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or correct erroneous data, he draws a line through the erroneous data and writes in the correct data. A copy is sent to the computer facility for processing to correct the master file.

(15) What other agencies have access to information or use of information in each data bank?

The Department of Justice.

(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? None are utilizing the data at the present time and there are no plans for such use in the future.

For the past 4 years, the taxpayer's social security number or employer identification number has been entered into the system if available. The purpose is to provide the capability of some type of interface with other IRS systems if such should be desired in the future.

(17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information.

None that apply specifically to this data file.

(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 data file was discussed by Treasury Department representatives before the Subcommittee on Departments of Treasury and Post Office and Executive Office appropriations of the Committee on Appropriations, House of Representatives, on February 24, 1965. See Treasury-Post Office Departments and Executive Office Appropriations for 1966-Hearings, pages 567–573. (B) Have any been specifically approved by Congress or Congressional committees?

This data file was not specifically approved by Congress or Congressional committees. (C) If so, would you please supply available testimony, or citations to such hearings?

Not applicable.

CHIEF COUNSEL-INTERNAL REVENUE SERVICE

CIVIL TAX CASE ABSTRACTS

Date Response Prepared.—November 17, 1971 (Updated April 16, 1973)
Class of File.-All Other Files

File Control No.-IR09

File Medium.—Microfilm

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 file consists of approximately 30,000 case abstracts on 30 reels of microfilm. Each abstract concerns a single case in litigation before the Tax Court or a suit for refund filed with a district court or the Court of Claims, or a case on appeal from one of these courts.

The abstract is a brief description of the facts and legal issues in the case, and usually consists of one or two typewritten pages. Except for the taxpayer's name and the IRS attorney's name, no personal data is contained in the abstract. [A sample is included as Attachment 2.]

Since many cases involve taxpayer corporations, the number of individuals currently included is less than 30,000.

(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.

Authority for keeping records: 44 U.S. Code, Section 3101 et seq.
Authority for automation: Treasury Department Administrative Circular

No. 73-Management of Automatic Data Processing, dated June 27, 1962.
(See Attachments.) [Both omitted.]

Purpose of Data Bank: To provide several hundred attorneys and other users easy access to narrative information concerning facts and legal issues involved in tax cases in litigation.

(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.

Not applicable.

(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.

Prior to microfilming, the abstracts prepared by attorneys are collected and stamped with a number representing the microfilm reel and frame number. This number, together with the case number, is input into a computerized system to permit computer print-outs of listings of cases by legal issues with microfilm access numbers which can serve as an issue-oriented index to the microfilmed material.

Each of the Chief Counsel field offices, the National Office and the Tax Division of the Justice Department are supplied with sets of the reels of microfilm and the monthly-updated listings which serve as an index to the microfilmed abstracts. Each location also has a microfilm reader-printer. References to all abstracts pertaining to any given issue can be found in the listing within a matter of seconds, and any desired abstract can be brought to the screen for viewing or printed out in a few additional seconds.

(5) Describe plans for further computerization or mechanization in each program.

None.

(6) In what instances would each system be utilized? By what officials and by what agencies?

Not applicable.

(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 multifaceted analysis of data on a scale not hitherto available.

Not applicable.

(8) What specific subject areas concerning an individual's background, personal life, personality and habits are noted in each data program?

None.

(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.

None specifically applicable to this file.

(10-A) Is the subject individual or his representative notified of the fact that he is in the data bank?

No.

(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.

No.

(11) What aspects of the recorded data are available to other persons? Who, specifically? For what purpose? By what authority?

IRS attorneys use the abstracts to determine whether other pending cases are sufficiently similar to the case he is handling to require that he coordinate with the attorney or attorneys who are assigned these other cases. The objective is to insure uniformity in the handling of cases in which the facts and legal issues are substantially identical.

(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 abstract is prepared by the attorney who is assigned the case. Abstracts are not prepared on all cases, but are generally confined to cases where the facts or issues are somewhat unique.

