[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 531 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 531
To prevent identity theft and tax crimes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 6, 2013
Ms. Castor of Florida (for herself and Mr. Nugent) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on the Judiciary, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To prevent identity theft and tax crimes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tax Crimes and Identity Theft
Prevention Act''.
SEC. 2. EXPEDITED RESOLUTION FROM INTERNAL REVENUE SERVICE FOR IDENTITY
THEFT VICTIMS.
Not later than 90 days after an individual notifies the Secretary
of the Treasury that such individual's identity has been misused by
another person in connection with the internal revenue laws, the
Secretary shall, to the extent practicable, determine the extent to
which the taxpayer's return and return information were affected by
such misuse and shall take such actions as are necessary to correct
such affected return or return information with respect to such misuse.
SEC. 3. DISCLOSURE OF RETURN AND RETURN INFORMATION IN FEDERAL AND
STATE PROSECUTION RELATING TO IDENTITY FRAUD.
(a) In General.--Subsection (k) of section 6103 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(11) Disclosure of certain return information in
connection with identity theft and fraudulent returns.--
``(A) In general.--In the case of an investigation
pertaining to the misuse of the identity of another
person for purposes of filing a false or fraudulent
return of tax, upon receipt of a written request which
meets the requirements of subparagraph (C), the
Secretary may disclose return information to officers
and employees of any Federal law enforcement agency, or
any officers and employees of any State or local law
enforcement agency, who are personally and directly
engaged in the investigation of any crimes implicated
in such misuse, but only if any such law enforcement
agency is part of a team with the Internal Revenue
Service in such investigation.
``(B) Limitation on use of information.--
Information disclosed under this subparagraph shall be
solely for the use of such officers and employees to
whom such information is disclosed in such
investigation.
``(C) Requirements.--A request meets the
requirements of this clause if--
``(i) the request is made by the head of
the agency (or his delegate) involved in such
investigation, and
``(ii) the request sets forth the specific
reason why such disclosure may be relevant to
the investigation.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 6103(a) of such Code is
amended by inserting ``or (k)(11)'' after ``subsection
(i)(7)(A)''.
(2) Paragraph (4) of section 6103(p) of such Code is
amended in the matter preceding subparagraph (A) by inserting
``or (11)'' after ``(k)(10)''.
(3) Paragraph (2) of section 7213(a) of such Code is
amended by inserting ``(k)(11),'' after ``(7)(A)(i),''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures after the date of the enactment of this Act.
SEC. 4. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION WITH
TAX FRAUD.
(a) In General.--Section 7207 of the Internal Revenue Code of 1986
is amended--
(1) by striking ``Any person who willfully'' and inserting
the following:
``(a) In General.--Any person who willfully'',
(2) by striking ``Any person required'' and inserting the
following:
``(b) Information in Connection With Certain Exempt
Organizations.--Any person required'', and
(3) by adding at the end the following:
``(c) Misappropriation of Identity.--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 be fined not less than $25,000
($200,000 in the case of a corporation), or imprisoned not more than 5
years, or both, together with the costs of prosecution.''.
(b) Effective Date.--The amendments made by this section shall
apply to returns and information submitted after the date of the
enactment of this Act.
SEC. 5. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF INFORMATION
BY PREPARERS OF RETURNS.
(a) In General.--Section 6713(a) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``$250'' and inserting ``$1,000'', and
(2) by striking ``$10,000'' and inserting ``$50,000''.
(b) Criminal Penalty.--Section 7216(a) of the Internal Revenue Code
of 1986 is amended by striking ``$1,000'' and inserting ``$100,000''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures or uses after the date of the enactment of this
Act.
SEC. 6. PIN SYSTEM FOR PREVENTION OF IDENTITY THEFT TAX FRAUD.
Not later than 1 year after the date of the enactment of this Act,
the Secretary of the Treasury (or the Secretary's delegate) shall
implement an identify theft tax fraud prevention program under which--
(1) a person who has filed an identity theft affidavit with
the Secretary may elect--
(A) to be provided with a unique personal
identification number to be included on any Federal tax
return filed by such person, or
(B) to prevent the processing of any Federal tax
return submitted in an electronic format by a person
purporting to be such person, and
(2) the Secretary will provide additional identity
verification safeguards for the processing of any Federal tax
return filed by a person described in paragraph (1) in cases
where a unique personal identification number is not included
on the return.
SEC. 7. PREVENTION OF FRAUDULENT REFUNDS.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall establish a fraudulent tax refund prevention program
under which--
(1) additional triggers are added to the refund database to
identify potentially fraudulent tax refunds, and
(2) the legitimacy of the refund claim can be promptly
determined before the distribution of the refund.
(b) Multiple Refunds to Same Debit Card.--The additional triggers
added under subsection (a)(1) shall include identification of requests
for multiple refunds to be paid to the same debit card.
