Privacy villain of (last) week: the IRS [priv]

[Declan McCullagh <declan () well com>]

-------- Original Message --------
Subject: [NCCP] Privacy Villain: IRS
Date: Fri, 16 Apr 2004 19:43:12 -0400
From: J Plummer <jplummer () consumeralert org>

                      Privacy Villain of the Week:
                                 The IRS

Did you file intimate financial details with the Internal Revenue
Service yesterday? Have you ever paused to wonder what happens with that
sensitive information after it gets to the P.O. Box in Memphis or Puerto
Rico?

According to the Congressional Joint Committee on Taxation, a lot
happens. The JCT publishes information provided by the IRS on how many
times each year IRS shares taxpayer information with others.
<http://www.house.gov/jct/> According to the Disclosure Report for 2003
released earlier this month, the total for last year was 3,744,087,686.
That's more than ten times for every man, woman and child in the United
States!

Now, about two-thirds of that total is accounted for by disclosure to
the individual states. The report says these 2.4 billion disclosures are
to state tax authorities for the purpose of administering state tax
laws. Why the states need more than eight data-dumps for each person
living in these United States is unclear, however. The vast majority of
these state disclosures were taken from "Master File tapes," apparently
something of an automated process.

More than 61,000 disclosures were made to criminal investigators in
various federal agencies and US Attorney offices, up more than 30
percent from 2002. These were not automated "tape" disclosures, however,
but rather "disclosures made by furnishing transcripts of records,
permitting inspection of records, furnishing photocopies of records,
oral disclosures, and disclosures by means of correspondence without
furnishing a copy of the record."

Meanwhile, 1.14 billion disclosures were made to the Census Bureau so
that pointy-headed bureaucrats can engage in social-engineering schemes
designed to undermine the free market choices individuals make in their
daily lives.

2.47 million disclosures were made to the Department of Agriculture so
that that Department's bureaucrats could actively work to control the
market for food, which results in higher prices for consumers at the
grocery store.

And 2.3 million disclosures were made to foreign taxing authorities.
That kind of activity undermines foreign investment in America,
resulting in a weaker economy, with fewer jobs, higher prices and less
innovation.

And this disclosure habit of the IRS is just one way the bureau
undermines privacy. A few examples from recent years:

     * The IRS launched in 2002 a new push to dig through credit
     card records in foreign banks looking for American accounts.

<http://www.nationalreview.com/nrof_comment/comment-mitchell040902.asp>

     * Last year, the General Accounting Office of the Congress
     found IRS computer systems to be ludicrously insecure and
     vulnerable to hackers.
     <http://www.computerworld.com/cwi/story/0,1199,NAV47_STO59540,00.html>

     * In 2000, Privacy Journal caught the IRS signing taxpayers up
     for junk mail. <http://www.politechbot.com/p-01563.html>

     * A General Accounting Office study found the IRS did not live
     up to the privacy criteria for government websites set by the
     Federal Trade Commission, bombarding users with third-party
     cookies.
     <http://freedom.house.gov/library/technology/gaoirs.pdf>

     * Congress closed a loophole in 1997 that let thousands of IRS
     employees "legally" "browse"
     <http://www.privacilla.org/government/irsbrowsing.html>
     through taxpayer records at will, subject to the occasional
     administrative slap on the wrist, but no criminal sanction. If
     you believe the practice stopped in 1997, we have swampland in
     Florida for sale you might be interested in.
     <http://www.epic.org/privacy/databases/irs/disposition.html>

Of course, consumers don't really have much of a choice when it comes to
turning over sensitive information to the IRS. It's not like you can
take away your business from the IRS when you become dissatisfied with
its privacy policy or practices. The tax collectors throw around words
like "voluntary compliance," but that just means you volunteer to risk
imprisonment if you don't give them everything they want - including
your personal information. Which is why the IRS is the Privacy Villain
this week.

--
By James Plummer

The Privacy Villain of the Week and Privacy Hero of the Month are
projects of the National Consumer Coalition's Privacy Group. For more
information on the NCC Privacy Group, see www.nccprivacy.org or contact
James Plummer at 202-467-5809 or jplummer () consumeralert org .



--
James Plummer
Policy Analyst
Consumer Alert
(202) 467-5809


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