(3) Mention is made of "Investigative Files," of which there are 10,000, yet no explanation is offered as to the nature or content of the files. The Strike Force Disclosure List response was deficient in at least two respects: (1) The response never reveals the essential nature of the bank; and the purpose of the data bank is not articulated. (2) The nature of the IRS/Justice Department relationship with regard to initiation of requests and sharing of information is not stated. The Narco Trafficking Information System response was confusing in regard to the interface with NCIC which, according to the response to question 16, is contemplated. The response states that access "will not be direct, i.e., computer to computer. ;" yet, there is no explanation as to the nature of the "indirect" interface. Moreover, a comparison of the Treasury Department cover letter (see part I) with the response in this part relating specifically to the Information Retrieval System reveals several puzzling discrepancies: (1) The cover letter indicates that the automated indices will be maintained on the national level. The Retrieval System response states that indices are to be maintained at the district level. (2) The cover letter names the Strike Force Disclosure List and Project 866 as parts of the system. The Retrieval System response lists neither of these but does list "Investigative Files." This discrepancy might lead one to suspect that "Investigative Files" is made up of the Strike Force Disclosure List and Project 866; however, total names included in the latter two files is 18,000, whereas the number listed for "Investigative Files" is 10,000. (3) The cover letter shows 1,500 as the number of names listed in the Narco Trafficking Files. The Retrieval System response indicates 3,000 as the proper number. (4) The cover letter states that "about" 20,000 names will be included in the National Register. Yet, the sub-categories listed in the same cover letter totals 25,500. The Information System response states that the procedures implementing the System are to be developed and will be ". . . issued in the near future." No copy has been provided the Subcommittee by publication date. III. Comments A. Statutory Authority As authority for these banks, the response cites 26 U.S.C. 7601, 7801, 7802. These provisions are general grants of authority to administer and enforce Title 26. Record keeping is obviously required for effective enforcement. So long as information collected and retained under the general authority cited is reasonably related to the enforcement of the Internal Revenue Code, files are, thus, justified by implied authorization. It is not clear that the Strike Force Disclosure List may properly be so categorized; collection of data relating to entities under consideration for possible violation of a Federal statute" seems to sweep too broadly to fit under the general authorization cited. B. Subject Notification and Review Individuals are not provided notice of inclusion in the files. The Information Retrieval System, Project 866, and Narco Trafficking Information System responses all point out that an individual who is actually investigated has, at some point, an opportunity to be heard. Individuals included in the Strike Force Disclosure List are provided no opportunity, at any point, to review or revise information, according to the response. Chiefs of District Intelligence Divisions are responsible for assuring the accuracy of data contained in Information Retrieval System and Project 866 files. The Intelligence Strike Force Representative assures the accuracy of information in the Strike Force files; IRS "Audit and Intelligence personnel" take care of accuracy in the Narco Trafficking Information System. The responses assert that there are routine procedures for detecting inaccuracies, making corrections, and purging files of dated records or those in which there is no longer any investigatory interest. C. Access by Other Agencies 1. INFORMATION RETRIEVAL SYSTEM AND PROJECT 866-Responses state that information obtained from public sources is available to state, local, and Federal law enforcement agencies on request. Information obtained through use of official authority is available to other law enforcement agencies only through normal established disclosure procedures (presumably, the procedures presented in the Master File summary). 2. STRIKE FORCE DISCLOSURE LIST-Information, according to the response is provided only to the Justice Department. No computer interface was being practiced at the time of submission of the response. 3. NARCO TRAFFICKING INFORMATION SYSTEM-Other state, local, and national law enforcement agencies are granted information from files that were derived from public sources. Other information will be available through "established disclosure procedures". The response acknowledges that interface with NCIC is being considered. However, the interface would be of a curious sort; it " . . . will not be direct, i.e. computer to computer." D. Public Access The matter of public access is not faced directly in the responses. They list the parties to which information is made available; outside individuals are not included in the list. E. Security Precautions All four responses mention 26 U.S.C. 6103 and 7213. In addition, 26 CFR 301.6133 et seq. 26 U.S.C. 6103 provides some detail as to conditions under which various parties will be permitted access to tax returns as well as restrictions on disclosure of information by parties gaining such access. 