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JCT Reports on IRS Return Disclosure Data for 2014

JUN. 5, 2015

JCX-89-15

DATED JUN. 5, 2015
DOCUMENT ATTRIBUTES
Citations: JCX-89-15

 

Prepared by the

 

INTERNAL REVENUE SERVICE

 

 

Published by the Staff

 

of the

 

JOINT COMMITTEE ON TAXATION

 

 

June 5, 2015

 

JCX-89-15

 

 

INTRODUCTION

 

 

Section 6103(p)(3)(C) of the Internal Revenue Code provides that the Secretary of the Treasury shall, within 90 days after the close of each calendar year, furnish to the Joint Committee on Taxation for disclosure to the public a report which provides, with respect to each Federal agency and certain other entities, the number of: (1) requests for disclosure of returns and return information (as such terms are defined in section 6103(b)); (2) instances in which returns and return information were disclosed pursuant to such requests or otherwise; and (3) taxpayers whose returns, or return information with respect to whom, were disclosed pursuant to such requests.1 In addition, the report must describe the general purposes for which such requests were made.

Pursuant to section 6103(p)(3)(C), the Internal Revenue Service ("IRS") prepared a disclosure report for public inspection covering calendar year 2014. The IRS also provided certain supplemental and corrected information regarding the IRS disclosure reports for calendar years 2012 and 2013.2

This document sets forth the report of the Internal Revenue Service, verbatim.3

 

Disclosure Report for Public Inspection

 

Pursuant to 26 USC Section 6103(p)(3)(C)

 

 

Internal Revenue Service

 

 

Calendar Year 2014

 

 

    Calendar Year 2014 Volume of Disclosures of Tax Returns and/or

 

       Return Information Required to be Accounted for Pursuant

 

                    to 26 U.S.C. sec. 6103(p)(3)(A)

 

 _____________________________________________________________________

 

 

                                      IRC Section        Bulk Master

 

                                      6103               File Data

 

 Disclosure To/For                    Subsection         (see note 1)

 

 _____________________________________________________________________

 

 

 Tax Checks                            (c)

 

 

 States                                (d)              7,750,742,634

 

 

 Congressional Committees              (f)                 64,569,982

 

 

 GEO, as Agent to Congressional        (f)                 87,981,982

 

 Committees

 

 

 President and Head of Agencies        (g)                          0

 

 

 Department of Justice                 (1)(2)                       0

 

 

 US Attorneys                          (i)(1)                       0

 

 

 US Attorneys                          (i)(2)                       0

 

 

 FBI                                   (i)(3)(A)                    0

 

 

 FBI                                   (i)(3)(B)                    0

 

 

 Other                                 (i)(3)(C)                    0

 

 

 Other                                 (i)(7)(A)                    0

 

 

 Other                                 (i)(7)(B)                    0

 

 

 US Attorneys                          (i)(7)(C)                    0

 

 

 Government Accountability             (i)(8)                       0

 

 Office

 

 

 Bureau of Census                      (j)(1)(A)        1,430,813,024

 

 

 Bureau of Economic Analysis

 

 (Note 5)                              (j)(1)(B)                    0

 

 

 Office of Economic Policy             (j)(3)                       0

 

 

 Department of Agriculture             (j)(5)               1,880,970

 

 

 Congressional Budget Office           (j)(6)                       0

 

 

 Foreign Countries                     (k)(4)               1,124,324

 

 Tax Treaty Authority (Note 6)

 

 

 Bureau of Prisons (Federal and        (k)(10)                      0

 

 State)

 

 

 Department of Labor                   (l)(2)                       0

 

 

 Pension Benefit Guaranty

 

 Corporation

 

 

 Federal Agencies                      (l)(3)                       0

 

 

 Department of Treasury                (l)(4)(A)                    0

 

 Employees

 

 

 Child Support Enforcement             (l)(6)              28,386,563

 

 Agencies

 

 

 Medicare Premium Subsidy              (l)(20)              8,638,932

 

 Adjustment (Note 7)

