Effective December 28, 2019, the Taxpayer First Act limits use of tax return information to only those purposes expressly authorized/consented to by the taxpayer. Specifically, the Act amended 26 U.S.C.A. § 6103(c) to provide: “Persons designated by the taxpayer under this subsection to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of, or request by, the taxpayer.” As a result, lenders and associated parties (e.g., servicers, brokers, etc.) sharing tax-return information obtained during the application/transaction process may only do so after receiving expressed consent from the taxpayer.
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