A note to the clients of The Business Doctor, CPA, PC. The following was announced by the IRS December 7^th, 2005. The IRS is trying to get non professionals to act appropriately. As CPAs we already have standards which are higher than those proposed by the IRS. These standards are regulatory and voluntary in nature. Voluntarily we have agreed to abide by our professions Code of Conduct (Ethics.) which anyone can read at http://www.aicpa.org/about/code/index.html. Also, we have policies and procedures in place to make sure that all client data, whether it is for tax return preparation or other services we provide, is secure and not shared with anyone outside our firm without client approval. If you have any concerns about our policies or the security of you data, please feel free to contact us.

IR-2005-139, Dec. 7, 2005

WASHINGTON - The Internal Revenue Service today issued proposed guidance on the disclosure or use of tax return information by tax return preparers. A key principle underlying the proposed guidance is that tax return preparers may not disclose or use tax return information for purposes other than tax return preparation without the knowing, informed and voluntary consent of the taxpayer.

The pre-existing regulations under Internal Revenue Code section 7216 were drafted in the early 1970s, prior to the advent of many of the business practices and technology uses that define the electronic preparation and transmission of tax returns by preparers.

The proposed regulations broaden the definitions of tax return preparer and tax return information, revise the manner and form of obtaining taxpayer consent to use or disclose tax return information and add a requirement to obtain taxpayer consent before preparers send tax return information offshore.

"Safeguarding of tax return information is critical," said IRS Commissioner Mark W. Everson. "It's vital we update the preparation rules for the 21st century. Americans ought to know when their tax returns are being outsourced and prepared abroad. In particular, I want to thank Massachusetts Rep. Ed Markey and others for drawing our attention to this important issue."

The new regulations also take into account the presence and wide-spread use of computers in tax preparation. If a tax return preparer hires contractors who will need access to tax return information to repair computers or data files, the tax return preparer must notify those contractors that they will also be subject to restrictions on their use or disclosure of tax return information.

The proposed regulations are open to public comment for 90 days after their date of publication. A public hearing on the proposed regulations has been scheduled for April 4, 2006 at 10 a.m.