Section 7216
Section 7216 of the tax code bars preparers from sharing client return information, or using it for another purpose, without consent or legal permission.
Updated · Sources
Penalties for improper disclosure or use
- $250
- is the civil penalty for each improper disclosure or use, under IRC 6713.
- $10,000
- is the most that civil penalty can reach in a calendar year.
- 1 year
- in prison, a $1,000 fine, or both, is the most a knowing or reckless violation can bring.
Disclosures tied to identity theft carry higher limits. The fine can reach $100,000, and the civil penalty is $1,000 per disclosure, up to $50,000 a year.
Section 7216 reaches anyone in the business of preparing income tax returns. It also reaches businesses that provide services in connection with returns, such as tax software developers and e-file providers. It covers anyone paid to prepare a return, even casually, and the employees who help. Tax return information means anything furnished for a return, even a name or an address, and what the preparer derives from it.
Some uses and disclosures need no consent. A preparer may use the information for the same client’s state and local returns. They may also disclose information under another provision of the Code or under a court order. The regulations add more exceptions, such as sharing inside a US firm to prepare the return. Anything else needs the client’s written consent first.
A valid consent is written, knowing and voluntary, and the client signs and dates it before any disclosure or use. It names the preparer, the client, the purpose, the recipients and the information. For a Form 1040 filer, a consent to use and a consent to disclose need separate documents. A consent with no stated duration lasts one year from signing.
A consent is void if the preparer makes its service depend on it. The one exception is a consent to share the return with another preparer who helps prepare it.
Sources
- 26 U.S.C. § 7216, Disclosure or use of information by preparers of returns
- 26 U.S.C. § 6713, Disclosure or use of information by preparers of returns (civil penalty)
- 26 C.F.R. § 301.7216-1, Penalty for disclosure or use of tax return information
- 26 C.F.R. § 301.7216-2, Permissible disclosures or uses without consent of the taxpayer
- 26 C.F.R. § 301.7216-3, Disclosure or use permitted only with the taxpayer’s consent
Reviewed and updated September 2026. General information, not advice for your situation.