[Congressional Record Volume 153, Number 61 (Tuesday, April 17, 2007)]
[House]
[Pages H3417-H3423]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1330
TAXPAYER PROTECTION ACT OF 2007
Mr. LEWIS of Georgia. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 1677) to amend the Internal Revenue Code of 1986 to
enhance taxpayer protections and outreach, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1677
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer
Protection Act of 2007''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; etc.
Sec. 2. Family business tax simplification.
Sec. 3. Taxpayer notification of suspected identity theft.
Sec. 4. Extension of time for return of property for wrongful levy.
Sec. 5. Individuals held harmless on wrongful levy, etc., on individual
retirement plan.
Sec. 6. Clarification of IRS unclaimed refund authority.
Sec. 7. Prohibition on IRS debt indicators for predatory refund
anticipation loans.
Sec. 8. Prohibition on misuse of Department of the Treasury names and
symbols.
Sec. 9. EITC outreach.
Sec. 10. Modification of rules pertaining to FIRPTA nonforeign
affidavits.
Sec. 11. Disclosure of prisoner return information to Federal Bureau of
Prisons.
Sec. 12. Increase in penalty for bad checks and money orders.
SEC. 2. FAMILY BUSINESS TAX SIMPLIFICATION.
(a) In General.--Section 761 (defining terms for purposes
of partnerships) is amended by redesignating subsection (f)
as subsection (g) and by inserting after subsection (e) the
following new subsection:
``(f) Qualified Joint Venture.--
``(1) In general.--In the case of a qualified joint venture
conducted by a husband and wife who file a joint return for
the taxable year, for purposes of this title--
``(A) such joint venture shall not be treated as a
partnership,
``(B) all items of income, gain, loss, deduction, and
credit shall be divided between the spouses in accordance
with their respective interests in the venture, and
``(C) each spouse shall take into account such spouse's
respective share of such items as if they were attributable
to a trade or business conducted by such spouse as a sole
proprietor.
``(2) Qualified joint venture.--For purposes of paragraph
(1), the term `qualified joint venture' means any joint
venture involving the conduct of a trade or business if--
``(A) the only members of such joint venture are a husband
and wife,
``(B) both spouses materially participate (within the
meaning of section 469(h) without regard to paragraph (5)
thereof) in such trade or business, and
``(C) both spouses elect the application of this
subsection.''.
(b) Net Earnings From Self-Employment.--
(1) Subsection (a) of section 1402 (defining net earnings
from self-employment) is amended by striking ``, and'' at the
end of paragraph (15) and inserting a semicolon, by striking
the period at the end of paragraph (16) and inserting ``;
and'', and by inserting after paragraph (16) the following
new paragraph:
``(17) notwithstanding the preceding provisions of this
subsection, each spouse's share of income or loss from a
qualified joint venture shall be taken into account as
provided in section 761(f) in determining net earnings from
self-employment of such spouse.''.
(2) Subsection (a) of section 211 of the Social Security
Act (defining net earnings from self-employment) is amended
by striking ``and'' at the end of paragraph (14), by striking
the period at the end of paragraph (15) and inserting ``;
and'', and by inserting after paragraph (15) the following
new paragraph:
``(16) Notwithstanding the preceding provisions of this
subsection, each spouse's share of income or loss from a
qualified joint venture shall be taken into account as
provided in section 761(f) of the Internal Revenue Code of
1986 in determining net earnings from self-employment of such
spouse.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
[[Page H3418]]
SEC. 3. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY THEFT.
(a) In General.--Chapter 77 (relating to miscellaneous
provisions) is amended by adding at the end the following new
section:
``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
``If, in the course of an investigation under section 7206
(relating to fraud and false statements) or 7207 (relating to
fraudulent returns, statements, or other documents), the
Secretary determines that there was or may have been an
unauthorized use of the identity of the taxpayer or
dependents, the Secretary shall--
``(1) as soon as practicable and without jeopardizing such
investigation, notify the taxpayer of such determination, and
``(2) if any person is criminally charged by indictment or
information under either of such sections, notify such
taxpayer as soon as practicable of such charge.''.
(b) Clerical Amendment.--The table of sections for chapter
77 is amended by adding at the end the following new item:
``Sec. 7529. Notification of suspected identity theft.''.
