[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 676 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 676
To prevent tax-related identity theft and tax fraud.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 9, 2013
Mr. Nelson (for himself, Mrs. Feinstein, Mr. Schumer, and Mr. Cardin)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To prevent tax-related identity theft and tax fraud.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Identity Theft and
Tax Fraud Prevention Act of 2013''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--PROTECTING VICTIMS OF TAX-RELATED IDENTITY THEFT
Sec. 101. Expedited refunds for identity theft victims.
Sec. 102. Single point of contact for identity theft victims.
Sec. 103. Enhancements to IRS PIN Program.
Sec. 104. Electronic filing opt out.
TITLE II--SHUTTING DOWN ABUSIVE IDENTITY THEFT AND TAX FRAUD SCHEMES
Sec. 201. Restrictions on ability to use prepaid cards for tax fraud.
Sec. 202. Limitation on multiple tax refunds to the same account.
TITLE III--ADDING CRITICAL NEW PROTECTIONS TO SAFEGUARD SOCIAL SECURITY
NUMBERS
Sec. 301. Restriction on access to the death master file.
Sec. 302. Prohibiting the display of Social Security account numbers on
newly issued Medicare identification cards
and communications provided to Medicare
beneficiaries.
Sec. 303. Prohibition of the display, sale, or purchase of Social
Security numbers.
Sec. 304. Criminal penalties for the misuse of a Social Security
number.
Sec. 305. Civil actions and civil penalties.
TITLE IV--STRENGTHENING LAWS AND IMPROVING ENFORCEMENT AGAINST TAX-
RELATED IDENTITY THEFT
Sec. 401. Criminal penalty for using a false identity in connection
with tax fraud.
Sec. 402. Increased penalty for improper disclosure or use of
information by preparers of returns.
Sec. 403. Authority to transfer Internal Revenue Service appropriations
to use for tax fraud enforcement.
Sec. 404. Local law enforcement liaison.
TITLE V--ACCELERATING TRANSITION TO A REAL-TIME TAX SYSTEM THAT
PROTECTS TAXPAYERS AND REDUCES FRAUD
Sec. 501. Improvement in access to information in the National
Directory of New Hires for tax
administration purposes.
Sec. 502. Plan of action for transitioning to a real-time tax system.
TITLE I--PROTECTING VICTIMS OF TAX-RELATED IDENTITY THEFT
SEC. 101. EXPEDITED REFUNDS FOR IDENTITY THEFT VICTIMS.
Not later than 180 days after the date of enactment of this Act,
the Secretary of the Treasury, or the Secretary's delegate, shall
establish a plan of action to reduce the administrative time required
to process and resolve cases of identity theft in connection with tax
returns, including the issuance of refunds to legitimate taxpayers, to
no more than 90 days, on average.
SEC. 102. SINGLE POINT OF CONTACT FOR IDENTITY THEFT VICTIMS.
Not later than 180 days after the date of enactment of this Act,
the Secretary of the Treasury, or the Secretary's delegate, shall
establish new procedures to ensure that any taxpayer whose return has
been delayed or otherwise adversely affected due to identity theft has
a single point of contact at the Internal Revenue Service throughout
the processing of his or her case. The single point of contact shall
track the case of the taxpayer from start to finish and coordinate with
other specialized units to resolve case issues as quickly as possible.
SEC. 103. ENHANCEMENTS TO IRS PIN PROGRAM.
(a) In General.--The Secretary of the Treasury, or the Secretary's
delegate, shall issue a personal identification number to identity
theft victims as soon as practicable after their true identity has been
established and verified.
(b) Report.--Not later than 360 days after the date of enactment of
this Act, the Secretary of the Treasury shall submit to Congress a
report analyzing the effectiveness of the program described in
subsection (a) in reducing tax fraud.
SEC. 104. ELECTRONIC FILING OPT OUT.
Not later than 180 days after the date of enactment of this Act,
the Secretary of the Treasury, or the Secretary's delegate, shall
implement a program under which a person who has filed an identity
theft affidavit with the Secretary may elect to prevent the processing
of any Federal tax return submitted in an electronic format by a person
purporting to be such a person.
