Section 9. LIMITATIONS

1. The FTI provided by the IRS will be used by the agency only to determine eligibility for, or the correct amount of, benefits under these programs. The agencies may not use the FTI in any manner or for any purpose not consistent with that authorized use under Section 6103(l)(7) of the Code. Any secondary use is specifically prohibited and may subject offending officials to the imposition of criminal and/or civil penalties. The FTI cannot be disclosed to contractors; see Section 3. Authority.

2. The Secretary shall disclose FTI only for purposes of, and to the extent necessary in, determining eligibility for, or the correct amount of, benefits programs listed in Section 3 of this document. Agencies which receive FTI pursuant to Section 6103(l)(7) of the Code may not reduce, suspend, terminate or deny aid or benefits until the agency has taken steps to independently verify the information, as provided for by the Section 552a(p) of the Privacy Act of 1974, as amended. (See Section 801 for additional guidance in this area.)

3. Access to FTI must be restricted to the agency employees whose duties require access for the purpose for which the disclosure to the agency was made. The agency must evaluate which employees require such access before the FTI is disclosed. An employee may need to know some information, however, it does not mean that the employee needs to know all the FTI provided to the agency. Access must be strictly limited and FTI must be separated so an employee only sees what he or she needs to know. The FTI must be kept separate from other information to avoid commingling that may allow individuals access to information they do not need to know. Section 6103(l)(7) of the Code does not allow recipient agencies to disclose FTI to contractors, Native American Tribal Governments or other State agencies.

4. The agency will strictly follow the safeguards required by the IRS in protecting FTI. Safeguard standards prescribed in IRS Publication 1075, Tax Information Security Guidelines for Federal, State, and Local Agencies, must be followed.

5. Officers and employees of federal, state, and local agencies who are entitled to access FTI must not access the FTI except to the extent necessary to achieve the purpose of the match and must not disclose FTI to any other officer or employee within the agency whose official duties do not require FTI to determine eligibility for, or the correct amount of, benefits for the programs specified in their matching agreement.

6. Officers and employees of federal, state, and local agencies who inspect or disclose FTI in a manner not authorized by Section 6103(l)(7) of the Code are subject to the criminal and civil penalty provisions of Sections 7213 and 7213A of the Code, and of 18 USC Section 1030(a) (2). In addition, federal agencies and state employees could be required to defend a civil damages action under Section 7431 of the Code.

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7. Willful, unauthorized inspections or disclosures of FTI must be reported to the IRS Office of Safeguards within 24 hours of identification of an incident potentially involving FTI. Agencies will follow the procedures outlined in IRS Publication 1075.

8. Agencies receiving FTI must immediately notify the IRS DIFSLA Project Manager if the agency receives FTI beyond that which is normally released under the DIFSLA program.