Tax mailing has Social Security numbers visible

December 29, 2006

Larry Sandler

When Wisconsin taxpayers pull their packets of 2006 state income tax forms out of their mailboxes, tens of thousands of them will see something even less welcome than the annual reminder of how much money they owe to Madison.

They'll see their Social Security numbers, printed right on the outside of the booklets - where identity thieves might be able to see them.

About 170,000 tax booklets were mailed with Social Security numbers on the address labels because of a computer programming error at a printing company hired by the state, Meredith Helgerson, spokeswoman for the state Department of Revenue, said Friday. That's about 15% of the 1.1 million booklets mailed out to individual taxpayers who file their returns by mail, she said.

The error is limited to taxpayers who filed Form 1, the long form, by mail earlier this year to pay their 2005 state income taxes, Helgerson said. It does not affect individuals who filed electronically or through professional tax preparers; individuals who filed the state's short, EZ or non-resident forms; or businesses, she said.

Now the Revenue Department is scrambling to retrieve undelivered forms from the U.S. Postal Service - and warning affected taxpayers to rush to their mailboxes as soon as possible after today's mail arrives.

If affected taxpayers are out of town and can't reach their mailboxes today, they could ask a trusted relative or friend to pick up their mail for them, Helgerson said. But today should be the last day for taxpayers to be concerned, she noted.

Regular mail won't be delivered Sunday, the postal service's normal day off; Monday, which is New Year's Day; or Tuesday, the national day of mourning for former President Gerald R. Ford, who died this week. By Wednesday, revenue and postal officials expect to have tracked down any undelivered tax booklets, Helgerson said.

"It's a serious breach, for sure," said state Rep. Marlin Schneider (D-Wisconsin Rapids), a leading privacy advocate in the Legislature. "Somebody must have screwed up."

Schneider said he wasn't worried that postal employees would misuse the information. The larger concern is that criminals would take tax booklets from taxpayers' mailboxes and use the Social Security numbers to steal their identities, Schneider and Helgerson said.

Revenue officials haven't determined whether the inadvertent disclosure violates any state law or regulation, Helgerson said, but they agree "that is not appropriate. We don't put Social Security numbers on those labels."

At least not anymore. For years, the Revenue Department mailed out everyone's tax forms with Social Security numbers on the address labels, Schneider recalled, until "we yelled about it and they stopped."

Under pressure from lawmakers and then-Gov. Tommy G. Thompson, the 1998 tax forms were the first to use labels with special coded identification numbers instead of Social Security numbers.

Among this year's forms, the first batch with Social Security numbers in the mailing labels went out Wednesday and arrived Friday, Helgerson said. That's when taxpayers started calling the Revenue Department to complain, she said.

The printing company will be charged for the cost of retrieving the forms and mailing them again with correct labels, Helgerson said. She said she did not know whether the printer would face any other penalties.

In a prepared statement issued Friday night, the Revenue Department said: "The department apologizes to the taxpayers of Wisconsin for this error. Confidentiality of taxpayer information is of the utmost importance to the department. The department is taking steps to make sure that this will never happen again."

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