SEC. 8. AUTHORITY TO TRANSFER INTERNAL REVENUE SERVICE APPROPRIATIONS
TO USE FOR TAX FRAUD ENFORCEMENT.
For any fiscal year, the Commissioner of Internal Revenue may
transfer not more than $10,000,000 to the ``Enforcement'' account of
the Internal Revenue Service from amounts appropriated to other
Internal Revenue Service accounts. Any amounts so transferred shall be
used solely for the purposes of preventing and resolving potential
cases of tax fraud.
SEC. 9. LOCAL LAW ENFORCEMENT LIAISON.
(a) Establishment.--The Commissioner of Internal Revenue shall
establish within the Criminal Investigation Division of the Internal
Revenue Service the position of Local Law Enforcement Liaison.
(b) Duties.--The Local Law Enforcement Liaison shall--
(1) coordinate the investigation of tax fraud with State
and local law enforcement agencies;
(2) communicate the status of tax fraud cases involving
identity theft, and
(3) carry out such other duties as delegated by the
Commissioner of Internal Revenue.
SEC. 10. REPORT ON TAX FRAUD.
Subsection (a) of section 7803 of the Internal Revenue Code of 1986
is amended by adding at the end the following new paragraph:
``(4) Annual report on tax fraud.--The Commissioner shall
submit to the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives an
annual report detailing--
``(A) the number of reports of tax fraud and
suspected tax fraud received from State and local law
enforcement agencies in the preceding year, and
``(B) the actions taken in response to such
reports.''.
SEC. 11. STUDY ON THE USE OF PREPAID DEBIT CARDS AND COMMERCIAL TAX
PREPARATION SOFTWARE IN TAX FRAUD.
(a) In General.--The Comptroller General shall conduct a study to
examine the role of prepaid debit cards and commercial tax preparation
software in facilitating fraudulent tax returns through identity theft.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Comptroller General shall submit to the Committee on
Finance of the Senate and the Committee on Ways and Means of the House
of Representatives a report with the results of the study conducted
under subsection (a), together with any recommendations.
SEC. 12. RESTRICTION ON ACCESS TO THE DEATH MASTER FILE.
(a) In General.--The Secretary of Commerce shall not disclose
information contained on the Death Master File to any person with
respect to any individual who has died at any time during the calendar
year in which the request for disclosure is made or the succeeding
calendar year unless such person is certified under the program
established under subsection (b).
(b) Certification Program.--
(1) In general.--The Secretary of Commerce shall establish
a program to certify persons who are eligible to access the
information described in subsection (a) contained on the Death
Master File.
(2) Certification.--A person shall not be certified under
the program established under paragraph (1) unless the
Secretary determines that such person has a legitimate fraud
prevention interest in accessing the information described in
subsection (a).
(c) Imposition of Penalty.--Any person who is certified under the
program established under subsection (b), who receives information
described in subsection (a), and who during the period of time
described in subsection (a)--
(1) discloses such information to any other person, or
(2) uses any such information for any purpose other than to
detect or prevent fraud,
shall pay a penalty of $1,000 for each such disclosure or use, but the
total amount imposed under this subsection on such a person for any
calendar year shall not exceed $50,000.
(d) Exemption From Freedom of Information Act Requirement With
Respect to Certain Records of Deceased Individuals.--
(1) In general.--The Social Security Administration shall
not be compelled to disclose to any person who is not certified
under the program established under section 9(b) the
information described in section 9(a).
(2) Treatment of information.--For purposes of section 552
of title 5, United States Code, this section shall be
considered a statute described in subsection (b)(3)(B) of such
section 552.
SEC. 13. TREASURY REPORT ON INFORMATION SHARING BARRIERS WITH RESPECT
TO IDENTITY THEFT.
(a) Review.--
(1) In general.--The Secretary of the Treasury (or the
Secretary's delegate) shall review whether current Federal tax
laws and regulations related to the confidentiality and
disclosure of return information prevent the effective
enforcement of local, State, and Federal identity theft
statutes. The review shall consider whether greater information
sharing between the Internal Revenue Service and State and
local law enforcement authorities would improve the enforcement
of criminal laws at all levels of government.
(2) Consultation.--In conducting the review under paragraph
(1), the Secretary shall solicit the views of, and consult
with, State and local law enforcement officials.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary shall submit a report with the results of the
review conducted under subsection (a), along with any legislative
recommendations, to the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives.
SEC. 14. GRANTS TO INVESTIGATE AND PROSECUTE STATE AND LOCAL TAX
CRIMES.
(a) Grant Program Authorized.--The Attorney General is authorized
to award grants to State and local law enforcement agencies to assist
such agencies in the investigation and prosecution of tax crimes.
(b) Authorization of Appropriations.--For each fiscal year, there
are authorized to be appropriated to carry out this section, from
amounts made available in each such fiscal year to carry out the Edward
Byrne Memorial Justice Assistance Grants program under part E of title
I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3750 et seq.), $50,000,000.
<all>