Extended Period for Receiving Authorization to Disclose Return Information Proposed

By Alistair M. Nevius, J.D.


The IRS issued a proposed regulation that would officially extend from 60 days to 120 days the permitted period for submission of taxpayer authorizations allowing disclosure of returns and return information to third-party designees (REG-153338-09). The IRS is proposing the change because some financial institutions have had difficulty obtaining and submitting written authorizations within the current 60-day limit.

Sec. 6103(c) authorizes the IRS to disclose a taxpayer’s returns or return information “to such person or persons as the taxpayer may designate.” To be effective, the IRS must receive a taxpayer’s signed and dated authorization within 60 days of the date the authorization is signed and dated (Regs. Sec. 301.6103(c)-1(b)(2)).

In December 2009, the IRS announced interim rules where it extended the period under which Sec. 6103(c) authorizations must be received from 60 days to 120 days (Notice 2010-8). The interim rules affected authorizations signed and dated on or after October 19, 2009. The proposed regulation would make the interim rules permanent; the interim rules will remain in effect until the proposed regulation is finalized. The final regulations would then apply to authorizations signed on or after October 19, 2009.

The IRS has asked for comments on the proposed regulation. Comments are due by May 17, 2011, and can be submitted electronically at www.regulations.gov. The IRS has scheduled a public hearing for June 9.

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