Internet research saved by the IRS becomes protected return information

Plain-English summary

Chief Counsel advised that an IRS employee may search the internet for information without creating a disclosure concern. Once the employee collects information about a property and saves it in a taxpayer's file, however, the IRS's copy becomes confidential return information. Section 6103(b)(2)(A) covers data received, recorded, prepared, furnished, or collected by the IRS in connection with a return or the determination of a person's possible tax liability. The advice therefore distinguishes the public act of searching from the protected status of the information after the IRS gathers and retains it for a tax matter.

Ruling snapshot

• Question: Does internet research create a disclosure problem, and is the information protected after the IRS saves it in a taxpayer's file?
• Outcome: advice given
• Key authorities: IRC § 6103(b)(2)(A)

Full text (IRS public release)

 ID:       CCA_2024032009214248                [Third Party Communication:

 UILC:     6103.02-02                          Date of Communication: Month DD, YYYY]

Number: 202417019
Release Date: 4/26/2024
From: ----------------------
Sent: Wednesday, March 20, 2024 9:21:42 AM
To: -----------------------
Cc: ----------------------
Bcc:
Subject: RE: Disclosure


Hi ----------:

Thank you for the question. Searching for this type of information on the internet does
not present any disclosure concerns.

That said, the information that you gather becomes confidential return information in the
Service’s hands because it is data “received by, recorded by, prepared by, furnished to,
or collected by the Secretary with respect to a return or with respect to the
determination of the existence, or possible existence, of liability (or the amount thereof)
of any person under this title for any tax, penalty, interest, fine, forfeiture, or other
imposition, or offense.” IRC 6103(b)(2)(A). So if you find information about a property
and save it in the taxpayer’s file, the Service’s copy of the information is protected as
return information.

Hope that helps. Please let me know if you have any questions.