[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5075 Introduced in House (IH)]







109th CONGRESS
  2d Session
                                H. R. 5075

 To amend the Internal Revenue Code of 1986 to clarify the restriction 
     on disclosures and use of information by tax return preparers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 4, 2006

   Mr. Stark (for himself, Mr. McDermott, Ms. Bean, and Mr. Inslee) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to clarify the restriction 
     on disclosures and use of information by tax return preparers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Taxpayer Privacy Act of 2006''.

SEC. 2. CLARIFICATION OF RESTRICTION ON DISCLOSURES AND USE OF 
              INFORMATION BY TAX RETURN PREPARERS.

    (a) Restriction on Foreign Use and Disclosure.--Section 7216 of the 
Internal Revenue Code of 1986 (relating to disclosure or use of 
information by preparers of returns) is amended by adding at the end 
the following new subsection:
    ``(c) Restriction on Foreign Use and Disclosure.--
            ``(1) In general.--Any disqualified foreign use or 
        disclosure by a tax return preparer shall be treated as a 
        violation of subsection (a).
            ``(2) Disqualified foreign use or disclosure.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `disqualified foreign 
                use or disclosure' means--
                            ``(i) any use by the tax return preparer 
                        (or any officer or employee of such preparer) 
                        outside the United States of information 
                        described in subsection (a), and
                            ``(ii) any disclosure by the tax return 
                        preparer of information described in subsection 
                        (a) to any person (including any officer or 
                        employee of any person) who is located outside 
                        the United States.
                    ``(B) Exceptions.--Such term shall not include any 
                use or disclosure of information if--
                            ``(i) the taxpayer initially furnishes such 
                        information to a tax return preparer located 
                        outside the United States, or
                            ``(ii) the taxpayer has significant 
                        business activities outside the United States 
                        and use or disclosure is appropriate given such 
                        activities.
            ``(3) Tax return preparer.--For purposes of this 
        subsection, the term `tax return preparer' means any person who 
        is engaged in the business of preparing, or providing services 
        in connection with the preparation of, returns of the tax 
        imposed by chapter 1, or any person who for compensation 
        prepares any such return for any other person.
            ``(4) United states.--For purposes of this subsection, the 
        term `United States' includes any territory or possession of 
        the United States.''.
    (b) Prohibition on Taxpayer Consent to Disclosure or Use of 
Information.--Paragraph (3) of section 7216(b) of such Code is amended 
to read as follows:
            ``(3) Regulations.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to a disclosure or use of information which is 
                permitted by regulations prescribed by the Secretary 
                under this section.
                    ``(B) Quality or peer reviews.--Such regulations 
                shall permit (subject to such conditions as such 
                regulations shall provide) the disclosure or use of 
                information for quality or peer reviews.
                    ``(C) Prohibition on disclosure and use based on 
                taxpayer consent.--
                            ``(i) In general.--Such regulations may not 
                        permit the disclosure or use of any information 
                        on the basis of the taxpayer's consent to such 
                        disclosure or use.
                            ``(ii) Exceptions.--Clause (i) shall not 
                        apply to any disclosure or use with respect to 
                        tax administration, legal proceedings, related 
                        parties or fiduciaries of the taxpayer, the 
                        performance of accounting or legal services 
                        (other than the solicitation therefor), and 
                        other similar purposes.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures and uses after the date of the enactment of this 
Act.
                                 <all>