Treasury Issues Final Regulations Regarding Third-party Contacts

December 19, 2002

Treasury Department has issued final regulations regarding the requirement in section 7602(c) that the IRS notify a taxpayer both before the IRS contacts third parties in connection with an examination or collection of the taxpayer's tax liability and after such third-party contacts are made (i.e., a report generally containing the names of the persons actually contacted by the IRS).

"The final regulations clarify the rules under which the IRS will notify taxpayers of third-party contacts," stated Treasury Assistant Secretary for Tax Policy Pam Olson.

This requirement, enacted as part of RRA 1998, is intended to help protect a taxpayer's reputation and business interests by giving the taxpayer notice that third parties might be contacted. At the same time, Congress recognized the privacy interests of third parties and the IRS' responsibility to administer the internal revenue laws effectively. The final regulations balance these important considerations.

The Text of the Final Regulations - 7602(c) [pdf]

Source: Treasury Department

Contact ALTA at 202-296-3671 or

North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.