another source, the r e t u r n or return information sought constitutes the most p r o bative evidence of a matter in issue relating to the commission of such criminal act. However, the Secretary shall not disclose any r e t u r n or return information under this paragraph if he determines and certifies to the court that such disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation. "(2)

RETURN

INFORMATION OTHER T H A N TAXPAYER RETURN

INFORMATION.—Upou written request from the head of a Federal agency described in paragraph (1)(A), or in the case of t h a Department of Justice, the Attorney General, the Deputy Attorney General, or an Assistant Attorney General, the Secretary shall disclose return information (other than taxpayer return information) to officers and employees of such agency personally and directly engaged in, and solely for their use in, preparation for any administrative or judicial proceeding (or investigation which may result in such a proceeding) described in paragraph (1) (A^. Such request shall set forth— " (A) the name and address of the taxpayer with respect to whom such r e t u r n information relates; " (B) the taxable period or periods to which the r e t u r n information relates; " (C) the statutory authority under which the proceeding or investigation is being conducted; and " (D) the specific reason or reasons why such disclosure is or may be material to the proceeding or investigation. However, the Secretary shall not disclose any r e t u r n or return information under this paragraph if he determines that such disclosure would identify a confidential informant or seriously impair a civil o r criminal tax investigation. "(3)

DISCLOSURE or RETURN INFORMATION CONCERNING POSSIBLE

CRIMINAL ACTIVITIES.—The Secretary may disclose in writing return information, other than tax p a y e r return information, which may constitute evidence of a violation of Federal criminal laws to the extent necessary to apprise the head of the appropriate Federal agency charged with the responsibility for enforcing such laws. "(4)

U S E I N JUDICIAL OR ADMINISTRATIVE PROCEEDING.—Any

r e t u r n or r e t u r n information obtained under paragraph (1), (2), or (3) may be entered into evidence in any administrative or judicial proceeding pertaining to enforcement of a specifically designated Federal criminal statute (not involving tax administration) to which the United States or an agency described in paragraph (1)(A) is a party but, in the case of any return or r e t u r n information obtained under paragraph (1), only if the court finds that such return or return information is probative of a m a t t e r in issue relevant in establishing the commission of a crime or the guilt of a party. However, any return or return information obtained under paragraph (1), (2), or (3) shall not be admitted into evidence in such proceeding if the Secretary determines and

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 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1677

notifies the Attorney General or his delegate or the head of such agency that such admission would identify a confidential informant or seriously i m p a i r a civil or criminal tax investigation. The admission into evidence of any return or return information contrary to the provisions of this paragraph shall not, as such, constitute reversible error upon appeal of a judgment in such proceeding. " (5) RENEGOTIATIOX OF CONTR^VCTS.—A r e t u r n o r r e t u r n infor-

mation with respect to the tax imposed by chapter 1 upon a taxpayer subject to the provisions of the Renegotiation Act of 1951 shall, upon request in writing by the Chairman of the Renegotiation Board, be open to officers and employees of such board personally and directly engaged in, and solely for their use in, verifying or analyzing financial information required by such Act to be filed with, or otherwise disclosed to, the board, or to the extent necessary to implement the provisions of section 1481 o r 1482. The Chairman of the Renegotiation Board may, upon referral of any matter with respect to such Act to the Department of Justice for further legal action, disclose such return and return information to any employee of such department charged with the responsibility for h and l i n g such matters.

26 USC 1. 50 USC app. 1211 note.

26 USC 1481, 1482.

" (6) C O M P T R O L L E R GENERAL.— " (A) R E T U R N S AVAILABLE FOR INSPECTION.—Except as p r o -

vided in subparagraph (B), upon written request by the Comptroller General of the United States, returns and return information shall be open to inspection by, or disclosure to, officers and employees of the General Accounting Office for the purpose of, and to the extent necessary in, making— " (i) an audit of the I n t e r n a l Revenue Service o r the Bureau of Alcohol, Tobacco and F i r e a r m s which may be required by section 117 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 67), or " ( i i) any audit authorized by subsection (p)(6), except that no such officer or empioyee shall, except to the extent authorized by subsection (f) o r (p)(6), disclose to any person, other than another officer or employee of such office whose official duties require such disclosure, any return or return information described in section 4424(a) in a form which can be associated with, o r otherwise identify, directly or indirectly, a particular taxpayer, n o r shall such officer or employee disclose any other return or r e t u r n information, except as otherwise expressly provided by law, to any person other than such other officer o r employee of such office in a form which can be associated with, or otherwise identify, directly o r indirectly, a particular taxpayer. "(B)

DISAPPROVAL BY JOINT COMMITTEE ON TAXATION.—

Returns and return information shall not be open to inspection or disclosed under subparagraph (A) with respect to an audita— " (i) unless the Comptroller General of the United Statics notifies in writing the Joint Committee on Taxation of such audit, and " (ii) if the Joint Committee on T a x a t i o n disapproves such audit by a vote of at least two-thirds of its members within the 30-day period beginning on the d a y the Joint Committee on Taxation receives such notice.

