Privacy Act of 1974; Exempting a System of Records From Certain Requirements, 41912-41914 [2024-09696]

Agencies

• DEPARTMENT OF THE TREASURY

[Federal Register Volume 89, Number 94 (Tuesday, May 14, 2024)]
[Proposed Rules]
[Pages 41912-41914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09696]


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DEPARTMENT OF THE TREASURY

31 CFR Part 1

RIN 1505-AC84


Privacy Act of 1974; Exempting a System of Records From Certain 
Requirements

AGENCY: Internal Revenue Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, as amended, the Department of the Treasury gives notice of a 
proposed amendment to this part to exempt a new Internal Revenue 
Service (IRS) system of records entitled ``IRS 34.018 Treasury/IRS 
Insider Risk Management Records'' from certain provisions of the 
Privacy Act.

DATES: Comments must be received no later than June 13, 2024.

ADDRESSES: You may submit comments, identified by docket number, 
Regulatory Information Number (RIN), and title, by any of the following 
methods:
    Federal e-rulemaking portal https://www.regulations.gov. Follow the 
Instructions for making comments; or U.S. Mail: Deputy Assistant 
Secretary for Privacy, Transparency, and Records, Department of the 
Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220, Attention: 
Revisions to Privacy Act Systems of Records.
    Instructions: For electronic submissions, type TREAS-DO-2024-0003 
in the search field on the regulations.gov homepage to find this notice 
and submit comments. All submissions received must include the agency 
docket number or RIN. All comments received electronically or on paper 
will be posted without change to https://www.regulations.gov, including 
personal information provided.
    Docket: For access to the docket to read background documents, or 
comments received, go to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Chief Risk Officer, Internal Revenue 
Service, Office of the Chief Risk Officer, Enterprise Risk Management, 
1111 Constitution Ave. NW, Washington, DC 20224-0002; telephone: (801) 
612-4815.

SUPPLEMENTARY INFORMATION: Under 5 U.S.C. 552a(k)(2) (31 CFR 1.36), the 
head of any agency may promulgate rules to exempt any system of records 
within the agency from certain provisions of the Privacy Act if the 
system is investigatory material compiled for law enforcement purposes 
that is not within the scope of 5 U.S.C. 552a(j)(2) (which applies to 
agencies and components thereof that perform as their principal 
function any activity pertaining to the enforcement of criminal laws).
    The IRS is hereby giving notice of a proposed rule to exempt 
``34.018, Treasury/IRS Insider Risk Management Records'' from certain 
provisions of the Privacy Act of 1974, pursuant to 5 U.S.C. 552a(k)(2). 
The proposed exemptions are from sections 552a(c)(3), (d)(1)-(4), 
(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) because the system 
contains investigatory material compiled for law enforcement purposes. 
The following are the reasons this system of records maintained by the 
IRS may be exempted pursuant to 5 U.S.C. 552a(k)(2):
    1. 5 U.S.C. 552a(c)(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon their request. Any such accountings must state the date, nature, 
and purpose of each disclosure of the record and the name and address 
of the recipient. Applying this subsection could alert the subject of 
an investigation of an actual or potential criminal, civil, or 
regulatory violation to the existence of that investigation and reveal 
investigative interest on the part of the IRS. Disclosure of an 
accounting would therefore present a serious impediment to the IRS, 
Treasury, and other law enforcement agencies by permitting the subject 
of record to impede investigations, to tamper with witnesses or 
evidence, and to avoid detection or apprehension, which would undermine 
the entire investigative process. In the case of a delinquent account, 
such release might enable the subject of the investigation to dissipate 
assets before levy. When an investigation has been completed, 
information on disclosures made may continue to be exempted if the fact 
that an investigation occurred remains sensitive after completion.
    2. 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant 
individuals access to records pertaining to them. An exemption from 
these provisions is appropriate because providing access to such 
records could inform the subject of an investigation of an actual or 
potential criminal, civil, or regulatory violation to the existence of 
that investigation and reveal investigative interest on the part of the 
IRS or another bureau or agency. Access to the records could permit the 
subject of a record to impede the investigation, to tamper with 
witnesses or evidence, and to avoid detection or apprehension. In 
addition, permitting access to such information could disclose 
security-sensitive information that could be detrimental to the IRS. 
Agency rules are exempt from the individual access provisions of 
subsection 5 U.S.C. 552a for this system of records, therefore, the IRS 
and Treasury are not required to establish requirements, rules or 
procedures with respect to such access.
    3. 5 U.S.C. 552a(d)(2), (3) and (4), (e)(4)(H), and (f)(4) permit 
an individual to request amendment of a record pertaining to them and 
require the agency to provide notice on how to request an amendment, 
and provide procedures for reviewing, making determinations and the 
appeal process concerning amendments. Because these provisions depend 
on the individual having access to their records, and since this rule 
exempts the IRS system of records from the provisions of 5 U.S.C. 552a 
relating to access to records for the reasons set forth above, these 
provisions do not apply. Furthermore, an exemption from this 
requirement is appropriate because allowing individuals to amend 
certain records that pertain to them would interfere with the mechanism 
of ongoing investigations and law enforcement activities and would 
impose an unreasonable administrative burden by requiring 
investigations to be continually reinvestigated. In addition, 
permitting amendment to such information could disclose security-

