[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[House]
[Pages H1461-H1467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAXPAYER BROWSING PROTECTION ACT
Mr. ARCHER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 1226) to amend the Internal Revenue Code of 1986 to prevent
the unauthorized inspection of tax returns or tax return information,
as amended.
[[Page H1462]]
The Clerk read as follows:
H.R. 1226
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Taxpayer Browsing Protection
Act''.
SEC. 2. PENALTY FOR UNAUTHORIZED INSPECTION OF TAX RETURNS OR
TAX RETURN INFORMATION.
(a) In General.--Part I of subchapter A of chapter 75 of
the Internal Revenue Code of 1986 (relating to crimes, other
offenses, and forfeitures) is amended by adding after section
7213 the following new section:
``SEC. 7213A. UNAUTHORIZED INSPECTION OF RETURNS OR RETURN
INFORMATION.
``(a) Prohibitions.--
``(1) Federal employees and other persons.--It shall be
unlawful for--
``(A) any officer or employee of the United States, or
``(B) any person described in section 6103(n) or an officer
or employee of any such person,
willfully to inspect, except as authorized in this title, any
return or return information.
``(2) State and other employees.--It shall be unlawful for
any person (not described in paragraph (1)) willfully to
inspect, except as authorized in this title, any return or
return information acquired by such person or another person
under a provision of section 6103 referred to in section
7213(a)(2).
``(b) Penalty.--
``(1) In general.--Any violation of subsection (a) shall be
punishable upon conviction by a fine in any amount not
exceeding $1,000, or imprisonment of not more than 1 year, or
both, together with the costs of prosecution.
``(2) Federal officers or employees.--An officer or
employee of the United States who is convicted of any
violation of subsection (a) shall, in addition to any other
punishment, be dismissed from office or discharged from
employment.
``(c) Definitions.--For purposes of this section, the terms
`inspect', `return', and `return information' have the
respective meanings given such terms by section 6103(b).''
(b) Technical Amendments.--
(1) Paragraph (2) of section 7213(a) of such Code is
amended by inserting ``(5),'' after ``(m)(2), (4),''.
(2) The table of sections of part I of subchapter A of
chapter 75 of such Code is amended by inserting after the
item relating to section 7213 the following new item:
``Sec. 7213A. Unauthorized inspection of returns or return
information.''
(c) Effective Date.--The amendments made by this section
shall apply to violations occurring on and after the date of
the enactment of this Act.
SEC. 3. CIVIL DAMAGES FOR UNAUTHORIZED INSPECTION OF RETURNS
AND RETURN INFORMATION; NOTIFICATION OF
UNLAWFUL INSPECTION OR DISCLOSURE.
(a) Civil Damages for Unauthorized Inspection.--Subsection
(a) of section 7431 of the Internal Revenue Code of 1986 is
amended--
(1) by striking ``Disclosure'' in the headings for
paragraphs (1) and (2) and inserting ``Inspection or
disclosure'', and
(2) by striking ``discloses'' in paragraphs (1) and (2) and
inserting ``inspects or discloses''.
(b) Notification of Unlawful Inspection or Disclosure.--
Section 7431 of such Code is amended by redesignating
subsections (e) and (f) as subsections (f) and (g),
respectively, and by inserting after subsection (d) the
following new subsection:
``(e) Notification of Unlawful Inspection and Disclosure.--
If any person is criminally charged by indictment or
information with inspection or disclosure of a taxpayer's
return or return information in violation of--
``(1) paragraph (1) or (2) of section 7213(a),
``(2) section 7213A(a), or
``(3) subparagraph (B) of section 1030(a)(2) of title 18,
United States Code,
the Secretary shall notify such taxpayer as soon as
practicable of such inspection or disclosure.''
(c) No Damages for Inspection Requested by Taxpayer.--
Subsection (b) of section 7431 of such Code is amended to
read as follows:
``(b) Exceptions.--No liability shall arise under this
section with respect to any inspection or disclosure--
``(1) which results from a good faith, but erroneous,
interpretation of section 6103, or
``(2) which is requested by the taxpayer.''
(d) Conforming Amendments.--
(1) Subsections (c)(1)(A), (c)(1)(B)(i), and (d) of section
7431 of such Code are each amended by inserting ``inspection
or'' before ``disclosure''.
(2) Clause (ii) of section 7431(c)(1)(B) of such Code is
amended by striking ``willful disclosure or a disclosure''
and inserting ``willful inspection or disclosure or an
inspection or disclosure''.
(3) Subsection (f) of section 7431 of such Code, as
redesignated by subsection (b), is amended to read as
follows:
``(f) Definitions.--For purposes of this section, the terms
`inspect', `inspection', `return', and `return information'
have the respective meanings given such terms by section
6103(b).''
(4) The section heading for section 7431 of such Code is
amended by inserting ``INSPECTION OR'' before ``DISCLOSURE''.
(5) The Table of sections for subchapter B of chapter 76 of
such Code is amended by inserting ``inspection or'' before
``disclosure'' in the item relating to section 7431.
(6) Paragraph (2) of section 7431(g) of such Code, as
redesignated by subsection (b), is amended by striking ``any
use'' and inserting ``any inspection or use''.
(e) Effective Date.--The amendments made by this section
shall apply to inspections and disclosures occurring on and
after the date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas [Mr. Archer] and the gentleman from Pennsylvania [Mr. Coyne],
each will control 20 minutes.
