(17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information? The data is stored in a room secured by a combination lock and only authorized personnel have access to the information. (18) What formal or informal arrangement does the Treasury Department have with congressional committees for the authorizing and reviewing of new data banks and the clearance of new electronic or mechanized record-management techniques? None. (19-A) Have any data programs or the development of other comprehensive records systems been discussed before other congressional committees by Treasury Department representatives? No. (19-B) Have any heen specifically approved by Congress or congressional committees? No. (19-C) If so, would you please supply any available testimony, or citations to such hearings? N/A INTERNAL REVENUE SERVICE (CP:I) NARCO TRAFFICKING INFORMATION SYSTEM Date Response Prepared.-December 22, 1971 (Updated April 16, 1973) File Control No.-IR-07 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. The Narcotic Trafficking Information System for the IRS Narcotic Traffickers Program (NTP) will be operative March 1973. It is being developed by the IRS in conjunction with the guidance of the Office of Law Enforcement, Department of the Treasury. The purpose of the system is to provide an information model for the tracking, analysis and evaluation of subjects within the NTP. The computerized system will be composed of five separate files: Identifier, Pre-investigation, Audit, Investigation, and Legal Disposition. This system will provide management information for research purposes and be used for administrative control. The files contain approximately 1450 names of subjects designated as Narcotic Traffickers. The major categories of data on these individuals will be identifying data (e.g., name, date of birth, SSN, address), tax return data, business operations and associations, assets and liabilities, criminal history and legal disposition of the current investigation. (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 Ú.S.C., 7601, 7801, 7802), Internal Revenue Code (Attachment 1A). B. Policy of the Internal Revenue Service P-9-1 (approved 8/19/70), Intelligence Division Mission Statement (Attachment 1B). 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). [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. Answer is no. The file is not intended to be 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. Files exist on magnetic tape via card input transcribed from source input sheets. The files constitute a single data base from which is generated hard copy output. Access is limited to program entry or hard copy review. (5) Describe plans for further computerization or mechanization in each program. Additional statistical tables are viewed as a possible expansion of this computerized system. (6) In what instances would each system be utilized? By what officials and by what agencies? The System will be utilized by the Director, Office of Law Enforcement, Office of the Secretary, Department of the Treasury and by the Directors Intelligence and Audit Divisions, Internal Revenue Service. (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. (7a) The data has not heretofore been available on a computer program. When implemented, it will make available a rapid correlation of the activities of Narcotic Traffickers in their business operations and it will extablish a means to key audits on these individuals in a systematic, automatic and timely manner. (7b) The System will permit correlation of all the data as it becomes available and the computer program evolves. 8. What specific subject areas concerning an individual's background, personal life, personality and habits are noted in each data program? No information will be collected on an indivual's personality or habits; however, we will collect information in the following subject areas: 1. Social Security Number 2. Name-Aliases 3. Date of Birth 4. Last Known address 5. Source of Information 6. Business Associates 7. Place of Birth 8. Occupation 9. Case Number (Intelligence) 10. Taxable Income 11. Taxes paid 12. Audit Examination (Years) 13. Assessment (regular, jeopardy, termination of tax year) 14. Assets (bank account, security, real estate, personal property-cars, yachts) 15. District/Region 16. Narcotic (type-street value) 17. Criminal History 18. Type of legal action (indictment, arraignment, trial, sentence) 19. Penalty (time, money) 20. Date of action 21. Telephone number of subject 22. License number of automobile (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. Access to the data within the System will be restricted to a few key officials within the Department of Treasury. Distribution of data to other agencies will be on a request basis. Information from public sources will be provided on request while other information within the System will not be provided except through normal established disclosure procedures.1 (Note: See items 14 and 17.) (10-A) Is the subject individual or his representative notified of the fact that he is in the data bank? 1 Restrictive requirements imposed by the law (26 U.S.C. 6103 and 7213) and the regulations issued pursuant thereto (26 CFR 301.6103 et seq.). (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) No. (B) If an individual in this program becomes the subject of a criminal tax investigation which ultimately results in a recommendation that he be criminally prosecuted, he is afforded an opportunity to present any explanation, facts, or evidence which he desires to have considered in the matter. (11) What aspects of the recorded data are available to other persons? Who, specifically? For what purpose? By what authority? Information obtained from public sources is available to other local, state and Federal law enforcement agencies upon request. Any information obtained through use of official authority is available to other law enforcement agencies only through 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 will be collected from news clippings, investigative reports, informants, tax returns, other Federal, state, and local government agencies and other public and private sources. (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? Continual review of the accuracy will be made by authorized Audit and Intelligence personnel of the IRS. Correction and adjustment entries will be made on a monthly basis to provide for continued accuracy. (15) What other agencies have access to information or use of information in each data bank? No other agencies will have direct access to the information to be contained within this system. It is expected that local, state and national law enforcement agencies will have access to data only to the extent such information comes from public sources. Other information will be available only through normal, established disclosure procedures. The Bureau of Narcotics and Dangerous Drugs