Purpose: This section explains the Local Taxpayer Advocate’s (LTA’s) discretion not to disclose certain information to the IRS pursuant to Internal Revenue Code (IRC) 7803(c)(4)(A)(iv).

Audience: These procedures primarily apply to LTAs and Case Advocates (CAs). However, all TAS employees should reference this IRM when addressing confidentiality and disclosure questions.

Policy Owner: The National Taxpayer Advocate is the owner of the policies contained in this IRM.

Program Owner: The EDCA-ITS is responsible for the administration, procedures, and updates related to this program.

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights. Under these rights taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information. The discretion not to disclose under IRC 7803(c)(4)(A)(iv) is one of the statutes that underlie the Right to Confidentiality found in the TBOR. The IRS Commissioner and the National Taxpayer Advocate announced the IRS adoption of the TBOR on June 10, 2014. On December 18, 2015, Congress added new paragraph (a)(3) to IRC 7803 to require the Commissioner to ensure IRS employees are familiar with, and act in accordance with, the TBOR. See Pub. L. No. 114-113, Division Q, section 401. For more information about other statutes that protect the Right to Confidentiality and the other nine rights in TBOR, see What the Taxpayer Bill of Rights Means for You at https://www.irs.gov/newsroom/taxpayer-bill-of-rights-8.

Confidentiality is often viewed as essential to any relationship in which one party is charged with representing, advocating on behalf of, or negotiating for another party. See, e.g., IRC 7525 (extending the traditional attorney-client confidentiality privilege to communications between taxpayers and federally authorized tax practitioners). Senator John Breaux, a sponsor of RRA 98 in the Senate, explained the importance of TAS confidentiality as follows:

TAS employees function as "ombuds" - persons to whom taxpayers may come with complaints and questions and who resolve disputes between taxpayers and the IRS without litigation. When TAS employees resolve disputes, they provide a form of alternative dispute resolution (ADR).

TAS modeled its confidentiality policies and procedures after guidance developed and published by the Federal ADR Steering Committee and the American Bar Association (ABA). Confidentiality is a key element of ADR. See Administrative Dispute Resolution Act of 1996 (ADR Act), 5 U.S.C. 574. Further, confidentiality is considered an essential characteristic of ombuds offices. Both the ADR Act and the ABA Standards for the Establishment and Operation of Ombuds Offices explicitly acknowledge the role confidentiality plays in bringing parties in a dispute to resolution. See, Revised Standards for the Establishment and Operation of Ombuds Offices, 14 (adopted Feb. 9, 2004) located at:https://www.prearesourcecenter.org/sites/default/files/library/abaadoptedbythehouseofdelegatesfeb92004.pdf (last visited May 1, 2019); Federal Alternative Dispute ResolutionCouncil, Department of Justice, Confidentiality in Federal Alternative Dispute Resolution Programs, 65 Fed. Reg. 83,085 (Dec. 29, 2000). The ABA Standards provide:

TAS’s discretion not to disclose taxpayerprovided information to the IRS serves the following purposes:

IRC 6103 and the Privacy Act of 1974 (5 U.S.C. 552a) generally protect taxpayer returns and return information from disclosure, subject to statutory exceptions. See IRM 9.3.1, Criminal Investigation, Disclosure and Publicity, Disclosure, IRM 11.3.1, Introduction to Disclosure, and IRM 10.5.6, Privacy Act.

The Freedom of Information Act (FOIA), 5 U.S.C. 552, as amended, provides for public access to records and information maintained by federal agencies. The FOIA applies to records either created or obtained by an agency and under agency control at the time of the FOIA request. All existing TAS records are subject to FOIA requests, including records maintained by the NTA and headquarters employees. The FOIA contains numerous exemptions and exclusions under which records may be withheld. See IRM 11.3.13, Freedom of Information Act (FOIA), and IRM 13.1.10.13, Freedom of Information Act.

