[Federal Register Volume 76, Number 220 (Tuesday, November 15, 2011)]
[Rules and Regulations]
[Pages 70640-70644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-29385]
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DEPARTMENT OF THE TREASURY
Office of the Secretary
31 CFR Part 1
RIN 1505-AC33
Privacy Act of 1974; Implementation
AGENCY: Internal Revenue Service, Treasury.
ACTION: Final rule.
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SUMMARY: In accordance with the requirements of the Privacy Act of
1974, as amended, 5 U.S.C. 552a, the Department of the Treasury gives
notice of an amendment to this part to reflect consolidation of
existing Internal Revenue Service (IRS) systems of records and to
continue to exempt the resulting revised systems of records from
certain provisions of the Privacy Act. The Office of Chief Counsel has
consolidated twelve systems of records into six systems of records.
This final rule migrates the previously approved exemptions to the
newly revised, renamed, and renumbered systems of records.
DATES: This rule is effective November 15, 2011.
ADDRESSES: Inquiries may be addressed to Sarah Tate, Office of
Associate Chief Counsel, Procedure & Administration,
[[Page 70641]]
Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC
20224.
FOR FURTHER INFORMATION CONTACT: Sarah Tate, Office of Associate Chief
Counsel, Procedure & Administration, Internal Revenue Service, 1111
Constitution Avenue NW., Washington, DC 20224. Ms. Tate may be reached
via telephone at (202) 622-4570 (not a toll-free call).
SUPPLEMENTARY INFORMATION: When the IRS first promulgated its systems
of records in 1975, the Office of Chief Counsel was aligned, in its
headquarters operations, by the nature of the work performed and, in
its field operations, by the type of the litigation activities
performed. In 1998, Congress enacted the Internal Revenue Restructuring
& Reform Act (RRA98), which, among other things, mandated the most
dramatic organizational changes in the IRS (and the Office of Chief
Counsel) since 1952. RRA98 directed the IRS to shift from a
geographically based structure to a structure that serves particular
groups of taxpayers with similar needs (i.e., individuals, small
businesses, large businesses, and tax exempt entities). The Office of
Chief Counsel reorganized itself to more closely align to the
restructured IRS, and the revised notices simplify the manner in which
the Office of Chief Counsel maintains individually identifiable
information. This direct final rule does not alter the exemptions
claimed for the individually identifiable information maintained in the
consolidated systems of records.
The Chief Counsel, IRS has reorganized the twelve systems of
records it maintains pursuant to the Privacy Act, which have been
consolidated into six systems of records. These systems of records
contain information maintained by the IRS for which an exemption has
been established previously. On October 2, 1975, the Department
published its final rule which included the exemption claimed pursuant
5 U.S.C. 552a(j)(2) and, (k)(2), published at 40 FR 45695, and the
exemption claimed pursuant to 5 U.S.C. 552a(k)(5), published at 40 FR
45697.
The Department of the Treasury is publishing separately in the
Federal Register the notices of the consolidated systems of records to
be maintained by IRS.
Under 5 U.S.C. 552a(j)(2), the head of a Federal agency may
promulgate rules to exempt a system of records from certain provisions
of 5 U.S.C. 552a if the system of records is ``maintained by an agency
or component thereof which performs as its principal function any
activity pertaining to the enforcement of criminal laws, including
police efforts to prevent, control, or reduce crime or to apprehend
criminals, and the activities of prosecutors, courts, correctional,
probation, pardon, or parole authorities, and which consists of (A)
Information compiled for the purpose of identifying individual criminal
offenders and alleged offenders and consisting only of identifying data
and notations of arrests, the nature and disposition of criminal
charges, sentencing, confinement, release, and parole and probation
status; (B) information compiled for the purpose of a criminal
investigation, including reports of informants and investigators, and
associated with an identifiable individual; or (C) reports identifiable
to an individual compiled at any stage of the process of enforcement of
the criminal laws from arrest or indictment through release from
supervision.''
To the extent that these systems of records contain investigative
material within the provisions of 5 U.S.C.552a(j)(2), the Department of
the Treasury has previously exempted material which will now be
maintained in the following systems of records from various provisions
of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2):
Treasury/IRS 90.001--Chief Counsel Management Information System
Records.
Treasury/IRS 90.003--Chief Counsel Litigation and Advice (Criminal)
Records.
