SECTION 2. BACKGROUND

.01 Section 7216(a) prescribes a criminal penalty for tax return preparers who knowingly or recklessly disclose or use tax return information for a purpose other than preparing a tax return. A violation of section 7216 is a misdemeanor, with a maximum penalty of up to one year imprisonment or a fine of not more than $1,000, or both, together with the costs of prosecution.

.02 Section 7216(b) establishes exceptions to the general rule and also authorizes the Secretary to promulgate regulations prescribing additional permitted disclosures and uses. Section 6713(a) prescribes a related civil penalty for disclosures and uses that constitute a violation of section 7216. The penalty for violating section 6713 is $250 for each disclosure and use, not to exceed a total of $10,000 for a calendar year. Section 6713(b) provides that the exceptions in section 7216(b) also apply to section 6713. Under section 7216(b), the provisions of section 7216(a) will not apply to any disclosure or use permitted under regulations prescribed by the Secretary.

.03 The regulations under section 7216 provide exceptions to the general rule. Section 301.7216–3 provides that, unless section 7216 or §301.7216–2 specifically permits the disclosure or use of tax return information, a tax return preparer may not disclose or use a taxpayer’s tax

return information prior to obtaining a consent from the taxpayer. The consent must be knowing and voluntary. Section 301.7216–3(a)(3) provides that the Commissioner may, by revenue procedure, prescribe the form and content of consents, as well as the requirements for a valid signature on an electronic consent under section 7216. This revenue procedure provides those requirements.