The failure to report a felony can be a "misprision of felony," which is a federal crime under 18 U.S.C. 4. A person is guilty of misprision of felony if he or she has knowledge of the actual commission of a felony, conceals it, and does not make it known to a person in authority as soon as possible. Generally, under federal law and in many states, a felony is any crime punishable by imprisonment for more than one year. This statute may be invoked when it relates to some other tax, money laundering, or currency violation. See IRM 9.1.3.4.3, 18 U.S.C. 4 - Misprision of Felony. No TAS employee will conceal a felony. If TAS employees are unsure whether something is a felony, they should seek advice from the Office of Chief Counsel per IRM 13.1.10.2, Obtaining Legal Advice from Chief Counsel. TAS employees who follow the nonstandard disclosure procedures in IRM 13.1.5.10 to report their knowledge of a felony to their LTA as soon as possible will be deemed to meet their obligation to make it known to a person in authority.

IRC 7214(a)(8) requires all Federal employees acting in connection with internal revenue laws who have knowledge or information of violations of such laws, or knowledge of fraud committed under such laws, to report such violations in writing to the Secretary of the Treasury. (Treas. Reg. 301.7214-1 states the violation should be reported to the Commissioner.) Failure to report such violations could result in termination, fines, or imprisonment. Mere suspicion of fraud is not enough; employees must have a firm indication of fraud to trigger the IRC 7214(a)(8) reporting requirement.

Treasury Dept. Circular No. 230 (Circular 230) [31 CFR Part 10] provides the rules of practice applicable to persons representing taxpayers before the IRS, including sanctions for violating any of those rules. Section 10.53(a) of Circular 230 provides that if an IRS officer or employee has reason to believe a practitioner has violated any of the rules of practice, the officer or employee must make a written report to the appropriate IRS Office(s) responsible for administering/enforcing Circular 230 (i.e., report to the Office of Professional Responsibility (OPR) or the Return Preparer Office (RPO) regarding the suspected violation). How TAS employees comply with section 10.53(a) of Circular 230 will depend on whether TAS has consent of the taxpayer to make the report. If the taxpayer consents to revealing the representative's actions to OPR/RPO, the TAS employee will make a standard disclosure to OPR or RPO per IRM 13.1.5.8.1. If the taxpayer does not consent to the disclosure, follow the nonstandard disclosure procedures in IRM 13.1.5.10 to report the matter to the NTA, who will then make the written report to OPR or RPO. See IRM 13.1.5.12 for an example of when reporting a suspected violation may be appropriate, and IRM 13.1.23.5, Complaints from Taxpayers About Representatives, for additional information.

The discretion not to disclose under IRC 7803(c)(4)(A)(iv) does not apply to persons other than the IRS. This means requests from the Treasury Inspector General for Tax Administration (TIGTA), Government Accountability Office (GAO), the Department of Justice (DOJ), the United States Attorney’s Office, or persons requesting information pursuant to the FOIA are not subject to the confidentiality provision in IRC 7803. Similarly, the discretion not to disclose does not apply in the context of litigation. Follow the procedure described in IRM 13.1.5.5 (5) and IRM 13.1.5.9 when dealing with these requests.

TAS employees must report bomb threats and similar emergency situations immediately. See http://serp.enterprise.irs.gov, under the link for Emergency Info at the top of the screen for procedures employees should use in various emergency situations. In addition, see IRM Exhibit 10.2.8-1, Incidents To Be Reported to SAMC, for a detailed list of incidents that must be reported.

TAS employees must also report to TIGTA and other appropriate law enforcement personnel:

To protect TAS independence, TAS policy generally favors nondisclosure, except in cases involving standard disclosures, emergency disclosures, and disclosures to avoid harm to health or safety. These types of disclosure are explained in IRM 13.1.5.8.

TAS’s exercise of discretion should:

In those instances where TAS discloses contact with a taxpayer or taxpayer-provided information to the IRS, disclosure should be limited to the information necessary to achieve the desired objective. See the second example in IRM 13.1.5.8.1.

In response to a request from an IRS employee, an LTA may exercise discretion not to disclose contact with, or information provided by, the taxpayer or the taxpayer’s representative. The LTA must complete the LTA Confidentiality Questionnaire and follow the procedures in IRM 13.1.5.10 if the LTA either wants to exercise such discretion or believes a nonstandard disclosure is warranted.

TAS’s discretion not to disclose information to the IRS may also be exercised by every intervening line supervisory position above the LTA up to and including the NTA. See IRM 1.11.4.5.2, Documenting Intervening Position Authority in Delegation Orders.

Any determination by an LTA to either withhold from or disclose to the IRS contact with, or information provided by, the taxpayer will be reviewed in accordance with the procedures provided in IRM 13.1.5.10.

