Your Papers, Please

[John Young <jya@pipeline.com>]

 Network World, November 15, 1997:

 Welcome To Cyberspace. Your Papers Please? 

 About a year ago, the Treasury Department issued a little-noticed discussion 
 document entitled "Selected Tax Policy Implications of Global Electronic 
 Commerce" (www.ustreas.gov). Beavering away in obscurity, these unelected 
 technocrats have almost finished turning the broad "implications" into
detailed 
 regulations. Like most tax rulings, these regulations require no further 
 congressional action to have the force of law. So, while rehabilitated Clinton 
 apparatchik Ira Magaziner was out mesmerizing the digerati with his 
 "Framework for Global Electronic Commerce," promising free markets and no new 
 taxes, the green-eyeshade boys were quietly laying the groundwork to launch
the 
 IRS into cyberspace. ...

 The classic strategy of forcing reporting requirements on key "taxing
points," such
 as banks, clearinghouses and other financial institutions, is not likely to
work as
 the need for intermediation on the Internet will be vastly reduced. In many
ways,
 that's the whole point of electronic commerce. Any reporting burdens must be
 pushed out to the end points of each transaction. How will this be done?
This is
 where Big Brother may arrive big time. 

 Under active consideration is a plan to require taxpayers to obtain digital
IDs for all
 electronic transactions, keeping records that could be examined on audit.
The IDs
 would be issued by IRS certified agencies, subject to government developed
 standards to ensure that proper identity checks are performed before anyone is
 allowed to shop online. The IRS would enforce this by issuing its own digital
 certificates to issuers of digital IDs so that they can electronically
prove that they
 have received IRS certification. The technology they need to make this
happen is
 available. All that's missing are the regulations forcing compliance. So,
stay tuned.
 If you enjoyed the encryption key escrow debate, you'll love this one. 

 Bill Frezza

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