 

 

 Affordable Care Act                   (1)(21)             55,765,781

 

 

 States IRC Section 6104(c)                                         0

 

 

 TOTALS                                                 9,429,904,192

 

 _____________________________________________________________________

 

 

                           [table continued]

 

 _____________________________________________________________________

 

 

                                                         Total

 

                                     Other               Number of

 

                                     Disclosures         Disclosures

 

 Disclosure To/For                   (see note 2)        (see note 3)

 

 _____________________________________________________________________

 

 

 Tax Checks                               10,429               10,429

 

 

 States                               148,411,197       7,899,153,831

 

 

 Congressional Committees                       0          64,569,982

 

 

 GEO, as Agent to Congressional                 0          87,981,982

 

 Committees

 

 

 President and Head of Agencies                 0                   0

 

 

 Department of Justice                          0                   0

 

 

 US Attorneys                              26,421              26,421

 

 

 US Attorneys                                 112                 112

 

 

 FBI                                            1                   1

 

 

 FBI                                            8                   8

 

 

 Other                                          0                   0

 

 

 Other                                          0                   0

 

 

 Other                                          0                   0

 

 

 US Attorneys                                   0                   0

 

 

 Government Accountability                  2,162               2,162

 

 Office

 

 

 Bureau of Census                       2,662,110       1,433,475,134

 

 

 Bureau of Economic Analysis

 

 (Note 5)                                     374                 374

 

 

 Office of Economic Policy              4,808,733           4,808,733

 

 

 Department of Agriculture                                  1,880,970

 

 

 Congressional Budget Office                    0                   0

 

 

 Foreign Countries                          2,557           1,126,881

 

 Tax Treaty Authority (Note 6)

 

 

 Bureau of Prisons (Federal and                 0                   0

 

 State)

 

 

 Department of Labor                        1,885               1,885

 

 

 Pension Benefit Guaranty

 

 Corporation

 

 

 Federal Agencies                               0                   0

 

 

 Department of Treasury                        57                  57

 

 Employees

 

 

 Child Support Enforcement                      0          28,386,563

 

 Agencies

 

 

 Medicare Premium Subsidy                       0           8,638,932

 

 Adjustment (Note 7)

 

 

 Affordable Care Act                            0          55,765,781

 

 

 States IRC Section 6104(c)                29,263              29,263

 

 

 TOTALS                               155,955,309       9,585,859,501

 

 _____________________________________________________________________

 

 

Reference Notes:

(1) Bulk Master File Data -- Disclosures are generated when an agency receives data from a database extract of taxpayer information. Each extract contains different data elements of a taxpayer's account information based on the nature and purpose of the specific extract. A block of data elements on one taxpayer for one year or period constitutes one record and is counted as one disclosure. In order to properly track any disclosure, the taxpayer's identity information (taxpayer's name, identification number and/or address) is included in every extract record. Other data specific to that extract is included in the record depending on the extract. Each record, regardless of amount of data elements constitutes one disclosure. Examples of varying data elements within a record include, for example; specific line items (or unique combinations of line items) from a tax return; account transactions (payments, assessments, refunds, adjustments); math and audit adjustments; filing dates and other filing activities such as extensions, filing status and exemptions. Each tax year or period disclosed for each record is counted as one disclosure.

(2) Other Disclosures -- Disclosures that are not bulk/extract disclosures also vary depending on what is included in the record. Disclosures are made when the IRS releases transcripts of accounts, permits inspection of or furnishes photocopies of records, makes oral or written disclosures, and any disclosure by means of correspondence without furnishing a copy of the record. Also included are disclosures from locally automated files. Examples include copies of examination or collection administrative files. When some or all of the contents of an administrative file are disclosed, the IRS counts the number of disclosures based on the number of taxpayers and tax years or periods contained within that file.

