[Federal Register Volume 76, Number 220 (Tuesday, November 15, 2011)]
[Notices]
[Pages 70813-70815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29372]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Privacy Act of 1974, as Amended

AGENCY: Internal Revenue Service, Treasury.

ACTION: Notice of Proposed New Privacy Act System of Records.

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, as amended, 5 U.S.C. 552a, the Department of the Treasury, 
Internal Revenue Service, gives notice of a proposed new system of 
records entitled ``Treasury/IRS 37.111--Preparer Tax Identification 
Number Records.''

DATES: Comments must be received no later than December 15, 2011. This 
new system of records will be effective December 20, 2011 unless the 
IRS receives comments that would result in a contrary determination.

ADDRESSES: Comments should be sent to the Office of Governmental 
Liaison and Disclosure, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC 20224. Comments will be available for 
inspection and copying in the Freedom of Information Reading Room (Room 
1621), at the above address. The telephone number for the Reading Room 
is (202) 622-5164 (not a toll-free number).

FOR FURTHER INFORMATION CONTACT: David R. Williams, Director, Return 
Preparer Office, 1111 Constitution Ave., NW., Washington, DC 20224. 
Phone: (202) 927-6428 (not a toll-free number).

SUPPLEMENTARY INFORMATION: The Return Preparer Review initiative 
represents a big step toward meeting the IRS strategic plan goals of 
increasing taxpayer compliance and ensuring uniform and high ethical 
standards of conduct for paid tax return preparers. The major 
components of the program include requiring paid tax return preparers 
to register with the IRS and obtain a preparer tax identification 
number (PTIN), requiring competency measurements (by testing or through 
other professional licensing) for paid tax return preparers, requiring 
continuing professional education for paid tax return preparers, 
extending the ethical rules found in Treasury Department Circular 230 
to all paid tax return preparers, assessing the quality of return 
preparation and performing tax compliance checks and suitability checks 
on paid tax return preparers, and developing a publicly accessible and 
searchable database of paid tax return preparers who have registered 
and been issued a PTIN.
    The proposed system will maintain administrative records pertaining 
to the issuance of PTINs to registered paid tax return preparers. This 
registration program will allow the IRS to better serve the public by 
requiring paid tax return preparers to register with the IRS, and to 
obtain and regularly renew their preparer tax identification number 
(PTIN). Paid tax return preparers may be subject to suitability checks, 
including background, fingerprint, and tax compliance checks, and to 
ethics and other regulatory rules; may be required to take competency 
tests; and may need to secure continuing education credits. IRS intends 
to notify the public of who is registered, and may provide to the 
public information sufficient to advise the public if a preparer is 
removed from the program. The IRS will also maintain information about 
individual providers of continuing education for paid tax return 
preparers, and intends to make certain information about these 
providers available to the public to assist return preparers in 
locating appropriate continuing education opportunities and to enable 
taxpayers to know the subject matter of courses a paid tax return 
preparer may have taken.
    A proposed rule exempting the proposed system of records from 
certain provisions of the Privacy Act will be published separately in 
the Federal Register.
    One provision of the Act, 5 U.S.C. 552a(d)(5), allows an agency to 
exempt qualifying material and is frequently overlooked by the public 
until it is invoked by an agency. The Internal Revenue Service is 
providing notice of its authority to assert the exemption granted by 
subsection (d)(5) to any record maintained in any of its systems of 
records when appropriate to do so. 5 U.S.C. 552a(d)(5) states that 
``nothing in this [Act] shall allow an individual access to any 
information compiled in reasonable anticipation of a civil action or 
proceeding.'' This subsection permits an agency to withhold a record 
from the access provisions of the Privacy Act and reflects Congress's 
intent to exclude civil litigation files which includes quasi-judicial 
administrative hearings from access under subsection (d)(1). Unlike the 
other Privacy Act exemptions (see 5 U.S.C. 552a(j)(2) and (k)), 
subsection (d)(5) is entirely ``self-executing,'' and as such it does 
not require an implementing regulation in order to be effective.

[[Page 70814]]

    As required by 5 U.S.C. 552a(r), a report of a new system of 
records has been provided to the Committee on Oversight and Government 
Reform of the House of Representatives, the Committee on Homeland 
Security and Governmental Affairs of the Senate, and the Office of 
Management and Budget.
    The system of records entitled ``Treasury/IRS 37.111--Preparer Tax 
Identification Number Records'' is published in its entirety below.

    Dated: October 24, 2011.
Melissa Hartman,
Deputy Assistant Secretary for Privacy, Transparency, and Records.
Treasury/IRS 37.111

SYSTEM NAME:
    Preparer Tax Identification Number Records.

SYSTEM LOCATION:
    National Office, Field Offices, Campuses, and Computing Centers. 
(See IRS Appendix A for addresses of IRS offices.)

