IRS Probes Tax Prep Software Privacy Practices

The Internal Revenue Service has begun conducting a survey examining the risks associated with electronic tax preparation and filing to gain information on taxpayer data protection practices.

The survey originates with recommendations two years ago by the Government Accountability Office. In a February 2009 report, the GAO recommended that the IRS examine how reliance on commercial tax preparation software used by taxpayers may introduce risks to tax administration in terms of accuracy of tax returns, security, privacy of taxpayer information, and reliability of electronic filing.

The IRS has requested that the non-profit MITRE Corporation, its federally funded research and development center, conduct the risk study. Russell Research, a New Jersey-based independent market research firm, will collect the survey responses.

The survey is voluntary, but the IRS said in an e-mail to tax professionals, tax software developers, and transmitters that it encourages full participation to aid in future policy development. The IRS mailed an information packet ahead of time to selected participants to help them prepare their responses. Participants should expect a call from Russell Research within one week of receiving the packet, the IRS warned. The phone survey on potential risk sources and impacts should take no more than 20 minutes and all responses will be kept “in the strictest of confidence,” the IRS noted.

For a preview of the survey  and Frequently Asked Questions, click here. Russell Research can be contacted at (800) 217-3098 for further questions about the survey.