Time: Sun Aug 31 15:09:06 1997
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	Sun, 31 Aug 1997 11:51:48 -0700 (MST)
Date: Sun, 31 Aug 1997 11:51:48 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: IRS Agreement with State of Tennessee (fwd)

<snip>
>
>AGREEMENT ON COORDINATION OF TAX ADMINISTRATION
>
>
>
>SECTION 1.  Introduction
>
>1.1  This agreement provides the basis for coordination of Federal and
>State tax administration.  The parties to this agreement will explore
>and adopt mutually acceptable techniques and modes of exchange most
>beneficial to improved tax administration with the least possible
>inter-ruption of their respective operating routines and with strict
>adherence to laws, regulations, and rules for protecting the
>confidentiality of exchanged information.
>
>1.2  This agreement may be supplemented by an implementing
>agreement, prescribing the nature, quantity and mechanics for the
>continuous exchange of tax information, including criteria and tolerance
>for selection of tax returns and return information as well as other
>cooperative activities.  If an implementing agreement has been
>approved, subsections preceded by asterisks (*) will have
>corresponding provisions in the implementing agreement which should
>be consulted for more detailed information about specific working
>arrangements and operational procedures for the exchange of tax
>information authorized by this agreement.  All provisions contained in
>implementing agreements must be consistent with the terms and
>conditions in this agreement.  In any situation where a conflict arises
>between the provisions of this agreement and the implementing
>agreement, the terms of this agreement will govern.
>
>
>SECTION 2.  Definitions
>
>For purposes of this agreement the following definitions apply:
>2.1 Agency.  The term "Agency" means Tennessee Department of
>Revenue
>
>2.2  IRS.  The term "IRS" means the Internal Revenue Service, U.S.
>Department of
>the Treasury.
>
>2.3  State Audit Agency.  The term "State Audit Agency" is defined in
>the same manner as provided in section 6103 (d)(2)(B) of the Code.
>State Audit Agency means  Comptroller of the Treasury - State Audit
>Div.
>
>2.4 State.  The term "State" means the State of Tennessee
>
>*2.5 Agency Representative.  The term "Agency Representative"
>means an Agency officer or employee designated in writing by the head
>of the Agency, to the District Director(s) at  Nashville, Tennessee and
>the Service Center Director at  Memphis, Tennessee as an individual
>who is to inspect or receive Federal returns or Federal return
>information on behalf of the Agency as provided by section 6103 (d)
>of the Code, but only so long as the duties and employment of such
>officer or employee require access to Federal returns and Federal
>return information for purposes of State tax administration.
>
>*2.6  IRS Representative.  The term "IRS Representative" means an
>officer or employee of the IRS who has been designated in writing to
>the head of the Agency by the District Director(s) at  Nashville,
>Tennessee or the Service Center Director at  Memphis, Tennessee
>as an individual who is to inspect or receive State returns or State
>return Information on behalf of IRS, but only so long as the duties and
>employment of such officer or employee require access to State returns
>and return information for the purpose of Federal tax administration.
>
>2.7 Federal Return.  The term "Federal Return" is defined in the same
>manner as provided in section 6103(b)(1) of the Code.
>
>2.8  Federal Return Information.  The term "Federal Return Information"
>is defined in the same manner as provided in section 6103(b)(2) of the
>Code.  However, "Federal Return Information" does not include that
>information in the hands of the State which ft obtained by means wholly
>from sources independent from the IRS.
>
>2.9 State Return.  The term "State Return" means any tax or information
>return, declaration of estimated tax, or claim for refund required by or
>
>provided for or permitted under the provisions of the internal revenue
>laws, or related statutes, of the State, and any amendment or supplement
>
>thereto, including supporting schedules, attachments or lists which are
>supplemental to or part of, the return so filed.
