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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."
Note to self: re-read the EULA on Turbo Tax.
Cogito Ergo Sum
Oh no, my information is going to be sold and the government is going to allow tax preparers to sell it!
... 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.
*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
Do you know what your government is doing with your census data?
My work here is dung.
Put an end to the IRS gathering this information on every single person on the country. Support the FairTax.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
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.
As if there's not enough trouble already with identity fraud & getting Social Security numbers of folks.
What dingbat at the IRS thought this was a good idea?
You know, one side effect of this is that it might accelerate the Flat Tax.
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.
I'm a big tall mofo.
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.
Hmm...it's my data, I provided it, where's my cut? I'd say $10 for every company my information was sold to. And I get royalties for every time a new company takes it from one of the original buyers. At least that would be incentive to give up your information.
Critics call the changes a dangerous 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.
"The normal interaction is that the taxpayer just signs what the tax preparer puts in front of them," said Jean Ann Fox of the Consumer Federation of America, one of several groups fighting the changes.
You can't expect to protect people from their own stupidity. If the preparer can't get the tax return data this way, they can just have their customers fill out a 'financial worksheet' and sell that instead. If you're stupid enough to 'just sign' anything, you're going to have your privacy violated. This ruling is moot.
The IRS wants to make it easier for people that I (may) do business with in processing my taxes to sell my tax information to marketers and whatnot?
Let me think what is on my tax info (I'm not rich and don't have a tax accountant, and I'm ignorant of needing such additional stuff).
My SSN.
My income.
My major debts (mortgage interest writeoff and student loan interest writeoff).
Doesn't equifax, and the other companies that collect and sell this information already have that and more?
My tinfoil hat might be suffering from a large dose of gamma radiation, but isn't this stuff already public knowledge?
Granted, the additional provisions for more people to be able to sell this information does absolutely nothing to my benefit, but I see where having more avenues to get to what is already practically in the public domain already is going to harm me any more.
Just think of the possibilities, like blackmailing people by telling them you will query their deductions with the IRS and get them audited, you could get a raise out of your boss, have random people give you money, get dates with pretty girls (hey this is /.), the possibilities are endless.
Any sufficiently advanced man is indistinguishable from God
After all, under their current procedures, people in India who were hired at Indian Minimum Wage already have access to your information. All it takes is a good memory to steal your identity. Which is why I used TurboTax previous to this- and may be switching next year if their EULA doesn't include a privacy clause.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Sadly, nothing is personal... not your ethnicity, not your income level, not your educational background, not your browsing habits, not your spending habits, not your tv viewing habits, etc... Maybe this will wake enough people up to change the way data about our lives is traded and sold to anyone with some green.
ConsultingFair.com
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.
So, I don't see a problem. If for some reason, say free preparation, someone wants to give away this information, isn't that their choice? As long as I have the ability to say no to this, I don't see a problem.
Personal information is a commodity today. If you want to sell it, you should have that right. If you want to keep it private you should have a choice to do that as well.
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).
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?
When you do your own taxes for a partnership or foreign investment, I'll be impressed. The tax prep software give you nice easy to fill out forms that feed into the final stuff but you are basically on your own as to how to fill them out. Until one owns a business I'd agree at that point you are likely enough to miss out on a decent portion of tax planning (ie if you structured a transaction this way rather than that way you would save on taxes). Those change frequently enough that unless you are paying high dollar (more than say H&R Block) for tax advice you probably won't be getting it in the service rendered.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Enough is enough...of calling a GS tax "fair."
...and, come on, this "hidden taxes" routine is just lame. We need 2.5T to keep the proverbial lights on in the federal government. You WILL PAY FOR IT SOMEHOW. You don't need to go through all the individual taxes to know what the government is taking. Just look at the budget. It comes to about $17k per working adult. Yeah, that's a lot of cash--and that's your "fair share." Well, actually, it's about $8333 per person, so if you have a family of four, you really should be ponying up about $33k instead of getting all those child credits while sucking up the education budget.
