[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Proposed Rules]
[Pages 71293-71294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29384]


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DEPARTMENT OF THE TREASURY

Office of the Secretary

31 CFR Part 1

RIN 1505-AC37


Privacy Act; Implementation

AGENCY: Office of the Secretary, 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 (Treasury) amends this 
part to partially exempt a new Internal Revenue Service (IRS) system of 
records entitled ``Treasury/IRS 37.111--Preparer Tax Identification 
Number Records'' from certain provisions of the Privacy Act.

DATES: Comments must be received no later than December 19, 2011.

ADDRESSES: Please submit comments to David R. Williams, Director, 
Return Preparer Office, 1111 Constitution Ave. NW., Washington, DC 
20224. Phone: (202) 927-6428 (not a toll-free number). Comments will be 
made available for inspection at the IRS 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). You may also 
submit comments through the Federal rulemaking portal at http://www.regulations.gov (follow the instructions for submitting comments).

FOR FURTHER INFORMATION CONTACT: David R. Williams, Director, Return 
Preparer Office, 1111 Constitution Ave. NW., Washington, DC 20224.

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. Treasury is hereby giving notice 
of a proposed rule to exempt ``Treasury/IRS 37.111--Preparer Tax 
Identification Number Records'' from certain provisions of the Privacy 
Act of 1974, pursuant to 5 U.S.C. 552a(k)(2). The proposed exemption 
pursuant to 5 U.S.C. 552a(k)(2) is from provisions (c)(3), (d)(1)-(4), 
(e)(1), (e)(4)(G)-(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 
alteration 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)-(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:
    (i) The existence of records pertaining to such individual,
    (ii) Requirements for identifying an individual who requested 
access to records,
    (iii) The agency procedures relating to access to and amendment of 
records,
    (iv) The content of the information contained in such records, and
    (v) The civil remedies available to the individual in the event of 
an adverse determination 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 that notifying an individual (at the individual's 
request) of the existence of an investigative file pertaining to such

[[Page 71294]]

individual or to granting access to an investigative file pertaining to 
such individual could:
    (i) Interfere with investigative and enforcement proceedings,
    (ii) Deprive codefendants of a right to a fair trial or an 
impartial adjudication,
    (iii) Constitute an unwarranted invasion of the personal privacy of 
others,
    (iv) Disclose the identity of confidential sources and reveal 
confidential information supplied by such sources,
    (v) 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 that are needed 
for compliance with the provisions of Title 26, 31 U.S.C. 330, and 
regulations applicable to paid tax return preparers. 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.
    (5) 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.
    Treasury will publish the notice of the proposed new system of 
records separately in the Federal Register.
    Pursuant to 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. Because no notice of 
proposed rulemaking is required, the provisions of the Regulatory 
Flexibility Act, 5 U.S.C. 601-612, do not apply.
    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.

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. 552a and this part.

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

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                Number                           Name of system
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                                * * * * *
IRS 37.111............................  Preparer Tax Identification
                                         Number Records.
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* * * * *

    Dated: October 24, 2011.
Melissa Hartman,
Deputy Assistant Secretary for Privacy, Transparency, and Records.
[FR Doc. 2011-29384 Filed 11-16-11; 8:45 am]
BILLING CODE 4830-01-P