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NEWS: Your Tax Returns For Sale!

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posted on Mar, 22 2006 @ 03:20 AM
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For the first time, the Internal Revenue Service is proposing a rule change that would permit information from individual tax returns to be sold to marketers and data brokers. While written taxpayer authorization would be required, critics charge that many taxpayers will fail to understand the full nature of the authorizations their tax preparers will most likely present. The proposed rule change is scheduled for public hearing on April 4, 2006.
 



seattletimes.nwsource.com



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

The possible 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 proposed changes as house-cleaning measures needed to update outmoded regulations that were adopted before the IRS 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 proposed changes a dangerous new 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.




Please visit the link provided for the complete story.


I find it completely ironic that the proposed rule changes have been wrapped in the following title:

Proposed Regulations to Safeguard Taxpayer Information

The full regulations may be found here.

This is a pretty surprising move I think has received far too little scrutiny. Without national media attention, I'm assuming this will easily pass the public hearing at the beginning of the month.

For those of you using Turbo Tax type software, you can bet these authorizations will appear there as well. The rules specifically contemplate "electronic authorizations."

I suggest you READ VERY CAREFULLY...

And to think the IRS designated these rule changes as "not a significant regulatory action."


See also, Notice 2005-93

[edit on 22-3-2006 by loam]

[edit on 22-3-2006 by Thomas Crowne]




posted on Mar, 22 2006 @ 01:59 PM
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Why is it that every time I hear something like this, I say to myself, "I cannot believe this"!?!?!? When, in fact, I can all too easily believe it.

The fact that it's wrapped in the name of security just makes me ill!

And we already used Turbo Tax...



posted on Mar, 22 2006 @ 02:04 PM
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BH, while the new rules wont go into effect for another few weeks (if it all goes their way), I wonder if Turbo Tax included these authorizations in anticipation of their passing. Can you look to see if that is the case?

Based on my reading, I see no reason why these authorizations could not be obtained in advance of the promulgation of these new regs...


What a scam!



[edit on 22-3-2006 by loam]



posted on Mar, 22 2006 @ 02:13 PM
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while I would never, for any amount of money, sell my clients' information to marketing folks (yup, accountant here), let me tell you my take on why they call it safeguarding the taxpayer's rights.

let's say you come to me to do your taxes and you have the option to check a box allowing your information to be used and you say no, your information is not for sale. Now I get caught selling it. I am screwed and out of work.

As it is now, there's an unspoken understanding that when you give me your information, I am using it to prepare your taxes and assist you in other planning strategies. Nothing more.

So, this isn't really giving me the right to sell the information, it is putting more restraint on me from doing it without gaining proper authorization from you.

That said, let me again state that any tax preparer who would sell his clients information is someone you might want to rethink using. I am going to go out on a limb now and guess that the first folks to be caught in violation of this, if it gets passed, will be small chop-shop type preparers and the first class action suits will come against HR Block. They do so many bad things to their "clients" with full approval from the clients that it is a wonder they get repeat business.



posted on Mar, 22 2006 @ 02:56 PM
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One more example of how the Bush administration places corporate interests over the individual citizen's. Yeah right like they will pay attention to our requests not to sell our information. Guess they will use the money to finance Iraq like their sale of national forests is supposed to do...a major stink in these parts, and Va. is about as red state as you can get and people are up in arms about it.



posted on Mar, 22 2006 @ 03:15 PM
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Originally posted by grover
One more example of how the Bush administration places corporate interests over the individual citizen's. Yeah right like they will pay attention to our requests not to sell our information. Guess they will use the money to finance Iraq like their sale of national forests is supposed to do...a major stink in these parts, and Va. is about as red state as you can get and people are up in arms about it.


grover (and everyone else I guess), the reg proposal is designed to protect the information from being used by PREPARERS not the IRS.

Read the thing. By checking the box your preparer CANNOT sell your information. It is a means of being able to go after the preparers who sell your information.



posted on Mar, 22 2006 @ 03:22 PM
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But it is the IRS who is allowing the use, if properly authorized... Let's be clear whose hands are on the faucet.

[edit on 22-3-2006 by loam]



posted on Mar, 22 2006 @ 05:09 PM
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no, the IRS is requeting the the taxpayer either give permission or deny permission for the TAX PREPARER to use that information.

Again, I think it is a sleazy practice to sell this information to anyone but this is an attempt to put a stop, or at the very least, limit the process. I also think by doing this you will see a rash of companies contacting preparers and attempting to convince them that selling the info is fine if the client didn't check the box. that box will be as attended to as the presidential election box



posted on Mar, 22 2006 @ 08:36 PM
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Once again:




The proposed regulations also contain other modifications to reflect the principle that taxpayers may provide knowing, informed, and voluntary consent to a tax return preparer's use of tax return information for purposes other than tax return preparation. While the ability of a tax return preparer to solicit consent from a taxpayer remains limited under certain circumstances, such as when the taxpayer has already rejected a substantially similar request for consent, these regulations allow a tax return preparer to solicit a taxpayer's consent to use tax return information under certain circumstances that the existing regulations currently prohibit. For example, these proposed regulations allow tax return preparers to obtain consents to use tax return information for solicitation of services or facilities furnished by any person rather than limiting solicitations to the services or facilities offered by the tax return preparer or member of the tax return preparer's ``affiliated group.''

