About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

110 Iowa L. Rev. Online 1 (2024-2025)

handle is hein.journals/iowalrb16 and id is 1 raw text is: Privacy and Tax Information Collection: A Response to Blank & Glogower Michelle Layser* ABSTRACT: In a recent article published in the Iowa Law Review, Professors Joshua Blank and Ari Glogower proposed a new actor-based information reporting regime that would be more comprehensive, more difficult to avoid, and more equitable than the current approach. However, their proposal would create new privacy risks that are not implicated by the current regime. Privacy values are an important tax policy objective that must be analyzed along with the values of efficiency, equity, and administrability. Accordingly, this Essay draws on theory about tax privacy to analyze the privacy implications of actor-based reporting. The Essay identifies several ways that actor-based information reporting may violate the privacy interests of high-end taxpayers. First, actor-based information reporting would be more coercive than prior law, forcing taxpayers to disclose financial information about themselves to third parties. Second, the proposed regime may break important income tax norms by collecting types of data that are not normally collected under the income tax laws. Third, emerging cybersecurity risks may call for heightened tax privacy and counsel against increased data collection, whereas the proposed regime would do the opposite. The Essay then considers a less invasive alternative to actor-based reporting: an incentive-based approach. It argues that economic incentives can be used to nudge people to share relevant information with the IRS, and it provides three examples. These include incentives for taxpayers to report rent paid to landlords, incentives for tax insurance companies to report information about insured tax positions, and incentives for tax whistleblowers. These policies have privacy advantages over actor-based reporting, but they may perform less favorably in terms of equity, efficiency, or simplicity objectives. Ultimately, tax policymakers must decide whether the privacy risks of an actor-based approach are an acceptable cost of tax enforcement, or whether less invasive policies should be adopted despite their shortcomings. INTRO DU CTION ........................................................................................ 2 Associate Professor, University of San Diego School of Law. The author thanks Profes- sors Joshua Blank and Ari Glogower for their comments on this Essay. 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most