Although TAS will usually honor a taxpayer’s request to keep taxpayer-provided information confidential, TAS is not required by IRC 7803(c)(4)(A)(iv) to honor such a request.

TAS may withhold information from the IRS (including the Criminal Investigation Division) pursuant to IRC 7803(c)(4)(A)(iv). See IRM 13.1.5.8.3.3. This discretion does not apply to requests for information from anyone other than the IRS. This means requests from TIGTA, GAO, the DOJ, the United States Attorney’s Office, or persons requesting information pursuant to the FOIA are not subject to the confidentiality provision in IRC 7803(c)(4)(A)(iv).

In the first contact with a taxpayer or the taxpayer’s representative, TAS personnel must explain the confidentiality rule of IRC 7803(c)(4)(A)(iv). TAS personnel should also tell taxpayers (or their representatives) they will generally need to provide information to IRS personnel to resolve the taxpayer’s problem.

The following is an example of what TAS employees could tell a taxpayer or taxpayer’s representative when he or she contacts TAS:

When TAS personnel need to expand the scope of what they disclose to the IRS beyond what the taxpayer or his or her representative agreed to in order to assist the taxpayer, TAS policy requires they seek consent from the taxpayer or taxpayer’s representative, unless such disclosure is required by law or permitted pursuant to emergency or nonstandard disclosure procedures, which are described in IRM 13.1.5.8.2 or IRM 13.1.5.8.3.

Information subject to nondisclosure under IRC 7803(c)(4)(A)(iv) includes:

If TAS decides to make a fraud referral, report the violation of internal revenue laws, or report the possible commission of a felony, then the nonstandard disclosure procedures in IRM 13.1.5.10must be used if TAS gains information about the alleged fraud or offense from the taxpayer. In contrast, if TAS gains information about the alleged fraud or violation from a source other than the taxpayer, and the information is not already known to the IRS, then TAS makes the referral by completing Form 3949, Information Report Referral, without going through the nonstandard disclosure procedures in IRM 13.1.5.10.

IRC 7803(c)(4)(A)(iv) determinations to disclose to the IRS information described in IRM 13.1.5.7 are made as follows:

To assist taxpayers, TAS employees may need to seek legal advice from the IRS Office of Chief Counsel. TAS employees can disclose taxpayer-provided information to the IRS Office of Chief Counsel, even if the taxpayer has not agreed to disclosure. Disclosure to Counsel is not considered disclosure to the IRS within the meaning of IRC 7803(c)(4)(A)(iv). Further, Counsel cannot disclose to the IRS (including CI) any information subject to nondisclosure pursuant to IRC 7803(c)(4)(A)(iv) (including the identity of the taxpayer seeking TAS’s assistance) that TAS discloses during these consultations. See IRM 13.1.10.2, Obtaining Legal Advice from Chief Counsel, and CCDM 33.1.2.4.3.3.2, Role of Counsel in the Section 7803(c)(4)(A)(iv) Context, for additional information.

IRC 7803(c)(4)(A)(iv) does not authorize an LTA to protect information when the IRS is required to produce information in connection with litigation. These requests could arise in a variety of contexts, including civil tax litigation in which the DOJ represents the government, or criminal litigation in which the United States Attorney's Office represents the government. LTAs must disclose the pertinent information to the appropriate government attorney handling the case after obtaining advice from the Counsel to the NTA. See IRM 13.1.5.5 (5) for more information. Before turning over any information in a litigation matter, TAS employees should ask for a written statement (email is acceptable) from the government attorney handling the litigation, detailing the name of the case, docket number, court, and the information being sought from TAS. Provide this written statement to the Counsel to the NTA.

