Common use of IRS Reimbursable Authority Clause in Contracts

IRS Reimbursable Authority. The authority to perform services on a cost reimbursable basis is contained in sections 6103(p)(2) and 6108(b) of the Internal Revenue Code (IRC). Performance of services is authorized only when consistent with the basic public obligations of the Internal Revenue Service (IRS). If necessary to fulfill its public obligations, the IRS may modify, reject, cancel, or terminate any part of this agreement and return the unused balance of funds advanced. 1a. Section 6103(p)(4) of the IRC provides specific requirements for Federal, state, and local organizations to safeguard Federal tax returns and return information as a condition of receiving the information. IRS Publication 1075, Tax Information Security Guidelines for Federal, State, and Local Agencies (OMB No. 1545-0962) provides additional guidelines.