Issues and Challenges in IRS Data Access

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Issues and ChallengesinIRS Data Access

• Nick Greenia, IRS
• Statistics of Income Division
• nicholas.h.greenia_at_irs.gov

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Federal Tax Information All FTI ? Always
Confidential

• Removing identifiers (TIN, address, etc.) is
  necessary but insufficient for anonymizing FTI
  
• No statute of limitations in perpetuity
• Homogeneous treatment of tax data/payers
• Equal sensitivity or significance of all
  variables means equal protection for all data of
  all taxpayers forever.
  
• Such protection is onerous and expensive

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More Fundamentals

• Confidential Microdata Official Use Only
  Materials
  
• Authorized Uses
• Tax Administration
• Statistical BEA, Census, USDA/NASS, CBO
• FTI must be safeguarded for authorized use
• Use/Safeguards Legal/Procedural standards

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Recipients of Tax Microdata (Not an Exhaustive
List)

• IRS Internal Audit, SOI, Research
• State tax agencies
• Social Security Administration
• Fed Stat agencies Census, BEA, NASS
• Congressional JCT, CBO, GAO
• Treasury

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Compliance Burden of Access(All Users)

• Section 6103, Internal Revenue Code (IRC)
  Regulations govern confidentiality
  
• Administrative procedures, requirements
• Minimum FTI for authorized purpose
• Third Party Scrutiny TIGTA, GAO, Media
• Costs Monetary Time Paperwork
  Oversight/Monitoring by IRS and Users
  

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Authorizing Outside Access to FTI

• Contractor (6103(n)) IPA (6103(h))
• Intergovernmental Personnel Act (IPA)
• Appointee IRS-Paid?Can Access FTI
• Detailee Unpaid?Cannot Access FTI
• Student Volunteer?Unpaid--Can Access FTI under
  direction of Appointee or Detailee
  

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Outside Access Requirementsfor IPA, 6103n

• ?Tax Admin. Purpose Contract/Agreement
• Withstand Third Party Scrutiny-- TIGTA, GAO,
  etc.
  
• ?Minimum Background Investigation (MBI)
  Fingerprints, Tax Check, Background
  
• ?Non-Disclosure Statement retain no FTI, no
  attempt to re-identify, even after work done
  
• Site AccessIRS or Off-Site (not easy)
• ?Minimum FTI needed to accomplish purpose

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Other Considerations

• Off site access--rigorous requirements for
  Physical Computer Security
  
• ?Penalties for non-compliance (esp re
  disclosures) can include prison, fines,
  termination
  
• ?Statute requires anonymity in any data release,
  but does not specify methodology
  
• ?All types FTI equally sensitiveno distinction
• ?No statute of limitations re confidentiality

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The Gray Zones

• How to ensure outsider does not retain FTI?
• Peer policing needed reliance on researcher
  community
  
• Compensated or Nonwhats the difference? Legal
  opinion pending 6103n uncompensated
  
• IPA? OPM Sponsoring Agency IPA org.
• Third party scrutinyImportance of perceptions
• Who owns what under either 6103n or IPA?
• Precedents not always consistentEvolving

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Why Is FTI Access Needed?

• Few are called, Fewer are chosen
• IRS cannot encourage access to FTI
• Oversight Resources Finite Capacity even for
  funded tax administration needs
  
• Competitive Bid vs. Sole Source
• Tax Administration or Statistical Purpose?

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Tax Data ReSources

• ?http//www.irs.gov/taxstats
• ?Statistical Information Services Office
• Telephone [phone]
• Email sis_at_irs.gov
• FAX [phone]
• ?Special Statistical Studies per IRC 6108(b)
• IRS Research (Eric Toder)
• SOI (Thomas.B.Petska_at_irs.gov)
• May require reimbursement

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Statistical Use

• IRC 6103jBEA, Census, USDA, CBO
• Census Center for Economic Studies
• URL www.ces.census.gov
• Limited FTI available--no actual tax
• Must pass the CES review process
• Rigorous requirements for all data access

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The Confidentiality Problem of Product
Proliferation

• IRC 6108(c) 6103(j)(4) limitations
• Anonymous form is an absolute, not a methodology
  
  
• Rule of 3/10, derivative disclosure problem
• Reasonable Means to protect confidentiality
• Technology/technique-relative
• Efficacy may degrade with time how viable today?
  
  
• Coordinated, complete record of releases needed
• Do we know whats out there?