TITLE II--SHUTTING DOWN ABUSIVE IDENTITY THEFT AND TAX FRAUD SCHEMES
SEC. 201. RESTRICTIONS ON ABILITY TO USE PREPAID CARDS FOR TAX FRAUD.
(a) Accounts With Elevated Risk of Identity Theft.--
(1) In general.--Not later than 360 days after the date of
the enactment this Act, the Federal primary financial
regulatory agencies, in consultation with the Secretary of the
Treasury, shall jointly prescribe regulations requiring newly
issued deposit or transaction account numbers, as the case may
be, to be distinguishable between verified accounts and at-risk
accounts.
(2) Definitions.--As used in this section--
(A) the term ``at-risk account'' means any deposit
account or transaction account, including accounts
associated with a prepaid access arrangement, that is
not a verified account;
(B) the term ``primary financial regulatory
agency'' has the same meaning as in section 2(12) of
the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5301(12)); and
(C) the term ``verified account'' means any deposit
account or transaction account in which the identity of
the account holder and any prepaid access customer
associated with the account is verified by--
(i) customer identification procedures that
comply with section 5318(l) of title 31, United
States Code; and
(ii) direct review of an original,
unexpired government-issued form of
identification bearing a photograph or similar
safeguard, such as a driver's license or
passport.
(b) GAO Audit of Debit Card Issuers To Ensure Compliance With
Customer Identification Requirements.--
(1) Review and evaluation.--The Comptroller General of the
United States shall review and evaluate the effectiveness of
the current Customer Identification Program rules implementing
the customer identification program requirements under section
5318(l) of title 31, United States Code, as such rules apply to
the prepaid card industry.
(2) Required considerations.--The review and evaluation
required under paragraph (1) shall--
(A) consider whether weaknesses in current customer
identification programs are contributing to identity
theft and financial loss, particularly with respect to
tax fraud; and
(B) review whether--
(i) current risk-based standards for
customer identification are the best means to
prevent criminal use of prepaid cards and
provide sufficient guidance and certainty to
the sellers and providers of prepaid access;
(ii) current exclusions from customer
identification requirements, such as exclusions
for government benefit programs, are
appropriate; and
(iii) Federal regulatory agencies exercise
adequate oversight and supervision of customer
identification practices of the prepaid card
industry.
(3) Report to congress.--Not later than 360 days after the
date of the enactment this Act, the Comptroller General of the
United States shall submit to Congress a report--
(A) on the findings of the review and evaluation
required under paragraph (1); and
(B) containing any recommendations or proposals for
legislative or administrative action to improve the
customer identification practices of the prepaid card
industry.
SEC. 202. LIMITATION ON MULTIPLE TAX REFUNDS TO THE SAME ACCOUNT.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Treasury, or the
Secretary's delegate, shall issue regulations that restrict the
delivery or deposit of multiple tax refunds from the same tax year to
the same individual account or mailing address.
(b) Exception.--The regulation promulgated under subsection (a)
shall provide that the restrictions shall not apply in cases and
situations where the Secretary determines there is not a likelihood of
tax fraud.
TITLE III--ADDING CRITICAL NEW PROTECTIONS TO SAFEGUARD SOCIAL SECURITY
NUMBERS
SEC. 301. RESTRICTION ON ACCESS TO THE DEATH MASTER FILE.
(a) In General.--Not later than 90 days after the date of the
enactment of this Act, the Commissioner of the Social Security
Administration shall vest all responsibilities for the release of
Social Security death records to non-governmental persons or entities
with the Secretary of Commerce through a memorandum of understanding.
(b) Prohibition.--The Secretary of Commerce shall not disclose
information contained in Social Security death records to any non-
governmental person or entity 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 2 calendar years unless such
person is certified under the program established under subsection (c).
