Philadelphia Inquirer of March 21 reports IRS plans to allow
Tax preparers to sell your tax return data to marketers.http://www.philly.com/mld/inquirer/business/14147002.htmThe IRS is considering a rules change that would allow our
most trusted financial advisors to sell entire tax returns of
consumers to marketers and data brokers! This would not only
be a serious ethical violation and breach of trust by tax
preparers, but may entirely undermine taxpayers trust in our
tax systems in the US.This rules change is apparently proposed at the behest of
Congressman Ed Markey of Illinois who raised privacy concerns
when it was discovered that some tax preparers were
outsourcing tax preparation online to India and other
countries without privacy protections. It was supposedly to
prevent the loss of financial information to identity
thieves. How ironic that the rule change was proposed as a
privacy protection, when it allows outright sale of tax
returns to marketers and data brokers.While so-called notification and consent by taxpayers is
required to allow this sale of information - can you imagine
anyone questioning their accountant about why he is asking
them to sign papers following tax return preparation? Most of
us put full trust in our tax preparers, accountants and
financial advisors when asked to sign documents. (I don't
condone this, it's just the way we operate - every person
should read every document and fully understand them
before signing.)If tax professionals suffer even a momentary flash of
reduced ethical and moral standards during that brief signing
- they may choose not to disclose what we are signing and
count on us to either ask pointedly about the documents or
that we read large sheafs of prepared paperwork to find out
that we are about to sign away our financial privacy along
with signing our tax returns.By now we should all be painfully aware of the endless stream
of data breaches, hacks, and dozens of cases of ineptitude by
data brokers and handlers of private personal financial
information.This issue has somehow escaped much public notice since it
was first proposed by the IRS on December 7, 2005. Here is
the official government notice of the proposed IRS Rule
Change allowing the sale of tax return data by tax preparers
(38 page PDF file).
http://www.irs.gov/pub/irs-regs/13724302.pdfThe Philadelphia Inquirer offered an address to protest the
rules change. It's too late to comment electronically, but the IRS
may still consider written comments by mail if you write to:CC:PA:LPD:PR (REG-137243-02)
Room 5203
Internal Revenue Service, Box 7604
Ben Franklin Station, Washington, D.C. 20044.This is so patently offensive that it is difficult to
comprehend. I want to know who convinced the IRS rulemakers
to slip this proposal in so quietly. Did Congressman Markey
have a hand in the rule language or was that a back room deal
with data brokers?Could it be that it was a lobbyist for beancounters who
make their living by doing taxes for median income families?
It certainly isn't likely to have been Ernst & Young looking
for extra little profit centers they might exploit in their
corporate client tax filings.Who would profit most from this? The data brokers and credit
reporting agencies - just follow the money. Who wants access
to broad swaths of taxpayer information? Those who don't
currently have it yet - marketers, and dozens of subsidiary
data brokers who currently don't have access to income
(and spending) data of Americans directly from tax forms.Imagine rich new income streams data brokers would have to
sell information to marketers about our buying habits, airline
preferences, hotel choices, internet service providers,
travel information, cell phone providers - all right there on
our itemized deductions list.A joint press release has been distributed by three separate
consumer organizations calling for removal of language in
the proposed rules that would allow for sale of information
in taxpayer tax returns to third parties for purposes of
selling "Subsidiary Services" to taxpayers. That broad
language is the focus of concern.http://snipurl.com/IRS_Privacy (Consumer Federation PDF)Since many of us are on the current "Do Not Call" list and
out of reach of telemarketing annoyance, you can bet your
junkmail volume would increase dramatically after your
spending habits are so well documented to marketing firms -
right off of your tax forms, which they legally purchased!If this were the only concern - it would be enough to rattle
most Americans trust in our government. But it isn't the end
of the story - we lose control over our financial data and
risk identity theft on a grand scale once the information is
in the hands of marketers. Just stop what you are doing and
go write a letter to the IRS at the address above to demand
that they stop this sellout to data brokers and marketers.Copyright © Mike Banks Valentine March 29, 2006Mike Banks Valentine blogs on privacy issues at:
http://PrivacyNotes.com/privacy_blog/ You can subscribe
to the RSS feed by entering My Yahoo or My MSN at:
http://privacynotes.com/privacy_blog/atom.xml
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Category : Finance:Taxes
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