IRS/FBI story re Internet

["E. ALLEN SMITH" <EALLENSMITH@ocelot.Rutgers.EDU>]

From:	IN%"educom@elanor.oit.unc.edu"  9-JAN-1996 20:19:54.25
To:	IN%"edupage@elanor.oit.unc.edu"  "EDUCOM Edupage Mailing List"

IRS, FBI EYE INTERNET WITH SUSPICION
The Clinton administration's reluctance to ease up on export controls for
encryption software stems in part from pressure from U.S. law enforcement
agencies, and the owner of a New York-based software company sees heavy
lobbying behind the government's desire to regulate content on the Internet:
"I think the Internal Revenue Service and the FBI are watching this one very
carefully.  They wouldn't mind seeing the government set a precedent for
deciding what can and cannot go on the Internet."  The IRS fears that easy
access to cheap and sophisticated encryption software will make income- and
sales-tax evasion too easy, and the FBI worries about criminal and terrorist
plots hatched in cyberspace, but some observers say government control
tactics are too little, too late.  A Hudson Institute economist says,
"Electronic money gets really interesting when you realize how impossible it
is to put national walls around it, mandate the use of national currencies,
or require that transactions go through banks...  The country will have no
practical choice but to rely more than ever on voluntary tax compliance.
That means tax rates will have to be kept as low as possible on people and
on businesses."  (Investor's Business Daily 9 Jan 96 B1)

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