(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?

The attorney who prepares the abstract is responsible for its accuracy. If an abstract is determined to be inaccurate, the attorney prepares a new abstract for microfilming. The computerized index is changed to show the microfilm access number of the new abstract for that case. Although the former abstract is still on the reel of microfilm, it is in effect deleted since the index will no longer lead a user to it.

(15) What other agencies have access to information or use of information in each data bank?

The Tax Division of the Department of Justice.

(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? None.

(17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information.

None that apply specifically to this data file.

(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 data file was discussed by Treasury Department representatives before the Subcommittee on Departments of Treasury and Post Office and Executive Office appropriations of the Committee on Appropriations, House of Representatives, on February 24, 1965. See Treasury-Post Office Departments and Executive Office Appropriations for 1966-Hearings, pages 567-573. (B) Have any been specifically approved by Congress or Congressional committees?

This data file was not specifically approved by Congress or Congressional committees. C. If so, would you please supply available testimony, or citations to such hearings?

Not applicable.

Attachments

The following attachments were included with the Internal Revenue Service, Office of the Chief Counsel response.

1. Sample print-out, Tape File.

2. Abstract, Microfilm File

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000-999467-691

CHIEF COUNSEL - APPELLATE MASTER FILE

PAGE 3923

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SEPT. 1971

000-999971-771

000 - 9999 71-71

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ATTACHMENT 2

(Sample record from Microfilm File, with name of taxpayer and IRS attorney changed to protect the identity of individuals)

ABSTRACT-TC

JULY 23, 1967

Dkt. 9876-69

Case: Lorna Doone

Class: Standard

Location: Western Region, Los Angeles, David Copperfield

Year: 1963, Gift Tax.

Issue: 2511.12-00; 2501.01-00.

Was there a gift of life insurance proceeds from petitioner to her children upon death of petitioner's husband, where petitioner was named as owner of insurance policy on husband's life and the children were the beneficiaries?

Facts: Decedent applied for a sickness and accident policy in the amount of $800,000, naming his wife (the petitioner) as owner. His wife and four children were named as beneficiaries, each to receive one-fifth of the proceeds. The decedent died six months later and the proceeds were paid in accordance with such designation.

Positions: TP-Under the terms of the policy the petitioner had no right to change beneficiaries. In addition, she and the decedent had agreed that there would be no change of beneficiaries.

Commissioner-The petitioner, as owner of the policy, had the right to designate beneficiaries (and did in fact do so), and that right coupled with the decedent's death, constituted a gift to the four children of four-fifths of the policy proceeds. Related Case: None.

Subpart 4-Internal Revenue Service, Special Service Staff Files

Subcommittee Analysis

In response to a special inquiry by the subcommittee, the IRS reported one additional data bank.

I. Index

Title

Description: (1) Purpose; (2) Contents

Subjects

A. Special Service Staff files (not computerized). (1) Purpose is to accumulate information on extremist 11,000.

individuals and groups to insure that they are
complying with Federal tax laws. Staff forwards
tax strike and tax resistance information to
District offices which may be affected. The staff
also provides information to branches of the IRS
that are responsible for issuing rulings on ap-
plications for tax exempt status.

(2) The response mentions that items such as social

security checks and tax return reports are
included, but does not indicate the precise
nature of any personal information that may be
contained in the files. An IRS Manual Supple-
ment provided with the response makes clear
that files contain documentation of criminal
violations other than those having to do with the
tax statutes.

II. Nature of Material Submitted

The Special Service Staff files were unmentioned in the original Treasury Department response. Upon receipt of information from an independent source regarding Staff activities, the subcommittee sent a followup inquiry on May 21, 1973, to Mr. Samuel R. Pierce, Jr., General Counsel of the Treasury. The information provided regarding the Special Service Staff Files, was in response to the letter of May 21 and not to the list of 18 numbered questions included in the original inquiry.

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