SUBJECT:
IRS YEARLY MATCH OF 2004 TAX INFORMATION
DISCUSSION:
The IRS yearly match with 2004 tax data is available to staff. No changes were made to the code sheet this year.
Information from this IRS information exchange is displayed on the IIRS screens for further staff investigation. DO NOT PRINT the IIRS screen for use in your investigation. Any notes written from the IIRS data are NOT to be kept in the case folder and MUST be destroyed after use.
Interest payments from the IRS of overdue tax refunds DO NOT require verification from the IRS. Since the information is provided to us from the payer of the income, consider the information on the IIRS screen as verified.
All letters and IM-6 forms printed as a result of the worker's request from the IIRS screens must be kept in a locked file with a cover letter attached to each letter to comply with the Taxpayer Browsing Protection Act of 1997. The cover letter must only contain the case name, case number, and the worker name or load number. This enables staff to distribute the IRS notices to the correct worker without seeing the IRS data on the notice. Each locked file must have a log kept of when the letter or form is received and the disposition of each. Destroy the letters after the IM-6 signed by the client is sent with the verification request. When the verification is received back in the county office, destroy any attached IM-6 produced as a result of an IRS match.
Failure to comply with the Internal Revenue Code for the unauthorized disclosure of tax return information can result in the following civil and criminal penalties and disciplinary action by the Family Support Division (FSD).
- The Internal Revenue Code (IRC) section 7213 (a) makes the unauthorized disclosure of Federal tax return information a felony punishable by a $5000 fine, up to five years imprisonment or both, together with the costs of prosecution.
- Section 7431 of the IRC permits a taxpayer to bring suit against individual staff for civil and punitive damage in U.S. District Court for willful disclosure or gross negligence for unauthorized disclosures even after FSD employment terminates.
- IRC Section 6103 prohibits a person from willfully disclosing any return information except as authorized by Title 26 of the United States Code.
- The 1997 Taxpayer Browsing Protection Act provides a penalty for the willful, unauthorized access or inspection of federal tax information, both electronic and paper formats. Upon conviction, the criminal misdemeanor penalty is a fine of up to $1000 and/or imprisonment up to one year. Civil damages for each finding of liability are up to $1000 or actual damages, whichever is greater. If gross negligence or willful unauthorized inspection or disclosure exists, punitive damages may be assessed.
- IRC Section 2651 requires that Social Security information from computer matches be treated the same as IRS data (26 U.S.C. 6103).
NECESSARY ACTION:
- Review and act on the IIRS data when notice is received that a client has information displayed.
- Review the penalties for sharing IRS data inappropriately with all staff, both IM and clerical, who may see the screens or printed notices.
- Ensure the county policy of using cover letters and a locked file for IRS letters or forms is enforced and that a log is kept showing the receipt of IRS letters/forms and the destruction of the notice.