Obama Disclosed Tax Info, but You Don't Have to

Barack Obama released his tax information, but everyone can refuse to reveal records.
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Financial transparency is an important issue for presidential candidates.

Sen. Barack Obama (D., Ill.) recently released seven years' worth of his tax filings, which disclosed income of "$1.65 million in 2005 and nearly $1 million in 2006" for his family and "charitable contributions of $137,622" during the same period,

according to the Los Angeles Times

.

Some see the move as a challenge to Hillary Clinton,

who has not released her tax records

.

But what about the rest of us? Who has the right to ask to see your tax returns? Do you have to comply?

For starters, the Internal Revenue Service keeps your documents private. Well, except to certain government agencies, like the Federal Bureau of Investigation. If you're being investigated for fraud, the FBI could have your documents subpoenaed. (FBI or IRS agents who peek at your information without authorization, however, face serious penalties.)

Outside of law enforcement, entities that request tax records are often trying to verify your stated income. They may include a real-estate agency, loan officer, bank or business partner.

Disclosure is at your discretion.

"Many people that you intend to do business with ask for tax returns as a part of due diligence," says Richard W. Goldstein, partner at Goldstein Jones LLP, a New York law firm that specializes in taxes.

Although you cannot be forced to reveal your information, their policies can dictate whether your business request is accepted. In other words, if you choose not to show a realtor your records, he or she may choose to not show you rental apartments.

Think of the request as "a matter of negotiation," says Steven Melnik, a professor of tax law at the Zicklin School of Business at Baruch College. "Ask why the information is needed and see if there are exceptions to a company's policy."

It is also important to realize that if you use the standard deductions form, there is less personal information on your tax documents than if you file an itemized return.

A standard tax form reveals basic information such as your name, address, income and Social Security number; an itemized report breaks down where your dollars actually went. (That is why

Al Gore

took a lot of heat after his tax forms revealed he gave only $353 to charity in 1997.)

So why might you choose to reveal your records?

There is "more confidence" placed in an individual offering full disclosure because "usually you're not going to overstate your income to the IRS," says Robert Ricketts, the Frank M. Burke Chair in Taxation at Texas Tech University. "The less information on my tax returns, the less concerned I would be about disclosing," Ricketts says.

Still, any tax revelation questions should be posed to an expert.

"If you're uncertain about tax disclosure," contact a local attorney

, says Goldstein. "Every situation can be unique."

Lyneka Little is a staff reporter for

MainStreet.com