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April
12, 2002, 8:30 a.m. By Daniel J. Pilla |
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s
the annual tax-return filing deadline pushes in on America, I reflect
upon a recent trend in our culture: the growing hatred of telemarketers.
These people use the phone to sell aluminum siding or to try to persuade
you to change long-distance phone companies, just as you are about to
sit down to a rare dinner with the entire family. Our loathing of these
invasions of our "privacy" has grown to the point where legal
action has been taken in an effort to restrict such marketing.
For instance, Minnesota's Attorney General Mike Hatch recently filed suit against a major bank to stop "privacy violations." The bank's crime was releasing customer information — names, addresses, phone numbers — to its "marketing partners" for use in marketing campaigns. In his diatribe against such "outrageous violations of privacy," Hatch vowed to protect consumers from these "unscrupulous marketing practices."
While nobody appreciates an annoying phone call, the fact that your participation is entirely voluntary seems to get lost in the discussion of this purported privacy invasion. You certainly have no obligation to buy the products or services offered and you don't even have to talk to the sales person if you don't wish. You may terminate the "invasion" by simply hanging up the phone.
I wonder why it is that we are so outraged at the idea of legitimate businesses using the telephone to sell legal products and services, while we blindly accept the idea of annually disgorging to government the most intimate details of our private business and personal affairs.
The scope and breadth of the Internal Revenue Service's information-gathering authority and practices have made a mockery of the concept of privacy. Keep in mind that a private business has access to only the information you voluntarily provide. The IRS, on the other hand, has the force of law to allow it access to not only your personal records, but records and information possessed by your business associates, friends, and neighbors.
Forget the Fourth Amendment and its "probable cause" requirements. The IRS does not need probable cause to obtain either your private documents or the documents of any other person or business — including your accountant. What's more, the IRS is not required to allege or even have a suspicion of any wrongdoing to justify rummaging through your affairs.
Does this sound like the kind of thing that went on during the Inquisition in 16th century England? Well, that's exactly what it is. In fact, in the 1964 case of United States v. Powell, the Supreme Court described the IRS's investigatory powers as "a power of inquisition." With this power, the IRS can and regularly does gain access to mortgage records, credit-card data, phone records, return preparation worksheets and background documents, banking and investment records, real property transaction data, records of purchases and sales of all assets, and your personal correspondence.
And, since the mid-1980s, Congress has steadily added to the tax code's list of information-reporting requirements. Americans are now to the point where they file more than 1.3 billion information returns annually. These are not tax forms. They are forms that report financial activities. So pervasive is this reporting that the mere act of withdrawing cash from your own bank account or buying a product or service with cash could trigger such a report.
Advocates of IRS information gathering claim you shouldn't have anything to worry about, since you don't cheat on your taxes. But, what they don't point out is that the IRS keeps no secrets when it comes to your private tax information. Like the Minnesota bank that sold its customer lists, the IRS openly makes all of your private personal and financial information available to other federal, state, and local government agencies.
Federal law authorizes the release of your tax return information to any government agency claiming an interest in the data. According to the General Accounting Office, at last count there were 37 federal and 215 state and local government agencies that obtained private tax information from the IRS for use in law enforcement alone. In 31% of the cases, the information was used in matters that had nothing to do with taxes. If that's not enough, even foreign governments regularly obtain U.S. citizens' private financial information from the IRS.
Are we truly concerned about privacy in America? If so, the way to address the problem is to restrict the prying eyes of the IRS, not telemarketers. The IRS's demands for data carry the force of law and the threat of penalty. At least when a telemarketer calls, you can hang up the phone.
— Mr. Pilla is a tax litigation consultant and author of the recent Institute for Policy Innovation study, "A Monument of Deficient Wisdom: The Constitutional Conflict in Federal Income Tax Law Enforcement." The study is available at www.ipi.org.