At tax time, like most people, you are concerned about the bottom line: Will I get a refund or will I have to pay? Privacy may never enter your mind, but perhaps it should.
When you visit the tax preparer, you may get stacks of papers to sign. Pressed for time, you may sign your name without a close reading. Or, you may just assume that what you tell your accountant will go no further than the IRS.
Under a new IRS proposal, among the papers you are asked to sign, could be a consent form that gives your tax preparer your okay to sell your entire tax return.
Once you give your consent, information from your very private tax return could be sold to third-parties. This may include marketers wanting to sell you something or data brokers looking to profit from selling your tax returns to their customers. This type of use of tax return information is virtually unknown, but could include anything from unwanted marketing to more sinister uses like identity theft.
The Privacy Rights Clearinghouse submitted comments to the IRS, expressing concern about the threat to privacy inherent in the agency's proposed regulations. We recommended that the IRS abandon its proposal regarding sale to third parties. (Read the PRC Comments at www.privacyrights.org/ar/IRS-TaxData.htm)
Other consumer organizations have also written about the potential for abuse as has United States Senator Barack Obama. (Read Senator Obama's letter to the IRS, http:/obama.senate.gov/news/060322-irs_may_alter_some_privacy_protections/index.html)
Officially, the time to comment ended on March 8, 2006. However, the IRS indicates that comments received within the next few weeks will be considered. You can submit your comments to the IRS electronically at: Notice.Comments@irscounsel.treas.gov
Or you can write the IRS at the following address: Internal Revenue Service, P.O. Box 7604, Room 5203, Ben Franklin Station, Washington, D.C. 20044
Be sure to include the proposal number REG-137243-02.
As a minimum, you may want to ask the IRS to give you a "cooling off" period of about a week. That way, you can take your papers home, study them, and then change your mind if you have already given your written consent. Or like us, you might want to recommend that they abandon the proposal altogether.
To read the IRS proposal, go to www.irs.gov/pub/irs-regs/13724302.pdf
For a sample letter to the IRS, go to http://www.privacyrights.org/Letters/IRStaxprep.htm