(c) Certification Program.--
(1) In general.--The Secretary of Commerce shall establish
a program--
(A) to certify persons who are eligible to access
the information described in subsection (b) contained
on the Death Master File, and
(B) to perform periodic and unscheduled audits of
certified persons to determine the compliance by such
certified persons with the requirements of the program.
(2) Certification.--A person shall not be certified nor
remain certified under the program established under paragraph
(1) unless--
(A) the Secretary of Commerce determines that
access to the information described in subsection (b)
is appropriate because--
(i) such person has a legitimate interest
in preventing fraud or unauthorized financial
transactions,
(ii) such access will facilitate compliance
by such person with an applicable law,
regulation, court order, or fiduciary duty,
(iii) such access will facilitate timely
and proper administration by such person of an
insurance policy or benefit program, or
(iv) such person is subject to disclosure
requirements under section 502 of the Gramm-
Leach-Bliley Act (15 U.S.C. 6802), section 620
of the Fair Credit Reporting Act (15 U.S.C.
1681r), or any other Federal statute that the
Secretary determines, following notice and
comment rulemaking, provides sufficient
protection against improper disclosure of
information described in subsection (b), and
(B) the Secretary of Commerce verifies that such
person has facilities and procedures in place to
safeguard such information, and experience in
maintaining the confidentiality, security, and
appropriate use of such information.
(3) Fees.--The Secretary of Commerce shall establish under
section 9701 of title 31, United States Code, for the charge of
fees sufficient to cover all costs associated with evaluating
applications for certification and auditing, inspecting, and
monitoring certified persons under the program.
(d) Imposition of Penalty.--
(1) In general.--Subject to paragraph (2), any person who
is certified under the program established under subsection
(c), who receives information described in subsection (b), and
who during the period of time described in subsection (b)--
(A) discloses such information to any other person,
or
(B) uses any such information to commit, or aid or
abet, any criminal offense,
shall pay a penalty of $5,000 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 $500,000.
(2) Exception.--A person who--
(A) is certified under the program established
under subsection (c),
(B) upon request by another person, verifies that
an individual is or is not deceased pursuant to
information contained on the Death Master File, and
(C) does not disclose any additional information
described in subsection (b),
shall not be subject to a penalty pursuant to paragraph (1).
(e) Exemption From Freedom of Information Act Requirement With
Respect to Certain Records of Deceased Individuals.--
(1) In general.--Subsequent to the date on which the
Secretary of Commerce establishes the program described in
subsection (c)(1), the Social Security Administration shall not
be compelled to disclose any information described in
subsection (b) to any non-governmental person or entity who is
not certified under such program.
(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. 302. PROHIBITING THE DISPLAY OF SOCIAL SECURITY ACCOUNT NUMBERS ON
NEWLY ISSUED MEDICARE IDENTIFICATION CARDS AND
COMMUNICATIONS PROVIDED TO MEDICARE BENEFICIARIES.
(a) In General.--Not later than 2 years after the date of the
enactment of this Act, the Secretary of Health and Human Services, in
consultation with the Commissioner of Social Security, shall establish
and begin to implement procedures to eliminate the unnecessary
collection, use, and display of Social Security account numbers of
Medicare beneficiaries.
(b) Newly Issued Medicare Cards and Communications Provided to
Beneficiaries.--
(1) Newly issued cards.--
(A) In general.--Not later than 4 years after the
date of enactment of this Act, the Secretary of Health
and Human Services, in consultation with the
Commissioner of Social Security, shall ensure that each
newly issued Medicare identification card meets the
requirements described in subparagraph (B).
(B) Requirements.--
(i) In general.--Subject to clauses (ii)
and (iii), the requirements described in this
subparagraph are, with respect to a Medicare
identification card, that the card does not
display or electronically store (in an
unencrypted format) a Medicare beneficiary's
Social Security account number.
(ii) Exception.--The Secretary may waive
the requirements under clause (i) in the case
where the health insurance claim number of a
beneficiary is the Social Security number of
the beneficiary, the beneficiary's spouse, or
another individual.