The Chair recognizes the gentleman from Texas [Mr. Archer].
General Leave
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous matter on the bill, H.R. 1226.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today is tax day. As most of the country knows by now, I
continue to do my own taxes. Like millions of other Americans who
struggle to fill out their forms before tonight's midnight deadline, I
keenly know how difficult, time-consuming and troubling it is to comply
with our Tax Code. But once the forms are complete and mailed in, you
would think taxpayers could then look forward to a refund or, for some
unfortunate souls, an audit.
But we have now learned that taxpayers have something else to fear:
IRS agents, who snoop through people's personal, confidential tax
records.
Mr. Speaker, this is a copy of form 1040. Taxpayer records are among
society's most confidential and sensitive documents. They often
describe how much alimony people pay, how much they spend on health
care, and, of course, how much money they make. This information
belongs to the taxpayers, not the Government. And taxpayers who suffer
enough already should not have to worry about snooping Toms at the IRS
who abuse their trust by looking up private tax information.
Yet the General Accounting Office tells us that there are more than
1,000 incidents that they know of in which IRS agents snooped into
someone's files. That is why I am pleased that the House today, as a
part of taxpayer protection week, will pass this bill that makes it a
crime to snoop into taxpayer records.
This bill also adds an important privacy shield for taxpayers by
requiring the IRS to notify taxpayers when criminal browsing activity
is indicated. If someone's privacy has been violated by the Government,
they have a right to know it, and they should be outraged.
I believe these two provisions will serve as a twin deterrent to
protect the privacy of taxpayer information.
Mr. Speaker, I look forward to the time when we can protect taxpayers
not only from the IRS but also from the current Tax Code which, after
all, is the root cause of these problems. The current code is unfair,
excessively complicated, overly intrusive, and antigrowth.
I believe we must pull the income tax out by its roots and throw it
away so that it can never grow back. When we do, we will have made the
tax system fairer, simpler, created more economic growth, and we will
have gotten the IRS completely and totally out of the lives of every
individual American.
Until that great day comes, we must do everything in our power to
protect the rights of taxpayers. When it comes to fighting those who
browse and snoop into personal taxpayer records, there ought to be a
law, and now there will be.
Mr. Speaker, I reserve the balance of my time.
Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 1226, the Taxpayer Browsing
Protection Act. This bill was introduced on a bipartisan basis in April
1997, and I want to thank my Democratic and Republican colleagues on
the Committee on Ways and Means for their support of H.R. 1226 and
their very quick action.
As expected, H.R. 1226 was approved unanimously by the committee with
[[Page H1463]]
one amendment on April 9, 1997. The bill before us today is a good
example of the Committee on Ways and Means working together to improve
and support the Internal Revenue Service. Also H.R. 1226 has the strong
support of the IRS and the Treasury Department.
Enactment of this bill will provide needed statutory support for the
IRS Commissioner's current zero tolerance policy for browsing. I should
mention that earlier this year IRS Commissioner Richardson contacted
members of the Committee on House Oversight to renew her request for
criminal sanctions in the tax code to deal with unauthorized inspection
of an individual's tax information.
Legislation similar to H.R. 1226 had been introduced by Senator Glenn
during the 104th Congress but was never acted upon at that time. I want
to commend the gentlewoman from Connecticut [Mrs. Johnson] for her
leadership on H.R. 1226 and the gentleman from Texas [Mr. Archer] and
the committee ranking member, the gentleman from New York [Mr. Rangel]
for their support for this legislation. It is time that something be
done. The public has the right to expect that its tax records will only
be reviewed by those authorized to do so. Browsing is unacceptable,
period. It must and it will stop.
In summary, H.R. 1226 would clarify in the Tax Code the criminal
sanctions for unauthorized inspection of tax information and
application of civil damages. First, violators would be subject to
significant criminal sanctions and dismissal from the IRS in their
employment. The offense that would be committed would be a misdemeanor,
with a fine of up to $1,000 and a prison term of up to 1 year, plus the
cost of prosecution.
Second, the criminal sanctions would apply to IRS employees, IRS
contractors, and other Federal and State employees having access to
Federal tax information.
Third, tax information retained by the IRS on paper and
electronically as well would be protected from unauthorized browsing.
And finally, the availability of civil damages for unauthorized
inspection or disclosure would be expanded. The taxpayer would be
notified when there has been a criminal indictment for illegal browsing
or disclosure, and the taxpayer would be able to sue for civil damages
in the same manner as under current law for an unauthorized disclosure,
the greater of $1,000 or actual punitive damages, plus costs.
{time} 1230
It is important to note that the IRS employee would not be subject to
criminal sanctions in the bill unless the unauthorized inspection was
willful inspection.
Also, the bill would not provide civil damages in the case of an
accidental or inadvertent inspection, such as making an error in typing
into the computer a taxpayer's identification number.
H.R. 1226 should not be construed as an attack on the IRS. While
there are a small number of IRS employees intent on violating the law,
the vast majority of IRS employees are hardworking and committed public
servants. IRS employees nationwide will benefit from this legislation,
knowing that any browsers identified by the IRS will be fired from
their jobs and prosecuted criminally.
Mr. Speaker, I urge passage of this important legislation and I
reserve the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman
from the State of Washington, [Ms. Dunn] who has contributed a great
deal toward the development of this bill today. In fact, an amendment
that she offered in committee is included in the bill, and I
congratulate her for all of her very, very good work.
