23VAC10-20-10 — Secrecy of information; penalty

# A.

Generally. Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for the Tax Commissioner or any agent, clerk, commissioner of the revenue, treasurer, or any other state or local tax or revenue officer, employee, or any former officer or employee of any of the aforementioned offices to divulge any information acquired by him or her in respect to the transactions, property, income, or business of any person, firm, or corporation while in the performance of his or her public duties. Such prohibition extends to, but is not limited to, any copy of a federal return or federal return information required by Virginia law to be attached to or included in the Virginia return. Any person violating the provisions of this section shall be guilty of a Class 2 misdemeanor.

# B.

Exceptions.

1. The prohibition does not extend to any matter required by law to be entered on any public assessment roll or book.

2. The prohibition does not extend to any act performed or words spoken or published in the line of duty under the law. This includes communications required in the performance of duty to any person or persons authorized to receive such information.

3. The prohibition does not extend to inquiries and investigations to obtain information as to the process of real estate assessments by a duly constituted committee of the General Assembly, or when such inquiry or investigation is relevant to its study, provided that any such information obtained shall be privileged.

4. The prohibition does not extend to the sales price, date of construction, physical dimensions or characteristics of real property, or to any information required for building permits.

5. The prohibition does not extend to the publication of statistics so classified as to prevent the identification of particular reports or returns.

6. The prohibition does not extend to the publication of delinquent lists showing names of taxpayers who failed to timely pay their taxes, together with any relevant information which in the opinion of the Department of Taxation may assist in the collection of such delinquent taxes.

7. The prohibition does not extend to a local tax official for disclosing whether or not a person, firm or corporation is licensed to do business in that locality.

8. The Tax Commissioner is authorized to divulge or cause to be divulged tax information to any Commissioner of the Revenue, Director of Finance or other similar collector of county, city or town taxes who, for the performance of his or her official duties, requests the same in writing setting forth the reasons for the request.

9. The Tax Commissioner is authorized to enter into written agreements with duly constituted tax officials of other states and the United States for the inspection of tax returns, the making of audits, and the exchange of information relating to any tax administered by the Department of Taxation.

10. The Tax Commissioner is authorized to supply the State Department of Social Services with all information on hand relative to the location, income and property of responsible persons who have abandoned or deserted, or are failing to support, children and their caretakers receiving public assistance and in the prosecution of welfare fraud.

11. The Tax Commissioner is authorized to exchange information with claimant agencies participating in the Set-off Debt Collection program under Va. Code § 58.1-533.

12. The Tax Commissioner is authorized to comply with a subpoena or other judicial order requiring production of confidential tax returns under Va. Code § 58.1-109.

# C.

Other disclosures. Confidential tax information may be given to the following persons:

1. Individual taxpayers. Return information may be given to the individual taxpayer, a third person in the presence of the taxpayer, or to the spouse of the taxpayer if the return information relates to a joint or combined return with such spouse.

2. Corporate taxpayers. Return information may be given to:

a. the president of the corporation,

b. an officer or employee of the corporation who is authorized to sign tax returns for the corporations upon presentation of satisfactory evidence of such authorization,

c. any person designated by the Board of Directors of the corporation to receive confidential tax information upon presentation of a certified extract from the minutes of the corporation indicating such authorization,

d. any person presenting a properly executed power of attorney.

3. Tax practitioners. An accountant, attorney, return preparer or other tax practitioner may not receive confidential tax information unless the taxpayer is present or has authorized disclosure to the tax practitioner in writing.

4. Partnership. Confidential tax information may be given to any person who was a member of the partnership during any part of the period covered by the return.

5. Estates and trusts. Confidential tax information may be given to the executor, administrator or trustee of the estate or trust. An heir at law or beneficiary under the will or trust agreement may be given confidential tax information if the heir or beneficiary has a financial interest which will be affected by the information.

# D.

Procedure. The department prefers that requests for disclosure of confidential tax information be made in writing and may refuse to make any disclosure until a written request is received. Copies of returns and other documents may only be requested in writing. Other information, such as account status, will be given to those who request it in person or over the telephone only after establishing their identity and right to receive the information. The Department may refuse to provide confidential tax information over the telephone or in person and instead mail the requested information to the taxpayer at the address shown on the return.

# E.

Written authorization and powers of attorney.

1. Any written authorization to disclose confidential tax information to a third party must contain the following:

a. Taxpayer's name and address,

b. Taxpayer's social security or other I.D. number,

c. Third party's name,

d. Tax type, taxable period and return involved,

e. Sufficient facts to enable the department to determine the nature and extent of the disclosure authorized.

f. Taxpayer's signature and date signed.

2. Any ambiguity in the authorization will be resolved against disclosure. However, where there is a direct relationship between information authorized to be disclosed and other information the department may disclose such other information. For example, if the department has received authorization to disclose information from an income tax return which claims a net operating loss deduction, the return for the year of the loss would be considered directly related to the return which claims a net operating loss deduction and may be disclosed if sufficient justification is shown.

3. The department and the Internal Revenue Service have both provided Power of Attorney forms for the convenience of taxpayers. An IRS power of attorney form authorizing disclosure of federal income or estate tax information will also authorize disclosure of the corresponding Virginia income or estate tax information.

4. A taxpayer may grant power of attorney to a person for reasons unrelated to tax returns, for example, to close a real estate transaction or handle financial matters while the taxpayer is traveling. Such a power of attorney will not be accepted by the department unless it clearly authorizes the disclosure of confidential tax information.