A pending IRS proposal would allow tax preparers to seek a consumer’s permission to share their returns with unaffiliated businesses. The IRS ended its formal public comment period on these proposed rules on March 8, 2006, but will be hearing testimony from those who already submitted comments on Tuesday, April 4, 2006 in Washington D.C. PennPIRG Education Fund’s McConnell is scheduled to testify at that hearing to urge the IRS to drop this proposed rule, and to argue for better consumer privacy protections.
Under new rules proposed by the Internal Revenue Service (IRS), tax preparers would be permitted to share the contents of a consumers’ entire tax return with an unaffiliated business, provided the consumer signed a consent form. Under current law, tax preparers are prohibited from sharing information in a consumers’ tax return with an unaffiliated third party. But under the new proposal, any tax preparer including H&R Block, Jackson Hewitt or a private accountant could sell the contents of a consumer’s tax return to an outside corporation. The proposed rule would require expressed written permission from the consumer to allow information to be sold, but Beth McConnell of PennPIRG has argued that’s not good enough. The IRS proposal does not contain any clear prohibition against tax preparers offering consumers incentives for signing the permission form, such as a discount on their tax service.
Consumers’ personal information has become a billion dollar business, with data brokers like Choicepoint and others collecting and selling consumers’ personal information to marketers. A rash of breaches of security at major corporations, including Choicepoint, MasterCard and dozens of others over the last year has affected hundreds of millions of Americans and put them at risk of identity theft. Contact: Beth McConnell, PennPIRG State Director, 215-732-3747, mcconnell@pennpirg.org, www.pennpirg.org.
