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 PayPal
and Internet
Privacy: The Three
Tests That Must be
Met
As
first reported on
Gambling911.com
Wednesday,
PayPal
had been summoned
by IRS
regarding
offshore
credit cards
requiring them to
produce various
account records
related to the use
of offshore credit
cards.
So
doesn't this smack
in the face of
Internet privacy
violations?
Well,
Edward Leyden,
President of
iMEGA.org, an
online privacy
advocacy group
recently granted
"standing" by a New
Jersey Circuit
Court, points to
three specific tests
that must be met.
"It
is also important to
note that even
though Internal
Revenue Code Section
7609(f) gives the
IRS the authority to
issue so-called
"John Doe"
summonses--such as
it did here--the
Service is required
under the law to
meet three tests:
"The summons must
relate to the
investigation of a
particular person or
ascertainable group
or class of persons.
"The Service must
have a reasonable
basis for believing
that such person or
group or class of
persons may fail or
may have failed to
comply with the tax
laws.
"The information and
identities sought to
be obtained from
summoned records
must not be readily
available from other
sources."
Leyden added that if
the IRS were to
simply issue a third
party summons for a
named individual or
group of
individuals, it
would, under IRS
7609(a), have to
notify the person
within three days so
that the individual
could contest the
summons by seeking
to have it quashed.
"With
a 'John Doe'
summons, the
targets'
opportunities to
fight the summons
are very limited.
For that reason, a
greater burden is
placed on the IRS to
show in a court of
law that it is not
engaged in a
"fishing
expedition."
"Cases such as this
one show how
delicate our rights
to privacy really
are, especially when
we are online, and
why we all need to
be very diligent in
fighting for them
and for all of our
'digital civil
rights'."
----
Christopher
Costigan,
Gambling911.com
Publisher
CCostigan@CostiganMedia.com
Originally published
April 23, 2008 10:50
pm EST
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