Breaching the Castle Wall

In an earlier version of this post, I discussed an article in the The Detroit Free Press about a proposed Treasury regulation that would permit the sale of information in tax returns, perhaps even of the entire return. CBS News put the story in more perspective tonight, pointing out that for decades taxpayers have been permitted to sign authorizations for others to obtain copies of returns or other tax information. If you've applied for a mortgage (as I did a few months ago--I shouldn't have got the wind up so quickly at the Free Press's article), you've signed one of those.

According to CBS, the proposed regulation is really designed to tighten the taxpayer's privacy protection by including a mandatory warning that, once released, neither you or the IRS has any control over what happens to the information.

Therein lies the problem. Tax information has always been sacrosanct. Not only is it among the most personal data that most individuals have, it is information that was gathered to comply with the law. While we may allow some businesses to obtain the figures on a return--or even a copy of the return itself--(we don't want people obtaining mortgages that they won't be able to repay), that should not be a license for the recipient to retail what is learned. The collection of information should be strictly limited; we might provide that the recipient cannot copy the actual document; if a return is to be downloaded, the file should be time-limited and the time should be short--perhaps hours or a day. Copying should be precluded. We ought to set strict limits on the information that may be abstracted from tax documents, preventing, for instance, listing of income or deductions, and permitting only notation of a range or grade, or a conclusion as to whether the taxpayer qualifies for a certain amount of financing. And persons who obtain tax information should be forbidden to reveal it, particularly in exchange for money or goods.

A person's home may still be his or her castle, but we need to be extra vigilant against the onslaught of creatures that would burrow through the walls to expose our private affairs.