Privacy Impact Assessment – Project 1446
Project 1446 System Overview
A U.S. partnership with foreign investors must pay tax on the amount of Effectively Connected Income (ECI) allocable to the foreign investor. The tax rate is 38.6% (39.1% in tax year 2002, or 39.6% for tax year 2001 and prior) for a foreign individual investor or 35% for a foreign business investor. This U.S. partnership remits the tax to the Internal Revenue Service on a quarterly basis with Form 8813.
Annually, the partnership must file a Form 8804 to report the total ECI and tax. The Partnership must also attach to Form 8804, a Form 8805 for each foreign partner showing their share of ECI, and the total tax credit. Project 1446 database is used to process the Foreign Partnership tax information off of Form 8804, 8805, and 8813. Users of the system manually enter Forms 8804, 8805, 8813 (payment information). The system is available for researching filing and payment information.
System of Records Number(s)
Treasury/IRS 22.027 Foreign Information System
Treasury/IRS 34.037 IRS Audit Trail and Security Records System
Treasury/IRS 42.027 Data on Taxpayers Filing on Foreign Holdings
Treasury/IRS 24.046 CADE Business Master File
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. The Withholding Agent – (the entity that withholds taxes on non-wage income)
Partnership Employer Identification Number (EIN), Tax Year Ending, Agent EIN, Agent Name, Address, City, State, Country, and Zip Code.
Country Code – Country, Code, and Treaty Code.
Form 8804 – Partnership EIN, Document Locator Number (DLN), Tax Year Ending, Received Date, Failure to File Form 8804 Penalties, Failure to File Form 8805 Penalties, Failure to Pay Penalties, Interest, Extended Received Date, Extended Due Date, Extended Payment and DLN, Number of Non-corporate Foreign Partners Paper or Tape, Number of corporate Foreign partners Paper or Tape, Non-corporate Foreign Partners Effectively Connected Taxable Income, Form 8804 Non-corporate Foreign Partners Effectively Connected Taxable Income, Corporate Foreign Partners Effectively Connected Taxable Income, Form 8804 Corporate Foreign Partners Effectively Connected Taxable Income, Total Tax Owed, Section 1446 Quarterly Payments, Section 1446 Payments by Other Partnerships, Section 1445(a) Tax Withheld by Partnership, Section 1445(e)(1) Tax Withheld by Partnership, Estimated Tax Payments, Total Credits, Overpayment Amount, Payment with Form 8804, Credit to Next Year, Refund, and Remarks.
Form 8805 – Partnership EIN, Partner Taxpayer Identification Number (TIN), DLN, Tax Year Ending, Case Status, Input Date, Received Date, Total Effectively Connected Income, Exemption Indicator, Section 1446 Quarterly Payments, Section 1446 Payments by Other Partnerships, Section 1445(a) Tax Withheld by Partnership, Section 1445(e)(1) Tax Withheld by Partnership, Estimated Tax Payments Payment with Form 8804, Section 1446 Tax Reported, and Remarks.
Partner – Partnership EIN, Partner TIN, Account Number, Country Code, Partner Type, Partner Name, Address, City, State, Country, and Zip Code. Partnership – Partnership EIN, Name, Address, City, State, Country, and Zip Code.
Payment – Partnership EIN, Tax Year, Received Date, Payment Amount, DLN, and Remarks.
B. The remarks area contains the last five digits of the employee profile number. The number is furnished by the employee, it is used to see when and who did the last action in case there is a problem.
The field cannot be searched and is not used for evaluative purposes. The employee supplied number is not included in Audit Trail information. However, the users information appears in a Contact table which has their information, and their login id is attached to the return document record.
C. Upon signing onto the system, the application memorizes the employee log-in information for use as an Audit Trail. The system the application resides, which is the XXXXXX system in XXXXXXX collects the employee log-in information.
D. Project 1446 does not contain data not collected from the taxpayer or the employee. All data except the computed penalties, interest, and last five digits of the employee profile number are obtained from Forms filed by the taxpayer and payments made by the taxpayer.
