Disclosure of certain return information with respect to identity theft

(a)

In general

Subsection (l) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(23)

Disclosure of return information in certain cases of identity theft

(A)

In general

If the Secretary has reason to believe that there has been a fraudulent use of a social security account number on a statement described in section 6051— (i)the Secretary shall disclose to the individual who was validly assigned such social security account number— (I)that the Secretary has reason to believe that the social security account number assigned to such individual has been fraudulently used in the employment context, (II)that the Secretary has made the disclosure described in clause (ii) to the Director of the Federal Bureau of Investigation and the Attorney General with respect to such fraudulent use, and (III)such other information (other than return information) as the Secretary determines, in consultation with Federal Trade Commission, would be helpful and appropriate to provide to a victim of identity theft, and (ii)the Secretary shall disclose to the Director of the Federal Bureau of Investigation and the Attorney General— (I)such social security account number, (II)that the Secretary has reason to believe that such social security account number has been fraudulently used in the employment context, and (III)the taxpayer identity information of the individual who was assigned such social security account number, the individual believed to have fraudulently used such social security account number, and the employer who made the statement described in section 6051 which included such social security account number. (B)

Restriction on disclosure to law enforcement

(i)

Disclosure to other law enforcement officials

The Director of the Federal Bureau of Investigation and the Attorney General may disclose information received under subparagraph (A)(ii) to appropriate Federal, State, and local law enforcement officials. (ii)

Restriction on use of disclosed information

Return information disclosed under subparagraph (A)(ii) may be used by Federal, State, and local law enforcement officials only for purposes of carrying out criminal investigations or prosecutions. (iii)

Memorandum of understanding

For purposes of this paragraph, any return information disclosed under subparagraph (A)(ii) may not be provided to any State or local law enforcement official until such official has entered into a memorandum of understanding with the Secretary that includes the following terms and conditions: (I)Confidentiality of returns and return information and prohibitions on disclosure described in subsection (a)(3). (II)Safeguards, restrictions on access, and recordkeeping requirements described in subsection (p)(4). (III)Application of penalties for unauthorized disclosure of returns and return information under section 7213(a)(2). (IV)Any additional terms and conditions deemed appropriate by the Secretary.

(b)

Prevention of identity theft

In the case of an employee for whom the Commissioner of the Social Security Administration has reason to believe that the social security number included on any statement described in section 6051(a) of the Internal Revenue Code of 1986 with respect to such employee is not the correct social security number for such employee, the Commissioner shall provide notification to the employer for such employee which includes— (1)the name of the employee and the social security number included on such statements; and (2)relevant information regarding the availability of the Social Security Number Verification Service for verification of social security numbers. (c)

Conforming amendments related to disclosure

(1)

Confidentiality

Paragraph (3) of section 6103(a) of such Code is amended by striking or (21) and inserting (21), or (23). (2)

Procedures and recordkeeping related to disclosures

Paragraph (4) of section 6103(p) of such Code is amended by striking or (20) each place it appears and inserting (20), or (23). (3)

Unauthorized disclosure or inspection

Paragraph (2) of section 7213(a) of such Code is amended by striking or (21) and inserting (21), or (23).

Penalties for tax-related identity theft

(a)

In general

Section 1028A(c) of title 18, United States Code, is amended— (1)by redesignating paragraphs (8) through (11) as paragraphs (10) through (13), respectively; and (2)by inserting after paragraph (7) the following new paragraphs:

(8)section 286 (relating to conspiracy to defraud the government with respect to claims), section 287 (relating to false, fictitious, or fraudulent claims), section 371 (relating to conspiracy to commit an offense or to defraud the United States), section 1001 (relating to statements or entries), section 1341 (relating to frauds and swindles), section 1342 (relating to a fictitious name or address), section 1343 (relating to fraud by wire, radio, or television), or section 1344 (relating to bank fraud), if the felony violation is a tax-related offense punishable under such section; (9)section 7206 of the Internal Revenue Code of 1986 (relating to fraud and false statements);

(b)

Penalty for misappropriation of tax identification numbers

(1)

In general

Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

6720D.

Misappropriation of tax identification number

In addition to any penalty provided by law, any person who knowingly or willfully misappropriates another person's tax identification number in connection with any list, return, account, statement, or other document submitted to the Secretary shall pay a penalty of $5,000.

(2)

Conforming amendment

The table of sections for part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item:

Sec. 6720D. Misappropriation of tax identification number..

(3)

Effective date

The amendments made by this subsection shall apply to returns and information submitted after the date of the enactment of this Act.