Orwell's Internal Revenue Service

By Stephen Pizzo, News for Real. Posted March 22, 2006.

Someday, not long from now, we will tell our grandkids about the good old days, when if someone used a word you didn't understand, you just had to crack open your Webster's dictionary to nail it down. For example, what would we have thought it meant if someone had issued a notice with the following headline:

"IRS Issues Proposed Regulations to Safeguard Taxpayer Information."

The word "safeguard" is the key. Webster's says it means:

Safeguard: a precautionary measure, stipulation, or device; a technical contrivance to prevent accident.

Well, I'm for that! Unfortunately, the Bush administration has not only shoved aside the U.S. Constitution, but Webster's as well. The words sound the same. They are spelled the same, but their meanings are now, well, flexible.

The headline noted above was atop a Treasury Department December press release announcing that your tax return and mine will soon be up for sale to anyone, anywhere, at any time.

The Internal Revenue Service is quietly moving to loosen the once-inviolable privacy of federal income-tax returns. … If it succeeds, accountants and other tax-return preparers for the first time would be able to sell information from individual returns -- or even entire returns -- to marketers and data brokers. … The change is in a set of proposed rules the Treasury Department and the IRS published in the Dec. 8 Federal Register, where the official notice labeled them "not a significant regulatory action."

Like the Dubai ports deal, the administration tried to slip this little gem by with as little advance warning or fanfare as possible. The press release was issued the same day the 30-day comment period began. The entirely misleading headline was designed to throw off newsroom editors who routinely toss out reams of government agency press releases because 99.9998 percent of them are no more interesting or noteworthy than a 5th grader's "What I did on vacation," report.

But someone noticed, and now the administration is in full Sgt. Shultz mode again: "I don't know nutting, I didn't see nutting." Suddenly, no one of any rank seems to know anything about the genesis of this rule. (This new proposed "safeguard" awkwardly made headlines the week after corporate tax preparer H&R Block was indicted for screwing taxpayers by selling them bogus savings accounts.)

IRS spokesman William M. Cressman was left to try to explain the contradictions between the actual rule and the headline of his agency's own press release. He explained that the "safeguard" referred to in the headline referred to a new rule requiring that, before tax preparers can sell a customer's tax return to someone they need to have the customer's signature authorizing them to do so.

But wait, there's already a real safeguard against that. Tax preparers are prohibited from selling (or even telling) anyone else the information on your tax returns -- period, signature or no signature. Besides, how often do you read all the fine print before you sign on that stack of forms your accountant shoves in front of you on noon April 15? Case closed.

Poor Cressman was completely lost when he tried to explain where this new rule came from. It's the IRS's "effort to update regulations that date back to the 1970s and predate the electronic era," was his best attempt at clarification.

Imagine all those hungry tax preparers out there who have, for the past five years or so, watched nervously as programs like Turbo Tax cut into their annual take. Now imagine they could make more money selling your tax return data to interested parties than they could preparing taxes. And speaking of Turbo Tax, imagine that its owners, the same company that produces the Quicken accounting programs, could sell all that hot data from the growing number of taxpayers using their service to file their taxes electronically.

No one, except the handful of companies itching to profit it, will find anything to like about this new rule.

Also remember this the next time this administration talks big about combating identity theft. Being able to purchase tens of thousands of Americans' tax returns would be the motherlode for ID thieves around the world. We might as well simply publish all our online banking usernames and passwords and ATM PIN numbers while we're at it.

Even this late in the game I continue to be amazed by the brazen, naked chutzpah of this administration and its corporate backers. Talk about the fleecing of America; this would be the fleecing of Americans themselves.

Anyway, for at least the next three years, you might want to put your Webster's dictionary on the shelf. It's an unreliable tool for understanding what this administration is talking about. This is particularly true whenever they use the word, "safeguard." If these guys say they are about to safeguard something for us, hide it, if you can.

Stephen Pizzo is the author of numerous books, including "Inside Job: The Looting of America's Savings and Loans," which was nominated for a Pulitzer.

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