>
>2.10 State Return Information.  The term "State Return Information"
>means a taxpayer's identity, the nature, source, or amount of his/her
>income, payments, receipts, deductions. exemptions, credits, assets,
>liabilities, net worth, tax liability, tax withheld, deficiencies,
>over-assessments, or tax payments, whether the taxpayers State return
>was, is being, or will be examined or subject to other investigation or
>processing, or any other data received by, recorded by, prepared by,
>furnished to, or collected by the Agency with respect to a State return
>or with respect to the determination of the existence, or possible
>existence, of liability (or the amount thereof) of any person under the
>internal revenue laws, or related statutes, of the State, for any tax,
>penalty, Interest, fine, forfeiture. or other imposition, or offense.
>
>
>2.11 Inspection.  The term "Inspection means any examination of a
>return or return information.
>
>2.12 Disclosure.  The term "Disclosure" means the making known to
>any person in any manner whatever a return or return information.
>
>2.13 State Tax Administration.  The term "State Tax Administration"
>(a)      means
>
>(i) the administration, management, conduct, direction, and supervision
>of the execution and application Of the revenue laws, or related
>statutes of the State and
>
>(ii) the development and formulation of State tax policy relating to
>existing or proposed internal revenue laws, or related statutes, of the
>State and
>
>(b) includes assessment, collection, enforcement, litigation, and
>statistical gathering functions under such laws or statutes.
>
>2.14 Code.  The term "Code" means the Internal Revenue Code of
>1954, as amended.
>
>SECTION 3.  Disclosure of Federal Returns and Federal Return
>Information
>
>3.1 Pursuant to the laws of the State, the Agency is charged with the
>responsibility for the ad, ministration of State taxes imposed on sales
>and use; motor vehicle registration; gasoline and petroleum products;
>corporate franchise, excise, and gross receipts; estate, gift, and
>inheritances; income from stocks and bonds; beer; alcoholic beverages;
>cigarette and tobacco products; business privilege; coal severance; real
>
>estate transfer and indebtedness recordation; litigation; soft drink
>mfg.'s; public utilities; theatres, motion picture and vaudeville shows;
>
>mixing bars, vending machines, diesel fuel, special motor fuels and
>non-commercial fuel. Federal returns and Federal return information
>(whether originals, paper copy, photocopy, microfilm, magnetic media
>or any other form) received from IRS will be used for the purpose of,
>and only to the extent necessary in, State tax administration.
>
>3.2 This agreement constitutes the requisite authorization pur-suant to
>section 6103(d)(1) of the Code for IRS to disclose to, and permit
>inspection by, an Agency Representative Of Federal returns and
>Federal return information relating to taxes imposed by chapter(s)
>1, 2, 6, 11, 12, 21, 23, 24, 31, 32, 44, 51, and 52 and Subchapter D
>of Chapter 36 of the Code.
>
>*3.3 Upon the occurrence of any change in employment, duties or other
>relevant matters affecting an Agency Representative's right of access to
>
>Federal returns and Federal return information or status as Agency
>Representative,  the head of the Agency shall promptly advise in writing
>
>the District Director(s) at    Nashville, Tennessee
>and the Service Center Director at Memphis, Tennessee
>that such individual is no longer an Agency Representative.
>
>3.4   An Agency Representative to whom a Federal return or Federal
>return information has been disclosed. may thereafter disclose such
>return or return information:
>
>(a) to another employee of the Agency for the purpose of and only to the
>
>extent necessary in the administration of the State tax laws for which
>the Agency is responsible;
>
>(b) to a person described in section 6103(n) of the Code or to any
>officer or employee of such person. solely for the purpose of State tax
>administration and in a manner consistent with applicable regulations,
>published rules or procedures, or written communications;
>
>(e) to a legal representative of the Agency personally and directly
>engaged in, and solely for use in, preparation far a civil or criminal
>proceeding (or investigation which may result ill a proceeding) before a
>
>State administrative body, grand jury, or court in a matter involving
>State tax admin-istration, if the returns and return information satisfy
>
>one or more of the criteria established in section 6103(h) (2)(A), (B)
>or (C).
>
>(d) to an officer or employee of the State audit agency for the purpose
>of and only to the extent necessary in making an audit of the State tax
>agency.
>
>3.5 A Federal return or Federal return information may be disclosed in a
>
>judicial or administrative proceeding pertaining to State tax
>administration, but only if the same criteria established in section
>6103(h)(4)(A), (B), or (C) are met.
