11.3.24. Disclosures to Contractors

(1) IRC 6103(n) permits the Secretary of the Treasury, pursuant to regulations, to disclose returns and return information to any person, including persons described in IRC 7513(a), to the extent necessary in connection with procurement actions for tax administration purposes as defined in IRC 6103(b)(4), such as:

• Equipment or other property or

• Services relating to the processing, storage, transmission, and reproduction of returns and return information or

• Support services relating to federal tax administration or

• Services relating to the programming, maintenance, repair, testing of equipment or other property or

• The providing of other services such as tow trucks, locksmiths, appraisers, court reporters and others

(2) Title 26 Code of Federal Regulations (CFR) 301.6103(n)-1 provides that the IRS and the Office of Chief Counsel may disclose returns and return information to contractors pursuant to IRC 6103(n). The regulation also places certain limitations on the disclosures; these are defined in 26 CFR 301.6103(n)-1(b).

(3) For disclosure of non-tax Privacy Act records to a contractor, the Privacy Act (5 U.S.C. 552a) requires that either written permission of the person whose identifier the Privacy Act record is retrieved by or that one of the 12 statutory exceptions in section (b) of the Privacy Act must be met. One of the statutory exceptions is when a “routine use” that authorizes disclosure to a contractor is published in a Privacy Act system of records notice.

1. If a Privacy Act system of records contains 6103 federal tax information (FTI), the system must state that returns and return information may only be disclosed as authorized by 6103. Paragraph (1) in this subsection explains what conditions must be met to authorize disclosure of 6103 information to a contractor.

2. For non-tax Privacy Act records, the routine use must authorize disclosure to contractors and what conditions are required to authorize disclosure. Disclosures to contractors generally require Privacy Act Accounting that is explained in IRM 10.5.6, Privacy Act.

(4) IRS System of Records Notices are published on Treasury’s website at: https://home.treasury.gov/footer/privacy-act/system-of-records-notices-sorns.

(5) IRC 7513 authorizes the scanning and reproduction of any return, document, or other matter. Title 26 CFR 301.7513-1 details the safeguards in place to protect the scans and reproduced documents from unauthorized use and disclosure.

(1) The following items govern the authority to disclose return and return information to any person, including persons described in IRC 7513(a), to the extent necessary in connection with procurement actions for tax administration purposes as defined in IRC 6103(b)(4):

• IRC 6103(n)

• 26 CFR 301.6103(n)-1

• Delegation Order 11-2 (Rev. 4), found in IRM 1.2.2.12.2, Authority to Permit Disclosure of Tax Information and to Permit Testimony or the Production of Documents

(1) Disclosure, GLDS will support the Office of Procurement and other IRS functions by advising on disclosure law and policy.

(2) Privacy Policy and Compliance, PGLD, has a responsibility to review procurement solicitations involving Privacy Act records, approval of contracts per OMB A-108, as well as training clauses in contracts. Refer to IRM 10.5.6.2.4.1, Privacy Act Contract Requirements, for further information.

(3) Personnel Security, Human Capital Office has the responsibility for conducting investigative processing for contractors and their employees commensurate with the position risk level designation associated with the work to be performed. See IRM 10.23.2, Contractor Investigations.

(4) Cybersecurity, Information Technology (IT) administers policy for conducting mandatory security briefings for contractors. See IRM 10.8.2.2.1.18, IT Security Roles and Responsibilities, Contractor. Also see Internal Revenue Service Acquisition Policy (IRSAP) 1024.9001, Determination of Pre-Award Survey, which references IR1052.224-9001, Mandatory IRS Information Protection and Security Awareness Training Requirements (DEC 2018). In addition there is IRSAP PGI, 1024.9001, Determination of pre-award survey and Pub 4812, Contractor Security & Privacy Controls.

(5) Privacy Policy and Compliance, PGLD administers policy for mandatory privacy briefings for contractors. See the Personnel Engaged in Procurement Activities and Contractors sections of IRM 10.5.1, Privacy Policy.

(6) Chief, Procurement is responsible for awarding contracts involving the release of SBU information and complying with all applicable laws, regulations and procedures.

(1) Business Units are responsible for establishing and documenting the program controls developed to oversee their program as well as ensuring employee compliance with all applicable elements of this IRM.

(1) The tables below list commonly used terms, definitions and acronyms used throughout this IRM section:

(1) Additional sources of guidance on disclosures of official information and disclosures to contractors may also be found at these related resources:

• IRM 11.3 series, Disclosure of Official Information

• Disclosure and Privacy Knowledge Base

• IRM 10.5.6.2, Privacy Act General Provisions (formerly IRM 11.3.14)

• IRM 11.3.21, Investigative Disclosure

(1) The IRS occasionally hires trainees through participation in certain work programs. Some of the students/trainees are of the "direct-hire" while others are of the "hosting" type.

(2) "Direct-hire" trainees are employed and paid by the IRS and their right of access to returns or return information, when required as part of their duties, is the same as for other IRS employees. See IRC 6103(h)(1).

(3) "Hosting" trainees are hired and paid by non-Treasury Department organizations and assigned by these organizations to the IRS for training. They may not be given access to tax returns or return information or information governed by the Privacy Act.

(4) Uncompensated student volunteers have been deemed by statute (5 U.S.C. 3111) to be Treasury and/or IRS employees for purposes of both the Privacy Act and IRC 6103. As such, disclosures are permissible. However, the student must meet the following criteria.

