Under the Radar

Here's a bull**** deal if I ever heard one.
Selling your tax return information?
Be careful what you sign!!!


Critics said the proposed regulation could lead to a loss of privacy for clients.
By Jeff Gelles

The IRS is quietly moving to loosen the once-inviolable privacy of federal income-tax returns. If it succeeds, accountants and other tax-return preparers will be able to sell information from individual returns - or even entire returns - to marketers and data brokers.

The change is raising alarm among consumer and privacy-rights advocates. It was included in a set of proposed rules that the Treasury Department and the IRS published in the Dec. 8 Federal Register, where the official notice labeled them "not a significant regulatory action."

IRS officials portray the changes as housecleaning to update outmoded regulations adopted before it began accepting returns electronically. The proposed rules, which would become effective 30 days after a final version is published, would require a tax preparer to obtain written consent before selling tax information.

Critics call the changes a dangerous breach in personal and financial privacy. They say the requirement for signed consent would prove meaningless for many taxpayers, especially those hurriedly reviewing stacks of documents before a filing deadline.

"The normal interaction is that the taxpayer just signs what the tax preparer puts in front of them," said Jean Ann Fox of the Consumer Federation of America, one of several groups fighting the changes. "They think, 'This person is a tax professional, and I'm going to rely on them.' "
Criticism also came from U.S. Sen. Barack Obama (D., Ill.). In a letter last Tuesday to IRS Commissioner Mark Everson, Obama warned that once in the hands of third parties, tax information could be resold and handled under even looser rules than the IRS sets, increasing consumers' vulnerability to identity theft and other risks.

Wu and other critics said they were uncertain who or what was behind the proposed changes in IRS privacy rules, which currently prohibit tax preparers from selling returns to third parties for marketing purposes, and require written consent if they want to use it for marketing by companies under their own corporate umbrella.

Officials at H&R Block and Jackson-Hewitt, two of the nation's largest tax-preparation firms, did not respond to requests for comment. Cressman said the IRS had so far received only about a dozen comments on the proposal.

"I think this just flew under the radar screen for so many people," McConnell said.
Although the formal comment period ended March 8, Cressman said late comments "may receive consideration if they are sent to the IRS promptly." Consumer advocates are urging taxpayers who oppose the changes to contact the agency and Washington lawmakers.