>
>3.6 Notwithstanding any other provision of this section, IRS will not
>disclose a Federal return or Federal return information under this
>section if such disclosure would identify a confidential informant or
>seriously impair a Federal civil or criminal tax in-vestigation.  The
>Agency agrees that neither it nor its legal representatives will make
>any further use or disclosure of a Federal return or Federal return
>information disclosed to an Agency Representa-tive by IRS if IRS
>notifies the head of the Agency in writing that such further use or
>disclosure would identify a confidential informant or seriously impair a
>
>Federal civil or criminal tax investigation. The Agency further agrees
>that prior to the disclosure of any Federal return or Federal return
>information in a State judicial proceeding or to any party other than
>the taxpayer or his/her designee in a State administrative proceeding as
>
>provided by paragraph 3.5 of this agreement, the head or legal
>representative of the Agency will notify in writing the Service Center
>or District Director, from whom the return or return information was
>received, of the intention to make such disclosure.  No officer,
>employee or legal representative shall so disclose a Federal return or
>Federal return Information in such State judicial or administrative
>proceeding if the Service Center or District Director or other IRS
>official, within 30 days following receipt of such written notice,
>informs the head or legal representa-tive of the Agency that such
>disclosure would identify a confidential informant or seriously impair a
>
>Federal civil or criminal tax investi-gation.
>
>3.7 Additionally. the Agency agrees that it will notify the IRS when,
>during an audit of the Agency by the State Audit Agency Federal returns
>and Federal return information are disclosed to the State Audit Agency
>and such information is made part of the State Audit Agency's
>workpapers.
>
>SECTION 4.  Disclosure of State Returns and Return Information
>
>4.1 This agreement constitutes the requisite authorization for the
>Agency to disclose to, and permit inspection by, IRS Representatives of
>State returns and State return information for the purpose or, and only
>to the extent necessary in the administration of the internal revenue
>laws, or related statutes, of the United States.  Any State returns and
>State return information so disclosed to, or inspected by, an IRS
>Representative become, in the hands of IRS, "taxpayer return
>information" as defined by section 6103(b)(3) of the Code and may be
>redisclosed by IRS only to such persons, for such purposes, and under
>such conditions as may be prescribed by the Code.
>
>4.2  Nothing in this agreement shall be construed as authority for the
>Agency to disclose State returns and State return information where such
>
>disclosure would be contrary to State law.
>
>*4.3  Upon the occurrence of any change in employment duties, or other
>relevant matters affecting an IRS representative s right of access to
>State returns and State return information or status as an IRS
>Representative, the District Director(s) at Nashville, TN
>and the Service Center Director at Memphis, Tennessee
>shall promptly advise the Agency in writing that such individual is no
>longer an IRS Representative.
>
>SECTION 5.  Other Cooperative Activities
>
>*5.1  Subject to the restrictions and other provisions of this agreement
>
>and the availability of enforcement resources, the Agency and IRS will
>develop cooperative return selection and examination programs with the
>objective of avoiding unnecessary duplication of Federal and State audit
>
>coverage.
>
>*5.2  Information other than Federal or State returns and return
>information, which the Agency and IRS may deem to be relevant or
>useful to the administration of State and Federal tax laws, may be
>exchanged pursuant to arrangements made by the Agency and IRS.
>
>*5.3  In addition to the exchange of tax and other information,
>the Agency and IRS will, to the extent feasible, extend to each other
>assistance in other tax administration matters.  This may include such
>activities as taxpayer assistance, stocking tax forms for the public,
>training of personnel, special statistical studies and compilations of
>data, development and improvement of tax administration systems and
>procedures, and such other activities as may improve tax administration.
>
>SECTION 6.  Safeguards and Other Requirements
>
>6.1  As an express condition for the inspection and disclosure of
>Federal returns and Federal return information the Agency agrees -to
>comply with the safeguards and requirements prescribed by section
>6103(p)(4) of the Code and any implementation of such safeguards and
>requirements as may be provided by regulations and published
>procedures including:
>
>(a) furnishing an annual report to the IRS describing the procedures
>established and utilized by the agency far ensuring the confidentiality
>of such returns and return information;
>
>(b) permitting IRS to review the extent to which the Agency is
>complying with the requirements of this paragraph; and
>
>(c) informing in writing all Agency Representatives and other persons to
>
>or by whom disclosure or inspection of Federal returns or Federal return
>
>information is authorized of the criminal penalties and civil liability
>provided by sections 7213 and 7217 of the Code for a disclosure of
>such returns and return information which is unauthorized by the Code.