89-194 O—78—pt. 2

14

Notification of congressional committee.

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 9 0 STAT. 1678

Regulations.

PUBLIC LAW 94-455—OCT. 4, 1976 " (1) DEPARTMENT OF COMMERCE.—Upon request i n writing by
 * '(j) STATISTICAL U S E. —

the Secretary of Commerce, the Secretary shall furnish— " (A) such returns, or return information reflected thereon, to officers and employees of the Bureau of the Census, and " (B) such return information reflected on returns of corporations to officers and employees of the Bureau of Economic Analysis, as the Secretary may prescribe by regulation for the purpose of, but only to the extent necessary in, the structuring of censuses and national economic accounts and conducting related statistical activities authorized by law. " (2) FEDERAL TRADE COMMISSION.—Upon request i n writing by

26 USC 1.

the C h a i r m a n of the Federal Trade Commission, the Secretary shall furnish such return information reflected on any r e t u r n of a corporation with respect to the tax imposed by chapter 1 to officers and employees of the Division of Financial Statistics of the Bureau of Economics of such commission as the Secretary may prescribe by regulation for the purpose of, but only to the extent necessary in, administration by such division of legally authorized economic surveys of corporations. " (3) DEPARTMENT o r TREASURY.—Returns and r e t u r n informa-

tion shall be open to inspection by o r disclosure to officers and employees of the Department of the Treasury whose official duties require such inspection or disclosure for the purpose of, b u t only to the extent necessary in, p r e p a r i n g economic o r financial forecasts, projections, analyses, and statistical studies and conducting related activities. Such inspection or disclosure shall be permitted only upon written request which sets forth the specific reason or reasons why such inspection or disclosure is necessary and which is signed by the head of the bureau or office of the Department of the Treasury requesting the inspection or disclosure. "(4)

A N O N Y M O U S FORM.—No person w h o receives a

return

or r e t u r n information under t h i s subsection shall disclose such return or return information to any person other than the taxpayer to whom i t relates except in a form which cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer, " (k) DISCLOSURE OF CERTAIN R E T U R N S AND R E T U R N INFORMATION FOR T A X ADMINISTRATION PURPOSES.— " (1) DISCLOSURE OF ACCEPTED OFFERS-IN-COMPROMISE.—Return

26 USC 7122.

information shall be disclosed to members of the general public to the extent necessary to permit inspection of any accepted offerin-compromise under section 7122 relating to the liability for a tax imposed by this title. " (2) DISCLOSURE OF AMOUNT OF OUTSTANDING L I E N. — I f a notice

of lien has been filed pursuant to section 6323(f), the amount of the outstanding obligation secured by such lien may be disclosed to any person Avho furnishes satisfactory written evidence that he has a r i g h t i n the property subject to such lien or intends to obtain a right in such property. "(3)

DISCLOSURE OF RETURN INFORMATION TO CORRECT M I S -

STATEMENTS OF FACT.—The Secretary may, b u t only following approval by the Joint Committee on Taxation, disclose such return information or any other information with respect to any specific tax p a y e r to the extent necessary for tax administration purposes to correct a misstatement of fact published or disclosed

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 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1679

with respect to such taxpayer's r e t u r n or any transaction of the taxpayer with the I n t e r n a l Revenue Service. "(4)

DISCLOSURE TO COMPETENT AUTHORITY UNDER INCOME TAX

CONVENTION.—A return or return information may be disclosed to a competent authority of a foreign government which has an income tax convention with the United States b u t only to the extent provided in, and subject to the terms and conditions of, such convention. "(5)

STATE AGENCIES REGULATING TAX RETURN PREPARERS.—

T a x p a y e r identity information with respect to any income tax return preparer, and information as to whether or not any penalty has been assessed against such income tax return preparer under section 6694, 6695, or 7216, may be furnished to any agency, body, Post, pp. 1689, or commission lawfully charged under any State or local law 1692. with the licensing, registration, or regulation of income tax return 26 USC 7216. preparers. Such information may be furnished only upon written request by the head of such agency, body, or commission designating the officers or employees to whom such information is to be furnished. Information may be furnished and used under this paragraph only for purposes of the licensing, registration, or regulation of income tax return preparers. "• (6) DISCLOSURE BY INTERNAL REVENUE OFFICERS AND EMPLOYEES

FOR INVESTIGATIVE PURPOSES.—An internal revenue officer or employee may, in connection with his official duties relating to any audit, collection activity, or civil or criminal tax investigation or any other offense under the internal revenue laws, disclose r e t u r n information to the extent that such disclosure is necessary in obtaining information, which is not otherwise reasonably available, with respect to the correct determination of tax, liability for tax, or the amount to be collected or with respect to the enforcement of any other provision of this title. Such disclosures shall be Regulations. made only in such situations and under such conditions as the Secretary may prescribe by regulation. "(1) DISCLOSURE OF R E T U R N S AND R E T U R N INFORMATION FOR P U R POSES OTHER T H A N T A X ADMINISTRATION.— " (1) DISCLOSURE OF CERTAIN RETURNS AND RETURN INFORMATION TO SOCIAL SECURITY ADMINISTRATION AND RAILROAD RETIRE-

MENT BOARD.—The Secretary may, upon written request, disclose returns and return information with respect to— " (A) taxes imposed by chapters 2, 21, and 24, to the Social Security Administration for purposes of its administration of the Social Security Act; " (B) a plan to which part I of subchapter D of chapter 1 applies, to the Social Security Administration for purposes of carrying out its responsibility under section 1131 of the Social Security Act, limited, however to return information described in section 6 0 5 7 (d); and " (C) taxes imposed by chapter 22, to the Railroad Retirement B o a r d for purposes of its administration of the Railroad Retirement Act.

