If you ask me, this is the Mother Of All Privacy Violations. My tax return data?

The IRS has proposed a rule to allow the tax preparation industry to disclose Joe American’s tax return information, collected while preparing returns for consumers, to third parties. Of course, this is only after they have received your “consent.”

I know what form this “consent” will take — and I’m sure you do too: your consent will be presumed as a matter of contract, from A. your failure to figure out that they are now allowed to do this(??), which used to be a criminal act(!!); and B. your failure to “opt-out” of the Standard Operating Procedure in a timely manner, by filing some form with your tax preparer by snail mail. EPIC, in a March 2006 report critical of the IRS and its privacy practices, indicates that the consent required could be “less than voluntary”.  The title of the press release? “IRS Issues Proposed Regulations to Safeguard Taxpayer Information.”

An article in the Philadelphia Inquirer predicted that accountants and companies in the tax preparation industry may soon be allowed to sell your electronic return data to personal data aggregators like ChoicePoint.

The IRS taketh away, but it also giveth: a noteworthy privacy plus in this regulation requires a tax preparer to notify the taxpayer if returns are going to be prepared overseas — which is already happening with many of the top companies and which, according to the CPA Journal Online, creates a whole set of potential professional, legal and ethical concerns. This makes sense: you shouldn’t have to know the data privacy laws in India, and you should know whether you now need to worry about a Pakistani records transcriber threatening to post consumer data online unless she receives a raise.