I must have missed it, but I cannot find how long we are required to retain the signed 7216 Consent Form. Also I cannot find if the actual paper form has to kept or can we scan it to pdf. Can anyone guide me on this. Thanks.
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Seems to me you would keep it as long as you keep the return and yes you can keep it as a pdf file. taxeaBelieve nothing you have not personally researched and verified. -
About those 7216 forms,
I found a (Drake) with some printable/usable forms on it;
but it seems like those are all tailored toward RALs and I'm looking for one to authorize sending one later in the year to mortgage companies for loans. I checked the IRS site and they mention six or seven situations, but none seem to fit for this purpose. Anybody got a sample for that?
Larmil -- Can't seem to find anything on the retaining period.Comment
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Black Bart,
Try this link:
There is a link to four free sample forms and I think consent A would suit your purpose.Comment
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I saw this good posting by a knowlegable practitioner on a different board.
CONSENT FOR DISCLOSURE OF TAX INFORMATION
Client(s):
(Name)
(Address)
(City, State, Zip)
Date
I/We, (insert client name(s) here), hereby request and authorize _________ to release our tax returns, tax information and tax-related documents as detailed below to the following person and/or institution:
NAME: ______________________________ ORGANIZATION: __________________________________
ADDRESS: __________________________________________________ _____________________________
CITY __________________________________ STATE __________ ZIP ___________________________
TELEPHONE ______________________ FAX _________________________
E-MAIL __________________________________________________ ________
Purpose of This Disclosure __________________________________________________ ______________
__________________________________________________ _____________________________________
Specific tax information and documents to be released:
__________________________________________________ _____________________________________
__________________________________________________ _____________________________________
Federal law requires this consent form be provided to you. Unless authorized by law, we cannot disclose, without your consent, your tax return information to third parties for purposes other than the preparation and filing of your tax return. If you consent to the disclosure of your tax return information, Federal law may not protect your tax return information from further use or distribution.
You are not required to complete this form. If we obtain your signature on this form by conditioning our services on your consent, your consent will not be valid. If you agree to the disclosure of your tax return information, your consent is valid for the amount of time that you specify. If you do not specify the duration of your consent, your consent is valid for one year.
If you believe your tax return information has been disclosed or used improperly in a manner unauthorized by law or without your permission, you may contact the Treasury Inspector General for Tax Administration (TIGTA) by telephone at 1-800-366-4484, or by email at complaints@tigta.treas.gov.
This consent will expire thirty (30) days from the date of the client signatures below.
________________________________________________ _____________
Taxpayer Signature Date
________________________________________________ _____________
Spouse Signature (if joint return) DateComment
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I also do not do RALS, sell other services, or outsource. I feel the only consent form I need is to send copies to mortgage companies etc and to talk to the client's brokers.Originally posted by Black Bart View PostI found a (Drake) with some printable/usable forms on it;
but it seems like those are all tailored toward RALs and I'm looking for one to authorize sending one later in the year to mortgage companies for loans. I checked the IRS site and they mention six or seven situations, but none seem to fit for this purpose. Anybody got a sample for that?
Larmil -- Can't seem to find anything on the retaining period.
I have written the following in the custom letters of my tax software. Between the ~'s in instruction to the software the fill in clients name etc. I believe it meets the requirements. Anyhow it is a good faith effort.
================================================== ===
CONSENT TO DISCLOSE TAX RETURN INFORMATION
~TSFULN~
~TPSADR~
~TPSCSZ~
Federal law requires this consent form be provided to you. Unless authorized by law, we cannot disclose, without your consent, your tax return information to third parties for purposes other than the preparation and filing of your tax return and, in certain limited circumstances, for purposes involving tax return preparation. If you consent to the disclosure of your tax return information, Federal law may not protect your tax return information from further use or distribution.
You are not required to complete this form. If we obtain your signature on this form by conditioning our services on your consent, your consent will not be valid. If you agree to the disclosure of your tax return information, your consent is valid for the amount of time that you specify. If you do not specify the duration of your consent, your consent is valid for one year.
I (We) ~TSFULN~ authorize ~FIRMNM~ to disclose to, or discuss with
__________________________________________________ ___________________¶
my tax year(s) ________________________ income tax return(s).
If you believe your tax return information has been disclosed or used improperly in a manner unauthorized by law or without your permission, you may contact the Treasury Inspector General for Tax Administration (TIGTA) by telephone at 1-800-366-4484, or by email at complaints@tigta.treas.gov.
I (We) understand this consent is not valid until signed and dated.
__________________________________________________ ___________________¶
Signature(s) DateComment
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I got a little bit disturbed today by accountants using Drake.
Drake prints out a general consent form to be signed by ALL clients before you talk to them about their tax return. Some of the accountants said only new clients need to sign this consent. Some say a POA will cover this. Until today I thought that the disclosure form applies only if a tax office shares the client data with a person outside the office.
I did some more reading and came across this website:
I tend to agree with the author that it is not clear if we can contact our clients after the tax return is done with suggestions for tax planning unless we have a consent form signed.