(iii) Use of partial account number.--The
Secretary of Health and Human Services, in
consultation with the Commissioner of Social
Security, may provide for the use of a partial
Social Security account number on a Medicare
identification card if the Secretary determines
that such use does not allow an unacceptable
risk of fraudulent use.
(2) Communications provided to beneficiaries.--Not later
than 4 years after the date of enactment of this Act, the
Secretary of Health and Human Services shall prohibit the
display of a Medicare beneficiary's Social Security account
number on written or electronic communication provided to the
beneficiary unless the Secretary, in consultation with the
Commissioner of Social Security, determines that inclusion of
Social Security account numbers on such communications is
essential for the operation of the Medicare program.
(c) Medicare Beneficiary Defined.--In this section, the term
``Medicare beneficiary'' means an individual entitled to, or enrolled
for, benefits under part A of title XVIII of the Social Security Act
(42 U.S.C. 1395c et seq.) or enrolled for benefits under part B of such
title (42 U.S.C. 1395j et seq.).
(d) Conforming Amendments.--
(1) Reference in the social security act.--Section
205(c)(2)(C) of the Social Security Act (42 U.S.C.
405(c)(2)(C)) is amended--
(A) by moving clause (x), as added by section
1414(a)(2) of the Patient Protection and Affordable
Care Act (Public Law 111-148), 6 ems to the left;
(B) by redesignating clause (x), as added by
section 2(a)(1) of the Social Security Number
Protection Act of 2010 (42 U.S.C. 1305 note), as clause
(xii); and
(C) by adding after clause (xii), as redesignated
by subparagraph (B), the following new clause:
``(xiii) Subject to section 302 of the Identity Theft and Tax Fraud
Prevention Act of 2013, social security account numbers shall not be
displayed on Medicare identification cards or on communications
provided to Medicare beneficiaries.''.
(2) Access to information.--Section 205(r) of the Social
Security Act (42 U.S.C. 405(r)) is amended by adding at the end
the following new paragraph:
``(10) To prevent and identify fraudulent activity, the
Commissioner shall upon the request of the Attorney General or upon the
request of the Secretary of Health and Human Services enter into a
reimbursable agreement with the Attorney General or the Secretary to
provide information collected under paragraph (1) if--
``(A) the requirements of subparagraphs (A) and (B) of
paragraph (3) are met; and
``(B) such agreement includes appropriate provisions to
protect the confidentiality of information provided by the
Commissioner under such agreement.''.
(e) Pilot Program.--
(1) Establishment.--The Secretary shall establish a pilot
program utilizing smart card technology to evaluate--
(A) the applicability of smart card technology to
the Medicare program under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.), including the
applicability of such technology to Medicare
beneficiaries or Medicare providers; and
(B) whether such cards would be effective in
preventing fraud under the Medicare program.
(2) Implementation.--
(A) Initial implementation.--The Secretary shall
implement the pilot program under this subsection not
later than 1 year after the date of enactment of this
Act.
(B) Scope and duration.--The Secretary shall
conduct the pilot program--
(i) in not less than 2 States; and
(ii) for a period of not less than 180 days
or more than 2 years.
(3) Report.--Not later than 12 months after the completion
of the pilot program under this subsection, the Secretary shall
submit to the appropriate committees of Congress and make
available to the public a report that includes the following:
(A) A summary of the pilot program and findings,
including--
(i) the costs or savings to the Medicare
program as a result of the implementation of
the pilot program;
(ii) whether the use of smart card
technology resulted in improvements in the
quality of care provided to Medicare
beneficiaries under the pilot program; and
(iii) whether such technology was useful in
preventing or detecting fraud, waste, and abuse
in the Medicare program.
(B) Recommendations regarding whether the use of
smart card technology should be expanded under the
Medicare program.
(4) Definitions.--In this subsection:
(A) Medicare provider.--The term ``Medicare
provider'' includes a provider of services (as defined
in section 1861(u) of the Social Security Act (42
U.S.C. 1395x(u))) and a supplier (as defined in section
1861(d) of such Act (42 U.S.C. 1395x(d))).
