[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Senate]
[Pages S3180-S3190]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    TAXPAYER PRIVACY PROTECTION ACT

  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 522) to amend the Internal Revenue Code of 1986 
     to impose civil and criminal penalties for the unauthorized 
     access of tax returns and tax return information by Federal 
     employees and other persons, and for other purposes.

  The Senate proceeded to consider the bill.


                            Amendment No. 45

  (Purpose: To amend the Internal Revenue Code of 1986 to prevent the 
   unauthorized inspection of tax returns or tax return information)

  Mr. LOTT. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Mississippi [Mr. Lott], for Mr. Coverdell, 
     for himself, Mr. Glenn, Mr. Roth, and Mr. Moynihan proposes 
     an amendment numbered 45.

  Mr. COVERDELL. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike all after the enacting clause and insert the 
     following:

     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 1985 (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 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 for 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 amendment 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.

     SEC. 4.

       (a) In General.--Section 1306(c)(1) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013(c)(1)) is amended by 
     striking ``30'' and inserting ``15''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall be construed to have taken effect on January 1, 1997, 
     and shall expire June 30, 1997.

  Mr. COVERDELL. Mr. President, as I understand the situation at the 
moment, we now have until 4:05, when the unanimous consent called for 
the vote. Time would be equally divided?
  The PRESIDING OFFICER. The Senator from Georgia is correct.
  Mr. COVERDELL. Is that about 20 minutes on each side?
  The PRESIDING OFFICER. There will be 17\1/2\ minutes for each side.
  Mr. COVERDELL. Mr. President, first, let me thank all the Senators 
who have played a significant role in this legislation that we are 
about to vote on, certainly Senators Glenn of Ohio and Roth of Delaware 
and others, who have committed themselves to ending the practice on the 
part of the IRS of snooping through the personal tax files of American 
citizens.
  Recently, the GAO issued its report on IRS system security, on April 
8, which was initiated at the request of Senator Glenn. The General 
Accounting Office concluded that the IRS has failed to effectively deal 
with file snooping. It says:

       Further, although the IRS has taken some action to detect 
     browsing--

  That word means looking at the personal tax files of American 
taxpayers.

     it is still not effectively addressing this area of 
     continuing concern because (1) it does not know the full 
     extent of browsing and (2) it is consistently addressing 
     cases of browsing.

  The GAO found that the IRS still does not know the full extent of 
file snooping, it says:

       Because the IRS does not monitor the activities of all 
     employees authorized to access taxpayer data . . ., IRS has 
     no assurance that employees are not--[snooping, they use the 
     word browsing] taxpayer data, and no analytical basis on 
     which to estimate the extent of the browsing problem or any 
     damage being done.

  The Internal Revenue Service stated a zero tolerance policy, with 
regard to file snooping. In 1993, Commissioner Margaret Richardson 
stated:

       Any access of taxpayer information with no legitimate 
     business reason to do so is unauthorized and improper and 
     will not be tolerated.

  She said:

       We will discipline those who abuse taxpayer trust up to and 
     including removal or prosecution.


[[Page S3181]]


  Recent reports have documented up to 800, last year alone, files were 
violated, hundreds of employees have been involved--and there have been 
23 suspensions. This statement that was made to the American people has 
not been fulfilled. That is why this legislation is here today.
  Since the IRS Commissioner made this statement, the IRS has found 
1,515 additional confirmed cases of file snooping. But, as I said, only 
23 resulted in job termination and only 23 percent resulted in any 
disciplinary action at all. Since 1991, there have been 3,345 confirmed 
cases of file snooping by IRS employees.
  This is reprehensible activity. These are very, very personal records 
and are expected to be maintained in just that way. I think the irony 
of this is that whenever you get at odds with IRS, you get audited. 
Some would say audited is a kind word. Some people feel they have been 
bludgeoned. But the IRS has been engaged in activity that is 
reprehensible and it is time for them to be audited.
  This measure, coauthored by myself, Senator Glenn, Senator Roth and 
others, is the beginning of an audit of IRS. It is symbolic that we 
pass this legislation today but it is important to note that the IRS 
Accountability Act comes right behind this, the IRS Accountability Act, 
which will deal not only with file snooping, but with random audits, 
balancing the ledger between the taxpayer and this agency, and putting 
IRS agents under the same laws as the rest of American citizens.
  Recently, the Wall Street Journal, on April 3, 1997, printed an 
article about IRS activities. I will quote it here. According to a 
Federal jury here, this gentleman:

       . . . took unauthorized looks at returns of a political 
     opponent, [this is an IRS employee] a family adversary, and 
     two associates in the white-supremacist movement whom, the 
     government says, he suspected of being informers. The jury 
     convicted [this gentleman] in December 1995 on 13 counts of 
     wire and computer fraud, and he spent 6 months of 1996 in 
     jail.

  Some IRS browsers apparently are merely nosy. Geoffrey Coughlin, a 
Houston account analyst, last year pleaded guilty to looking at more 
than 150 unauthorized files, including those of friends and relatives, 
ex-girlfriends, politicians, and sports stars.
  This is another case. Robert M. Patterson, an IRS examiner in 
Memphis, TN, scanned agency computers for tax records of people named 
Dolly Parton, Wynonna Judd, Karen Carpenter, Garth Brooks, Elizabeth 
Taylor--well, it is pretty clear, to understand the drift here.
  This legislation, Coverdell-Glenn-Roth, makes it a Federal 
misdemeanor, $1,000 fine, a year imprisonment under the Federal 
sentencing guidelines. A convicted offender would pay costs of 
prosecution and be dismissed from position where applicable. It covers 
Federal employees and officers, and State and other employees who have 
access to tax records.
  Taxpayers whose files have been accessed and are disclosed without 
proper authorization can seek civil action; such civil action against 
the United States, when the offender is a Federal employee, and against 
the individual offender when not a Federal employee. It requires 
taxpayer notification if we certify that their files have been 
improperly accessed or disclosed and they would be notified when the 
offender is charged formally.
  There are several Senators who want to speak on this measure. I 
notice the Senator from Ohio has arrived, the coauthor of the proposal.
  I am going to yield to the Chairman of the Finance Committee, Senator 
Roth, who has done outstanding work on this proposal.
  Mr. President, how much time do we have remaining?
  The PRESIDING OFFICER. The Senator from Georgia has 9 minutes 
remaining.
  Mr. COVERDELL. I yield 5 minutes to the chairman of the Finance 
Committee.
  The PRESIDING OFFICER. The Senator from Delaware is recognized for 5 
minutes.
  Mr. ROTH. Mr. President, students of history may remember Henry 
Stimson. He served America as Secretary of War and Secretary of State 
in the first half of the 20th century. While in office, Stimson tried 
to close down American counterintelligence sources. His reason, you may 
recall, was that ``gentlemen do not read each other's mail.''
  Today, Mr. President, Henry Stimson would not only be concerned about 
counterintelligence operations but about the Internal Revenue Service 
as well. Recent reports disclose that among the abuses and misuses of 
power and access at the IRS is the ability of IRS employees to snoop in 
the files of unwitting taxpayers.
  While it's not the mail that these snoops are reading, it is 
something just as sensitive. I don't know of anyone who wants his or 
her detailed financial information perused without reason. The millions 
of Americans who comply with the law and file tax returns each year, 
should be able to do so without fear or hesitation that someone--for 
purposes of curiosity, revenge, or even a more avaricious motive--is 
snooping through their private information.
  If Government has one responsibility to these men and women it 
certainly must be to ensure their privacy. Current law does prohibit 
the disclosure of confidential taxpayer information. However, the 
Internal Revenue Code does not specifically prohibit IRS employees from 
unauthorized inspection or snooping of confidential taxpayer 
information.
  I can think of no better day to call for change that today, April 15, 
when once again those millions of trusting Americans are rushing their 
returns off to the IRS.
  You may remember, Mr. President, that last year, Congress amended 
title 18 of the United States Code to make it a crime to use a computer 
to snoop information of any Federal department or agency, including the 
IRS. However, last year's legislation did not apply to unauthorized 
inspection of paper documents.
  The bill we introduce today will correct that. It will require that 
tax return information be kept confidential by the IRS and it's 
employees. It will ensure that IRS employees do not snoop confidential 
taxpayer information.
  This bill will create a criminal penalty in the Internal Revenue Code 
of up to 1 year in prison and/or a fine of up to $1,000, plus the cost 
of prosecution for unauthorized willful browsing of confidential 
taxpayer information. The bill will also require the abusing employee 
to be fired.
  The bill will allow civil damages for snooping, and, if an IRS 
employee is indicted for unlawful inspection or disclosure of a 
taxpayer's confidential information, the bill will require that the IRS 
notify the taxpayer.
  Mr. President, this bill will provide additional protections and some 
peace of mind for taxpayers. I want to thank Senator Coverdell and 
Senator Glenn for their efforts to protect taxpayers by making it a 
crime for IRS employees to snoop taxpayer data.
  Mr. MOYNIHAN. Mr. President, I rise as an original cosponsor of this 
legislation to associate myself with the remarks of the distinguished 
chairman of the Committee on Finance. Unauthorized browsing of 
confidential tax information undermines the confidence of taxpayers, 
and such behavior ought to be subject to criminal penalties--which it 
will be under this bill.
  This legislation is a product of the bipartisan efforts of the 
Senator from Ohio, Mr. Glenn, the Senator from Georgia, Mr. Coverdell, 
the chairman of the Finance Committee, Senator Roth, and the Senator 
from New York, among others. I join my chairman in urging its prompt 
enactment.
  The PRESIDING OFFICER. Who yields time?
  Mr. GLENN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. GLENN. We each have 17 minutes, is that correct?
  The PRESIDING OFFICER. Seventeen and one-half minutes.
  Mr. GLENN. I yield myself such time as I shall use.
  Mr. President, today is April 15. We do not need to tell everybody 
that. It is tax day for most Americans. On this day, honest hard-
working citizens voluntarily--voluntarily--share their most personal 
and sensitive financial information with their Government.
  All Americans should have unbridled faith that their tax returns will 
remain absolutely, unequivocally confidential and zealously 
safeguarded. That is the hallmark of our taxpaying system, and if this 
trust is breached, it shakes the whole foundation of our very 
Government, because it means our people are losing faith in their 
Government.