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    Applicants for a PTIN; registered paid tax return preparers 
(individuals issued a PTIN); individuals whose application or 
registration is rejected, revoked, or suspended. Individual providers 
of continuing education for paid tax return preparers, including 
applicants for IRS approval, approved providers, and former providers. 
Individual contractors who assist the IRS in reviewing continuing 
education provider applications. Individuals who communicate with the 
IRS regarding the paid tax return preparer registration program or 
about any specific paid tax return preparer or continuing education 
provider.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Administrative records pertaining to paid tax return preparers, 
including records pertaining to applications for registration, renewal 
of registration, revocations, suspensions, and appeals; records 
pertaining to IRS investigation and evaluation of eligibility for 
registration; records relating to proof of identity for applicants who 
do not have Social Security Numbers; records related to competency 
testing, including applications, answer sheets, and test scores; 
records related to background, fingerprint, and tax compliance checks; 
records on continuing education requirements to become a registered 
paid tax return preparer; and information related to testing and 
education exemptions due to supervised status and types of returns 
prepared. Records pertaining to individual providers of continuing 
education for paid tax return preparers, including applications for IRS 
approval of courses or programs, grants and denials of such 
applications, and records of participation in offered courses and 
programs. Records pertaining to individual contractors who assist IRS 
in reviewing continuing education provider applications. Records 
pertaining to received communications.

    Note: Disciplinary records pertaining to registered paid tax 
return preparers are maintained in Treasury/IRS 37.007, Practitioner 
Disciplinary Records.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    5 U.S.C. 301; 26 U.S.C. 7801 and 7803; 31 U.S.C. 330.

PURPOSE(S):
    To administer records pertaining to the issuance of Preparer Tax 
Identification Numbers (PTINs) to registered paid tax return preparers.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM INCLUDING CATEGORIES 
OF USERS AND PURPOSES OF SUCH USES:
    Returns and return information may be disclosed only as authorized 
by 26 USC 6103. Material covered by rule 6(e) of the Federal Rules of 
Criminal Procedure may be disclosed only as permitted by that rule. All 
other records may be used as described below if the IRS deems that the 
purpose of the disclosure is compatible with the purpose for which IRS 
collected the records, and no privilege is asserted.
    (1) Disclose information to the Department of Justice (DOJ) when 
seeking legal advice or for use in any proceeding, or in preparation 
for any proceeding, when: (a) The IRS or any component thereof; (b) any 
IRS employee in his or her official capacity; (c) any IRS employee in 
his or her individual capacity if the IRS or DOJ has agreed to provide 
representation for the employee; or (d) the United States is a party 
to, has an interest in, or is likely to be affected by, the proceeding 
and the IRS determines that the records are relevant and necessary to 
the proceeding or advice sought.
    (2) Disclose information during a proceeding before a court, 
administrative tribunal, or other adjudicative body when: (a) The IRS 
or any component thereof; (b) any IRS employee in his or her official 
capacity; (c) any IRS employee in his or her personal capacity if the 
IRS or DOJ has agreed to provide representation for the employee; or 
(d) the United States is a party to, has an interest in, or is likely 
to be affected by, the proceeding and the IRS or DOJ determines that 
the information is relevant and necessary to the proceeding. 
Information may be disclosed to the adjudicative body to resolve issues 
of relevancy, necessity, or privilege pertaining to the information.
    (3) Disclose information to an arbitrator, mediator, or other 
neutral, in the context of alternative dispute resolution, to the 
extent relevant and necessary for resolution of the matters presented, 
including asserted privileges. Information may also be disclosed to the 
parties in the alternative dispute resolution proceeding.
    (4) Disclose to a Federal, State, local, or tribal agency, or other 
public authority, which has requested information relevant or necessary 
to hiring or retaining an employee, or issuing or continuing a 
contract, security clearance, license, grant, or other benefit.
    (5) Disclose pertinent information to an appropriate Federal, 
State, local, or tribal agency, or other public authority, responsible 
for implementing or enforcing, or for investigating or prosecuting the 
violation of, a statute, rule, regulation, order, or license, when a 
record on its face, or in conjunction with other records, indicates a 
potential violation of law or regulation and the information disclosed 
is relevant to any regulatory, enforcement, investigative, or 
prosecutorial responsibility of the receiving authority.
    (6) Disclose information to foreign governments in accordance with 
international agreements.
    (7) Disclose information to third parties during the course of an 
investigation to the extent necessary to obtain information pertinent 
to the investigation.
    (8) Disclose information to professional organizations or 
associations with which individuals covered by this system of records 
may be affiliated, such as state bar and accountancy disciplinary 
authorities, to meet their responsibilities in connection with the 
administration and maintenance of standards of conduct and discipline.
    (9) To the extent consistent with the American Bar Association's 
Model Rules of Professional Conduct, Rule 4.2, disclose to a person the 
fact that his chosen legal representative may not be authorized to 
represent him before the IRS.
    (10) Disclose information to a contractor, including an expert 
witness or a consultant, hired by the IRS, to the extent necessary for 
the performance of a contract.
    (11) Disclose information to a supervised tax return preparer 
sufficient

