[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.7216-3]

[Page 489-490]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                 Crimes, Other Offenses, and Forfeitures
 
Sec. 301.7216-3  Disclosure or use only with formal consent of taxpayer.

    (a) Written consent to use or disclosure--(1) Solicitation of other 
business. (i) If a tax return preparer has obtained from the taxpayer a 
consent described in paragraph (b) of this section, he may use the tax 
return information of such taxpayer to solicit from the taxpayer any 
additional current business, in matters not related to the Internal 
Revenue Service, which the tax return preparer provides and offers to 
the public. The request for such consent may not be made later than the 
time the taxpayer receives his completed tax return from the tax return 
preparer. If the request is not granted, no follow up request may be 
made. This authorization to use the tax return information of the 
taxpayer does not apply, however, for purposes of facilitating the 
solicitation of the taxpayer's use of any services or facilities 
furnished by a person other than the tax return preparer, unless such 
other person and the tax return preparer are members of the same 
affiliated group within the meaning of section 1504. Thus, for example, 
the authorization would not apply if the other person is a corporation 
which is owned or controlled directly or indirectly by the same 
interests which own or control the tax return preparer but which is not 
affiliated with the tax return preparer within the meaning of section 
1504(a). Moreover, this authorization does not apply for purposes of 
facilitating the solicitation of additional business to be furnished at 
some indefinite time in the future, as, for example, the future sale of 
mutual fund shares or life insurance, or the furnishing of future credit 
card services. It is not necessary, however, that the additional 
business be furnished in the same locality in which the tax return 
information is furnished.

[[Page 490]]

    (ii) For prohibition against solicitation of employment in matters 
related to the Internal Revenue Service, see 31 CFR 10.30 (Treasury 
Department Circular No. 230) and section 7 of Rev. Proc. 68-20, 1968-1 
C.B. 812.
    (2) Permissible disclosures to third parties. If a tax return 
preparer has obtained from a taxpayer a consent described in paragraph 
(b) of this section, he may disclose the tax return information of such 
taxpayer to such third persons as the taxpayer may direct. However, see 
Sec. 301.7216-2 for certain permissible disclosures without formal 
written consent.
    (3) Disclosure or use of information in connection with another 
person's return. A tax return preparer may disclose or use any tax 
return information, which was obtained from a first taxpayer, in 
preparing a tax return of a second taxpayer if the tax return preparer 
has obtained from the first taxpayer a written consent described in 
paragraph (b) of this section. See Sec. 301.7216-2(b) for disclosure or 
use in certain cases without formal consent.
    (b) Form of consent. A separate written consent, signed by the 
taxpayer or his duly authorized agent or fiduciary, must be obtained for 
each separate use or disclosure authorized in paragraph (a) (1), (2) or 
(3) of this section and shall contain--
    (1) The name of the tax return preparer,
    (2) The name of the taxpayer,
    (3) The purpose for which the consent is being furnished.
    (4) The date on which such consent is signed,
    (5) A statement that the tax return information may not be disclosed 
or used by the tax return preparer for any purpose (not otherwise 
permitted under Sec. 301.7216-2) other than that stated in the consent, 
and
    (6) A statement by the taxpayer, or his agent or fiduciary, that he 
consents to the disclosure or use of such information for the purpose 
described in subparagraph (3) of this paragraph (b).
    (c) Illustrations. The application of this section may be 
illustrated by the following examples:

    Example 1. In order to stimulate the making of loans, a bank 
advertises that it is in the business of preparing tax returns. A 
taxpayer goes to the bank to have his tax return prepared. After the 
return has been completed by the bank, the employee of the bank who 
obtained the tax return information from the taxpayer explains that the 
taxpayer owes an additional $400 in taxes and that the bank's loan 
department may be able to offer the taxpayer a loan to pay the tax due. 
If the taxpayer decides to accept the opportunity offered to apply for a 
loan, the bank must first have the taxpayer execute a written consent 
described in paragraph (b) of this section for the bank to use any of 
such information which is required in determining whether to make the 
tax loan.
    Example 2. An individual who sells life insurance and shares in a 
mutual fund is also in the business of preparing tax returns. A taxpayer 
who has gone to the individual to have his tax return prepared is 
requested, at the time he picks up his completed tax return, to give his 
consent to the individual's use of his tax return information in 
connection with such individual's solicitation of the taxpayer's 
purchasing a life insurance policy and shares in the mutual fund. Before 
the individual may use such tax return information as a basis for 
soliciting such additional business from the taxpayer, the taxpayer must 
execute separate written consents under paragraph (b) of this section, 
one authorizing the use of such information as a basis for soliciting 
the sale of the mutual fund shares and a second authorizing the use of 
such information as a basis for soliciting the sale of the life 
insurance.
    Example 3. The facts are the same as in example 2 except that the 
individual does not sell life insurance but does sell shares in several 
mutual funds. If the request is for the purpose of using the tax return 
information as a basis for soliciting the sale at one time of shares in 
mutual funds A and B, only one written consent under paragraph (b) of 
this section is required of the taxpayer. If, however, the request is 
for the purpose of using the tax return information as a basis for 
soliciting the sale of shares in fund A at one time, and the sale of 
shares in fund B at a later time, two written consents under such 
paragraph are required of the taxpayer.

[T.D. 7310, 39 FR 11540, Mar. 29, 1974]

                  penalties applicable to certain taxes