[[Page S3182]]

  That is why I am proud to be standing here today as one of the 
authors, one of the sponsors, the Democratic sponsor of legislation to 
outlaw what I have come to term as ``computer voyeurism.'' That is the 
unauthorized inspection of your tax information by those not entitled 
to see it, not the people legitimately working on your tax account.
  In 1993 and 1994, as chairman of the Governmental Affairs Committee, 
I held hearings which first exposed this insidious practice. We came 
across it almost by happenstance.
  In 1990, I was pleased to work with my distinguished colleague who 
just spoke, Senator Roth, then ranking member of the committee, to pass 
into law the Chief Financial Officers Act. That measure required major 
Government agencies to do something for the first time which our own 
private businesses take for granted. That is, producing annual 
auditable financial statements so we know how much money is being 
spent, where it is being spent, and how it is being spent.
  I figured that of all the Government agencies which should be able to 
balance its books and come up with a good auditable statement, it would 
be the IRS; it should be able to account for all the revenue taken in, 
and the IRS would be the agency we would look at first. In fact, before 
the CFO Act, we had no idea of the differences between what revenues 
the IRS reported it was collecting and what was actually on the books. 
Little did I know then how wrong I really was.
  For 4 years running now, the IRS has not been able to pass its own 
audit. The General Accounting Office, which we asked to go in and help 
audit the IRS, still cannot even render an opinion on the reliability 
of the IRS's own books due, in part, to missing records, 
unsubstantiated amounts, and unreliable information. If we have that 
situation in the IRS, you can imagine what the situation is in some of 
the other agencies of Government.
  The IRS, I guess if we put it in our own household terms, it would be 
records in a shoe box under the bed. If your return was being audited 
and you could not come up with the documents, you would be called on 
the carpet for that. You would not get too much sympathy. But all that 
is another story, one of which the Governmental Affairs Committee has 
held numerous oversight hearings on.
  But it was through these initial GAO CFO audits we first discovered 
the problems IRS was having in preventing and detecting employees who 
get their kicks, apparently, out of surfing through other people's tax 
returns, ones they are not supposed to be working on or looking at.
  Our hearings revealed that in the years 1989 to 1994, more than 1,300 
IRS employees were investigated on suspicion of snooping through 
private taxpayer files. Those probes resulted in disciplinary action 
against 420 workers, primarily in the Southeast region where the 
investigation was concentrated.
  My investigation found that some IRS employees had been browsing 
through the financial records of family members, ex-spouses, coworkers, 
neighbors, friends and enemies, and celebrities in particular.
  They also had submitted fraudulent tax returns and then used their 
computer access to monitor the IRS review of those returns.
  They used the computer to issue fraudulent refunds to family and to 
friends and, in fact, one employee was reported to have altered about 
200 accounts and received kickbacks from inflated refund checks.
  We, in Congress, at that time were absolutely stunned at these 
revelations and did not believe it could happen, but it did. But it did 
not light a candle to the firestorm across the country from outraged--
appropriately outraged--American taxpayers because we got a wave of 
indignation. Taxpayers were shocked to know that the most personal 
information they voluntarily, and in good faith, provide to the 
Government could, in effect, become an open book for others' private 
entertainment.
  Even worse was the pitifully low number of employees fired for 
committing these awful actions. It turned out that no criminal 
penalties existed for these kinds of browsing offenses.

  Mr. President, above the entrance to the main IRS building in DC are 
inscribed the famous words uttered by Oliver Wendell Holmes:

       Taxes are what we pay for a civilized society.

  Unfortunately, what American citizens have been subjected to in this 
case is downright uncivilized behavior.
  At our hearings, the Commissioner of Internal Revenue pledged to 
implement a ``zero tolerance'' policy. Warnings of possible prosecution 
for unauthorized use of the system began appearing whenever workers 
logged on to the main taxpayer account database. Explicit memos went 
out to all employees warning them against such unauthorized activities.
  Finally, a new automated detection program, called EARL--electronic 
audit research log--was installed on the primary computer system to 
monitor employee use and alert managers to possible misuse.
  To evaluate the effectiveness of these actions, particularly the new 
computer detection system, I asked GAO to conduct a review. I also 
asked the inspector general at the Department of Treasury to perform an 
inspection.
  In the meantime, we worked with the Treasury Department, the 
Department of Justice and the IRS to come up with a legislative 
solution for closing the legal loophole that let browsers off the hook 
from criminal punishment.
  That effort culminated in the legislation, the Taxpayer Browsing 
Protection Act, which I introduced in 1995 during the 104th Congress 
and as S. 523 for the 105th Congress.
  The goal was simple: to make willful browsers subject to a criminal 
misdemeanor penalty of up to $1,000 and a year in jail, and if any IRS 
employees are convicted of such an offense, they would be fired 
immediately. Zero tolerance should mean what it says--absolutely, 
positively no tolerance.
  That legislation was incorporated into this amendment and was the 
basis for the bill as is currently being considered in the House.
  We were not able to pass my bill in the last Congress--we did come 
close to trying to move it in the Senate--the issue has gotten more 
exposure now due to two recent court cases.
  Just last year, in Tennessee, a jury acquitted a former IRS employee 
who had been charged with 70 counts of improperly peeking at the tax 
returns of celebrities such as Elizabeth Taylor, Dolly Parton, Wynonna 
Judd, Michael Jordan, Lucille Ball, Tom Cruise, President Clinton, and 
Elvis Presley, just to name some of them.
  More recently, just a few weeks ago, a Federal appeals court in 
Boston reversed the conviction of a former employee who had been found 
guilty of several counts of wire and computer fraud by improperly 
accessing the IRS taxpayer database. It is reported that he had browsed 
through several files, including those of a local politician who had 
beaten him in an election, and a woman he once had dated. The 
Government had alleged that this worker was a member of a white 
supremacist group and was collecting data on people he thought could be 
Government informers.
  In both of these cases, though there was unauthorized snooping, 
because there was no subsequent disclosure to third parties, no 
criminal penalties could be meted out. As the First U.S. Circuit Court 
of Appeals held:

       Unauthorized browsing of taxpayer files, although certainly 
     inappropriate conduct, cannot, without more, sustain a felony 
     conviction.