26 USC 1401, 3101, 3401. 42 USC 1305. 26 USC 401.

42 USC

1320b-l. 26 USC 6057. 26 USC 3201. 45 USC 215 DISCLOSURE OF RETURNS AND RETURN INFORMATION TO THE note.

"(2) DEPARTMENT OF LABOR AND PENSION BENEFIT GUARANTY CORPORA-

TION.—The Secretary may, upon written request, furnish returns and return information to the proper officers and employees of the Department of Labor and the Pension Benefit G u a r a n t y Corporation for purposes of, but only to the extent necessary in, the

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Page:United States Statutes at Large Volume 90 Part 2.djvu/212

 90 STAT. 1680 29 USC 1001 °®*®*

5 USC 552a °°*®'

PUBLIC LAW 94-455—OCT. 4, 1976 administration of titles I and IV of the Employee Retirement Income Security Act of 1974. " (3) DISCLOSURE OF RETURNS AND RETURN INFORMATION TO PRIVACY PROTECTION STUDY COMMISSION.—The Secretary may, upon written request, disclose returns and return information to the Privacy Protection S t u d y Commission, or to such members, ojKcers, o r employees of such commission as may be named in such written request, to the extent provided under section 5 of the Privacy Act of 1974. " (4) DISCLOSURE OF RETURNS AND RETURN INFORMATION FOR USE IN PERSONNEL OR CLAIMANT REPRESENTATIVE MATTERS.—The Secretary may disclose returns and r e t u r n information— " (A) upon written request— " (i) to an employee or former employee of the Department of the Treasury, or to the duly authorized legal representative of such employee or former emploj^ee, who is or may be a party to any administrative action or proceeding affecting the personnel rights of such employee or former employee; or " ( i i) to any person, or to the duly authorized legal representative of such person, whose rights are or may be affected by an administrative action or proceeding under section 3 of the Act of July 7, 1884 (23 Stat. 258; 31 U.S.C. 1026), solely for use in the action or proceeding, or in preparation for the action or proceeding, b u t only to the extent that the Secretary determines that such returns or return information is or may be relevant and material to the action or proceeding; or " (B) to officers and employees of the Department of the Treasury for use in any action or proceeding described in subparagraph (A), or in preparation for such action or proceeding, to the extent necessary to advance or protect the interests of the United States. "(5)

26 usr 42 USC 432.

fio'ii

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE.—

Upon written request by the Secretary of Health, Education, and Welfare, the Secretary may disclose information returns filed pursuant to part III oi subchapter A of chapter 61 of this subtitle for the purpose of carrying out, in accordance with an agreement entered into pursuant to section 232 of the Social Security Act, an effective return processing program. "(6) DISCLOSURE OF RETURN INFORMATION TO FEDERAL, STATE, AND LOCAL CHILD SUPPORT ENFORCEMENT AGENCIES.— "(A) RETURN INFORMATION FROM INTERNAL REVENUE SERV-

42 USC 651.

ICE.—The Secretary may, upon written request, disclose to the appropriate Federal, State, or local child support enforcement agency— "(i) available return information from the master files of the Internal Revenue Service relating to the address, filing status, amounts and nature of income, and the number of dependents reported on any return filed by, or with respect to, any individual with respect to whom child support obligations are sought to be established or enforced pursuant to the provisions of part D of title IV of the Social Security Act and with respect

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 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1681

to any individual to whom such support obligations are ' owing, and " ( i i) available r e t u r n information reflected on any r e t u r n filed by, or with respect to, any individual described in clause (i) relating to the amount of such 96 IJSC 61 individual's gross income (as defined in section 61) or consisting of the names and addresses of payors of such income and the names of any dependents reported on such return, b u t only if such return information is not reasonably available from any other source. "(B)

RESTRICTION ON DISCLOSURE.—The Secretary

shall

disclose return information under subparagraph (A) only for purposes of, and to the extent necessary in, establishing and collecting child support obligations from, and locating, individuals owing such obligations, "(m)

