I certainly think privacy is very important. And tax information in particular ought to remain completely confidential. If for no other reason than it's one less piece of information that marketers and identity thieves can get a hold of. But some state governments in the US have been releasing sensitive tax information in an attempt to shame high profile individuals into paying their taxes. Making the news rounds is a story of how the Italian government released tax return information not just for people who are past due in paying, but "posted the returns for all 40 million Italians who paid taxes in 2005," according to this report from the New York Times.

Here in the United States, tax return information is confidential under federal law. There are stiff penalties for tax professionals or IRS agents who disclose tax information without your explicit authorization. Some states, however, post the names and addresses of people or businesses who are in arrears in paying their taxes. And even federal tax debts can become a matter of public record if the IRS files a tax lien against you.

So what can you do to ensure that your tax privacy is protected? It helps to begin by identifying who has access to your tax and financial records. Make sure your accountant and family members understand this information is confidential and ought not to be disclosed. Accountants are required to maintain the confidentiality of your records, and so you might want to review any privacy policies they have. Second, make sure your tax records and any electronic files are password-protected, or stored to a secure media. For example, you might want to place PDF documents and tax software files into a ZIP file that's protected by a strong password. And, finally, if you are in a situation where you owe taxes, make sure you set up a payment arrangement as soon as you can. This will help prevent the government from releasing your contact information on their Web site and may prevent them from filing a lien against you.