Document Type

Article

Disciplines

Taxation-Federal | Tax Law

Abstract

In this article, Professor Pomp provides a historical overview of the debate and law surrounding public access to individual tax returns.

To fund the Civil War, the Revenue Act of 1862 imposed an income tax on individuals. At a time which predated reliable mail, the public was notified of their tax liabilities through newspaper advertisements.

In 1870, when the income tax had become unpopular, Congress prohibited the publication of tax returns. Public disclosure was revisited in 1913; by 1918 the public was permitted to view lists of individual taxpayers, though this information was not allowed to be published.

Fueled by corruption concerns, the Revenue Act of 1924 required the disclosure of names, addresses, and tax liabilities. The New York Times published the taxes paid by thousands of persons. In 1926, however, the law was changed due to privacy concerns and the failure of the disclosures to uncover tax evasion. Only the taxpayer’s name and address, but not their tax liability, could be published.

A resurgence in favor of disclosure emerged in 1934, during the Great Depression. The tax liability (as well as name, address, gross income, deductions, net income, and credits) of taxpayers was made public in an attempt to deter tax evasion. But critics of this approach, concerned that compromised taxpayers would be targeted by criminals and con artists, managed to repeal the law.

The law remained unchanged until, in the aftermath of Watergate, Congress enacted IRC section 6103.

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