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Tuesday, March 21, 2006

Now, Even the IRS Wants to Sell Your Financial Data

Even I can’t believe this, and the past year has been full of surprises. The Internal Revenue Service has decided it should get in the business of selling your name and private information. Not directly, you understand, but to authorize every tax preparer in the country to do so. The IRS is proposing to allow tax preparers to sell the very data you provide them to do your taxes. The stuff we all thought was sacred until now.

Mind you, there have been situations in the past when certain tax information was released, but primarily for legal reasons, not for mass marketing. This is blatant government irresponsibility in the handling of perhaps one of your most personal assets. Sure, the preparer has to get your consent, but this reeks of the days when junk mailers were forced to bury that now infamous phrase in their sales pitches: we may share your name with other (junk) mailers… They don’t even have the guts to say “sell.”

In a article by Martin Bosworth, he remarks that H&R Block could sell your tax return information to data brokers such as ChoicePoint, who in turn could sell it to anyone with the ability to buy. Or, as we have observed, lose it to an ID thief (my comment). Bosworth continues with a statement by Ed Mierzwinski from Public Interest Research Group: (this is) “…the same IRS that let Richard Nixon and many other Presidents run roughshod over the privacy of ordinary American citizens…”

Kathleen Pender, in the San Francisco Chronicle, makes an interesting observation: “The IRS, with a straight face, says the existing prohibitions against sharing (there’s that killer word again) confidential data with outside parties ‘restrict the ability of taxpayers to control and direct the use of their own tax return information as they see fit.’” The consent form, which is supposed to be separate from all other material, also has a “disclaimer.” It specifies that the tax preparer has no control over your name and personal data once it is in the hands of the third party—ChoicePoint, etc. Isn’t that comforting?

Jeanne Sahadi, in a piece on, says: “You want a piece of me? Pay me.” This is the position everyone should take in the selling of their name and private information. However, if you took legal ownership of your name, you’d probably bargain it away for freebies like cable or other services, according to Chris Hoofnagle of the Electronic Privacy Information Center. He also feels that, at the present time, whoever possesses your personal data, owns it.

And that’s why we must pass federal legislation that will give consumers control over their names and private information, and, while we’re at it, pay them whenever it is sold. Sahadi agrees and cautions taxpayers further: even though the IRS regulations are not final, tax preparers could ask your consent, anticipating this potential windfall. Be aware!

More in my next Post on this issue, including the “biggies” of tax preparation like H&R Block and Jackson Hewitt, the IRS Commissioner, Mark W. Everson’s part in this new regulation, and the junk mail list people now standing in line to sell your financial data found in this new treasure trove.

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