Bay Area Estate And Tax Planning Law Firm

How private is your tax return?

On Behalf of | Sep 6, 2016 | Uncategorized |

With this being an active campaigning year the subject of disclosure of tax returns has surfaced. The top runners for each party have sparred over transparency and the release to the public of their own tax returns.

Currently Hillary Clinton has agreed to provide her tax return statements. Donald Trump has said that he cannot release his returns because he is being audited.

Since the 1970s, and as a reaction to the Watergate scandal, candidates have sought to engender the public trust and exude transparency in the running of their campaigns. One way they do this is by releasing their tax returns for public scrutiny.

But all of this leads to the question of privacy. Should candidates have to reveal their income and expenses and what they pay in taxes? And building upon that, how private should each of us expect our own tax returns to be?

Recently it was reported in the Wall Street Journal that third party tax preparing programs such as Intuit have been holding on to tax return information after transmitting it to the IRS for three years. Intuit was testing the waters of a new program that would allow clients of CPAs who were seeking mortgages to import their tax returns from Intuit’s storage directly to a mortgage lender.

Since no one files directly to the IRS this brings up questions as to how long preparers and programs such as Intuit should hold on to tax information. It is well understood that the longer electronic information is stored the more vulnerable it becomes to cyber thieves. We then must ask what is a reasonable amount of time to hold this information and whom does this retention benefit.

Should candidates release their tax returns as a show of transparency? What is a reasonable amount of time to store tax information? Who benefits from this extensive housing of private information? Is it worth the risk?