DISCLOSURE

or

TAXPAYER

IDENTII-Y

INFORMATION.—The

Secretary is authorized— " (1) to disclose taxpayer identity information to the press and other media for purposes of notifying persons entitled to tax refunds when the Secretary, after reasonable eifort and lapse of time, has been unable to locate such persons, and " (2) upon written request, to disclose the mailing address of a tax p a y e r to officers and employees of an agency personally and directly engaged in, and solely for their use in, preparation for any administrative or judicial proceeding (or investigation which may result i n such a proceeding) pertaining to the collection o r compromise of a Federal claim against such taxpayer in accordance with the provisions of section 3 of the Federal Claims Collection Act of 1966. " (n) CERTAIN OTHER P E R S O N S. — Pursuant to regulations prescribed

on iicn QI;9 31 UbL 952. Regulations.

by the Secretary, returns and return information may be disclosed to any person, including any person described in section 7513(a), to the extent necessary in connection with the processing, storage, transmission, and reproduction of such returns and return information, and the program m i n g, maintenance, repair, testing, and procurement of equipment, for purposes of tax administration. " (o) DISCLOSURE OF RETURNS AND R E T U R N INFORMATION W I T H RESPECT TO CERTAIN T A X E S. — " (1) TAXES IMPOSED BY SUBTITLE E.—Returns and r e t u r n

information with respect to taxes imposed by subtitle E (relating to taxes on alcohol, tobacco, and firearms) shall be open to inspection by or disclosure to officers and employees of a Federal agency whose official duties require such inspection or disclosure. "(2)

TAXES

IMPOSED BY CHAPTER

3 5.—Returns and

return

information with respect to taxes imposed by chapter 35 (relating to taxes on wagering) shall, notwithstanding any other provisionof this section, be open to inspection by or disclosure only to such person or persons and for such purpose or purposes as a r e prescribed by section 4424. " (p) PROCEDURE AND RECORDKEEPING.— " (1) M A N N E R, TIME, AND PLACE OF INSPECTIONS.—Requests for

the inspection or disclosure of a r e t u r n or r e t u r n information and such inspection or disclosure shall be made in such manner and a t such time and place as shall be prescribed by the Secretary. " (2) PROCEDURE.— " (A) REPRODUCTION

OF RETURNS.—A

reproduction

or

certified reproduction of a return shall, upon written request, be furnished to any person to whom disclosure o r inspection

26 USC 5001.

26 USC 4401.

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 90 STAT. 1682 Fee.

PUBLIC LAW 94-455—OCT. 4, 1976 of such return is authorized under this section. A reasonable fee may be prescribed for furnishing such reproduction or certified reproduction. " (B) DISCLOSURE OF RETURN INFORMATION.—Return infor-

Fee.

mation disclosed to any person under the provisions of this title may be provided in the form of written documents, reproductions of such documents, films or photoimpressions, or electronically produced tapes, disks, or records, or by any other mode or means which the Secretary determines necessary or appropriate. A reasonable fee may be prescribed for furnishing such return information. "(C) USE OF REPRODUCTIONS.—Any reproduction of any

return, document, or other matter made in accordance with this paragraph shall have the same legal status as the original, and any such reproduction shall, if properly authenticated, be admissible in evidence in any judicial or administrative proceeding as if it were the original, whether or not the original is in existence. "(3) RECORDS OF INSPECTION AND DISCLOSURE.— "(A) SYSTEM OF RECORDKEEPING.—Except as otherwise

provided by this paragraph, the Secretary shall maintain a permanent svstem of standardized records or accountings of all requests tor inspection or disclosure of returns and return information (including the reasons for and dates of such requests) and of returns and return information inspected or disclosea under this section. Notwithstanding the provisions of section 552a (c) of title 5, United States Code, the Secretary shall not be required to maintain a record or accounting of requests for inspection or disclosure of returns and return information, or of returns and return information inspected or disclosed, under the authority of subsections (c), (e), (h) (1), (3)(A), or (4), (i)(4) or (6)(A) (ii), (k)(1), (2), or (6), (1)(1) or (4)(B) or (5), (m), or (n). The records or accountings required to be maintained under this paragraph shall be available for examination by the Joint Committee on Taxation or the Chief of Staff of such joint committee. Such record or accounting shall also be available for examination by such person or persons as may be, but only to the extent, authorized to make such examination under section 552a(c) (3) of title 5, United States Code. Report to <^o^F®^sional committee. """

" (B) REPORT BY THE SECRETARY.—The Secretary shall, within 90 days after the close of each calendar year, furnish to the Joint Committee on Taxation a report with respect to, o r summary of, the records or accounting described in subparagraph (A) in such form and containing such information as such joint committee or the Chief of Staff of such joint committee may designate. Such report or summary shall not, however, include a record or accounting of any request by the President under subsection (g) for, or the disclosure in response to such request of, any return or return information with respect to any individual who, a t the time of such request, was an officer or employee of the executive branch of the Federal Government. Such report or summary, or any part thereof, may be disclosed by such joint committee to such persons and for such purposes as the joint committee may,

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Page:United States Statutes at Large Volume 90 Part 2.djvu/215

