FC: More on IRS gives out taxpayer info, correction

[Declan McCullagh <declan () well com>]

[Whew. I inadvisedly quibbled with a Privacy Journal article yesterday that 
Robert Ellis Smith sent me and I was wrong; I owe him an apology. I was 
rushing out to an FTC event (some photos at 
http://www.mccullagh.org/cgi-bin/photosearch.cgi?name=privada) and didn't 
read the article carefully enough. Lots of politech members justifiably 
jumped in to correct me. Here's a sampling of the mail. --Declan]

********

> Date: Tue, 12 Dec 2000 08:36:42 -0500
> To: declan () well com, politech () politechbot com
> From: Marc Rotenberg <rotenberg () epic org>
> Subject: Re: FC: IRS gives out taxpayer information, from Privacy Journal
> Cc: ellis84 () ma ultranet com
>
>
> Bob is correct: "the names and addresses of *respondents*
> become the property of H&R Block."
>
> Also, I stand by comments yesterday. Edmonds was not an
> abberation. Over the last several years, the Supreme Court
> has become increasingly responsive to privacy claims:
> MacIntyre (1995), Chandler (1995), ACLF (1996), Wilson
> (1999) and now Edmonds (2000). And see what happens this
> term.
>
> Marc.


********

> From: [someone at a conservative group]
> To: "'declan () well com'" <declan () well com>
> Subject: RE: IRS gives out taxpayer information, from Privacy Journal
> Date: Tue, 12 Dec 2000 08:48:22 -0500
>
> It is a common practice to "rent" a list (often called a "prospect" list),
> mail to it (with a survey or whatever), and then take the names of the
> respondents and add them to the organization's "house file" for future
> snail-mail harassment, er... communications.
>
> But the information traded is only a mailing address, and of course, the
> source of the list ( the NRA's list will have gun owners and the Claire
> Boothe Luce Institute's list will contain pro-lifers ).
>
> There are a number of non-profit organizations who raise a majority of funds
> this way, and it has been going on for years in the offline world. It's an
> important fundraising tool for conservative groups who cannot or will not
> take government money.

********

> From: "Alfred C Thompson II" <act2 () ACThompson net>
> To: <declan () well com>
> Subject: Re: IRS gives out taxpayer information, from Privacy Journal
> Date: Tue, 12 Dec 2000 09:13:43 -0500
> X-Mailer: Microsoft Outlook Express 5.50.4133.2400
>
> Doesn't "respondents" mean the people who respond to the mailing? This is
> hardly likely to be the full set of people who recieved the origional mail.
> >From the description you sent, it does not appear that H&R Block knows who
> the mail was sent to.  They only know who replied. And it does seem logical
> they be able to keep records on the people who reply. Do agreements usually
> prohibit that? In effect do they say, "you can't keep track of the people
> who write you back?"
>
> Or does "respondents" mean something different in direct mail?

********

> From: "Walker, Ed" <WalkeJE () WSDOT WA GOV>
> To: "'declan () well com'" <declan () well com>
> Subject: RE: IRS gives out taxpayer information, from Privacy Journal
> Date: Tue, 12 Dec 2000 06:35:35 -0800
> X-Mailer: Internet Mail Service (5.5.2448.0)
>
> I quibble with your quibble:  The IRS broke the law if it sold the list, but
> part of the report implies that it didn't, that it agreed to mail to people
> on its database itself and didn't disclose names and addresses or other
> information.  H&R Block doesn't know anything until a consumer responds to
> the solicitation - at which point that information (about the respondent,
> due to selection criteria) becomes the property of H&R Block.
>
> All of this makes the IRS a pack of rat-bastard spammers (of the snail-mail
> variety) rather than felons.  Hey, what's another black eye for our
> most-despised federal agency.
>
> Ed Walker

********

> To: declan () well com
> From: Frog <FrogRemailer@NoReply.Invalid>
> Date: 12 Dec 2000 14:41:17 -0000
> Subject: IRS and lists
> Comments: This message probably did not originate from the above address.
>         It was automatically remailed by one or more anonymous mail services.
>         You should NEVER trust ANY address on Usenet ANYWAYS: use PGP !!!
>         Get information about complaints from the URL below
> X-Remailer-Contact: http://yi.org/frogadmin/
>
> Declan, it is quite standard in the industry that lists are
> rented for one time use, but at the same time the standard
> industry practice and terms are that if the recipient responds
> to a mailing or other contact authorized in the list agreement,
> then that recipient's name and address becomes usable repeatedly
> by the renter, with no further payments or notification to the
> list house. Typically, there are control names (fakes) placed in
> the list to monitor the legitimacy of such reuse of names.
>
> Now whether or not IRS should be in the list business is another
> question. Since under penalty of law the info must be disclosed
> to the IRS, their using that power to go into the list business
> seems smarmy at best. But, hey, it's the IRS. What do you
> expect? Being accustomed to taking all your money unless you
> waive your 4th amendment protections and tell them what you
> talked with Harry about at lunch back in '96, a little list
> skullduggery barely blips the radar.