(B) Secretary.--The term ``Secretary'' means the
Secretary of Health and Human Services.
(C) Smart card.--The term ``smart card'' means
identification used by a Medicare beneficiary or a
Medicare provider that includes anti-fraud attributes.
Such a card--
(i) may rely on existing commercial data
transfer networks or on a network of
proprietary card readers or databases; and
(ii) may include--
(I) cards using technology adapted
from the financial services industry;
(II) cards containing individual
biometric identification, provided that
such identification is encrypted and
not contained in any central database;
(III) cards adapting technology and
processes utilized in the TRICARE
program under chapter 55 of title 10,
United States Code, or by the Veterans'
Administration; or
(IV) such other technology as the
Secretary determines appropriate.
SEC. 303. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF SOCIAL
SECURITY NUMBERS.
(a) Prohibition.--
(1) In general.--Chapter 47 of title 18, United States
Code, is amended by inserting after section 1028A the
following:
``Sec. 1028B. Prohibition of the display, sale, or purchase of Social
Security numbers
``(a) Definitions.--In this section:
``(1) Display.--The term `display' means to intentionally
communicate or otherwise make available (on the Internet or in
any other manner) to the general public an individual's Social
Security number.
``(2) Person.--The term `person' means any individual,
partnership, corporation, trust, estate, cooperative,
association, or any other entity.
``(3) Purchase.--The term `purchase' means providing
directly or indirectly, anything of value in exchange for a
Social Security number.
``(4) Sale.--The term `sale' means obtaining, directly or
indirectly, anything of value in exchange for a Social Security
number.
``(5) State.--The term `State' means any State of the
United States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, the United States Virgin Islands,
Guam, American Samoa, and any territory or possession of the
United States.
``(b) Limitation on Display.--No person may display any
individual's Social Security number to the general public without the
affirmatively expressed consent of the individual.
``(c) Limitation on Sale or Purchase.--Except as otherwise provided
in this section, no person may sell or purchase any individual's Social
Security number without the affirmatively expressed consent of the
individual.
``(d) Prerequisites for Consent.--In order for consent to exist
under subsection (b) or (c), the person displaying or seeking to
display, selling or attempting to sell, or purchasing or attempting to
purchase, an individual's Social Security number shall--
``(1) inform the individual of the general purpose for
which the number will be used, the types of persons to whom the
number may be available, and the scope of transactions
permitted by the consent; and
``(2) obtain the affirmatively expressed consent
(electronically or in writing) of the individual.
``(e) Exceptions.--Nothing in this section shall be construed to
prohibit or limit the display, sale, or purchase of a Social Security
number--
``(1) required, authorized, or excepted under any Federal
law;
``(2) for a public health purpose, including the protection
of the health or safety of an individual in an emergency
situation;
``(3) for a national security purpose;
``(4) for a law enforcement purpose, including the
investigation of fraud and the enforcement of a child support
obligation;
``(5) if the display, sale, or purchase of the number is
for a use occurring as a result of an interaction between
businesses, governments, or business and government (regardless
of which entity initiates the interaction), including, but not
limited to--
``(A) the prevention of fraud (including fraud in
protecting an employee's right to employment benefits);
``(B) the facilitation of credit checks or the
facilitation of background checks of employees,
prospective employees, or volunteers;
``(C) the retrieval of other information from other
businesses, commercial enterprises, government
entities, or private nonprofit organizations; or
``(D) when the transmission of the number is
incidental to, and in the course of, the sale, lease,
franchising, or merger of all, or a portion of, a
business;
``(6) if the transfer of such a number is part of a data
matching program involving a Federal, State, or local agency;
or
``(7) if such number is required to be submitted as part of
the process for applying for any type of Federal, State, or
local government benefit or program;
except that, nothing in this subsection shall be construed as
permitting a professional or commercial user to display or sell a
Social Security number to the general public.
