Safeguarding Taxpayer Data

41 Pages Posted: 25 Apr 2024

See all articles by Michael Hatfield

Michael Hatfield

University of Washington - UW Law; University of Washington - School of Law

Date Written: April 24, 2024

Abstract

The Internal Revenue Service (IRS) collects more information on more individuals than any other government agency. The information is not only financial but personal, potentially including information about health care needs and decisions; the caregivers, disabilities, and foreign birth of children; the educational progress and felony convictions of students; and one’s religious and charitable associations. In acknowledging the vast quantity of information held by the IRS, and the necessity of taxpayers trusting tax administrators with their information, Congress provided greater protection for taxpayer information under the Internal Revenue Code (IRC) than it was provided under the Privacy Act. Congress obligated IRS employees to keep taxpayer information confidential, and authorized felony charges and damages suits, including punitive damages for inappropriate disclosures of taxpayer information. These special protections were enacted almost fifty years ago, long before the spread of the Internet and emergence of cybercrime. This Article proposes updating the IRC’s special protections for taxpayer information to reflect the cybersecurity objectives of the Federal Information Security Modernization Act (FISMA), and the frequent audits of the IRS by its Inspector General that show the IRS’s persistent failures to comply with FISMA guidance, such as failing to encrypt taxpayer data, secure mainframe platforms, regulate system access, remediate known vulnerabilities, and assist victims of data breaches.

Keywords: taxpayer, taxpayer rights, IRS, data, safeguarding, Privacy Act, 6103, 7431, breach, cybersecurity, privacy, FISMA, Government Accountability Office, GAO, Treasury Inspector General for Tax Administration, TIGTA,

JEL Classification: K34,

Suggested Citation

Hatfield, Michael W. and Hatfield, Michael W., Safeguarding Taxpayer Data (April 24, 2024). Available at SSRN: https://ssrn.com/abstract=4806598 or http://dx.doi.org/10.2139/ssrn.4806598

Michael W. Hatfield (Contact Author)

University of Washington - School of Law ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States
206-221-1535 (Phone)

HOME PAGE: http://www.law.washington.edu/Directory/Profile.aspx?ID=725

University of Washington - UW Law ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98195-3020
United States

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