Consent to Use

[ttbtaxes]

I am totally clear on the Consent to Disclose form and have used it over the past few years.

What about the Consent to Use form. I do not offer RALs, IRA, mortgages or anything like that. Tax preparation and that's it.

I am e-filing for the first time. Is there a reason to get a Consent to Use for e-filing purposes? Any other reasons I need to have the Consent to Use form if just preparing returns?

[Chief]

Consent to Use

I only use information for filing client's tax return. I dohave everyone sign and engagement letter.

[dtlee]

You definitely do not need a Consent to Use form if your activities are limited to collecting information, preparing the return, and efiling it. Those activities are specifically allowed without prior consent (alternately, you might consider the signature forms for the return to be the consent you need for those activities). Either way, that is covered.

Use of taxpayer information for preparing a single year's return or the estimates for the coming year are not situations requiring prior signed consent. You can even contact them to give them information about amending that return or changing those estimates without prior signed consent.

However, since the IRS considers an engagement to be for a single tax year at at time, should you want to have permission to call a client or mail them information about a different tax year, that use of their information requires prior signed consent. So, if you do things like the following:

• Set up appointments for the following year without them asking and then call them to remind them that they have an appointment (which some of the chains were doing).
• Send them a reminder card that they need to make an appointment the next tax season.
• Send them a letter specifically about their tax situation for the upcoming season.

you need prior signed consent.

While this may seem ridiculous, if you send a general newsletter about tax information to all clients, that is not something that requires prior signed consent. If you decide to warn all clients above a certain income level that they may face up to $7,000 in additional taxes if the AMT extender is not passed, you are using tax information and that use requires prior written consent.

[Gretel]

This would mean sending out an organizer requires a consent to use, right?

[dtlee]

Technically, yes..

If it is not unsolicited (i.e., if a client calls you and asks for an organizer), then it is not a problem.

From my discussions with them, they did not want us assuming that if we are engaged for a year, we are allowed to continue contact with these clients beyond the return engagement without first getting the clients consent.

I get a consent form siggned from every client allowing me to give advice for years beyond the current return and to contact clients with information pertaining to their tax situation in the future.

[ttbtaxes]

This would mean sending out an organizer requires a consent to use, right?

I do not believe it does.

Sec. 301.7216-2(m) specifically allows a tax preparer to contact clients for the purpose of offering additional services. I believe that sending an existing client an engagement letter (or tax services agreement) along with a tax organizer for the upcoming year, and thereby offering additional tax services, is completely allowable.

http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_F,_Sec._301.7216-2

[dtlee]

I do not believe it does.

Sec. 301.7216-2(m) specifically allows a tax preparer to contact clients for the purpose of offering additional services. I believe that sending an existing client an engagement letter (or tax services agreement) along with a tax organizer for the upcoming year, and thereby offering additional tax services, is completely allowable.

http://www.taxalmanac.org/index.php/...ec._301.7216-2

I will admit that I take a much more conservative view on this than some people (far less conservative than others, I might add). Here is the exact wording of this section:

Lists for solicitation of tax return business. Any tax return preparer may compile and maintain a separate list containing the names and address of taxpayers whose tax returns he 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.

In my view, they are giving us permission to send a reminder or circular or coupon or other offer of tax services. Sending an organizer is a concern to me for two reasons. One, it goes beyond offering the service (which I admit is open to dispute). Two, such organizers, if personalized, use much more tax information than a name and address. Thus, if you send organizers out and someone other than the taxpayer at that address is able to discern wages and self-employment income and mortgage amounts from the organizer, but you never had consent to send it, there may be a violation of the rules.

A blank, generalized organizer, like the one from TheTaxBook is likely well within what we are allowed to send without prior consent. I was thinking of one that included last year's information on it. Thank you wiiawiwb for clarifying this.