AICPA Urges Pause in Section 7216 Regulatory Effort
The American Institute of Certified Public Accountants (AICPA) testified at an Internal Revenue Service (IRS) hearing on Tuesday, that regulatory process regarding proposed regulations under Internal Revenue section 7216, should be paused to allow for further discussion. The AICPA told the IRS that protection of tax return information should remain a top priority. The proposed regulations have also drawn criticism from consumer groups.
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The AICPA recognizes the need to modernize the section 7216 disclosure rules, which have not been updated since 1974, in order to accommodate today’s electronic capabilities for transferring data. However, the AICPA said about the proposed regulations, that “it does not appear the IRS fully considered their impacts. In our view the proposed regulations, as currently designed, will impose unnecessary burdens on taxpayers and service providers alike. We believe the IRS could produce more effective disclosure modernization proposals if it took the time to fully engage the impacted parties in a consideration of the impacts and alternatives.” The AICPA noted it made specific recommendations in its comments to the IRS on March 8, 2006.
At that time, the AICPA said, “we encourage the Service to finalize only those portions of the proposed regulations relating to the facilitation of electronic tax administration; and at the same time, engage the professional service provider industry in a substantive discussion about the other issues covered by the proposed regulations, in order to best ensure the requisite security of tax information in the context of today’s modern (global) business practices.”
The AICPA, on Tuesday, reaffirmed their commitment to protecting tax return information, saying, “As professional providers of tax services, our members know first-hand that their clients expect them and everyone else who comes in contact with their return data, to hold it confidential. As a result, the Institute has strongly supported the historically high standards for return information confidentiality.”
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