 PUBLIC LAW 94-455—OCT. 4, 1976 by record vote of a majority of the members of the joint committee, determine. " (C) PUBLIC REPOKT ON DISCLOSURES.—The Secretary shall,

within 90 days after the close of each calendar year, furnish to the Joint Committee on Taxation for disclosure to the public a report with respect to the records or accountings described in subparagraph (A) which— " (i) provides with respect to each Federal agency, each agency, body, or commission described in subsection (d) or (1)(3) or (6), and the General Accounting Office the number of— " (I) requests for disclosure of returns and return information, " ( II) instances in which returns and return information were disclosed pursuant to such requests, " ( III) taxpayers whose returns, or return information with respect to whom, were disclosed pursuant to such requests, and "(ii) describes the general purposes for which such requests were made, "(4) SArEGUARDS.—Any Federal agency described in subsection (h)(2), (i)(1), (2) or (5), (j)(l) or (2), (1)(1), (2), or (5), or (o)(1), the General Accounting Office, or any agency, body, or commission described in subsection (d) or (1)(3) or (6) shall, as a condition for receiving returns or return information— "(A) establish and maintain, to the satisfaction of the Secretary, a permanent system of standardized records with respect to any request, the reason for such request, and the date of such request made by or of it and any disclosure of return or return information made by or to it; "(B) establish and maintain, to the satisfaction of the Secretary, a secure area or place in which such returns or return information shall be stored; "(C) restrict, to the satisfaction of the Secretary, access to the returns or return information only to persons whose duties or responsibilities require access and to whom disclosure may be made under the provisions of this title; "(D) provide such other safeguards which the Secretary determines (and which he prescribes in regulations) to be necessary or appropriate to protect the confidentiality of the returns or return information; " (E) furnish a report to the Secretary, at such time and containing such information as the Secretary may prescribe, which describes the procedures established and utilized by such agency, body, or commission or the General Accounting Office for ensuring the confidentialty of returns and return information required by this paragraph; and " (F) upon completion of use of such returns or return information— "(i) in the case of an agency, body, or commission described in subsection (d) or (1)(6), return to the Secret&Tj such returns or return information (along with any copies made therefrom) or make such returns or return information undisclosable in any manner and furnish a written report to the Secretary describing such manner; and

90 STAT. 1683

Report to congressional committee.

Record maintenance.

Report.

Report.

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Page:United States Statutes at Large Volume 90 Part 2.djvu/216

 90 STAT. 1684

PUBLIC LAW 94-455—OCT. 4, 1976 "(ii) in the case of an agency described in subsections (h)(2), (i)(1), (2), or (5), (j)(l) or (2), (1)(1), (2), o r (5), o r (o)(l), the commission described in subsection (1)(3), or the General Accounting Office, either— " (I) return to the Secretary such returns or return information (along with any copies made therefrom), " ( II) otherwise make such returns or return information widisclosable, or " ( III) to the extent not so returned or made undisclosable, ensure that the conditiees ef subparagraphs (A), (B), (C), (D), and (E) of this paragraph continue to be met with respect to such returns or return information, except that the conditions of subparagraphs (A), (B), (C), (D), and (E) shall cease to apply with respect to any return or return information if, and to the extent that, such return or return information is disclosed in the course of any judicial or administrative proceeding and made a part of the public record thereof. If the Secretary determines that any such agency, body, or commission or the General Accounting Office has failed to, or does not, meet the requirements of this paragraph, he may, after any proceedings for review established under paragraph (7), take such actions as are necessary to ensure such requirements are met, including refusing to disclose returns or return information to such agency, body, or commission or the General Accounting Office until he determines that such requirements have been or will be met. "(5)

REPORT ON PROCEDURES AND SAFEGUARDS.—After

the

close of each calendar quarter, the Secretary shall furnish to each committee described in subsection (f)(1) a report which describes the procedures and safeguards established and utilized by such agencies, bodies, or commissions and the General Accounting Office for ensuring the confidentiality of returns and return information as required by this subsection. Such report shall also describe instances of deficiencies in, and failure to establish or utilize, such procedures. " (6) AUDIT or PROCEDURES AND SAFEGUARDS.— " (A) AUDIT BY COMPTROLLER GENERAL.—The Comptroller

General may audit the procedures and safeguards established by such agencies, bodies, or commissions pursuant to this subsection to determine whether such safeguards and procedures meet the requirements of this subsection and ensure the confidentiality of returns and return information. The Comptroller General shall notify the Secretary before any such audit is conducted, " (B) RECORDS OF INSPECTION AND REPORTS BY THE COMPTROLLER GENERAL.—The Comptroller General shall—

"(i) maintain a permanent system of standardized records and accountings of returns and return information inspected by officers and employees of the General Accounting Office under subsection (i)(6)(A) ( i i) and shall, within 90 days after the close of each calendar year, furnish to the Secretary a report with respect to, or summary of, such records or accountings in such form and containing such information as the Secretary may prescribe, and

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Page:United States Statutes at Large Volume 90 Part 2.djvu/217

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1685

"(ii) furnish an annual report to each committee described in subsection (f) and to the Secretary setting forth his findings with respect to any audit conducted pursuant to subparagraph (A). The Secretary may disclose to the Joint Committee any report furnished to him under clause (i). " (7) ADMINISTRATIVE REVIEW.—The Secretary shall by regulations prescribe procedures which provide for administrative review of any determination under paragraph (4) that any agency, body, or commission described in subsection (d) has failed to meet the requirements of such paragraph.

