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Regulation 7216 Policies


									Regulation 7216 Policies & Procedures

Background on Regulation

Section 7216 has been on the books since 1971, when Congress imposed criminal penalties on tax
return preparers who disclosed or used tax return information without authorization. The IRS has
recently modified the regulations under Sec. 7216 with the goal of better protecting taxpayers’ tax
return information, particularly in today’s technologically advanced business environment where
electronic theft and security data breaches are all too common.

The updated regulations generally prohibit “tax return preparers” from disclosing or using clients’ “tax
return information” (which includes name, addresses, and email addresses) for purposes other than tax
return preparation without taxpayers’ knowing, informed and voluntary consent.

Our Process – Existing Clients

    1) Run a report of all of our tax return only (TRO) clients– individuals and businesses. In cases
       where the owner(s) of a firm are also individual clients, we would still send mailings, etc. to the
       owners at the business address and no information will be sent to the owners at their home
       address (unless we receive a signed consent form back).

    2) Marketing will mark the TRO clients as “Do not solicit” in DATABASE, which means that they will
       no longer receive any mailings or emails from us.

    3) Marketing will continue our existing process and content with all or our newsletters (i.e. Profit
       Margins will continue to have articles from affiliated companies).

    4) Marketing will send a cover letter from the engagement partner and two consent forms to our
       TRO clients with business reply envelopes going to MARKETING ASSISTANT’S attention. The
       consent letters will include verbiage that their signature/consent is for the duration of time that
       they are a client of FIRM. We will not send a consent form to children; they will remain marked
       as “Do not solicit” in our database.

    5) Marketing will use this list to create a tracking list of whether or not we received their signed
       consent forms back.

    6) Once the consent forms are received back, MARKETING ASSISTANT will remove the “Do not
       solicit” from our database and update the tracking list to show the forms have been received.
       The original letters will be scanned and stored in DATABASE(S).

    7) When the tax return is ready, and the assistant contacts the client, they will first check to see if
       we have received their signed consent forms by looking on the tracking list. If we have not
       received the forms back, the assistant will ask the client if they received the form and ask if they
       are planning to sign or not. If they respond they have not received, the assistant will resend the
       forms. Once the tax return is delivered, we are prohibited from asking about the consent forms
       until the next tax engagement (e.g., mid-year tax planning).
Disclosure to Unrelated Third Parties

   1) In situations where a tax client requests their tax return information be disclosed to an
      unrelated third party (e.g., attorney, banker, etc.) either a separate disclosure form will be sent
      to the taxpayer or the tax return information will be sent directly to the taxpayer.

Our Process –New Tax Only Clients

   1) Instead of sending out a welcome letter, they will receive a revised letter which will also include
      the consent forms.
   2) The new client name will be added to the tracking log by MARKETING ASSISTANT and they will
      be marked as “Do not solicit” in DATABASE.
   3) The same procedures as outline above will be followed regarding the tracking and handling of
      the consent forms.

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