DISCLOSURE AND SUMMONS PROVISIONS OF 1976 TAX REFORM ACT - PRIVACY GAINS WITH UNKNOWN LAW ENFORCEMENT EFFECTS

• NCJ Number: 60417
• Author(s): ANON
• Date Published: 1979
• Length: 86 pages
• Corporate Author: US Comptroller General
• Sale Source: Azimuth Inc.
• Language: English
• Country: United States of America
• Note: THERE IS A CHARGE FOR MORE THAN ONE COPY.

Annotation

THE EFFECTS OF THE DISCLOSURE AND SUMMONS PROVISIONS OF THE 1976 TAX REFORM ACT OF 1976 ARE DISCUSSED.

Abstract

THE CONGRESS, THROUGH THE TAX REFORM ACT OF 1976, TIGHTENED THE RULES GOVERNING THE INTERNAL REVENUE SERVICE'S (IRS) DISCLOSURE OF TAX DATA AND ITS ISSUANCE OF SUMMONSES TO THIRD-PARTY RECORDKEEPERS. ALTHOUGH THE LEGISLATION HAS APPARENTLY AFFORDED TAXPAYERS INCREASED PRIVACY OVER INFORMATION THEY PROVIDE IRS AND ADDITIONAL CIVIL RIGHTS IN SUMMONS MATTERS, SUBSTANTIAL RESTRICTIONS HAVE BEEN PLACED ON GOVERNMENT AGENCIES' RIGHTS OF ACCESS TO TAX INFORMATION AND AUTHORITY TO IMPOSE CRIMINAL AND CIVIL PENALTIES FOR UNLAWFUL DISCLOSURES. WHILE DISCLOSURE PROVISIONS HAVE ADVERSELY AFFECTED COORDINATION BETWEEN IRS AND OTHER LAW ENFORCEMENT AGENCIES, THEY ARE NOT SUFFICIENT TO BE CAUSE FOR CONCERN. OTHER COORDINATION PROBLEMS ARE MORE TROUBLESOME; FOR EXAMPLE, COORDINATION WITH THE DEPARTMENT OF JUSTICE HAS BEEN AFFECTED BECAUSE IRS IS RESTRICTED IN SOME SITUATIONS FROM ALERTING ATTORNEYS THAT IT HAS TAX INFORMATION THAT MAY BE OF VALUE TO THEM IN FEDERAL LAW ENFORCEMENT. ALTHOUGH THE DISCLOSURE PROVISIONS HAVE HAD SOME ADVERSE EFFECTS, THE RECORD OF THOSE EFFECTS IS INSUFFICIENT TO WARRANT RECOMMENDING REVISIONS TO THE LAW. THE SUMMONS PROVISIONS OF THE TAX REFORM ACT REQUIRE IRS TO NOTIFY THE AFFECTED TAXPAYER AFTER ISSUING A SUMMONS TO A THIRD-PARTY RECORDKEEPER. THE TAXPAYER THEN HAS 14 DAYS TO STAY COMPLIANCE, AND SHOULD COURT ACTION BE INITIATED BY IRS TO ENFORCE THE SUMMONS, THE TAXPAYER CAN INTERVENE IN THE COURT PROCEEDING. ALTHOUGH INVESTIGATIVE DELAYS HAVE OCCURRED AS A RESULT OF THESE PROVISIONS, UNTIL IRS TAKES ACTION TO IMPROVE ITS SUMMONS ISSUANCE PROCESS AND COLLECTS ACCURATE AND USEFUL DATA TO DEMONSTRATE THE ADVERSE IMPACT OF THE SUMMONS PROVISIONS, THERE CAN BE NO BASIS FOR RECOMMENDING CHANGES IN THE LAW. IMPROVED TRAINING OF IRS EMPLOYEES TO FULFILL THE PROVISIONS OF THE ACT WITH REGARD TO THE ISSUANCE OF SUMMONS WOULD BE HELPFUL. THE CONGRESS MAY WANT TO MONITOR THE USE OF THE STAY OF COMPLIANCE PROCEDURE UNDER THE RIGHT TO FINANCIAL PRIVACY ACT AND CONSIDER WHETHER THE ADOPTION OF SIMILAR PROVISIONS FOR IRS SUMMONSES WOULD BE APPROPRIATE. VARIOUS STATISTICS AND INFORMATION COLLECTED FROM THE STUDY ARE INCLUDED IN THE APPENDIXES. (RCB)