Third-party contacts by IRS personnel in connection with determining and collecting tax from taxpayers are governed by disclosure regulations as well as by certain notice and reporting requirements.

IRC 6103(k)(6) provides that IRS employees may disclose return information to the extent that such disclosure is necessary in obtaining information, which is not otherwise reasonably available, with respect to the correct determination of tax, liability for tax, or the amount to be collected.

IRC 7602(c) stipulates that IRS personnel may not contact third parties with respect to the determination or collection of the tax liability without providing advance notice to the taxpayer. Section 3417 of RRA 98 further amended IRC 7602(c) to require IRS personnel to maintain a record of such contacts and provide taxpayers with this record upon request.

Section 1206 of the Taxpayer First Act amended IRC Section 7602(c)(1), Notice of Contact of Third Parties and now requires IRS to:

The authorities for these policies are:

The Director of Collection Policy, SBSE, is responsible for the procedures in this IRM.

Managers of employees who make TPCs are responsible for ensuring their employees comply with TPC guidelines and procedures.

Employees who make TPCs are responsible for following these procedures.

Program Reports: When IRS personnel document a TPC as described in this IRM, the information is captured in the Third-Party Contact Database. This information is provided to taxpayers upon request.

Program Effectiveness: Each BOD functional unit with TPC-related activities should conduct periodic reviews of the TPC program to ensure that taxpayers are being notified of potential third-party contacts and that third-party contacts are being properly reported. Case reviews and quality reviews may include this topic. The methodology and review cycle will be determined by the BOD functional units.

The third-party database is maintained within IDRS, and it is subject to the same access controls and permissions governing IDRS.

The following table defines acronyms commonly used throughout this IRM section:

In addition to this IRM, there are other relevant IRM sections employees will use, including but not limited to:

Helpful information can be found on websites, including, but not limited to the following:

Effective August 15, 2019, Publication 1 no longer satisfies the advance notice requirement of IRC Section 7602(c)(1).

In all cases involving third-party contact notices provided after August 15, 2019, or in which contacts with third-parties will occur after August 15, 2019, a notice meeting the new requirements must be provided. Employees may not contact a third party until the 46th day following the date of the notice.

The notice must also include the tax period(s) at issue. Employees may reissue notices yearly, if necessary.

The Letter 3164, Third Party Notice, series is issued by Collection and Exam employees to notify taxpayers of potential TPCs. There are over twenty versions of the general Letter 3164, available to meet specific functional requirements.

When it is determined a third-party contact is necessary, carefully review each period to determine if the taxpayer received TPC notification and that the date of the third party contact will occur within the period specified in the notice. If the third-party contact will occur outside the period specified in any prior TPC notice, a new notice is required.

If the taxpayer has not received prior notification and a third-party contact is necessary, employees should do the following:

Regardless of whether Letter 3164 was hand delivered or mailed, employees may not contact a third party until the 46th day following the date of the notice.

In situations where an IRS employee attempts to reach a taxpayer by telephone, but instead reaches someone other than the taxpayer:

IRC 7602(c)(3) provides for four situations when the IRS is not required to give the taxpayer advance notice or to include a particular TPC on the list of TPCs provided to the taxpayer. The exceptions are:

Treas. Reg 301.7602-2(f) provides detail on additional exceptions as follows:

If an IRS employee determines that providing the advance notice or a record of a specific contact to a taxpayer may result in a reprisal -- an act of revenge or retaliation -- against any person, then the following actions should be taken:

Make a reprisal determination for all TPCs. Make a determination on a contact-by-contact basis with no blanket determinations for different types of contact.

Use all available information when making a reprisal determination.

To protect the provider of the information, make any reprisal situation very apparent in the case history with the facts surrounding the reason for the reprisal determination, and consult with his or her manager, if needed. Information that could disclose the identity of the third party should not be in the case history, it should be in a confidential envelope and clearly marked.

In some situations you can make a determination based on the case history that a person could be subject to reprisal if the taxpayer received the advance notice or notice of a particular TPC. In these situations, sending the advance notice or notice of a particular contact is not required if doing so may result in reprisal against any person.

A potentially dangerous taxpayer (PDT) indicator alone is not a sufficient basis for determining that sending the advance notice may result in reprisal against any person. However, the employee may be aware of other facts in a particular case from which a determination can be made that sending the advance notice Letter 3164 may result in reprisal.

If the determination cannot be made based upon the facts already known, advise the third party that by law the IRS is required to provide his/her name to the taxpayer as a TPC and ask if there is a fear of reprisal.

Advise the third party that his or her name will be placed on a list of third parties contacted and provided to the taxpayer if requested. Do not make the reprisal inquiry in a way that would influence the third party. The following suggested language may be used as part of direct TPC:

If the third party indicates no reprisal concerns, complete Form 12175 and forward it to the TPC Coordinator or input personnel.

If the third party does indicate fear of reprisal, document the case file, and prepare Form 12175 as outlined above. Any concern raised by the third party with respect to reprisal will be taken at face value.

If a letter is sent to an individual third party, include the first part of the suggested language above and add the following:

Complete Form 12175 manually and hold for 10 calendar days. If no fear of reprisal is communicated, then forward the Form 12175 to the TPC Coordinator or input personnel.

If the third party does claim fear of reprisal:

If the third party initially indicates no fear of reprisal and later advises there is fear of reprisal:

Do not provide information to any persons that may result in the taxpayer learning the identity of a third party who has indicated a fear of reprisal. This information may be provided to Service employees acting within the scope of their duties, including employees of the Office of Chief Counsel.

Form 12180, Third-Party Contact Authorization Form, may be used to document the taxpayer's authorization. Consent must be obtained prior to the contact being made by the IRS employee. Although taxpayers may give oral authorization, the best practice is to complete Form 12180. If oral authorization is accepted, the case documentation must include the date and method used to authorize the contact. The taxpayer can revoke the authorization at any time.

If the taxpayer authorizes contact with a third party, the IRS employee is NOT required to provide the advance notice (if not already provided) or record the contact. If contacts will be made with other third parties and the taxpayer authorization has not been obtained for these contacts, the advance notice must be provided and a record of these contacts must be kept.

The employee must tell the taxpayer the Service will not maintain or provide a record of the authorized contacts.

If written authorization is to be obtained, do the following:

The employee making contact with a third party may determine that providing the taxpayer with the advance notice or a record of a specific contact would jeopardize the collection of any tax liability, see Treas. Reg. 301.7602-2(f)(2).

If a jeopardy situation exists, take the following actions:

When the jeopardy situation no longer exists, forward Form 12175 to the TPC Coordinator or input personnel. If additional contacts will be made, verify that the taxpayer was properly notified per IRM 25.27.1.3.1.