AccountingWeb.com is reporting: “IRS E-Filing Directive Sparks Privacy Debate.” The article asks: “Is it unnecessary government intrusion or a way to gather routine information?” Tax preparers are debating that question since the IRS announced it would flag taxpayers who use its free electronic tax filing program, and this on the heels of the IRS trying to encourage taxpayers to file electronically in order to reduce paperwork. One commentator decries the practice, saying “Taxpayers should not have their records flagged and segregated simply because they choose to use the IRS Free File program.”
The IRS response to the outcry according to the article: “Terry Lutes, IRS e-filing chief, said flagging the returns is needed to judge the effectiveness of the program and to better market e-filing. He said the IRS is gathering routine information, and he is “flabbergasted” by privacy arguments.”