Ms. DUNN. Mr. Speaker, I want to commend Chairman Archer for his
leadership in bringing this timely issue of taxpayer privacy to the
floor of the House today.
Throughout my tenure in the Congress I have heard from thousands of
constituents who have described to me a myriad of problems they see
within our system of taxation.
Granted, our Nation suffers under an unfair and incomprehensible Tax
Code that takes too much of what we earn. Worse, some rogue members of
the IRS, the organization responsible for the enforcement of the Tax
Code, have a record of seeking to intimidate and to frighten honest
hard working taxpayers. They damage the reputation of a huge majority
of the honest people working at the agency. We must not tolerate a Tax
Code that punishes families just as we should not tolerate an IRS agent
who is eager to bully, harass, or snoop on a taxpayer.
An important element of the IRS Accountability Act that I have
offered and of the bill on the floor today is the protection of
taxpayer privacy. It is well-documented that certain agents have been
able to snoop through confidential taxpayer information with no regard
for individual rights of the honest and the law-abiding taxpayers.
Furthermore, recent reports shed additional light on the need for
this legislation and the adoption of my amendment. According to the
GAO, for fiscal year 1994 and 1995, over 1,500 instances occurred where
IRS employees were accused of unlawful browsing. After accounting for
firings, for disciplinary action, and for counseling, 33 percent of
these cases were closed without action.
I am glad the Committee on Ways and Means adopted my amendment to
require that the taxpayer be notified when an IRS agent is indicted or
otherwise charged with unauthorized inspection.
The bottom line is that this provision addresses what I believe to be
a matter of common decency.
My amendment also provides taxpayers a civil remedy in such
unauthorized inspection or browsing cases. The honest American family
works too long and too hard to have to deal with an unfair and, on
occasion, overly intrusive IRS and agents who trample on their rights.
The IRS deserves closer scrutiny when certain agents go beyond
acceptable enforcement procedures and commit outright intimidation or
when it is unable to use common sense as a yardstick.
This bill, the one we are considering on the floor today, will ensure
that the powerful government agency, the IRS, will no longer scoff at
the rights of well-intentioned and law-abiding taxpayers.
Mr. Speaker, I thank the chairman for his proposal of this
legislation, and I urge my colleagues to support the adoption of this
measure.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Connecticut, [Mrs. Johnson] another member of our committee, highly
respected, and chairman of the Subcommittee on Oversight.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the chairman for
yielding me this time and commend him for his leadership on this
matter, bringing forth a bill that is truly bipartisan and addresses a
very significant problem at the IRS.
The American public's willingness to provide the Federal Government
with sensitive personal information on their tax returns each year
depends on the confidence that the people have that this information
will be held in the strictest confidence. That is why it is vitally
important to have strong measures in place to ensure the security of
tax return information.
Public confidence in the IRS has been again shaken by new reports
that the IRS personnel continue to snoop into taxpayer files. Last year
the IRS confirmed almost 800 cases in which IRS employees looked
through taxpayer files without authorization. That has just got to
stop.
As an original cosponsor of the Taxpayer Browsing Protection Act, I
believe this legislation will give the IRS the tool it needs to enforce
its zero tolerance policy against unauthorized browsing into taxpayer
records by making it a crime punishable by up to a year in jail.
Today we are telling IRS employees that if they go into other
people's private files, they will be heavily penalized and they may go
to jail. As Americans file their tax returns today, they can be
confident that their tax return information is theirs alone and their
privacy rights will be protected by law by this Congress.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas, Mr. Sam Johnson, another respected member of the Committee on
Ways and Means.
Mr. SAM JOHNSON of Texas. Mr. Speaker, from 1982 to 1993, the
Democrats in Congress voted to increase the taxes of hardworking
Americans by $666 billion. This new revenue was not
[[Page H1464]]
put toward the debt or used to eliminate the deficit. Instead it was
used to increase the size and scope of Government.
History has shown us that every time Congress increases taxes, they
also increase spending. I believe that it is one more reason why the
American people should demand that Congress abolish the IRS. I think
the agency is out of control.
What the tax limitation amendment will do is provide a safeguard for
taxpayers and no longer be simple and easy for Congress to increase
taxes. It is a win-win for the American taxpayer. Not only will they
get a smaller, more efficient government, but protection from higher
taxes.
I think the Speaker agrees with me that something must be done. I
think that of the browsing that has been going on, the Speaker probably
does not know that 1,500 IRS agents were caught browsing from fiscal
year 1994 to 1995, and only 23 of them were tried. The rest were either
given a slap on the wrist or counseled. What does counseling mean? I do
not know.
We ought to demand accountability not only from the IRS, but from the
judges in Boston who ruled it was OK as long as they did not use it
maliciously.
Mr. Speaker, I strongly urge my colleagues to vote with us today.
Give Americans the assurance of trust they deserve from their
Government.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan [Mr. Camp] another respected member of the committee.
Mr. CAMP. Mr. Speaker, I thank the chairman for yielding me this
time, and I rise in support of this protaxpayer bill.
For years the American people have told us that our Tax Code needs
reform. Seventy-five percent of Americans believe we need a fundamental
overhaul of our tax law. We in the Committee on Ways and Means are
continuing a series of hearings today on doing just that.