  Sounds ridiculous, but that is what the court ruled. That was their 
interpretation of the fine print of the law. I doubt these kinds of 
decisions give great comfort to honest law-abiding citizens.
  I should note that last year, Congress passed the Economic Espionage 
Act of 1996. My good friend, Senator Leahy, played a major part in this 
effort. This law does provide title 18 criminal penalties for anyone 
intentionally accessing a computer without authorization, or exceeding 
authorized access, and obtaining any information from any Department or 
agency of the United States. This section may be helpful in prosecuting 
future cases, since it would apply to tax information stored in 
computers.
  This provision is not enough in our efforts to deter and punish 
browsing, for, according to the IRS, it does not apply to the 
unauthorized access or inspection of paper tax returns, return

[[Page S3183]]

information in other forms, such as documents or magnetic media, such 
as tapes.
  That is why we, all taxpayers, need the protections originally 
espoused in the bill and incorporated in this amendment to specifically 
fill this gap and ensure unauthorized browsing or inspection of any tax 
information in any form is subject to criminal penalties, and that is 
what this does. It will also provide those criminal sanctions within 
the Internal Revenue Code so that the confidentiality scheme governing 
tax information and the related law enforcement mechanisms are 
preserved in the same section.
  While I do feel the recent court decisions have spurred us on, I also 
believe the new findings contained in a GAO report I released last 
weekend entitled ``IRS Security Systems: Tax Processing Operations and 
Data Still at Risk Due to Serious Weaknesses,'' have brought this 
problem to the forefront.
  This report is the evaluation I asked GAO to undertake in 1994 in 
response to the actions implemented by the IRS to prevent browsing and 
enforce its zero tolerance policy. It was released by GAO earlier this 
year; however, because some of the specific details could potentially 
jeopardize IRS security, the report was designated for ``Limited 
Official Use'' with restricted access.

  I have been involved in this important issue for a long time and 
because I believe the public has a right to know, I requested that GAO 
issue a redacted version of the report suitable for public release. I 
thank GAO for their hard work in this matter and also the IRS for their 
cooperation in making this possible.
  The findings of GAO's report are disturbing. Even more important, 
their conclusions are reaffirmed by the IRS in a comprehensive internal 
report of their own compiled last fall.
  In addition, I should add, they are buttressed to some extent by a 
review I asked the Treasury Inspector General to conduct on IRS 
computer security controls and the Service's progress in addressing the 
shortcomings. That report, too, is ``Limited Official Use.'' But I can 
tell you, while there have been some positive actions taken to 
proactively confront this problem, we are nowhere near any satisfactory 
resolution.
  The bottom line is although the IRS efforts in this area are well-
intentioned, unfortunately they have come too late and fall far short 
of the commitment and determination sorely needed to tackle this 
problem head on.
  The findings of GAO's report are disturbing. Just as important, their 
conclusions are affirmed by the IRS in a comprehensive internal report 
of their own compiled last fall.
  GAO found that serious weaknesses in IRS's information security makes 
taxpayer data vulnerable to authorized use, to modification, or to 
destruction. According to GAO, the IRS also has no effective means for 
measuring the extent of the browsing problem, the damage being done by 
browsing, or the progress being made to deter browsing.
  Finally, and this is something I am having GAO look at further, we do 
not know to what extent the detection and control systems exist in 
other IRS databases, besides ``IDRS,'' the primary taxpayers' account 
system looked at here. That may be open for further problems.
  I was struck by the candor in the IRS's own internal report on the 
``EARL'' detection system. That report found its progress in management 
programs to prevent and detect browsing ``painfully slow,'' as they 
determined. Quite distressing to me, the IRS internal report indicated 
that some employees felt IRS management does not aggressively pursue 
browsing violations. Some workers, when confronted about their snooping 
activities, saw nothing wrong and believed it would be of no 
consequence to them even if they were caught. Hard to believe.
  Mr. President, we have to fix that. When you have over 1,500 
investigations of browsing cases since my last hearings 2 years ago, 
and only 23 workers fired, something just is not right. That does not 
sound like zero tolerance to me.
  I have a more detailed summary of the major findings contained in 
both the GAO and internal IRS report which I ask unanimous consent to 
have printed at the end of my statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. GLENN. I also point out the effectiveness of controls used to 
safeguard IRS systems, facilities, and taxpayer data. GAO found serious 
weaknesses in these efforts, especially in the areas of physical and 
logical security.
  For example, the facilities visited by GAO could not account for over 
6,400 units of magnetic storage media such as tapes and cartridges 
which might contain taxpayer data. Now, IRS responded last week they 
have located 5,700 of the units, but that means that 700 are still 
unaccounted for. That begs the question: Where are they? Are they 
deemed lost? And can they be misused? Each of the units can store tax 
information on thousands of Americans. We need to know where they are. 
Moreover, GAO only visited selected facilities. I just wonder if the 
IRS is able to track all of its inventory at the other major sites not 
visited by GAO. We would like to know what the results are there, too.
  GAO also found that printouts containing taxpayer data were left 
unprotected and unattended in open areas of two facilities, where they 
could be compromised. I do not want to say much more on this portion of 
the report than I have already said, except that these matters and the 
others referred to by GAO must be dealt with swiftly and effectively.
  I am glad to have brought this matter to the Senate's attention and 
am pleased to have the support of colleagues. I commend the efforts of 
Senator Coverdell in this area. He has added very significant 
provisions to some of the original language. I think we have an 
excellent bill. I want to congratulate him for taking the initiative in 
bringing this up.
  The first of the sections that Senator Coverdell brought would 
require that a taxpayer be notified by the Secretary of the Treasury 
when a criminal indictment or charge is brought against an IRS employee 
for unlawful inspection of that taxpayer's return or return 
information. This is something I remember Senator Pryor, our former 
colleague, bringing up before the Commissioner at one of our earlier 
hearings.

  The second new section will provide taxpayers with a civil remedy in 
such unauthorized inspections as similarly provided under current law 
for unlawful disclosures. This provision clarifies that civil liability 
will not be a remedy in cases where the inspection is requested by the 
taxpayer or in any instance which results from an accidental review of 
a return or return information.
  I want to be clear about that last point in reference to the 
legislation at hand. I do not want to compromise IRS employees' ability 
to do what they are supposed to be doing, especially in the areas of 
return processing, examination, and inspection. Under this bill, IRS 
employees will continue to be able to inspect tax returns or return 
information as authorized by the Internal Revenue Code or tax 
administration purposes without penalties. Only intentional, willful, 
unauthorized inspections will be subject to prosecution, where you knew 
or should have known it was wrong.
  As the report by the House Ways and Means Committee states: 
``Accidental or inadvertent inspection that may occur--such as, for 
example, by making an error in typing in a TIN [Taxpayer Identification 
Number]--would not be subject to damages because it would not meet this 
standard.''
  These are good provisions and I welcome their inclusion. I also want 
to thank my distinguished colleague, Senator Roth, who sat with us as 
ranking member of the Governmental Affairs Committee during our 
hearings last year during consideration of the Taxpayer Bill of Rights 
2, pledged his commitment and support for bringing this legislation to 
the floor.
  Let me say a word about the men and women who work at the IRS. The 
vast majority of the people who work at the IRS are just as fine a 
people as there are in this room or anywhere else in this country. They 
are dedicated. They are trying to do a good job. I do not want to 
unduly scare anyone that this is commonplace or that their privacy has 
been violated. You have a few bad apples over there, but I am sure most 
of the people over there want to turn in themselves because most of the 
people

[[Page S3184]]

of the IRS, including the Commissioner, are proud of the work they are 
doing.
  The Commissioner has done a good job in many areas. I have been 
complimentary of her. Her plan to deal with the IRS is a good one. The 
way of getting it downhill to the centers and the different regions and 
having it done there did not occur the way it should have, with what I 
thought was a very good plan. I do not want to condemn all the IRS over 
there. Normally, the people look down on the tax man every April 15. We 
know that. It is not popular to pay taxes. The people working there are 
doing a great service for this country, and we want to weed out those 
few bad apples that may be over there.
  I have visited some of the sites and I know what some of the IRS 
employees are up against. It is not an easy job. They are, by and 
large, a dedicated bunch, committed to their job and laboring under 
difficult conditions with very outmoded systems. Unfortunately, in this 
day and age, they must also fear for their own personal safety. 
However, even just a single incidence of this behavior is one too many 
and cannot be tolerated.
  The IRS has a moral and legal obligation to uphold when Americans 
provide the Government with their most personal and private 
information. The IRS must have the complete trust and confidence of 
taxpayers. That means we cannot tolerate any of this browsing or 
mishandling of accounts. The American people expect and demand nothing 
less.
  I thank you, and I reserve the balance of my time.

