Privacy experts are howling over a little-known proposal by the IRS to electronically release taxpayers' records to third parties such as credit bureaus and mortgage brokers.

An all-electronic system would "turn a trickle into a flood" of requests for sensitive tax records, warns Evan Hendricks, editor of Privacy Times.

By the Internal Revenue System's own estimate, annual requests for tax records to be sent to third parties could jump to more than 50 million from the current 6 million, says Sherrill Fields, director for electronic program enhancement.

Much of that increase would come from a handful of government agencies, such as the Department of Education, which uses tax records to process student loans.

Tax information released to third parties must be requested by the taxpayer. After the IRS receives the request, it mails or hand-delivers the records directly to the third party. The process can take two weeks.

But under the electronic system, which will be tested in California next year, the process will take just 24 hours.

Aide’s message sets off hail of replies, bogging down system

Congress was treated to a real-world demonstration of e-mail’s potential evils last week when a congressional aide sent out a mass mailing that touted a weight loss pill. That one slice of spam touched off a torrent of replies that bogged down the U.S. House of Representatives’ e-mail system — and generated new support for anti-spam legislation.

THE EPISODE, as related Monday by the Capitol Hill publication Roll Call, began Thursday when a press aide to Rep. Alcee Hastings, D-Fla., sent a message recommending a weight loss pill to colleagues on the House e-mail system. The problem was that the message went out to hundreds, perhaps thousands of people via an e-mail distribution list, said Jason Poblete, a spokesman for the House Administration Committee, which is in charge of the chamber’s computer network.

Roll Call identified the aide as Cher Castillo, a recent addition to Hastings’ staff. In a telephone conversation with MSNBC on Monday, Castillo said she was not authorized to discuss the episode. Other inquiries were referred to press secretary Lillian German, who was unavailable for immediate comment.

Poblete said the message sparked e-mail protests, such as “get me off this list” and “don’t send any more e-mail like this.” But when the messages were sent as “reply all,” they went to every recipient of the original e-mail, literally compounding the problem.

Something good may come out of these Y2K fears after all.

A US government report says that attention to fixing the calendar rollover on older computer systems may provide an excellent test of the nation's ability to protect its critical networks from terrorists and hostile nations.

Monday's General Accounting Office report, "Critical Infrastructure Protection -- Comprehensive Strategy Can Draw on Year 2000 Experiences," urges government and industry to parlay their Y2K debugging tactics into dealing with more worrisome threats.

"The challenges associated with the Year 2000 date conversion problem are examples of the broader and longer term challenges that our nation faces in protecting our computer-supported critical infrastructure from hostile attacks," the report said. "While differences exist, many of the efforts that have been undertaken to manage and remedy the Year 2000 problem can also be applied to these longer term challenges."

Travel site Travelocity Monday acquired a majority stake in fellow travel firm Preview Travel Inc. and will incorporate Preview Travel's operations under the Travelocity name.

Under terms of the deal, Travelocity, a division of Sabre Holdings Corp. (TSG), will pay $50 million in cash for a 70 percent stake in Preview Travel (PTVL), and the two companies will combine services under the Travelocity name.

Terrell B. Jones, president of Travelocity.com, will be the president and CEO of the new company, and James Hornthal, founder and chairman of Preview Travel, Inc., will serve as vice chairman.

The merger combines two leaders in the online travel industry, said Krista Pappas, senior analyst for Gomez Advisors. Travelocity.com has approximately 8.7 million members, while Preview Travel currently has 9 million members.

"It's been pretty clear that Preview, Travelocity and Expedia have been the major players in the online travel space," she said. "Now I think with new deals with AOL & Yahoo for Preview and Travelocity through this merger, it clearly gives them a lead in the travel space. And we'll start seeing a lot more consolidation going on with the smaller players. . ."

Pappas referred to the five-year, $200 million agreement announced Monday with America Online, Inc. (AOL) in which Travelocity.com will be the exclusive reservations engine for all travel-related services within the AOL service, AOL.com, CompuServe, Digital City and Netscape. Also, Yahoo! Inc. (YHOO) extended its existing contract with Travelocity.com and will invest in the combined company.