as well as the Bureau of Customs are likely to be the principal participants in this system. (16) What states and federal agencies may utilize the data in your computerized files by coding, interfacing and other devices relating to their own computers? It is being considered that interface with the National Crime Information System (NČIC), maintained by the Department of Justice, will be available with the use of Social Security Numbers, but this interface will not be direct, i.e., computer to computer. For example, queries could be made by an agency outside Treasury from the Narco Trafficking Information system data base, but this information would not be obtained by direct access. The information that will be available on request from other agencies will be that obtained from public sources while all other information will be available only through normal established disclosure procedures. (17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information? No computer security devices are currently incorporated in this system. However, manual efforts in the forms of restricted review, secure storage, and background clearance of handling personnel are key concepts throughout its operation. (18) What formal or informal arrangement does the Treasury Department have with congressional committees for the authorizing and reviewing of new data banks and the clearance of new electronic or mechanized record-management techniques? None. (19-A) Have any data programs or the development of other comprehensive records systems been discussed before other congressional committees by Treasury Department representatives? This program has not been discussed with a Congressional committee to our knowledge. (19-B) Have any been specifically approved by Congress or congressional committees? No. (19-C) If so, would you please supply any available testimony, or citations to such hearings? Not applicable. Attachments The following attachments accompanied the Internal Revenue Service's Law Enforcement, Intelligence Files response. 1A. 26 U.S.C. 7601, 7801, 7802 1B. Policy of the Internal Revenue Service P-9-1, Intelligence Division Mission Statement 1C. Policy of the Internal Revenue Service P-9-46 1D. Policy of the Internal Revenue Service P-1-185 2. Executive Order dated 2/7/68 3. Form 7691-C, Preliminary Control Record Sec. 7601 ATTACHMENT 1A SEC. 7601. CANVASS OF DISTRICTS FOR TAXABLE PERSONS AND OBJECTS. Sec. 7601(a) (a) GENERAL RULE.-The Secretary or his delegate shall, to the extent he deems it practicable, cause officers or employees of the Treasury Department to proceed, from time to time, through each internal revenue district and inquire after and concerning all persons therein who may be liable to pay any internal revenue tax, and all persons owning or having the care and management of any objects with respect to which any tax is imposed. Source: Sec. 3600, 1939 Code, substantially unchanged. (b) PENALTIES.— Sec. 7601(b) For penalties applicable to forcible obstruction or hindrance of Treasury officers or employees in the performance of their duties, see section 7212. P-9-1 (Approved 8-19-70) ATTACHMENT 1B INTELLIGENCE MISSION The Intelligence mission is to further the total Service objective of encouraging and achieving the highest possible degree of voluntary compliance with the internal revenue laws by: identifying the existence of areas of willful noncompliance by taxpayers and the devious and complex methods employed by them to evade the tax laws (except those relating to alcohol, tobacco, narcotics and firearms); enforcing the statutory sanctions applicable to income, estate, gift, employment and certain excise taxes through the investigation of cases of possible criminal violations of such laws and the recommendation (when warranted) of prosecution and/or assertion of the 50% ad valorem addition to the tax in order to create the broadest possible impact on the compliance attitudes of the taxpaying public; measuring the effectiveness of the investigation processes; and providing protection of persons and property; and other enforcement coordination as required. ATTACHMENT 1C RACKETEER AND WAGERING TAX ENFORCEMENT P-9-46 (Approved 6-23-71) ENFORCEMENT MEASURES TO MAINTAIN COMPLIANCE WITH THE TAX LAWS BY PERSONS IDENTIFIED AS RACKETEERS The Service's general enforcement effort will include a program and procedures for identifying as racketeers those taxpayers who derive substantial income from illegal activities and for a continuing scrutiny of the tax affairs of those so identified. ANNUAL REVIEW OF RETURNS AND RELATED INFORMATION Once each year the latest returns filed by persons identified as racketeers, and related information, shall be scrutinized by designated district office enforcement officials for the purpose of recommending or initiating any Service action warranted. PARTICIPATION IN THE GOVERNMENT'S DRIVE AGAINST ORGANIZED CRIME The Service will participate in the Government's drive against organized crime and will cooperate with the Department of Justice in that undertaking by conducting investigations of the tax affairs of major racketeers identified by that Department. ENFORCEMENT EFFORTS IN RACKETEER INVESTIGATIONS Cases investigated under the Organized Crime Drive will receive top priority Other enforcement efforts under the Service's racketeer program shall be conducted with as little variance from general procedures as possible, consistent with the necessity to provide an adequate deterrent without unduly hampering other important Service responsibilities. As available resources preclude the applicability of special enforcement measures to all persons engaged in illegal activities, the program will be limited to Organized Crime Drive cases and to those racke eers who, because of their widespread illegal operations and disregard for law, are likely subjects of productive cases. P-1-185 (Approved 5-17-67) ATTACHMENT 1D INFORMATION ON TAX RETURNS IS CONFIDENTIAL IN NATURE; IDENTITY OF INVESTIGATIVE SUBJECTS GENERALLY NOT DISCLOSED Consistent with the spirit of the statutory prohibitions against disclosing the contents of tax returns, claims, and related documents, the Service will generally not make public (except as such items become matters of public record through normal judicial processes or as may be necessary in connection with investigative inquiries) the identity of persons or organizations being investigated or audited, or the status of any investigation or audit or of collection proceedings undertaken by the Service. LIMITED DISCLOSURE OF INFORMATION WARRANTED IN CERTAIN SITUATIONS, ESPECIALLY WHERE TAXPAYER HAS MADE INFORMATION AVAILABLE TO MASS MEDIA Limited disclosure of information to the extent necessary to correct an erroneous impression may be warranted in situations where silence could give rise to a presumption that the Service is derelict in its responsibilities or is acting improperly. 20-550 0-74-pt. 5- -17 |