Treasury/IRS 90.004--Chief Counsel Legal Processing Division Records.
Treasury/IRS 90.005--Chief Counsel Library Records.
The exemption under 5 U.S.C. 552a(j)(2) for the above-referenced
systems of records is from provisions 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),
(e)(4)(H), (e)(4)(I), (e)(5), (e)(8), (f), and (g).
Under 5 U.S.C. 552a(k)(2), the head of a Federal agency may
promulgate rules to exempt a system of records from certain provisions
of 5 U.S.C. 552a if the system of records is ``investigatory material
compiled for law enforcement purposes, other than material within the
scope of subsection (j)(2).'' To the extent that these systems of
records contain investigative material within the provisions of 5
U.S.C. 552a(k)(2), the Department of the Treasury has previously
exempted material that will now be maintained in the following systems
of records from various provisions of the Privacy Act pursuant to 5
U.S.C. 552a(k)(2):
Treasury/IRS 90.001--Chief Counsel Management Information System
Records.
Treasury/IRS 90.002--Chief Counsel Litigation and Advice (Civil)
Records.
Treasury/IRS 90.004--Chief Counsel Legal Processing Division Records.
Treasury/IRS 90.005--Chief Counsel Library Records.
The exemption under 5 U.S.C. 552a(k)(2) for the above-referenced
systems of records is from provisions 5 U.S.C. 552a(c)(3), (d)(1),
(d)(2), (d)(3), (d)(4), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and
(f).
The following are the reasons why the investigative material
contained in the above-referenced systems of records maintained by IRS
have been exempted from various provisions of the Privacy Act pursuant
to 5 U.S.C. 552a(j)(2) and/or 5 U.S.C. 552a(k)(2) since 1975.
(1) 5 U.S.C. 552a(e)(4)(G) and (f)(l) enable individuals to inquire
whether a system of records contains records pertaining to themselves.
Disclosure of this information to the subjects of investigations would
provide individuals with information concerning the nature and scope of
any current investigation. Further, providing information as required
by this provision would alert the individual to the existence of an
investigation and afford the individual an opportunity to attempt to
conceal his/her criminal activities so as to avoid apprehension, may
enable the individual to avoid detection or apprehension, may enable
the destruction or alteration of evidence of the criminal conduct that
would form the basis for an arrest, and could impede or impair IRS's
ability to investigate the matter. In addition, to provide this type of
information may enable individuals to learn whether they have been
identified as subjects of investigation.
(2) 5 U.S.C. 552a(d)(1), (e)(4)(H), and (f)(2), (3), and (5) grant
individuals access, or concern procedures by which an individual may
gain access, to records pertaining to themselves. Disclosure of this
information to the subjects of investigations would provide them with
information concerning the nature and scope of any current
investigation, may enable them to avoid detection or apprehension, may
enable them to destroy or alter evidence of criminal conduct that would
form the basis for their arrest, and could impede or impair IRS's
ability to investigate the matter. In addition, permitting access to
investigative files and records could disclose the identity of
confidential sources and the nature of the information supplied by
informants as well as endanger the physical safety of
[[Page 70642]]
those sources by exposing them to possible reprisals for having
provided the information. Confidential sources and informers might
refuse to provide IRS with valuable information unless they believe
that their identities would not be revealed through disclosure of their
names or the nature of the information they supplied. Loss of access to
such sources would seriously impair IRS's ability to perform its law
enforcement responsibilities. Furthermore, providing access to records
contained in the systems of records could reveal the identities of
undercover law enforcement officers who compiled information regarding
the individual's criminal activities, thereby endangering the physical
safety of those undercover officers by exposing them to possible
reprisals. Permitting access in keeping with these provisions would
also discourage other law enforcement and regulatory agencies from
freely sharing information with IRS and thus would restrict its access
to information necessary to accomplish its mission most effectively.
(3) 5 U.S.C. 552a(d)(2), (3), and (4), (e)(4)(H), and (f)(4) permit
an individual to request amendment of a record pertaining to the
individual or concern related procedures, and require the agency either
to amend the record or to note the disputed portion of the record, and
to provide a copy of the individual's statement of disagreement with
the agency's refusal to amend a record to persons or other agencies to
whom the record is thereafter disclosed. Since these provisions depend
upon the individual having access to his or her records, and since an
exemption from the provisions of 5 U.S.C. 552a relating to access to
records is proposed, for the reasons set out in the preceding paragraph
of this section, these provisions should not apply to the above-listed
systems of records.
