“When you’re trying to find out what the IRS is doing and how they’re doing it and techniques, it’s very difficult to get much headway without running into a 6103 barrier,” he said.

The rules also frustrate the IRS, because the tax agency can’t tell its side of what seems like a taxpayer horror story.

“If the taxpayer does not give any kind of waiver, then the IRS is totally constrained, even if the stuff is in the newspaper,” said Williams, now a senior counsel at Public Strategies Washington Inc.

That was a hurdle during congressional hearings in the 1990s, Williams said, when taxpayers testified about agency abuses that he said were “trumped up.”

Ready Response

The privacy rules give IRS officials a ready response when confronted with taxpayers’ complaints. Afterward, upon request, they can explain more to the panel’s chairmen and staff members.

“It may give you some momentary relief in a situation like that, but it’s not like the internal game plan is let’s use 6103 and hide our sins,” said Matthews, now an attorney at Caplin & Drysdale in Washington. “Because somebody’s going to get it eventually.”

Every year, the IRS releases a report on the number of disclosures under section 6103. The 2012 total, including bulk data for research purposes, was 8.3 billion, with about 4.5 billion going to states, 2.4 billion going to congressional committees and 1.3 billion to the U.S. Census Bureau. The IRS made three disclosures to aid in investigations of terrorism.

The rules also apply to tax-exempt groups, which are at the center of the current controversy. Their applications for tax- exempt status aren’t public unless they are approved by the IRS. Donor lists filed as part of their tax returns are private.

Interpretations of the rules can vary.