(3) Disclosure Counts -- The number of disclosures of tax information depends on the type of record disclosed and what constitutes a record subject to disclosure accounting. Generally, when some part of one taxpayer's record is disclosed for one year or period, the IRS counts that as one disclosure. For example, if a return transcript is disclosed to a state tax agency, the IRS counts one disclosure for every tax year each time a transcript is disclosed. If the agency receives a transcript for two tax years, that is counted as two disclosures. If the agency receives three different transcripts for the same taxpayer and tax year, which is counted as three disclosures since each transcript is a separate record.

(4) United States Attorneys -- Disclosures pursuant to an Ex Parte Court Order under IRC Section 6103(i)(1) are generally made to the Department of Justice, U.S. Attorney's Office (USAO). In prior years, the majority of disclosures were to the USAO. When directed by the Ex Parte Order and in coordination with the USAO instructions, the IRS disclosed in a small number of cases, return information directly to the named law enforcement employees of the Drug Enforcement Agency (DEA), Federal Bureau of Investigation (FBI), and other agencies (Other). The small numbers of disclosures directly to those agencies are still coordinated with the USAO. Employees of these law enforcement agencies conduct the non-tax criminal investigations, assist the USAO in the Ex Parte application process and use the return information obtained to further those investigations. There was no change to the total number of disclosures in prior years. To simplify the 2014 report, we combined all Ex Parte disclosures into one line item.

(5) See Prior Year Corrections, below.

(6) Foreign Tax Treaty Disclosures -- The total number of disclosures are from two sources: 2,557 -- Disclosures of taxpayer-specific returns or return information made to a competent authority of a foreign government with which the United States has an income tax convention or other bilateral agreement relating to the exchange of tax information with the United States. 1,124,324 -- Disclosures relating to automatic exchanges of information by the United States to a competent authority of a foreign government with which the United States has an income tax convention or other bilateral agreement relating to exchange of information with the United States. Such exchanges consist of fixed, determinable, annual or periodical (FDAP) income data pertaining to taxpayers reporting residence in a foreign jurisdiction. The data exchanged are drawn from the information reported to the IRS annually by withholding agents on Form 1042-S (Foreign Person's U.S. Source of Income Subject to Withholding). Automatic exchanges were paused in 2013 to update the processes the IRS employs to assess whether U.S. exchange partners have the appropriate legal framework and infrastructure to safeguard the information exchanged, and implement these new processes.

Prior Year Corrections:

(5) Bureau of Economic Analysis (BEA) (Department of Commerce) -- Disclosures were overstated in prior years. The error resulted from a misunderstanding of the disclosures made to the BEA for two different purposes.

 Disclosures to BEA           CY 2012                     CY 2013

 

 _____________________________________________________________________

 

 

 Reported                   107,009,753                 28,552,289

 

 Corrected                          411                        343

 

 

The corrected disclosures are for corporate return information pursuant to IRC Section 6103(j)(1)(B) and subject to this accounting. The corrected disclosures align with the disclosures made in 2014. The overstated disclosures were to the BEA, but in their capacity as a contractor to the Statistics of Income function of IRS. Disclosures to a contractor under IRC Section 6103(n) are not subject to accounting.

(7) Social Security Administration (SSA) Medicare Premium Subsidy Adjustment under IRS Section 6103(1)(20): Disclosures were overstated in prior years. The error resulted from a misunderstanding of the actual disclosures made.

 Disclosures to BEA           CY 2012                     CY 2013

 

 _____________________________________________________________________

 

 

 Reported                   39,798,632                  41,466.018

 

 Corrected                   6,052,330                   6,366.635

 

 

SSA sends to the IRS a record of all taxpayers who receive Medicare benefits and the income threshold over which they do not qualify for a Medicare subsidy. IRS researches the Master File and discloses specific return information only for those taxpayers exceeding the criteria. IRS also returns the remaining list of taxpayers to SSA without explanation. In prior years, we thought returning the entire list to SSA was a disclosure because the IRS accessed the Master File database using that list. Any disclosure of return information, even the absence of something, such as a fact of non-filing, constitutes a disclosure.