``(f) Limitation.--Nothing in this section shall prohibit or limit
the display, sale, or purchase of Social Security numbers as permitted
under title V of the Gramm-Leach-Bliley Act, or for the purpose of
affiliate sharing as permitted under the Fair Credit Reporting Act,
except that no entity regulated under such Acts may make Social
Security numbers available to the general public, as may be determined
by the appropriate regulators under such Acts. For purposes of this
subsection, the general public shall not include affiliates or
unaffiliated third-party business entities as may be defined by the
appropriate regulators.''.
(2) Conforming amendment.--The chapter analysis for chapter
47 of title 18, United States Code, is amended by inserting
after the item relating to section 1028 the following:
``1028B. Prohibition of the display, sale, or purchase of Social
Security numbers.''.
(b) Study; Report.--
(1) In general.--The Attorney General shall conduct a study
and prepare a report on all of the uses of Social Security
numbers permitted, required, authorized, or excepted under any
Federal law. The report shall include a detailed description of
the uses allowed as of the date of enactment of this Act, the
impact of such uses on privacy and data security, and shall
evaluate whether such uses should be continued or discontinued
by appropriate legislative action.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Attorney General shall report to
Congress findings under this subsection. The report shall
include such recommendations for legislation based on criteria
the Attorney General determines to be appropriate.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 30 days after the date on which the final
regulations promulgated under section 5 are published in the Federal
Register.
SEC. 304. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL SECURITY
NUMBER.
(a) Prohibition of Wrongful Use as Personal Identification
Number.--No person may obtain any individual's Social Security number
for purposes of locating or identifying an individual with the intent
to physically injure, harm, or use the identity of the individual for
any illegal purpose.
(b) Criminal Sanctions.--Section 208(a) of the Social Security Act
(42 U.S.C. 408(a)) is amended--
(1) in paragraph (8), by inserting ``or'' after the
semicolon; and
(2) by inserting after paragraph (8) the following:
``(9) except as provided in subsections (e) and (f) of
section 1028B of title 18, United States Code, knowingly and
willfully displays, sells, or purchases (as those terms are
defined in section 1028B(a) of title 18, United States Code)
any individual's Social Security account number without having
met the prerequisites for consent under section 1028B(d) of
title 18, United States Code; or
``(10) obtains any individual's Social Security number for
the purpose of locating or identifying the individual with the
intent to injure or to harm that individual, or to use the
identity of that individual for an illegal purpose;''.
SEC. 305. CIVIL ACTIONS AND CIVIL PENALTIES.
(a) Civil Action in State Courts.--
(1) In general.--Any individual aggrieved by an act of any
person in violation of this Act or any amendments made by this
Act may, if otherwise permitted by the laws or rules of the
court of a State, bring in an appropriate court of that State--
(A) an action to enjoin such violation;
(B) an action to recover for actual monetary loss
from such a violation, or to receive up to $500 in
damages for each such violation, whichever is greater;
or
(C) both such actions.
It shall be an affirmative defense in any action brought under
this paragraph that the defendant has established and
implemented, with due care, reasonable practices and procedures
to effectively prevent violations of the regulations prescribed
under this Act. If the court finds that the defendant willfully
or knowingly violated the regulations prescribed under this
subsection, the court may, in its discretion, increase the
amount of the award to an amount equal to not more than 3 times
the amount available under subparagraph (B).
(2) Statute of limitations.--An action may be commenced
under this subsection not later than the earlier of--
(A) 5 years after the date on which the alleged
violation occurred; or
(B) 3 years after the date on which the alleged
violation was or should have been reasonably discovered
by the aggrieved individual.
(3) Nonexclusive remedy.--The remedy provided under this
subsection shall be in addition to any other remedies available
to the individual.
(b) Civil Penalties.--
(1) In general.--Any person who the Attorney General
determines has violated any section of this Act or of any
amendments made by this Act shall be subject, in addition to
any other penalties that may be prescribed by law--
(A) to a civil penalty of not more than $5,000 for
each such violation; and
(B) to a civil penalty of not more than $50,000, if
the violations have occurred with such frequency as to
constitute a general business practice.
