July 21, 2025
Section 7216 of the Internal Revenue Code sets strict rules to protect taxpayer privacy. Since 1971, it’s made clear that tax professionals can’t use or share the information on a tax return for anything other than preparing it—unless there’s a specific rule that allows it or the taxpayer gives written permission. The law works on a “prohibited-unless-allowed” basis, meaning everything is off-limits unless it’s clearly approved. That’s why tax preparers need to be extra careful and document everything precisely. In 2008, the IRS updated the rules to reflect changes in technology—like e-filing and cloud-based services—while keeping strong privacy protections in place.
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