[Federal Register Volume 67, Number 113 (Wednesday, June 12, 2002)]
[Proposed Rules]
[Pages 40253-40254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14745]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

31 CFR Part 1


Privacy Act, 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, as amended, the Department of the Treasury gives notice of a 
proposed amendment to this part to exempt a new Internal Revenue 
Service (IRS) system of records, the Employee Complaint and Allegation 
Referral Records, IRS 00.007, from certain provisions of the Privacy 
Act.

DATES: Comments must be received no later than July 12, 2002.

ADDRESSES: Please submit comments to the Director, Commissioner's 
Complaint Processing and Analysis Group, 1111 Constitution Avenue, 
N:ADC:C, NW., Washington, DC 20224. Comments will be made available for 
inspection at the IRS Freedom of Information Reading Room also located 
at 1111 Constitution Avenue, NW. The telephone number for the Reading 
Room is (202) 622-5164.

FOR FURTHER INFORMATION CONTACT: Jim D'Elia, Commissioner's Complaint 
Processing and Analysis Group, N:ADC:C, 1111 Constitution Avenue, NW., 
Washington, DC 20224. Telephone number (202) 622-5212.

SUPPLEMENTARY INFORMATION: The Commissioner of the IRS has established 
a Complaint Processing and Analysis Group in the IRS National 
Headquarters. The purpose of the Group is (1) to promote public 
confidence in the integrity of the IRS; (2) to identify and monitor 
complaints, allegations and other information received concerning 
current and former IRS employees and IRS contractors; (3) to ensure 
that the IRS provides a timely and appropriate response to those 
complaints, allegations and other information; (4) to advise 
complainants of the status and results of investigations or inquiries 
conducted as a result of the IRS's receipt of their complaints, and (5) 
to compile summary reports. The reports will provide non-identifying 
information about the type of complaints, allegations and resulting 
actions concerning current and former IRS employees and IRS contractors 
and will be distributed to IRS and Department of the Treasury 
executives, managers and employees, the Congress and the public. 
Specifically, section 1211 of Public Law 104-168, Taxpayer Bill of 
Rights 2 (TBOR2), requires that the Secretary of the Treasury submit to 
the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report of instances involving the 
misconduct of employees of the IRS. Section 3701 of Public Law 105-206, 
the IRS Restructuring and Reform Act (RRA) of 1998 requires that the 
Secretary or the Secretary's delegate maintain records of taxpayer 
complaints of misconduct by IRS employees on an individual employee 
basis to prepare the report required by section 1211 of TBOR2.
    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. To ensure appropriate and complete response to 
complaints or allegations, the Complaint Processing and Analysis Group 
will frequently need to forward complaints, allegations, or related 
information to the Treasury Inspector General for Tax Administration 
(TIGTA) for investigation to determine if there has been a violation of 
a rule, regulation, or statute. Copies of the information forwarded to 
TIGTA will be retained in the Employee Complaint and Allegation 
Referral Records pending completion of investigation by TIGTA. The 
results of investigation completed by TIGTA will also be retained in 
the Employee Complaint and Allegation Referral Records in accordance 
with the procedures in Internal Revenue Manual 1.15.2, Records 
Disposition Handbook.
    The IRS is hereby giving notice of a proposed rule to exempt IRS 
00.007, Employee Complaint and Allegation Referral Records, from 
certain provisions of the Privacy Act of 1974 pursuant to 5 U.S.C. 
552a(k)(2). The proposed exemption is from provisions 552a (c)(3), (d), 
(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) because the system 
contains investigatory material compiled for law enforcement purposes. 
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). These provisions of the Privacy Act 
provide 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 which 
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), (e)(4)(G), (e)(4)(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 
content of the information contained in such records and the civil 
remedies available

[[Page 40254]]

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 individual 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) 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in 
each system of records. The reasons an exemption from this provision 
has been claimed, are as follows:
    (i) Revealing categories of sources of information could disclose 
investigative techniques and procedures;
    (ii) Revealing categories of sources of information could cause 
sources who supply information to investigators to refrain from giving 
such information because of fear of reprisal, or fear of breach of 
promises of anonymity and confidentiality.
    (4) 5 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 are as 
follows:
    (i) The IRS will limit the Employee Complaint and Allegation 
Referral Records to those relevant and necessary for identifying, 
monitoring, and responding to complaints, allegations and other 
information received concerning current and former IRS employees and 
IRS contractors. However, an exemption from the foregoing 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 first received 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 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.
    The regulation will not have a substantial direct effect on the 
States, on the relationship between the Federal Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, it is determined that this 
proposed 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 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, Subpart C of title 31 of the Code of Federal Regulations is 
amended as follows:

PART 1--[AMENDED]

    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.

    2. Section 1.36 paragraph (g)(1)(viii) is amended by adding the 
following text to the table in numerical order.


Sec. 1.36  Systems exempt in whole or in part from provisions of 5 
U.S.C. 522a and this part.

* * * * *
    (g) * * *
    (1) * * *
    (viii) * * *

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                  Number                           Name of system
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                  *        *        *        *        *
IRS 00.007................................  Employee Complaint and
                                             Allegation Referral Records
 
                  *        *        *        *        *
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    Dated: May 20, 2002.
W. Earl Wright, Jr.,
Chief Management and Administrative Programs Officer.
[FR Doc. 02-14745 Filed 6-11-02; 8:45 am]
BILLING CODE 4830-11-P