E. none
F. none
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. Since Form 8804 and 8813 is now on the Business Master File (BMF) we no longer record these documents in the Project 1446 application, or document any penalties or interest. The Form 8805 is the only document used to populate the database. The DLN (98546) is stamped onto the F8805 by the IRS. Both the DLN and the data from the F8805 is obtained from them.
B. All data elements except the computed penalties and last five digits of the employee profile number are obtained from Forms filed by the taxpayer and payments made by the taxpayer.
C. The last five digits of the employee profile number are obtained from the employee.
D. No other Federal Agencies provide data for Project 1446.
E. No State or Local Agencies provide data for Project 1446.
F. No Other third party sources provide data for Project 1446.
3. Is each data item required for the business purpose of the system? Explain.
The data items are taken from Forms 8804, 8805, and 8813. All of the data items are necessary to process the Forms for the business purpose of the system.
4. How will each data item be verified for accuracy, timeliness, and completeness?
The data items are manually entered into the Project 1446 database. There are several validation checks within the database for data verification. The tax examiner manually verifies each item for accuracy, timeliness, and completeness, prior to input. In addition, individual quality review and Process Analysis System (PAS) reviews are performed for accuracy, timeliness and completeness.
5. Is there another source for the data? Explain how that source is or is not used. No
6. Generally, how will data be retrieved by the user?
The data is generally retrieved by partnership EIN, or DLN number.
7. Is the data retrievable by a personal identifier such as name, SSN, or other unique identifier?
Yes, data is retrievable by Taxpayer Name, DLN, Tax Period, or TIN number. It is not retrievable by employee profile number.
Access to the Data
8. Who will have access to the data in the system (Users, Managers, System Administrators, Developers, Others)?
The Users, Manager, System/Database Administrator, and the Headquarters Tax Analyst will have access to the data in the system. Access is granted on a need to know requirement. Users of the system process Foreign Partnership tax information (Form 8804), the distribution to the foreign partner (Form 8805), and installment payment (Form 8813).
Only users and managers, with a need to know, will gain access to the data. A Form 5081, Information System User Registration/Change Request is submitted, reviewed, and signed by management so the user can be added. A user’s access to the application is terminated when it is no longer required.
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.
Yes. All Form 8805 data is extracted and provided to the Office of Statistics of Income (SOI), Enterprise Data Warehouse (EDW), and the Information Return Master File (IRMF) through File Transfer Protocol (FTP) using the Enterprise File Transfer Utility (EFTU). The SOI system is on an Oracle Platform on a SUN System.
11. Have the IRS systems described in Item 10 received an approved Security Certification and Privacy Impact Assessment? Yes.
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?
The production user or business owner may request a special purging of the application in order to optimize its full capacity for efficient operation. All taxpayer electronic file data is destroyed when it has reached the 6th year after the end of the processing year as required by the IRM 1.15.29 The records are extrapolated and then erased/deleted from the UNIX box. It cannot be recovered. Refer to IRM 1.15.29, Exhibit 1.15.29-1, Item 56 Job No. N1-58-95-1.
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.
The system will be used to identify or locate Foreign Partnerships and Partners. The business purpose is to determine filing and payment information. The system cannot identify or locate employees. The last five digits of the employees profile number are entered into the remarks field. The remarks field cannot be searched and is not used for evaluative purposes.
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 will be used to monitor the filing and payment information of Foreign partnerships and partners. The business purpose is to determine filing and payment information. The system cannot monitor employees. XXXXXXXXXX XXXXXXXXXXX XXXXXXXXXXXX XXXXXXXXXX.
UNAX training is also provided to inform users of the statutory rules governing the IRS’ policy on unauthorized access and inspection of records by IRS employees. UNAX training is mandatory for all IRS employees and each employee is certified annually.
17. Can use of the system allow IRS to treat taxpayers, employees, or others, differently? Explain.
All Forms 8804, 8805, and 8813 filed by taxpayers are processed through Project 1446. All taxpayers will be treated equally. XXXXXXXXXX XXXXXXXXXXX XXXXXXXXXXXX XXXXXXXXXX. All employees are 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 about taxpayers or employees.
19. If the system is web-based, does it use persistent cookies or other tracking devices to identify web visitors?
The system is not web-based.
|
