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Departmental Offices; Privacy Act of 1974, as Amended

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Departmental Offices, Treasury.


Notice of proposed New Privacy Act System of Records.


In accordance with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C. 552a, the Department of the Treasury, gives notice of a proposed new system of records entitled “Treasury/DO .226—Validating EITC Eligibility with State Data Pilot Project Records.”


Comments must be received no later than August 8, 2011. This new system of records will be effective August 8, 2011 unless the Department receives comments which would result in a contrary determination.


Comments should be sent to the Office of the Fiscal Assistant Secretary, Department of the Treasury, 1500 Pennsylvania Ave., NW., Room 2112, Washington, DC 20220. You may send your comments by electronic mail to In general, the Department will make all comments available in their original format, including any business or personal information provided such as names, addresses, electronic mail addresses, or telephone numbers, for public inspection and photocopying in the Department's library, Room 1428, Main Department Building, 1500 Pennsylvania Avenue, NW., Washington, DC, 20220, on official business days between the hours of 10 a.m. and 5 p.m. You can make an appointment to inspect comments by calling (202) 622-0990. All comments, including attachments and other supporting materials, received are part of the public record and are subject to public disclosure. You should submit only information that you wish to make available publicly.

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Carl Maryott, Senior Financial Program Specialist, Office of the Fiscal Assistant Secretary, Department of the Treasury, (202) 622-1795 (

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The Department of the Treasury (Departmental Offices and the Internal Revenue Service) is conducting a pilot project funded by the Partnership Fund for Program Integrity Innovation (Partnership Fund). The Partnership Fund was established by the Consolidated Appropriations Act, 2010 (Pub. L. 111-117, 123 Stat. 3034, 3171-3172) to fund pilot projects to improve delivery of Federal assistance programs administered through State and local governments, or where Federal-State cooperation could be beneficial. Congress appropriated funds to the Office of Management and Budget (OMB) and authorized it to transfer such funds to appropriate agencies to carry out pilot projects and to provide for the evaluation of such projects. The Department submitted a pilot concept to OMB to assess the usefulness of State-administered benefits data in validating Earned Income Tax Credit (EITC) eligibility, including the identification of individuals who are eligible for but have not claimed the EITC.

The Department proposes to obtain State-administered benefits data for a prior calendar year from up to five States. The pilot would evaluate whether State-administered benefits data could identify both ineligible individuals who receive improper EITC payments and eligible individuals who are not claiming the EITC. The assessment will be conducted separate from, but parallel to, normal Federal EITC operations. The Department will not use the data collected from States to intervene in the current tax filing season to stop improper EITC payments to ineligible individuals or attempt to initiate new claims for eligible individuals. Data from the pilot will not be used to adjust or correct a tax return.

The Department's Internal Revenue Service (IRS) will match the data collected from the States against data contained in IRS databases. The data matching analysis will be conducted in two stages. The first stage will entail automated database matching between information contained in IRS databases and the State-administered benefits data collected from the States to identify the positive and negative EITC eligibility matches. In the second stage, the results of the first stage will be validated by selecting a sample of the positive and negative matches and conducting interviews and individual case file research with State personnel to determine the extent to which the automated database matching may have generated false positives and false negatives. This two stage process will ensure the credibility of the automated results by confirming actual family circumstances and will allow for the development of the most reliable data matching protocol that could be used nationally to improve EITC eligibility determinations and reduce improper tax refund payments.

As required by 5 U.S.C. 552a(r), a report of a new system of records has been provided to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and OMB.

The system of records entitled “Treasury/DO .226—Validating EITC Eligibility with State Data Pilot Project Records ” is published in its entirety below.

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Dated: June 23, 2011.

Melissa Hartman,

Deputy Assistant Secretary for Privacy, Transparency, and Records.

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Treasury/DO .226

System Name:

Validating EITC Eligibility with State Data Pilot Project Records -Treasury/DO.