Federal Register: December 8, 2005 (Volume 70, Number 235): 26 CFR Part 301



Previously, consent was limited to affiliate distribution...the idea being that your tax preparer, with your permission, could only share your returns with it's affiliates to deliver additional tax preparation services or other services like tax planning...

This is a beast of an entirely different color.

EDIT: Fixed link.

[edit on 22-3-2006 by loam]



posted on Mar, 22 2006 @ 08:50 PM
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Fair enough Laom.

BH, I don't think you need to worry since Turbo Tax isn't your preparer but you might want to double check with them just to be safe.



posted on Mar, 22 2006 @ 09:41 PM
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No problem, Crakeur. Just wanted everyone to be clear what this potentially means....


I totally agree with you, btw, on the H&R comment! They recently got caught selling investment vehicles to their clients, where they charged fees in the hundreds of dollars more than the instrument would return.... Of course, the victims were all elderly or low income...


What scum! If they were prepared to do that, what do people think they would do with this?



posted on Mar, 22 2006 @ 11:03 PM
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Is nothing sacred?!

No, apparently not.

Anything for a buck, the American national animal.




.

[edit on 22-3-2006 by soficrow]



posted on Mar, 23 2006 @ 06:28 AM
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let's boycott this sham!!! let's not prepare our taxes!!



I am not happy!! the clients privacy when it comes to tax information should be a given! no one should be allowed to sell it. wonder who does tom delays, bush's chaney's, condi's and all the others tax return...wonder how much their preparers would charge for a copy???

what about the supreme court justices??? anyone know who prepares theirs. maybe we could get a fundraising gig going, buy them, and well, publish them all on the web, less the social security numbers of course, for the whole world to see....

bet it would take no time whatsoever for them to shoot this down then!!!



posted on Mar, 23 2006 @ 06:48 AM
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I am a retired EA, Enrolled Agent for the IRS. This means that I was licensed by the IRS to prepare tax returns and represent my clients in tax court.

This makes my whole body cringe! I have worked for CPA firms and had my own business. The first word drilled into our heads from the very beginning is confidentiality.

Never, in a million years, should a clients information be shared with anyone unless there is permission given by the client for a specific use.

I really don't see how this relates to "our protection".



posted on Mar, 23 2006 @ 09:19 AM
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Originally posted by loam
No problem, Crakeur. Just wanted everyone to be clear what this potentially means....


I totally agree with you, btw, on the H&R comment! They recently got caught selling investment vehicles to their clients, where they charged fees in the hundreds of dollars more than the instrument would return.... Of course, the victims were all elderly or low income...


What scum! If they were prepared to do that, what do people think they would do with this?


those IRAs also charge a fee to make additional contributions. That's robbery in my opinion. totally taking advantage of the naive and trusting. However, thanks to H&R Block, my business grows a bit more each year.


Mahree, the regulation will give the preparer permission from the client. That's the whole point. Truth is, I never even thought about the idea of using the info for other purposes. When my brother in law, who worked with me for years, decided to quit and become a stock broker I wouldn't even let him contact the clients he had worked with over the years. It just seems so sleezy.



posted on Mar, 23 2006 @ 09:24 AM
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Crakeur

It's nice to know some still have ethics...



posted on Mar, 23 2006 @ 09:36 AM
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Originally posted by loam
It's nice to know some still have ethics...


I get paid very well to keep my clients' money in their pockets. I wouldn't want to ruin the level of trust they have in me by selling them out for a few extra dollars.
Not worth it.



posted on Mar, 23 2006 @ 09:45 AM
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Originally posted by Crakeur

Originally posted by loam

Mahree, the regulation will give the preparer permission from the client. That's the whole point. Truth is, I never even thought about the idea of using the info for other purposes. When my brother in law, who worked with me for years, decided to quit and become a stock broker I wouldn't even let him contact the clients he had worked with over the years. It just seems so sleezy.


I do understand this point. My point was that it already is a law. It looks to me that the only difference is putting it on the face of the return.

And I do believe that it will be abused. As was mentioned before, the check box for political contributions is not used correctly. In an interview with a client, they will usually not understand what it is for. When I explained they just didn't want to be bothered with it. So, I can see some tax preparers taking advantage of this.










posted on Mar, 23 2006 @ 11:02 AM
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There's only one such box on my taxes, and I said no. It was only about providing your name, address, and date of birth to Elections Canada, anyway. I guess Canada hasn't dropped that low yet.

But if you didn't notice, all information you are legally required to fill out on a census is already sold to companies anyways... tax info/income is only a small part of that. In fact, a lot of it is already free information. Here is Canada's, I don't know where the US keeps theirs
. commerce.statcan.ca...


[edit on 23-3-2006 by Yarcofin]



posted on Mar, 23 2006 @ 12:28 PM
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It is my understanding that this rule change would allow people to be able to electronically file their tax return for free. There are companies who would allow people to file their returns in exchange for certain information that the company would then sell. I am not saying that I agree with this, but in my opinion the bigger crime is the outrageous interest rates charged for these Refund Anticipation Loans (Rapid Refund) and the fact that the IRS doesn't allow an individual to file their returns online. They are in fact supporting a multi-billion dollar industry.



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