Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Keep Your Tax Data Private on Your Tax Return by Knowing this info!

Name: Painting Business Owners: Keep Your Tax Data Private on Your Tax Return by Knowing this info!
Uploaded: 2023-09-20T14:34:00+00:00
Duration: 36 s
Channel: Daniel Honan
Description: In this brief segment, the speaker explains that under IRS Code §7216 a tax preparer must obtain a taxpayer’s explicit signature or permission before…

20 Sept 2023 · 1 min

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In this brief segment, the speaker explains that under IRS Code §7216 a tax preparer must obtain a taxpayer’s explicit signature or permission before using information from the tax return to market or offer additional services such as retirement plans or insurance. By default, a preparer is limited to preparing the return only; any other use—like suggesting a 401(k) or whole‑life policy—requires the taxpayer’s consent. The speaker emphasizes that without this permission, the preparer cannot legally leverage the return data for cross‑selling, highlighting the privacy protection built into the tax preparation process for painting business owners.

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you have to get a signature from the taxpayer specifically that you can use that information for offering them other services, right? Yeah. The IRS has a disclosure, it's in the code 7216, I believe, where you can't legally use the information you glean from a tax return to offer somebody services without their permission. So, you know, for example, I do a lot of tax planning. If I want to look at your tax return to see if you would be a good fit for a 401(k) or maybe a whole life insurance policy or something like that, I can't even make those suggestions unless you give me permission to do so. By default, the only thing a tax preparer should be able to do with your information is prepare your tax return unless you say otherwise.