(4) 5 U.S.C. 552a(c)(3) requires an agency to make accountings of
disclosures of a record available to the individual named in the record
upon his or her request. Making accountings of disclosures available to
the subjects of investigations would alert them to the fact that IRS is
conducting an investigation into their activities as well as identify
the nature, scope, and purpose of that investigation. Providing
accountings to the subjects of investigations would alert them to the
fact that IRS has information regarding their activities and could
inform them of the general nature of that information. The subjects of
the investigations, if provided an accounting of disclosures, would be
able to take measures to avoid detection or apprehension by altering
their operations or by destroying or concealing evidence that would
form the basis for detection or apprehension.
(5) 5 U.S.C. 552a(c)(4) requires an agency to inform any person or
other agency about any correction or notation of dispute that the
agency made in accordance with 5 U.S.C. 552a(d) to any record that the
agency disclosed to the person or agency if an accounting of the
disclosure was made. Since this provision depends on an individual's
having access to and an opportunity to request amendment of records
pertaining to the individual, and since an exemption from the
provisions of 5 U.S.C. 552a relating to access to, and amendment of,
records is proposed for the reasons set out in paragraph (2) of this
section, this provision should not apply to these systems of records.
(6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general
notice listing the categories of sources for information contained in a
system of records. Revealing sources of information could disclose
investigative techniques and procedures, result in threats or reprisals
against confidential informants by the subjects of investigations, and
cause confidential informants to refuse to give full information to
criminal investigators for fear of having their identities as sources
disclosed.
(7) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required to be
accomplished by statute or Executive Order. The term ``maintain,'' as
defined in 5 U.S.C. 552a(a)(3), includes ``collect'' and
``disseminate.'' The application of this provision could impair IRS's
ability to collect and disseminate valuable law enforcement
information. In the early stages of an investigation, it may be
impossible to determine whether information collected is relevant and
necessary, and information that initially appears irrelevant and
unnecessary often may, upon further evaluation or upon review of
information developed subsequently, prove particularly relevant and
necessary to a law enforcement program. Compliance with the records
maintenance criteria listed in the foregoing provision would require
IRS to periodically update the investigatory material it collects and
maintains in these systems to ensure that the information remains
timely and complete. Further, IRS oftentimes will uncover evidence of
violations of law that fall within the investigative jurisdiction of
other law enforcement agencies. To promote effective law enforcement,
IRS will refer this evidence to other law enforcement agencies,
including State, local, and foreign agencies, that have jurisdiction
over the offenses to which the information relates. If required to
adhere to the provisions of 5 U.S.C. 552a(e)(1), IRS might be placed in
the position of having to ignore information relating to violations of
law not within its jurisdiction when that information comes to IRS's
attention during the collection and analysis of information in its
records.
(8) 5 U.S.C. 552a(e)(2) requires an agency to collect information
to the greatest extent practicable directly from the subject individual
when the information may result in adverse determinations about an
individual's rights, benefits, and privileges under Federal programs.
The application of this provision to the above-referenced systems of
records would impair IRS's ability to collect, analyze, and disseminate
investigative, intelligence, and enforcement information. During
criminal investigations it is often a matter of sound investigative
procedure to obtain information from a variety of sources to verify the
accuracy of the information obtained. IRS often collects information
about the subject of a criminal investigation from third parties, such
as witnesses and informants. It is usually not feasible to rely upon
the subject of the investigation as a credible source for information
regarding his or her alleged criminal activities. An attempt to obtain
information from the subject of a criminal investigation will often
alert that individual to the existence of an investigation, thereby
affording the individual an opportunity to attempt to conceal his
criminal activities so as to avoid apprehension.
(9) 5 U.S.C. 552a(e)(3) requires an agency to inform each
individual, whom it asks to supply information, of the agency's
authority for soliciting the information, whether disclosure of
information is voluntary or mandatory, the principal purpose(s) for
which the agency will use the information, the routine uses that may be
made of the information, and the effects on the individual of not
providing all or part of the information. The above-referenced systems
of records should be exempted from these provisions to avoid impairing
IRS's ability to collect and maintain investigative material.
