Privacy Act of 1974; System of Records

DEPARTMENT OF THE TREASURY

Internal Revenue Service

Privacy Act of 1974; System of Records

AGENCY: Internal Revenue Service, Treasury.

ACTION: Notice of Proposed New Privacy Act System of Records.

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SUMMARY: The Treasury Department, Internal Revenue Service, gives

notice of a proposed new system of records entitled Automated

Information Analysis System--Treasury/IRS 46.050, which is subject to

the Privacy Act of 1974, 5 U.S.C. 552a. This proposed system has been

developed to assist the Internal Revenue Service in accomplishing its

mission of encouraging and achieving the highest possible degree of

voluntary compliance with the Internal Revenue laws. It is further

proposed to have the system exempt from meeting certain requirements of

the Privacy Act of 1974.

DATES: Comments must be received no later than October 9, 1996. This

new system of records will be effective October 21, 1996, unless

comments are received which result in a contrary determination.

ADDRESSES: Comments should be sent to the Office of Disclosure,

Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC

20224. Comments will be made available for inspection and copying in

the Freedom of Information Reading Room upon request.

FOR FURTHER INFORMATION CONTACT: Wayne Loving, Director, Office of

Policy and Information Division, Criminal Investigation, (202) 622-

5676.

SUPPLEMENTARY INFORMATION:

The Internal Revenue Service's Criminal Investigation Division

(CID) seeks to establish and maintain the proposed new system of

records as a more efficient means of performing its responsibilities.

Among Criminal Investigation's principal responsibilities are probing

and referring for prosecution criminal cases centering largely on

violations of tax laws, including income tax evasion, refund fraud, and

other crimes contributing to the Federal tax gap. Criminal

Investigation also investigates violations of certain money laundering

laws. The Automated Information Analysis System will automatically

identify potential leads to money laundering and income tax violations

which might not otherwise surface through traditional information

gathering efforts. The Automated Information Analysis System only

relies upon internal data included in other Privacy Act systems of

records. This action should encourage individuals and businesses to

fully comply with the tax laws and other reporting requirements and aid

Internal Revenue's Criminal Investigation Division in identifying

potential violations.

The Automated Information Analysis System is designed to provide

the Internal Revenue Service with high quality investigative leads to

tax noncompliance at a substantial savings.

The Automated Information Analysis System produces an output

record that identifies leads appropriate for further evaluation by

field special agents. Once the output record is sent to the District

Criminal Investigation office that will investigate the leads, it will

be covered by system of records Treasury/IRS 46.009, Centralized

Evaluation and Processing of Information Items (CEPIIs).

In a separate publication, the Internal Revenue Service is also

giving public notice of a proposed rule to exempt this system of

records from certain provisions of 5 U.S.C. 552a pursuant to

subsections (j)(2), and (k)(2) of the same section.

Treasury/IRS 46.050

Automated Information Analysis System - Treasury/IRS.

[[Page 47548]]

Detroit Computing Center, 1300 John C. Lodge Drive, Detroit,

Michigan 48226 and Automated Criminal Investigation Office, 7940

Kentucky Drive, Boone County, Kentucky 41042.

Taxpayers and other individuals involved in financial transactions

which require the filing of information reflected in the Categories of

records below.

The information included in the Automated Information Analysis

System is from reported income and tax information on the Individual

Master File (IMF)--Treasury/IRS 24.030; Individual Returns Files,

Adjustments and Miscellaneous Documents File--Treasury/IRS 22.034. The

Automated Information Analysis System also includes information from

such sources as: Currency Transaction Reports (CTRs), Currency and

Monetary Instrument Reports (CMIR's), Bank Secrecy Reports File,

Foreign Bank Account Reports (FBARs), Forms 8300 (Currency Received in

Trade or Business),--Treasury/CS .067; the Taxpayer Delinquent Account

Files (TDA)--Treasury/IRS 26.019, which includes adjustments and

payment tracer files and collateral files; Taxpayer Delinquency

Investigation Files (TDI)--Treasury/IRS 26.020, which includes taxpayer

information on delinquent returns; the Examination Administrative

File--Treasury/IRS 42.001, and Casino Transaction Reports from the

Detroit Computing Center.

5 U.S.C. 301; 26 U.S.C. 7602, 7801, and 7802.

The purpose is to maintain records which identify transaction

patterns that are indicative of criminal and/or civil noncompliance

with Federal income tax and money laundering laws and to simultaneously

evaluate diverse data sources.

Disclosure of returns and return information may be made only as

provided by 26 U.S.C. 6103.

Electronic and Magnetic Media.

Records are retrievable by name, address, and social security

number.

All Criminal Investigation personnel accessing the system will

have successfully passed a background investigation. Criminal

Investigation will furnish information from the system of records to

approved personnel only on a ``need to know'' basis using passwords and

access controls. Access control will not be less than those provided by

the Manager's Security Handbook, IRM 1(16)12. Procedural and physical

safeguards to be utilized include the logging of all queries and

periodic review of the query logs; compartmentalization of information

to restrict access to authorized personnel; encryption of electronic

communications; intruder alarms; and 24-hour building guards.

All records are disposed of after 4 years. Records will be

disposed of by erasure of magnetic media.

Official prescribing policies and practices--Assistant

Commissioner (Criminal Investigation), National Office. Officials

maintaining the system--Detroit Computing Center, CI Representative,

and the Automated Criminal Investigation Office Manager, 7940 Kentucky

Drive, Boone County, Kentucky 41042.

This system of records may not be accessed for purposes of

determining if the system contains a record pertaining to a particular

individual.

This system of records may not be accessed for purposes of

inspection or for contest of content of records.

26 U.S.C. 7852(e) prohibits Privacy Act amendment of tax records.

This system of records may not be accessed for purposes of

determining the source of the records. Records to be included all come

from existing Treasury and Internal Revenue Service databases. The

databases are comprised of records submitted by taxpayers, financial

institutions, casinos and businesses pursuant to federal law.

This system is exempt from 5 U.S.C. 552a(c)(3), (c)(4), (d)(1),

(d)(2), (d)(3), (d)(4),(e)(1), (e)(2), (e)(3), (e)(4)(G), (H), and (I),

(e)(5), (e)(8), (f), and (g) of the Privacy Act pursuant to 5 U.S.C.

552a(j)(2), and (k)(2).

Dated: August 21, 1996.

Alex Rodriguez,

Deputy Assistant Secretary (Administration)

[FR Doc.22895 Filed 9-6-96: 8:45am]

Billing Code: 4830-01-F