IRS PLAN WOULD ALLOW SALE OF TAX DATA TO MARKETERS
March 22, 2006
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The Internal Revenue Service (IRS) is quietly moving to loosen the once-inviolable privacy of federal income-tax returns, the Detroit Free Press reported. If the agency succeeds, accountants and other tax-return preparers for the first time would be able to sell information from individual returns — or even entire returns — to marketers and data brokers. The change is described in a set of proposed rules the Treasury Department and the IRS published in the Dec. 8 Federal Register, where the official notice labeled them “not a significant regulatory action.” IRS officials portray the changes as housecleaning needed to update outmoded regulations adopted before it began accepting returns electronically. The proposed rules, which would become effective 30 days after a final version is published, would require a tax preparer to obtain written consent before selling tax information. Critics call the changes a dangerous breach in personal and financial privacy. They say the requirement for signed consent would prove meaningless for many taxpayers, especially those hurriedly reviewing stacks of documents before a filing deadline. Sen. Barack Obama (D-Ill.) criticized the proposal in a letter March 14 to IRS Commissioner Mark Everson. Obama warned that, once in the hands of third parties, tax information could be resold and handled under even looser rules than the IRS sets, increasing consumers’ vulnerability to identity theft and other risks.
IRS PLAN WOULD ALLOW SALE OF TAX DATA TO MARKETERS