26 U.S.C. 7213 has to do with criminal sanctions for wrongful disclosure. 26 CFR 301 provides procedures regarding disclosure to various parties. Further security is provided by restricted access, and secure buildings and cabinets. F. Sources of Information 1. INFORMATION RETRIEVAL SYSTEM-Information is derived from administrative files, investigative files, major racketeer files, special agents, informants, police and "other investigative agencies," news papers and magazines, and from the individual himself through interviews, statements, affidavits. 2. STRIKE FORCE DISCLOSURE LIST-Response is unclear: "The identifying information is transcribed from the disclosure request letters initiated by the Department of Justice and approved by the Commissioner, Internal Revenue Service." 3. PROJECT 866-Information comes from internally generated. documents. 4. NARCO TRAFFICKING INFORMATION SYSTEM-News clippings, investigative reports, informants, tax returns, ".. . . other Federal, state and local government agencies and other public and private sources." IV. Evaluation The lack of candor and inadequate disclosure to the Subcommittee, as related in II above, naturally raise suspicions as to the use to which the files are put. The criteria for determining which individuals are to be included in the Potential Major Racketeer file and the Strike Force Disclosure List are open-ended enough that seemingly anyone could be made a part of them. The response to the subcommitte inquiry regarding means of obtaining data is so general that virtually any source could be utilized. Individuals included in the files are allowed to review and update data only after an investigation has commenced; such an opportunity to be heard is of much less value to the individual than if he were allowed to correct erroneous information before he becomes the subject of an investigation In general, the potential for abuse of information on individuals runs high in the investigative files. The subcommittee inquiry could have provided a vehicle by which the IRS might reassure readers that wrongful use is not being made of these files. Respondents chose not to take advantage of the opportunity. Agency Response The following IRS responses to the subcommittee's October 15, 1971, request for responses to the standard questionnaire (see inside back cover) were prepared on December 22, 1971, updated on April 16, 1973, and received May 8, 1973. INTERNAL REVENUE SERVICE (CP:I) INTELLIGENCE DIVISION INFORMATION RETRIEVAL SYSTEM Date Response Prepared.-December 22, 1971 (Updated April 16, 1973). File Control No.-IR-06. File Medium.-Magnetic Tape. National Security Classification.-None. (1) Describe briefly the major categories of data on individuals presently maintained and stored under auspices of the Treasury Department and its agencies and the approximate number of subject individuals covered in each category. Ă national information retrieval system for the Intelligence Division of the Internal Revenue Service is currently being implemented. The system will consist of a national register of selected taxpaying entities and automated indexes to district background files. The individuals included on the National Register are those who are the subject of an Intelligence Division investigation; racketeers identified as "major" because of their major involvement in illegal activities; and racketeers identified as potentially "major" because they are engaged in illegal activities involving potential unreported or understated income, or other offenses within the jurisdiction of the Intelligence Division or there are indications that the subject is engaged in inter-district activities with potential tax consequences. The national register will be maintained in the National Office, Intelligence Division, and data included in that register will be restricted to identification data: subject name, Social Security Number, date of birth, and city and state. The register will also show the office which is maintaining a file for that particular entity and the entity will be classified by a code to reflect the alleged major source of activity giving rise to potential unreported income. The indexes to the District Background Files consist of a subject and document index. The subject index lists each entity in alphabetical order followed by a listing of related background file documents. The document index is in numerical sequence with all subjects of interest in each document listed after the document. Based on screening criteria that has been developed it is estimated that there will be approximately 20,000 individuals in the National Register in a given year composed of the following: There will be approximately 200,000 District Background files maintained in the 58 district offices on individuals where specific information with potential tax consequence has come to the attention of the Intelligence Division. The automated indexes relating to the District Background files are maintained and accessible only in each separate district. (2) Under what statutory and administrative authority was each data bank established and for what purpose? Please supply copies of pertinent federal statutes, regulations and memoranda on which this authority is based and by which it is implemented. 