  Major Findings From GAO Report, Supplemented With Excerpts From the 
             IRS' Earl Executive Steering Committee Report


      the irs system designed to detect browsing (earl) is limited

       The main monitoring system, EARL, is supposed to be able to 
     detect patterns of potential abuse by IRS employees in the 
     IRS' primary database (IDRS). GAO found that the EARL system 
     is ineffective because it can't distinguish between 
     legitimate work activity and illegal browsing. Only through 
     time-consuming manual reviews, which, according to internal 
     IRS documents can sometimes take up to 40 hours, can actual 
     instances, of snooping be positively identified.
       Moreover, EARL only monitors the main taxpayer database. 
     There are several other systems used by employees to create, 
     access, or modify data which, apparently, go unsupervised. 
     This is something I have asked the GAO to look into further.
       According to GAO, ``because IRS does not monitor the 
     activities of all employees authorized to access taxpayer 
     data . . . IRS has no assurance that these employees are not 
     browsing taxpayer data and no analytical basis on which to 
     estimate the extent of the browsing problem or any damage 
     being done.''
       In fact, according, to the IRS' EARL report:
       ``The current system of reports does not provide accurate 
     and meaningful data about what the abuse detection programs 
     are producing, the quality of the outputs, the efficiency of 
     our abuse detection research efforts, or the level of 
     functional management follow through and discipline. This 
     impedes our ability to respond to critics and congressional 
     oversight inquiries about our abuse detection efforts.''


  irs progress in reducing and disciplining browsing cases is unclear

       IRS' management information systems do not provide 
     sufficient information to describe known browsing incidents 
     precisely or to evaluate their severity consistently.
       The systems used by the IRS cannot report on the total 
     number of unauthorized browsing incidents. Nor do they 
     contain sufficient information to determine, for each case 
     investigated, how many taxpayer accounts were inappropriately 
     accessed or how many times each account was accessed.
       Consequently, for known incidents of browsing, IRS cannot 
     efficiently determine how many and how often taxpayers' 
     accounts were inappropriately accessed. Without such 
     information, IRS cannot measure whether it is making progress 
     from year to year in reducing browsing.
       Internal IRS figures show a fluctuation in the number of 
     browsing cases closed in the last few years: 521 cases in 
     FY'91; 787 in FY'92; 522 in FY'93; 646 in FY'94, and; 869 in 
     FY'95.
       More distressing, however, is the fact that in spite of the 
     Commissioner's announced ``Zero Tolerance'' policy, the 
     percentages of cases resulting in discipline has remained 
     constant from year to year. Figures for FY'91-FY'95 show that 
     the percentage of browsing cases resulting in the IRS' three 
     most severe categories of penalties (disciplinary action, 
     separation, resignation/retirement) has ranged between 23-32 
     percent, with an average of 29 percent.
       The IRS' internal report also confirms this: ``A review of 
     disciplinary actions for IDRS abuse over the last four years 
     showed that only 25% of the cases result in some 
     discipline.''
       That report also indicated that almost one-third of the 
     cases detected were situations where an employee accessed 
     their own account, which, according to the report, is 
     ``generally attributable to trainee error.''


     Incidents of Browsing are Reviewed and Referred Inconsistently

       IRS processing facilities do not consistently review and 
     refer potential browsing cases. They had different policies 
     and procedures for identifying potential violations and 
     referring them to the appropriate unit within IRS for 
     investigation and action. Further, IRS management had not 
     developed procedures to assure that potential browsing cases 
     were consistently reviewed and referred to management 
     officials throughout the agency.
       The IRS internal report identifies this as a problem area, 
     too:
       ``Although the EARL system has been under development since 
     1993, the service has not yet maximized its ability to 
     identify IDRS browsing. The process is labor intensive and 
     there is little accountability for effectively using EARL and 
     handling the cases it identifies. There is little consistency 
     in the detection procedures from one center to the next or in 
     how discipline is applied on abuse cases throughout the 
     nation.''


           Penalties for Browsing are Inconsistent Across IRS

       Despite IRS policy to ensure that browsing penalties are 
     handled consistently across the agency, it appears that there 
     are disparities in how similar cases are decided among 
     different offices, or even sometimes within the same office. 
     Examples of inconsistent discipline included:
       Temporary employees who attempted to access their own 
     accounts were given letters of reprimand, although 
     historically, IRS terminated temporary employees for this 
     type of infraction.
       One employee who attempted to access his own account was 
     given a written warning, while other employees in similar 
     situations, from the same division, were not counseled at 
     all.
       The IRS' EARL internal report also demonstrated widespread 
     deviations on how browsing penalties were imposed. That 
     report showed that for FY'95, for example, the percentage of 
     browsing cases resulting in employee counseling ranged from a 
     low of 0 percent at one facility to 77 percent at another. 
     Similarly, the report showed that the percentage of cases 
     resulting in removal ranged from 0 percent at one facility to 
     7 percent at another. For punishments other than counseling 
     or removal (e.g., suspension), the range was between 10 
     percent and 86 percent.
       More incredible to me--and quite distressing--is the 
     extremely low percentage of employees caught browsing each 
     year who are fired for their offense, according to the IRS' 
     own figures. Would you believe that, for all of the browsing 
     cases detected and closed each year, the highest number of 
     employees fired in one year has been 12. Between FY'91-FY'95, 
     only 43 employees were fired after browsing investigations. 
     That is generally 1% of the total number of cases brought 
     each year. Even if you include the category of resignation 
     and retirement, the highest percentage of employees 
     terminated through separation or resignation/retirement in 
     any one year has been 6%.


Punishments Assessed for Browsing Not Consistently Publicized to Deter 
                               Violations

       GAO found that IRS facilities did not consistently 
     publicize the penalties assessed in browsing cases to deter 
     such behavior. For example, one facility never reported 
     disciplinary actions. By contrast, another facility used its 
     monthly newsletter to report disciplinary actions for 
     browsing, including citing a management official who had 
     accessed a relative's account.
       By inconsistently and incompletely reporting on penalties 
     assessed for employee browsing, IRS is missing an opportunity 
     to more effectively deter such action.