[[Page 41913]]

sensitive information that could be detrimental to the IRS.
    4. 5 U.S.C. 552a(e)(1) requires an agency to maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required by statute or 
Executive order. Maintenance of information, as defined in 5 U.S.C. 
552a(a)(3), includes the collection and dissemination of information. 
An exemption from this provision is therefore appropriate because its 
application would require the IRS to make determinations at the time of 
collection about the relevance and necessity of collected information. 
Speculative determinations about the relevance and necessity of 
collected information may be impossible to determine immediately, as 
information that initially appears irrelevant and unnecessary, often 
may prove particularly valuable, therefore application of this 
provision to the system of records could impair the Department's 
ability to collect, utilize and disseminate valuable law enforcement 
information.
    5. 5 U.S.C. 552a(e)(4)(G) and (f)(1) enable individuals to inquire 
whether a system of records contains records pertaining to them An 
exemption from these provisions is appropriate because alerting 
individuals involved in illegal activity that the IRS has, or does not 
have, information that could lead to them being identified for 
investigation allows them to take steps to avoid detection, begin, 
continue, or resume illegal conduct upon learning that they are not 
identified in the system of records; or destroy evidence needed to 
prove the violation, all of which could undermine the IRS's ability to 
carry out its mission.
    6. 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general 
notice listing the categories of sources for information contained in a 
system of records. The application of this provision to the system of 
records could disclose investigative techniques and cause informants to 
refuse to give full information for fear their identities as sources 
could be disclosed, subjecting them to threats or reprisals. This could 
compromise the IRS's ability to complete or continue investigations or 
to share useful information to law enforcement agencies.
    The IRS is also hereby giving notice of a proposed rule to exempt 
``34.018 Treasury/IRS Insider Risk Management Records'' from certain 
provisions of the Privacy Act of 1974, pursuant to 5 U.S.C. 552a(k)(5). 
The proposed exemptions are from provisions 552a(c)(3), (d)(1)-(4), 
(e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f) because the system 
contains investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, Federal contracts, or access to classified 
information.. The following are the reasons this system of records 
maintained by the IRS may be exempted pursuant to 5 U.S.C. 552a(k)(5):
    1. The sections of 5 U.S.C. 552a from which the systems of records 
are exempt generally provide for individuals' access to or amendment of 
records. Such access may reveal the identity of a confidential source 
under an express promise that the source's identity would be held in 
confidence. This could hinder the IRS's ability to obtain future 
confidential sources. In addition, 5 U.S.C. 552a(e)(1) is unduly 
restrictive in requiring the IRS to maintain only such information 
about an individual as is relevant and necessary to accomplish a 
purpose of the agency as required by a statute or executive order, 
since it is often not until well after the investigation that it is 
possible to determine the relevance and necessity of particular 
information.
    2. IRS claims the exemptions 5 U.S.C. 552a(j)(2) and (k)(2) if any 
investigatory material contained in the above-named system becomes 
involved in criminal or civil matters.

Procedural Matters

    As required by Executive Order 12866, it has been determined that 
this proposed rule is not a significant regulatory action, and 
therefore, does not require a regulatory impact analysis. The 
regulation will not have a substantial direct effect on the States, on 
the relationship between the Federal Government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. Therefore, it is determined that this proposed rule does 
not have federalism implications under Executive Order 13132.
    Pursuant to the requirements of the Regulatory Flexibility Act, 5 
U.S.C. 601-612, it is hereby certified that these regulations will not 
have a significant economic impact on a substantial number of small 
entities. The proposed rule imposes no duties or obligations on small 
entities.
    In accordance with the provisions of the Paperwork Reduction Act of 
1995, the Department of the Treasury has determined that this proposed 
rule would not impose new recordkeeping, application, reporting, or 
other types of information collection requirements.

List of Subjects in 31 CFR Part 1

    Privacy.

    The Department of the Treasury proposes to amend part 1 of title 31 
of the Code of Federal Regulations as follows:

PART 1--DISCLOSURE OF RECORDS

0
1. The authority citation for part 1 continues to read as follows:

    Authority:  5 U.S.C. 301, 552, 552a, 553; 31 U.S.C. 301, 321; 31 
U.S.C. 3717.

0
2. Amend Sec.  1.36 by:
0
a. In paragraph (g)(1)(vii), adding an entry to table 16 to paragraph 
(g)(1)(vii) in alpha-numeric order; and
0
b. In paragraph (k)(1)(iii), adding an entry to table 23 to paragraph 
(k)(1)(iii) in alpha-numeric order.
    The additions read as follows:


Sec.  1.36  Systems exempt in whole or in part from provisions of the 
Privacy Act and this part.

* * * * *
    (g) * * *
    (1) * * *
    (vii) Internal Revenue Service.

                    Table 16 to Paragraph (g)(1)(vii)
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                  No.                             Name of system
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                              * * * * * * *
IRS 34.018.............................  Treasury/IRS Insider Risk
                                          Management Records.
 
                              * * * * * * *
------------------------------------------------------------------------

* * * * *
    (k) * * *
    (1) * * *

[[Page 41914]]

    (iii) Internal Revenue Service.

                    Table 23 to Paragraph (k)(1)(iii)
------------------------------------------------------------------------
                  No.                             Name of system
------------------------------------------------------------------------
IRS 34.018.............................  Treasury/IRS Insider Risk
                                          Management Records.
 
                              * * * * * * *
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* * * * *

Ryan Law,
Deputy Assistant Secretary Privacy, Transparency, and Records, U.S. 
Department of the Treasury.
[FR Doc. 2024-09696 Filed 5-13-24; 8:45 am]
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