2A. (26 U.S.C., 7601, 7801, 7802), Internal Revenue Code (Attachment A). [7801, 7802 omitted] B. Policy of the Internal Revenue Service P-9-1 (approved 8/19/70), C. Policy of the Internal Revenue Service P-9-46 (approved 6/23/71), D. Policy of Internal Revenue Service P-1-185 (approved May 17, 1967), E. 44 U.S.C. 3101 et seq. (Attachment E). [Omitted] (3) Are Treasury Department controls, guidelines, or advice required by or offered to state officials and private individuals who either administer or who utilize this data-gathering program? Please supply copies of pertinent rules or advisory documents as issued by federal and state agencies. No. The file is not available to state officials or private individuals. (4) For each category and each conglomerate of data, indicate its present state of computerization or other mechanization for access and retrieval as well as for evaluation and analysis. The procedures implementing this system have been written and will be issued in the near future. (5) Describe plans for further computerization or mechanization in each program. There are no plans to further computerize or mechanize this program beyond the current implementing procedures. (6) In what instances would each system be utilized? By what officials and by what agencies? N/A (7) For each new data storage and processing program, please describe: (a) the advantages; and (b) the extent to which it permits correlating, common storage and multi-faceted analysis of data on a scale not hitherto available. N/A (8) What specific subject areas concerning an individual's background, personal life, personality and habits are noted in each data program? The National Register and automated indexes to the District Background Files will contain nothing about the person's personal life, personality, or habits beyond the identification data set forth in response to Question No. One (1). (9) Has the Treasury Department and its component agencies developed comprehensive guidelines governing maintenance of any or all the various data systems, access to them, review and disclosure of material in them, and distribution of data to other agencies? If so, please supply copies. The procedures implementing this system have been written and will be issued in the near future. These will include comprehensive guidelines for the maintenance, review and purging of the file. Access to data in these indexes will be restricted to a few employees who will be authorized to work with these files. The guidelines that normally govern disclosure* of Internal Revenue Service information apply to these indexes. (10-A) Is the subject individual or his representative notified of the fact that he is in the data bank? (B) Is he allowed to review the data on record about him; to supplement his file; or to explain or rebut inaccurate material? Please describe the precise limitations on such rights for each restriction. (A) The subject individual or his representative will not be notified that he is in the national register or a background file. (B) At the time he becomes the subject of an investigation he is ordinarily notified that he is being investigated and during the course of the investigation given the opportunity to explain his failure to file or his under-reporting of income. (11) What aspects of the recorded data are available to other persons? Who, specifically? For what purpose? By what authority? Data will be made available to other law enforcement agencies only to the extent it is obtained from public sources. Information from tax returns and obtained through official investigations (from other than public sources) will not be made available to those outside the Internal Revenue Service, except thru normal established disclosure procedures. (12) Is a record maintained of each inspection or use of the individual's record? No. (13) For each data bank, please indicate how the information is collected, whether it is solicited from the individual, from third persons, or from existing records. The information may come from the individual, third persons and existing records. The information for this system comes from administrative files, investigative files, major racketeer files, information obtained from special agents and informants. Information entering the system must relate to specific subjects or entities. It must involve financial transactions with potential tax consequences; illegal activities with tax potential; or, other illegal activities which fall within the investigative jurisdiction of IRS Intelligence Division. This information may include, but is not limited to, the following: (a) copies of income tax returns; (b) special agents' reports; (c) revenue agents' reports; (d) reports from police and other investigative agencies; (e) memoranda of interview, question and answer statements, and affidavits; (f) collateral requests and replies; (g) information items; (h) newspaper and magazine articles and other published data; (i) financial information from public records; and case initiating documents. (14) What officials in your agency are responsible for determining the accuracy of information in the data bank? What provisions are made, procedurally, for deleting information found to be inaccurate or inappropriate, either on the initiative of the agency or on motion of the individual? *Restrictive requirements imposed by the law (26 USC 6103 and 7213) and the regulations issued pursuant thereto (26 CFR 301.6103 et seq.). |