IRS training may not use unreleased real case examples

Plain-English summary

Chief Counsel advised that IRS training should not use real case examples or legal opinions from real cases unless the taxpayer consented or the material had already been released publicly. Removing names and other identifiers may not be enough because the remaining facts can still be return information under IRC § 6103(b)(2). The advice also explains that the employee-needs-to-know exception in IRC § 6103(h)(1) permits disclosure to an IRS employee for official tax administration duties, but training is not part of those duties in the circumstances described.

Ruling snapshot

• Question: May unreleased real case examples or legal opinions be used in IRS training after taxpayer names and other identifiers are removed?
• Outcome: Advice given.
• Key authorities: IRC §§ 6103(b)(2) and 6103(h)(1)

Full text (IRS public release)

ID: CCA_2010123015401519 Number: 201104044
Release Date: 1/28/2011
Office: -----------
UILC: 6103.00-00

From: ----------------------
Sent: Thursday, December 30, 2010 3:40:16 PM
To: -----------------
Cc: ----------------
Subject: Training and section 6103

After consulting with the disclosure experts in Counsel, I have confirmed that you should not be using real case examples (unless you have obtained the taxpayer's consent) or legal opinions secured in real cases (unless the opinion has already been released to the public) as part of your ------ training because even if the names of the taxpayers are removed from the example or the opinion, the documents will still likely contain taxpayer information and thus would generally be prohibited from disclosure. Under IRC § 6103(b)(2), 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 example or opinion, the facts of the case that remain likely still constitute "return information." Under IRC § 6103(h)(1), taxpayer information may be released to an IRS employee if the employee needs to know the information in order to perform the employee's official tax administration duties. Training, however, is not part of the employee's official duties. Thus, it cannot be disclosed to the class under this exception. If you have questions, please feel free to contact me.