IRS contract interpreters should not sign taxpayer nondisclosure agreements

Plain-English summary

Chief Counsel considered whether a sign-language interpreter working under an IRS contract should sign a nondisclosure agreement supplied by a taxpayer. The interpreter's contract already subjected the interpreter to civil and criminal consequences for unauthorized disclosure of tax information, which adequately protected confidentiality. A private agreement could be used to interfere with the IRS's authority to conduct an examination and obtain third-party information. It also could conflict with section 6103 provisions allowing disclosures to IRS or Treasury personnel, the Department of Justice, or persons with a material interest. The advice therefore states that IRS employees and contractors should not sign taxpayer-furnished nondisclosure agreements.

Ruling snapshot

• Question: Should an IRS contract interpreter sign a taxpayer's private nondisclosure agreement?
• Outcome: advice given, no
• Key authorities: IRC §§ 6103(e), 6103(h), 6103(k)(6), 7602, 7605

Full text (IRS public release)

ID:              CCA_2017102410333743
UILC:            6103.01-00

Number: 201746025
Release Date: 11/17/2017
From:
Sent: Tuesday, October 24, 2017 10:33:37 AM
To:
Cc:
Bcc:
Subject: RE: Sign Language Interpreter


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I am providing you with my analysis on this issue and ask that you pass it along to those
functions where this issue is likely to arise.

I have reviewed the documents that you provided, and I agree that the contract under
which the interpreters operate, holding them to all the criminal and civil penalties that
apply to the unauthorized disclosure of tax data, is sufficient assurance to taxpayers that
their confidential tax data is being adequately protected. There is no basis for an
interpreter to be required to sign a non-disclosure agreement (NDA) furnished by a
taxpayer. In fact, there are many good reasons to refuse to sign such an
agreement. First, as a general matter, the IRS has authority under I.R.C. section 7605 to
set the time, place and manner of an examination and section 7602 provides broad
authority to gather records. If an interpreter working under contract for the IRS were to
sign a private taxpayer’s NDA, the taxpayer could attempt to use that agreement to limit
the IRS’s authority to obtain information from third parties in order to protect
“confidentiality,” thereby creating collateral issues, and the potential for argument
among the parties, as to the intent of the NDA is debated,

A second, more specific, reason to refuse to allow our contract interpreters to sign a
taxpayer furnished NDA, are the exceptions to the confidentiality provisions of I.R.C.
section 6103. While an NDA may limit redisclosure of any information communicated to
or received by the interpreter, this would not be consistent with the provisions of section
6103 which allow for the disclosure of such information in a variety of circumstances,
including to other Treasury/IRS employees who have a need to know for tax
administration purposes (6103(h)(1)), to the Department of Justice for use in a matter
involving tax administration (6103(h)(2)) or when a taxpayer demonstrates they have a
material interest in the information under 6103(e). . This is especially true if the
taxpayer inserts language into the NDA that disclosures are limited to those that are
necessary. The taxpayer could argue that for a limited interpretation of “necessary” (as
in “absolutely necessary”) while the IRS relies on the broader interpretation of necessary
(“useful or helpful”) that is set forth in the regulations under 6103(k)(6).
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For these reasons, our office has always taken the position that no IRS employee or
contractor should ever sign a NDA furnished by a taxpayer.

I hope this provides you with the information you need. Please contact me if you have
questions or need further assistance.

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