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No Hiding Place For Taxpayers,
by Jeremy Hetherington-Gore, Tax-News.com, London
Wednesday, October 08, 2008
This week's admission by German telecommunications company, Deutsche Telekom,
that subsidiary T-Mobile lost confidential data on 17 million clients, including
telephone numbers, dates of birth, addresses and email addresses, is merely
the latest in a long line of personal data leaks that undermine belief in the
security of data-bases.
Last month the Norwegian Tax Authority mistakenly included personal identity
numbers on CDs of tax returns for effectively the entire population which it
routinely sends to the newspapers under freedom of information laws. The personal
identity number contains the birth date, gender and residence status of each
individual, and could be used in identity theft. The Tax Authority asked for
the CDs back, but Norwegian commentators say that the data had already been
widely copied. Apparently 'someone forgot to check' the CDs before they were
sent out.
But the palm for losing data has to be handed to the UK's HMRC. In 2007 two
CDs with 25 million sets of child benefit records were put into the general
mail and disappeared. They contained names, addresses, dates of birth, child
benefit numbers, National Insurance numbers and bank or building society account
details. Rather unfairly, the Chairman of HMRC was made to fall on his sword.
And in 2005 the parliamentary Public Accounts Committee revealed that housekeeping
software installed by the Inland Revenue to delete old cases also deleted almost
one million live tax records between 1997 and 2000.
Those incidents were accidental, unlike the theft of a CD from LGT Treuhand,
a subsidiary of Liechtenstein's LGT bank, in 2002, containing client details
for 1,400 confidential accounts, which is said to have been sold for EUR4.5mn
to the German intelligence services. Then in 2005, in a separate theft, 2,325
account statements were stolen from Liechtensteinische Landesbank AG, which
the bank tried to buy back for up to CHF12m.
Also not accidental were the court cases in which the US and UK tax authorities
obtained court orders forcing a wide range of banks to divulge the identities
of hundreds of thousands of offshore account holders, who they are now pursuing
for back taxes.
The bottom line is, if you don't want your data falling into the wrong hands,
don't give it away to anyone! But that is impossible in this day and age for
a law-abiding person, so you might as well accept that there will be no secrets
in future. And who knows, you may be a vice-presidential candidate one day,
in which case your tax returns will be on the front page of the Wall Street
Journal. No hiding place!
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