(2) Determination of violations.--Any willful violation
committed contemporaneously with respect to the Social Security
numbers of 2 or more individuals by means of mail,
telecommunication, or otherwise, shall be treated as a separate
violation with respect to each such individual.
(3) Enforcement procedures.--The provisions of section
1128A of the Social Security Act (42 U.S.C. 1320a-7a), other
than subsections (a), (b), (f), (h), (i), (j), (m), and (n) and
the first sentence of subsection (c) of such section, and the
provisions of subsections (d) and (e) of section 205 of such
Act (42 U.S.C. 405) shall apply to a civil penalty action under
this subsection in the same manner as such provisions apply to
a penalty or proceeding under section 1128A(a) of such Act (42
U.S.C. 1320a-7a(a)), except that, for purposes of this
paragraph, any reference in section 1128A of such Act (42
U.S.C. 1320a-7a) to the Secretary shall be deemed to be a
reference to the Attorney General.
TITLE IV--STRENGTHENING LAWS AND IMPROVING ENFORCEMENT AGAINST TAX-
RELATED IDENTITY THEFT
SEC. 401. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION
WITH TAX FRAUD.
(a) In General.--Section 7206 of the Internal Revenue Code of 1986
is amended--
(1) by striking ``Any person'' and inserting the following:
``(a) In General.--Any person'', and
(2) by adding at the end the following new subsection:
``(b) Use of False Identity.--Any person who willfully
misappropriates another person's taxpayer identity (as defined in
section 6103(b)(6)) for the purpose of making any list, return,
account, statement, or other document submitted to the Secretary under
the provisions of this title shall be guilty of a felony and, upon
conviction thereof, shall be fined not more than $250,000 ($500,000 in
the case of a corporation) or imprisoned not more than 5 years, or
both, together with the costs of prosecution.''.
(b) Aggravated Identity Theft.--Section 1028A(c) of title 18,
United States Code, is amended by striking ``or'' at the end of
paragraph (10), by striking the period at the end of paragraph (11) and
inserting ``; or'', and by adding at the end the following new
paragraph:
``(12) section 7206(b) of the Internal Revenue Code of 1986
(relating to use of false identity in connection with tax
fraud).''.
(c) Effective Date.--The amendments made by this section shall
apply to offenses committed after the date of the enactment of this
Act.
SEC. 402. 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. 403. 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. 404. 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 serve as the
primary source of contact for State and local law enforcement
authorities with respect to tax-related identity theft and other tax
fraud matters, having duties that shall include--
(1) receiving information from State and local law
enforcement authorities;
(2) responding to inquiries from State and local law
enforcement authorities;
(3) administering authorized information-sharing
initiatives with State or local law enforcement authorities and
reviewing the performance of such initiatives;
(4) ensuring any information provided through authorized
information-sharing initiatives with State or local law
enforcement authorities is used only for the prosecution of
identity theft-related crimes and not re-disclosed to third
parties; and
(5) any other duties as delegated by the Commissioner of
Internal Revenue.
TITLE V--ACCELERATING TRANSITION TO A REAL-TIME TAX SYSTEM THAT
PROTECTS TAXPAYERS AND REDUCES FRAUD
SEC. 501. IMPROVEMENT IN ACCESS TO INFORMATION IN THE NATIONAL
DIRECTORY OF NEW HIRES FOR TAX ADMINISTRATION PURPOSES.
(a) In General.--Paragraph (3) of section 453(i) of the Social
Security Act (42 U.S.C. 653(i)) is amended to read as follows:
``(3) Administration of federal tax laws.--The Secretary of
the Treasury shall have access to the information in the
National Directory of New Hires for purposes of administering
the Internal Revenue Code of 1986.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
SEC. 502. PLAN OF ACTION FOR TRANSITIONING TO A REAL-TIME TAX SYSTEM.
Not later than 270 days after the date of enactment of this Act,
the Secretary of the Treasury, or the Secretary's delegate, shall
submit to Congress a report analyzing and outlining options and
potential timelines for moving toward a tax system that reduces burdens
on taxpayers and decreases tax fraud through real-time information
matching.
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