Privacy Impact Assessment – Form 1042S Program Report Spreadsheet
1042 System Overview
This system maintains records necessary to effectively administer the back-up withholding laws and regulations. Form 1042 is the annual taxable return used by withholding agents to report tax withheld on U.S. source income paid to certain nonresident alien individuals, and corporations. The withholding agent issues a Form 1042S, “Foreign Person's U.S. Source Income Subject to Withholding. The 1042S Program is a monthly report of interest on International returns processed at Philadelphia Service Processing Center (PSPC). From this program a mail out is sent to taxpayers for filing the next years return. PSPS is the only Center that processes this work.
System of Record Number(s)
Treasury/IRS 22.026 Form 1042S Index by Name of Recipient
Treasury/IRS 34.037 IRS Audit Trail and Security Records System
Data in the System
1. Describe the information (data elements and fields) available in the system in the following categories:
A. Taxpayer
B. Employee
C. Audit Trail Information (including employee log-in info)
D. Other (Describe)
a. Data elements obtained from Form 1042S are address, zip, Taxpayer TIN/EIN, Name, Gross Income, and U.S. Federal Tax Withheld, and country. The 1042S Program contains no employee information.
b. IRS standard Audit Trail applications apply, requiring users to log-in, be tracked and held accountable.
D. N/A
2. Describe/identify which data elements are obtained from files, databases, individuals, or any other sources.
A. IRS
B. Taxpayer
C. Employee
D. Other Federal Agencies (List agency)
E. State and Local Agencies (List agency)
F. Other third party sources (Describe)
a. All information is obtained from Form 1042S as prepared by withholding agent.
b. Information is obtained from foreign person who has the U.S. source income that is subject to withholding.
c. The 1042S Program contains no employee information.
d. No other Federal Agencies provide data for 1042S Program.
e. No State or Local Agencies provide data for 1042S Program.
f. Withholding agent – entire form 1042S
3. Is each data item required for the business purpose of the system? Explain.
Yes. Each data item is necessary to complete the 1042S report to effectively administer the back-up withholding laws and regulations that pertain to foreign persons with U.S. source income subject to withholding. It was designed to provide an audit trail of the processing for the monthly transfer of monies. The data is XXX XXX XXX XXX within PSPC, Submission Processing.
4. How will each data item be verified for accuracy, timeliness, and completeness?
Accounting Control/Services Dept personnel check the data for accuracy, timeliness, and completeness.
5. Is there another source for the data? Explain how that source is or is not used.
No. 1042S dates back to 1957, and is a standard method to account for foreign person’s U.S. source income subject to withholding. The monthly report of interest on International returns processed at PSPC assures timely accurate accounting of the activities associated with 1042S interest.
6. Generally, how will data be retrieved by the user?
Data is retrieved using personal identifiers on the 1042S Entry Form.
7. Is the data retrievable by a personal identifier such as name, SSN, or other unique identifier?
Yes, data is retrievable by name and TIN/EIN on the 1042S Entry Form.
Access to the Data
8. Who will have access to the data in the system (Users, Managers, System Administrators, Developers, Others)?
Accounting Technicians in the Philadelphia Submission Processing Accounting Control/Services Ops, Accounting Control/Services Dept will have access to the data. Access to the data is determined by the manager based on a user’s position and need-to-know.
9. How is access to the data by a user determined and by whom?
Access to the data is determined by the manager based on a user’s position and need-to-know. The manager will request a user be added. They must fill out Form 5081, Information System User Registration/Change Request, to request access to the application. A user’s access to the data terminates when it is no longer required. Criteria, procedures, controls, and responsibilities regarding access are documented in the Information Systems Security Rules on Form 5081.
10. Do other IRS systems provide, receive, or share data in the system? If YES, list the system(s) and describe which data is shared. If NO, continue to Question 12.
Data in Form 1042 “Annual Withholding Tax Return for U.S. Source Income of Foreign Persons must be completed by each withholding agent who files a 1042S.
11. Have the IRS systems described in Item 10 received an approved Security Certification and Privacy Impact Assessment? No.
12. Will other agencies provide, receive, or share data in any form with this system?
No.
Administrative Controls of Data
13. What are the procedures for eliminating the data at the end of the retention period?
Forms 1042S uses Records Control Schedule for Service Center Operations IRM 1.15.2 CH22, Exhibit 1.15.29-1(Cont. 14), Item 56(1)(a)&(b). The data will be destroyed on or after January 16, six years after the end of the processing year.
14. Will this system use technology in a new way? If "YES" describe. If "NO" go to Question 15. No.
15. Will this system be used to identify or locate individuals or groups? If so, describe the business purpose for this capability.
Yes, the 1042S Entry Form is used to identify or locate individuals or groups who have been sent Form 1042S. A 1042S Annual Report is generated yearly. The report cannot be used to identify or locate individuals or groups.
16. Will this system provide the capability to monitor individuals or groups? If yes, describe the business purpose for this capability and the controls established to prevent unauthorized monitoring.
The system does not provide the capability to monitor individuals or groups.
17. Can use of the system allow IRS to treat taxpayers, employees, or others, differently? Explain.
No, all taxpayers will be treated equally.
18. Does the system ensure "due process" by allowing affected parties to respond to any negative determination, prior to final action?
The system cannot make determinations.
19. If the system is web-based, does it use persistent cookies or other tracking devices to identify web visitors?
The 1042S Program is not a web-based application.
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