Excessive Disclosure

Today TaxMama® wants to address some political craziness. This year’s presidential campaign is getting out of hand. On the Senate floor, Senate Majority Leader Harry Reid (D-NV)  recently stated that a “reliable source” has revealed that Romney hasn’t paid federal income taxes in the past ten years. Kelly Phillips Erb, (otherwise known as TaxGirl) writes in her Forbes column that revealing such information about a citizen’s tax return is unlawful.  

 

Well My Friends,

How do you feel about this concept? Imagine if it were your private tax information that was bruited about on the Senate floor, on television, and in the general public arena. There are some very strong protections in Title 26 (the U.S. Tax Code) to protect the privacy of our tax information.

Kelly includes excerpts from a letter one CPA sent to IRS Commissioner Doug Shulman requesting that he prefer charges against the senator, who a government employee, for revealing privileged information. You may want to read this – it’s interesting intellectual fodder.

But here’s a twist on the question. Senator Reid is wrong on two counts. First, Romney did release his 2011 tax return. (In fact, it’s right there on the TaxHistory site I showed you yesterday.) Second, not only did Romney pay taxes each year – he paid over $3 million in each of the last two years that we can see.

So, here’s the twist on the question of whether Senator Reid is guilty of disclosing privileged information:

If the information he disclosed was utterly false, is he still guilty of revealing privileged information? After all, when he made the public disclosure, he believed it was true.

What do you think?

And remember, you can find answers to all kinds of questions about tax ethics and other tax issues, free. Where? Where else? At www.TaxMama.com.

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