Incidents like those reported recently, IRS employees browsing
through tax records of neighbors, relatives, friends, and with friends
like that who needs enemies, IRS employees even browsing the records of
celebrities like Tom Cruise, all this shows how badly reform is needed.
With 108,000 IRS employees, twice as many as DEA, CIA, and FBI
combined, there is plenty of time, apparently, to fool around. In only
2 years, over 1,500 cases of unauthorized browsing have occurred.
Clearly, these IRS employees are doing the wrong things. Do these
people have no sense of respect for the privacy of the customers they
serve? We and they work for the U.S. taxpayer, and now IRS employees
are arrogantly snooping wherever they choose.
Let us pass this bill today. Then we will be able to take appropriate
action against those who violate our trust. Meanwhile, we in the
Congress must continue our work and, as the gentleman from Texas, [Mr.
Archer] is so fond of saying, tearing our present Tax Code out by the
roots and putting in its place a fairer and simpler tax system with
less room for such fraud and abuse.
Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume
just to submit for the Record a letter that was written to me by
Commissioner Richardson of the IRS on March 10, citing the need for the
legislation that we are debating here today and insert that in the
Record; also, a memo from Commissioner Richardson in October 1993 to
all employees of the IRS stating her policy of zero tolerance for any
type of browsing within the agency.
Department of the Treasury,
Internal Revenue Service,
Washington, DC, March 10, 1997.
Hon. William J. Coyne,
Subcommittee on Oversight, Committee on Ways and Means, House
of Representatives, Washington, DC.
Dear Mr. Coyne: I wanted to let you know about a case that
was recently decided by the United States Court of Appeals
for the First Circuit, United States v. Czubinski, No. 96-
1317, 1997 U.S. App. LEXIS 3077 (1st Cir. February 21, 1977)
and to request your support for legislation to clarify the
criminal sanctions in the Internal Revenue Code for the
unauthorized access of taxpayers' accounts by Internal
Revenue Service employees.
Since becoming Commissioner, I have repeatedly stated that
the IRS will not tolerate violations by employees of the
rules against unauthorized access. The Service's ``zero
tolerance'' policy prohibits any employee access to (and use
of) tax information, except to the extent necessary for an
employee to perform assigned duties.
In the Czubinski case, the First Circuit reversed the
conviction of a former IRS employee for improperly accessing
taxpayer information in the IRS database. That person had
been indicted and convicted of several counts of violating 18
USC Sec. Sec. 1343 and 1346 (wire fraud) and 18 USC
Sec. 1030(a)(4) (computer fraud). In reversing the
conviction, the court stated that ``unauthorized browsing of
taxpayer files, although certainly inappropriate conduct,
cannot, without more, sustain [a] federal felony conviction
[under 18 USC Sec. Sec. 1343, 1346 and 1030(a)(4)].''
This decision and a 1996 acquittal, by a Memphis, Tennessee
jury of another former IRS employee who had been indicted for
improper access of taxpayer accounts under 26 USC Sec. 7213
(Unlawful Disclosure of Tax Return Information), United
States v. Patterson, Cr. No. 96-20002 (W.D. Tenn. April 10,
1996), are very troubling and make it more difficult for the
Service to appropriately discipline employees who violate our
policy against unauthorized access.
In the past several years, the IRS has taken a number of
steps to ensure that unauthorized access of taxpayer
information by IRS employees does not occur. For example,
each time an employee logs onto the taxpayer account
database, a statement warns of possible prosecution for
unauthorized use of the system. All new users receive
training on privacy and security of tax information before
they are entitled to access the Integrated Data Retrieval
System (IDRS). The Service has also installed automated
detection programs that monitor employees' actions and
accesses to taxpayers' accounts, identify patterns of use,
and alert managers to potential misuse. Employees are
disciplined according to a Guide for Penalty Determinations
that includes dismissal. In the Czubinski opinion, for court
noted that ``the IRS rules plainly stated that employees with
passwords and access codes were not permitted to access files
on IDRS [the database] outside of the course of their
official duties.''
In addition to the internal actions, the IRS has
recommended and supported legislative efforts to amend the
Internal Revenue Code and Title 18 to clarify the criminal
sanctions for unauthorized computer access to taxpayer
information. A recent amendment to 18 USC Sec. 1030(a)(2)(B)
by the Economic Espionage Act of 1996, Pub. L. No. 104-294,
110 Stat. 3488 (1996), provides criminal misdemeanor
penalties for anyone who intentionally accesses a computer
without authorization or who exceeds authorized access and
thereby obtains information, including tax information from
any department or agency of the United States. I have been
advised by counsel that had this amendment been in effect and
applicable to the Czubinski and Patterson cases, the
government very likely would not have lost those cases.
Although the recent amendment to 18 USC Sec. 1030(a)(2)(B)
will hopefully serve as a significant deterrent to
unauthorized computer access of taxpayer information, this
statute only applies to unauthorized access of computer
records. It does not apply to unauthorized access or
inspection of paper tax returns and related tax information.
Legislation such as S. 670, introduced in the 104th Congress,
would achieve that result. By clarifying the criminal
sanctions for unauthorized access or inspection of tax
information in section 7213 of the Internal Revenue Code,
whether that information is in computer or paper format, the
entire confidentiality scheme respecting tax information and
related enforcement mechanisms would be appropriately found
in the Internal Revenue Code.
