Privacy Impact Assessment – Chapter Three Withholding
CTW System Overview:
Chapter Three Withholding (CTW) is an application developed to process Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholdings and Form 1042-T, Annual Summary and Transmittal of Form 1042-S. Data is reformatted and downloaded to the Unix Sun E10K where checks for validation, consistency and math are performed. Valid data posts to either the Payer Master File (PMF) or the Information Returns Master File (IRMF). Valid data is also sent to the Unisys mainframe to be reconciled with the extract from the Business Master File (BMF).
System of Records Number(s):
Treasury/IRS 24.030 CADE Individual Master File (IMF),
Treasury/IRS 24.046 CADE Business Master File (BMF),
Treasury/IRS 22.026 Form 1042-S, Index by Name of Recipient
Treasury/IRS 22.061 Information Return Master File (IRMF)
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. Form 1042-S Foreign Person’s U. S. Source Income Subject to Withholding
Form 1042-T Annual Summary and Transmittal of Form 1042-S
The sensitivity assessment reveals that CTW process, stores, and/or transmits Sensitive But Unclassified (SBU) and Privacy Act information that requires protection under the Privacy Act of 1974.
Withholding information about recipients for which monies are withheld may be identified by Recipient TIN (not required), Recipient Name, Street, City, State, Postal Code and sometimes even by Province and Country Code.
Qualified Intermediaries (QI’s) and Non-Qualified Intermediaries (NQI’s)/Flow-Through Entities for which monies are withheld may be identified by QI/NQI Entity TIN, QI/NQI Entity Name, Street, City, State, Postal Code and sometimes even by Province and Country Code.
Payer Information is captured and stored within the system and is identified by Payer Name and Payer TIN.
Transmitter data is captured and stored within the CTW system and may be identified by Transmitter Control Code(TCC), Transmitter Name, Street, City, State and Postal Code.
B. The Chapter Three Withholding System (CTW) does not contain employee categories of Information requiring protection from unauthorized, unintentional disclosure, modification or destruction.
C. The system the application resides on collects the employee log-in information.
D. Chapter Three Withholding System (CTW) does not contain other categories of Information requiring protection from unauthorized or unintentional disclosure.
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. Database Information is provided by a Files Transfer Protocol (FTP) download from the Unisys mainframe processing of the 1042-S and 1042-T process.
CTW0703: valid 1042-S data.
CTW0701: void 1042-S data.
CTW0704: 1042-S data in error.
CTW0702: 1042-T Summary and Transmittal data.
CTW Unpostables: Tickler records of data not posted to the PMF.Computer System Administrators for mainframe operations transmits directly to the CTW's database at TCC.
B & C. Taxpayer information, collected from the IRS Forms 1042-S and 1042-T, is used to grant access to CTW. This includes:
* Withholding Agent EIN
* Withholding Agent name
* Withholding Agent Street address
* Withholding Agent City
* Withholding Agent State
* Withholding Agent Postal Code
* Withholding Agent Province
* Withholding Agent Country Code
* Recipient TIN, if applicable
* Recipient Name
* Recipient Street
* Recipient City
* Recipient State
* Recipient Postal Code
* Recipient Province
* Recipient Country Code
D. Federal agencies that submit data to the CTW system are the Social Security Administration (SSA) and the Railroad Retirement Board (RRB).
E. No State or Local Agencies supply data to the CTW system.
F. No other third party source supplies data to CTW.
3. Is each data item required for the business purpose of the system? Explain.
The data items are taken from Form 1042-S. 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 two agencies who input data into the CTW system are relied upon to review the data they supply to assure it is accurate and in the correct format as specified by Publication 1187 (Specifications for Filing Form 1042S, Foreign Person’s U.S. Source Income Subject to Withholding, Magnetically or Electronically).
Data submitted magnetically or electronically is verified by initial 1042-S and 1042-T processing on the consolidated UNISYS. If fatal error checks are passed, valid data proceeds through the system. If the fatal error tests fail, data will be returned to the filer for correction and resubmission.