Report to congressional committees,

Regulations,

" (8) S T A T E LAW REQUIREMENTS.—

" (A) SAFEGUARDS.—Notwithstanding any other provision of this section, no return or return information shall be disclosed after December 31, 1978, to any oflGlcer or employee of any State which requires a taxpayer to attach to, or include in, any State tax return a copy of any portion of his Federal return, or information reflected on such Federal return, unless such State adopts provisions of law which protect the confidentiality of the copy of the Federal return (or portion thereof) attached to, or the Federal return information reflected on, such State tax return. "(B)

DISCLOSURE or RETURNS OR RETURN INFORMATION I N

STATE RETURNS.—Nothing in subparagraph (A) shall be construed to prohibit the disclosure by an officer or employee of any State of any copy of any portion of a Federal return or any information on a Federal return which is required to be attached or included in a State return to another officer or employee of such State (or political subdivision of such State) if such disclosure is specifically authorized by State law. "(q) REGULATIONS.—The Secretary is authorized to prescribe such Regulations, other regulations as are necessary to carry out the provisions of this section." (2) CONFORMING AMENDMENT.—The table of sections for subchapter B of chapter 61 is amended by striking out the item relating to section 6103 and inserting in lieu thereof the following: "Sec. 6103. Confidentiality and disclosure of returns and return information." (b) STATISTICAL PUBLICATIONS AND STUDIES.—Section 6108 (relating 26 USC 6108.

to publication of statistics of income) is amended to read as follows: •SEC. 6108. STATISTICAL PUBLICATIONS AND STUDIES. " (a) PUBLICATION O OTHER DISCLOSURE OF STATISTICS OF INCOME.— R

The Secretary shall prepare and publish not less than annually statistics reasonably available with respect to the operations of the internal revenue laws, including classifications of taxpayers and of income, the amounts claimed or allowed as deductions, exemptions, and credits, and any other facts deemed pertinent and valuable. "(b) SPECIAL STATISTICAL STUDIES.—The Secretary may, upon written request by any party or parties, make special statistical studies and compilations involving return information (as defined in section 6103(b)(2)) and furnish to such party or parties transcripts of any such special statistical study or compilation. A reasonable fee may be Fee. prescribed for the cost of the work or services performed for such party or parties.

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Page:United States Statutes at Large Volume 90 Part 2.djvu/218

 9 0 STAT. 1686

PUBLIC LAW 94-455—OCT. 4, 1976 " (c) ANONTMOUS FOR M. — N o publication or other disclosure of statistics o r other information required o r authorized by subsection (a) o r special statistical study authorized by subsection ^b) shall i n any manner permit the statistics, study, o r any information so published, furnished, or otherwise disclosed to be associated with, o r otherwise identify, directly o r indirectly, a particular tax p a y e r. " (c) INSPECTION OF CERTAIN RECORDS BY LOCAL OFFICERS. —

26 USC 4102.

Regulations.

(1) IN GENERAL.—Section 4102 (relating to inspection of records, returns, etc., by local officers) is amended to read as follows: " Under regulations prescribed by the Secretary, records required to be kept with respect to taxes under this part shall be open to inspection by such officers of a State, o r a political subdivision of any such State, as shall be charged w i t h the enforcement o r collection of any tax on gasoline o r lubricating oils." (2) CONFORMING AMENDMENT.—The table of sections for subpart B of part III of chapter 32 is amended by striking out the item relating to section 4102 and inserting i n lieu thereof the following: "Sec. 4102. Inspection of records by local officers." (d)
 * SEC. 4102. INSPECTION OF RECORDS BY LOCAL OFFICERS.

26 USC 7213.

Section 7213 (relating to unauthorized disclosure of information) is amended by striking o u t subsection (c), redesignating subsections (d) and (e) as (c) and (d), respectively, and by amending subsection (a) to read as follows: "(a)

Ante, p. 1681. Ante, p. 1668.

P E N A L T Y FOR UNAUTHORIZED DISCLOSURE OF INFORMATION. —

R E T U R N S AND R E T U R N INFORMATION. — " (1) FEDERAL EMPLOYEES AND OTHER PERSONS.—It shall

be

unlawful for any officer o r employee of the United States or any person described in section 6103(n) (or a n officer or employee of any such person), o r any former officer o r employee, to disclose to any person, except as authorized i n this title, any r e t u r n o r r e t u r n information (as defined in section 6 1 0 3 (b)). Any violation of this paragraph shall be a felony punishable upon conviction by a fine in any amount not exceeding $5,000, o r imprisonment of not more than 5 years, or both, together with the costs of prosecution, and if such offense i s committed by any officer o r employee of the United States, h e shall, i n addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense. "(2)