(c) Effective Date.--The amendments made by this section
shall apply to determinations made after the date of the
enactment of this Act.
SEC. 4. EXTENSION OF TIME FOR RETURN OF PROPERTY FOR WRONGFUL
LEVY.
(a) Extension of Time for Return of Property Subject to
Levy.--Subsection (b) of section 6343 (relating to return of
property) is amended by striking ``9 months'' and inserting
``2 years''.
(b) Period of Limitation on Suits.--Subsection (c) of
section 6532 (relating to suits by persons other than
taxpayers) is amended--
(1) in paragraph (1) by striking ``9 months'' and inserting
``2 years'', and
(2) in paragraph (2) by striking ``9-month'' and inserting
``2-year''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) levies made after the date of the enactment of this
Act, and
(2) levies made on or before such date if the 9-month
period has not expired under section 6343(b) of the Internal
Revenue Code of 1986 (without regard to this section) as of
such date.
SEC. 5. INDIVIDUALS HELD HARMLESS ON WRONGFUL LEVY, ETC., ON
INDIVIDUAL RETIREMENT PLAN.
(a) In General.--Section 6343 (relating to authority to
release levy and return property) is amended by adding at the
end the following new subsection:
``(f) Individuals Held Harmless on Wrongful Levy, Etc. on
Individual Retirement Plan.--
``(1) In general.--If the Secretary determines that an
individual retirement plan has been levied upon in a case to
which subsection (b) or (d)(2)(A) applies, an amount equal to
the sum of--
``(A) the amount of money returned by the Secretary on
account of such levy, and
``(B) interest paid under subsection (c) on such amount of
money,
may be deposited into such individual retirement plan or any
other individual retirement plan (other than an endowment
contract) to which a rollover from the plan levied upon is
permitted.
``(2) Treatment as rollover.--If amounts are deposited into
an individual retirement plan under paragraph (1) not later
than the 60th day after the date on which the individual
receives the amounts under paragraph (1)--
``(A) such deposit shall be treated as a rollover described
in section 408(d)(3)(A)(i),
``(B) to the extent the deposit includes interest paid
under subsection (c), such interest shall not be includible
in gross income, and
``(C) such deposit shall not be taken into account under
section 408(d)(3)(B).
For purposes of subparagraph (B), an amount shall be treated
as interest only to the extent that the amount deposited
exceeds the amount of the levy.
``(3) Refund, etc., of income tax on levy.--If any amount
is includible in gross income for a taxable year by reason of
a levy referred to in paragraph (1) and any portion of such
amount is treated as a rollover under paragraph (2), any tax
imposed by chapter 1 on such portion shall not be assessed,
and if assessed shall be abated, and if collected shall be
credited or refunded as an overpayment made on the due date
for filing the return of tax for such taxable year.
``(4) Interest.--Notwithstanding subsection (d), interest
shall be allowed under subsection (c) in a case in which the
Secretary makes a determination described in subsection
(d)(2)(A) with respect to a levy upon an individual
retirement plan.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid under subsections (b), (c), and
(d)(2)(A) of section 6343 of the Internal Revenue Code of
1986 after the date of the enactment of this Act.
SEC. 6. CLARIFICATION OF IRS UNCLAIMED REFUND AUTHORITY.
Section 6103(m)(1) (relating to tax refunds) is amended by
inserting ``, and through any other means of mass
communication,'' after ``media''.
SEC. 7. PROHIBITION ON IRS DEBT INDICATORS FOR PREDATORY
REFUND ANTICIPATION LOANS.
(a) In General.--Subsection (f) of section 6011 (relating
to promotion of electronic filing) is amended by adding at
the end the following new paragraph:
``(3) Prohibition on irs debt indicators for predatory
refund anticipation loans.--
``(A) In general.--In carrying out any program under this
subsection, the Secretary shall not provide a debt indicator
to any person with respect to any refund anticipation loan if
the Secretary determines that the business practices of such
person involve refund anticipation loans and related charges
and fees that are predatory.
``(B) Refund anticipation loan.--For purposes of this
paragraph, the term `refund anticipation loan' means a loan
of money or of any other thing of value to a taxpayer secured
by the taxpayer's anticipated receipt of a Federal tax
refund.
