Confidentiality and Disclosure of Returns and Return Information

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224
January 27, 1999
DL-120406-98
UILC: 6103.00-00
Number: 199912032
Release Date: 3/26/1999
INTERNAL REVENUE SERVICE NATIONAL OFFICE CHIEF COUNSEL ADVICE
MEMORANDUM FOR ISP SHIPPING COORDINATOR
FROM: David L. Fish
Chief, Branch 4 (Disclosure Litigation) CC:EL:D
SUBJECT: MARAD Reporting Requirement
This document is not to be cited as precedent.

CONCLUSION: The IRS may disclose to MARAD the fact of examination of certain taxpayers under I.R.C. § 6103(k)(6) in order to obtain the contract ceiling amounts or other discrete items of information necessary in determining the taxpayer’s tax liability, if the IRS cannot obtain this information from the taxpayers directly. To the 2 DL-120406-98 1 Treas. Reg. § 301.6103(k)(6)-1(a) specifically states Disclosure of taxpayer identity information to a person other than the taxpayer to whom such taxpayer identity information relates or such taxpayer’s legal representative for the purpose of obtaining such necessary information or otherwise properly accomplishing such activities as authorized by this paragraph should be made, however, only if the necessary information cannot, under the facts and circumstances of the particular case, otherwise reasonably be obtained in accurate and sufficiently probative form, or in a timely manner, and without impairing the proper performance of the official duties, or if such activities cannot otherwise properly be accomplished without making such disclosure. extent a dialogue with MARAD is sought, or MARAD needs information from the IRS to perform its statutory duties, the consent of the taxpayer under I.R.C.
§ 6103(c) should be obtained.
LAW AND ANALYSIS: In order to authorize disclosure to MARAD, the IRS must meet the requirements under section 6103(k)(6), which states that internal revenue officers and employees may disclose return information to the extent that such disclosure is necessary in obtaining information which is not otherwise reasonably available for certain tax administration activities, including examinations. The IRS may make such disclosures to MARAD provided that the IRS cannot obtain the contract ceiling information from the taxpayer directly. Treas. Reg.
§ 301.6103(k)(6)-1(a).1 Furthermore, under section 6103(k)(6), the IRS may only disclose to MARAD that information which the IRS needs to obtain the information sought (i.e., identity and the fact of examination of the taxpayer).
However, the disclosure authority under section 6103 (k)(6), as described above, does not extend to the IRS reporting to MARAD the adjustments made to the taxpayers’ tax return information, or other information that is not necessary for the IRS to obtain information. If a dialogue is sought, or MARAD seeks to obtain the resulting IRS adjustments to offset the taxpayer’s capital account or perform other statutory responsibilities, MARAD must obtain a section is 6103(c) consent from the taxpayers: Form 8821 (“Tax Information Authorization”) is suitable for this purpose.
Section 3417of the IRS Restructuring and Reform Act (Pub. L. No. 105-206, 112
Stat. 685, 757(1998)), notice of IRS contact of third parties, may apply to the IRS’ communication with MARAD under the section 6103(k)(6) disclosure scenario. You should contact District Counsel or the Assistant Chief Counsel (General Litigation) for advice on this issue. Additionally, any further disclosure questions should be directed to your local disclosure office.
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DL-120406-98
If you have any further questions, please call 202-622-4570. cc: Disclosure Office
South Florida District
Assistant Chief Counsel (General Litigation)