Tax Type
General Provisions
Description
Secrecy of returns; Federal sharing of local information
Topic
Returns/Payments/Records
Date Issued
03-02-1999
March 2, 1999
Re: Request for a Ruling; Executive Order 13 (71)
Dear **************
This will reply to your letter of November 3, 1998 in which you ask whether Executive Order 13 (71), which allows Commissioners of the Revenue (COR's) to share confidential taxpayer information with United States tax officials, is still effective.
FACTS
Code of Virginia § 58.1-3 (copy enclosed) provides that state and local government officials, with certain exceptions, shall not disclose individual or corporate tax information. Violation of this prohibition is punished as a Class 2 misdemeanor. COR's may disclose tax information to the Tax Commissioner in order for the department to perform its duties. Also, the department may enter into written agreements with other states' and United States tax officials to disclose tax information. However, the statute is silent as to whether COR's may disclose individual or corporate tax information to officials of the United States.
Executive Order 13 (71), which was issued by former Governor Linwood Holton on October 28, 1971, provided that all tax and revenue officers were to provide tax information to certain designated officers of the Internal Revenue Service and United States Treasury Department in the performance of their official duties.
A COR requests a ruling as to whether Executive Order 13 (71) is still valid. Also, the COR asks how to respond to an IRS agent's request for confidential information relative to performing his duties if Executive Order 13 (71) is no longer in effect.
RULING
In 1971, the statute which applied to the confidentiality of taxpayer information was Code of Virginia § 58-46 (copy enclosed). This statute stated that all taxpayer information was confidential. However, that statute specifically provided that the Governor had the power, by written order, to direct that any of this information could be made public. Pursuant to this statute, Executive Order 13 (71) was issued.
In 1984, the tax code of Virginia was recodified. Code of Virginia § 58-46 was recodified as Code of Virginia § 58.1-3. This section did not expressly grant the Governor the authority to release any taxpayer information. Instead, the General Assembly allowed the COR's to provide taxpayer information to the Tax Commissioner in the execution of their respective duties. The Tax Commissioner was allowed to enter into agreements with duly constituted tax officials of other states and the United States to release taxpayer information for the performance of their duties. The statute does not provide for the sharing of information directly between United States officials and COR's.
Executive Order 13 (71) was issued expressly under the authority of Code of Virginia § 58-46. This section has been superseded, and the recodified Code of Virginia § 58.1-3 does not specifically grant the Governor the authority to issue an executive order to permit the release of confidential taxpayer information. Therefore, both the original section and its express grant of authority no longer exist. The Attorney General has acknowledged that the Governor has "a reservoir of inherent authority . . . vested . . . that may be exercised by him as 'chief executive'. . . .' However, absent statutory authority, the Governor may not issue an executive order unless there is a "genuine emergency' or the order is "administrative' in nature, as opposed to legislative. 1990 Report of the Attorney General 1, 3-5 (copy enclosed).
Based on these opinions of the Attorney General, it would appear that Executive Order 13 (71) is no longer in effect. No other statutory authority exists which grants COR's the authority to release confidential information to IRS agents. Consequently, COR's may not release confidential taxpayer information to IRS agents. The department has informed the IRS that COR's may not provide them with any confidential taxpayer information without a valid subpoena.
I hope this ruling answers your question. If you have any other questions, you may contact, * * * * * at * * * * *.
Sincerely,
Danny Payne
Tax Commissioner
Rulings of the Tax Commissioner