[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[House]
[Pages H1461-H1467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    TAXPAYER BROWSING PROTECTION ACT

  Mr. ARCHER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1226) to amend the Internal Revenue Code of 1986 to prevent 
the unauthorized inspection of tax returns or tax return information, 
as amended.

[[Page H1462]]

  The Clerk read as follows:

                               H.R. 1226

       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 ``Taxpayer Browsing Protection 
     Act''.

     SEC. 2. PENALTY FOR UNAUTHORIZED INSPECTION OF TAX RETURNS OR 
                   TAX RETURN INFORMATION.

       (a) In General.--Part I of subchapter A of chapter 75 of 
     the Internal Revenue Code of 1986 (relating to crimes, other 
     offenses, and forfeitures) is amended by adding after section 
     7213 the following new section:

     ``SEC. 7213A. UNAUTHORIZED INSPECTION OF RETURNS OR RETURN 
                   INFORMATION.

       ``(a) Prohibitions.--
       ``(1) Federal employees and other persons.--It shall be 
     unlawful for--
       ``(A) any officer or employee of the United States, or
       ``(B) any person described in section 6103(n) or an officer 
     or employee of any such person,

     willfully to inspect, except as authorized in this title, any 
     return or return information.
       ``(2) State and other employees.--It shall be unlawful for 
     any person (not described in paragraph (1)) willfully to 
     inspect, except as authorized in this title, any return or 
     return information acquired by such person or another person 
     under a provision of section 6103 referred to in section 
     7213(a)(2).
       ``(b) Penalty.--
       ``(1) In general.--Any violation of subsection (a) shall be 
     punishable upon conviction by a fine in any amount not 
     exceeding $1,000, or imprisonment of not more than 1 year, or 
     both, together with the costs of prosecution.
       ``(2) Federal officers or employees.--An officer or 
     employee of the United States who is convicted of any 
     violation of subsection (a) shall, in addition to any other 
     punishment, be dismissed from office or discharged from 
     employment.
       ``(c) Definitions.--For purposes of this section, the terms 
     `inspect', `return', and `return information' have the 
     respective meanings given such terms by section 6103(b).''
       (b) Technical Amendments.--
       (1) Paragraph (2) of section 7213(a) of such Code is 
     amended by inserting ``(5),'' after ``(m)(2), (4),''.
       (2) The table of sections of part I of subchapter A of 
     chapter 75 of such Code is amended by inserting after the 
     item relating to section 7213 the following new item:

       ``Sec. 7213A. Unauthorized inspection of returns or return 
     information.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to violations occurring on and after the date of 
     the enactment of this Act.

     SEC. 3. CIVIL DAMAGES FOR UNAUTHORIZED INSPECTION OF RETURNS 
                   AND RETURN INFORMATION; NOTIFICATION OF 
                   UNLAWFUL INSPECTION OR DISCLOSURE.

       (a) Civil Damages for Unauthorized Inspection.--Subsection 
     (a) of section 7431 of the Internal Revenue Code of 1986 is 
     amended--
       (1) by striking ``Disclosure'' in the headings for 
     paragraphs (1) and (2) and inserting ``Inspection or 
     disclosure'', and
       (2) by striking ``discloses'' in paragraphs (1) and (2) and 
     inserting ``inspects or discloses''.
       (b) Notification of Unlawful Inspection or Disclosure.--
     Section 7431 of such Code is amended by redesignating 
     subsections (e) and (f) as subsections (f) and (g), 
     respectively, and by inserting after subsection (d) the 
     following new subsection:
       ``(e) Notification of Unlawful Inspection and Disclosure.--
     If any person is criminally charged by indictment or 
     information with inspection or disclosure of a taxpayer's 
     return or return information in violation of--
       ``(1) paragraph (1) or (2) of section 7213(a),
       ``(2) section 7213A(a), or
       ``(3) subparagraph (B) of section 1030(a)(2) of title 18, 
     United States Code,

     the Secretary shall notify such taxpayer as soon as 
     practicable of such inspection or disclosure.''
       (c) No Damages for Inspection Requested by Taxpayer.--
     Subsection (b) of section 7431 of such Code is amended to 
     read as follows:
       ``(b) Exceptions.--No liability shall arise under this 
     section with respect to any inspection or disclosure--
       ``(1) which results from a good faith, but erroneous, 
     interpretation of section 6103, or
       ``(2) which is requested by the taxpayer.''
       (d) Conforming Amendments.--
       (1) Subsections (c)(1)(A), (c)(1)(B)(i), and (d) of section 
     7431 of such Code are each amended by inserting ``inspection 
     or'' before ``disclosure''.
       (2) Clause (ii) of section 7431(c)(1)(B) of such Code is 
     amended by striking ``willful disclosure or a disclosure'' 
     and inserting ``willful inspection or disclosure or an 
     inspection or disclosure''.
       (3) Subsection (f) of section 7431 of such Code, as 
     redesignated by subsection (b), is amended to read as 
     follows:
       ``(f) Definitions.--For purposes of this section, the terms 
     `inspect', `inspection', `return', and `return information' 
     have the respective meanings given such terms by section 
     6103(b).''
       (4) The section heading for section 7431 of such Code is 
     amended by inserting ``INSPECTION OR'' before ``DISCLOSURE''.
       (5) The Table of sections for subchapter B of chapter 76 of 
     such Code is amended by inserting ``inspection or'' before 
     ``disclosure'' in the item relating to section 7431.
       (6) Paragraph (2) of section 7431(g) of such Code, as 
     redesignated by subsection (b), is amended by striking ``any 
     use'' and inserting ``any inspection or use''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to inspections and disclosures occurring on and 
     after the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas [Mr. Archer] and the gentleman from Pennsylvania [Mr. Coyne], 
each will control 20 minutes.
  The Chair recognizes the gentleman from Texas [Mr. Archer].