Confidential sources or undercover law enforcement officers often
obtain information under circumstances in which it is necessary to keep
the true purpose of their actions secret so as not to let the subject
of the investigation or
[[Page 70643]]
his or her associates know that a criminal investigation is in
progress. Further, application of this provision could result in an
unwarranted invasion of the personal privacy of the subject of the
criminal investigation, particularly where further investigation
reveals that the subject was not involved in any criminal activity.
(10) 5 U.S.C. 552a(e)(5) requires an agency to maintain all records
it uses in making any determination about any individual with such
accuracy, relevance, timeliness, and completeness as is reasonably
necessary to assure fairness to the individual in the determination.
Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include ``collect''
and ``disseminate,'' application of this provision to the systems of
records would hinder the initial collection of any information that
could not, at the moment of collection, be determined to be accurate,
relevant, timely, and complete. In collecting information during a
criminal investigation, it is often neither possible nor feasible to
determine accuracy, relevance, timeliness, or completeness at the time
that the information is collected. Information that may initially
appear inaccurate, irrelevant, untimely, or incomplete may, when
analyzed with other available information, become more relevant as an
investigation progresses. Compliance with the records maintenance
criteria listed in the foregoing provision would require the periodic
review of IRS's investigative records to insure that the records
maintained in the system remain timely, accurate, relevant, and
complete.
(11) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable
efforts to serve notice on an individual when the agency makes any
record on the individual available to any person under compulsory legal
process, when such process becomes a matter of public record. The
above-referenced systems of records should be exempted from this
provision to avoid revealing investigative techniques and procedures
outlined in those records and to prevent revelation of the existence of
an ongoing investigation where there is need to keep the existence of
the investigation secret.
(12) 5 U.S.C. 552a(g) provides for civil remedies to an individual
when an agency wrongfully refuses to amend a record or to review a
request for amendment, when an agency wrongfully refuses to grant
access to a record, when an agency fails to maintain accurate,
relevant, timely, and complete records which are used to make a
determination adverse to the individual, and when an agency fails to
comply with any other provision of 5 U.S.C. 552a so as to adversely
affect the individual. The investigatory information in the above-
referenced systems of records should be exempted from this provision to
the extent that the civil remedies may relate to provisions of 5 U.S.C.
552a from which this would exempt the systems of records, since there
should be no civil remedies for failure to comply with provisions from
which IRS is exempted. Exemption from this provision will also protect
IRS from baseless civil court actions that might hamper its ability to
collect, analyze, and disseminate investigative, intelligence, and law
enforcement data.
Under 5 U.S.C. 552a(k)(5), the head of any agency may promulgate
rules to exempt any system of records within the agency from certain
provisions of the Privacy Act of 1974 if the system is investigatory
material compiled solely for the purpose of determining suitability,
eligibility, and qualifications for Federal civilian employment or
access to classified information, but only to the extent that the
disclosure of such material would reveal the identity of a source who
furnished information to the Government under an express promise that
the identity of the source would be held in confidence, or, prior to
September 27, 1975, under an implied promise that the identity of the
source would be held in confidence. Thus to the extent that the records
in this system can be disclosed without revealing the identity of a
confidential source, they are not within the scope of this exemption
and are subject to all the requirements of the Privacy Act.
This paragraph applies to the following system of records
maintained by the Internal Revenue Service: Treasury/IRS 90.006--Chief
Counsel Human Resources and Administrative Records Files.
The Department has previously exempted material that will now be
maintained in the above system of records of this section from the
following provisions of 5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(5):
5 U.S.C. 552a(c)(3), 5 U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C.
552a(e)(1), 5 U.S.C. 552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
(1) The sections of 5 U.S.C. 552a from which the system of records
has been exempted since 1975 include in general those providing for
individuals' access to or amendment of records. When such access or
amendment would cause the identity of a confidential source to be
revealed, it would impair the future ability of the Department to
compile investigatory material for the purpose of determining
suitability, eligibility, or qualifications for Federal civilian
employment, Federal contracts, or access to classified information. In
addition, the systems shall be exempt from 5 U.S.C. 552a(e)(1) which
requires that an agency maintain in its records only such information
about an individual as is relevant and necessary to accomplish a
purpose of the agency required to be accomplished by statute or
executive order. The Department believes that to fulfill the
requirements of 5 U.S.C. 552a(e)(1) would unduly restrict the agency in
its information gathering inasmuch as it is often not until well after
the investigation that it is possible to determine the relevance and
necessity of particular information.