  Mr. COVERDELL. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from Georgia has 4 minutes and 23 
seconds, plus the 5 minutes.
  Mr. COVERDELL. Mr. President, first let me thank my good colleague 
from Ohio, Senator Glenn, for the extended effort and work, some of 
which he outlined in his statement, over a period of years to get at 
this problem. I appreciate his kind remarks in regard to my efforts.
  Mr. President, the fact that we have come to a situation where it has 
been certified by the General Accounting Office and others that 
employees of the Internal Revenue Service have been reviewing personal 
records in an unauthorized way must be stopped. The purpose of this 
legislation is to do just that.
  Senator Glenn also complimented the many loyal employees who work at 
the Internal Revenue Service, and that should be done. We would be 
remiss not to do so.
  Mr. President, there is a reason that half the American people are 
offended

[[Page S3185]]

by this agency. The belligerence, the intimidation is well-documented, 
time and time again, and it is time that aura of having a standard or 
status that is higher than the taxpayer themselves come to an end.
  As I said, on this Senator's part, this legislation is but a 
beginning of the kind of accountability that I think needs to be put in 
place with regard to the relationship between the Internal Revenue 
Service and the American people.
  Somebody said today, in all the flurry of meetings, trying to resolve 
the differences here, that in no case should the average American 
citizen be frightened by an arm of their Government in the day-to-day 
function and relationship between people and their Government. The 
people should not be intimidated. They should not be fearful of this 
relationship.
  I will leave the individual unnamed, but not long ago I was in a 
commercial establishment and I was visiting with probably a 70-year-
old-plus woman in Atlanta. I was completing the transaction, and she 
said she wondered if she might be in touch with me. I said, ``Of 
course.'' I was about to leave, so I was trying to give her my card. I 
said, ``Here is somebody you can call to give me the details,'' and she 
leaned over between her computer and her cash register and motioned me 
to come over and began whispering to me about a problem that involved 
her and the IRS--a 70-year-old woman, a hard worker for years and 
years. She was scared to death. She was whispering to me because she 
was frightened. That has left a mark on me. It has happened to me more 
than once.
  All too often the citizens that contact me with regard to problems 
with the IRS are of very modest means and they cannot defend 
themselves. They cannot protect themselves. They are frightened to 
death.
  I hope what we jointly, in this bipartisan effort, are doing is but, 
as I said, a first step. We are ending a reprehensible practice that 
has occurred on the part of some at the IRS, but there is much work to 
be done as we begin a congressional audit of the Internal Revenue 
Service.
  I am prepared to yield back my time and relinquish the floor for 
final comments from the Senator from Ohio.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. GLENN. I thank my distinguished colleague from Georgia. I know we 
are approaching the time when we are supposed to have a vote.
  The American people have to have the utmost confidentiality in the 
IRS. We have to have somebody collect the taxes that does everybody in 
this country good, that builds roads, the airways, does everything, so 
those who say we are mad at the IRS and we will do away with it, if 
they will just think what they are saying, what we need is to have zero 
tolerance for browsers and misuse of the system. That is what this 
addresses today. Our legislation will get the snoops out of the IRS. 
Our legislation says if you are going to snoop, you are going to jail. 
It is that simple.
  If you are going to snoop, you are going to pay also. You are also 
going to lose your job. I think browsing angers me just like being 
violated personally, almost. Everybody has to feel that way because you 
trust your Government. We say we are giving this information willingly, 
honestly, and then they are misusing it. They are browsing, and the 
information may not remain confidential. We don't know what is going to 
happen to it. The American people deserve better than that.
  I deplore those who are guilty of engaging in IRS-bashing. And it 
always seems to build to a crescendo on April 15. I repeat that most 
IRS employees are just as honest as anybody in this room or anybody in 
America. They are dedicated workers. They want to clean out this 
snooping and they want to see this problem go away just like all the 
rest of us do, so that more Americans don't lose faith in our voluntary 
tax system.
  Mr. President, I ask unanimous consent to add John Kerry of 
Massachusetts and Senator Kohl of Wisconsin to the bill as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEAHY. Mr. President, last Congress we passed legislation I had 
written to provide criminal penalties for unauthorized snooping in 
computers. I understand that the Republican leadership is bringing up 
an extension of that legislation today. I am happy to see them bring it 
up, but I also point out to the American people that we have already 
passed some very strong legislation on this.
  In fact, in terms of privacy protection legislation, we could have 
passed additional, strong legislation last year to provide protection 
and criminal sanctions against misuse of personal medical information, 
except that the Republican leadership objected to it. That medical 
records confidentiality legislation was we put together in a bipartisan 
fashion with Senator Bennett of Utah, myself, and others, based on work 
a number of us have been doing for years, but we were blocked when it 
was going to pass last year. I hope that the Republican leadership 
willingness to extend protections against government snooping into 
private financial records will signal a new attitude and willingness to 
address the crisis that is looming with respect to the confidentiality 
of health care information, as well.
  I think we have to ask, why is it suddenly so important to take up 
this IRS bill today without consideration by the Senate Judiciary 
Committee or any Senate Committee. Aha, what is today? April 15. This 
is, as more and more things around here are, a staged event for 
partisan political purposes. This is tax day, to be sure. But, 
unfortunately, the Republican majority is looking for something to do 
and something to distract from the fact that it is not doing what it is 
supposed to do today.
  Along with all Americans we have to file our income taxes today, 
April 15. The Republican leadership of the House and Senate, however, 
is supposed to pass a budget by April 15. I suspect that there are tens 
of millions of Americans who are getting their taxes filed by today. 
When they go down to file their taxes, having stayed up late and worked 
it out, they should ask the leadership in the House and Senate if that 
Republican leadership has done what the law requires them to do--to 
have a budget by April 15. Guess what? Has one been passed? No. Has one 
even been debated? No. There is a law that says that, by April 15, we 
must pass it, but today will come and go and the Senate will miss its 
statutory deadline.
  Now, I ask my friends throughout this country, Republican, Democrat, 
and Independent, if you don't follow the law that says you have to file 
and pay your taxes by April 15, what is going to happen? Aha, you might 
suddenly become a guest of the State, in a very secure place--bars on 
the windows, bars on the doors.
  What happens to the leadership of the House and the Senate if they 
don't obey the law and have a budget passed by April 15? They will be 
on the floor in the House and the Senate with a distraction.
  So while I support the extension of the law we introduced in 1995 and 
passed last year in order to cover the paper records of the IRS, I 
remain concerned that the Senate is not making the progress that we 
need to make on the Federal budget, on the chemical weapons treaty, and 
on confirming Federal judges. We have confirmed two Federal judges in 4 
months. There are 100 vacancies. Talk about zero population growth. At 
this rate, at the end of the Congress there will 150 vacancies.
  Then there's campaign finance reform. Remember campaign finance 
reform? Has anybody heard of it since the handshake in New Hampshire. 
Ha, ha and ho, ho. The Republican leadership could bring up campaign 
finance reform this afternoon if they wanted to. You are not going to 
see it.
  I understand that the House plans to use the Constitution as a 
political prop again today. I guess I should at least be grateful that 
the Senate has avoided that temptation--for today.
  All I suggest, Mr. President, is that the American people are 
required to follow the law and file their taxes today. The U.S. Senate 
and the House of Representatives are required to have a budget by 
today--and we are waiting.
  Privacy is a precious right of every American. When our own 
Government workers abuse their access to personal information and 
compromise our privacy, it is doubly wrong.
  While I was happy that we are taking this matter up today and to 
support it, I comment briefly on the manner in

[[Page S3186]]

which this matter is proceeding. Unfortunately, the Senate of the 
United States is not doing the work that needs to be done to serve the 
interests of the American people. We are not confirming the Federal 
judges that we all need, we are not making progress on balancing the 
budget, we are not considering the chemical weapons treaty, and we are 
not considering campaign finance reform legislation.
  I commend Senator Glenn for his efforts in following up on his 
longstanding efforts to monitor abuse of access to Internal Revenue 
returns and information by Government employees.
  When we file our tax returns today and the American people reveal to 
the Government intimate details about their personal finances, we 
rightfully expect that the Internal Revenue Service and its employees 
will treat that information with confidentiality, as the law has long 
contemplated. Reports that IRS employees are snooping through these 
files to satisfy their own voyeuristic urges are unacceptable. 
Unauthorized browsing by IRS employees has been a longstanding problem, 
according to a recent GAO report, and one that has concerned a number 
of us for years.
  It is one of the principal circumstances that motivated me to include 
within legislation that I authored last Congress criminal sanctions 
against unauthorized snooping. Back in June 1995, I introduced, with 
Senators Kyl and Grassley, legislation making snooping through use of 
Government computers a crime. We obtained the views of the Attorney 
General, the FBI Director, the Secret Service and others. The bill was 
considered and reported twice by the Senate Judiciary Committee and 
passed by the Senate as part of a legislative package back in October 
1996. The National Information Infrastructure Protection Act, title II 
of Public Law 104-294, made it a Federal crime for Government employees 
to misuse their computer access to obtain private information in 
Government files. Under the law, Government employees who abuse their 
computer privileges to snoop through personal information about 
Americans, including tax information, are subject to criminal 
penalties.
  Part of our purpose in passing that law was to stop the snooping by 
IRS employees of private taxpayer tax returns. In 1994, at least 1,300 
IRS employees were internally investigated for using Government 
computers to browse through the tax returns of friends, relatives, and 
neighbors. At a 1995 oversight hearing of the Department of Justice, I 
asked the Attorney General whether a criminal statute making it clear 
that such snooping is illegal would send a clear signal that we want 
our private information provided to the Government to remain private? 
Her response focused on the need for passage of the NII Protection 
Act. Attorney General Reno stated:

       Enactment of a new statute covering such situations is 
     advisable to send a clear signal about the privacy of such 
     sensitive information. To that end, included as part of [the 
     NII Protection Act] is an amendment to 18 U.S.C. 
     Sec. 1030(a)(2) that would make it clearly illegal for a 
     government employee to intentionally exceed authorized access 
     to a government computer and obtain information.

