Guide for IRS Employees

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LEN SMIGELSKI: As IRS employees, we enjoy one of the best reputations in government when it comes to the public's level of trust and confidence in how we protect their information. That trust is a cornerstone of voluntary compliance. If taxpayers can't comfortably share their private financial and other personal information with us, they are less likely to be completely forthcoming in their dealings with the IRS. We've got to strike a balance between two very different legal requirements found in Internal Revenue Code Section 6103. We'll just call it Section 6103. Every day, we must simultaneously protect confidential returns and return information while disclosing that same information when allowed to do so.

In this video, we'd like to review your responsibilities and share a strategy to help you understand and comply with them. I'm going to take you on an abbreviated tour of the "Disclosure Awareness Pocket Guide," a handy document designed to assist you in meeting those important responsibilities. While you won't need a guide as you view this video, it's easy to find online, or you can order one from the publishing catalog.

Our first obligation is to protect federal tax returns and return information. Section 6103 includes a very strict prohibition that forbids employees from disclosing tax information unless allowed by statute. If you work at the IRS, you're involved with some aspect of tax administration. For example, if you work in an operating division in Services & Enforcement, you deal with tax returns from the moment IRS receives them, whether on paper or digitally, until you finish with them. Return information has a much broader definition in the law and one that some employees occasionally ignore at their peril. Return information, as the pocket guide explains, means information from and about the return, even fact of filing. Because this information surrounds us in the workplace, we have to be very conscientious and deliberate.

For example, while the need-to-know provisions of the Code allow us to confer with other IRS employees and disclose return information to understand or resolve a particular tax matter, it's important to hold those discussions in a secure environment, not in the lobby or in the elevator. It's also very important that there is an underlying business need for the conversation. There's no need for your co-workers to hear about the matter simply because the taxpayer you're working with is well-known.

The pocket guide describes a strategy that will help you make the right disclosure decision. We call it the CAP process. CAP stands for Code, authority, and procedures. It's really very simple. Before making any disclosure, check the Code to be sure that the Code allows it. Check your authority to be sure that you have the authority to make the disclosure. And check the procedures to be sure that you follow proper procedures for releasing information.

Let me tell you a story to illustrate this point. Once upon a time, when IRS was organized and managed by district directors across the nation, one director in America's heartland learned that the liaison for his state tax agency failed to file federal tax returns. The director wanted to do the right thing. He knew that the state employee had broken the law and that such an act violated the state agency's code of conduct. The director also knew that he had the authority to make the disclosure. After all, he had always signed letters sending sensitive tax information to the state agency. So this director had the "C" in CAP covered -- the Code. And he knew he had the "A" in CAP covered -- the authority. He made the disclosure to the head of the agency but failed to follow the appropriate procedures when making the disclosure. He did not follow the procedures, the "P" in CAP. The state employee sued the IRS for wrongful disclosure. The story made the front page of The Wall Street Journal and other newspapers across the land. In court, the judge hearing the case described the IRS director's failure to follow established procedures in his treatment of this very sensitive information as "cavalier." The moral of this story is to make sure your CAP is firmly secured before making any disclosure. Remember, we hold the public's trust and confidence, and we can't let them down. So be thoughtful and deliberate with all sensitive data in your care. While most of us work with tax data, others might work with employee data or personal data about our contractors, volunteers, and visitors to our Websites and other social-media outlets.

The vast majority of our employees take their obligation to protect the public trust and safeguard sensitive information in their care very seriously. Unfortunately, there are still some who don't, and this unfortunate situation repeats year after year. Whether motivated by money, feelings, or simply tempted by mere opportunity, some employees decide to knowingly and willfully access or disclose returns and return information which they do not have a need to know. That decision can be costly. The penalties for IRS employees are both serious and severe, as the pocket guide describes. Willful unauthorized disclosure is a crime, a felony for which the punishment can include fines, imprisonment, and cost of prosecution. The fines for unauthorized access, or UNAX, are also heavy. The law also says that civil damages may be pursued in the courts by the injured party.

Remember, these penalties apply where the wrongful disclosure or access is intentional. They don't apply when an employee makes a mistake. We're only human, and mistakes do occur. But because we work with sensitive information and bear the weight of public trust and public scrutiny, we need to be vigilant. The pocket guide has a list of prevention tips that will help you to avoid the most common reported errors. The guide also tells you what you should do to report both wrongful and unintentional disclosures. In closing, I'd like to let you know that you can click on the disclosure link on IRWeb or call us at the disclosure help desk with questions about any particular disclosure situation.

I'll leave you with this great advice from the pocket guide. "When in doubt, check it out before you give it out."