                             General Leave

  Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous matter on the bill, H.R. 1226.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today is tax day. As most of the country knows by now, I 
continue to do my own taxes. Like millions of other Americans who 
struggle to fill out their forms before tonight's midnight deadline, I 
keenly know how difficult, time-consuming and troubling it is to comply 
with our Tax Code. But once the forms are complete and mailed in, you 
would think taxpayers could then look forward to a refund or, for some 
unfortunate souls, an audit.
  But we have now learned that taxpayers have something else to fear: 
IRS agents, who snoop through people's personal, confidential tax 
records.
  Mr. Speaker, this is a copy of form 1040. Taxpayer records are among 
society's most confidential and sensitive documents. They often 
describe how much alimony people pay, how much they spend on health 
care, and, of course, how much money they make. This information 
belongs to the taxpayers, not the Government. And taxpayers who suffer 
enough already should not have to worry about snooping Toms at the IRS 
who abuse their trust by looking up private tax information.
  Yet the General Accounting Office tells us that there are more than 
1,000 incidents that they know of in which IRS agents snooped into 
someone's files. That is why I am pleased that the House today, as a 
part of taxpayer protection week, will pass this bill that makes it a 
crime to snoop into taxpayer records.
  This bill also adds an important privacy shield for taxpayers by 
requiring the IRS to notify taxpayers when criminal browsing activity 
is indicated. If someone's privacy has been violated by the Government, 
they have a right to know it, and they should be outraged.
  I believe these two provisions will serve as a twin deterrent to 
protect the privacy of taxpayer information.
  Mr. Speaker, I look forward to the time when we can protect taxpayers 
not only from the IRS but also from the current Tax Code which, after 
all, is the root cause of these problems. The current code is unfair, 
excessively complicated, overly intrusive, and antigrowth.
  I believe we must pull the income tax out by its roots and throw it 
away so that it can never grow back. When we do, we will have made the 
tax system fairer, simpler, created more economic growth, and we will 
have gotten the IRS completely and totally out of the lives of every 
individual American.
  Until that great day comes, we must do everything in our power to 
protect the rights of taxpayers. When it comes to fighting those who 
browse and snoop into personal taxpayer records, there ought to be a 
law, and now there will be.
  Mr. Speaker, I reserve the balance of my time.
  Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 1226, the Taxpayer Browsing 
Protection Act. This bill was introduced on a bipartisan basis in April 
1997, and I want to thank my Democratic and Republican colleagues on 
the Committee on Ways and Means for their support of H.R. 1226 and 
their very quick action.
  As expected, H.R. 1226 was approved unanimously by the committee with

[[Page H1463]]

one amendment on April 9, 1997. The bill before us today is a good 
example of the Committee on Ways and Means working together to improve 
and support the Internal Revenue Service. Also H.R. 1226 has the strong 
support of the IRS and the Treasury Department.
  Enactment of this bill will provide needed statutory support for the 
IRS Commissioner's current zero tolerance policy for browsing. I should 
mention that earlier this year IRS Commissioner Richardson contacted 
members of the Committee on House Oversight to renew her request for 
criminal sanctions in the tax code to deal with unauthorized inspection 
of an individual's tax information.
  Legislation similar to H.R. 1226 had been introduced by Senator Glenn 
during the 104th Congress but was never acted upon at that time. I want 
to commend the gentlewoman from Connecticut [Mrs. Johnson] for her 
leadership on H.R. 1226 and the gentleman from Texas [Mr. Archer] and 
the committee ranking member, the gentleman from New York [Mr. Rangel] 
for their support for this legislation. It is time that something be 
done. The public has the right to expect that its tax records will only 
be reviewed by those authorized to do so. Browsing is unacceptable, 
period. It must and it will stop.
  In summary, H.R. 1226 would clarify in the Tax Code the criminal 
sanctions for unauthorized inspection of tax information and 
application of civil damages. First, violators would be subject to 
significant criminal sanctions and dismissal from the IRS in their 
employment. The offense that would be committed would be a misdemeanor, 
with a fine of up to $1,000 and a prison term of up to 1 year, plus the 
cost of prosecution.
  Second, the criminal sanctions would apply to IRS employees, IRS 
contractors, and other Federal and State employees having access to 
Federal tax information.
  Third, tax information retained by the IRS on paper and 
electronically as well would be protected from unauthorized browsing.
  And finally, the availability of civil damages for unauthorized 
inspection or disclosure would be expanded. The taxpayer would be 
notified when there has been a criminal indictment for illegal browsing 
or disclosure, and the taxpayer would be able to sue for civil damages 
in the same manner as under current law for an unauthorized disclosure, 
the greater of $1,000 or actual punitive damages, plus costs.

