RubinBrown Team Member Manual

IRC §7216 Compliance 1219

Policy Title: Policy Number:

Section:

Risk Management

Effective Date:

Supersedes Policy Dated:

06/01/2024

06/01/2023

Background: Beginning in 2009, the Internal Revenue Code (IRC) §7216 imposes misdemeanor criminal penalties on return preparers who disclose or improperly use taxpayer information. The penalties imposed by this particular code section include a maximum fine of $1,000 or one year in prison, or both Policy: Each year we take time to remind our team members of the importance of IRC §7216 and how it affects our ability to serve our clients. Generally speaking, return preparers are precluded from disclosing covered information to third parties or using information obtained about a taxpayer in the return preparation process for the return preparer’s own purpose. The basic rule is to allow disclosure or use of covered information only with prior taxpayer consent. A valid consent must include the names of both the preparer and the taxpayer, and be: • Signed and dated by the taxpayer; • Knowing and voluntary; and • Meet the content and other requirements specified in the Treasury Regulations. The firm has developed a "best practice" policy to these rules as follows: • All non-1040 series engagement letters contain the required communications under Treasury Regulation §301.7216-3, for Authorized Disclosures and Authorized Uses. These consents ( disclosure and use ) will be obtained annually as part of the annual client engagement letter. These disclosures are now part of Exhibit B and included as an attachment to the annual engagement letter. • When obtaining written consents (disclosures and use) for 1040 series clients, law requires these clients to receive separate letters, which contain the required communications under Treasury Regulation §301.7216 3, for Authorized Disclosures and Authorized Uses. It is important to note these letters cannot be part of the client's annual 1040 engagement letter (e.g., organizer letter). There are templates within the engagement letter database to assist with the preparation of these separate disclosure and use letters. • All 1040 series clients should complete a new Authorized Disclosure consent letter if there is a change in requested recipient(s) (e.g., new investment advisor, new banker, new attorney, etc.). NOTE: IT IS FIRM POLICY THAT NO RUBINBROWN TEAM MEMBER SEND ANY CLIENT INFORMATION TO A THIRD PARTY, UNLESS RUBINBROWN HAS IN ITS POSSESSION THE PROPER DISCLOSURE OR USE CONSENT PRIOR TO RELEASING THE REQUESTED INFORMATION. [Your other choice is to send the requested information to the client directly and have the client send to the third party. However, a written, signed consent will still be needed in order to permit use of the client information for purposes other than return preparation.]

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