The bill titled "Taxpayer Notification and Privacy Act" focuses on amending section 7602(c) of the Internal Revenue Code of 1986 regarding third-party contact notices. The proposed amendment aims to enhance the specificity of these notices for taxpayers. It seeks to address the issue by making changes to paragraph (1) of the mentioned section, intending to provide clearer guidelines for third-party contact. The bill's primary objective is to strengthen taxpayer notification and privacy measures within the context of third-party interactions related to tax matters.
Taxpayer Notification and Privacy Act
This bill expands the Internal Revenue Service (IRS) notice requirements for contacting a third party (e.g., employer or bank) for information related to a taxpayer’s federal tax liability and the rights of the taxpayer in such situation. (Conditions and exceptions apply.)
Currently, the IRS must notify a taxpayer at least 45 days in advance of a time period during which the IRS intends to contact a third party for information related to the taxpayer’s tax liability but is not required to specify what information is being sought.
The bill requires the IRS to specify in a notice to a taxpayer each item of information sought from a third party when (1) the IRS has not previously requested such information from the taxpayer, and (2) the taxpayer can reasonably provide such information. This requirement does not apply if the IRS determines such third-party information is necessary.
Further, under the bill, a taxpayer is allowed no less than 45 days (or more if requested by the taxpayer and deemed reasonable) to respond before the IRS contacts such third party.