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Elections by Foreign Corporation Application

Privacy Impact Assessment – Elections by Foreign Corporation Application

Elections by Foreign Corporation Application System Overview:

Under certain conditions, Foreign Corporations that own US real property interests and would like to have themselves be considered as a US corporation for income tax purpose can file a general statement (Election) with the IRS under IRC Section 897(i).  This statement must be signed by a responsible corporate officer (or duly authorized Power of Attorney) under penalty of perjury.  No particular format is required for this statement.  The Elections application is used to document the IRS received date, entity information of a Foreign Corporation, and Power of Attorney data to the database. When the Election is either approved or rejected, the IRS uses Service Center/Computer Generated (SC/CG) letters.  These letters are printed and mailed by the production workers to the taxpayer.

System of Records Number(s): 

TREAS/IRS 22.027, Foreign Information System
TREAS/IRS 34.037, IRS Audit Trail and Security Records System
TREAS/IRS 42.027, Data on Taxpayers Filing on Foreign Holdings
TREAS/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. Taxpayer:  Elections program contains the following taxpayer information:
atrny_address1- address line 1 of the attorney
atrny_address2- address line 2 of the attorney
atrny_address3- address line 3 of the attorney
atrny_name- name of the attorney
corp_addres1- address line 1 of the corporation
corp_addres2- address line 2 of the corporation
corp_addres3- address line 3 of the corporation
corp_name- name of the corporation
country_of_inc- Country code of the country where the corporation resides
elect_cntrl_num- control number of the election record
p_amount - payment amount received by IRS
p_contno - control number of the payment record
p_corp - name of the corporation that made payment
p_country - country code of the country where the corporation resides that made payment
p_tin - payment TIN of the corporation
tin - TIN of the corporation

B. Employee:  Elections Program contains the following employee information.
login1 - user ID of the first user on file for this record
login2 - user ID of the first user on file for this record
login3 - user ID of the first user on file for this record
login4 - user ID of the first user on file for this record
login5 - user ID of the first user on file for this record

C. Audit Trail Information
usr_date1 - date the user in login1 performed a function on the record
usr_date2 - date the user in login2 performed a function on the record
usr_date3 - date the user in login3 performed a function on the record
usr_date4 - date the user in login4 performed a function on the record
usr_date5 - date the user in login5 performed a function on the record
usr_func1 - function performed by user in login1 on the record
usr_func2 - function performed by user in login2 on the record
usr_func3 - function performed by user in login3 on the record
usr_func4 - function performed by user in login4 on the record
usr_func5 - function performed by user in login5 on the record


D. Other:  Elections Program contains the following other information:
Acpted - yes/no switch that specifies that the record has been accepted through the system.
Acpted_date - date the record was accepted through
the system
ind_1 - an undefined indicator used for the system
ind_2 - an undefined indicator used for the system
ind_3 - an undefined indicator used for the system
ind_4 - an undefined indicator used for the system
letter_date - date the letter was sent
p_rcvdate - date the payment record was received by the IRS
p_remarks - remarks or comments in the payment log table
rcvd_date - date the record was received by the IRS
letter 3495 control number
letter 3495 FC Inc. place & date indicator
letter 3495 Treaty Art. #FC NDT indicator
letter 3495 Desc. USRPI indicator
letter 3495 Disp. List 12/79-6/80 indicator
letter 3495 Corp. Off. Signed indicator
letter 3495 Bene. Waiver indicator
letter 3495 Consent to be Taxed  indicator
letter 3495 IH Signed consent indicator
letter 3495 Stock stm Req indicator
letter 3495 Prior Disp. Stmt. indicator
letter 3495 Doc. Granting Attorney Authority indicator

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)

2.A. None - Elections is a stand-alone program;
 does not access any IRS files or databases.

2.B. The following Taxpayer information entered in by the user:
Corporation Name
TIN
Country of Incorporation
Corporation Address
Attorney Name
Attorney CAF Number
Attorney Address
Dollar amount

2.C. The employee information entered in by the user:
Contact Employee
Contact I.D. Number
Contact Telephone Number
Contact Tour
User ID
User Function

2.D. None - no Federal agencies provide data for use in the application.

2.E. None - no state or local agencies provide data for use in the system.

2.F. None - no third party sources data is collected.

3.  Is each data item required for the business purpose of the system?  Explain.

Each data element is needed for the purpose of the program.  The program utilizes all the data elements for the Elections application and generation of the appropriate letter.  It also tracks users and functions performed on the application.

4. How will each data item be verified for accuracy, timeliness, and completeness?

Only information that the user/authorized representative provides is used.  The data items are manually entered into the Elections 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 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 the foreign corporation EIN, Name or Election Control number.

7. Is the data retrievable by a personal identifier such as name, SSN, or other unique identifier? 

Yes - The data can be retrieved by a SQL query on the database using the Corporation Name, TIN, or Election Control 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. 

9. How is access to the data by a user determined and by whom? 

Only Users and Managers, with a need to know, will gain access to the data.  Access is gained by having been approved by the user's manager, a functional security coordinator, and the system administrator/security administrator and by entering a password.  A user must fill out form 5081, Information system user registration/change request.  A user's access to the application is terminated when it is no longer required.  This is done in accordance with IRM 25.10.1

The following criteria, procedures and Responsibilities are defined for the users of the Election Program:

The system assures that users without authorization are not allowed access to its data.  IRS workstations require users to identify themselves and provide proof of their identity by user identification. Passwords will be unique to each user. 

Paragraph redacted.

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.

No - other IRS systems do not provide or receive or share data from this application.

11. Have the IRS systems described in Item 10 received an approved Security Certification and Privacy Impact Assessment?  Not Applicable

12.  Will other agencies provide, receive, or share data in any form with this system?

No - no other agencies receive data from this application.

Administrative Controls of Data

13.  What are the procedures for eliminating the data at the end of the retention period?

Records Control Schedule for Tax Administration – International, Exhibit 1.15.26.1, Item 23: Retire to the Federal Records Center 2 years after case is closed; Destroy 12 years after case is closed.

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 system provides the capability to identify and locate through the Internal Audit Trail, which tracks the access made on the Elections system by employee, time, and date. Monitoring is not a capability of this system.

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.

No - This system does not allow IRS to treat taxpayers, employees or others differently.  The Elections applications audit features allow security personnel to track the actions of users with access to the system.

18.  Does the system ensure "due process" by allowing affected parties to respond to any negative determination, prior to final action?

Due Process is not an issue.  Foreign Corporations are either given approval or denied approval to be treated as U.S. Corporations for income tax purposes.  Due Process is reserved for individuals.

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.

Page Last Reviewed or Updated: 01-Apr-2014