Tax News

Tax Analysts report:

Some comments from IRS officials over the last several months indicate the Service is getting closer to beginning work on a central data warehouse that would store taxpayer information from IRS forms and could be made available to other government agencies.

The latest comments came during a January 15 radio appearance by Bert DuMars, IRS director of electronic tax administration.

One of [the ideas to help grow electronic filing] we keep looking at is a clearinghouse concept for information returns, and we're trying to figure out what would that be and how would that work, DuMars said on The Business of Government Hour, sponsored by IBM.

The IRS has been floating the idea since at least October, when both DuMars and Darius Taylor, IRS director of tax administration development service, said the IRS was considering a repository for Forms 1098, 1099, and W-2 that would serve as the single point of collection and dissemination for those information returns. So far IRS officials have yet to publicly flesh out the concept, but it could prove to be controversial if it requires changes to section 6103 disclosure rules or treads on provisions of the Privacy Act.

The IRS press office was not able to comment by press time, but IRS Commissioner Mark Everson has said repeatedly over the last year that relaxing disclosure rules to allow more information sharing would be beneficial to the IRS.

DuMars stressed that the final decision to create an IRS data clearinghouse has not yet been made and likely would not be made for a few months. He provided few explicit details into how exactly it would operate, but pointed to several other data warehouses as templates.

There are examples in the health medical records space; there are examples in student data and transcript space; and there are also examples in transportation and licensing space, DuMars said. So we're trying to understand how they work.

There is precedent for government data warehouses as well. The Federal Trade Commissions Identity Theft Data Clearinghouse, for example, operates under the strict Privacy Act guidelines.