[Federal Register Volume 65, Number 183 (Wednesday, September 20, 2000)]
[Rules and Regulations]
[Pages 56791-56792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24167]


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DEPARTMENT OF THE TREASURY

31 CFR Part 1


Internal Revenue Service; Privacy Act, Implementation

AGENCY: Office of the Secretary, Treasury.

ACTION: Final 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 gives 
notice of a final rule to exempt an Internal Revenue Service system of 
records entitled ``IRS Audit Trail and Security Records System--
Treasury/IRS 34.037,'' from certain provisions of the Privacy Act. The 
exemption is 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.

EFFECTIVE DATE: September 20, 2000.

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

SUPPLEMENTARY INFORMATION: The Department of the Treasury published a 
notice of a proposed rule exempting a system of records from certain 
provisions of the Privacy Act of 1974, as amended, on November 17, 
1999, at 64 FR 62620-62622. The Internal Revenue Service (IRS) 
published the system notice in its entirety on November 19, 1999, at 63 
FR 63108. Under 5 U.S.C. 552a(k)(2), the head of an agency may 
promulgate rules to exempt any system of records within the agency from 
certain provisions of the Privacy Act of 1974, as amended, if the 
system is investigatory material compiled for law enforcement purposes. 
The IRS Audit Trail and Security Records System--Treasury/IRS 34.037 
contains investigatory material compiled for law enforcement purposes.
    The proposed rule requested that public comments be sent to the 
Governmental Liaison and Disclosure Office, Internal Revenue Service, 
1111 Constitution Ave., NW, Washington, DC 20224, no later than January 
22, 1999. The Governmental Liaison and Disclosure Office received 
comments addressing the issues below from one individual. As discussed 
below, no changes to the rule were made on the basis of these comments.
    First, the commenter stated that the system notice lacked 
specificity as to the users of the system because the notice provided 
that ``[o]utside of IRS information systems, the office of the Treasury 
Inspector General for Tax Administration is the principal user of the 
data contained in this system of records.'' The use of the word 
``principal'' would permit other personnel to have access to this 
system of records. The language in the current rule is the same that is 
used for the Treasury/IRS 34.020, the Audit Lead Trail Analysis System. 
This is because it is impossible to predict that only the information 
systems personnel and the Treasury Inspector General for Tax 
Administration may have a need to use this system. This system concerns 
primarily audit logs that track access to

[[Page 56792]]

sensitive but unclassified data for almost all IRS computer systems. 
Although generally the people who monitor such logs are information 
system administrators, there may be exceptions where personnel from 
another IRS function monitor the logs.
    The commenter also expressed concern that government and non-law 
enforcement personnel will have access to and use of the system, and 
that the system should only exempt certain records depending on whether 
the information is being used for law enforcement purposes. All of the 
information is being used for law enforcement purposes, specifically to 
detect violations of applicable statutes, including 18 U.S.C. 
1030(a)(2)(B) and 26 U.S.C. 6103, 7213, 7213A. Therefore, the entire 
system is entitled to the law enforcement exemption. The final concern 
expressed by the commenter was a lack of description of the specific 
records to be covered. This system is broad because it would be 
burdensome and confusing to the public to create multiple systems with 
corresponding multiple notices for the purpose of printing the same 
description of audit logs and security records used to monitor access.
    Accordingly, the Department of the Treasury is hereby giving notice 
that the system of records entitled ``IRS Audit Trail and Security 
Records System--Treasury/IRS 34.037,'' is exempt from certain 
provisions of the Privacy Act. The provisions of the Privacy Act from 
which exemption is claimed pursuant to 5 U.S.C. 552a(k)(2) are as 
follows: 5 U.S.C. 552a (c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), 
(e)(4)(G) , (H) and (f).
    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.
    The regulation will not have a substantial direct effect on the 
States, on the relationship between the national Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, it is determined that this 
final rule does not have federalism implications under Executive Order 
13132.
    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 final 
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 in paragraph (b)(1) under the heading THE 
INTERNAL REVENUE SERVICE:
* * * * *
    (b) * * *
    (1) * * *

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

    Dated: September 13, 2000.
W. Earl Wright, Jr.,
Chief Management and Administrative Programs Officer.
[FR Doc. 00-24167 Filed 9-19-00; 8:45 am]
BILLING CODE 4830-01-P