Fergie's Tech Blog

Sale of Data by Tax Preparers Draws Protests

Albert B. Crenshaw writes in The Washington Post:

Consumer groups and privacy advocates are attacking proposed Internal Revenue Service rules that would spell out how tax-return preparers may legally sell financial information and other data from their clients' returns.

It has long been a principle of tax administration that no unauthorized person can get such information and that this assurance encourages taxpayers to file honest and complete returns. That notion is still a "fundamental underpinning" of IRS practice, Commissioner Mark W. Everson said yesterday in an interview.

The proposal, issued in December, was billed by the IRS as improving privacy protections for taxpayers, detailing the steps for getting permission to use the information. But it has focused attention on a little-known fact: Although law forbids the unauthorized disclosure of taxpayer information, return-preparers have long been allowed to disclose it, even sell it, if they obtain their clients' permission. Once the information goes out the door, taxpayers have little control over what happens to it.

posted by Fergie @ 3/23/2006 08:43:00 AM