Taxpayers Rights in Comparative Perspective. The Protection of Tax Related Information of Individual Taxpayers and the Rationale Behind It. A comparison between the legal systems of Germany and the United States

Table of Contents

Introduction

I Germany

Historical Development of Tax Confidentiality

Legal Framework of Tax Confidentiality

§ 30 (1) and § 30 (3) AO – The Scope of Tax Confidentiality

§ 30 (2) AO – Breach of Duty

§ 30 (4) AO – Exceptions to Tax Confidentiality

§ 30 (5) AO – Disclosure in case of Intentional False Statements

§ 40 AO – Actions contrary to the Law

Consequences of a Violation of § 30

II United States of America

Historical development of Tax confidentiality

Legal Framework of Tax Confidentiality

Freedom of Information Act and Internal Revenue Code

§ 6103 (a) and § 6103 (b) IRC - Definitions

§ 6103 (c) IRC – Disclosure of Returns and Return information to designee of Taxpayer

§ 6103 (h) (4) IRC – Disclosure in juridical and administrative proceedings

§ 6103 (m) – Disclosure of Taxpayer Identity Information

§ 6110 IRS – Public Inspection of Written Documents

III Comparison

Historical Development of Tax Confidentiality

Confidentiality as a right – Status in Constitution

Legal Framework of Tax Confidentiality

Possible Exceptions to Tax Confidentiality

Violation of Tax Confidentiality

IV Rationale

Conclusion

Research Objectives and Key Topics

This thesis examines the protection of sensitive tax-related information within the legal systems of Germany and the United States, investigating how these jurisdictions balance state interests in tax administration with the individual taxpayer's right to privacy and confidentiality.

• Comparative analysis of the historical evolution of tax confidentiality in Germany and the U.S.
• Examination of the legal frameworks, specifically the German Fiscal Code (AO) and the U.S. Internal Revenue Code (IRC).
• Identification and assessment of exceptions to tax confidentiality in both legal systems.
• Investigation into the underlying rationales—ranging from taxpayer protection to public interest and tax compliance strategies.

Excerpt from the Book

Summary of Chapters

Introduction: Outlines the core concepts of tax information, transparency, and confidentiality, and defines the research objective to compare the legal approaches in Germany and the U.S.

I Germany: Provides a comprehensive overview of the historical development and the specific legal provisions in the German Fiscal Code (AO) regarding tax confidentiality.

II United States of America: Details the historical evolution of U.S. tax confidentiality and examines relevant legislation including the Freedom of Information Act and the Internal Revenue Code.

III Comparison: Contrasts the two jurisdictions, highlighting differences in historical consistency, constitutional status, and the number of exceptions to confidentiality.

IV Rationale: Explores the motivations behind the legislative approaches, identifying taxpayer protection in Germany and tax compliance as the primary drivers in the United States.

Conclusion: Summarizes the finding that both countries maintain a high level of confidentiality, though Germany's system is characterized by a more static and protective approach.

Keywords

Tax confidentiality, tax compliance, tax transparency, rationale, taxpayer privacy, Fiscal Code, Internal Revenue Code, comparative law, tax information, legal system, data protection, public interest, tax evasion, secrecy.

Frequently Asked Questions

What is the core subject of this thesis?

The work focuses on the legal protection of tax-related information and the concept of tax confidentiality, comparing how Germany and the United States handle taxpayer data.

What are the primary themes analyzed in the research?

Central themes include the historical development of confidentiality, the current legislative frameworks, specific exceptions to confidentiality, and the underlying rationales for protecting tax information.

What is the central research question?

The study seeks to answer: "How is tax-related information of an individual taxpayer protected by confidentiality, and what is the rationale behind it?"

Which scientific methodology is employed?

The author employs a comparative legal analysis, examining national legislative rules, case law, and historical developments to identify similarities and differences between the German and U.S. jurisdictions.

What topics are covered in the main section?

The main section covers the detailed legal provisions of the German Fiscal Code (AO) and the U.S. Internal Revenue Code (IRC), discusses specific exceptions to secrecy, and compares the legal status and constitutional framework of both countries.

Which keywords best characterize this work?

Key terms include tax confidentiality, tax compliance, taxpayer privacy, comparative law, and specific legal instruments like the German AO and U.S. IRC.

Does the German system allow for the disclosure of taxpayer identity to the media?

No, unlike the U.S. system, where the IRS may disclose information if a taxpayer cannot be located, Germany does not have such an exception in its Fiscal Code.

How does the U.S. define "return information" in this context?

The definition is anchored in § 6103 (b) (2) of the IRC, covering almost all information referred to the IRS by the taxpayer regarding their tax liability.

What is the impact of § 40 AO in the German system?

§ 40 AO stipulates that it is immaterial for taxation whether an action violates statutory regulations, ensuring that even income from illegal sources is taxed and remains subject to confidentiality.

Why did the U.S. introduce the "Pink Slip Requirement" in 1934?

It was introduced in response to the 1929 stock market crash and subsequent financial crisis as a limited disclosure measure to prevent tax evasion and identify loopholes, though it was later repealed.