March 23, 2006

DEMOCRATS FIGHTING TO PROTECT TAXPAYER PRIVACY

Washington, DC — Senate Democratic Leader Harry Reid today sent the following letter to Treasury Secretary John Snow about proposed new changes that would weaken the confidentiality of taxpayer information and make it easier for tax preparers to sell it to third parties. Democrats believe taxpayer privacy should be protected, not sold out by the IRS.

March 23, 2006

The Honorable John W. Snow

Department of the Treasury

1500 Pennsylvania Avenue

Washington, D.C. 20220

Dear Secretary Snow:

I am writing to express my deep concern with changes proposed by the Internal Revenue Service (IRS) that will weaken current restrictions on the disclosure of taxpayer information. One such change would allow return preparers to disclose, with taxpayer consent, tax return information to third party businesses. The changes proposed by the IRS were initially announced in December, and the IRS will hold a public hearing on these changes on April 4.

The confidentiality of taxpayer information is crucial to maintaining the integrity of our voluntary income tax system. If taxpayers believe that their confidential financial information could be disclosed to third parties, it will undermine our tax system. I am unconvinced that the requirement that return preparers receive consent from the taxpayer before disclosing such information provides sufficient protection for taxpayers.

The new rules loosening the restrictions on disclosing taxpayer information proposed by the IRS should be withdrawn. To the extent that changes to the current rules are needed that enhance taxpayer protections, I would be happy to work with your office to get them enacted.

Sincerely yours,

Harry Reid

Democratic Leader

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