********

> From: "Singleton, Norman" <Norman.Singleton () mail house gov>
> To: declan () well com
> Subject: RE: IRS gives out taxpayer information, from Privacy Journal
> Date: Tue, 12 Dec 2000 09:41:52 -0500
> X-Mailer: Internet Mail Service (5.5.2650.21)
>
> I believe that when you rent a list and mail to that list the names of those
> who respond to your mailing become your property, however may experience is
> in political direct mail where the goal is to build a long-term relation
> ship with donors and activists. Standards may be different in commercial
> transactions but I doubt it since a commercial vendor would have an interest
> in building a long-term relationship with customers.

********

> From: "Bischoff, Alex" <Alex.Bischoff () xpedior com>
> To: "'declan () well com'" <declan () well com>
> Subject: RE: Yet Another Survey: Americans have become privacy pragmatists
> Date: Tue, 12 Dec 2000 09:13:54 -0600
> X-Mailer: Internet Mail Service (5.5.2650.21)
>
> > often do. Just look at Safeway discount cards (and, in DC, Fresh Fields
> > discount cards).
>
> Declan,
>
> I enjoy supermarket savings as much as the next guy, but these Purchase
> Tracking cards leave a bitter taste. Fortunately, there's an easy solution:
> lie on the application. As long as your "pretend address" is plausible (such
> as being within the same state as the supermarket), the sales-drones are
> usually none the wiser. Of course, if you do this, be sure to also checkmark
> the "don't send me mail" box, as returned mail would be a sure giveaway ;).
>
>
> Alex Bischoff                                              3812078 on ICQ

********

> Date: Tue, 12 Dec 2000 10:57:29 -0500
> To: declan () well com
> From: Jonathan Weinberg <weinberg () mail msen com>
> Subject: Re: FC: IRS gives out taxpayer information, from Privacy
>   Journal
>
>         I expect what the author meant, reading the sentence in the 
> contexzt of
> the rest of the graf, is that if any person responds to the mailing, and
> asks H&R Block to file his return, then H&R Block then has his name and
> address and can exploit them.

********

> Date: Tue, 12 Dec 2000 12:15:06 -0500 (EST)
> From: John R Levine <johnl () iecc com>
> To: Declan McCullagh <declan () well com>
> Subject: Re: FC: IRS gives out taxpayer information, from Privacy Journal
>
> > [It sure looks like the IRS violated the law. But one quibble: The Privacy
> > Journal article says: "Under standard direct-mail industry practice, the
> > names and addresses of respondents become the property of H&R Block."
>
> The respondents are the people who respond to the mailing.  Since they're
> writing back to H&R Block, you'd expect that Block would keep the
> addresses.  The article says that Block didn't know who the IRS was
> mailing to, but I agree that the whole thing stinks.  In particular, what
> is the IRS doing with a marketing database?
>
> I can see it now ... "we know you have a choice when it comes to sending
> off 30% of your income every April, so thanks for selecting the United
> States Internal Revenue Service, your one-stop source for all of your
> Federal fiscal needs!"

********

> Date: Tue, 12 Dec 2000 10:12:04 -0800
> To: declan () well com
> From: Jim Warren <jwarren () well com>
> Subject: Re: FC: IRS gives out taxpayer information, from Privacy Journal
> Cc: "Robert Ellis Smith" <ellis84 () ma ultranet com>
>
> > [It sure looks like the IRS violated the law. But one quibble: The 
> > Privacy Journal article says: "Under standard direct-mail industry 
> > practice, the names and addresses of respondents become the property of 
> > H&R Block." I don't believe that is usually the case; database firms have 
> > little incentive to give away their only asset in a one-time deal that 
> > would mean no repeat businesses. In my experience, clients usually lease 
> > the names for one-time use, but I'd be open to seeing figures proving me 
> > wrong. --Declan]
>
> Having rented numerous mailing lists in my years of running and promoting 
> the Computer Faire and other computer conferences and events, and having 
> maintained and rented my own large list -- back in the '70s-early'80s when 
> I published the freebie SILICON GULCH GAZETTE and the fee-be periodical 
> that became INFOWORLD -- I will state authoritatively that almost NONE of 
> the *commerical* list-providers "sell" their lists.
>
> They rent them for one-time use; their contracts make it very clear, 
> including ample penalties for multiple uses; they often provide them to 
> their renters only through bonded labeling shops (that place the labels on 
> the mailing pieces); and almost all serious mailing list services "seed" 
> each list they rent with some number of false entries to addresses that 
> return copies of each specific mailing piece to them for review and 
> policing of the use of their list.
>
> On the OTHER hand, lists obtained from government sources -- e.g., lists 
> of licensed real estate brokers, building contractors, assessor records on 
> real-property parcel owners, etc. -- ARE quite often one-time purchases 
> with NO control at all on their re-use (although that's slowly changing in 
> SOME cases, due to growing legislative/public awareness/concern for 
> privacy protection).
>
> --jim, Jim Warren; jwarren () well com
> Contributing Editor & technology public-policy columnist, MicroTimes Magazine
> Also GovAccess list-owner/editor
> 345 Swett Rd, Woodside CA 94062; voice/650-851-7075; fax/off due to spam-glut
>
> [self-inflating puff: Playboy Foundation Hugh Hefner First-Amendment Award;
> Electronic Frontier Foundation Pioneer Award (in its first year);
> Soc.of Prof.Journalists-Nor.Calif. James Madison Freedom-of-Information Award;
> founded InfoWorld and the Computers, Freedom & Privacy Conferences; blah blah]

