IRS Guidance on Gramm-Leach-Bliley Act and Return Preparers

The IRS has received inquiries from practitioners and return preparers on the effect of the Gramm-Leach-Bliley Act (Act) on Sec. 7216. The Act imposed new requirements on financial institutions to protect the privacy of nonpublic personal information. Sec. 7216 prohibits the unauthorized use or disclosure of return information by preparers.

Return preparers, as defined in Regs. Sec. 301.7216-1(b)(2), are advised that, although they may be subject to the Act's privacy provisions, such provisions do not supersede, alter or affect the preexisting Sec. 7216 requirements restricting a preparer's disclosure or use of return information. Specifically, the Act does not permit use or disclosure of return information prohibited by Sec. 7216 and the regulations thereunder.

For guidance on the use or disclosure of return information, return preparers may refer to Regs. Sec. 301.7216 and Notice 2000-64.

Notice 2002-6, IRB 2002-1

REFLECTIONS. For a discussion of some of the taxpayer privacy issues, see TTA, June 2001, p. 404.