STATE AND OTHER EMPLOYEES.—It shall be unlawful

for

any officer, employee, o r agent, o r former officer, employee, o r agent, of any State ( a s defined i n section 6 1 0 3 (b)(5)) o r any local child support enforcement agency to disclose to any person, except as authorized in this title, any return or r e t u r n information (as defined i n section 6103(b)) acquired by h i m o r another person under section 6103(d) or (1)(6). Any violation of t h i s paragraph shall be a felony punishable by a fine i n any amount not exceeding $5,000, o r imprisonment of not more than 5 years, or both, together with the costs of prosecution. " (3) OTHER PERSONS.—It shall be unlawful for a n v person to whom any r e t u r n o r r e t u r n information ( a s defined i n section 6103(b)) is disclosed in a manner unauthorized by this title to thereafter p r i n t or publish i n any m a n n e r not provided by law any such r e t u r n or return information. Any violation of this paragraph shall be a felony punishable by a fine i n any amount

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Page:United States Statutes at Large Volume 90 Part 2.djvu/219

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1687

not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. " (4) SOLICITATION.—It shall be unlawful for any person to offer any item of material value in exchange for any return or return information (as defined i n section 6103(b)) and to receive as a Ante, p. 1668. result of such solicitation any such return or return information. Any violation of this paragraph shall be a felony punishable by a fine i n any amount not exceeding $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution. " (5) SHAREHOLDERS.—It shall be unlawful for any person to whom a return or return information (as defined in section 6103 (b)) is disclosed pursuant to the provisions of section 6103(e)(1) (D) (iii) to disclose such return or return information in any i manner not provided by law. Any violation of this paragraph shall be a felony punishable by a fine in any amount not to exceed $5,000, or imprisonment of not more than 5 years, or both, together with the costs of prosecution." (e) CrviL DAMAGES FOR UNAUTHORIZED DISCLOSURE OF R E T U R N S AND R E T U R N INFORMATION.—

(1) IN GENERAL.—Part I of subchapter A of chapter 75 (relati n g to miscellaneous penalties and forfeitures) is amended by a d d i n g a t the end thereof the following new section: "SEC. 7217. CIVIL DAMAGES FOR UNAUTHORIZED DISCLOSURE OF 26 USC 7217. RETURNS AND RETURN INFORMATION. " (a) GENERAL RULE.—Whenever any person knowingly, or by reason of negligence, discloses a return or r e t u r n information (as defined in section 6103(b)) with respect to a taxpayer in violation of the provisions of section 6103, such taxpayer may bring a civil action for damages against such person, and the district courts of the United States shall have jurisdiction of any action commenced under the provisions of this section. " (b) DAMAGES.—In any suit brought under the provisions of subsection (a), upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of— " (1) actual damages sustained by the plaintiff as a result of the unauthorized disclosure of the r e t u r n or return information and, in the case of a willful disclosure or a disclosure which is the result of gross negligence, punitive damages, but in no case shall a plaintiff entitled to recovery receive less than the sum of $1,000 with respect to each instance of such unauthorized disclosure; and " (2) the costs of the action. " (c) A n action to enforce any liability created under this section may be brought, without regard to the amount in controversy, within 2 years from the date on which the cause of action arises or at any time within 2 years after discovery by the plaintiff of the unauthorized disclosure." (2) CONFORMING AMENDMENT.—The table of sections for such

part is amended by a d d i n g at the end thereof the following new item: "Sec. 7217. Civil damages for unauthorized disclosure of returns and return information." (f)

PROCESSING OF R E T U R N S, R E T U R N INFORMATION, AND OTHER

DOCUMENTS.—Section 7513 (relating to reproduction of returns and 26 USC 7513. other documents) is amended by striking out subsection (c) and redesignating subsection (d) as subsection (c).

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Page:United States Statutes at Large Volume 90 Part 2.djvu/220

 90 STAT. 1688 26 USC 7852.

PUBLIC LAW 94-455—OCT. 4, 1976 (g) OTHER APPLICABLE RULES. — S e c t i o n 7852 ( r e l a t i n g to other

rules applicable under title 26) is amended by a d d i n g at the end thereof the following new subsection: " (e) PRIVACY ACT OF 1974.—The provisions of subsections (d)(2), (3), and (4), and (g) of section 552a of title 5, United States Code, shall not be applied, directly or indirectly, to the determination of the existence or possible existence of liability ( o r the amount thereof) of any person for any tax, penalty, interest, fine, forfeiture, or other imposition or offense to which the provisions of this title apply." (h) T E C H N I C A L AND CONFORMING AMENDMENTS. —

