II 109th CONGRESS 2d Session S. 2498 IN THE SENATE OF THE UNITED STATES April 4, 2006 Mr. Thomas (for himself, Mr. Schumer, and Mr. Enzi) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to prohibit the disclosure of tax return information by tax return preparers to third parties.

1.

Prohibition of tax preparers disclosing tax return information

(a)

In general

Paragraph (3) of section 7216(b) of the Internal Revenue Code of 1986 (relating to regulations) 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)

Peer reviews

The regulations under this section shall permit (subject to such conditions as such regulations shall provide) the disclosure or use of information for quality or peer reviews. (C)

Disclosure to third parties

(i)

In general

The regulations under this section shall not permit the disclosure or use of information for purposes of facilitating the solicitation of the taxpayer's use of any services provided or facilities furnished by a person unless— (I)such person is a person described in subsection (a) or a person who is a member of the same affiliated group (within the meaning of section 1504) as such person, and (II)the taxpayer has granted consent to such disclosure or use. (ii)

Solicitation of consent

The regulations under this section shall not permit any person described in clause (i)(I) to request the consent of a taxpayer to disclose or use information for any purpose other than a purpose described in clause (i). . (b)

Effective date

The amendment made by this section shall take effect on the date of the enactment of this Act.