When litigation is initiated or is reasonably anticipated, the Office of Chief Counsel may issue a "litigation hold" notice via email to any IRS employee who may possess information relevant or potentially relevant to the litigation. A TAS employee who receives a litigation hold notice must ensure that all documents and electronically stored information (ESI) that may be relevant or potentially relevant to the litigation are collected and preserved (even if that means retaining them beyond the normal record retention period). Upon receipt of a litigation hold notice, a TAS employee should inform his or her manager, and then respond to the Chief Counsel attorney within seven business days. The response must indicate receipt of the notice, and an understanding that all relevant or potentially relevant documents must be preserved. If the TAS employee had no involvement with the subject of the litigation hold notice, the TAS employee must inform the Chief Counsel attorney of the lack of involvement in the matter. TAS employees do not need to provide the documents or ESI upon receipt of the litigation hold notice; as the litigation proceeds, the Chief Counsel attorney will contact the affected TAS employees if sending the documents or ESI becomes necessary. The CA and the LTA should not use the nonstandard disclosure procedures when responding to a litigation hold notice, or when providing the documents or ESI. Any questions about the litigation hold notice should be directed to the Chief Counsel attorney who issued it or to the Counsel to the NTA. Before providing any documents and ESI in response to the litigation hold, contact the Counsel to the NTA for advice.

The IRS may ask TAS for taxpayer-provided information in connection with a personnel action or proceeding (e.g., disciplinary/adverse actions, suitability determinations, and other personnel decisions). IRC 6103(l)(4)(B) authorizes the disclosure of returns and return information to employees of the Department of the Treasury for use in any personnel action or proceeding (or in preparation for a personnel action or proceeding) if the disclosure is necessary to advance or protect the interests of the United States. Typically, an attorney from the General Legal Services (GLS) division of the Office of Chief Counsel will be representing the interests of the United States. The CA and the LTA should not use the nonstandard disclosure procedures for these types of requests; the LTA must disclose the pertinent information to the GLS attorney handling the action or proceeding after obtaining advice from the Counsel to the NTA.

Occasionally, TAS employees may receive a request for testimony in a litigation matter. Such requests may come from the taxpayer, DOJ, or the United States Attorney’s Office. These requests are not subject to the confidentiality provision in IRC 7803(c)(4)(A)(iv). The CA and the LTA should not use the nonstandard disclosure procedures for these types of requests. Instead, the LTA must obtain advice from the Counsel to the NTA whenever he or she receives a request for a TAS employee’s testimony. See IRM 13.1.10.2.6, Requests for TAS Employees to Testify or Produce IRS Records or Information.

If disclosure is required to prevent serious bodily harm to the public health or safety, the CA should immediately follow disclosure procedures provided in IRM 10.2.8.2 , Incident Report, and IRM 21.1.3.10, Safety and Security Overview.

If disclosure is proposed to address a systemic issue or to address a specific case in which a Systemic Advocacy employee is assisting a CA, as described in IRM 13.1.5.8.3.2, the proposal should be elevated to the NTA in the following manner. Systemic Advocacy personnel complete a Systemic Advocacy Confidentiality Questionnaire and a proposed NTA Confidentiality Determination. See IRM 13.1.5.1.7 for a link to an electronic fill-in version of both forms. Seek input from the TAS Attorney Advisor handling confidentiality matters, who will consult with the Counsel to the NTA. The TAS Attorney Advisor will then send both documents to the NTA, with a copy to the Executive Director of Systemic Advocacy. The NTA (or designee) will make the final disclosure decision and revise the proposed NTA Confidentiality Determination accordingly. The NTA (or designee) will confirm the decision by returning signed copies of the NTA Confidentiality Determination.

When no other type of disclosure to the IRS applies, (e.g., standard or emergency disclosure), the CA must complete a CA Confidentiality Questionnaire and forward the Questionnaire to the LTA. See IRM 13.1.5.1.7 for a link to an electronic fill-in version of the CA Questionnaire.

Upon receipt of a Case Advocate Confidentiality Questionnaire, the LTA reviews the CA’s recommendation, completes the LTA Confidentiality Questionnaire (see below), and then forwards his or her recommendation to the DEDCA along with the Confidentiality Questionnaire Routing Slip (see below) and a proposed NTA Confidentiality Determination (see below). See IRM 13.1.5.1.7 for a link to electronic fill-in versions of the CA Questionnaire, LTA Questionnaire, NTA Confidentiality Determination, and the Confidentiality Questionnaire Routing Slip.

The DEDCA ensures the LTA’s determination is fully developed in accordance with TAS’s confidentiality procedures. The DEDCA then forwards the LTA’s forms and recommendation to the NTA’s Attorney Advisor handling confidentiality matters.

The NTA's Attorney Advisor will consult with Counsel to the NTA and then send a recommendation to the NTA.