``(C) IRS debt indicator.--For purposes of this paragraph,
the term `debt indicator' means a notification provided
through a tax return's acknowledgment file that a refund will
be offset to repay debts for delinquent Federal or State
taxes, student loans, child support, or other Federal agency
debt.''.
(b) Effective Date.--The amendment made by this section
shall apply to determinations after the date of the enactment
of this Act.
SEC. 8. PROHIBITION ON MISUSE OF DEPARTMENT OF THE TREASURY
NAMES AND SYMBOLS.
(a) In General.--Subsection (a) of section 333 of title 31,
United States Code, is amended by inserting ``internet domain
address,'' after ``solicitation,'' both places it appears.
(b) Penalty for Misuse by Electronic Means.--Subsections
(c)(2) and (d)(1) of section 333 of such Code are each
amended by inserting ``or any other mass communications by
electronic means,'' after ``telecast,''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to violations occurring after the
date of the enactment of this Act.
SEC. 9. EITC OUTREACH.
(a) In General.--Section 32 (relating to earned income) is
amended by adding at the end the following new subsection:
``(n) Notification of Potential Eligibility for Credit and
Refund.--
``(1) In general.--To the extent possible and on an annual
basis, the Secretary shall provide to each taxpayer who--
``(A) for any preceding taxable year for which credit or
refund is not precluded by section 6511, and
``(B) did not claim the credit under subsection (a) but may
be allowed such credit for any such taxable year based on
return or return information (as defined in section 6103(b))
available to the Secretary,
notice that such taxpayer may be eligible to claim such
credit and a refund for such taxable year.
``(2) Notice.--Notice provided under paragraph (1) shall be
in writing and sent to the last known address of the
taxpayer.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.
SEC. 10. MODIFICATION OF RULES PERTAINING TO FIRPTA
NONFOREIGN AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating
to exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be treated as
applying to a transaction if, in connection with a
disposition of a United States real property interest--
``(i) the affidavit specified in paragraph (2) is furnished
to a qualified substitute, and
``(ii) the qualified substitute furnishes a statement to
the transferee stating, under penalty of perjury, that the
qualified substitute has such affidavit in his possession.
``(B) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445
(relating to definitions) is amended by adding at the end the
following new paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a United
States real property interest--
``(A) the person (including any attorney or title company)
responsible for closing the transaction, other than the
transferor's agent, and
``(B) the transferee's agent.''.
(c) Exemption Not to Apply if Knowledge or Notice That
Affidavit or Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b) (relating
to special rules for paragraphs (2) and (3)) is amended to
read as follows:
``(7) Special rules for paragraphs (2), (3), and (9).--
Paragraph (2), (3), or (9) (as the case may be) shall not
apply to any disposition--
``(A) if--
``(i) the transferee or qualified substitute has actual
knowledge that the affidavit referred to in such paragraph,
or the statement referred to in paragraph (9)(A)(ii), is
false, or
``(ii) the transferee or qualified substitute receives a
notice (as described in subsection (d)) from a transferor's
agent, transferee's agent, or qualified substitute that such
affidavit or statement is false, or
``(B) if the Secretary by regulations requires the
transferee or qualified substitute
[[Page H3419]]
to furnish a copy of such affidavit or statement to the
Secretary and the transferee or qualified substitute fails to
furnish a copy of such affidavit or statement to the
Secretary at such time and in such manner as required by such
regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d) (relating to
notice of false affidavit; foreign corporations) is amended
to read as follows:
``(1) Notice of false affidavit; foreign corporations.--
If--
``(A) the transferor furnishes the transferee or qualified
substitute an affidavit described in paragraph (2) of
subsection (b) or a domestic corporation furnishes the
transferee an affidavit described in paragraph (3) of
subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual knowledge that such affidavit
is false, or
``(II) in the case of an affidavit described in subsection
(b)(2) furnished by a corporation, such corporation is a
foreign corporation, or
``(ii) any transferee's agent or qualified substitute, such
agent or substitute has actual knowledge that such affidavit
is false,
such agent or qualified substitute shall so notify the
transferee at such time and in such manner as the Secretary
shall require by regulations.''.
