IRS gains permanent authority for undercover operations, disclosure of information

Two brief paragraphs in the newly enacted Emergency Economic Stabilization Act of 2008 delete expiration dates from sections of the Internal Revenue Code that grant the Internal Revenue Service (IRS) authority to conduct undercover operations and disclose information relating to terrorist activities and render this authority permanent.

In a press release last spring, the Senate Finance Committee requested permanent authority to conduct uncover operations for the IRS saying that, "The temporary status of this provision creates uncertainty as the IRS plans its undercover efforts from year to year."

At that time, the Committee asked that the authority to disclose tax return information relating to terrorist activities be extended to the end of 2009.

Title IV of the new law, Extension of Tax Administration Provisions Sec. C. 401, is not an extension but instead grants:

Permanent Authority for Undercover Operations
(a) IN GENERAL.—Section 7608(c) (relating to rules relating to undercover operations) is amended by striking paragraph (6).

The deleted paragraph, Paragraph 6 (c of Section 7608, Authority of internal revenue enforcement officers, applied to expiration dates of the authority:

The provisions of this subsection—
(A) shall apply after November 17, 1988, and before January 1, 1990, and
(B) shall apply after the date of the enactment of this paragraph and before January 1, 2008.

You can read the full text of the
Emergency Economic Stabilization Act of 2008.

Similarly, the following section of the legislation, Section 402, grants:

Permanent Authority for Disclosure of Information Relating to Terrorist activities
(a) DISCLOSURE OF RETURN INFORMATION TO APPRISE APPROPRIATE OFFICIALS OF TERRORIST ACTIVITIES.—Subparagraph (C) of section 6103(i)(3) is amended by striking clause (iv).
(b) DISCLOSURE UPON REQUEST OF INFORMATION RELATING TO TERRORIST ACTIVITIES.—Paragraph (7) of section 6103(i) is amended by striking subparagraph (E).

Clause (iv) and Paragraph (7), which have been deleted from Section 6103, Confidentiality and disclosure of returns and return information, both said "Termination -- No disclosure may be made under this subparagraph after December 31, 2007."

The Privacy Act of 1974, the Freedom of Information Act, and rules in the Internal Revenue Code generally regulate IRS undercover activity and disclosure of information.

You can read the IRS statement regarding undercover activities.

Evolution of the Emergency Economic Stabilization Act of 2008:


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