Wednesday, March 22, 2006

Alert: IRS to Allow Your Data to be Sold!

The IRS is going to allow tax preparers to sell your personal and business tax data. Yes, you read that right. The IRS is issuing a rules change (without benefit of Congress!) that will allow tax preparers like H&R Block, and Jackson-Hewitt, or Pete, the guy down the block from you who “does everybody’s returns for them”, to sell your tax information to marketers, credit bureaus, and the like, which means it will fall into the hands of those who will use it against you.

Your tax information is the deepest intrusion into your personal life the law allows any government agency to make. It surpasses the data given to the census, which is (supposedly) not linked to your identity. Your personal income, investments, marital status, prior marital status if paying or receiving alimony, Social Security Number, size of your family, who’s a student, who’s disabled, who had high medical expenses and if they were high enough to gain a deduction, what those expenses were for is there, too.

The IRS is doing this by stealth. They have recently published notice that they are making changes to IRS Regulations and Rules. “…Not a significant regulatory action", they say.

“Not a significant regulatory action?" Are they nuts? Obviously, some companies have lobbied the IRS to make these changes simply so they can gain increased income from the sale of the data, and so other companies not bound by confidentiality can store the data for later sales to market research firms, credit bureaus, or just plain no-goodniks.

The IRS says it is only trying to give more control to the taxpayer’s data by requiring preparers to get a signed release! Do you read every word you sign under at Block’s?

This is a pitiful attempt at diminishing personal identity, and exposing the taxpayer to identity theft, or unscrupulous use of their data. Further, in the case of families, it gives the permission of the one or two persons (if filing jointly) to sell the personal data of everyone on that return – including kids.

Imagine the eventual onslaught: you will be inundated by demographically matched sales people, calling you, sending you emails, and snail-mails, and even camped out on your doorstep waiting your arrival home from work, with sales pitches tuned to your family’s data. Have a nasty neighbor you don’t get along with? Watch out they don’t go to the online XYZ Data Repository and buy your tax data to look for things to use against you.

Specifically, by requiring the tax preparer to obtain your authorization for the release of your data, the IRS is saying to the preparer that they can do whatever they want with your data – as long as they get your release.

It is not too late to stop this. There is a 30 day public comment period after the prospective rules are published. While it is too late to post comment at the IRS website, there is still time to register your outrage by snail-mail at:

CC:PA:LPD:PR (REG-137243-02)
Room 5203
Internal Revenue Service, Box 7604
Ben Franklin Station, Washington, D.C. 20044

You know what to do. And, while you are writing them, you should call your Congressman and Senator and get them to move on this. It’s an election year, so they should be responsive.

See an expansive article about this at the Philadelphia Inquirer, titled
IRS plans to allow preparers to sell data.

This is reprehensible. Let’s get it stopped now.

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