An amendment to section 7213 such as was proposed in the
104th Congress would serve important tax administration
objectives. (Of course, as is currently the case under
section 7213 for convictions resulting from the disclosure of
tax information to unauthorized third parties, a conviction
of federal officers and employees for the unauthorized access
or inspection of tax information would, in addition to
imprisonment and fine, continue to result in dismissal from
office or discharge from employment.)
We would like to work with you and your staff to assure
that improper access can be dealt with appropriately.
Sincerely,
Margaret Milner Richardson.
____
Department of the Treasury,
Internal Revenue Service,
Washington, DC October 20, 1993.
Memorandum for all employees.
From: Margaret Milner Richardson, Commissioner, Internal
Revenue Service.
Subject: Taxpayer privacy and security.
One of the most important issues facing the IRS today is
the privacy and security of taxpayer account information.
Many of the changes we are experiencing right now, as well as
the ones we hope to make, depend on our ability to protect
private tax information.
In our daily work, we must continue to perform our duties
in a manner that recognizes and enhances individuals' rights
of privacy and ensures that our activities are consistent
with laws, regulations, and good administrative practice. The
Privacy Advocate, recently established under the Chief
Information Officer to oversee the privacy concerns of the
IRS and American taxpayers, has developed a Privacy Policy
Statement. I fully endorse the attached statement, which
[[Page H1465]]
gives a clear message about the importance of protecting
taxpayers and employees from unnecessary intrusion into their
tax records.
Any access of taxpayer information with no legitimate
business reason to do so is unauthorized and improper and
will not be tolerated. I made a pledge to Congress and I make
it to you; taxpayer privacy and the security of tax data will
not be compromised. We will discipline those who abuse
taxpayer trust up to and including removal or prosecution.
The fundamental basis of our tax system, voluntary
compliance, is directly affected by the level of trust
taxpayers have in our ability to protect their information.
The vast majority of IRS employees are dedicated and
trustworthy. We must depend on each other's integrity and
commitment to this agency and to keeping our tax system the
best in the world.
Attachment.
Taxpayer Privacy Rights
The IRS is fully committed to protecting the privacy rights
of all taxpayers. Many of these rights are stated in law.
However, the Service recognizes that compliance with legal
requirements alone is not enough. The Service also recognizes
its social responsibility which is implicit in the ethical
relationship between the Service and the taxpayer. The
components of this ethical relationship are honesty,
integrity, fairness, and respect.
Among the most basic of a taxpayer's privacy rights is an
expectation that the Service will keep personal and financial
information confidential. Taxpayers also have the right to
expect that the Service will collect, maintain, use, and
disseminate personally identifiable information and data only
as authorized by law and as necessary to carry our agency
responsibilities.
The Service will safeguard the integrity and availability
of taxpayers' personal and financial data and maintain fair
information and recordkeeping practices to ensure equitable
treatment of all taxpayers. IRS employees will perform their
duties in a manner that will recognize and enhance
individuals' rights of privacy and will ensure that their
activities are consistent with law, regulations, and good
administrative practice. In our recordkeeping practices, the
Service will respect the individual's exercise of his/her
First Amendment rights in accordance with law.
As an advocate for privacy rights, the Service takes very
seriously its social responsibility to taxpayers to limit and
control information usage as well as to protect public and
official access. In light of this responsibility, the Service
is equally concerned with the ethical treatment of taxpayers
as well as their legal and administrative rights.
Approved: Margaret M. Richardson, Commissioner.
Date: October 15, 1993.
____
Department of the Treasury,
Internal Revenue Service,
Washington, DC, November 16, 1994.
Memorandum for all employees.
From: Margaret Milner Richardson, Commissioner of Internal
Revenue.
Robert M. Tobias, President, National Treasury Employees
Union.
Subject: Privacy and Security of Taxpayer Information.
Safeguarding public confidence in the integrity and
competence of the Service is a top priority for all
employees. Each of us must take seriously any perceived or
real breach in public confidence and trust in our ability to
administer tax laws. The availability of taxpayer
information, or any other protected data, dictates a
responsibility to observe privacy principles, to secure
sensitive data, and to guard against improper disclosures.
Clearly, most Service employees are conscientious and respect
the taxpayer's right to expect that the information they
provide will be safeguarded. However, any one breach by any
one of us seriously undermines public confidence and trust in
the Service.
Improper access to, or misuse of, taxpayer information
violates law, rule, and regulation and is contrary to our
ethical values and principles of public trust. In October
1993, the Service issued a Privacy Policy Statement. The
policy emphasizes comprehensive privacy, security, and
disclosure requirements. It also represents an application of
Service ethical values and principles of public trust in our
day-to-day operations. This year, we began to strengthen our
commitment to the protection of taxpayer privacy through the
Declaration of Privacy Principles and the issuance of the
Guide for Penalty Determinations. Each of you received a copy
of these documents and we urge you to become familiar with
their contents.
Our efforts to maintain taxpayer privacy also includes
continually improving Service ability to identify any
employee who fails to safeguard taxpayer information and,
where appropriate, taking disciplinary action, up to and
including removal. This effort is not intended to impose an
additional burden on conscientious employees in their use of
tax systems. It is, however, intended as a concerted effort
to maintain a work environment that reflects the highest
standard for the protection of sensitive taxpayer
information.