The NTA (or designee) will make the final disclosure decision and revise the proposed NTA Confidentiality Determination accordingly. The NTA (or designee) will confirm the decision by sending signed copies of the NTA Confidentiality Determination to the DEDCA and LTA who will ensure the determination is made part of the case file.

The nonstandard disclosure questionnaire processing timeframes (except for the Systemic Advocacy Confidentiality Questionnaire) are as follows.

Identity theft occurs when someone uses an individual's personal information, such as name, Social Security number (SSN), or other identifying information without permission to commit fraud or other crimes. For general information about identity theft and the documentation necessary to establish identity theft occurred, see IRM 25.23.2, Identity Protection and Victim Assistance - General Case Processing. Questions involving disclosure and identity theft can often be complex; LTAs and DEDCAs should consult with the NTA’s Attorney Advisor handling confidentiality matters if they have questions.

TAS employees may encounter the following scenarios:

In scenario A, if Taxpayer X filed a return using an individual taxpayer identification number (ITIN) and is paying taxes on the wages he earned, Taxpayer X has not violated the internal revenue laws. Thus, the LTA has no obligation to report anything under IRC 7214(a)(8). Even though using someone else’s SSN to obtain employment is a non-tax felony, IRC 6103(i)(3)(A) doesn’t support disclosure to another federal agency (e.g., Immigration and Customs Enforcement) for non-tax law enforcement purposes in this situation.

In contrast, if Taxpayer X is attempting to evade tax, or willfully fails to file a return or pay tax on wages earned while using another taxpayer's SSN and refuses to work with TAS to bring the violation to the IRS's attention per IRM 13.1.5.8.3.3, Taxpayer X may be violating laws under the Internal Revenue Code (e.g., IRC 7201, IRC 7203). In that situation, follow the nonstandard disclosure procedures in IRM 13.1.5.10 to report the potential violation to the NTA for appropriate action, consistent with IRC 7214(a)(8). See IRM 13.1.5.3 for additional information.

In scenario B, the fictitious return filed by Taxpayer Y to obtain a fraudulent refund is not a valid return. The use of another taxpayer's identity in this fashion is a possible violation of the internal revenue laws and a possible felony under 18 U.S.C. 1028(a)(7) (use, without lawful authority, of a means of identification of another person with the intent to commit an activity that violates federal law). Any information TAS has about the true identity of Taxpayer Y and about the inappropriate use of another taxpayer's name and SSN should be reported as both a potential fraud referral to CI (to comply with IRC 7214), and a referral to Disclosure (to comply with 18 U.S.C. 4). Per Delegation Order 11-2 Rev. 3 (found in IRM 1.2.2.11.2), only Disclosure has the delegated authority to disclose information to non-IRS federal law enforcement officials. See IRM 13.1.5.3 for additional information. If TAS gained any of the information from communication with Taxpayer Y or his representative, the referrals must be made using the nonstandard disclosure procedures in IRM 13.1.5.10. Once a referral to CI has been approved by the NTA through the nonstandard disclosure process, the referral can be sent to the CI mailbox at&CI-HQ-RC-S&A EMP to be addressed.

In scenario C, Taxpayer Z seeks relief through TAS by claiming to be a victim of identity theft, even though the taxpayer filed both tax returns under his own SSN. The second return is not an attempt to correct or amend the original return. If the CA discovers the taxpayer fraudulently filed the second tax return in an attempt to receive a second refund, and the taxpayer refuses to work with TAS to bring the violation to the IRS's attention per IRM 13.1.5.8.3.3, the CA follows the nonstandard disclosure procedures in IRM 13.1.5.10 to report the suspected fraud to the NTA for appropriate action, consistent with IRC 7214(a)(8). See IRM 13.1.5.3 for additional information.

Unfortunately, there are some unscrupulous individuals assisting taxpayers, either through representation or preparation of returns. In certain situations, a referral to the Office of Professional Responsibility (OPR) or the Return Preparer Office (RPO) may be appropriate. See IRM 13.1.23.5, Complaints from Taxpayers About Representatives, IRM 25.24, Return Preparer Misconduct Program, and IRM 1.25.4.2, Referrals to the Office of Professional Responsibility, for additional information.

Form 8484, Report of Suspected Practitioner Misconduct, is used to make referrals to the OPR. Form 14157, Return Preparer Complaint, is used to make referrals to RPO.