[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.