
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, January 20, 1995                   TAG: 9501200105
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Medium

YOUR IRS FILE SOON MAY SWELL

THE IRS IS PLANNING to add a valuable weapon to its auditors' arsenal: extensive new financial information on almost all of us.

In an effort to catch more tax cheats, the Internal Revenue Service plans to vastly expand the secret computer database of information it keeps on virtually all Americans.

Likely to be included are credit reports, news stories, tips from informants and real estate, motor vehicle and child support records, as well as conventional government financial data.

``Any individual who has business and/or financial activities'' can expect upgraded agency computers to put such information before IRS auditors promptly, according to an IRS notice filed last month.

Although agency officials concede some of the data collected will be inaccurate, taxpayers will not be allowed to review or correct it.

Only when undergoing audits - which the system is designed to target and assist - will taxpayers be able to rebut the system's inaccuracies, said Phyllis DePiazza, chief of the agency's Privacy and Education Branch.

Even then, she acknowledged, taxpayers will not be permitted to see actual raw data about them that the IRS has collected.

The purpose of the system, DePiazza said, is to shrink the $100 billion annual gap between IRS estimates of federal taxes due and tax revenues actually collected. Specifically, the system will help the IRS identify patterns of tax evasion and devise better lists of audit candidates.

The taxpayer database, begun in the 1970s, is being expanded and enhanced as part of an $8 billion IRS computer and software upgrade due to be completed in 2008.

The new IRS system has some appeal - ``Everybody would like the IRS to do a better job of enforcement,'' said Robert McIntyre, director of Citizens For Tax Justice, a Washington group formed to reduce burdens on low- and middle-income Americans.

But the prospect of an intimately detailed federal taxpayer database appalls privacy advocates. ``They're creating dossiers on everybody in America,'' said David Banisar, a policy analyst at the Electronic Privacy Information Center in Washington.

by CNB