>
>6.2 To the extent consistent with Federal law IRS will accord State
>returns and State return information confidentiality safeguards
>comparable to those required of the Agency pursuant to this agreement.
>
>6.3 Processing of Federal returns and Federal return information
>received by the Agency from IRS in the form of microfilms,
>photo-impressions. magnetic media, or other format (including
>reformatting or reproduction, or conversion to magnetic media, punch
>cards, or hard copy printout) and transmission and storage of such
>Federal returns Or Federal return information by or on behalf of the
>Agency may be performed by either Agency owned and/or operated
>computer facilities, or State shared facilities or by any other person
>described in section 6103(n) d the Code.  In those cases where such
>facilities used by the State Agency are shared with other State agencies
>
>or operated by any other person described by section 6103(n) of the
>Code, the Agency will ensure the confidentiality of the Federal returns
>and Federal return information provided to such shared facility or
>person.
>As part of this responsi-bility the terms of any contract or agreement
>between the Agency and a shared computer facility Or other person to
>whom Federal return or Federal return information is or may be
>disclosed for a purpose de-scribed in this subsection, will provide,
>or will be amended to provide, that such person, and officers and
>employees of the person, will comply with the applicable safeguard
>conditions contained in regulations, published rules or procedures,
>or written communications.
>
>
>6.4  Because some taxpayers may be unaware that Agency tax officials
>are authorized under Federal law to obtain Federal returns and Federal
>return information for State tax administration purposes, the Agency
>will publicize, in a manner satisfactory to IRS, that such returns or
>return information were obtained pursuant to specific authority granted
>by the Code.  Similar publicity will be provided by IRS, If requested by
>
>the Agency, for State tax information furnished IRS pursuant to State
>law.
>
>SECTION 7.  Limitations
>
>7.1 Pursuant to the provisions of section 6103(p)(2) of the Code,
>and of State law, if any, IRS and the Agency may charge each
>other a reasonable fee for furnishing returns and return information
>under the terms of this agreement.  IRS and the Agency may agree
>not to charge each other for the costs of routine reproduction of
>returns and return information mutually exchanged.
>
>7.2 Under no circumstances will the Agency permit any Federal return
>or Federal return Information to be inspected by, or disclosed to an
>individual who is the Chief Executive Officer of the State or any person
>
>other than one described in Section 3 of this agreement.
>
>7.3 Notwithstanding any other provision of this agreement, IRS will not
>disclose or make known in any manner whatever to any person
>described in Section 3 of this agreement --
>
>(a) any original, copy, abstract of any return, payment, or registration
>
>made pursuant to Chapter 35 of the Code (relating to taxes on
>wagering);
>
>
>
>(b) any record required for making any such return, payment, or
>registration made or required pursuant to Chapter 35 which IRS is
>permitted by the taxpayer to examine or which is produced pursuant to
>section 7502 of the Code (relating to the examination of books and
>witnesses);
>
>(c) any information obtained by the exploitation of any such return,
>payment, registration, or record made or required pursuant to Chapter
>35.
>
>7.4  Notwithstanding any other provision of this agreement, IRS will not
>
>disclose or make known in any manner to any person described in
>Section 3 of this agreement information which was obtained pursuant
>to a tax convention between the United States and a foreign
>government.
>
>SECTION 8.  Officials to Contact for Obtaining Information
>
>8.1 Requests by the Agency for Federal returns or Federal return
>information should be made to the officials named in the implementing
>agreement or to the officials below if an implementing agreement has not
>
>been executed.
>
>(a) Requests by the Agency for Federal return information in magnetic
>media mode should be made to the District Director at P.O. Box 1107,
>Nashville, TN  37202
>who will be responsible for coordinating the requests with the National
>Office.
