Could a local-government tax consultant disclose confidential sales-and-use-tax records to an outside attorney retained as an independent contractor?

Plain-English summary

California sales-and-use-tax information about retailers and other reporting persons was confidential. Section 7056 allowed limited access by local-government agencies and private consultants under specified conditions.

Staff said a covered private consultant could disclose information contained in or derived from tax records only to an authorized officer or employee of the county, city and county, city, or district. An attorney retained as an independent contractor to provide legal services was not an employee and could not receive the confidential information under that provision.

The letter warned that violating section 7056 was a misdemeanor then punishable under section 7153 by a $1,000-to-$5,000 fine, up to one year in county jail, or both.

Common questions

Could the consultant share records with the local government's outside attorney?

No, if the attorney was an independent contractor rather than an employee.

Who could receive the information?

An authorized local-government officer or employee under the cited rule.

Did the source identify criminal consequences?

Yes, under the statutes then in effect.

Citations and references

• California Revenue and Taxation Code section 7056(b)(1)(B) — disclosure limited to authorized local-government officers and employees
• California Revenue and Taxation Code section 7153 — historical misdemeanor penalties quoted

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/180-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/180-0500.pdf

Original ruling text

180.0500

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

JOHAN KLEHS
First District, Hayward

LEGAL DIVISION – MIC: 82
450 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082)
TELEPHONE: (916) 445-3723
FAX: (916) 323-3387

DEAN ANDAL
Second District, Stockton
ERNEST J. DRONENBURG, JR.
Third District, San Diego
BRAD SHERMAN
Fourth District, Los Angeles
KATHLEEN CONNELL
Controller, Sacramento

May 20, 1996

E. L. SORENSEN, JR
Executive Director

Mr. J--- W. A----- --- --XXXXX --- --- ---, Suite XXX
--- ---, CA XXXXX

Dear Mr. A---:

As we advised you on March 22, 1996, when we met with you, and members of your staff, and with your attorney, here in Sacramento, we have recently reviewed the provisions of Revenue and Taxation Code section 7056. As you are aware, that section generally provides that information pertaining to any retailer or any other person required to report to the Board or pay tax pursuant to the Sales and Use Tax Law is confidential. Section 7065 does provide that information may be released to local government agencies and to private persons contracting with local government agencies under certain conditions and subject to certain qualifications. Section 7056 specifically provides in paragraph (b)(1)(B) that a private consultant shall disclose information contained in or derived from sales or transactions and use tax records “only to an officer or employee of the county, city and county, city or district who is authorized…to examine the information.” It is our view that a private consultant may not disclose confidential information to an attorney who is retained as an independent contractor to provide legal services and is not an employee of the person identified by resolution.

Mr. J--- A---

-2-

May 20, 1996
180.0500

As you are aware, any violation of section 7056 is a misdemeanor punishable by a fine of not less than one thousand dollars ($1,000) and not more than five thousand dollars ($5,000) or imprisonment not exceeding one year in the county jail, or both. Rev. & Tax. Code § 7153. Very truly yours,

Gary J. Jugum
Assistant Chief Counsel
GJJ:sr
cc:

Mr. Glenn A. Bystrom – MIC:43