As discussed in a story in this morning’s Tax Notes, the IRS intends to begin requesting electronic files as part of taxpayer examinations so that it can analyze the “metadata” contained in those files. Metadata, sometimes referred to as “data about data,” generally shows information about a computer file, such as its editing history. The IRS claims that such information “may be relevant” to taxpayer examinations because the information “may support or undermine the credibility of the records offered to substantiate the accuracy of the [taxpayer's] return.” See Chief Counsel Advice 201146017.
To obtain taxpayers’ metadata, the IRS would issue a document request or summons for unaltered electronic copies of taxpayers’ data files, such as are used in their financial and accounting software. These files would contain the metadata that the IRS seeks regarding when and by whom entries to the files were made.
But would the IRS be the only group to access the information contained in these files? (more…)