26 USC 6106. 26 USC 6323.

26 USC 7213.

26 USC 7515. 26 USC 7809.

26 USC 4424.

26 USC 6103 note.

26 USC 7701.

(1) Section 6106 (relating to publicity of unemployment tax returns) is hereby repealed. (2) Section 6323 (relating to validity and priority of tax liens against certain persons) is amended by striking out paragraph (3) of subsection (i). (3) Subsection (d) of section 7213 (relating to cross references) is amended by striking out paragraph (1) and inserting i n lieu thereof: "(1) Penalties for disclosure of information by preparers of returns.—For penalty for disclosure or use of information by preparers of returns, see section 7216." (4) Section 7515 (relating to special statistical studies and compilations and other services on request) is hereby repealed, (5) Subsection (c) of section 7809 (relating to deposit of collections) is amended by striking out in paragraph (1) "section 7515 (relating to special statistical studies and compilations for other services on r e q u e s t) " and inserting in lieu thereof "section 6103(p) (relating to furnishing of copies of returns or of r e t u r n information), and section 6108(b) (relating to special statistical studies and compilations)". (6) Subsection (d) of section 4424 (relating to disclosure of wagering tax information) is amended by striking out " 6 1 0 3 (d) " and inserting in lieu thereof "6103 (f) ". (i) EFFECTIVE D A T E. — The amendments made by this section take effect January 1, 1977. SEC. 1203. INCOME TAX RETURN PREPARERS. (a) DEFINITION.—Section 7701(a) (relating to definitions) is amended by a d d i n g at the end thereof the following new paragraph: " ( 3 6) INCOME TAX RETURN PREPARER.—

"Income tax return preparer."

26 USC 1.

" (A) IN GENERAL.—The term 'income tax r e t u r n p r e p a r e r ' means any person who prepares for compensation, or who employs one or more persons to prepare for compensation, any r e t u r n of tax imposed by subtitle A or any claim for refund of tax imposed by subtitle A. For purposes of the preceding sentence, the preparation of a substantial portion of a r e t u r n or claim for refund shall be treated as if it were the p r e p a r a t i o n of such r e t u r n or claim for refund. " (B) EXCEPTIONS.—A person shall not be an 'income tax return p r e p a r e r ' merely because such person— " (i) furnishes t y p i n g, reproducing, or other mechanical assistance, " ( i i) prepares a r e t u r n or claim for refund of the employer (or of a n officer or employee of the employer) by whom he is regularly and continuously employed, " ( i i i) prepares a return or claim for refund for any trust or estate with respect to which he is a fiduciary, or

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Page:United States Statutes at Large Volume 90 Part 2.djvu/221

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1689

" ( i v) prepares a claim lor refund for a tax p a y e r in response to any notice of deficiency issued to such taxp a y e r or in response to any waiver of restriction after the commencement of an a u d i t of such tax p a y e r o r another tax p a y e r if a determination in such audit of such other tax p a y e r directly or indirectly affects the tax liability of such tax p a y e r. " (b) ASSESSABLE P E N A L T I E S W H E R E PREPARER UNDERSTATES PAYER'S L I A B I L I T Y. —

TAX-

(1) IN GENERAL.—Subchapter B of chapter 68 (relating to assessable penalties) is amended by a d d i n g a t the end thereof the following new section: "SEC. 6694. UNDERSTATEMENT OF TAXPAYER'S LIABILITY BY INCOME 26 USC 6694. TAX RETURN PREPARER. " (a) NEGLIGENT OR INTENTIONAL DISREGARD o r RULES AND REGULA-

Penalties.

TioNS.—If any part of any understatement of liability with respect to any return or claim for refund is due to the negligent or intentional disregard of rules and regulations by any person who is an income tax return preparer with respect to such return or claim, such person shall pay a penalty of $100 with respect to such return or claim. " (b) W I L L F U L UNDERSTATEMENT OF L I A B I L I T Y. — I f any part of any

understatement of liability with respect to any return o r claim for refund is due to a willful attempt in any m a n n e r to understate the liability for a tax by a person who is a n income tax return p r e p a r e r with respect to such return or claim, such person shall pay a penalty of $500 with respect to such return or claim. W i t h respect to any return o r claim, the amount of the penalty payable by any person by reason of this subsection shall be reduced by the amount of the penalty paid by such person by reason of subsection (a). " (c) E X T E N S I O N OF PERIOD OF COLLECTION W H E R E PREPARER P A Y S 15 P E R C E N T OF P E N A L T Y. —

" (1) IN GENERAL.—If, within 30 days after the d a y on which notice and demand of any penalty under subsection (a) o r (b) is made against any person w h o is an income tax return preparer, such person pays a n amount which is not less than 15 percent of the amount of such penalty and files a claim for rfefund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, o r prosecuted until the final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421 (a), the beginning of such proceeding o r levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. " (2) PREPARER MUST BRING SUIT I N DISTRICT COURT TO DETERMINE

H I S LIABILITY FOR PENALTY.—If, within 30 days after the d a y on which his claim for refund of any partial payment of any penalty under subsection (a) o r (b) is denied (or, if earlier, within 30 days after the expiration of 6 months after the d a y on which he filed the claim for r e f u n d), the income tax r e t u r n p r e p a r e r fails to begin a proceeding i n the a p p r o p r i a t e United States district court for the determination of his liability for such penalty, paragraph (1) shall cease to a p p l y with respect to such penalty, effective on the d a y following the close of the applicable 30-day period referred to i n this paragraph. " (3) SUSPENSION OF R U N N I N G OF PERIOD OF LIMITATIONS ON COL-

LECTION.—The r u n n i n g of the period of limitations provided i n

,

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