                              {time}  1230

  It is important to note that the IRS employee would not be subject to 
criminal sanctions in the bill unless the unauthorized inspection was 
willful inspection.
  Also, the bill would not provide civil damages in the case of an 
accidental or inadvertent inspection, such as making an error in typing 
into the computer a taxpayer's identification number.
  H.R. 1226 should not be construed as an attack on the IRS. While 
there are a small number of IRS employees intent on violating the law, 
the vast majority of IRS employees are hardworking and committed public 
servants. IRS employees nationwide will benefit from this legislation, 
knowing that any browsers identified by the IRS will be fired from 
their jobs and prosecuted criminally.
  Mr. Speaker, I urge passage of this important legislation and I 
reserve the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from the State of Washington, [Ms. Dunn] who has contributed a great 
deal toward the development of this bill today. In fact, an amendment 
that she offered in committee is included in the bill, and I 
congratulate her for all of her very, very good work.
  Ms. DUNN. Mr. Speaker, I want to commend Chairman Archer for his 
leadership in bringing this timely issue of taxpayer privacy to the 
floor of the House today.
  Throughout my tenure in the Congress I have heard from thousands of 
constituents who have described to me a myriad of problems they see 
within our system of taxation.
  Granted, our Nation suffers under an unfair and incomprehensible Tax 
Code that takes too much of what we earn. Worse, some rogue members of 
the IRS, the organization responsible for the enforcement of the Tax 
Code, have a record of seeking to intimidate and to frighten honest 
hard working taxpayers. They damage the reputation of a huge majority 
of the honest people working at the agency. We must not tolerate a Tax 
Code that punishes families just as we should not tolerate an IRS agent 
who is eager to bully, harass, or snoop on a taxpayer.
  An important element of the IRS Accountability Act that I have 
offered and of the bill on the floor today is the protection of 
taxpayer privacy. It is well-documented that certain agents have been 
able to snoop through confidential taxpayer information with no regard 
for individual rights of the honest and the law-abiding taxpayers.
  Furthermore, recent reports shed additional light on the need for 
this legislation and the adoption of my amendment. According to the 
GAO, for fiscal year 1994 and 1995, over 1,500 instances occurred where 
IRS employees were accused of unlawful browsing. After accounting for 
firings, for disciplinary action, and for counseling, 33 percent of 
these cases were closed without action.
  I am glad the Committee on Ways and Means adopted my amendment to 
require that the taxpayer be notified when an IRS agent is indicted or 
otherwise charged with unauthorized inspection.
  The bottom line is that this provision addresses what I believe to be 
a matter of common decency.
  My amendment also provides taxpayers a civil remedy in such 
unauthorized inspection or browsing cases. The honest American family 
works too long and too hard to have to deal with an unfair and, on 
occasion, overly intrusive IRS and agents who trample on their rights.
  The IRS deserves closer scrutiny when certain agents go beyond 
acceptable enforcement procedures and commit outright intimidation or 
when it is unable to use common sense as a yardstick.
  This bill, the one we are considering on the floor today, will ensure 
that the powerful government agency, the IRS, will no longer scoff at 
the rights of well-intentioned and law-abiding taxpayers.
  Mr. Speaker, I thank the chairman for his proposal of this 
legislation, and I urge my colleagues to support the adoption of this 
measure.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Connecticut, [Mrs. Johnson] another member of our committee, highly 
respected, and chairman of the Subcommittee on Oversight.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the chairman for 
yielding me this time and commend him for his leadership on this 
matter, bringing forth a bill that is truly bipartisan and addresses a 
very significant problem at the IRS.
  The American public's willingness to provide the Federal Government 
with sensitive personal information on their tax returns each year 
depends on the confidence that the people have that this information 
will be held in the strictest confidence. That is why it is vitally 
important to have strong measures in place to ensure the security of 
tax return information.
  Public confidence in the IRS has been again shaken by new reports 
that the IRS personnel continue to snoop into taxpayer files. Last year 
the IRS confirmed almost 800 cases in which IRS employees looked 
through taxpayer files without authorization. That has just got to 
stop.
  As an original cosponsor of the Taxpayer Browsing Protection Act, I 
believe this legislation will give the IRS the tool it needs to enforce 
its zero tolerance policy against unauthorized browsing into taxpayer 
records by making it a crime punishable by up to a year in jail.
  Today we are telling IRS employees that if they go into other 
people's private files, they will be heavily penalized and they may go 
to jail. As Americans file their tax returns today, they can be 
confident that their tax return information is theirs alone and their 
privacy rights will be protected by law by this Congress.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas, Mr. Sam Johnson, another respected member of the Committee on 
Ways and Means.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, from 1982 to 1993, the 
Democrats in Congress voted to increase the taxes of hardworking 
Americans by $666 billion. This new revenue was not

[[Page H1464]]

put toward the debt or used to eliminate the deficit. Instead it was 
used to increase the size and scope of Government.
  History has shown us that every time Congress increases taxes, they 
also increase spending. I believe that it is one more reason why the 
American people should demand that Congress abolish the IRS. I think 
the agency is out of control.
  What the tax limitation amendment will do is provide a safeguard for 
taxpayers and no longer be simple and easy for Congress to increase 
taxes. It is a win-win for the American taxpayer. Not only will they 
get a smaller, more efficient government, but protection from higher 
taxes.
  I think the Speaker agrees with me that something must be done. I 
think that of the browsing that has been going on, the Speaker probably 
does not know that 1,500 IRS agents were caught browsing from fiscal 
year 1994 to 1995, and only 23 of them were tried. The rest were either 
given a slap on the wrist or counseled. What does counseling mean? I do 
not know.
  We ought to demand accountability not only from the IRS, but from the 
judges in Boston who ruled it was OK as long as they did not use it 
maliciously.
  Mr. Speaker, I strongly urge my colleagues to vote with us today. 
Give Americans the assurance of trust they deserve from their 
Government.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan [Mr. Camp] another respected member of the committee.
  Mr. CAMP. Mr. Speaker, I thank the chairman for yielding me this 
time, and I rise in support of this protaxpayer bill.
  For years the American people have told us that our Tax Code needs 
reform. Seventy-five percent of Americans believe we need a fundamental 
overhaul of our tax law. We in the Committee on Ways and Means are 
continuing a series of hearings today on doing just that.
  Incidents like those reported recently, IRS employees browsing 
through tax records of neighbors, relatives, friends, and with friends 
like that who needs enemies, IRS employees even browsing the records of 
celebrities like Tom Cruise, all this shows how badly reform is needed.
  With 108,000 IRS employees, twice as many as DEA, CIA, and FBI 
combined, there is plenty of time, apparently, to fool around. In only 
2 years, over 1,500 cases of unauthorized browsing have occurred. 
Clearly, these IRS employees are doing the wrong things. Do these 
people have no sense of respect for the privacy of the customers they 
serve? We and they work for the U.S. taxpayer, and now IRS employees 
are arrogantly snooping wherever they choose.
  Let us pass this bill today. Then we will be able to take appropriate 
action against those who violate our trust. Meanwhile, we in the 
Congress must continue our work and, as the gentleman from Texas, [Mr. 
Archer] is so fond of saying, tearing our present Tax Code out by the 
roots and putting in its place a fairer and simpler tax system with 
less room for such fraud and abuse.
  Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume 
just to submit for the Record a letter that was written to me by 
Commissioner Richardson of the IRS on March 10, citing the need for the 
legislation that we are debating here today and insert that in the 
Record; also, a memo from Commissioner Richardson in October 1993 to 
all employees of the IRS stating her policy of zero tolerance for any 
type of browsing within the agency.