  I have long been concerned with maintaining the privacy of our 
personal information. Doing so in this age of computer networks is not 
always easy but is increasingly important.
  By passing the NII Protection Act we have already closed a loophole 
that had existed in our laws. That loophole resulted in the dismissal 
of criminal charges earlier this year against an IRS employee who went 
snooping through the tax returns of individuals involved in a 
Presidential campaign, a prosecutor who was investigating a family 
member, a police officer and various social acquaintances. He made 
these unauthorized searches in 1992, before our new law went into 
effect. He was able to retrieve on his computer screen all the taxpayer 
information stored in the IRS main data base in Martinsburg, WV. Since 
the IRS employee did not disclose the information to anyone else and 
did not use it for nefarious purposes, the wire and computer fraud 
charges against him had to be dismissed. The point is that with 
President Clinton having signed the NII Protection Act into law last 
October 11, the law has been corrected to make such unauthorized 
snooping through individual tax records by means of computers a Federal 
crime.
  Employees of the IRS and other Government agencies and departments 
are forewarned that under the law and augmented by the NII Protection 
Act last year, unauthorized browsing through computerized tax filings 
is criminal and will be prosecuted.
  I am hopeful that the National Information Infrastructure Protection 
Act and its privacy protections will help deter illegal browsing by IRS 
employees and help restore the confidence of American taxpayers that 
the private financial information we are obliged to give the Government 
will remain private.
  Our job is not done, however. We need to remain vigilant to protect 
the privacy of our intimate personal information in this era of 
computer networks. I am particularly concerned that we are doing a 
woefully inadequate job at protecting the privacy of our medical 
information. For several years I have worked on legislation to provide 
privacy protection to our health care information. I hope that this 
year we will finally enact this much-needed and overdue legislation. If 
we do not, we risk having the computerized transmissions of health care 
information required by the so-called administrative simplification 
provisions of the law passed last year, without the privacy protection 
that the American people expect and deserve.
  Mr. BAUCUS. Mr. President, the public expects some essential services 
from the Government. Social security payments, highway funding, 
national defense, a safety net in bad times, clean air and water, the 
National Park System, and so on. These are important to the country and 
the Government should provide them.
  So most folks are willing to pay their fair share of taxes. Nobody 
likes it, but most of us do it regularly and honestly. But we do expect 
the Government to keep it fair, make it as simple as possible, and keep 
it private.
  And we've recently found that in their zeal to catch the few people 
who don't pay their taxes, some tax collectors forget the most 
fundamental truth about our tax system. Citizens have rights that must 
be protected.
  One of the first bills I introduced when I first came to the Senate 
was a Taxpayers' Bill of Rights, to protect taxpayers in disputes with 
the Internal Revenue Service. And I noted:

       Oliver Wendell Holmes reasoned that ``Taxes are what we pay 
     for a civilized society.'' However, Justice Holmes did not 
     consider additional burdens imposed on taxpayers--added costs 
     and delays that result from inefficiencies and 
     inconsistencies in the administration of tax law.

  That was back in 1979. And it took a while, but in 1988 we finally 
passed a comprehensive Taxpayer Bill of Rights. That went a long ways 
toward defining taxpayer rights and gave some protection against 
arbitrary actions by the IRS.
  This law made IRS give at least 30 days' notice before levying on a 
taxpayers' property, so that he or she would have time to file an 
appeal. It exempted more kinds of property from IRS levies, and raised 
the wage total exempt from collection. It allowed taxpayers to collect 
costs and attorney's fees from the Government if the IRS acted without 
substantial justification. And it let taxpayers sue the Government for 
damages if IRS employees acted recklessly in collecting taxes or 
intentionally disregarded any provision of the Internal Revenue Code.
  This helped make taxation a little more fair and accountable. But it 
didn't solve all the problems. Last year, we did some more with the 
Taxpayer Bill of Rights II. This created an Office of Taxpayer Advocate 
within the IRS to help taxpayers resolve their problems with the IRS. 
It gave taxpayers more power to take the IRS to court in order to abate 
interest and eased the burden of proof for collecting attorney's fees 
and costs when you challenge an IRS decision and win. And it raised the 
damages a taxpayer can collect in the event an IRS agent recklessly or 
intentionally disregards the Internal Revenue Code.

  But as important as these laws are, we need to do a lot more to give 
taxpayers confidence in the system and the people who work in it.
  Today we're going to go a little further. Every once in a while we 
find that some IRS employees are snooping around in tax returns that 
ought to be private. That's happened twice this

[[Page S3187]]

year--first, with the revelation that President Nixon tried to pressure 
his IRS Administrator to look through political opponents' returns, and 
now when we hear that some IRS employees have browsed in returns for 
fun. Our bill today will impose criminal penalties on anyone who does 
it. And we'll make sure the taxpayer whose records have been violated 
in this way can be notified so that they too can take action. Without 
this high level of protection of taxpayer privacy, we undermine our 
ability to make a system of voluntary taxation work.
  Once this bill is signed into law, as I am confident that it will be, 
we must not rest on our laurels. There is still much work to be done to 
fully protect the rights of taxpayers. The administration proposes 
simplification and Bill of Rights initiatives that we must review very 
soon. The Commission on the Restructuring of the Internal Revenue 
Service will also issue a bipartisan report that will help us address a 
broad range of problems with the IRS.
  That should be a top priority. We need a tax system that brings in 
the revenue to pay for essential services. One that balances the 
budget. But also one that is fair and reasonable, and understands that 
most of us are good people who obey the law and shouldn't be picked on 
all the time. It's that simple.
  Mr. CAMPBELL. Mr. President, I am pleased to be a cosponsor of S. 
522, legislation which would allow civil and criminal penalties to be 
imposed for the unauthorized access of tax returns and return 
information by employees of the Internal Revenue Service or other 
Federal employees. It is altogether appropriate that this issue should 
come before both the House and Senate on April 15, and I applaud the 
efforts of my colleagues, Senators Coverdell and Glenn, to work 
together on this bipartisan piece of legislation.
  Abuse by employees of the IRS has been of concern to Members of 
Congress for many years. Over the years numerous Coloradans have 
written me to express their concerns with this type of abuse as well. 
And with the recent release of the report by the General Accounting 
Office detailing its findings on security problems at the IRS, in 
addition to reports on browsing by IRS employees through private 
taxpayer files, this issue has once again come to the forefront.
  This morning, as chairman of the Appropriations Subcommittee on 
Treasury and General Government, I held a hearing to receive testimony 
on the issue of browsing. For the record, I would like to state the 
witnesses included: Senator John Glenn; Larry Summers, Deputy Secretary 
of the U.S. Department of the Treasury; Dr. Rona B. Stillman, Chief 
Scientist for Computers and Telecommunications with the GAO; Margaret 
Milner Richardson, Commissioner of the IRS; and Valerie Lau, inspector 
general of the U.S. Department of the Treasury.
  It became clear in all of the witnesses' testimonies this morning 
that currently it is not necessarily illegal for IRS employees to 
browse through taxpayer files. The law, as it exists, makes it 
difficult for the IRS to take effective action against those employees 
who are caught browsing taxpayer files.
  Those IRS employees who do access the computerized or paper records 
of celebrities, friends, or enemies most often do so just for the fun 
of it. However, let me tell you--taxpayers do not find this activity 
very funny. It is an invasion of privacy, and unauthorized browsing 
should be punishable with civil and criminal penalties. During this 
morning's hearing, Treasury officials kept referring to taxpayers as 
``customers''. Well, I would like to clarify that in my State 
Coloradans do not consider themselves customers. If anything, they 
consider themselves victims. Unfortunately, taxpayers have become 
victims of browsing, and they currently have no assurances that 
browsers will be held accountable for their actions.
  With that, Mr. President, I ask unanimous consent to submit a couple 
of items for the record to be printed immediately following my 
statement. First, I have an article from the Washington Post. In 
addition, I would also like to submit a relevant section of the 
Electronic Audit Research Log's Executive Steering Committee Report on 
taxpayer privacy.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. CAMPBELL. Finally, I would simply like to reiterate my support 
for S. 522. I would like to be able to tell my constituents that 
Congress recognized the need to safeguard their personal tax records 
and took action accordingly by passing this legislation and sending it 
on to the President for signature.