Data submitted on paper will be analyzed by Code and Edit at the service center. Instructions must be followed as stated in the IRM (3.21.110) before data is allowed to enter the CTW system.
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 DLN number.
7. Is the data retrievable by a personal identifier such as name, SSN, or other unique identifier?
No. Data residing on the Tier II system will not be retrievable by a personal identifier during the correction process. Documents erroring out for correction will only be retrievable with a Document Locator Number (DLN).
Access to the Data
8. Who will have access to the data in the system (Users, Managers, System Administrators, Developers, Others)?
CTW has identified the following user groups:
a. CTW Users (Philadelphia Submission Processing Center (SPC) functions, such as Code & Edit, ISRP, Error Resolution, Unpostables, Underreporter, Criminal Investigation, Examination, Fraud Detection, Adjustments).
b. CTW TCC SA/DBA’s
c. CTW Development Team
d. CTW Functional Security Coordinator at TCC
e. Statistics of Income Coordinator
f. U.S. Competent Authority (International) Coordinator
9. How is access to the data by a user determined and by whom?
A Form 5081, Information System User Registration/Change Request is submitted, reviewed, and the user is added. A user’s access to the application is terminated when it is no longer required. CTW access is restricted as detailed below:
* CTW TCC SA’s have full access to the application, database system, and data.
* CTW TCC Functional Security Controllers have Read, Write, Execute, and Search access to audit trails and other security control mechanisms.
* CTW Developers have full access to identify system and application controls necessary to maintain system integrity.
The provisions of Internal Revenue Code 6103 are applied by the CTW development staff in the assignment of individual and group permissions.
CTW and the host platform, the Sun Ultra Enterprise 10,000 (E10K) System with the Sun Solaris Operating System, network controls and permissions are set to support CTW. The CTW database at TCC is physically partitioned. User access is restricted to the partition assigned by IRS Form 5081. CTW Developers, the TCC SAs and Functional Security Coordinators can access all CTW Data. The Functional Security Coordinator and SAs monitor the history files for any unauthorized actions on the part of a CTW User.
In addition, all IRS personnel receive annual training on the “Taxpayer Browsing Protection Act of 1997 (UNAX) and certify completion of annual UNAX awareness briefing by signature and supervisory acknowledgement.
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. The Statistics of Income (SOI) access the CTW database to extract bulks of data used in further processing in SOI. The U.S. Competent Authority (International) access the CTW database to extract bulks of data used in further processing in the U.S. Competent Authority.
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. However, please note: Other agencies may have access to the data as part of security reviews, audits, or required assessments conducted on this system. GAO, TIGTA, and other agencies or functions may require access as part of their official oversight audit responsibilities.
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. Data in the CTW system is retained for the period of time required by regulation, currently three years. CTW records are maintained by IRM Control 1.15.8-1. Data in the CTW system is retained for a period of three years by regulation. After a period of three years, storage tapes will be scratched and made available for further use by CTW. The Service Level Agreement Document between SB/SE, as the primary Business Unit responsible for the data collected and TCC, the production site, document the nightly database export procedures, as well as, offline storage/data archiving-backups procedures. The Technical Contingency Planning Document (TCPD) contains information concerning offline storage and the company that is responsible for it.
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. No.
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. No.
17. Can use of the system allow IRS to treat taxpayers, employees, or others, differently? Explain.
All Forms 1042-S and 1042-T filed by taxpayers are processed through CTW. All taxpayers are treated equally. The employees profile number is entered into the system as the user for audit trail purposes. All employees are treated equally. It is unlikely that disparate treatment of individuals or groups will occur. Computer analysis should be used to improve compliance and better serve taxpayers.
18. Does the system ensure "due process" by allowing affected parties to respond to any negative determination, prior to final action?
Yes. The CTW system performs validation checks of tax treaty rates and corrects any incorrect reporting.
19. If the system is web-based, does it use persistent cookies or other tracking devices to identify web visitors?
This system is not web-based.
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