                                       Department of the Treasury,


                                     Internal Revenue Service,

                                   Washington, DC, March 10, 1997.
     Hon. William J. Coyne,
     Subcommittee on Oversight, Committee on Ways and Means, House 
         of Representatives, Washington, DC.
       Dear Mr. Coyne: I wanted to let you know about a case that 
     was recently decided by the United States Court of Appeals 
     for the First Circuit, United States v. Czubinski, No. 96-
     1317, 1997 U.S. App. LEXIS 3077 (1st Cir. February 21, 1977) 
     and to request your support for legislation to clarify the 
     criminal sanctions in the Internal Revenue Code for the 
     unauthorized access of taxpayers' accounts by Internal 
     Revenue Service employees.
       Since becoming Commissioner, I have repeatedly stated that 
     the IRS will not tolerate violations by employees of the 
     rules against unauthorized access. The Service's ``zero 
     tolerance'' policy prohibits any employee access to (and use 
     of) tax information, except to the extent necessary for an 
     employee to perform assigned duties.
       In the Czubinski case, the First Circuit reversed the 
     conviction of a former IRS employee for improperly accessing 
     taxpayer information in the IRS database. That person had 
     been indicted and convicted of several counts of violating 18 
     USC Sec. Sec. 1343 and 1346 (wire fraud) and 18 USC 
     Sec. 1030(a)(4) (computer fraud). In reversing the 
     conviction, the court stated that ``unauthorized browsing of 
     taxpayer files, although certainly inappropriate conduct, 
     cannot, without more, sustain [a] federal felony conviction 
     [under 18 USC Sec. Sec. 1343, 1346 and 1030(a)(4)].''
       This decision and a 1996 acquittal, by a Memphis, Tennessee 
     jury of another former IRS employee who had been indicted for 
     improper access of taxpayer accounts under 26 USC Sec. 7213 
     (Unlawful Disclosure of Tax Return Information), United 
     States v. Patterson, Cr. No. 96-20002 (W.D. Tenn. April 10, 
     1996), are very troubling and make it more difficult for the 
     Service to appropriately discipline employees who violate our 
     policy against unauthorized access.
       In the past several years, the IRS has taken a number of 
     steps to ensure that unauthorized access of taxpayer 
     information by IRS employees does not occur. For example, 
     each time an employee logs onto the taxpayer account 
     database, a statement warns of possible prosecution for 
     unauthorized use of the system. All new users receive 
     training on privacy and security of tax information before 
     they are entitled to access the Integrated Data Retrieval 
     System (IDRS). The Service has also installed automated 
     detection programs that monitor employees' actions and 
     accesses to taxpayers' accounts, identify patterns of use, 
     and alert managers to potential misuse. Employees are 
     disciplined according to a Guide for Penalty Determinations 
     that includes dismissal. In the Czubinski opinion, for court 
     noted that ``the IRS rules plainly stated that employees with 
     passwords and access codes were not permitted to access files 
     on IDRS [the database] outside of the course of their 
     official duties.''
       In addition to the internal actions, the IRS has 
     recommended and supported legislative efforts to amend the 
     Internal Revenue Code and Title 18 to clarify the criminal 
     sanctions for unauthorized computer access to taxpayer 
     information. A recent amendment to 18 USC Sec. 1030(a)(2)(B) 
     by the Economic Espionage Act of 1996, Pub. L. No. 104-294, 
     110 Stat. 3488 (1996), provides criminal misdemeanor 
     penalties for anyone who intentionally accesses a computer 
     without authorization or who exceeds authorized access and 
     thereby obtains information, including tax information from 
     any department or agency of the United States. I have been 
     advised by counsel that had this amendment been in effect and 
     applicable to the Czubinski and Patterson cases, the 
     government very likely would not have lost those cases.
       Although the recent amendment to 18 USC Sec. 1030(a)(2)(B) 
     will hopefully serve as a significant deterrent to 
     unauthorized computer access of taxpayer information, this 
     statute only applies to unauthorized access of computer 
     records. It does not apply to unauthorized access or 
     inspection of paper tax returns and related tax information. 
     Legislation such as S. 670, introduced in the 104th Congress, 
     would achieve that result. By clarifying the criminal 
     sanctions for unauthorized access or inspection of tax 
     information in section 7213 of the Internal Revenue Code, 
     whether that information is in computer or paper format, the 
     entire confidentiality scheme respecting tax information and 
     related enforcement mechanisms would be appropriately found 
     in the Internal Revenue Code.
       An amendment to section 7213 such as was proposed in the 
     104th Congress would serve important tax administration 
     objectives. (Of course, as is currently the case under 
     section 7213 for convictions resulting from the disclosure of 
     tax information to unauthorized third parties, a conviction 
     of federal officers and employees for the unauthorized access 
     or inspection of tax information would, in addition to 
     imprisonment and fine, continue to result in dismissal from 
     office or discharge from employment.)
       We would like to work with you and your staff to assure 
     that improper access can be dealt with appropriately.
           Sincerely,
     Margaret Milner Richardson.
                                                                    ____

