Politech mailing list archives
FC: IRS gives out taxpayer information, from Privacy Journal
From: Declan McCullagh <declan () well com>
Date: Tue, 12 Dec 2000 08:25:20 -0500
[It sure looks like the IRS violated the law. But one quibble: The Privacy Journal article says: "Under standard direct-mail industry practice, the names and addresses of respondents become the property of H&R Block." I don't believe that is usually the case; database firms have little incentive to give away their only asset in a one-time deal that would mean no repeat businesses. In my experience, clients usually lease the names for one-time use, but I'd be open to seeing figures proving me wrong. --Declan]
******** From: "Robert Ellis Smith" <ellis84 () ma ultranet com> To: "Declan McCullagh" <declan () well com> Date: Thu, 7 Dec 2000 17:45:53 -0500 PRIVACY JOURNAL electronic edition, December 2000 In accepting this electronic edition, the subscriber agrees not to transmit or copy this text, except for brief excerpts of 250 words or fewer, without the consent of the publisher. To order books: http://www.privacyjournal.net Or, if you prefer, go to amazon.com: www.amazon.com/exec/obidos/redirect-home/privacyjournal [snip--DBM] IRS Generates Commercial Mail Advertising to Taxpayers As soon as Duane Horton received the mailing, he spotted something fishy. It was an unsolicited CD-ROM containing Kiplinger TaxCut software and an appeal from H&R Block, the tax-preparation people, to sign up for electronic filing of his federal in-come-tax returns. It was the mailing label that was suspicious. The solicitation was ad-dressed to Horton and his wife in a format that appears only on their tax returns and to a post office box in Rhode Island at which the only joint mail they receive is from state and federal tax agencies. Horton suspected that the Internal Revenue had disclosed his name and address to its friends at H&R Block. Block's home office in Kansas City wasn 't much help in answer-ing Horton's questions. In fact, it asked for Horton' s Social Security number before it would even talk to him. Duane Horton is a persistent man. He wrote a complaint to the IRS Criminal Investiga-tion Division, and five months later, in June, he sent a Freedom of Information Request to the revenue service demanding all of its records about his complaint. In September, he received a copy of a seven-page Memorandum of Agreement between IRS and H&R Block, in which the IRS agreed to mail out the tax-preparation software to 225,000 tax-payers selected from its own "marketing database." It agreed to mail out an additional 225,000 pieces of mail later. It's part of the IRS campaign to get more taxpayers to file returns electronically, not manually. IRS paid for the mailing. The federal tax code prohibits the release of taxpayer information by IRS, and the Pri-vacy Act prohibits sale of government mailing lists. IRS provided the labels to a private mail house but does not consider that as a disclosure of taxpayer information, as prohib-ited by law. But the point of the mailing was to have recipients respond to H&R Block and sign up for electronic filing. Under standard direct-mail industry practice, the names and addresses of respondents become the property of H&R Block. The company is free to solicit more business from them, and the memo of agreement does not prohibit this. Originally a folksy tax-preparation service, Block now has subsidiaries that provide fi-nancial advice, mortgage loans, mortgage brokering, accounting, investments, and tax-filing software including TaxCut, in the U.S., Canada, Australia, and England. Under a new federal law enacted in 1999, even if a consumer objects, the conglomerate is free to exchange among all its affiliates the personal information it has harvested from the IRS arrangement. The memo implies that IRS has similar arrangements with other businesses. Because the names and addresses for the original mailing were selected with specific criteria, H&R Block now knows something about the re-spondents: they filed a paper re-turn for 1998; they had a refund; they prepared their own returns; they apparently used no computer software previously; and they have a joint gross income of $40,000 or more. H&R Block knows all of that about the respondents, and we now know all of that about Duane Horton. [...] Index to This Newsletter To find articles in your stored copies of PRIVACY JOURNAL, you need the Index to Volumes 21-26, 1994 through October 2000. It has more than 250 entries on pri-vacy, from Adoption to Zero Knowledge. Order today from PRIVACY JOURNAL, 401/274-7861, fax 401/274-7861. privacyjournal () prodigy com. [...] ------------------------------------------------------------------------- POLITECH -- the moderated mailing list of politics and technology You may redistribute this message freely if it remains intact. To subscribe, visit http://www.politechbot.com/info/subscribe.html This message is archived at http://www.politechbot.com/ -------------------------------------------------------------------------
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- FC: IRS gives out taxpayer information, from Privacy Journal Declan McCullagh (Dec 13)