Disclosure Awareness FTI Need and Use

Disclosure Awareness FTI Need and Use (5:42 minutes)
This is a video presentation published by the U.S. Internal Revenue Service Office of Safeguards. This video explains the concepts of "need and use" for getting access to FTI. When using FTI, state agencies need to be aware of "need and use" policy to avoid possible disclosure of sensitive information.
The IRS routinely discloses large amounts of federal tax information, or FTI, to state tax agencies. When FTI is exchanged on such a large scale, the possibility of confidentiality breaches increases. By limiting disclosures of FTI to that which is genuinely needed and will be used for tax-administration purposes, we reduce the risk of unintended accesses or disclosures. The IRS’s Office of Safeguards conducts need and use reviews of state tax agencies as part of its safeguard review process.
The Internal Revenue Service has a formal policy that the FTI provided to state tax agencies will be limited to their justified need and use for that information. The term “need and use” describes the concept that an agency must use the federal tax information it receives only for state tax administration purposes. Internal Revenue Code Section 6103(d)(1) says that “Disclosure may be made only for the purpose of “and to the extent necessary in the administration of state tax laws.” The objective of the need and use process is to reduce risk.