    [Public Papers of the Presidents of the United States: William J. Clinton (1997, Book II)]
    [August 5, 1997]
    [Pages 1058-1059]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Statement on Signing the Taxpayer Browsing Protection Act
    August 5, 1997

        Today I have signed into law H.R. 1226, the ``Taxpayer Browsing
    Protection Act,'' to provide additional criminal penalties and civil
    remedies to help ensure that taxpayers' returns and return information
    remain confidential.
        Our system of taxation relies heavily on taxpayers' voluntary
    compliance with their tax reporting obligations. Maintaining the
    confidentiality of the information submitted by taxpayers is critical to
    the operation of this system. If taxpayers do not believe that the
    Government is adequately safeguarding their personal financial
    information they may be less willing to supply that information in the
    future.
        Taxpayers have the right to expect that their returns and return
    information are, and will remain, confidential. Such information should
    be inspected or reviewed only for proper purposes, including tax
    administration, in accordance with the criteria established by law. It
    is my Administration's clear policy that unauthorized inspection of tax
    information will not be tolerated. This is a bipartisan issue on which
    everyone can agree: ``browsing'' taxpayer information is wrong, and we
    all condemn it.
        Using currently available tools, the Internal Revenue Service (IRS)
    has stepped up its efforts to end browsing, and my Administration has
    supported providing the IRS with additional tools. Significant progress
    was made on this issue last year. The National Information
    Infrastructure Protection Act of 1996 made it a crime to access
    intentionally a Federal computer without proper authority and obtain
    information from any department or agency of the United States
    Government. Thus, browsing tax records stored in a Federal computer is
    already punishable as a crime. The bill I have signed today will further
    strengthen the tools the IRS can employ against unauthorized inspections
    of taxpayer data.
        This legislation will add a separate provision to the Internal
    Revenue Code specifically prohibiting unauthorized inspection or
    browsing of tax returns and return information. It will make a
    misdemeanor of certain activities that are not covered under current
    law. For example, it will prohibit the unauthorized inspection of
    noncomputerized tax information, such as ``hard copies'' of paper
    returns or return information. It will prohibit unauthorized inspection
    using computers belonging to State or local governments or contractors
    when Federal tax information has been conveyed to them pursuant to
    existing law. Finally, the new misdemeanor will serve as an additional
    option for prosecutors even in cases already covered under current law.
        I am pleased that the bill provides additional civil remedies to
    those taxpayers whose privacy has been invaded by unauthorized
    inspection or disclosure of their tax information. Current law requires
    an actual disclosure to a third person of taxpayer information before a
    civil remedy is available. This bill will provide a civil remedy to
    taxpayers whose tax information has been unlawfully inspected,
    regardless of whether there has been a subsequent disclosure. Further,
    H.R. 1226 will require notification to taxpayers whose tax information
    has been either improperly inspected or disclosed whenever a person is
    indicted or otherwise charged with a violation of criminal provisions
    applicable to browsing or unlawful disclosure.
        It is entirely appropriate for taxpayers whose tax information has
    been improperly inspected to have the same remedies as taxpayers whose
    information has actually been unlawfully disclosed. Further,
    notification to the taxpayer is appropriate when the Government has
    sufficient evidence to support a criminal charge. Acknowledging that we
    believe someone has violated the confidentiality rules, and advising
    taxpayers

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    that we are vigorously pursuing such individuals with criminal
    penalties, will ultimately enhance taxpayers' confidence that the
    Government is vigilant about protecting their privacy.
        These actions should deter persons who have access to tax returns
    and return information from unauthorized browsing, and the number of
    such instances should decline significantly in the future.
        For these reasons, I am pleased to have signed H.R. 1226 into law.

                                                          William J. Clinton

    The White House,

    August 5, 1997.

    Note: H.R. 1226, approved August 5, was assigned Public Law No. 105-35.