                                       Department of the Treasury,


                                     Internal Revenue Service,

                                  Washington, DC October 20, 1993.
     Memorandum for all employees.
     From: Margaret Milner Richardson, Commissioner, Internal 
         Revenue Service.
     Subject: Taxpayer privacy and security.
       One of the most important issues facing the IRS today is 
     the privacy and security of taxpayer account information. 
     Many of the changes we are experiencing right now, as well as 
     the ones we hope to make, depend on our ability to protect 
     private tax information.
       In our daily work, we must continue to perform our duties 
     in a manner that recognizes and enhances individuals' rights 
     of privacy and ensures that our activities are consistent 
     with laws, regulations, and good administrative practice. The 
     Privacy Advocate, recently established under the Chief 
     Information Officer to oversee the privacy concerns of the 
     IRS and American taxpayers, has developed a Privacy Policy 
     Statement. I fully endorse the attached statement, which

[[Page H1465]]

     gives a clear message about the importance of protecting 
     taxpayers and employees from unnecessary intrusion into their 
     tax records.
       Any access of taxpayer information with no legitimate 
     business reason to do so is unauthorized and improper and 
     will not be tolerated. I made a pledge to Congress and I make 
     it to you; taxpayer privacy and the security of tax data will 
     not be compromised. We will discipline those who abuse 
     taxpayer trust up to and including removal or prosecution.
       The fundamental basis of our tax system, voluntary 
     compliance, is directly affected by the level of trust 
     taxpayers have in our ability to protect their information. 
     The vast majority of IRS employees are dedicated and 
     trustworthy. We must depend on each other's integrity and 
     commitment to this agency and to keeping our tax system the 
     best in the world.
       Attachment.

                        Taxpayer Privacy Rights

       The IRS is fully committed to protecting the privacy rights 
     of all taxpayers. Many of these rights are stated in law. 
     However, the Service recognizes that compliance with legal 
     requirements alone is not enough. The Service also recognizes 
     its social responsibility which is implicit in the ethical 
     relationship between the Service and the taxpayer. The 
     components of this ethical relationship are honesty, 
     integrity, fairness, and respect.
       Among the most basic of a taxpayer's privacy rights is an 
     expectation that the Service will keep personal and financial 
     information confidential. Taxpayers also have the right to 
     expect that the Service will collect, maintain, use, and 
     disseminate personally identifiable information and data only 
     as authorized by law and as necessary to carry our agency 
     responsibilities.
       The Service will safeguard the integrity and availability 
     of taxpayers' personal and financial data and maintain fair 
     information and recordkeeping practices to ensure equitable 
     treatment of all taxpayers. IRS employees will perform their 
     duties in a manner that will recognize and enhance 
     individuals' rights of privacy and will ensure that their 
     activities are consistent with law, regulations, and good 
     administrative practice. In our recordkeeping practices, the 
     Service will respect the individual's exercise of his/her 
     First Amendment rights in accordance with law.
       As an advocate for privacy rights, the Service takes very 
     seriously its social responsibility to taxpayers to limit and 
     control information usage as well as to protect public and 
     official access. In light of this responsibility, the Service 
     is equally concerned with the ethical treatment of taxpayers 
     as well as their legal and administrative rights.
       Approved: Margaret M. Richardson, Commissioner.
       Date: October 15, 1993.
                                                                    ____

                                       Department of the Treasury,


                                     Internal Revenue Service,

                                Washington, DC, November 16, 1994.
     Memorandum for all employees.
     From: Margaret Milner Richardson, Commissioner of Internal 
         Revenue.
     Robert M. Tobias, President, National Treasury Employees 
         Union.
     Subject: Privacy and Security of Taxpayer Information.
       Safeguarding public confidence in the integrity and 
     competence of the Service is a top priority for all 
     employees. Each of us must take seriously any perceived or 
     real breach in public confidence and trust in our ability to 
     administer tax laws. The availability of taxpayer 
     information, or any other protected data, dictates a 
     responsibility to observe privacy principles, to secure 
     sensitive data, and to guard against improper disclosures. 
     Clearly, most Service employees are conscientious and respect 
     the taxpayer's right to expect that the information they 
     provide will be safeguarded. However, any one breach by any 
     one of us seriously undermines public confidence and trust in 
     the Service.
       Improper access to, or misuse of, taxpayer information 
     violates law, rule, and regulation and is contrary to our 
     ethical values and principles of public trust. In October 
     1993, the Service issued a Privacy Policy Statement. The 
     policy emphasizes comprehensive privacy, security, and 
     disclosure requirements. It also represents an application of 
     Service ethical values and principles of public trust in our 
     day-to-day operations. This year, we began to strengthen our 
     commitment to the protection of taxpayer privacy through the 
     Declaration of Privacy Principles and the issuance of the 
     Guide for Penalty Determinations. Each of you received a copy 
     of these documents and we urge you to become familiar with 
     their contents.
       Our efforts to maintain taxpayer privacy also includes 
     continually improving Service ability to identify any 
     employee who fails to safeguard taxpayer information and, 
     where appropriate, taking disciplinary action, up to and 
     including removal. This effort is not intended to impose an 
     additional burden on conscientious employees in their use of 
     tax systems. It is, however, intended as a concerted effort 
     to maintain a work environment that reflects the highest 
     standard for the protection of sensitive taxpayer 
     information.
       Privacy, security and disclosure issues will continue to be 
     a major consideration and top priority for you as our 
     Compliance 2000 and Tax Systems Modernization efforts lead to 
     the identification of innovative approaches to the protection 
     of taxpayer privacy. Each of us must continually examine how 
     we accomplish our duties and be ever vigilant in safeguarding 
     taxpayer privacy.
                                                                    ____

