Do not use one taxpayer's case as an example without consent

Plain-English summary

Chief Counsel advised against using one taxpayer's case as an example for training or in an annual report unless the taxpayer consented. The advice explained that return information under section 6103(b)(2) is broad and can include facts such as income sources, deductions, credits, and examination status, not only names or identification numbers. It stated that common facts from three or more technical advice memoranda could be combined into a sample, because the facts would not identify a particular taxpayer. If three or more memoranda do not share common facts, the advice recommended creating a hypothetical example.

Ruling snapshot

• Question: May taxpayer cases be used as examples in training or an annual report without taxpayer consent?
• Outcome: Advice given.
• Key authorities: IRC § 6103(b)(2); Publication 1075, page 39.

Full text (IRS public release)

ID:        CCA_2010011915351822                             Number: 201007058
                                                            Release Date: 2/19/2010
Office:  -----------
UILC:      6103.00-00


From: ---------------------
Sent: Tuesday, January 19, 2010 3:35:21 PM
To: -------------------
Cc: ----------------
Subject: disclosure issues with using TAOs as examples


Hi --------. Thanks for giving us an opportunity to weigh in here. The use of examples
has been the source of many questions in TAS, and we will give you the same advice
that we have consistently given to others in TAS over the last several years.

Unless you have obtained taxpayer consent, we advise against the use of any one
taxpayer's case as an example, whether it be an example for training purposes, or even
an example in the Annual Report to Congress. Please take a close look at IRC §
6103(b)(2), and you'll see that the definition of "return information" is very broad and
covers many different types of data furnished to or collected by the IRS. Besides a
taxpayer's name, address, or social security number, "return information" also includes
things like the source of a taxpayer's income, which deductions or credits the taxpayer
claimed on his/her return, and whether the taxpayer's return is under examination. So
while you may have removed some of the "return information" from each case, the facts
of the case that remain likely still constitute "return information."

If three or more TAOs present a common set of facts, you can use those common facts.
So if you had 3 TAOs involving a particular topic where the facts were common, you
could provide a sample TAO that uses those common facts. This is often referred to as
"the rule of 3" as set forth on page 39 of Publication 1075. By using common facts from
three or more cases, the idea is that you are giving statistical data in a form that cannot
be associated with, or otherwise identify, directly or indirectly, a particular taxpayer. If
there are not three or more TAOs with a common set of facts, you can create a
hypothetical set of facts to illustrate the same problem.

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Please let me know if you have any questions.
Thanks.