[Federal Register Volume 64, Number 221 (Wednesday, November 17, 1999)]
[Proposed Rules]
[Pages 62620-62622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30036]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

31 CFR Part 1


Privacy Act; Proposed Implementation

AGENCY: Internal Revenue Service, Treasury.

ACTION: Proposed Rule.

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, 5 U.S.C. 552a, as amended, the Department of the Treasury, 
Internal Revenue Service (IRS) gives notice of a proposed rule to 
exempt a new system of records entitled ``IRS Audit Trail and Security 
Records System--Treasury/IRS 34.037,'' from certain provisions of the 
Privacy Act. The exemptions are intended to comply with the legal 
prohibitions against the disclosure of certain kinds of information and 
to protect certain information, about individuals, maintained in this 
system of records.

DATES: Comments must be received no later than December 17, 1999.

ADDRESSES: Please submit comments to Office of Governmental Liaison and 
Disclosure, Internal Revenue Service, 1111 Constitution Ave., NW, 
Washington, DC 20224. Persons wishing to review the comments should 
call 202-622-6200 to make an appointment with the Office of 
Governmental Liaison and Disclosure.

FOR FURTHER INFORMATION CONTACT: David Silverman, Tax Law Specialist, 
6103/Privacy Operations, Governmental Liaison and Disclosure, Internal 
Revenue Service at 202-622-6200.


[[Page 62621]]


SUPPLEMENTARY INFORMATION: Under 5 U.S.C. 552a(k)(2), the head of an 
agency may promulgate rules to exempt a system of records from certain 
provisions of 5 U.S.C. 552a, if the system is investigatory material 
compiled for law enforcement purposes. The IRS compiles records in this 
system for law enforcement purposes. Treasury/IRS 34.037--IRS Audit 
Trail and Security Records System, contains records that enable the IRS 
to investigate and monitor the activities of individuals who access IRS 
information systems which process IRS information. The IRS will use the 
information to ensure the protection and confidentiality of IRS 
information for the detection and deterrence of unauthorized access and 
abuse of the information.
    The IRS is hereby giving notice of a proposed rule to exempt 
Treasury/IRS 34.037--IRS Audit Trail and Security Records System, from 
certain provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). 
The proposed exemption is from provisions 552a (c)(3), (d)(1), (d)(2), 
(d)(3), (d)(4), (e)(1), (e)(4)(G) , (H) and (f). Pursuant to the 
provisions of 5 U.S.C. 552a (k)(2), it is proposed to exempt system of 
records 34.037, the IRS Audit Trail and Security Records System, from 
the foregoing provisions of the Privacy Act of 1974, because the system 
contains investigatory material compiled for law enforcement purposes. 
The records will be used to enforce 26 U.S.C. 7213, 7213A, 7214, and 18 
U.S.C. 1030(a)(2)(B). The following are the reasons why this system of 
records maintained by the IRS is exempt pursuant to 5 U.S.C. 552a(k)(2) 
of the Privacy Act of 1974.
    (1) 5 U.S.C. 552a (c)(3). This provision of the Privacy Act 
provides for the release of the disclosure accounting required by 5 
U.S.C. 552a(c) (1) and (2) to the individual named in the record at 
his/her request. The reasons for exempting this system of records from 
the foregoing provisions are:
    (i) The release of disclosure accounting would put the subject of 
an investigation on notice that an investigation exists and that such 
person is the subject of that investigation.
    (ii) Such release would provide the subject of an investigation 
with an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to whom the 
disclosure was made. The release of such information to the subject of 
an investigation would provide the subject with significant information 
concerning the nature of the investigation and could result in the 
altering or destruction of documentary evidence, the improper 
influencing of witnesses, and other activities that could impede or 
compromise the investigation.
    (iii) Release to the individual of the disclosure accounting would 
alert the individual as to which agencies were investigating the 
subject and the scope of the investigation and could aid the individual 
in impeding or compromising investigations by those agencies.
    (2) 5 U.S.C. 552a (d)(1), (d)(2), (d)(3), (d)(4), (e)(4) (G), (H), 
and (f). These provisions of the Privacy Act relate to an individual's 
right to be notified of the existence of records pertaining to such 
individual; requirements for identifying an individual who requested 
access to records; the agency procedures relating to access to records 
and the contest of the information contained in such records and the 
administrative remedies available to the individual in the event of 
adverse determinations by an agency concerning access to or amendment 
of information contained in record systems. The reasons for exempting 
this system of records from the foregoing provisions are as follows: To 
notify an individual at the individual's request of the existence of an 
investigative file pertaining to such individual or to grant access to 
an investigative file pertaining to such individuals or grant access to 
an investigative file could interfere with investigative and 
enforcement proceedings; deprive co-defendants of a right to a fair 
trial or an impartial adjudication; constitute an unwarranted invasion 
of the personal privacy of others; disclose the identity of 
confidential sources and reveal confidential information supplied by 
such sources; and, disclose investigative techniques and procedures.
    (3) U.S.C. 552a(e)(1). This provision of the Privacy Act requires 
each agency to maintain in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
agency required to be accomplished by statute or executive order. The 
reasons for exempting this system of records from the foregoing 
provision are as follows:
    (i) The IRS will limit its inquiries to information that is 
necessary for the enforcement and administration of computer security 
laws and tax laws. However, an exemption from the foregoing provision 
is needed because, particularly in the early stages of an 
investigation, it is not possible to determine the relevance or 
necessity of specific information.
    (ii) Relevance and necessity are questions of judgment and timing. 
What appears relevant and necessary when collected may subsequently be 
determined to be irrelevant or unnecessary. It is only after the 
information is evaluated that the relevance and necessity of such 
information can be established with certainty.
    (iii) When information is received by the IRS relating to 
violations of law within the jurisdiction of other agencies, the IRS 
processes this information through the IRS systems in order to forward 
the material to the appropriate agencies.
    As required by Executive Order 12866, it has been determined that 
this proposed rule is not a significant regulatory action, and 
therefore, does not require a regulatory impact analysis.
    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, it is hereby certified that these regulations will not 
significantly affect a substantial number of small entities. The 
proposed rule imposes no duties or obligations on small entities.
    In accordance with the provisions of the Paperwork Reduction Act of 
1995, the Department of the Treasury has determined that this proposed 
rule would not impose new record keeping, application, reporting, or 
other types of information collection requirements.

List of Subjects in 31 CFR Part 1

    Privacy.

    Part 1 of Title 31 of the Code of Federal Regulations is amended as 
follows:
    1. The authority citation for part 1 continues to read as follows:

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued 
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C. 
552a.


Sec. 1.36  [Amended]

    2. Section 1.36 of Subpart C is amended by adding the following 
text in numerical order under the heading The Internal Revenue Service 
in paragraph (b)(1) to read as follows:
* * * * *
    (b) * * *
    (1) * * *

 
------------------------------------------------------------------------
                         Name of system                            No.
------------------------------------------------------------------------
                          *    *    *    *    *
IRS Audit Trail and Security...................................  .......
Records System.................................................   34.037
                          *    *    *    *    *
------------------------------------------------------------------------

*    *    *    *    *


[[Page 62622]]


    Dated: September 21, 1999.
Shelia Y. McCann,
Deputy Assistant Secretary (Administration).
[FR Doc. 99-30036 Filed 11-16-99; 8:45 am]
BILLING CODE 4830-01-P