Taxpayer Privacy

A Guide for Screening and Assessing Proposals to Disclose Confidential Tax Information to Specific Parties for Specific Purposes

This report discusses the statutory exceptions to privacy laws whereby US law enforcement, federal and state agencies can access confidential personal information which has been collected by the Internal Revenue Service (IRS). This information may be used to prosecute tax and nontax crimes or to verify eligibility for need-based programs and collect child support. The author argues that in evaluating such proposals, it is important that Congress consider both the benefits expected from a disclosure of federal tax information and the expected costs, including reduced taxpayer privacy, risk of inappropriate disclosure, and negative effects on tax compliance and tax-system administration.

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