IRS Proposal Would Allow Tax Preparers to Sell Financial Information

Published on Thursday, March 23, 2006 by the Oregon Mail Tribune
IRS Proposal Would Allow Tax Preparers to Sell Financial Information


WASHINGTON — 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 Everson said Wednesday in an interview.

The IRS billed the proposal, issued in December, 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.

The problem, said Evan Hendricks, publisher of the Privacy Times newsletter and other publications on privacy, is that "information about you is valuable in general, and the more detailed ... it is, the more valuable it is."
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http://www.commondreams.org/headlines06/0323-11.htm