Section 7216 Consent Requirements for Tax Return Preparers

Under Section 7216, a tax return preparer must get your signed, written consent before disclosing your tax return information to anyone else or using it for any purpose other than preparing your return. The 7216 consent requirements set out exactly what the form has to say, when it has to be signed, how long it stays valid, and the narrow set of situations where no consent is needed at all. If a preparer skips those steps, the disclosure or use is unauthorized, regardless of how routine it might seem.

What Counts as Tax Return Information

The rules cover everything you hand over during the preparation process: your name, Social Security number, income figures, deductions, credits, and supporting documents. Protection also reaches data the preparer generates from what you provided, such as depreciation schedules or capital gains calculations.¹

Two separate actions trigger the statute. “Disclosure” means making your information known to someone else, whether a marketing partner, a software vendor, or another firm. “Use” means the preparer applying your data internally for a purpose other than completing the return, such as targeting you with ads for financial products. Both require consent unless a specific exception applies.

The definition of “tax return preparer” is broad. It reaches the person who signs your return, the firm that employs them, anyone doing data entry or support work on the file, and providers of tax software and e-file transmission services.² Every entity in that chain carries the same obligations, so an outsourced processor or a third-party platform is bound by Section 7216 too.

When Your Preparer Needs a Consent Form

The default is straightforward. Unless the regulations specifically permit the activity, your preparer must have your written consent before any disclosure or use of your tax return information that goes beyond preparing your return. Common situations that trigger the requirement:

Cross-selling financial products, such as sharing your income data with an affiliated insurance or investment company.
Marketing or soliciting non-tax services using details drawn from your return.
Sending your data to a third party that has no role in preparing your return.
Sending your 1040 information to a service provider located outside the United States.

A blanket line buried in an engagement letter does not qualify. Consent must be knowing and voluntary, and conditioning your tax preparation on signing the form makes it involuntary and therefore invalid.³

What a Valid Consent Form Must Contain

The regulations are exacting about the contents. A vague form or a verbal agreement will not hold up. Every consent document has to include:

Your name and the preparer’s name, both clearly identified.
The specific tax return information involved. The form can identify particular items or authorize the entire return.
The purpose of the disclosure or use.
The recipient, if information is being disclosed.
Your signature and the date you signed.

One rule frequently missed: a single form can authorize multiple disclosures, or multiple uses, but never a mix of both. If your preparer wants to share your data with a third party (a disclosure) and also use it internally for marketing (a use), those go on separate forms, and each intended action has to be listed individually.³

Timing matters too. The preparer must have your signed form in hand before the disclosure or use occurs, and must give you a copy of the signed form at the time you sign it. Consent obtained after the fact is not consent.

Extra Language Required on 1040 Consents

If you are filing anything in the 1040 series, the consent form has to open with specific language mandated by the regulations. That text tells you federal law requires the form and warns you that once your information is disclosed, federal law may not restrict what the recipient does with it next.

The mandatory language also has to state that signing is not a condition of receiving tax preparation services. If a preparer suggests they won’t file your return unless you sign, any consent you give under that pressure is invalid. The rule exists because a preparer holding your documents while a deadline approaches has obvious leverage over you.³

Sending Your Data Outside the United States

Many firms outsource preparation work to processing centers abroad. If any preparer who will receive your information sits outside the United States, the firm needs your written consent before sending your data overseas. There is no exception for affiliated offices or subsidiaries of the same firm.³

The offshore form has to meet all the standard requirements: name the foreign recipient, describe the information being shared, state the purpose, and, for 1040 filers, include the mandatory disclosure language. The domestic exception that lets preparers inside a single firm share files with each other does not extend across the border.

How Long Consent Lasts and How to Revoke It

If the form is silent on duration, the consent expires one year from the date you signed. You and your preparer can agree to a different period, but it has to be stated on the form.³

You can revoke consent at any time. Once the preparer receives your revocation, all disclosure or use has to stop immediately. No grace period, no wind-down.

The regulations also keep preparers from wearing you down. If you decline a request, the preparer cannot come back and ask for consent to something substantially similar. And once your completed return has been delivered to you for signature, the preparer cannot ask for consent to use your data to solicit non-tax business. That closes the window near the filing deadline when a tired client might sign anything to be done.

When Consent Is Not Required

Some disclosures and uses are permitted without a form, so the preparation process can actually function and so preparers can meet other legal duties.⁴ The main categories:

Disclosures to IRS officers or employees.
Within-firm sharing among employees when it’s needed to prepare your return or provide related services.
Disclosures to another domestic preparer assisting with your return, as long as that other preparer is not making substantive determinations about your tax liability.
Disclosures compelled by a court order.
Sharing with the preparer’s own attorney or accountant to get advice about your return.
External quality reviews or peer reviews, where the reviewers maintain confidentiality.
Legal or ethical conflict-of-interest checks.

A narrow exception lets preparers use limited client list information — names, addresses, and the type of return filed — to solicit additional tax preparation business. That exception does not stretch to marketing non-tax services. A reminder to file next year’s return is fine; a pitch for investment advisory services from the same list is not.

Penalties If a Preparer Violates the Rules

A preparer who knowingly or recklessly discloses or uses your tax return information without authorization commits a misdemeanor under Section 7216. The standard penalty is a fine of up to $1,000, imprisonment for up to one year, or both, plus prosecution costs. When the unauthorized disclosure or use is connected to misappropriating someone’s taxpayer identity, the maximum fine rises to $100,000.¹

Section 6713 adds a civil penalty of $250 for each unauthorized disclosure or use, capped at $10,000 per person per calendar year. The civil standard is lower than the criminal one and does not require proof that the preparer acted knowingly or recklessly. When identity theft is involved, the civil penalty rises to $1,000 per disclosure or use, with an annual cap of $50,000.⁵

The criminal and civil penalties are not mutually exclusive. The IRS can pursue both against the same preparer for the same conduct.

1
Office of the Law Revision Counsel. 26 U.S. Code 7216 – Disclosure or Use of Information by Preparers of Returns
2
eCFR. 26 CFR 301.7216-1 – Penalty for Disclosure or Use of Tax Return Information
3
GovInfo. 26 CFR 301.7216-3 – Disclosure or Use Permitted Only With the Taxpayer’s Consent
4
eCFR. 26 CFR 301.7216-2 – Permissible Disclosures or Uses Without Consent of the Taxpayer
5
Office of the Law Revision Counsel. 26 U.S. Code 6713 – Disclosure or Use of Information by Preparers of Returns