                                       Department of the Treasury,


                                     Internal Revenue Service,

                                  Washington, DC, January 3, 1995.
     Memorandum for all employees.
     From: Margaret Milner Richardson, Commissioner of Internal 
         Revenue.
     Subject: IRS information security policy.
       Privacy, security and disclosure issues are key elements 
     for the success of our Compliance 2000 and Tax Systems 
     Modernization efforts. The success of the Service in 
     addressing privacy, security and disclosure issues also has a 
     critical impact on voluntary compliance, the fundamental 
     basis of our tax system. Therefore, it is mandatory for each 
     of us to secure sensitive data and guard against improper 
     disclosures.
       In October 1993, the Service issued a Privacy Policy 
     Statement developed by the Privacy Advocate. A related 
     document, the IRS Information Security Policy, has been 
     developed by the System Architect's Office under the 
     direction of the Chief Information Officer. The intent of 
     this policy, which is attached, is threefold:
       Ensure that the Service complies with the applicable 
     guidance from public laws, regulations, and directives.
       Ensure that taxpayer and other sensitive information is 
     protected commensurate with the risk and magnitude of the 
     harm that would result from inappropriate use.
       Ensure that taxpayer and other sensitive information is 
     used only for necessary and lawful purposes.
       I fully endorse the attached policy statements.
       I made a pledge to Congress and I make it to you: taxpayer 
     privacy and the security of tax data will not be compromised. 
     The implementation of the IRS Information Security policy is 
     an important step in fulfilling this pledge.
       Attachment.

                    IRS Information Security Policy

       P1. It is the policy of the IRS to establish and enforce a 
     comprehensive and appropriate security program that assures 
     IRS information resources are protected commensurate with the 
     risk and magnitude of the harm that would result from the 
     loss, misuse, or unauthorized access to or modification of 
     such resources.
       P2. It is the policy of the IRS to collect, use, maintain, 
     and disseminate only that information required for a 
     necessary and lawful purpose.
       P3. It is the policy of the IRS to ensure that its 
     information collection, use, storage, dissemination, and 
     derivation processes maintain the accuracy of the information 
     relative to its intended use.
       P4. It is the policy of the IRS to ensure that all 
     information and resources required by an authorized 
     individual to perform an assigned function are complete and 
     available when required.
       P5. It is the policy of the IRS to collect, use, maintain, 
     and disseminate information with appropriate timeliness to 
     ensure successful completion of IRS business functions.
       P6. It is the policy of the IRS to limit access to IRS 
     information and resources to authorized individuals who have 
     a right to the information or resource or a demonstrable need 
     for the information or resource to perform official duties.
       P7. It is the policy of the IRS to disclose information to 
     organizations or individuals outside of the IRS only when 
     such disclosure is consistent with public law and other 
     governing regulations.
       P8. It is the policy of the IRS to ensure that only 
     functions required for a necessary and lawful purpose be 
     performed on IRS information or resources.
       P9. It is the policy of the IRS to prevent, or to detect 
     and counter, fraud.
       P10. It is the policy of the IRS to ensure the continuity 
     of operation of activities that support official agency 
     functions.
       P11. It is the policy of the IRS to establish and enforce 
     security procedures for persons involved in the design, 
     development, operation, or maintenance activities that affect 
     the protection of IRS information and resources.
       P12. It is the policy of the IRS to ensure that its work 
     force has the technical and awareness training, appropriate 
     to level of responsibility and authority, to implement and 
     adhere to an IRS security program.

  Mr. Speaker, I reserve the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arizona, [Mr. Hayworth], another respected member of the Committee on 
Ways and Means.
  Mr. HAYWORTH. Mr. Speaker, I thank the gentleman for yielding me this 
time. I apologize, but I was visiting with constituents from the great 
State of Arizona, so I hope I can be forgiven my tardiness.
  Mr. Speaker, I rise in strong support of this measure. Indeed, the 
only criticism I would have would be with its name, Taxpayer Browsing, 
because I believe that is far too mild a term for what has transpired.
  As Americans, if we truly champion the notion of privacy, then we 
should

[[Page H1466]]

react as we are reacting today, in a bipartisan fashion, to put an end 
to this obscenity, this voyeurism in the vault that allows bureaucrats 
to take a look at the most sensitive financial information supplied by 
any citizen.
  What we will do today, Mr. Speaker, is to rise collectively, as a 
body, to end this obscenity, for it is totally at odds with our notion 
of a right to privacy. It is totally at odds with the notion of 
fairness and, indeed, I champion the fact that this legislation now 
prescribes exact penalties so that those voyeurs of people's records 
will be punished when they are caught and that taxpayers, whose records 
have been violated, will be notified of such violation.

