The IRS has information-sharing agreements in place with numerous state and local governmental agencies. Under IRC section 6103(d), the IRS is authorized to share information about the payment of federal taxes with state and local tax authorities in order to help those agencies collect their own taxes more effectively. Information shared can include information submitted in individual and business filings, audit results, and employment tax data.
As reported by Forbes, Tax Analysts has received over 1,200 pages of documents from the IRS in response to a Freedom Of Information Act request. This request was originally filed in order to examine how many state and local tax entities were participating in the tax information sharing program with the IRS and what type of agencies were receiving information from the IRS.
What’s interesting is that initial research into the information provided by the IRS shows that information sharing is not limited to just tax-specific entities like state departments of revenue— it includes some state attorney general’s offices as well as departments of transportation and labor. Many questions about the IRS’s information-sharing agreements remain unanswered. Tax Analysts have pledged to continue to examine the data provided by the IRS to uncover information such as what type of tax data is shared with certain agencies and how that sensitive information is stored once it has been dispersed. We’ll provide updates as more information comes forward about the scope and nature of these tax information sharing agreements.