IRS plans to allow preparers to sell data

[geekgirldany]

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.

http://www.philly.com/mld/inquirer/business/14147002.htm

what an interesting turn

[Bird Legs]

Selling Clients Info.

Wonder what Congressperson got paid how much by whom on this one.

[Black Bart]

Yes, isn't it?

.

what an interesting turn

Just read some more interesting details on this tidbit. Consent is required from the taxpayer, but some critics believe that the consent can be buried in engagement letters which are generally unread in their entirety.

In a positively Orwellian press release, the official IRS notice was entitled "IRS Issues Proposed Regulations to Safeguard Taxpayer Information." Who needs a spin doctor to work on a title that does the exact opposite of its stated intention?

Funny thing; asked for comments, Block & J-H had nothing at all to say about it. Talk about a gold-mine of info to peddle to tele-marketers.

[geekgirldany]

That is what popped up in my head is it written into an engagement letter that they don't even read.

[S T]

Circular 230

So how are they going to amend the Circular 230 rules that Enrolled Agents are under. Don't these proposed rules violate our ethics???

Or is it going to be limited to those preparers outside of Enrolled Agents?

Of course, regardless I would never think of providing any of my client information for $$, but I am sure there are a lot of other "firms" that might.

Being on the consumer end, I am really concerned and tired of my personal information being passed around!! Credit Identity, Social Security Identity, etc.

Sandy

[Black Bart]

Selling tax data

So how are they going to amend the Circular 230 rules that Enrolled Agents are under. Don't these proposed rules violate our ethics???

Or is it going to be limited to those preparers outside of Enrolled Agents?

Of course, regardless I would never think of providing any of my client information for $$, but I am sure there are a lot of other "firms" that might.

Being on the consumer end, I am really concerned and tired of my personal information being passed around!! Credit Identity, Social Security Identity, etc.

Sandy

230 wasn't mentioned. Just a guess, but I'd say they won't amend anything--maybe just put out a reg which "supersedes" all previous regulations. Ethics violation? Yeah, at least in the sense of the the trust put in us by the clients and which IRS had stressed so constantly (until yesterday) the absolutely inviolable, confidential nature of such things. Now this is the defining example of a 180 degree policy reversal.

Doesn't talk like there's any restrictions, whether EA, PA, CPA, unlicensed, or whatever.

I'm not doing it either, but this action wasn't taken for you and me--it's for large tax prep/accounting corporations to sell and for credit card vendors, etc. to buy millions of dollars worth of information. Blanket mailings would be obsolete--vendors could sharply target/tailor their offers (% rate/credit line)--one for the "pore boys;" another for the "upper crust."

Like you, it struck me that my information is going to be peddled just like every other taxpayer's. Nobody's exempt--not even IRS employees. Keeping a low profile, IRS noted "this is not considered to be significant regulatory action." Gosh; wonder what would constitute it? By IRS's tone and manner, it's apparent the administration has "told" them to soft-pedal and endorse this action, although I'd like to believe that, internally, they think it's a terrible idea. I thought about writing my congressman, but, interestingly enough, the "comment period" ended on March 8th, so it's gonna be hard to do.

This is a pure political move to rake in dough for large companies--just like the ports deal, the Medicare plan, the no-bid drugs, the no-bid Haliburton contracts, the skyrocketing gas prices, and the proposed (but declined) privatizing of social security for the benefit of stockbrokers.

Good grief! I've been a Republican for 25 years, but all this is enough to make me (a staunch conservative) jump in bed with Ted Kennedy and all the other flaming liberals. This is such unhusbandlike conservatorship of the country's resources, that it beggars the imagination. I'm starting to think they're trying to loot the U. S. treasury on behalf of big business. And, in another three years, they just might do it.

[Armando Beaujolais]

Wonder what Congressperson got paid how much by whom on this one.

You got it.

Taxpayer rights have been eroding for decades. Look at Circular 230. It basically says that any IRS employee can do anything they want, and if you as a tax professional do anything to resist in defense of your client, you're in violation.

We've been turned into government agents.

I hope Obama turns this into a lobbying scandal. Big piles of dough in the right pockets are the only possible explanation for something so hideous as IRS blessing of firms selling client information and passing it off as "taxpayer protection."

What protection does the taxpayer have?

They were trying to pass this under the radar. Don't let it happen folks.

[John of PA]

Selling our clients data

This is a disgrace. The marketing industry has become an ugly monster out of control. I would never sell my clients data, and if they gave me permission to do so, they probably do not realize what they are doing.

[Gretel]

Yes, this is outrageous. We are all treated like a bag of dump.

I wonder if this "selling certificate" includes the IRS and State Governments. They would make a bundle of money and are the best resource. Why don't we just post all tax returns on the internet?

[John of PA]

Post all returns on the internet

Thats a good one Gabrielle, but congress would not want to burden us with the task of posting all tax returns on the internet, they probably would only require us to post, just our wealthiest clients. Why not get right to the meat of things.

[Guest]

Already happening

H&R Block uses a consent form that authorizes the release of limited data to H&R Block's mortgage division and also to the financial advisor division.

My understanding is that the mortgage brokers and investment advisors don't get the entire tax return, or anything close to it. They get name, address and phone number, and that's it. It's a warm sales call.

But think about this: they're not getting this data for every tax client. Block is filtering the clients based on income level, among other things. So even though the mortgage rep or investment rep is not seeing the tax return, the mere fact that they've been given the name as a sales lead indicates that the client is in a certain income range, or expressed an interest in buying a house when they met with the tax pro, or already has a mortgage that could be refinanced. So they are indirectly releasing data that indicates that the prospective client falls within certain criteria.

Block has gotten trashed in the media lately by Spitzer, but it isn't just Block. The credit bureaus have been doing this for years. Why do think you are "pre-approved?"

Block has obviously been put under a microscope. Assuming for the sake of argument that the disclosure and consent are adequate [insert laugh track here] what they are doing does not violate Circular 230.

This may be because it is an "affiliated business."

[Dennis V]

Consent

H&R Block uses a consent form that authorizes the release of limited data to H&R Block's mortgage division and also to the financial advisor division.

My understanding is that the mortgage brokers and investment advisors don't get the entire tax return, or anything close to it. They get name, address and phone number, and that's it. It's a warm sales call.

But think about this: they're not getting this data for every tax client. Block is filtering the clients based on income level, among other things. So even though the mortgage rep or investment rep is not seeing the tax return, the mere fact that they've been given the name as a sales lead indicates that the client is in a certain income range, or expressed an interest in buying a house when they met with the tax pro, or already has a mortgage that could be refinanced. So they are indirectly releasing data that indicates that the prospective client falls within certain criteria.

Actually, the names are not filtered based on income or anything else. Names are only released to affiliated businesses if the client specifically requests it. It is not based on any criteria from the tax return. We ask the client if they would like to be contacted by a mortgage broker or a financial adviser. If they say no, that is the end of it.

[John of PA]

No data should be released

Block or anyone else should not be releasing any of thier clients data. Not even filtered data. Intuit who writes the Pro Series and Lacerte software is fighting this law, as they realize they would be at the top of the list of defendents in the hugh invasion of privacy lawsuits that this law will generate.