At a certain point (generally at about $100k), the vast majority people quickly stop consuming their income and start hoarding it. Oh sure, some will burn through it on booze, drugs and hookers, but most start shoving that capital back into capital. The higher that income gets, the smaller the percentage of it that is consumed. So, your "fair" tax would, dollar-for-dollar, tax someone making $100k the same as someone making $1M...and I got news for you, that "used property" exclusion? Well, they ain't makin' any new land, so guess what will happen to the price of dirt? Well, until we're vacationing on the Moon.
Business purposes = no tax? Again, people nearing or exceeding $100k routinely put their entire damned lives on Schedule C (or into corporations) for exactly this purpose. Even if they _do_ consume above that level, it will surely be claimed as business expense--and that's determined at the point of sale or are we back to filing returns to prove it? Well, guess what, if you can avoid taxes completely by claiming business expense...you're going to find a great number of entrepreneurs and if they have to file returns, what's the benefit again in terms of paperwork and complexity reduction? If they don't, how do we prove it was business-related? Hmm.
A "prebate?" So, everyone gets a monthly check for the taxes on the first $14k of income, assumed to be consumed? Gah... That is going to eliminate the bureaucracy precisely HOW? So, people under $14k will get prebates for whatever % of $14k or will they have to file returns to prove exactly how poor they are? That'll really free up the ol' paperwork and fraud burden, now, won't it? What if it's a family of 12 and all but one are saving every penny. Now do we file returns to prove our consumption of "necessities?" Oy vey.
The tax structure we have now is designed to induce certain behavior in many sectors. It is also designed to pay for certain _types_ of consumption, like gas taxes paying for the interstate pavement based on use. You consume pavement, you pay for the pavement. This sort of all-encompassing tax would shift the bureaucratic burden, it wouldn't eliminate it.
Really, I think the "Fair Tax" crowd has critically examined the current problem, which is certainly well due and admirable, but I don't think they've critically examined their solution, which on even first sight is fraught with all the same problems as the existing system -- and totally ignores a number of problems that the existing system deals with quite extensively.
Once again, the media has overstated a story to attract attention to a non-issue. Regardless of what the IRS decides to do about tax preparers sharing tax information, this practice is already regulated by another law: the Gramm-Leach-Bliley Act(GLBA).
GLBA was passed in 1999 to modernize aspects of the banking industry. Title V prevents financial institutions from selling consumer data without consent from the consumer. Remember a couple of years ago every bank, credit card company, loan agency, and anyone else who touched your money flooded your mailbox with Privacy Policy notices and "opt-out" statements? That was GLBA.
The best part is that GLBA classifies tax preparers as financial institutions , so H&R Block must provide the same protections to your information that a bank would (or should).
The proposed IRS rule change under section 1 specifically cites GLBA and points out that this rule change has no impact on the GLBA requirements.
Sorry to all you privacy alarmists out there, but this "Privacy Bomb" for the IRS is a dud.
Sigs are for lusers. Hey! wait a second...
Yeah, it's called a government. You elect representatives that share your views, then they vote to determine a policy that represents the majority. They have absolute power to protect the people. At least, that's how it's supposed to work. Voting for the guy with the prettiest TV commercials kind of short circuits the whole thing.
The biggest concern I see about 3rd parties holding a complete picture of your finances is identity theft. I recently finished an encryption project for a fairly large company that had millions (as in m) of unencrypted credit card and financial data available to anyone in the IT department for the taking with an iPod or a USB drive.
The more information someone can gleen about you the greater chance they can go out and get a car loan, house loan, access your bank accounts, or get various other forms of credit in your name. People should be concerned because there is no magic bullet to protecting yourself. Credit monitoring might catch activity but when you have to carry around a police report to keep from getting arrested you may not feel like that credit monitoring was the best solution. Identity theft victims spend years trying to rebuild their credit reports after an identity theft. Imagine not being able to open a bank account, get a job, apply for a credit card, get a load for car, a mortgage, a student loan or having the APR on your current cards go from 9% to 30% when you credit score gets trashed and there are police records with your name on it for writing bad checks and stealing cars on loan.