The extract containing taxpayer information constitutes a disclosure under IRC Section 6103(1)(20). Returning the remaining taxpayer list to SSA does not. This second list did not contain any explanation for why taxpayers did not exceed SSA's subsidy criteria. In fact, the list was an unspecified combination of data that includes --

  • Taxpayers whose income did not exceed the threshold

  • Taxpayers for whom there were no returns filed

  • The data SSA provided did not match our records (SSN/Name mismatch). There was no disclosure, since there was no 'making known' to SSA of anything more than what SSA already provided the IRS.

Public Report on Disclosures

 

 

           Explanation of Internal Revenue Code Section 6103

 

 _____________________________________________________________________

 

 

 IRC Section 6103               Subsection Purpose of Disclosure

 

 _____________________________________________________________________

 

 

     (c)               Disclosure of returns and return information to

 

                       the designee of the taxpayer.

 

 

     (d)               Disclosure of returns and return information to

 

                       State tax officials having responsibility for

 

                       administering State tax law.

 

 

     (f)               Disclosure of returns and return information to

 

                       Committees of Congress or their agents

 

                       (including Government Accountability Office

 

                       (GAO)) and the Joint Committee on Taxation

 

                       (JCT)).

 

 

     (g)               Disclosure of returns and return information of

 

                       any taxpayer by request of the President, or

 

                       for return information of taxpayers considered

 

                       for appointment to the executive or judicial

 

                       branches by the President or head of any

 

                       Federal agency.

 

 

     (h)(2)            Disclosure of returns and return information to

 

                       the Department of Justice in a tax

 

                       administrative manner for use in, or preparing

 

                       for, any proceeding or investigation before a

 

                       Federal Grand Jury, Federal or State court,

 

                       pursuant to a written request by the Attorney

 

                       General, Deputy or Assistant Attorney General.

 

 

     (i)(1)            Disclosure of returns or return information to

 

                       Federal officers or employees upon the grant of

 

                       an ex parte order by a Federal district court

 

                       judge or magistrate for use in Federal non-tax

 

                       criminal investigations.

 

 

     (i)(2)            Disclosure of return information, other than

 

                       taxpayer return information, to Federal

 

                       officers or employees for use in Federal

 

                       non-tax criminal investigations, upon request

 

                       by the head of the agency or Inspector General

 

                       thereof (or designated officials of the

 

                       Department of Justice).

 

 

     (i)(3)(A)         Disclosure of return information other than

 

                       taxpayer return information, to apprise

 

                       appropriate Federal officials of potential

 

                       violations of Federal criminal law.

 

 

     (i)(3)(B)         Disclosure of return information in situations

 

                       involving the imminent threat of death or

 

                       physical injury to any individual. Disclosure

 

                       is made to Federal or State law enforcement.

 

                       Also includes disclosure to Federal law

 

                       enforcement in situations involving flight from

 

                       Federal prosecution.

 

 

     (i)(3)(C)         Disclosure of return information other than

 

                       taxpayer return information in situations that

 

                       may be related to a terrorist incident, threat,

 

                       or activity.

 

 

     (i)(7)(A)         Disclosure of return information other than

 

                       taxpayer return information to officers and

 

                       employees of any Federal law enforcement agency

 

                       personally and directly engaged in the response

 

                       to or investigation of any terrorist incident,

 

                       threat, or activity.

 

 

     (i)(7)(B)         Disclosure of return information, other than

 

                       taxpayer return information, to Federal

 

                       agencies engaged in the collection or analysis

 

                       of intelligence and counterintelligence

 

                       information or investigation concerning any

 

                       terrorist incident, threat, or activity upon

 

                       receipt of a valid written request by the

 

                       Secretary.

 

 

     (i)(7)(C)         Disclosure of return or return information to a

 

                       Federal law enforcement or Federal intelligence

 

                       agency engaged in any investigation, response

 

                       to, or analysis of information concerning a

 

                       terrorist incident, threat, or activity upon

 

                       grant of an ex parte court order by a Federal

 

                       district court judge or magistrate.