                               Exhibit 1

                [From the Washington Post, Apr. 9, 1997]

                  IRS Audit Reveals More Tax Browsing

                           (By Stephen Barr)

       The Internal Revenue Service fired 23 employees, 
     disciplined 349 and counseled 472 other workers after agency 
     audits found that government computers were still being used 
     to browse through the tax records of friends, relatives and 
     celebrities, an IRS document released yesterday showed.
       The document, covering fiscal 1994 and 1995, listed 1,515 
     cases where employees were accused of misusing computers. 
     After accounting for the firings, the disciplinary action and 
     the counseling, 33 percent of the cases were closed without 
     any action and the remaining 12 percent took retirement or 
     were cleared.
       Yesterday's disclosure, made by Sen. John Glenn (D-Ohio), 
     marked the second time that IRS employees have been faulted 
     for peeking at tax records. A probe in 1993 and 1994 turned 
     up more than 1,300 employees suspected of using government 
     computers to browse through tax files. At the time, the IRS 
     promised ``zero tolerance'' for such snooping.
       But the new data indicate the problem has continued and the 
     agency does not know how big a problem it has on its hands. 
     ``I don't know what kind of new math they are using, but that 
     doesn't sound like zero tolerance to me,'' Glenn said at a 
     news conference, where he released excerpts of IRS documents 
     and a General Accounting Office (GAO) report.
       Government employees face criminal penalties for misuse of 
     computer databases, but loopholes have thwarted prosecution 
     of some IRS employees who snooped in files but did not 
     disclose the information to others. Glenn and other 
     lawmakers, including House Ways and Means Committee Chairman 
     Bill Archer (R-Tex.), have proposed legislation this year to 
     tighten the laws.
       David A. Mader, the IRS chief for management, said 
     ``browsing is not widespread'' at the 102,000-employee 
     agency, but stressed that curious employees must understand 
     that even one unauthorized peek in tax files undercuts the 
     IRS goal of fair and confidential tax administration. The IRS 
     supports efforts to tighten laws, he said.
       ``It is challenging to change the behavior of an 
     organization this size,'' Mader said. Not every employee 
     deserves to be fired when accused of browsing, he said, but 
     ``we ought to start with the assumption we're going to fire 
     them and then look at the circumstances.
       The disclosure of additional IRS employee snooping comes at 
     a time when privacy advocates are increasingly worried about 
     the government's growing dependence on computers and 
     information technology. The GAO, for example, has issued more 
     than 30 reports in the last four years describing how 
     government systems are vulnerable to ``hackers'' and even 
     federal employees who want to change data, commit fraud or 
     disrupt an agency's operations.
       The GAO, in reviewing IRS computer security at Glenn's 
     request, found that five IRS centers could not account for 
     about 6,400 computer tapes and cartridges that might contain 
     taxpayer data. Since the GAO audit, however, 5,700 of the 
     tapes and cartridges have been found, Mader said. He said the 
     problem involved inventory controls and that no tapes were 
     lost.
       In two centers, computer printouts containing taxpayer data 
     were left unprotected and unattended in open areas, the GAO 
     said.
       GAO found some computer problems were so sensitive that the 
     congressional watchdog agency feared public disclosure could 
     jeopardize IRS security. As a result, Glenn received a 
     confidential report on those problems and the GAO-prepared 
     report released yesterday leaves out some matters and does 
     not identify the tax processing centers with lax security 
     practices. But the breaches of taxpayer privacy led 
     congressional investigators to conclude that IRS computer 
     systems operate with ``serious weaknesses'' that place tax 
     returns and tax files ``at risk to both internal and external 
     threats,'' GAO said.
       The IRS handles more than 200 million taxpayer returns each 
     year at 10 primary centers. After the returns are processed, 
     the data are electronically transmitted to a central computer 
     site, where master files on each taxpayer are maintained and 
     updated.
       To avoid compromising taxpayer information, the IRS 
     developed a software program to monitor the electronic trail 
     left by employees as they call up tax returns and files on 
     their computer screens. The program, the Electronic Audit 
     Research Log (EARL), also signals managers when an employee's 
     work pattern or use of command codes appears at odds with the 
     tasks assigned. The audit trail covered about 58,000 
     employees who use the IRS's main computer system. But the GAO 
     found EARL does not monitor IRS employees using secondary 
     computer systems and does not effectively distinguish between 
     browsing and legitimate work.

[[Page S3188]]

       The IRS internal audit, in a section on disciplining 
     employees, said, ``Some employees, when confronted, indicate 
     they browsed because they do not believe it is wrong and that 
     their will be little or no consequence to them if they are 
     caught.''
       The IRS document added that agency managers ``apply vastly 
     different levels of discipline for similar offenses,'' 
     sending ``an inconsistent message to the workforce.'' Glenn 
     called for swift passage of his bill to end loopholes in the 
     law that allow some federal workers to escape prosecution for 
     browsing through records.
       He cited a federal appeals court decision in February that 
     overturned a guilty verdict against a Ku Klux Klansman 
     employed by the IRS in Boston who browsed through tax records 
     of suspected white supremacists, a family adversary and a 
     political opponent.
       Last year, a former IRS employee was acquitted of criminal 
     charges after peeking at the records of Elizabeth Taylor, 
     Lucille Ball, Tom Cruise, Elvis Presley and other 
     celebrities.
       In both cases, there was little or no testimony to prove 
     that the IRS workers passed information to others or used the 
     information in a criminal way.
       Congress expanded criminal penalties last year to deter the 
     use of computer data without proper authorization, but the 
     provision does not apply to paper tax returns or magnetic 
     tapes.
                                                                    ____


                EARL Executive Steering Committee Report

       Attached are excerpts from a lengthy internal IRS audit on 
     the state of taxpayer privacy at the agency. Following are 
     highlights, including the executive summary of the report. 
     Left out are discussions of computer codes and other 
     primarily technical information.