(2) If any investigatory material contained in the above-named
systems becomes involved in criminal or civil matters, exemptions of
such material under 5 U.S.C. 552a(j)(2) or (k)(2) is hereby claimed.
These regulations are being published as a final rule because the
amendments do not impose any requirements on any member of the public.
This amendment is the most efficient means for the Treasury Department
to implement its internal requirements for complying with the Privacy
Act.
Accordingly, pursuant to the administrative procedure provisions in
5 U.S.C. 553, the Department of the Treasury finds good cause that
prior notice and other public procedure with respect to this rule are
impracticable and unnecessary and finds good cause for making this rule
effective on the date of publication in the Federal Register.
In accordance with Executive Order 12866, it has been determined
that this rule is not a ``significant regulatory action'' and,
therefore, does not require a Regulatory Impact Analysis.
The regulation will not have a substantial direct effect on the
States, on the relationship between the national Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, it is determined that this
final rule does not have federalism implications under Executive Order
13132.
Because no notice of proposed rulemaking is required, the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do
not apply.
In accordance with the provisions of the Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.), the Department of the Treasury has
determined that this rule will not impose new record keeping,
application, reporting, or other types of information collection
requirements.
[[Page 70644]]
List of Subjects in 31 CFR Part 1
Privacy.
Part 1, subpart C of Title 31 of the Code of Federal Regulations is
amended as follows:
PART 1--[AMENDED]
0
1. The authority citation for part 1 continues to read as follows:
Authority: 5 U.S.C. 301, 31 U.S.C. 321, subpart A also issued
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C.
552a.
0
2. Section 1.36 is amended as follows:
0
a. Paragraph (c)(1)(viii) is amended by revising the entry for ``IRS
90.001''.
0
b. Paragraph (c)(1)(viii) is further amended by adding entries for
``IRS 90.003''; ``IRS 90.004''; and ``IRS 90.005'' to the table in
numerical order.
0
c. Paragraph (g)(1)(viii) is amended by removing entries for ``IRS
90.002''; ``IRS 90.004''; ``IRS 90.005''; ``IRS 90.009''; ``IRS
90.010''; ``IRS 90.013''; and ``IRS 90.016''.
0
d. Paragraph (g)(1)(viii) is further amended by adding entries for
``IRS 90.001''; ``IRS 90.002'';``IRS 90.004'', and ``IRS 90.005'' to
the table in numerical order.
0
e. Paragraph (m)(1)(viii) is amended by removing entries for ``IRS
90.003'' and ``IRS 90.011''.
0
f. Paragraph (m)(1)(viii) is further amended by adding ``IRS 90.006''
to the table in numerical order.
The revisions and additions read as follows:
Sec. 1.36 Systems exempt in whole or in part from provisions of 5
U.S.C. 522a and this part.
* * * * *
(c) * * *
(1) * * *
(viii) * * *
------------------------------------------------------------------------
Number System name
------------------------------------------------------------------------
* * * * *
IRS 90.001............................. Chief Counsel Management
Information System Records.
IRS 90.003............................. Chief Counsel Litigation and
Advice (Criminal) Records.
IRS 90.004............................. Chief Counsel Legal Processing
Division Records.
IRS 90.005............................. Chief Counsel Library Records.
------------------------------------------------------------------------
* * * * *
(g) * * *
(1) * * *
(viii) * * *
------------------------------------------------------------------------
Number System name
------------------------------------------------------------------------
* * * * *
IRS 90.001............................. Chief Counsel Management
Information System Records.
IRS 90.002............................. Chief Counsel Litigation and
Advice (Criminal) Records.
IRS 90.004............................. Chief Counsel Legal Processing
Division Records.
IRS 90.005............................. Chief Counsel Library Records.
------------------------------------------------------------------------
* * * * *
(m) * * *
(1) * * *
(viii) * * *
------------------------------------------------------------------------
Number System name
------------------------------------------------------------------------
* * * * *
IRS 90.006............................. Chief Counsel Human Resources
and Administrative Records.
------------------------------------------------------------------------
* * * * *
Dated: October 24, 2011.
Melissa Hartman,
Deputy Assistant Secretary for Privacy, Transparency and Records.
[FR Doc. 2011-29385 Filed 11-14-11; 8:45 am]
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