Improving Business Statistics Through Interagency Data Sharing Summary of a Workshop (2006) / Chapter Skim
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Part II Background Papers - 5 Data-Sharing History and Legislation: Background Notes--Robert P. Parker
Part II Background Papers - 5 Data-Sharing History and Legislation: Background Notes--Robert P. Parker
Pages 53-78
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Part II Background Papers
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. CIPSEA, however, did not change the provisions of Internal Revenue Code Section 6103, which precludes these agencies from sharing tax return information for statistical purposes.
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Business data are "operating information and financial data and related information about businesses, tax exempt organizations, and government entities." Identifiable form means information "that permits the identity of the respondent to whom the information applies to be reasonably inferred by either direct or indirect means." Statistical purposes are "the description, estimation, or analysis of the characteristics of groups, without identifying the individuals or organizations that comprise such groups." They also include methods and procedures related to the "collection, compilation, processing, or analysis" of data about these groups and the development of related "measurement methods, models, statistical classifications, or sampling frames." Using definitions from the report of the Privacy Protection Study Commission (1977) , the term "research" is used to refer to "any systematic, objective process designed to obtain new knowledge, regardless of whether it is `pure' (aimed at deriving general principles)
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In addition, one of the papers prepared for the conference that led to the report notes the creation of new data sets as a benefit of data sharing. However, there is no mention of the benefits of data sharing to statistical agencies, such as the ability to develop common business registers.
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states that `'a provision that permits data sharing for statistical purposes under controlled conditions be included in the consistent set of statutes and regulations governing the maintenance of federal statistical records" (p.
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. The report discusses the enactment of CIPSEA, noting that the first formal proposal for data sharing under CIPSEA, which involved matching data from BEA's international investment surveys with data from the Census Bureau's Survey of Industrial Research and Development conducted for the National Science Foundation, was announced in June 2003.
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23) : A key element in the Census Bureau's data is its business register, which is constructed with data from the Internal Revenue Service (IRS)
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In fact, BEA continues to fund an updated version of this match, but without the SSA records. Among the papers prepared for this panel, "Privacy, Confidentiality, and Data Sharing" by David McMillen is the most relevant to sharing of business data.
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EFFORTS TO EXPAND DATA SHARING Before 1976 In a 1979 study, GAO reported on the status of efforts of the Census Bureau to create a centralized business listing, or business register, that would be used by the Census Bureau and other statistical agencies to select samples for various surveys (U.S. General Accounting Office, 1979)
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1983 to 1994 After the unsuccessful effort by the Census Bureau to change Title 13 and Section 6103 to allow it to share its business register with other statistical agencies, OMB sought legislation to allow more extensive data sharing, including the sharing of data on individuals. The new effort would include allowing for sharing by more statistical agencies, but it also would provide statutory protection for data collected by all statistical agencies similar to the protection afforded to the Census Bureau by Title 13.
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They also report on the objections of the Treasury Department to increasing access to individually identifiable data for statistical purposes. The authors report that "this aspect of the draft Bill is unacceptable in the opinion of the Department of Treasury because, among other things, it might greatly expand the dissemination of tax return information, attenuate the ability to control such dissemination, and provide insufficient safeguards to prevent further disclosure and erosion of confidentiality." Interestingly, the authors also report that "there also appears to be no provision in the Bill that would aid the research work needed to manage tax policy or tax administration situations.
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It increased statutory protections for the confidentiality of statistical data and permitted sharing of data for statistical purposes among designated agencies. The proposal also called for companion legislation to make complementary changes to provisions set forth in the Statistical Use section of the Internal Revenue Code.
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, the Bureau of Labor Statistics (BLS) , and the Cen sus Bureau to share individually identifiable business data for statistical purposes.
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The complementary proposal has been endorsed by the Trea sury Department and submitted to the Congress. Positions on Changing Section 6103 This section describes the public positions of various organizations with an interest in data sharing, particularly with tax return records.
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Because some of the List data comes from the Internal Revenue Service, the Treasury Department has reservations about using tax information for statistical purposes. However, the Commerce Department plans to introduce proposals for changes to the confidentiality laws and GAO recommends favorable congressional consideration.
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More recent proposals concerning data sharing have called for enact ment of legislation that would allow statistical agencies to share data and information with appropriate safeguards to protect against breaches of confidentiality. These proposals were not adopted, in part because of gen eral concerns that greater data sharing might endanger the privacy of individuals.
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In the past, attempts have been made to pass legisla tion, together with a conforming bill to modify the Internal Revenue Code, allowing such data sharing under carefully crafted agreements between or among statistical agencies. In 1999 such legislation passed the House but stalled in the Senate.
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The information that is available seems to indicate that business taxpayers are willing to allow more access to statistical agencies for some types of tax return information. Private business economists have actively supported data sharing.
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CURRENT INTERAGENCY SHARING OF BUSINESS DATA Among the many examples of interagency sharing of business data, the oldest and most extensive is the use of tax information by the Census Bureau to support its economic statistics programs. With the cooperation of the IRS in modifying questions on tax returns and timely delivery of tax records, the Census Bureau has been able to reduce reporting burden in the quinquennial economic censuses for small businesses, to improve the quality of key data from these censuses, and to develop new statistical programs.
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. Using data collected in the economic censuses, business tax return information from the IRS, and administrative data from the SSA, the SBO provides statistics that describe the composition of U.S.
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the benefits and risks of sharing list information. After an initial round of comparisons had been completed and a report presented to the Federal Economic Statistics Advisory Committee, the project was stopped by the IRS because the Census Bureau may have given BLS staff access to tax return information embedded in the census register.
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BLS prepared this report using data from the BEA's 1989 Annual Survey of Foreign Direct Investment in the United States to identify foreign-owned establishments in the BLS Covered Employment and Wages data. These establishments were then linked to establishments from the BLS Occupational Employment Statistics Survey of Manufacturing Industries for 1989.
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2003 Privacy, Confidentiality, and Data Sharing. Unpublished paper presented at the National Research Council's Committee on National Statistics Confidential Data Access for Research Purposes Workshop, Washington, DC.
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2001 The potential of confidentiality and attitudes toward data sharing by federal agen cies.
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Smith 1983 Access to tax records for statistical purposes.
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