• Qualify as a Student - A student is defined as "an individual who is enrolled, not less than half-time, in a high school, trade school, technical or vocational institute, junior college, college, university, or comparable recognized educational institution." Individuals from high schools or above who participate in a formal program with the IRS as part of their curriculum are considered student volunteers. To qualify, they must obtain the permission of the institution where they are enrolled as part of a program to provide educational experiences for students. They must be "uncompensated" and may not be used to displace any employee. Counsel has clarified the definition of uncompensated. Student volunteers compensated by other than Federal funds are considered uncompensated for 5 U.S.C. 3111 purposes.

Note: Volunteers from other organizations or welfare to work programs do not qualify for access to IRC 6103 or Privacy Act data.

(1) The IRS hires a considerable number of disabled employees. To effectively use the skills of these individuals it is often necessary that they be assisted by non-IRS personnel. Several Federal, state and local agencies provide assistors at no cost to the IRS.

(2) Under 5 U.S.C. 3102(b), these assistors can be "hired" by IRS and are permitted to have access to returns or return information, under IRC 6103(h)(1), subject to its requirements, even if they are uncompensated by IRS.

(1) The IRS procures the vast majority of title searches by use of contracts or purchase orders pursuant to IRC 6103(n).

(2) When low volume, rare, exigent circumstances exist, purchase cards may be used, rather than contracts or purchase orders, to procure title searches. See the Restricted Purchase List for more information. The disclosures will be pursuant to IRC 6103(k)(6), investigative disclosures, and the IRS business office/unit must:

1. Incur very few needs for title searches on a monthly basis

2. Demonstrate that vigorous, real effort has been made to procure a contract for title searches and

3. Thoroughly document that no company contacted is willing (obtain written refusal where possible) to enter such a contract

(1) Procurement actions involving the use of appraisers, court reporters, interpreters, and others must follow the contract requirement provisions for Privacy Act, statutes governing release of returns and return information, and SBU data found elsewhere in this IRM.

(2) Business units should email *Privacy for assistance with procurements involving Privacy Act and SBU data.

(3) It is important that the system of records notice routine use contains the appropriate language to permit disclosing Privacy Act records to a contractor. See IRM 11.3.24.1.1(3).

(1) Other SBU information, not Privacy Act or return information, may be disclosed to contractors when it is determined that such access is necessary to properly perform assigned tasks.

(2) This other type of SBU material is that information not protected by either the Privacy Act or the statutes governing release of returns and return information.

(3) SBU documents are the property of the IRS, and are construed to be "a thing of value" protected by statute (18 U.S.C. 641, as modified by 18 U.S.C. 3571).

(4) Access to SBU documents will not be routinely granted to contractors. Each case must be decided on its own merit, with the needs of the IRS being the foremost consideration.

(5) For more information, refer to the SBU Data section of IRM 10.5.1, Privacy Policy and the Staff-Like Access section of IRM 10.23.2, Contractor Investigations.

(1) Under IRC 6103(n), IRC 7623, and 26 CFR 301.6103(n)-2, Disclosure of return information in connection with written contracts among the IRS, whistleblowers, and legal representatives of whistleblowers, IRS employees are authorized to disclose return information to a whistleblower and their legal representative, to the extent necessary in connection with a written contract between the Internal Revenue Service (IRS), the whistleblower and their legal representative, for services relating to the detection of violations of the internal revenue laws or related statutes.

(2) Disclosures may include, but are not limited to, disclosures to obtain information related to the subject of the whistleblower’s claim that is otherwise unavailable, similar in nature to disclosures under IRC 6103(k)(6) and the applicable regulations.

(3) Upon written request by a whistleblower, or a legal representative of a whistleblower, with whom the IRS has entered into a written contract for services as described in 26 CFR 301.6103(n)-2(a)(1), the Director of the Whistleblower Office, or designee of the Director, may inform the whistleblower and, if applicable, the legal representative of the whistleblower of the following:

• The status of the whistleblower's claim for award under section 7623

• Whether the claim is being evaluated for potential investigative action, or

• Whether the claim is pending due to an ongoing examination, appeal, collection action, or litigation

(4) Any whistleblower, or legal representative of a whistleblower, who receives return information under this section, is subject to the civil and criminal penalty provisions of IRC 7431, 7213, and 7213A for the unauthorized inspection or disclosure of the return information.

(1) Contracts for the destruction of tax information falls within the scope of IRC 6103(n).

1. A contractual agreement, in compliance with IRC 6103(n), is required if tax information to be destroyed does not remain in sealed containers or is otherwise protected from view by the contractor during the destruction process

(2) IRSAP 1052.224-9000, Safeguards Against Unauthorized Disclosure of Sensitive but Unclassified Information (current IRSAP), should be included when procuring services for the destruction of sensitive but unclassified information. See IRSAP 1024.9001, Determination of Pre-Award Survey, which references IR1052.224-9000, Safeguards Against Unauthorized Disclosure of Sensitive but Unclassified Information (current IRSAP). In addition there is IRSAP PGI 1024.9001, Determination of pre-award survey.

(3) Ensure IRS records, hard copy and electronic including those containing SBU data, are managed appropriately and in accordance with Document 12990, Records and Information Management Records Control Schedules (RCS), and Document 12829, General Records Schedules (GRS). Document 12829 as approved records disposition by the National Archives and Records Administration (NARA) to prevent unauthorized/unlawful destruction of records. Refer to IRM 1.15, Records and Information Management series for further records retention guidance.