                              {time}  1245

  Mr. Speaker, the late Supreme Court Justice Potter Stewart when 
talking about obscenity said, ``I can't define it. I know what it is 
when I see it.''
  Mr. Speaker, what has occurred in the past has been an obscenity the 
American people can do without. Punishment will be swift and sure. This 
is a positive action we take together on a bipartisan basis to say let 
us rein in those who would abuse our rights to privacy.
  Mr. COYNE. Mr. Speaker, I yield such time as he may consume to the 
distinguished gentleman from Massachusetts [Mr. Neal].
  Mr. NEAL of Massachusetts. I thank the gentleman from Pittsburgh for 
yielding me this time and for his good work.
  Mr. Speaker, today is a day that we all dread, and we know that it 
comes every year. As the old expression goes, ``You can be certain 
about death and taxes.'' But there is another thing that you should be 
certain about, and that is your privacy.
  As technology continues to advance and more of us surf the net, 
privacy becomes more difficult to protect. Information that individuals 
report on their tax returns should be kept confidential. Individuals 
have every right to expect that this information will remain 
confidential and that liberty should not be violated.
  Senator Glenn has worked diligently to correct browsing at the 
Internal Revenue Service. Browsing is unauthorized opportunities to 
peek at tax returns. In 1993, the IRS commissioner established a zero 
tolerance for such conduct.
  The IRS is working toward fair and private tax administration, and 
this is but another example. Commissioner Richardson has requested this 
legislation today, and we hope that it will eliminate browsing. I have 
been a cosponsor of this legislation, and I certainly believe that the 
IRS is correct in attempting to implement a zero tolerance policy.
  The purpose of this legislation is to clarify in the Tax Code 
criminal sanctions for the unauthorized inspection of tax information. 
Violators would be subject to significant criminal sanctions and 
dismissal from IRS employment. Criminal sanctions would apply to IRS 
employees, IRS contractors, and other Federal and State employees 
having access to Federal tax information. Tax information on paper and 
in computer data bases would be protected from browsing.
  Some of the browsing which has occurred at the IRS entailed the 
unauthorized viewing of celebrities' tax returns. We need to send a 
strong message to IRS employees that they should respect the rights of 
all citizens and taxpayers. IRS employees should not act on impulses 
based upon curiosity. It may be tempting to look at the tax files of 
such famous individuals as Lucille Ball, but everyone should have their 
expectation of privacy met.
  This legislation will provide a deterrent against IRS employees 
taking a quick look at tax returns for purposes not related to work. I 
commend the IRS for identifying this problem and taking corrective 
action immediately. Commissioner Richardson also should be noted for 
her work on this legislation, and today we will pass it in a bipartisan 
manner. This legislation is something positive that we can do for all 
taxpayers. We can ensure their basic right to privacy.
  While I urge an affirmative vote on the Taxpayer Browsing Protection 
Act, I also would point out to my colleagues in this institution and to 
members of the media as well that one of the most fundamental rights in 
this society is the basic notion of privacy. It is also the cornerstone 
of liberty.
  Mr. COYNE. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield the balance of my time to the 
gentleman from Georgia [Mr. Gingrich], the respected Speaker of the 
House of Representatives.
  Mr. GINGRICH. I thank my friend, the chairman, for yielding me this 
time.
  Mr. Speaker, let me say first of all I want to commend both sides of 
the Committee on Ways and Means, both the Republicans and the 
Democrats, for bringing this timely bill out in a very responsive way.
  We were surprised, I think, all of us, to discover how frequently 
Internal Revenue Service agents look at, I would use the word ``snoop'' 
rather than ``browse,'' the private files of individual citizens. There 
were apparently in the last year over 800 cases of different employees 
illegally looking at tax returns without authorization. Ninety of them 
were fired. The rest were either reprimanded or received a slap on the 
wrist, yet supposedly the Internal Revenue Service has a zero tolerance 
policy for these abuses.
  I commend the Committee on Ways and Means on this bipartisan effort 
to change the law to make clear that the Congress will not accept 
Internal Revenue agents stepping over their bounds and looking at 
private tax information purely out of curiosity or, in some cases, 
potentially in order to blackmail people.
  This step of beginning to curb IRS abuses is only the first step in 
what I think will be a real landmark Congress in bringing the Internal 
Revenue Service under control. The fact is, with 110,000 employees, the 
Internal Revenue Service is too big, too complex, and too arrogant.
  For the average citizen, let me just say 110,000 IRS employees 
compares with 5,500 working for the Border Patrol or 7,400 working for 
the Drug Enforcement Administration. So there are almost 10 IRS agents 
for every person protecting us from drugs and illegal immigration. I 
think that is clearly too many. One of our goals is to change the IRS 
as we know it, to shrink it, to go through tax simplification, to make 
sure that we have a much simpler and much fairer tax system.
  The need for a simpler tax system was made clear when the IRS spent 
$4 billion, not million, $4 billion trying to build a computer that 
could understand the Tax Code. The fact is that that computer could not 
understand the Tax Code because the Code is probably incomprehensible. 
Every year reporters call five or six different IRS offices and get 
five or six different answers, because it is impossible for any human 
to fully understand the complexity.
  I want to commend the gentleman from Texas [Mr. Archer], the 
chairman, for a joint editorial that he and the gentleman from Texas 
[Mr. Armey], the majority leader, had in this morning's Washington 
Times where they both begin to outline the case for dramatic, bold tax 
simplification. They happen to go at it in slightly different ways. The 
gentleman from Texas [Mr. Archer], the chairman, would replace the 
entire income tax with a sales tax. The gentleman from Texas [Mr. 
Armey] would have a very flat income tax that one could fill out on a 
single page. But both of them have the right direction.
  The debate over the next 2 or 3 years between a flat tax or replacing 
the income tax with a sales tax will be one of the most important 
debates in American history, and one of the consequences of that debate 
will be the adoption of a system which is dramatically simpler, with a 
much smaller IRS, with much less impact on your lives.
  Let me give a couple of examples of how complicated this gets and how 
bad the need is, how desperate the need is, for change. Let me start 
with, one of my staff brought in his daughter's paperwork. She has a 
small amount of money she has been saving. Her parents and grandparents 
have tried to help her save money for college. She is 10 years old. 
They put it in a little fund for her.
  Last year, the stock market went up too much. She had not paid 
quarterly,