[[Page 70815]]

to identify the supervising tax return preparer, and information to a 
supervising tax return preparer sufficient to identify the tax return 
preparers who have named that individual as their supervisor.
    (12) Disclose information to a contractor's financial institution 
to the extent necessary for the processing of PTIN application and 
registration fee payments.
    (13) Disclose information to a former employee of the IRS to the 
extent necessary for personnel-related or other official purposes when 
the IRS requires information and/or consultation assistance from the 
former employee regarding a matter within that person's former area of 
responsibility.
    (14) Disclose information to the public sufficient to identify 
individuals who have registered with the IRS as a paid tax return 
preparer and been issued a PTIN, and to advise the public when such an 
individual is removed from the program.
    (15) Disclose information to the public sufficient to identify 
individual providers of continuing education for paid tax return 
preparers, including contact information.
    (16) Disclose information to appropriate agencies, entities, and 
persons when: (a) The IRS suspects or has confirmed that the security 
or confidentiality of information in the system of records has been 
compromised; (b) the IRS has determined that as a result of the 
suspected or confirmed compromise there is a risk of harm to economic 
or property interests, identity theft or fraud, or harm to the security 
or integrity of this system or other systems or programs (whether 
maintained by the IRS or another agency or entity) that rely upon the 
compromised information; and (c) the disclosure made to such agencies, 
entities, and persons is reasonably necessary to assist in connection 
with IRS efforts to respond to the suspected or confirmed compromise 
and prevent, minimize, or remedy such harm.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Paper and electronic media.

RETRIEVABILITY:
    Records pertaining to paid tax return preparers may be retrieved by 
the preparer's Preparer Tax Identification Number (PTIN), name, 
Taxpayer Identification Number (Social Security Number or Employer 
Identification Number), or application number. Records pertaining to 
individual continuing education providers may be retrieved by provider 
name, Taxpayer Identification Number, application number, or course or 
program number. Records pertaining to contractors may be retrieved by 
contractor name or Taxpayer Identification Number, or by contract 
number. Records pertaining to communications with individuals regarding 
the paid tax return preparer registration program may be retrieved by 
the name of the individual or the name or other identifying information 
of a paid tax return preparer or a continuing education provider 
identified in the communication. Records may also be retrieved by IRS 
employee identification number for the employee assigned to the case, 
project, or determination.

SAFEGUARDS:
    Only persons authorized by law will have access to these records. 
Security standards will not be less than those published in TD P 71-10, 
Department of the Treasury Security Manual, and IRM 10, Security, 
Privacy and Assurance.

RETENTION AND DISPOSAL:
    Record retention will be established in accordance with the 
National Archives and Records Administration Regulations Part 1228, 
Subpart B--Scheduling Records.

SYSTEM MANAGER(S) AND ADDRESS:
    Director, Return Preparer Office, 1111 Constitution Ave. NW., 
Washington, DC, 20224. Phone: (202) 927-6428 (not a toll-free number).

NOTIFICATION PROCEDURE:
    Individuals seeking notification and access to any record contained 
in this system of records, or seeking to contest its content, may 
inquire in writing in accordance with instructions appearing at 31 CFR, 
Part 1, Appendix B. Written inquiries should be addressed to Director, 
ETA, Wage and Investment, 1111 Constitution Ave. NW., Washington, DC, 
20224. This system of records contains records that are exempt from the 
notification, access and contest requirements pursuant to 5 U.S.C. 
552a(k)(2).

RECORDS ACCESS PROCEDURES:
    See ``Notification Procedure'' above.

CONTESTING RECORDS PROCEDURES:
    26 U.S.C. 7852(e) prohibits Privacy Act amendment of tax records. 
With respect to records other than tax records, see ``Notification 
Procedure'' above.

RECORDS SOURCE CATEGORIES:
    Applicants and registered paid tax return preparers; Treasury and 
other Federal agency records; state and municipal government agencies; 
contractors; continuing education providers; witnesses; professional 
organizations; publicly available records such as real estate records 
and news media.

 EXEMPTIONS CLAIMED FOR THE SYSTEM:
    Some of the records in this system are exempt from sections (c)(3), 
(d)(1)-(4), (e)(1), (e)(4)(G)-(I), and (f) of the Privacy Act, pursuant 
to 5 U.S.C. 552a(k)(2). (See 31 CFR 1.36)
[FR Doc. 2011-29372 Filed 11-14-11; 8:45 am]
BILLING CODE 4830-01-P