7216 - A Number That Changes My Firm

7216 - A Number That Changes My Firm
The number in question is 7216. No, that is not my winning lottery ticket number. But, just like if I hit the lottery, it will make a drastic change to my practice. 7216 refers to Code Section 7216 of the Internal Revenue Code. So, you are wondering why this number is so big of a deal. Basically, code section 7216 is about the tax preparer maintaining your privacy. Trust me, I already do that.

But, code section 7216 has been amended by our wonderful Congress in such a drastic manner that it greatly effects what I can do for you. In the past, you could call me up, and ask me to send a copy of your tax return to your mortgage company - and I would have done it. Now, everything has changed. Under the new rules, I must obtain written directions in advance from the taxpayer (and only the taxpayer) to release information. In addition, I must obtain very detailed information of why you want me to release that information including the purpose of the request etc. If I comply with those rules, I could open myself up to legal implications based on my professional responsibilities. So, it is kind of a catch 22.

In addition, I will have to keep track of each of those written requests for 7 years. Further, I cannot use a "blanket" release and thus I must get a new release each time. Needless to say, that will become overly cumbersome - even in my paperless environment. As such, I am forced to change my policy on releasing data; And with that - here it is:

NEW POLICY ON RELEASE OF INFORMATION

I will no longer release information to any person other than the taxpayer. If you need a copy of your records for someone, I will only send it to you; and you will need to forward the information to the person requesting the information. I regret any inconvenience that this creates but I am sure you will understand. Specifically, here are the parties that I will release information to:

Individuals (non-minor) - taypayer
Minor taxpayers - taxpayer or parents or legal guardians
Estates - Executor (and like parties)
Trusts - Trustee
General Partner - Any general partner (may restrict to owner with highest ownership percentage)
Limited Partner - The general partner
Corporations - Officers and directors
Non-Profits - Board members and executive director

INFORMATION COVERED BY SECTION 7216

Unfortunately, section 7216 defines the information in such a broad manner that it includes all information obtained or gathered in the preparation of your tax return. Under the new rules, I cannot use the information I obtain in preparing your tax return for any other purpose.
EXAMPLE

If your bookkeeper calls and asks for a depreciation schedule so that they can record the monthly expense; Unfortunately, I cannot send that to them. I will send it to you and you will have to forward it.

Ronda Zaragoza Accountant Eagle Eye Accounting


As always if you have any questions or comments please email me at rondazaragoza@gmail.com.