This is part of the language in the code:
"uses any such information for any purpose other than to prepare, or assist in preparing, any such return"
Is everyone just getting paranoid? Do we indeed need to have ALL our clients sign a disclosure form??Comment
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I just found this example disclosure form in an article I downloaded some days ago and can't remember the source:
CONSENT TO USE OF TAX RETURN INFORMATION
Federal law requires this consent form be provided to you. Unless authorized by law, we cannot use, without your consent, your tax return information for purposes other than the preparation and filing of your tax return.
You are not required to complete this form. If we obtain your signature on this form by conditioning our service on your consent, your consent will not be valid. Your consent is valid for the amount of time that you specify. If you do not specify the duration of your consent, your consent is valid for one year.
Taxpayer hereby consents to the use by (name of accounting firm/preparer) of any and all tax return information contained in the taxpayer’s federal income tax returns (Forms 1040, 1040NR, 1040A, 1040EZ, etc. and supporting schedules) for the purpose of mailing, including electronic transmission, to the taxpayer information pertaining to:
• Newsletters of accounting firm/preparer.
• Newsletters of affiliated financial planning firm to the accounting firm/preparer.
• Press releases and published articles of accounting firm/preparer.
• Upcoming seminars, webinars, and webcasts.
• Accounting firm/preparer promotion or hire announcements.
The tax information may not be disclosed or used by (name of accounting firm/preparer) for any purpose other than that permitted by this consent document.
This consent will be valid for a period of three years beginning on January 1, 2009 and expire on December 31, 2011.
Alternative expiration date requested if not December 31, 2011: ______________________.
Signed this____ day of ____________________, 200___
Name (please print) ______________________________
Signature ______________________________________
If you believe your tax return information has been disclosed or used improperly in a manner unauthorized by law or without your permission, you may contact the Treasury Inspector General for Tax Administration (TIGTA) by telephone at 1-800-366-4484 by email at complaints@tigta.treas.gov.Comment
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Gretel,Originally posted by Gretel View PostI got a little bit disturbed today by accountants using Drake.
Drake prints out a general consent form to be signed by ALL clients before you talk to them about their tax return. Some of the accountants said only new clients need to sign this consent. Some say a POA will cover this. Until today I thought that the disclosure form applies only if a tax office shares the client data with a person outside the office.
I did some more reading and came across this website:
I tend to agree with the author that it is not clear if we can contact our clients after the tax return is done with suggestions for tax planning unless we have a consent form signed.
This is part of the language in the code:
"uses any such information for any purpose other than to prepare, or assist in preparing, any such return"
Is everyone just getting paranoid? Do we indeed need to have ALL our clients sign a disclosure form??
Most preparers disagree with me, so take this with a grain of salt.
After studying the original regulations, the proposed regulations, and the final regulations and after reading all of the notices, listening to three courses on the topic and speaking to the Office of Associate Chief Counsel at the Internal Revenue Service (only twice so far), I have come to the conclusion that the goal of these regulations is to allow clients more control over what is done with their tax return information. There are things you need to discuss with the client in order to prepare the current year's tax return and there is advice and information you need to offer the client to prepare the current year's tax return. I do not believe that the IRS wants to prohibit us from talking about the tax return for which we have been engaged in any way, and thus discussions directly related to the current tax return do not need prior consent.
Some preparers go beyond preparation and discussion of the current tax return. If you offer other services beyond tax preparation, you need consent to use the tax return information to discuss those services. If you want to talk about tax returns beyond the current tax return, the IRS recommends that signed consent to use tax return information for that purpose be obtained prior to such discussions. If you wear multiple hats and you are also an accountant or a lawyer, you do not need consent to disclose the tax return information to yourself in those roles. If you are a financial planner or a registered representative, you do need consent to disclose tax return information to yourself in that role.
That being said, I would strongly recommend against basing anything you do in line with §7216 of the code as being because of some post you read on some tax forum somewhere. §7216 is a criminal statute and the penalties for committing such a crime can go beyond the fine and jail term they can impose.DougComment
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Say What???
I use Drake and don't use any such consent form. All clients sign my engagement letter prior to tax preparation, that's it. If they want a bank product, there is a consent form specifically for that use. Otherwise I don't worry about consent forms, because I won't give information to a third party, only to the taxpayer and/or spouse on the return.Originally posted by Gretel View Post
I get a little bit disturbed by accountants who diss software they don't use."A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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Doug, I agree with you. I never said I agree with what the other people are thinking. However, the issue of sending info to the client AFTER the tax return is done, like a letter advising them of tax law changes for their next tax return, is not addressed.
This is the only issue I am concerned about, and if I go strictly by the letter of the law, I think I am not allowed to send out a letter if I don't have the consent. What do you think?
The intent is one thing, what stupid IRS employees or other people make of it is quite another.