(B) Failure to furnish notice.--Paragraph (2) of section
1445(d) (relating to failure to furnish notice) is amended to
read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent, transferee's
agent, or qualified substitute is required by paragraph (1)
to furnish notice, but fails to furnish such notice at such
time or times and in such manner as may be required by
regulations, such agent or substitute shall have the same
duty to deduct and withhold that the transferee would have
had if such agent or substitute had complied with paragraph
(1).
``(B) Liability limited to amount of compensation.--An
agent's or substitute's liability under subparagraph (A)
shall be limited to the amount of compensation the agent or
substitute derives from the transaction.''.
(C) Conforming amendment.--The heading for section 1445(d)
is amended by striking ``or Transferee's Agents'' and
inserting ``, Transferee's Agents, or Qualified
Substitutes''.
(d) Effective Date.--The amendments made by this section
shall apply to dispositions of United States real property
interests after the date of the enactment of this Act.
SEC. 11. DISCLOSURE OF PRISONER RETURN INFORMATION TO FEDERAL
BUREAU OF PRISONS.
(a) In General.--Subsection (k) of section 6103 (relating
to disclosure of certain return and return information for
tax administration purposes) is amended by adding at the end
the following new paragraph:
``(10) Disclosure of certain return information of
prisoners to federal bureau of prisons.--
``(A) In general.--Under such procedures as the Secretary
may prescribe, the Secretary may disclose to the head of the
Federal Bureau of Prisons any return information with respect
to individuals incarcerated in Federal prison whom the
Secretary has determined may have filed or facilitated the
filing of a false return to the extent that the Secretary
determines that such disclosure is necessary to permit
effective Federal tax administration.
``(B) Restriction on redisclosure.--Notwithstanding
subsection (n), the head of the Federal Bureau of Prisons may
not disclose any information obtained under subparagraph (A)
to any person other than an officer or employee of such
Bureau.
``(C) Restriction on use of disclosed information.--Return
information received under this paragraph shall be used only
for purposes of and to the extent necessary in taking
administrative action to prevent the filing of false and
fraudulent returns, including administrative actions to
address possible violations of administrative rules and
regulations of the prison facility.
``(D) Annual report.--In each of the calendar years 2007
through 2010, the Secretary shall submit to Congress and make
publicly available a report on the filing of false and
fraudulent returns by individuals incarcerated in Federal and
State prisons. Such report shall include statistics on the
number of false and fraudulent returns associated with each
Federal and State prison.
``(E) Termination.--No disclosure may be made under this
paragraph after December 31, 2010.''.
(b) Recordkeeping.--Paragraph (4) of section 6103(p) is
amended by striking ``(k)(8)'' both places it appears and
inserting ``(k)(8) or (10)''.
(c) Evaluation by Treasury Inspector General for Tax
Administration.--Paragraph (3) of section 7803(d) is amended
by striking ``and'' at the end of subparagraph (A), by
striking the period at the end of subparagraph (B) and
inserting ``; and'', and by adding at the end the following
new subparagraph:
``(C) not later than December 31, 2009, submit a written
report to Congress on the implementation of section
6103(k)(10).''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to disclosures
made after December 31, 2007.
(2) Annual report.--Section 6103(k)(10)(D) of the Internal
Revenue Code of 1986 (relating to annual reports), as added
by this section, shall apply to reports submitted after the
date of the enactment of this Act.
SEC. 12. INCREASE IN PENALTY FOR BAD CHECKS AND MONEY ORDERS.
(a) In General.--Section 6657 (relating to bad checks) is
amended--
(1) by striking ``$750'' and inserting ``$1,250'', and
(2) by striking ``$15'' and inserting ``$25''.
(b) Effective Date.--The amendments made by this section
shall apply to checks or money orders received after the date
of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Georgia (Mr. Lewis) and the gentleman from Minnesota (Mr. Ramstad) each
will control 20 minutes.
The Chair recognizes the gentleman from Georgia.
Mr. LEWIS of Georgia. Mr. Speaker, I yield myself such time as I may
consume.
I rise in strong support of H.R. 1677 and am pleased to be a lead co-
sponsor of this bill with Chairman Rangel.
Today is the due date for Americans to file their tax returns. On
this day, it is wise for the House to consider a bill to increase
taxpayer protection and expand outreach efforts to millions of
Americans.