Data theft is much easier than robbing at gun point. Your only protection is your data. The more data out there in 3rd party hands, the greater the risk. It's a simple as that.
or
Suddenly tax-prep gets more lucrative. Of course, if they ever come through with that "flat tax" all those guys'll be out of business overnight anyway (and then I can ride to work on a flying pig every morning...)
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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.
Wave upon wave of demented avengers March cheerfully out of obscurity into the dream
At a certain point (generally at about $100k), the vast majority people quickly stop consuming their income and start hoarding it. Oh sure, some will burn through it on booze, drugs and hookers, but most start shoving that capital back into capital.
m l#48
...and I got news for you, that "used property" exclusion? Well, they ain't makin' any new land, so guess what will happen to the price of dirt? Well, until we're vacationing on the Moon.
f
m l#3
Which is otherwise known as "investing", which is generally a good thing, providing money for loans, growing businesses, etc.
"The higher that income gets, the smaller the percentage of it that is consumed. So, your "fair" tax would, dollar-for-dollar, tax someone making $100k the same as someone making $1M
So what? If a millionare wants to reign in his spending to match that of someone making $100K, so what? You may be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.ht
But they are, of course, making new houses and other buildings. You might be interested in: http://www.fairtax.org/pdfs/TreatmentOFhousing.pd
"We need 2.5T to keep the proverbial lights on in the federal government. You WILL PAY FOR IT SOMEHOW."
The Fair Tax has been set up with an initial rate of 23%, which is calculated to directly replace the funds currently used to keep the lights on by the Federal Income Tax.
"A "prebate?" So, everyone gets a monthly check for the taxes on the first $14k of income, assumed to be consumed? Gah... That is going to eliminate the bureaucracy precisely HOW?"
The prebate has nothing to do with income. You might be interested in: http://www.fairtaxvolunteer.org/smart/faq-main.ht
"Business purposes = no tax? Again, people nearing or exceeding $100k routinely put their entire damned lives on Schedule C (or into corporations) for exactly this purpose."
This is a valid area for concern. But remember, people cheat on their taxes today. The goal of the Fair Tax isn't to make a more cheat-proof system (though I believe it does just that), but rather to make a simpler, fairer system of taxation.
Steve
A work that expires before its copyright never enters the public domain and thus enjoys eternal copyright protection.
The "Fair" Tax people want to move the entire tax burden to sales taxes, so that poor people will pay more of the tax burden.
Flat Tax proponents want to have a flat rate tax on all income, so everyone pays a fair share in direct proportion to how much they can afford.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
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...
I don't read AC A human right
I highly doubt that, like someone making $20k/year, many people making $1M/year are spending 30% of their incomes in restaurants. Honestly, you think it is _common_ at that level of income to spend $904 PER DAY EVERY DAY on FOOD? Yeah, they spend more, but at a certain point, the restaurants just don't get much more expensive.
t y_real_estate_wrap_howard_owns_the_hamptons.php
for example, Howard Stern likes to eat at Nobu. Dinner at Nobu is about $100. He makes that in 30 seconds (24/7). I pretty routinely eat at places, say, half that expensive at about $50. An average dinner tab for me is thus about one twentieth of one percent of my income. 1/20th of 1% of his income would be $50,000.
That's about 500 plates of Nobu goodness. He must be REALLY hungry.
He must spend much more on housing, though. Oh wait, no, his house cost $20M.
http://www.curbed.com/archives/2005/11/14/celebri
That's ONE FIFTH of his annual income. Most people around or below the $100K mark are buying homes worth FIVE TIMES their incomes--and guess what, his was "used." A great number in the $100K mark are forced out into new construction in the 'burbs. So, for a $500k suburban McMansion, I gotta pony up $69k in "Fair Tax." For Howard's $20M manse in the Hamptons, he whistles dixie.
Get it yet?