[Congressional Record (Bound Edition), Volume 152 (2006), Part 4]
[Extensions of Remarks]
[Page 4920]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  INTRODUCING THE TAXPAYER PRIVACY ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Tuesday, April 4, 2006

  Mr. STARK. Mr. Speaker, I am pleased to join my colleagues Mr. 
McDermott, Mr. Inslee, and Ms. Bean in introducing the Taxpayer Privacy 
Act of 2006. This bill protects the privacy of millions of Americans, 
ensuring that taxpayers who rely on paid preparers do not have their 
confidential and sensitive personal information disseminated, sold or 
sent overseas.
  The IRS is currently considering a rule that would make it easier for 
tax preparers to disclose the private information contained in tax 
returns--including name, address, Social Security number, employer, 
income, and charitable donations. Currently, paid preparers can only 
use taxpayer information to generate business within their own 
affiliates. The new rule would allow preparers to obtain taxpayers' 
approval to disclose tax information to generate outside business.
  Taxpayers should not be coerced into giving up their privacy rights 
just to file their taxes. Our bill protects taxpayers by requiring 
preparers to use information only to prepare taxes--and not for any 
other purpose.
  Reports also suggest that Ernst and Young and other large tax 
preparation firms are sending tax returns overseas for processing. But 
the IRS has no control over tax information once it's been sent to 
India or another country. Even the best data security systems can't 
protect private taxpayer information from entrepreneurial foreign 
businesses than can make huge profits selling U.S. taxpayer 
information.
  Our bill strictly prohibits domestic tax preparers from sending 
returns overseas for processing. Preparers found to have disclosed 
private information to a foreign entity would be assessed a $1000 fine 
and up to one year in jail for each wrongful disclosure. The bill does 
not prohibit a taxpayer from choosing to have their taxes done by a 
preparer based overseas, it merely protects them from having their 
taxes shipped to a foreign country when they believe the forms are 
being completed by their local preparer.
  This legislation is a common sense solution that protects taxpayers 
without burdening tax preparers. I urge my colleagues on both sides of 
the aisle to stand up for taxpayer privacy and support this bill.

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