                                          DISPOSITION OF CASES--MISCONDUCT ALLEGATIONS INVOLVING MISUSE OF IDRS                                         
                                                            [Population approximately 56,500]                                                           
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            FY 1991             FY 1992             FY 1993             FY 1994             FY 1995     
                                                     ---------------------------------------------------------------------------------------------------
                                                       Actions   Percent   Actions   Percent   Actions   Percent   Actions   Percent   Actions   Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clearance...........................................         5         1        75        10        10         2        50         8        58         7
Closed Without Action...............................       174        33       245        31       146        28       204        32       291        33
Counseling..........................................       221        42       202        26       205        39       190        29       282        32
Disciplinary Action.................................       100        19       242        31       140        27       163        25       186        21
Separation..........................................         7         1         7         1         6         1        12         2        11         1
Resignation/Retirement..............................        14         3        16         2        15         3        27         4        41         5
                                                     ---------------------------------------------------------------------------------------------------
      Total.........................................       521  ........       787  ........       522  ........       646  ........       869  ........
Disciplinary Action/as a percent of IDRS users......     0.21%  ........     0.45%  ........     0.28%  ........     0.35%  ........     0.41%  ........
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Mr. HAGEL. Mr. President, we are engaged in an important debate--a 
debate about privacy, liberty, and the role of Government in our lives. 
The American people want less Government, less regulation and less 
taxes. They want less hassle and more respect from their Government.
  I am proud to be an original cosponsor of the Taxpayer Privacy 
Protection Act, which was introduced by my distinguished colleague from 
Georgia, Senator Coverdell. The Senate will vote on this important 
legislation later today, and I urge all of my colleagues to support it.
  As the April 15 income tax deadline approaches each year, Americans 
rush to file their returns while wading through a paper storm of tax 
forms that even some tax lawyers have trouble understanding. During tax 
season, animus for the IRS reaches its peak as taxpayers are reminded 
what an intrusive, overbearing bureaucracy the Internal Revenue Service 
has become.
  Nobody likes taxes, and nobody likes tax collectors. They are 
necessary evils. But if we must have them, then we need to do all we 
can to ease the burden they impose on our citizens and to make the 
system user-friendly and respectful of our people.
  The IRS system today is neither user-friendly nor respectful. Today 
we have an IRS that is out of control from top management all the way 
down to its field offices, and the American taxpayers are paying the 
price for that disarray--a price in inefficiency, inconvenience, 
intrusiveness, and even harassment.
  The American people deserve better. It is bad enough that taxpayers 
have to pay for an agency that wastes their money and time. But it is 
simply unacceptable that the IRS has tolerated some of its employees 
snooping through confidential taxpayer information.
  The headlines of our newspapers have been littered with accounts of 
IRS employees reading taxpayers' confidential files without authority 
and without cause. During fiscal years 1994 and 1995, there were 1,515 
cases of IRS employees browsing through confidential taxpayer computer 
records, according to a recent General Accounting Office report. These 
employees violated the privacy of hundreds of taxpayers when they 
snooped through the tax returns of friends, family member or 
celebrities without authorization and without justification.
  Yet, of those 1,515 cases of snooping, only 844 resulted in employees 
being fired, disciplined, or counseled.
  Let me emphasize that, Mr. President--only 844 of the 1,515 snoops 
had action taken against them. That means almost 700 known cases of 
snooping went unpunished.
  This is not acceptable. Unauthorized snooping is wrong and 
intolerable. That is why the laws need to be changed.
  The Taxpayer Privacy Protection Act imposes civil and criminal 
penalties against IRS employees who snoop through tax returns and 
related information without authority. It puts real power in the hands 
of taxpayers who are the victims of IRS snooping--it lets them bring 
suit against the IRS employee who is responsible. Under this 
legislation, IRS employees can be fired, fined, and jailed if they are 
found guilty of snooping.
  This bill is an important step toward protecting Americans from an 
out of control IRS. It is an important step toward holding IRS 
employees accountable for their actions. It is a small but important 
step toward making our tax system respectful, trustworthy, and sound.
  It should become law--now.
  Mr. FAIRCLOTH. Mr. President, as a cosponsor of S. 522, The Taxpayer 
Browsing Protection Act, I urge my colleagues to support this important 
measure to stop IRS employees from electronically browsing through 
taxpayer files.
  Mr. President, today is not a day when most Americans feel much 
sympathy for the IRS. For many Americans finishing up their tax 
returns, the last several days have been painful ones, with families 
struggling to understand and fill out complex forms, writing checks to 
the IRS and wondering where all the money they send to Washington 
actually goes.
  And it doesn't help to see recent news accounts of the $4 billion of 
the taxpayers money has been wasted by the IRS in an effort to 
modernize its computer system--without success. That's nearly enough 
money to pay for our troops in Bosnia, and for continued disaster 
relief to areas of the country damaged by floods and storms, including 
areas of North Carolina still suffering from the effects of Hurricane 
Fran.
  And so, Mr. President, today is not a good day for the American 
people to be told of yet another outrage at the IRS. As many as 211 
million Americans who file tax returns this year will pay over $1.6 
trillion in taxes. That is outrage enough. Quite frankly, the American 
people are overtaxed, and I hope that we can provide them some tax 
relief this year.
  As complicated and burdensome as our Tax Code has become, the vast 
majority of taxpayers fill out their tax forms honestly and completely. 
In fact, our entire system of tax collection depends on the voluntary 
compliance of the American people. Much of the information contained in 
these tax returns is extremely private and sensitive. Taxpayers have a 
right to expect that this information will be treated with the greatest 
of care.
  For that reason, I was deeply troubled by the results of the recent 
investigation of the Internal Revenue Service by the General Accounting 
Office

[[Page S3189]]

which has prompted this hearing. The GAO has uncovered at least 1,515 
cases where IRS employees have used Government computers to browse 
through the private tax files of Americans--without authorization.
  According to the GAO, this is not the first time that IRS employees 
have been caught peeking in on private tax files. In 1993 and 1994, the 
GAO discovered that more than 1,300 IRS employees had used Government 
computers to electronically browse through tax records. At that time, 
the Commissioner of the IRS announced a new zero tolerance policy for 
such behavior.
  Unfortunately, zero tolerance has been more like zero improvement. 
According to the GAO, little has changed since this problem was first 
identified in 1993. IRS employees are still snooping into tax files 
without proper authorization. The system put in place by the IRS to fix 
the problem and detect unauthorized browsing--the Electronic Audit 
Research Log, or EARL--can't even tell the difference between browsing 
and legitimate work.
  To make matters worse, an IRS internal audit found that many 
employees who were caught browsing did not believe that snooping in 
taxpayers' files is wrong, and perhaps even more troubling, they 
thought there would be little or no consequence to them if they were 
caught.
  I am concerned that we can't count on the senior management of the 
IRS to supervise their employees. In fact, I am concerned about the 
supervisors themselves, and I wonder who is watching them. I find news 
accounts that the IRS may be conducting politically motivated audits of 
selected nonprofit organizations deeply troubling.
  Mr. President, the IRS has demonstrated that it cannot adequately 
supervise its own employees to protect the privacy of the American 
people. Stronger measures are clearly needed. That is why I am a 
cosponsor of of S. 522, The Taxpayer Browsing Protection Act offered by 
my good friend, Senator Coverdell. I join my colleagues in support of 
the measure.
  Mr. President, due to a prior family commitment, I was unavoidably 
detained and missed the vote on S. 522. Had I been present I would have 
voted ``aye.''
  Mr. COVERDELL. Mr. President, I ask for yeas and nays on final 
passage.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  Mr. COVERDELL. Mr. President, I urge adoption of the amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
45.
  The amendment (No. 45) was agreed to.
  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading, was read 
the third time.
  The PRESIDING OFFICER. The question now occurs on passage of the 
bill.
  The yeas and nays have been ordered. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina [Mr. 
Faircloth] and the Senator from Oregon [Mr. Gordon Smith] are 
necessarily absent.
  Mr. FORD. I announce that the Senator from West Virginia [Mr. 
Rockefeller] is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 97, nays 0, as follows:

                      [Rollcall Vote No. 43 Leg.]

                                YEAS--97

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Cleland
     Coats
     Cochran
     Collins
     Conrad
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Ford
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Helms
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Mikulski
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Reed
     Reid
     Robb
     Roberts
     Roth
     Santorum
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Warner
     Wellstone
     Wyden

                             NOT VOTING--3

     Faircloth
     Rockefeller
     Smith (OR)
  The bill (S. 522), as amended, was passed, as follows

                                 S. 522

       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 for 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

[[Page S3190]]

     ``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.

     SEC. 4. NATIONAL FLOOD INSURANCE ACT OF 1968.

       (a) In General.--Section 1306(c)(1) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013(c)(1)) is amended by 
     striking ``30'' and inserting ``15''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall be construed to have taken effect on January 1, 1997, 
     and shall expire June 30, 1997.

  Mr. GLENN. Mr. President, I move to reconsider the vote by which the 
bill, as amended, was passed.
  Mr. COVERDELL. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. LOTT. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LOTT. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Mr. President, I would like to announce officially--as most 
Senators know, but in case they missed it--that that was the last 
recorded vote for the day. We are discussing some other issues that we 
hope to get agreement on today and tomorrow. We will keep the Members 
informed on that.

                          ____________________