Taxpayer Notification and Privacy Act of 2025
This bill, the Taxpayer Notification and Privacy Act of 2025, would add new protections and a notice framework to how the IRS requests information from third parties under existing law. If the information the IRS seeks could reasonably be provided by the taxpayer, the IRS must specify the exact items it intends to obtain from third parties and give the taxpayer a minimum 45-day period (with a possible extension for reasonable cause) to provide that information before contacting third parties. There is an explicit exception: the Secretary can bypass this requirement if it determines the information is necessary regardless of the taxpayer’s ability to provide it. The changes apply to notices sent after 12 months from enactment. The goal is to increase transparency, safeguard taxpayer privacy, and give taxpayers a clear opportunity to cooperate before third-party information is sought.
Key Points
- 1When information sought from third parties could be provided by the taxpayer, the IRS must identify each specific item it intends to seek from third parties.
- 2The taxpayer must be given a reasonable opportunity and at least 45 days to respond and provide the information described, before the IRS contacts third parties (unless the Secretary provides otherwise).
- 3There is an exception: if the Secretary determines the information is necessary despite the taxpayer’s ability to provide it, the specificity requirement does not apply.
- 4The amendments reorganize and clarify the relevant text in the Internal Revenue Code (7602(c)) by renaming subparagraphs for readability.
- 5The new rules take effect for notices issued under 7602(c) 12 months after enactment.