[Federal Register Volume 62, Number 219 (Thursday, November 13, 1997)]
[Rules and Regulations]
[Pages 60781-60783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29794]



Departmental Offices

31 CFR Part 1

Privacy Act of 1974; Implementation

AGENCY: Departmental Offices, Treasury.

ACTION: Final Rule.


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 exempt the system of records entitled, 
``Integrated Data Retrieval System (IDRS) Security Files--Treasury/IRS 
34.018,'' from certain provisions of the Privacy Act.

EFFECTIVE DATE: November 13, 1997.

FOR FURTHER INFORMATION CONTACT: Michael Sincavage, Director, 6103/
Privacy Operations, Governmental Liaison & Disclosure, Internal Revenue 
Service at (202) 622-6240.

SUPPLEMENTARY INFORMATION: The Department of the Treasury published a 
notice of a proposed rule exempting a system of records from certain 
provisions of the Privacy Act of 1974, as Amended, at 60 FR 40797, 
dated August 10, 1995. The Internal Revenue Service published an 
alteration to the system notice on July 31, 1995, at 60 FR 30972.
    Under 5 U.S.C. 552a(k)(2), the head of an agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the

[[Page 60782]]

Privacy Act of 1974 if the system is investigatory material compiled 
for law enforcement purposes. The Internal Revenue Service has as its 
principal function enforcement of the tax law of the United States. 
System of records Treasury/IRS 34.018--Integrated Data Retrieval System 
Security Files, contains records that enable the Service to investigate 
and monitor the activities of its employees to ensure the protection 
and confidentiality of tax return information. The information in this 
system is used in investigations relating to unauthorized use of the 
Integrated Data Retrieval Files.
    The proposed rule requested that public comments be sent to the 
Director, Office of Disclosure, Internal Revenue Service no later than 
September 11, 1995. No comments pertaining to the proposed rule were 
received by the Office of Disclosure. Accordingly, the Department of 
the Treasury is hereby giving notice that the system of records 
entitled, ``Integrated Data Retrieval System (IDRS) Security Files--
Treasury/IRS 34.018,'' is exempt from certain provisions of the Privacy 
Act. The following are the reasons why certain systems of records 
maintained by the Internal Revenue Service are exempt pursuant to 5 
U.S.C. 552a(k)(2) of the Privacy Act of 1974.
    (1) 5 U.S.C. 552a(c)(3). This provision of the Privacy Act provides 
for the release of the disclosure accounting required by 5 U.S.C. 
552a(c)(1) and (2) to the individual named in the record at his 
request. The reasons for exempting systems of records from the 
foregoing provision are as follows:
    (i) The release of disclosure accounting would put the subject of 
an investigation on notice of the existence of an investigation and 
that such person is the subject of that investigation;
    (ii) Such release would provide the subject of an investigation 
with an accurate accounting of the date, nature, and purpose of each 
disclosure and the name and address of the person or agency to whom the 
disclosure is made. The release of such information to the subject of 
an investigation would provide the subject with significant information 
concerning the nature of the investigation and could result in the 
altering or destruction of documentary evidence, the improper 
influencing of witnesses, and other activities that could impede or 
compromise the investigation. In the case of a delinquent account, such 
release might enable the subject of the investigation to dissipate 
assets before levy;
    (iii) Release to the individual of the disclosure accounting would 
alert the individual as to which agencies were investigating this 
person and the scope of the investigation, and could aid the individual 
in impeding or compromising investigations by those agencies.
    (2) 5 U.S.C. 552a(d)(1),(2),(3), and (4), (e)(4)(G) and (H) and 
(f). These provisions of the Privacy Act relate to an individual's 
right to notification of the existence of records pertaining to such 
individual; requirements for identifying an individual who requests 
access to records; the agency procedures relating to access to records 
and the contest of the information contained in such records; and the 
civil remedies available to the individual in the event of adverse 
determinations by an agency concerning access to or amendment of 
information contained in such record systems. The reasons for exempting 
systems of records from the foregoing provisions are as follows: To 
notify an individual at the individual's request of the existence of 
records in an investigative file pertaining to such individual or to 
grant access to an investigative file could interfere with 
investigative and enforcement proceedings; deprive co-defendants of a 
right to a fair trial or an impartial adjudication; constitute an 
unwarranted invasion of the personal privacy of others, disclose the 
identity of confidential sources and reveal confidential information 
supplied by such sources; and disclose investigative techniques and 
    (3) 5 U.S.C. 552a(e)(4)(I). This provision of the Privacy Act 
requires the publication of the categories of sources of records in 
each system of records. In cases where an exemption from this provision 
has been claimed, the reasons are as follows:
    (i) Revealing categories of sources of information could disclose 
investigative techniques and procedures;
    (ii) Revealing categories of sources of information could cause 
sources who supply information to investigators to refrain from giving 
such information because of fear of reprisal, or fear of breach of 
promises of anonymity and confidentiality.
    (4) 5 U.S.C. 552a(e)(1). This provision of the Privacy Act requires 
each 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 
reasons for exempting systems of records from the foregoing provisions 
are as follows:
    (i) The Internal Revenue Service will limit its inquiries to 
information which is necessary for the enforcement and administration 
of tax laws. However, an exemption from the foregoing provision is 
needed because, particularly in the early stages of a tax audit or 
other investigation, it is not possible to determine the relevance or 
necessity of specific information.
    (ii) Relevance and necessity are questions of judgement and timing. 
What appears relevant and necessary when collected may subsequently be 
determined to be irrelevant or unnecessary. It is only after the 
information is evaluated that the relevance and necessity of such 
information can be established with certainty.
    (iii) When information is received by the Internal Revenue Service 
relating to violations of law within the jurisdiction of other 
agencies, the Service processes this information through Service 
systems in order to forward the material to the appropriate agencies.
    As required by Executive Order 12866, it has been determined that 
this final rule is not a significant regulatory action and, therefore, 
does not require a regulatory impact analysis.
    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, it is hereby certified that this rule will not have 
significant economic impact on a substantial number of small entities. 
The final rule imposes no duties or obligations on small entities.
    In accordance with the provisions of the Paperwork Reduction Act of 
1995, 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.

List of Subjects in 31 CFR Part 1

    Part 1 of Title 31 of the Code of Federal Regulations is amended as 
    1. The authority citation for Part 1 continues to read as follows:

    Authority: 5 U.S.C. 301 and 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. 

Sec. 1.36  [Amended]

    2. Section 1.36 of Subpart C is amended by adding the following 
text in numerical order under the heading THE INTERNAL REVENUE SERVICE:
*      *      *      *      *
    (b)  *    *    *
    (1)  *    *    *

                        Name of System                             No.  
                  *        *        *        *        *                 
Integrated Data Reporting System (IDRS) Security Files........    34.018

[[Page 60783]]

                  *        *        *        *        *                 

*      *      *      *      *

    Dated: October 3, 1997.

Alex Rodriguez,
Deputy Assistant Secretary (Administration)

[FR Doc. 97-29794 Filed 11-12-97; 8:45 am]
Billing Code: 4830-01-F