[Federal Register Volume 60, Number 85 (Wednesday, May 3, 1995)]
[Notices]
[Pages 21847-21848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10801]
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[[Page 21848]]
DEPARTMENT OF THE TREASURY
Internal Revenue Service
Privacy Act of 1974; System of Records
AGENCY: Internal Revenue Service, Treasury.
ACTION: Supplemental information about a proposed amendment to a system
of records.
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SUMMARY: On December 20, 1994, the Internal Revenue Service published,
at 59 FR 65573, notice of an amended Privacy Act system of records:
``Compliance Programs and Projects File--Treasury, IRS 42.021.'' Based
on the comments received, the notice may not have adequately
distinguished among the various users and uses of the compliance
system, as well as the data it is to contain.
The system will not be used to support large scale data matching in
order to identify specific individuals for contact by IRS personnel.
The IRS has developed procedural safeguards to prevent data used in the
compliance research programs and projects that engage in large scale
data manipulation techniques to determine levels of compliance in
particular ``market segments'' from being used for enforcement purposes
as to specific taxpayers.
In light of the comments received, the IRS will clarify the notice
to better describe more precisely the types of activities covered.
Until that clarification is issued, the supplementary information below
fully describes the compliance programs and projects covered.
ADDRESSES: Comments may be sent to the Office of Disclosure, Internal
Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 20224.
Comments will be made available for inspection and copying in the
Freedom of Information Reading Room, (202) 622-5164, upon request.
FOR FURTHER INFORMATION CONTACT: Wayne Thomas, National Director,
Compliance Research, (202) 874-0100.
SUPPLEMENTARY INFORMATION: The compliance research system presently
includes records to support information gathering to identify
noncompliance with the Internal Revenue Code. The system is being
redesigned to identify causes and trends of noncompliance and to
generate and test new approaches to increasing voluntary compliance.
This redesign will be accomplished by using an automated
information system and secure networks to support compliance research
on broadly shared characteristics and compliance trends of large
groups. The enhancements themselves, the personnel who will access and
use the enhanced system, and the purposes for which it will be used
will be clearly distinguished from other uses by enforcement personnel
who lawfully access similar records for individual enforcement actions.
The enhancements will not include maintenance of records with
individually identifying information since compliance research will
focus on broadly shared characteristics and compliance trends of large
groups, typically national in scope. The personnel who use and access
the research system will not be enforcement personnel. The system will
not be used to select individuals for enforcement actions.
The enhanced system should provide the Internal Revenue Service
with a wider range of options for improving voluntary compliance beyond
the limited and costly current enforcement actions applied to
individuals, one at a time. Information produced by analyzing enhanced
data will be analogous to that used broadly in the private sector under
the name ``market segment research.'' It will allow group-based
measurements of noncompliance. Based solely upon an identified
significant degree of group noncompliance, these enhancements will
further allow the construction of group profiles or characteristics
directly related to tax compliance behavior. Enhanced data will also
permit researchers to use statistical and other research methods to
determine the issues and causes of noncompliance. Against those issues
and causes, new initiatives at improving group compliance will be
vigorously tested on a small scale. Research personnel will oversee but
not directly test or implement such initiatives.
The enhanced system is intended to support compliance initiatives
that rely more on group access and forums that on contacting
individuals; and more on non-enforcement actions (e.g., legislative or
regulatory revision, education, assistance) rather than on enforcement
actions. Even in those instances where an enforcement remedy is
appropriate, the enhanced system itself cannot be used by enforcement
personnel nor can it select individuals to whom such remedies will be
applied.
This system of records has always on a limited basis and with legal
authority contained information from various third-party sources. The
enhancements to this system will add more information from more
sources. It will also improve access to this information. However, use
of these enhancements for the purposes of compliance research will
adhere to the operating principles of such research: it will be group-
focused rather than individually focused and not directly used to
select individuals for enforcement actions. The minimum data about
group demographic and economic characteristics that bear directly upon
measured group non-compliance will be used. Unlike the common practice
of private-sector market research, these enhancements will not include
``life-style'' or other highly personal information even in aggregate.
Additionally, the Internal Revenue Service recognizes its
responsibility to validate third-party data before they are used to
support even research activities.
Dated: April 16, 1995.
Alex Rodriguez,
Deputy Assistant Secretary (Administration).
[FR Doc. 95-10801 Filed 5-2-95; 8:45 am]
BILLING CODE 4830-01-M