 

 

     (i)(8)            Return and return information is open to

 

                       inspection by the Government Accountability

 

                       Office for purposes of auditing, among others,

 

                       the Internal Revenue Service.

 

 

     (j)(l)(A)         Disclosure of returns, or return information

 

                       reflected thereon, to the Bureau of the Census

 

                       in activities allowed by law.

 

 

     (j)(l)(B)         Disclosure of return information reflected on

 

                       returns of corporations to the Department of

 

                       Commerce for statistical use by the Bureau of

 

                       Economic Analysis in activities allowed by law.

 

 

     (j)(3)            Disclosure of Social Security data extracts of

 

                       individual Social Security earnings and

 

                       benefits for use in preparing economic or

 

                       financial forecasts, projections, analyses, and

 

                       statistical studies.

 

 

     (j)(5)            Disclosure of returns, or return information

 

                       reflected thereon, to the Department of

 

                       Agriculture for structuring, preparing, and

 

                       conducting the Census of Agriculture as allowed

 

                       by law.

 

 

     (j)(6)            Disclosure of return information to the

 

                       Congressional Budget Office for long-term

 

                       modeling of the Social Security and Medicare

 

                       programs.

 

 

     (k)(4)            Disclosure of returns or return information to

 

                       the competent authority of a foreign government

 

                       that has a tax convention or bilateral

 

                       information exchange agreement with the United

 

                       States.

 

 

     (k)(10)           Disclosure of returns or return information to

 

                       the Federal Bureau of Prisons or any State

 

                       agency charged with administration of state

 

                       prisons to the extent the IRS determines an

 

                       incarcerated individual filed or facilitated in

 

                       filing a false return.

 

 

     (l)(2)            Disclosure of returns and return information to

 

                       the Department of Labor and Pension Benefit

 

                       Guaranty Corporation for administration of

 

                       Titles I and IV of the Employee Retirement

 

                       Income Security Act of 1974.

 

 

     (l)(3)            Disclosure of tax delinquent account indicator

 

                       to Federal agencies to determine credit

 

                       worthiness of a Federal loan applicant.

 

 

     (l)(4)(A)         Disclosure of returns and return information

 

                       for the use in personnel or claimant

 

                       representative matters by employees of the

 

                       Department of the Treasury or practitioners who

 

                       are the subject of such matters, or their

 

                       representatives.

 

 

     (l)(6)            Disclosure of return information to Federal,

 

                       State, and local child support enforcement

 

                       agencies for use in establishing and collecting

 

                       child support obligations from and locating

 

                       individuals owing such obligations.

 

 

     (l)(20)           Disclosure of return information to the

 

                       Commissioner of Social Security for use in

 

                       establishing the appropriate amount of any

 

                       Medicare part B premium adjustment under

 

                       section 1839 of the Social Security Act.

 

 

     (1)(21)           Disclosure of return information to the

 

                       Secretary of Health and Human Services for use

 

                       in determining any premium tax credit,

 

                       cost-sharing reduction, eligibility for

 

                       participation in a State's Medicaid program, a

 

                       State's children's health insurance, or a basic

 

                       health program covered by the Patient

 

                       Protection and Affordable Care Act.

 

 

 IRC Section 6104(c)   Disclosure of certain information pertaining to

 

                       charitable organizations to appropriate state

 

                       officers.

 

FOOTNOTES

 

 

1 Unless otherwise stated, all section references are to the Internal Revenue Code of 1986, as amended.

2 For the IRS report for calendar year 2012, see Joint Committee on Taxation, Disclosure Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 2012 (JCX-8-13), April 15,2013. For the IRS report for calendar year 2013, see Joint Committee on Taxation, Disclosure Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 2013 (JCX-52-14), May 22, 2014.

3 This document may be cited as follows: Joint Committee on Taxation, Disclosure Report for Public Inspection Pursuant to Internal Revenue Code Section 6103(p)(3)(C) for Calendar Year 2015 (JCX-89-15), June 5,2015. This document is also available on the Joint Committee on Taxation website at www.jct.gov.

 

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