System Location:

Office of the Fiscal Assistant Secretary, Department of the Treasury, Washington, DC.Start Printed Page 39981

Categories of Individuals Covered By The System:

Individuals who file for State-administered public assistance benefits in States participating in the Department's pilot program.

Categories of Records in the System:

These records include information pertaining to the Department of the Treasury's pilot project “Assessing State Data for Validating EITC Eligibility.” Records include, but are not limited to, the application[s] for State-administered benefits, including subsequent recertification documentation and other documents supporting eligibility for State-administered benefit programs. The records may contain taxpayer names, Taxpayer Identification Numbers, social security numbers, and other representative authorization information.

Authority for Maintenance of the System:

The Consolidated Appropriations Act, 2010 (Pub. L. 111-117, 123 Stat. 3034, 3171-3172); 5 U.S.C. 301; 31 U.S.C. 321.


The purpose of this system is to determine whether data maintained by up to five States in their public assistance and other databases can assist in identifying both ineligible individuals who receive improper Earned Income Tax Credit payments and eligible individuals who are not claiming the EITC.

Routine Uses of Records Maintained in the System Including Categories of Users And Purposes of Such Uses:

Disclosure of returns and return information may be made only as provided by 26 U.S.C. 6103. All other records may be used as described below if the Department determines that the purpose of the disclosure is compatible with the purpose for which the Department collected the records, and no privilege is asserted.

(1) Disclose to the appropriate State agencies responsible for validating results of the data matching initiative with specific individual case file research.

(2) Provide information to a Congressional Office in response to an inquiry made at the request of the individual to whom the records pertain.

(3) Disclose information to a contractor, including a consultant hired by Treasury, to the extent necessary for the performance of a contract.

(4) To appropriate agencies, entities, and persons when: (a) The Department suspects or has confirmed that the security or confidentiality of information in the system of records has been compromised; (b) the Department has determined that as a result of the suspected or confirmed compromise, there is a risk of harm to economic or property interests, identity theft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by the Department or another agency or entity) that rely upon the compromised information; and (c) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the Department's efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.

(5) Disclose information to the National Archives and Records Administration (“NARA”) for use in its records management inspections and its role as an Archivist.

Policies and Practices for Storing, Retrieving, Accessing, Retaining and Disposing of Records in the System:


Paper records and electronic media.


By taxpayer name and Taxpayer Identification Number, social security number, employer identification number, or similar number assigned by the IRS.


Access to electronic records is restricted to authorized personnel who have been issued non-transferrable access codes and passwords. Other records are maintained in locked file cabinets or rooms with access limited to those personnel whose official duties require access. The facilities have 24-hour on-site security.

Retention and Disposal:

Electronic and paper records will be maintained indefinitely until a records disposition schedule is approved by the National Archives and Records Administration.

System Manager(s) and Address:

Deputy Assistant Secretary for Fiscal Operations and Policy, Office of the Fiscal Assistant Secretary, Department of the Treasury, 1500 Pennsylvania Ave., NW., Washington, DC 20220.

Notification Procedure:

Individuals seeking to determine if this system of records contains a record pertaining to themselves may inquire in accordance with instructions appearing at 31 CFR part 1, subpart C, appendix A. Inquiries should be addressed as in “Record Access Procedures” below.

Records Access Procedures:

Individuals seeking access to any record contained in this system of records, or seeking to contest its content, may inquire in accordance with instructions appearing at 31 CFR part 1, subpart C, appendix A. Inquiries should be addressed to Director, Disclosure Services, Department of the Treasury, 1500 Pennsylvania Ave., NW., Washington, DC 20220.

Contesting Records Procedures:

26 U.S.C. 7852(e) prohibits Privacy Act amendment of tax records. For all other records, see “Records Access Procedures” above.

Records Source Categories:

Records in this system are provided by the States' department for public assistance and health services, and/or the departments of revenue for the States participating in the pilot project.

Exemptions Claimed For The System:


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[FR Doc. 2011-17029 Filed 7-6-11; 8:45 am]