[[Page H1467]]

so at 10 years of age she found she had a $6 penalty. It took nine 
pages of tax forms to get to that point.
  I note from some material that the gentleman from Ohio [Mr. Boehner], 
chairman of the House Republican Conference, has shared that in 1992 
the Internal Revenue Service seized $26 from the bank account of a 6 
year old to help pay her parents' overdue tax bill. Now surely at 6 
years of age one hardly needs to encounter the IRS.
  We had in my own district a couple that had taken over a small firm. 
This was a little company called Pro Tackle in Duluth, GA. When they 
took over the firm, they found out that the former chief executive at a 
previous time under the previous corporation had embezzled the excise 
tax funds. The IRS pursued the new couple and the new firm and 
basically put them out of business through a mistake. They did not 
understand that the legalities had changed, that in fact they did not 
owe the money, and between the cost of the attorney and the cost of 
fines and penalties, Mr. Mitchell, my constituent, was forced out of 
the bait and tackle business. Finally, years later, the IRS came back 
and said they goofed.
  Similarly, there are other examples, and some of these, frankly, are 
almost impossible to believe, but let me give some examples. The 
Heritage Foundation issued a report that a day care center which 
allegedly owed the IRS $14,000 was raided by armed agents who then 
refused to release the children until parents pledged to give the 
Government money.
  One taxpayer in 1993, this again is from the Heritage Foundation, was 
fined $46,806 for an alleged underpayment of 10 cents. Another taxpayer 
was fined $10,000 for using a 12-pitch typewriter, that is a kind of 
type, to fill out his tax form instead of a 10-pitch typewriter. Again, 
that is from the Heritage Foundation.
  Going through case after case, one discovers that the IRS is out of 
touch, it is arrogant, it does not understand the average American, and 
I am not quite sure how they train their new employees, but again and 
again they seem to have difficulties.
  Money magazine sent reporters posing as ordinary citizens to 10 
different IRS district offices around the country and had them call the 
IRS help line and ask 10 common questions. This is according to Money 
magazine. Quote: It took an extraordinary effort to get a staffer on 
the line. A full 30 percent of the time, no one who could answer 
questions picked up the phone. Most of the time, we either got busy 
signals or recorded messages or were disconnected. Furthermore, well 
over half the callers who got through, 60 percent, waited 5 minutes or 
more, including one in four who had to hold for more than 20 minutes.
  Money magazine went on to say, and I quote, and when we finally got 
through, we did not receive the right answer one out of every five 
times. The IRS workers answered only 78 percent of our questions 
accurately, got 12 percent wrong, and promised to call back with the 
correct answer but then failed to do so 10 percent of the time.
  These are the IRS folks who, instead of learning the Tax Code and 
helping the citizen, have been snooping into the privacy files of 
citizens without right.
  This bill is a first step toward changing the IRS as we know it. It 
sets the right standard. I commend again both the Democrats and the 
Republicans on the committee. This is the perfect day to be offering 
this bill. I just want to take one final moment to encourage the 
chairman, who I know hardly needs encouragement, but what he is doing 
in launching this dialog on whether we should replace the income tax 
with a sales tax or go to a flat tax, what he and Majority Leader Armey 
are doing is truly historic, and I want to take this moment on April 15 
to thank him for the leadership he is offering and urge everyone to 
vote yes on this bill.
  Mr. KLECZKA. Mr. Speaker, I rise today in support of a bipartisan 
bill to protect taxpayers, H.R. 1226, the Taxpayer Browsing Protection 
Act.
  In February of this year, the First Circuit Court of Appeals 
overturned the conviction of Richard W. Czubinski, a former Internal 
Revenue Service employee who had snooped through the tax records of 
several taxpayers. The court claimed that although there was a law 
against unauthorized disclosure of confidential tax information, there 
was no law against unauthorized browsing of those private tax records.
  The public correctly expects that their tax records will only be 
inspected by those authorized to do so for legitimate purposes: 
Browsing is unacceptable, and it must stop.
  This bill will prohibit unauthorized review or browsing of Federal 
tax information which the IRS possesses. It will improve current law by 
putting criminal sanctions in the Tax Code and by protecting tax 
information in both electronic and paper forms. Those who break the law 
would be dismissed by the IRS, could be sentenced up to a year in jail, 
and additionally could be forced to pay up to $100,000 in fines. Also 
upon the filing of a criminal action against a browser, the IRS would 
notify affected taxpayers who could then sue the violator for civil 
damages.
  Mr. Speaker, taxpayers expect and deserve that the Federal Government 
will protect the privacy of their personal financial information. As an 
original cosponsor of this measure, I urge Members to join me in voting 
``yes'' today on H.R. 1226, the Taxpayer Browsing Protection Act.
  Mr. STARK. Mr. Speaker, I rise in support of H.R. 1226, the Taxpayer 
Browsing Protection Act.
  This bill bolsters the administration's position of zero tolerance 
for unauthorized browsing of taxpayer information. Current law focuses 
more on unauthorized disclosure of taxpayer information. This bill 
addresses--and makes a crime--IRS employees looking at a taxpayers 
records when they have no justifiable reason to do so, even if no 
disclosure of the information to others takes place.
  Taxpayers are entitled to privacy of their records and we must assure 
that the information they provide the IRS will be protected. Protection 
of privacy rights of taxpayers is critical for a voluntary tax system.
  IRS employees also deserve to have their ranks purged of those whose 
unlawful acts bring shame on Federal workers.
  As a cosponsor of H.R. 1226, I am pleased to see that the House is 
responding to the administration's request for action on this 
legislation.
  The SPEAKER pro tempore (Mr. Goodlatte). The question is on the 
motion offered by the gentleman from Texas [Mr. Archer] that the House 
suspend the rules and pass the bill, H.R. 1226, as amended.
  The question was taken.
  Mr. ARCHER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________