For sale: Your tax return

By analog | Published: March 24, 2006

The IRS, the GOP Congress, and the Bush administration plan to sell your tax returns to, well, whomever wants to buy them. This is what they call a “safeguard”, and “not a significant regulatory action”. There’s a simple, beautiful understanding to any words used by the modern GOP… just take the dictionary definition of the words they use, and they mean the opposite.

This is the sort of thing that makes my blood boil… well, in general, but specifically whenever anyone even IMPLIES a connection between the Republican Party and the libertarian side of conservative values. I mean, in America, it’s considered rude to talk about salaries in public! Historically, private tax returns have been treated as nearly sacred, especially by the IRS.

And what’s in this deal for consumers? How is this in any way good for American citizens? I can easily see how it’s good for a handful of corporations. And identity thieves. And blackmailers. And scandal-monging journalists. But everyone else? This will just suck.

But if you vote Democrat, we’ll have welfare and sex ed and the terrorists will win.

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  • http://enfranchisedmind.com Candide

    Got cite?

  • analog

    The Seattle Times, for starters.

  • TheHawk

    To be fair, its not exactly the government who is planning to sell the tax info. They’re merely planning to allow tax-preparers to sell it with people’s permission. Thats not to say its that much better, but its at leas something.

  • analog

    And I’m SURE the tax preparers will be “fair” when making it clear to you that you’re about to give them permission to sell your tax return to… well, anyone willing to pay for it. They wouldn’t just slip it into a random form you must sign along with the three dozen others, or use a default checkbox in your tax software, right? Right?

    THIS is why we have consumer protection laws. There is absolutely no benefit to consumers to have their tax returns made available to anyone else. No one in their right mind would grant permission. So it will be done in sneaky, underhanded ways, entirely for the benefit of corporations, at the detriment of ordinary people.

    There’s no “it’s at least something here”. This is just plain awful.

  • TheHawk

    Having now researched the actual proposed regulation, I say that this a huge mountain from a tiny little molehill. The regulation in no way allows tax-return preparers to in any way sell tax-return information, with or without the person’s consent. The only time a tax-return preparer can disclose information to a third-party is at the direction of the taxpayer, and with their written consent. What this regulation does is expand and clarify the section on the disclosure or use of tax-return information to make it clear what exactly is and is not allowed, and to further safeguard the rights of the taxpayer. Any one interested in looking through the proposed regulation themselves should go here

  • TheHawk

    Also, for those situations in which the regulation says the taxpayer must give consent. That consent must be given seperately for each use or disclosure specifically, specifically detailing the exact information that consent is given for and while the disclosure of an entire return, the consent form must include a detailed explanantion of why a more specific release would not work. Also, the form to recieve such a consent must be given on a seperate, full-sized sheet of paper which can contain nothing other then the request for consent, and a copy of which must be returned to the taxpayer. Also, they can not ask for your consent after presenting you with a completed return or if they have in any way already asked for it.

  • http://enfranchisedmind.com Candide

    I provide last year’s tax return in a lot of cases (mortgages, student loans, etc.), so apparently I’m not in my right mind. And I want my tax preparer to be able to send my tax return directly to someone else — for one thing, that means I don’t have to maintain my own copy of my tax return and any associated documents: I just have to fax a letter to my accountant to pass it onto someone if I ever care. I know that it was dubiously legal to do that in the past, since I have had my accountant refuse to fax it (or even to have me fax it from his office) to a third party out of legal concerns.

    And TheHawk does a good job of pointing out that it does contain a LOT of very good consumer protection. So obviously the GOP is doing a

    This is why the Democrats are construed as panicky, anti-business busy-bodies, BTW: a lot of these kind of “OMGTHESKYISFALLING!!!” panicky stuff is really just making life easier for ordinary citizens. This post is an excellent case in point.

    Now, the civil rights violations (warrantless wiretapping) certainly deserve the anger and panic going on here — but I don’t see civil rights violations here. I see a clarification of the law and enhanced convenience for those using tax preparers.

    Quite frankly, if you’re really concerned about how much information tax returns contain, we should address that problem directly. A floored flat tax contains a lot less information, which would make the stakes and the potential business interest much lower.

  • analog

    So let’s revisit this in a couple of years… and if the only outcome is to make it slightly easier to provide your tax return for a mortgage, I’ll gladly eat my words on this. GLADLY.

    But if we find tax returns being sold to credit companies without per-case consent (which seems to me the line that got crossed here), I’ll expect y’all to admit the reason liberals are panicky busybodies is because we have too much experience with “pro-business conservatives” to trust them farther than we can throw them.

    As for the anti-business comment… well, look at the stock market and small business growth during the Clinton administration, and look at it during the Bush administration (either one, and throw in Reagan for good measure), and tell me just who is anti-business. But y’all go on sticking your fingers in your ears and going LALALALALALA if it helps you feel any better about the shortsighted, selfish, irresponsible semi-legalized robbery that passes for Republican fiscal policy.

  • analog

    Although I must add, I’m with you on the floored flat tax (with a high floor). It’s essentially a progressive tax, something unfortunately lost on a lot of liberals. Of course, putting the floor in offends a lot of conservatives.

  • bhurt-aw

    I saw an interesting study a while back- people are much more willing to allow for privacy violations if it benefits them. Which is what this law doesn’t have in spades. Providing tax returns for loans, etc.- that is an advantage to you (you get the loan). What we’re talking about here is your tax preparer selling your private tax information only for the benefit of your tax preparer. Don’t expect any benefit to be passed along to you.

    So the tax information is being sold for the benefit of H&R Block, not you- and who is it being sold to? To anyone willing to step up and pay what H&R Block wants to charge. Credit card companies looking to do some targetted marketing. Or looking for a reason to jack your interest rate from 6% to 30%. All sorts of insurance and financial services looking to do the same thing. Con artists looking for good marks. People looking to do a little bit of identity theft. Remember that there is no disencentive for H&R Block to sell your information to whomever has the lucre. There’s no downside to them. And no upside to you.

    And, to be brutally honest, attempts to reassure me are going to fall on deaf ears, because I’ve heard this chorus before. It won’t be broadly interpreted. It won’t be abused. It won’t be as bad as it looks. That’s what they said about the DMCA. That’s what they said about the Patriot Act. That’s what they said about Bush’s tax cuts. That’s what they said about the war resolution (which, unbeknowst to everyone outside of the Whitehouse, didn’t just authorize unlimited use of force against anyone, it also seems to have repealled the fourth admendment). No, it’s not going to be as bad as I think, experience says it’s going to be worse.

  • TheHawk

    I’ll admit, I’m not a tax lawyer and thus can’t really say exactly how this regulation will be interpreted. However, this regulation does explicitly say that consent must be given per-case, and that any consent given is good for no more then 1 year. Also, it explicitly says that consent can not be given retroactively and as I said, can not be given after they have finished processing the tax return. So if in three years we find tax-returns being sold without per-consent then there better be a lot of people going to jail, and if there’s not its not because it wasn’t illegal.

    And if H&R Block wants to sell my tax information to somebody, there going to have to tell me exactly what information they’re going to sell to whom, and they’re going to have to do it before they complete my tax-return.

    Note that this regulation also very explicitly and loosely interprets tax-preparer for the purposes of this regulation. Basically, anyone who handles your tax-return information counts as a tax-preparer, including the secretary who made copies of the paperwork. Also, tax-return information is interpreted very broadly and includes any information giving to the tax-preparer in connection with the tax-return, and any information the tax-preparer gets from the IRS regarding the tax-return, including if it was accepted or if it qualified for a refund.

    Details on the proposed format requirements for consent forms is here.

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