********

> To: declan () well com
> cc: ellis84 () ma ultranet com, hibbert () netcom com
> from: hibbert () netcom com
> Subject: Re: FC: IRS gives out taxpayer information, from Privacy Journal
> Date: Tue, 12 Dec 2000 10:33:31 -0800
> Sender: hibbert () agorics com
>
>
> The IRS didn't send the original list to H&R Block, it went to the mailer.
> People who respond to the ad send their own name and address to H&R Block;
> they're the "respondents" the article mentions.  Under standard Direct mail
> practices (as I understand them), that's normal: the renter doesn't get the
> list, but any names they get when people respond to the solicitation are
> theirs.
>
> I'm not trying to say it's right, and as you point out, H&R thereby learns
> soemthing about the respondents, since it got to choose the criteria for
> the original mailing.  But it is standard practice.
>
> As to whether that's a violation of the law, I couldn't say.  My impression
> is that the courts have generally accepted this practice as not a
> disclosure to the list renter.  IANAL.
>
> Chris
>
> declan () well com said:
> > [It sure looks like the IRS violated the law. But one quibble: The
> > Privacy  Journal article says: "Under standard direct-mail industry
> > practice, the  names and addresses of respondents become the property
> > of H&R Block." I  don't believe that is usually the case; database
> > firms have little  incentive to give away their only asset in a
> > one-time deal that would mean  no repeat businesses. In my experience,
> > clients usually lease the names for  one-time use, but I'd be open to
> > seeing figures proving me wrong. --Declan]
>
> the article said:
> > ... a copy of a seven-page Memorandum of
> > Agreement between IRS and H&R Block, in which the IRS agreed to mail
> > out the tax-preparation software to 225,000 tax-payers selected from
> > its own "marketing database."  [...]
> > The federal tax code prohibits the release of
> > taxpayer information by IRS, and the Pri-vacy Act prohibits sale of
> > government mailing lists. IRS provided the labels to a private mail
> > house but does not consider that as a disclosure of taxpayer
> > information, as prohib-ited by law.  [...] Under standard
> > direct-mail industry practice, the names and
> > addresses of respondents become the property of H&R Block.
>
> ---
> Chris Hibbert                 protecting privacy in the computer age is
> hibbert () netcom com            like trying to change a tire on a moving car.
> http://discuss.foresight.org/~hibbert/home.html              --Colin
> Bennett

********

> X-Sender: frissell () popserver panix com (Unverified)
> X-Mailer: QUALCOMM Windows Eudora Version 5.0.2
> Date: Tue, 12 Dec 2000 13:18:09 -0500
> To: declan () well com, politech () politechbot com, cypherpunks () cyberpass net
> From: Duncan Frissell <frissell () panix com>
> Subject: Re: FC: Yet Another Survey: Americans have become privacy
>   pragmatists
> Cc: Sonia Arrison <sarrison () pacificresearch org>
>
>
> > Business President Alan Westin says that more Americans now fall into the 
> > category of "privacy pragmatist" rather than "privacy fundamentalist." 
> > Ron Plesser of Piper Marbury Rudnick & Wolf says that the Internet 
> > industry must determine how to properly use Social Security numbers. 
> > "Regulating the purchase and sale of Social Security numbers over the 
> > Internet won't come overnight," Plesser says.
>
> Damn few "privacy fundamentalists" out there.  Most "privacy advocates" 
> support massive government privacy invasions including the Internal 
> Revenue Code of 1986, as amended, the Census Bureau, and the various state 
> DMVs.
>
> Unless a "privacy advocate" is prepared to call for the elimination of the 
> above privacy invading institutions or at least their conversion to 
> anonymous credential technology, then I submit that they are *not* privacy 
> advocates at all.
>
> As for the eternal SS# question, Amex and Discover will currently give you 
> "one time use" cc numbers to use over the nets.  A consumer-friendly 
> government could do the same.  Particularly since they already have the 
> institutional setup in place.  Anyone who forms an entity of any kind that 
> has US tax implications (sole proprietorship, partnership, trust, estate, 
> corporation, etc.) can/must apply for a taxpayer ID number (TIN).  The 
> Feds could issue them to the rest of us for one-time use.
>
> DCF
>
> I knew America was in trouble when I found that the application to join 
> the Sons of the American Revolution asks for your Social Security Number.


********




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