Privacy, security and disclosure issues will continue to be
a major consideration and top priority for you as our
Compliance 2000 and Tax Systems Modernization efforts lead to
the identification of innovative approaches to the protection
of taxpayer privacy. Each of us must continually examine how
we accomplish our duties and be ever vigilant in safeguarding
taxpayer privacy.
____
Department of the Treasury,
Internal Revenue Service,
Washington, DC, January 3, 1995.
Memorandum for all employees.
From: Margaret Milner Richardson, Commissioner of Internal
Revenue.
Subject: IRS information security policy.
Privacy, security and disclosure issues are key elements
for the success of our Compliance 2000 and Tax Systems
Modernization efforts. The success of the Service in
addressing privacy, security and disclosure issues also has a
critical impact on voluntary compliance, the fundamental
basis of our tax system. Therefore, it is mandatory for each
of us to secure sensitive data and guard against improper
disclosures.
In October 1993, the Service issued a Privacy Policy
Statement developed by the Privacy Advocate. A related
document, the IRS Information Security Policy, has been
developed by the System Architect's Office under the
direction of the Chief Information Officer. The intent of
this policy, which is attached, is threefold:
Ensure that the Service complies with the applicable
guidance from public laws, regulations, and directives.
Ensure that taxpayer and other sensitive information is
protected commensurate with the risk and magnitude of the
harm that would result from inappropriate use.
Ensure that taxpayer and other sensitive information is
used only for necessary and lawful purposes.
I fully endorse the attached policy statements.
I made a pledge to Congress and I make it to you: taxpayer
privacy and the security of tax data will not be compromised.
The implementation of the IRS Information Security policy is
an important step in fulfilling this pledge.
Attachment.
IRS Information Security Policy
P1. It is the policy of the IRS to establish and enforce a
comprehensive and appropriate security program that assures
IRS information resources are protected commensurate with the
risk and magnitude of the harm that would result from the
loss, misuse, or unauthorized access to or modification of
such resources.
P2. It is the policy of the IRS to collect, use, maintain,
and disseminate only that information required for a
necessary and lawful purpose.
P3. It is the policy of the IRS to ensure that its
information collection, use, storage, dissemination, and
derivation processes maintain the accuracy of the information
relative to its intended use.
P4. It is the policy of the IRS to ensure that all
information and resources required by an authorized
individual to perform an assigned function are complete and
available when required.
P5. It is the policy of the IRS to collect, use, maintain,
and disseminate information with appropriate timeliness to
ensure successful completion of IRS business functions.
P6. It is the policy of the IRS to limit access to IRS
information and resources to authorized individuals who have
a right to the information or resource or a demonstrable need
for the information or resource to perform official duties.
P7. It is the policy of the IRS to disclose information to
organizations or individuals outside of the IRS only when
such disclosure is consistent with public law and other
governing regulations.
P8. It is the policy of the IRS to ensure that only
functions required for a necessary and lawful purpose be
performed on IRS information or resources.
P9. It is the policy of the IRS to prevent, or to detect
and counter, fraud.
P10. It is the policy of the IRS to ensure the continuity
of operation of activities that support official agency
functions.
P11. It is the policy of the IRS to establish and enforce
security procedures for persons involved in the design,
development, operation, or maintenance activities that affect
the protection of IRS information and resources.
P12. It is the policy of the IRS to ensure that its work
force has the technical and awareness training, appropriate
to level of responsibility and authority, to implement and
adhere to an IRS security program.
Mr. Speaker, I reserve the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Arizona, [Mr. Hayworth], another respected member of the Committee on
Ways and Means.
Mr. HAYWORTH. Mr. Speaker, I thank the gentleman for yielding me this
time. I apologize, but I was visiting with constituents from the great
State of Arizona, so I hope I can be forgiven my tardiness.
Mr. Speaker, I rise in strong support of this measure. Indeed, the
only criticism I would have would be with its name, Taxpayer Browsing,
because I believe that is far too mild a term for what has transpired.
As Americans, if we truly champion the notion of privacy, then we
should
[[Page H1466]]
react as we are reacting today, in a bipartisan fashion, to put an end
to this obscenity, this voyeurism in the vault that allows bureaucrats
to take a look at the most sensitive financial information supplied by
any citizen.
What we will do today, Mr. Speaker, is to rise collectively, as a
body, to end this obscenity, for it is totally at odds with our notion
of a right to privacy. It is totally at odds with the notion of
fairness and, indeed, I champion the fact that this legislation now
prescribes exact penalties so that those voyeurs of people's records
will be punished when they are caught and that taxpayers, whose records
have been violated, will be notified of such violation.
{time} 1245
Mr. Speaker, the late Supreme Court Justice Potter Stewart when
talking about obscenity said, ``I can't define it. I know what it is
when I see it.''
Mr. Speaker, what has occurred in the past has been an obscenity the
American people can do without. Punishment will be swift and sure. This
is a positive action we take together on a bipartisan basis to say let
us rein in those who would abuse our rights to privacy.
Mr. COYNE. Mr. Speaker, I yield such time as he may consume to the
distinguished gentleman from Massachusetts [Mr. Neal].
Mr. NEAL of Massachusetts. I thank the gentleman from Pittsburgh for
yielding me this time and for his good work.
Mr. Speaker, today is a day that we all dread, and we know that it
comes every year. As the old expression goes, ``You can be certain
about death and taxes.'' But there is another thing that you should be
certain about, and that is your privacy.