Mr. Speaker, this is an important bill; this is a timely bill. The
Taxpayer Protection Act is a result of a hearing held by the Oversight
Subcommittee that I chair. H.R. 1677 is an important first step in
standing up, really standing up for the American taxpayer. It is a
shame that people use fraudulent tax schemes to steal Social Security
numbers and financial information from Americans.
This legislation protects taxpayers from misleading Web sites and
identity theft. H.R. 1677 provides higher penalties for persons who use
either Web site names that may be confused with the official IRS Web
site or mass e-mails that appear to be from the IRS. This bill requires
the IRS to notify you if your identity is stolen in a tax scam.
You should not become more vulnerable for being a responsible
citizen. The Taxpayer Protection Act prohibits the IRS from providing
certain information to businesses that the IRS believes make predatory
loans based on tax refunds. These short-term loans often charge
interest rates sometimes above 100 percent that victimize low-income
workers.
H.R. 1677 will also assist with efforts to reach millions of working
Americans who are eligible to claim the earned income tax credit. These
taxpayers often do not take advantage of the EITC. They have a right to
know of all benefits available to them. Under this bill, the IRS will
expand its current outreach program to help more low-income Americans
receive this tax credit, a credit which lifts millions of families out
of poverty each year.
This bipartisan legislation moves us in the right direction to make
tax issues simpler and clearer for the average person. We must fight
poverty, fight fraud, and provide these basic protections for all
Americans.
Mr. Speaker, I fully support the Taxpayer Protection Act, and I urge
all of my colleagues on both sides of the aisle to vote ``yes'' for
H.R. 1677.
Mr. Speaker, I reserve the balance of my time.
Mr. RAMSTAD. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I strongly support the Taxpayer Protection Act. This
legislation is a package of commonsense reforms that passed the Ways
and Means Committee by a voice vote with broad bipartisan support, and
I want to take this opportunity to thank Chairman Rangel of the full
Ways and Means Committee, as well as Chairman Lewis, the chairman of
our Oversight Subcommittee, for working in a bipartisan, pragmatic and
commonsense way on this legislation, and for working in a bipartisan
way thus far generally in the committee. I also want to thank Ranking
Member McCrery for his leadership.
Mr. Speaker, true to its name, this bill will protect taxpayers and
expand their rights. One important reform will prevent Internet domains
from using the Treasury Department's name or symbol, which is usually
done to trick people into giving out sensitive personal or financial
information. Clearly, this should not be allowed and should be
outlawed, as this bill provides. It
[[Page H3420]]
prohibits phishing, and by that I mean phishing with a ``P-H,'' not the
kind that Minnesota is famous for. We are referring here to mass e-mail
communications falsely claiming to be from the IRS that can lead to
identity theft and have victimized too many Americans.
The bill also requires the IRS to notify taxpayers when there is an
unauthorized use of the taxpayer's identity. This will help taxpayers
take steps to clear their names quickly if and when their identity is
stolen.
Another commonsense provision of this bill allows the IRS to return
funds directly to a taxpayer's retirement account if the IRS improperly
levied fines from that account.
One provision, Mr. Speaker, that received considerable attention in
the committee deals with refund anticipation loans. I mentioned in the
committee that while I certainly understand the motivation behind the
provision and the belief that the IRS should not be a facilitator for
predatory loans, I am concerned because the bill does not define
``predatory''; but I trust, Mr. Speaker, that will be clarified in the
conference.
I also hope we are not inadvertently making this problem worse by
denying lenders information on ``debt indicators'' so that the
provision increases the risk that a lender will not be reimbursed by
the taxpayer's refund. This could cause lenders to increase fees and
interest rates even further, making taxpayers pay even more for early
access to their refunds. While I am not opposed to the provision, this
should be addressed in the conference.
I strongly support another provision in the bill which would
encourage the IRS to do more to ensure that taxpayers entitled to
receive earned income credit refunds actually receive them.
Mr. Speaker, as we all know, the earned income credit is one of our
most effective antipoverty tools for working families. This provision
certainly deserves our strong support.
Mr. Speaker, I am also very pleased that the committee adopted my
amendment to prevent tax fraud by prison inmates. This amendment is
based on legislation that Chairman Lewis and I introduced in the last
Congress in response to a hearing we held in 2005. This hearing
revealed massive tax fraud going on within the walls of our Nation's
prisons. In fact, the IRS testified that 15 percent of all tax fraud in
the United States is committed by prison inmates while in prison. Tax
fraud in any form is obviously unacceptable and illegal; but it is
particularly outrageous and egregious when it is committed by prison
inmates who are supposed to be paying their debt to society, not
bilking taxpayers.
