Inability To Share Data Hampers IRS

Central to the debate about efforts to thwart domestic terrorism is the inability of federal agencies to share information with each other or even within their own bureaucracies, but operations other than national defense also suffer from broken links.

Take, for instance, the relationship between the Citizenship and Immigration Services, a unit of the Department of Homeland Security, and the Internal Revenue Service. Both agencies don't share data with each other to ensure that taxpayers meet their obligations or to determine immigration eligibility. Michael Brostek, director of strategic issues at the Government Accountability Office--the investigative arm of Congress--told a Senate panel Wednesday that steps should be taken to provide such data sharing.

Data sharing could "assist IRS in identifying noncompliant taxpayers and to improve CIS eligibility decisions in granting immigration benefits," Brostek said in prepared testimony before the Senate Finance Committee .

For example, Brostek said, the IRS might use immigration information to help identify taxpayers with no record of recent filing.

The GAO, known until last month as the General Accounting Office, conducted a nationwide study of 413,723 businesses that applied to sponsor immigrant workers between the year 1997 and 2004, and found that 19,972 businesses were unknown to the IRS. Although the IRS does not use Citizenship and Immigration data, Brostek said, information like this can be helpful to select taxpayers for audit or other enforcement efforts.

Similarly, Brostek testified, Citizenship and Immigration could benefit from obtaining IRS data. For instance, 16% of businesses applying to sponsor immigrant workers failed to file tax returns. That could be relevant to a Citizenship and Immigration adjudicator's decision on whether a business can pay wages to an immigrant. IRS officials told GAO they believe that data on taxpayers' income that they use are more accurate and useful for enforcing tax law than Citizenship and Immigration Services data.

But Citizenship and Immigration doesn't have access to IRS data primarily because federal law bans it. Congress could change that. But technical obstacles also exist that would make it difficult for Citizenship and Immigration to access IRS data. Both agencies use different identifiers to track individuals, so their systems couldn't properly interact with each other.

Citizenship and Immigration uses immigrant registration numbers as tracking identifiers; the IRS uses Social Security or employer-identification numbers. Although Citizenship and Immigration's systems capture Social Security and employer identification numbers, if they are provided on applications, the agency doesn't require them to be entered into its systems. Just over 1 million of 4.5 million nationwide immigration records that GAO examined didn't have Social Security or employer identification identifiers that could be matched against the IRS's databases.

In addition, both agencies face privacy concerns regarding the confidentiality of electronically shared immigration and taxpayer data.

The GAO recommended that Homeland Security Secretary Tom Ridge and IRS Commissioner Mark Everson assess the benefits and cost of data sharing, a recommendation endorsed by officials from both agencies.