As technology continues to advance and more of us surf the net,
privacy becomes more difficult to protect. Information that individuals
report on their tax returns should be kept confidential. Individuals
have every right to expect that this information will remain
confidential and that liberty should not be violated.
Senator Glenn has worked diligently to correct browsing at the
Internal Revenue Service. Browsing is unauthorized opportunities to
peek at tax returns. In 1993, the IRS commissioner established a zero
tolerance for such conduct.
The IRS is working toward fair and private tax administration, and
this is but another example. Commissioner Richardson has requested this
legislation today, and we hope that it will eliminate browsing. I have
been a cosponsor of this legislation, and I certainly believe that the
IRS is correct in attempting to implement a zero tolerance policy.
The purpose of this legislation is to clarify in the Tax Code
criminal sanctions for the unauthorized inspection of tax information.
Violators would be subject to significant criminal sanctions and
dismissal from IRS employment. Criminal sanctions would apply to IRS
employees, IRS contractors, and other Federal and State employees
having access to Federal tax information. Tax information on paper and
in computer data bases would be protected from browsing.
Some of the browsing which has occurred at the IRS entailed the
unauthorized viewing of celebrities' tax returns. We need to send a
strong message to IRS employees that they should respect the rights of
all citizens and taxpayers. IRS employees should not act on impulses
based upon curiosity. It may be tempting to look at the tax files of
such famous individuals as Lucille Ball, but everyone should have their
expectation of privacy met.
This legislation will provide a deterrent against IRS employees
taking a quick look at tax returns for purposes not related to work. I
commend the IRS for identifying this problem and taking corrective
action immediately. Commissioner Richardson also should be noted for
her work on this legislation, and today we will pass it in a bipartisan
manner. This legislation is something positive that we can do for all
taxpayers. We can ensure their basic right to privacy.
While I urge an affirmative vote on the Taxpayer Browsing Protection
Act, I also would point out to my colleagues in this institution and to
members of the media as well that one of the most fundamental rights in
this society is the basic notion of privacy. It is also the cornerstone
of liberty.
Mr. COYNE. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield the balance of my time to the
gentleman from Georgia [Mr. Gingrich], the respected Speaker of the
House of Representatives.
Mr. GINGRICH. I thank my friend, the chairman, for yielding me this
time.
Mr. Speaker, let me say first of all I want to commend both sides of
the Committee on Ways and Means, both the Republicans and the
Democrats, for bringing this timely bill out in a very responsive way.
We were surprised, I think, all of us, to discover how frequently
Internal Revenue Service agents look at, I would use the word ``snoop''
rather than ``browse,'' the private files of individual citizens. There
were apparently in the last year over 800 cases of different employees
illegally looking at tax returns without authorization. Ninety of them
were fired. The rest were either reprimanded or received a slap on the
wrist, yet supposedly the Internal Revenue Service has a zero tolerance
policy for these abuses.
I commend the Committee on Ways and Means on this bipartisan effort
to change the law to make clear that the Congress will not accept
Internal Revenue agents stepping over their bounds and looking at
private tax information purely out of curiosity or, in some cases,
potentially in order to blackmail people.
This step of beginning to curb IRS abuses is only the first step in
what I think will be a real landmark Congress in bringing the Internal
Revenue Service under control. The fact is, with 110,000 employees, the
Internal Revenue Service is too big, too complex, and too arrogant.
For the average citizen, let me just say 110,000 IRS employees
compares with 5,500 working for the Border Patrol or 7,400 working for
the Drug Enforcement Administration. So there are almost 10 IRS agents
for every person protecting us from drugs and illegal immigration. I
think that is clearly too many. One of our goals is to change the IRS
as we know it, to shrink it, to go through tax simplification, to make
sure that we have a much simpler and much fairer tax system.
The need for a simpler tax system was made clear when the IRS spent
$4 billion, not million, $4 billion trying to build a computer that
could understand the Tax Code. The fact is that that computer could not
understand the Tax Code because the Code is probably incomprehensible.
Every year reporters call five or six different IRS offices and get
five or six different answers, because it is impossible for any human
to fully understand the complexity.
I want to commend the gentleman from Texas [Mr. Archer], the
chairman, for a joint editorial that he and the gentleman from Texas
[Mr. Armey], the majority leader, had in this morning's Washington
Times where they both begin to outline the case for dramatic, bold tax
simplification. They happen to go at it in slightly different ways. The
gentleman from Texas [Mr. Archer], the chairman, would replace the
entire income tax with a sales tax. The gentleman from Texas [Mr.
Armey] would have a very flat income tax that one could fill out on a
single page. But both of them have the right direction.
The debate over the next 2 or 3 years between a flat tax or replacing
the income tax with a sales tax will be one of the most important
debates in American history, and one of the consequences of that debate
will be the adoption of a system which is dramatically simpler, with a
much smaller IRS, with much less impact on your lives.
Let me give a couple of examples of how complicated this gets and how
bad the need is, how desperate the need is, for change. Let me start
with, one of my staff brought in his daughter's paperwork. She has a
small amount of money she has been saving. Her parents and grandparents
have tried to help her save money for college. She is 10 years old.
They put it in a little fund for her.
Last year, the stock market went up too much. She had not paid
quarterly,
[[Page H1467]]
so at 10 years of age she found she had a $6 penalty. It took nine
pages of tax forms to get to that point.
