ARLINGTON, Va.—The IRS has amended the confidentiality provision of the Taxpayer First Act (TFA), and NAFCU is outlining some details CUs should pay attention to.
NAFCU Regulatory Compliance Counsel Reginald Watson clarifies that the ability of credit unions that receive tax returns directly from the Internal Revenue Service to further disclose information beyond the express purposes of the consent is limited under the new TFA provision.
"Credit unions are also prohibited from disclosing return information to any other person, including investors without the express permission of, or request by the taxpayer," writes Watson.
Watson also outlined the IRS's clarifying guidance, explaining that the provision only applies to new consent agreements occurring after the effective date. However, he noted the IRS has declined to provide a model form or sample language for financial institutions, like credit unions, to include in consent agreements.
"Credit unions should consult with legal counsel regarding any appropriate changes to make to tax return consent agreements given the complexity of tax and contract law," said Watson.