Current through Register Vol. 41, No. 3, September 23, 2024
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.
Statutory Authority
§§ 58.1-3 and 58.1-203 of the Code of Virginia.