I note from some material that the gentleman from Ohio [Mr. Boehner],
chairman of the House Republican Conference, has shared that in 1992
the Internal Revenue Service seized $26 from the bank account of a 6
year old to help pay her parents' overdue tax bill. Now surely at 6
years of age one hardly needs to encounter the IRS.
We had in my own district a couple that had taken over a small firm.
This was a little company called Pro Tackle in Duluth, GA. When they
took over the firm, they found out that the former chief executive at a
previous time under the previous corporation had embezzled the excise
tax funds. The IRS pursued the new couple and the new firm and
basically put them out of business through a mistake. They did not
understand that the legalities had changed, that in fact they did not
owe the money, and between the cost of the attorney and the cost of
fines and penalties, Mr. Mitchell, my constituent, was forced out of
the bait and tackle business. Finally, years later, the IRS came back
and said they goofed.
Similarly, there are other examples, and some of these, frankly, are
almost impossible to believe, but let me give some examples. The
Heritage Foundation issued a report that a day care center which
allegedly owed the IRS $14,000 was raided by armed agents who then
refused to release the children until parents pledged to give the
Government money.
One taxpayer in 1993, this again is from the Heritage Foundation, was
fined $46,806 for an alleged underpayment of 10 cents. Another taxpayer
was fined $10,000 for using a 12-pitch typewriter, that is a kind of
type, to fill out his tax form instead of a 10-pitch typewriter. Again,
that is from the Heritage Foundation.
Going through case after case, one discovers that the IRS is out of
touch, it is arrogant, it does not understand the average American, and
I am not quite sure how they train their new employees, but again and
again they seem to have difficulties.
Money magazine sent reporters posing as ordinary citizens to 10
different IRS district offices around the country and had them call the
IRS help line and ask 10 common questions. This is according to Money
magazine. Quote: It took an extraordinary effort to get a staffer on
the line. A full 30 percent of the time, no one who could answer
questions picked up the phone. Most of the time, we either got busy
signals or recorded messages or were disconnected. Furthermore, well
over half the callers who got through, 60 percent, waited 5 minutes or
more, including one in four who had to hold for more than 20 minutes.
Money magazine went on to say, and I quote, and when we finally got
through, we did not receive the right answer one out of every five
times. The IRS workers answered only 78 percent of our questions
accurately, got 12 percent wrong, and promised to call back with the
correct answer but then failed to do so 10 percent of the time.
These are the IRS folks who, instead of learning the Tax Code and
helping the citizen, have been snooping into the privacy files of
citizens without right.
This bill is a first step toward changing the IRS as we know it. It
sets the right standard. I commend again both the Democrats and the
Republicans on the committee. This is the perfect day to be offering
this bill. I just want to take one final moment to encourage the
chairman, who I know hardly needs encouragement, but what he is doing
in launching this dialog on whether we should replace the income tax
with a sales tax or go to a flat tax, what he and Majority Leader Armey
are doing is truly historic, and I want to take this moment on April 15
to thank him for the leadership he is offering and urge everyone to
vote yes on this bill.
Mr. KLECZKA. Mr. Speaker, I rise today in support of a bipartisan
bill to protect taxpayers, H.R. 1226, the Taxpayer Browsing Protection
Act.
In February of this year, the First Circuit Court of Appeals
overturned the conviction of Richard W. Czubinski, a former Internal
Revenue Service employee who had snooped through the tax records of
several taxpayers. The court claimed that although there was a law
against unauthorized disclosure of confidential tax information, there
was no law against unauthorized browsing of those private tax records.
The public correctly expects that their tax records will only be
inspected by those authorized to do so for legitimate purposes:
Browsing is unacceptable, and it must stop.
This bill will prohibit unauthorized review or browsing of Federal
tax information which the IRS possesses. It will improve current law by
putting criminal sanctions in the Tax Code and by protecting tax
information in both electronic and paper forms. Those who break the law
would be dismissed by the IRS, could be sentenced up to a year in jail,
and additionally could be forced to pay up to $100,000 in fines. Also
upon the filing of a criminal action against a browser, the IRS would
notify affected taxpayers who could then sue the violator for civil
damages.
Mr. Speaker, taxpayers expect and deserve that the Federal Government
will protect the privacy of their personal financial information. As an
original cosponsor of this measure, I urge Members to join me in voting
``yes'' today on H.R. 1226, the Taxpayer Browsing Protection Act.
Mr. STARK. Mr. Speaker, I rise in support of H.R. 1226, the Taxpayer
Browsing Protection Act.
This bill bolsters the administration's position of zero tolerance
for unauthorized browsing of taxpayer information. Current law focuses
more on unauthorized disclosure of taxpayer information. This bill
addresses--and makes a crime--IRS employees looking at a taxpayers
records when they have no justifiable reason to do so, even if no
disclosure of the information to others takes place.
Taxpayers are entitled to privacy of their records and we must assure
that the information they provide the IRS will be protected. Protection
of privacy rights of taxpayers is critical for a voluntary tax system.
IRS employees also deserve to have their ranks purged of those whose
unlawful acts bring shame on Federal workers.
As a cosponsor of H.R. 1226, I am pleased to see that the House is
responding to the administration's request for action on this
legislation.
The SPEAKER pro tempore (Mr. Goodlatte). The question is on the
motion offered by the gentleman from Texas [Mr. Archer] that the House
suspend the rules and pass the bill, H.R. 1226, as amended.
The question was taken.
Mr. ARCHER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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