>
>(b) Requests for physical inspection or copying of Federal returns, or
>requests for audit abstracts and reports pertaining to such returns,
>showing addresses within
>the State should be made to the Director, Internal Revenue
>Service Center,  P.O. Box 30309 Airport Mail Facility
>Memphis Tennessee, 38130 Attn: Taxpayer Assistance Section
>who will be responsible for making the proper arrangements
>for inspection or copying.
>
>(c) Requests by the head of the Agency for Federal returns of taxpayers
>or Federal return information relating to taxpayers showing addresses
>outside the State should be made to the District Director at  P.O. Box
>1107, Nashville, Tennessee  37202
>
>8.2  Requests by authorized officers and employees of the IRS far
>inspection or copying of State returns and State return information
>should be made to the officials named in the implementing agreement
>supplementing this agreement, or to the Data Security Coordinator (this
>was crossed through and "Fed-State Disclosure Officer"
>is hand written above it), Tennessee Department of Revenue,
>P.O. Box 2565, Nashville, Tennessee 37219
>if an implementing agreement has not been executed.
>
>SECTION 9.  Termination or Modification of Agreement
>
>9.1 The provisions Of the agreement are subject to provisions of the
>Code, implementing regulations, published procedures, and to the
>provisions of State statutes and regulations. This agreement may be
>terminated or modified at the discretion of IRS or the Agency due to
>changes In Federal or State statutes and regulations or whenever In the
>administration of Federal or state laws that action seems appropriate.
>
>9.2  Any unauthorized use or disclosure of Federal returns or Federal
>return information furnished pursuant to this agreement or inadequate
>procedures for safeguarding the confidentiality of such returns and
>return information, also constitutes grounds for termination of this
>agreement and the exchange of information thereunder, subject to the
>rights of administrative appeal as provided by regulations pre-scribed
>by section 6103(p)(7) of the Code.
>
>9.3 Notwithstanding any other provision of this agreement, no Federal
>return or Federal return information shall be disclosed after December
>31, 1978, by IRS to any person described in Section 3 of this
>agreement if the requirements of section 6103(p)(8) of the Code
>are not met.
>
>
>APPROVED:
>
>Martha Brown Olsen                   Signed, but not able to read
>(signature)                              (Commissioner of Internal
>Revenue)
>
>Commissioner of Revenue
>(Title of Agency Official)
>
>Signed at Nashville, Tenn.            Signed at Washington, D.C. this
>this 23 day of October, 1981        2d   day of Feb. ,     1982.
>
>
>
>Here's the response from the Commissioner of the Tennessee
>Department of Revenue regarding my FOIA request for the
>Agreement on Coordination of Tax Administration and the
>Implementing Agreement to the Agreement on Coordination of
>Tax Administration between the Tennessee Department of Revenue
>and the Internal Revenue Service.
>
>Regards,
>Brooks
>
>Response as follows:
>
>Ruth Johnson
>Commissioner
>
>
>July 25, 1997
>
>
>Brooks Martin
>XXXXXXXXXXX
>XXXXXXXXXXX
>
>Re: Document Request
>Dear Mr. Martin:
>
>This is in response to your request made on July 23, 1997, for copies
>of the Agreement on Coordination of Tax Administration and the
>Implementing Agreement to the Agreement on Coordination of Tax
>Administration Between the Tennessee Department of Revenue and
>the Internal Revenue Service. During our meeting on that date, you
>were presented with a full copy of the Agreement and a redacted
>copy of the Implementing Agreement.
>
>It is the position of the Department that we will not release an
>unredacted copy of the Implementing Agreement. The Department's
>position is based on the terms of the Agreement, the designation of this
>
>information as for "Official Use Only" and subject to the protection
>of law enforcement material, as well as federal statutes, including
>5 U.S.C. 552(b)(2)-(3), -(7), 26 U.S.C. 6103(b)(2), and
>26 C.F.R. 601.701(b).
>
>
>Sincerely,
>
>
>
>Ruth F. Johnson
>
>RFJ:CRK
>
>
>
>
>
>
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>

========================================================================
Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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