Review of Several Aspects of the Internal Revenue Service's Proposed Computerized Tax Administration System

Concern was expressed about the Internal Revenue Service's (IRS) Tax Administration System's privacy safeguards over the exchange and use of tax information, information and data management features, and potential for and controls over linking with other Government and private computer systems. The IRS management structure's ability to support the system's advanced technology was also questioned.

No plans were found which would violate current laws protecting the privacy of tax return information, and no covert, illegal attempts to link the system with any other computer system could be detected. Direct electronic linkage between the IRS system and any other computer system should be decreed illegal, and the transfer of data by any means between the IRS system and other systems should be allowed only when specifically authorized by law. IRS has planned for special coding access to terminals through use of passwords, system monitoring, no terminal to terminal communication capability, and audit trails as means of preserving security. Data input under the proposed system will be the same as in the current system, and the internal control features will probably not change. IRS has no plans to link the proposed system with any other system (Government or private) unless required by law to do so. If IRS implements its planned privacy and security controls, taxpayer privacy should be protected in accordance with established legislation.