IRS to Allow Tax Preparers to Sell Your Info?

merkel writes "The Philadelphia Inquirer reports that the IRS has proposed rule changes allowing tax-return preparers, like H&R Block, to sell an individual's return information to marketers and data brokers. The proposed rule [PDF], which does contain some substantive protections for the processing of electronic returns, was published in the Federal Register on December 8, 2005. The official comment period has passed, but hearings will be held this month."

Comments

Internet Stalking 101

[eldavojohn]

Oh no, my information is going to be sold and the government is going to allow tax preparers to sell it!

*gasp*

Let's narrow our fears on something a little more worrisome regarding privacy and the United States Government.

Ever filled out census information? Because, if you have, your information is available to anyone via a number of sites. That's right, for as cheap as an $8-$10 fee, people can find out what income range you are in along with a variety of other facts about you. They can also find out where you live for free!

I would normally thank god that I have a very non-unique name but if I enter my hometown and state, there I am listed five times with my address and parent's phone number. I was just a kid when I lived there! The best part is that if you click my name, they take the liberty to plug my address into Mapquest and Google Map bars in case you don't have the time to copy and paste it in there!

Go ahead, now try your name.

*cups his hand to his ear listening for the sound of a million nerds enshrouding themselves in tin foil*

I'm not worried about my personal information being sold to marketers ... you can send me all the marketing offers and SPAM you want. I am worried about someone with my same name trying to pass their credit card debt off on me. And I'm also worried about anyone I know who might have a problem with a stalker.

Do you know what your government is doing with your census data?

Re:Internet Stalking 101

['nother poster]

Well, it's my information. I am paying them to process and file my tax returns. Nothing more, nothing less. If they are going to sell the information needed to do a task I paid them to do, they owe me money. You want to sell my personal information? Pay me $50 for the privilege of doing my taxes.

Why not leave it to the market?

[l2718]

Well, this rule should not be too alarming -- as long as these companies are up-front about it. What I'd like to see is a premium price for privacy: for an extra $10 (or whatever the value of your personal data is), they promise to never share it. Think of it another way: there's a $10 discount for letting them share your data.

It would be different if you had to go through these people, but since there are alternatives [TurboTax?] I suspect the market will sort it out. If tax preparation software acquired a "phone home" behaviour I'd start getting concerned.

Re:Why not leave it to the market?

[l2718]

It's not your data anymore. This is like you selling me a book and then trying to dictate what tone of voice I use while reading it aloud because it's your poetry.

Say you decided to sign a contract whereby you gave them the data and allowed them to use it for various purposes, in return for $10. If you didn't like the terms (e.g. you want more than $10, you want royalties, or you don't want them to have your data at all) them you should not have signed the contract in the first place. What the law should say is that they are not allowed to do anything with your information unless you explicitely sold it to them (just like I can't read your book in public without signing a contract while it's under copyright protection).

Re:Why not leave it to the market?

[hackstraw]

Hmm...it's my data, I provided it, where's my cut?

I've been wondering this for years.

Companies have paid lip service to "privacy" over the years. Most every website and company has a "privacy policy", that often ends with the clause "subject to change without your notice".

Is there some way that consumers can organize and make their own demands of the terms that determine who they do business with? Kinda like a union for consumers?

The only answer I've come up with is hiding myself behind a company or corporation and not personally owning any property, but is there a way to do this with other consumers that want to have the same rights?

It isn't their information to sell.

[Aspirator]

It is the individual taxpayers information.

It was not acquired by the voluntary cooperation of the source.

If they want to sell it then they need permission from
the owner of the information, not the IRS's.

Fine by me.

[bigtallmofo]

I use TurboTax. I normally pay the $29 fee to electronically file it, but I can just as easily not send it to an intermediary by printing it out and mailing it in.

It will be interesting to see how many people go back to paper filing their forms directly to the IRS. Should be a nightmare of un-automation for them.

CPA

[thehubbell]

Go to a CPA. CPA's can loose their license to practice as a CPA.

CPA's ethics guidelines limit who and how a CPA share your information.

-Peer review
-Court order
-and such

It is a lot worse loose your CPA license than if a evening tax preparer to have to pick up a seasonal job. I doubt HR block would sell your info though even if they could.

How evil is H&R Block?

[DysenteryInTheRanks]

This just adds to the many reasons NOT to use H&R Block:

• H&R Block successfully lobbied to severely curtail an innovative California program to assist poor people filling out their taxes (Source: This article in Mother Jones, a regular National Magazine Award-winner)

• H&R Block charges close to 500 percent for short-term tax refund loans. These loans are predominantely used by poor people claiming the Earned Income Tax Credit. (Source: NY Times Reporter David Cay Johnston's excellent book "Perfectly Legal" and this MSNBC article about the state of California suing H&R Block.)

• I have completed the full 1040 for four tax years, including accounting for capital losses and miscellaneous income and interest, and it's just NOT THAT HARD to do your own taxes.

Re:that print button..

[rcamera]

i think they do just fine scaring people away from e-filing on their own... e-filing costs ~$30 (part irs, part h&r/intuit) while paper filing costs ~30 seconds or print time, ink, and a stamp.

Re:note to self--

[nelomolen]

I have a feeling that this already happens without a seal of approval...

My credit score dropped 58 points following filing my 2005 taxes, with no information contained within my credit reports (at all three bureaus!) having changed. The only 'new' information available was that I made substantially less in 2005 than in any other previous year, but there are 'only' three parties with that information: Intuit, the IRS, and myself.

Re:Some clarifications...

[ENIGMAwastaken]

My question about FairTax is this: If it's revenue neutral, how does the proportion change? Do the lower 50% pay more or less of the total cost?

Re:I use paper-based filing anyway...

[Firethorn]

From what I've heard, they were going to offer free e-filing themselves as it actually saves them money* but H&R and other tax-prep companies sued about 'interference with business' and forced the IRS to stop.

*No need for manual entry or scanning, forms are automatically checked for accuracy, etc...