[Federal Register Volume 74, Number 194 (Thursday, October 8, 2009)]
[Rules and Regulations]
[Pages 51777-51778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24302]


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DEPARTMENT OF THE TREASURY

Office of the Secretary

31 CFR Part 1


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, as amended, the Department of the Treasury exempts a new Internal 
Revenue Service (IRS) system of records entitled ``Treasury/IRS 
50.222--Tax Exempt/Government Entities (TE/GE) Case Management 
Records'' from certain provisions of the Privacy Act.

DATES: Effective Date: October 8, 2009.

FOR FURTHER INFORMATION CONTACT: Telephonic inquiries should be 
directed to Marianne Davis, Program Analyst, Internal Revenue Service, 
TE/GE Division, at telephone number (949) 389-4304. Written inquiries 
should be directed to Robert Brenneman, TE/GE Reporting and Electronic 
Examination System (TREES) Project Manager, at Internal Revenue 
Service, TE/GE Business Systems Planning (SE:T:BSP), 1111 Constitution 
Avenue, NW., Attn: PE-6M4, Washington, DC 20224.

SUPPLEMENTARY INFORMATION: The Department of the Treasury published a 
notice of proposed rule on December 7, 2005 (Volume 70, No. 234), pages 
72739-72740, exempting the new system of records from certain 
provisions of the Privacy Act of 1974, as amended. The IRS published 
the proposed system notice in its entirety on December 7, 2005 (Volume 
70, Number 234), pages 72876-72878.
    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 if the system contains investigatory 
material compiled for law enforcement purposes. Treasury/IRS 52.222--
Tax Exempt/Government Entities (TE/GE) Case Management Records contains 
investigatory material compiled for law enforcement purposes.
    The proposed rule requested that public comments be sent the Office 
of Governmental Liaison and Disclosure, 1111 Constitution Avenue, NW., 
Washington, DC 20224, no later than January 6, 2006.
    The IRS received one comment on the proposed rule and the system of 
records notice urging the IRS: (1) not to exempt the system of records 
from requirements that its information be relevant and necessary for 
its purpose; and, (2) to limit the scope of its exemptions from the 
Privacy act requirements to provide access and correction rights to 
individuals.
    After consideration, the IRS determined that the public comment did 
not present any new information that would be a basis for changes being 
made to the proposed rule or system of records notice because: (1) 
Relevance and necessity can only be established with certainty after 
the information is evaluated; and, (2) the access provisions, as 
written, are consistent with the language and intent of the Privacy 
Act, comport with the Treasury regulation language for (k)(2), and 
explain that the release of information to the individual covered by 
the system would provide the individual or entity subject to 
investigation with significant information concerning the nature of the 
investigation and could result in altering or destruction of 
documentary evidence, the improper influencing of witnesses, and other 
activities that could impede or compromise the investigation. 
Accordingly, the Department of the Treasury is hereby giving notice 
that the system of records entitled ``Treasury/IRS 50.222--Tax Exempt/
Government Entities (TE/GE) Case Management Records'' is exempt from 
certain provisions of the Privacy Act.
    The provisions of the Privacy Act from which the system of records 
is exempt pursuant to 5 U.S.C. 552a(k)(2) are as follows: 552a(c)(3), 
(d)(1), (2), (3) and (4), (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). 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 provision are:
    (i) The release of disclosure accounting would put the tax exempt 
or government entity subject to investigation or individuals connected 
with those entities 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 individual 
covered by the system would provide the individual or entity subject to 
investigation 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.

[[Page 51778]]

    (iii) Release to the individual of the disclosure accounting would 
alert the individual as to which agencies were investigating the tax 
exempt government entity subject to investigation, would provide 
information concerning 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), (2), (3) and (4), (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; 
the content of the information contained in such records; and; the 
civil 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:
    Notifying an individual (at the individual's request) of the 
existence of an investigative file pertaining to such individual or 
granting 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; or, disclose 
investigative techniques and procedures.
    (3) 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 system to those records relevant and 
necessary for identifying, monitoring, and responding to complaints, 
allegations and other information received concerning violations or 
potential violations of Title 26. However, an exemption from the 
foregoing is needed because, particularly in the early stages of an 
investigation, it is not always 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.
    (4) 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 for exempting this system of 
records from the foregoing provision 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 that 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.
    As required by Executive Order 12866, it has been determined that 
this 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 
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 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 rule 
would not impose new recordkeeping, application, reporting, or other 
types of information collection requirements.

List of Subjects in 31 CFR Part 1

    Privacy.

0
Part 1, subpart C of title 31 of the Code of Federal Regulations is 
amended as follows:

PART 1--[AMENDED]

0
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.



0
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 subpart.

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

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                  Number                           Name of system
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                                * * * * *
Treasury/IRS 50.222.......................  Tax Exempt Government
                                             Entities Case Management
                                             Records.
 
                                * * * * *
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    Dated: August 25, 2009.
Elizabeth Cuffe,
Deputy Assistant Secretary for Privacy and Treasury Records.
[FR Doc. E9-24302 Filed 10-7-09; 8:45 am]
BILLING CODE 4830-01-P