Preventing Congressional Violations of Taxpayer Privacy

58 Pages Posted: 10 Jul 2015 Last revised: 1 Mar 2016

George K. Yin

University of Virginia School of Law

Date Written: March 1, 2016

Abstract

This article claims that the U.S. House Ways & Means Committee violated the law in 2014 when it voted (strictly along party lines) to release to the public the tax return information of 51 taxpayers. The committee acted under the belief that an obscure tax law provision authorized its action. But the provision required the committee to have a legitimate purpose for the disclosures and — incredibly — the committee failed to satisfy this almost trivial, common-sense restriction. Although the disclosures occurred in connection with the committee’s allegations of possible criminal misconduct by a high-ranking IRS official (Lois Lerner), most of the return information released was completely unrelated to the oversight objective and no disclosure was necessary to support the committee’s claims. In fact, there does not appear to have been any purpose whatsoever for the disclosures other than possibly providing a partisan political advantage to the committee majority. Because the Speech or Debate Clause of the Constitution insulated the committee from prosecution for the violation, the incident reveals a serious gap in taxpayer privacy protections. A future tax committee, for no legitimate reason, might release with impunity the return information of any taxpayer, including sensitive information belonging to a political enemy of those controlling the committee at the time.

To prevent that outcome, this article proposes a new restriction on the access of the tax committees to tax return information. If the committees cannot obtain the information in the first instance, then they will be unable to disclose it for improper purposes. The proposal respects the legitimate need of the tax committees for the information by giving exclusive access to a Congressional staff intermediary who would be responsible for conveying necessary information to the tax committees while preventing improper disclosures. If, as claimed in this article, the intermediary’s actions would likely not be protected by the Speech or Debate Clause, then restrictions placed on the intermediary’s discretion in order to protect taxpayer privacy rights could be adequately enforced. Since today’s majority on a committee may obviously be tomorrow’s minority, it behooves every legislator to take action to prevent illegitimate disclosures in the future.

Keywords: taxpayer privacy, Ways & Means, Speech or Debate, illegal disclosures

JEL Classification: H20, K14, K34, K42, L31

Suggested Citation

Yin, George K., Preventing Congressional Violations of Taxpayer Privacy (March 1, 2016). 69 Tax Lawyer 103 (2015); Virginia Public Law and Legal Theory Research Paper No. 36; Virginia Law and Economics Research Paper No. 20. Available at SSRN: https://ssrn.com/abstract=2628193 or http://dx.doi.org/10.2139/ssrn.2628193

George K. Yin (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
434-924-7025 (Phone)
434-924-7536 (Fax)

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