The intent of the tax preparer penalty of $1,000 was also intended to week out the bad preparers but I have heard cases where honest, good tax preparers have been slapped with this penalty for a honest mistake, like not checking a box in the software that a piece of property doesn't qualify as a passive activity. When the preparer disagreed with the penalty he was told to go to court.Comment
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Not everyone is paranoid. (Well maybe paranoid but acting as if not paranoid). I am not making anyone sign anything different this year. And I have very few people sign anything as is.Originally posted by Gretel View Post
The only change I will make is if they want their returns forwarded. Actually I like this change. It makes someone either look harder or come in and pick up themselves. Saves me time. I will have a consent form for that which will mean some faxing or mailing. Thanks to you that posted some possible forms to use.
But Gretel, the issue about when to fill out the form and whether to use the form are two different issues. If a preparer (who sells products) decides most of their clients will need to sign a form then they need to sign the form before the tax return is started. I thought the "before" was clear, but if it is not well that is no surprise either.)JGComment
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Gretel
I believe the source of the document you quoted is from AICPA (Jesse provided a link to it for me up above on this same thread ). Bees Knees had something to say about this on another thread and it's quoted below, although I'm not certain it's what you are looking for.
Originally posted by Bees Knees View PostThat information is misleading and totally out of context. The actual regulation says no such thing. Under frequently asked questions on the IRS website, Q8, it says the rules for obtaining consents are found in Treasury Regulation Section 301.7216-3. You can read that regulation for yourself at:
What the regulation actually says is as follows: That is quite different than what the IRS website implies. The IRS website implies that any and all disclosures we make can only be done if we obtain a signed consent prior to the client signing the tax return. For example, the summer following preparing the return (where we never had the taxpayer sign a consent), our client calls and says to send a copy of his return to his mortgage company because he is trying to refinance his house. According to IRS website, we would have to say, sorry I can’t do that. You never signed a consent prior to signing your tax return. But that is not what the reg says. The reg says you can’t disclose information without the taxpayers consent. We can still get consent after the client signed the return in cases where the client is the one calling us asking us to send a copy of his return someplace. What we can’t do, according to the regulation, is call the client after the return is signed and ask for consent to use the tax return information for our own solicitation or other unrelated business purposes.
If we want to use the information for our own use, the written consent must be signed prior to the taxpayer signing the return. If the client wants us to disclose the information to a third party, the client can sign that kind of consent anytime, even after the return has been signed.Comment
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Black Bart,Originally posted by Black Bart View Post
With all due respect, I am going to disagree with you and the AICPA, but this is only my opinion at this time and the IRS is working on clarifying some of this for us.
First of all, I believe the regulations are intended to cover an engagement to prepare a tax return. That engagement usually ends when the return is complete. Thus, I do not believe that a client coming to you three months or three years later and asking for help is part of the original engagement three months or three years earlier. Thus, I do not see how quoting or misquoting the regulations about disclosing information matters in the scenario that Bees or Gretel is discussing.
In Gretel's situation, she talks about "the issue of sending info to the client AFTER the tax return is done, like a letter advising them of tax law changes for their next tax return" and claims it is not addressed in the regulations. I offer this from §301.7216-2:
In my discussions with the IRS they do not understand why people keep saying that they can't contact their clients or send newsletters. They think this paragraph is pretty clear.A tax return preparer may compile and maintain a separate list containing solely the names, addresses, e-mail addresses, and phone numbers of taxpayers whose tax returns the tax return preparer has prepared or processed. This list may be used by the compiler solely to contact the taxpayers on the list for the purpose of offering tax information or additional tax return preparation services to such taxpayers.
Bees was saying that that the regulations do not say that you must have consent to disclose before the tax return is signed. While I agree that his statements are true in the context of a client requested disclosure, the IRS website is only talking about when a tax preparer is soliciting permission to disclose or use information, not when the client is asking you to disclose or use information. When you are asking the client for permission to disclose or use tax return information the IRS website does agree with the regulations. If you do not believe the regulations mention the timing, consider this from the regulations:It is saying that a tax preparer needs consent before disclosing or using information and when that tax preparer is the one who asking for this consent for the purpose of soliciting business the request must be done beofre the return is given to the taxpayer for signature.(1) No retroactive consent. A taxpayer must provide written consent before a tax return preparer discloses or uses the taxpayer’s tax return information.
(2) Time limitations on requesting consent in solicitation context. A tax return preparer may not request a taxpayer’s consent to disclose or use tax return information for purposes of solicitation of business unrelated to tax return preparation after the tax return preparer provides a completed tax return to the taxpayer for signature.DougComment
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Thanks for all the responses, especially Doug. What I gather is that I cannot do in 2009 what I did in 2008 unless I get a consent signed. Below find what I did:
I am not maintaining a separate list for my clients just for addresses and phone numbers. I use the function in my software. Some of my clients got specific advise in regards to their tax situation (f.e. advising them of the possibility to convert their IRA to a Roth for little tax dollars).
I am not even sure I could send out a generic newsletter unless I maintain a separate data base. I sure hope the IRS issues some common sense guidelines.Comment
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