FR 2021-03142

The document in question is a notice from the Internal Revenue Service (IRS), published in the Federal Register. It serves as an invitation for the public and other federal agencies to provide comments on certain regulations related to the disclosure of tax return information. This inquiry is part of the IRS's broader effort to ensure that its processes remain effective and less burdensome as per the requirements of the Paperwork Reduction Act of 1995. Specifically, the IRS is focusing on determining when tax return information can be shared for quality checks or when such disclosure is necessitated by the incapacity or death of a tax return preparer. Comments on this matter are requested by April 19, 2021.

General Summary

The notice plays a dual role: it seeks to gauge the necessity and efficacy of current regulations and to minimize any undue load on businesses or other profit-driven establishments that need to comply with these requirements. Current regulations require business entities to maintain confidentiality of tax information while also stipulating certain conditions under which such information can be disclosed. The document highlights the IRS’s intention to prolong existing information collection practices and invites public feedback on improving these directives for the IRS’s future operations.

Significant Issues or Concerns

The document, however, presents a few significant concerns. Firstly, while it mentions 'quality or peer reviews,' it does not define these terms. This lack of specificity might lead to confusion or misinterpretation about how the regulations are applied.

Secondly, the method for submitting comments is restricted to mailing an address, while neglecting more accessible mediums such as online portals. This omission could be seen as a barrier for some individuals or groups wishing to participate in this crucial feedback process.

Another noteworthy concern is the lack of detailed information on how the estimated burden of 250,000 annual hours is calculated for respondents. This absence leaves room for questioning whether the figures provided accurately reflect the actual time and resources required.

Moreover, the notice doesn’t provide past data or results related to these regulations, making it difficult for stakeholders to evaluate the efficacy and practical utility of the information collection process.

Lastly, although the document acknowledges the need to reduce respondent burden through potential technological solutions, it does not clarify whether the IRS has considered or implemented any advanced techniques to achieve this reduction.

Impact on the Public

For the general public, especially businesses affected by these regulations, the impact is twofold. On the positive side, the IRS’s open call for comments offers a democratic means to voice concerns or suggest improvements, which can lead to more efficient and streamlined processes. However, without clear definitions and accessible options for participation, the process may seem daunting, thus limiting participation.

Impact on Specific Stakeholders

For specific stakeholders such as tax professionals and businesses, this document is particularly pertinent. The current regulations have direct implications for how they manage sensitive tax return information, and any changes could affect operational protocols. While engaging them in this feedback phase is critical, the lack of accessible submission methods may disproportionately affect smaller entities with fewer resources. Additionally, without clarity on regulatory specifics, these entities could face challenges in compliance, which the document seeks to discuss and potentially address.

In conclusion, the IRS's notice underscores the importance of ongoing dialogue to refine information collection methods while also exposing areas that require further alignment with the needs of the public. Engaging stakeholders effectively will hinge on clearer communication, detailed guidelines, and inclusive participation strategies.