For example, we heard testimony, Mr. Speaker, from one inmate who had
swindled taxpayers to the tune of $3.5 million in false tax return
claims, and this was not an isolated incident.
While the IRS is able to detect some inmate tax fraud, far too much
of it falls through the cracks. And, unfortunately, the IRS is
prohibited by current law from sharing information with prison
officials that would allow those officials to punish and stop this
fraud.
My amendment, and I appreciate the chairman's support of this
amendment, my amendment would allow the IRS to disclose information to
Federal prison officials to help them stop the tax fraud that is
occurring right under their noses within the walls of Federal prisons.
I hope in time this commonsense provision can also be extended to
include State prisons.
Mr. Speaker, it is truly fitting that in a bill entitled the Taxpayer
Protection Act we protect honest taxpayers from such blatant,
outrageous fraud that is being committed by some prison inmates.
Mr. Speaker, I urge my colleagues to protect taxpayers and support
this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. LEWIS of Georgia. Mr. Speaker, I thank my friend, my colleague,
the ranking member, for all of his help and support in bringing this
legislation before us today.
General Leave
Mr. LEWIS of Georgia. Mr. Speaker, I ask unanimous consent to give
Members 5 legislative days to revise and extend their remarks on the
bill, H.R. 1677.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Georgia?
There was no objection.
Mr. LEWIS of Georgia. Mr. Speaker, I yield 3 minutes to the gentleman
from North Dakota (Mr. Pomeroy), a member of the committee.
Mr. POMEROY. Mr. Speaker, I want to commend my friend, the chairman
of the Oversight Subcommittee, the former chairman, now ranking member
of the Oversight Subcommittee, for bringing this bipartisan bill to the
floor.
There are a couple of features I wish to speak to: one, we prohibit
use of misleading Internet names. I want to show you why I think that
is important.
This is Departmentofthetreasury
.com. You pull it up and it looks like an official Web page of the
Federal Government. However, the second page on this same domain name
shows
Departmentofthetreasury.com is for sale. Basically, departmentofthe
treasury.gov is the protected government name, and dot-com is a private
name that preys upon the public believing they are communicating with
the Federal Government, and they are not.
Now, I think we ought to take some exception to the marketing
``Departmentofthetreasury.com is for sale.'' That is a public name. It
is owned by the American people. You can't sell something you don't
own, and that is a name appropriately reserved reflecting the
Department of Treasury of this country, and nobody should be allowed to
make a plug nickel on it.
Here is some body of information showing just how lucrative it might
be for those who want to prey upon the public using Federal names.
There is a domain site called IRS.com, and inconceivably to me, they
rang the bell as some prized business concern in the American Stock
Exchange this morning. Well, I think a business that preys upon the
public with misleading domain names is no business you want to
celebrate in ringing the bell of a great stock exchange.
In fact, public reports, as reported in the New York Times today,
show that their revenues jumped from $17.5 in 2005 to $25.6 million
after IRS.com paid $12.9 million for that domain name. I have pulled up
IRS.com. Some would say there is clear disclosure; this is not a public
site. IRS.com has IRS. It has tax information, and in little tiny,
flyspeck language it has the disclosure. It is deliberately built to
deceive, and in fact one survey showed that 40 percent of those
accessing the site thought it was a Federal site. And even after seeing
it, one-third thought it was a Federal site. But they use this site to
market information to taxpayers.
Just to conclude, the business plan of these enterprises to get
people to the site, they then have other services offered on the site.
The domain holder, IRS.com, is paid for each link accessed by a member
of the public. Some of the things sold on that site represent very low
value: refund anticipation loans or expensive tax preparation services.
This is a fraud on the public, and we ought to put an end to it.
I also appreciate what we are doing, turning up the heat on these
refund anticipation loans, or RALs. To me, they represent an
exceedingly poor value to the American public. In fact, such a poor
value that I can't believe people are accessing them if they knew the
facts and knew the costs. The commissioner has identified some of the
practices as predatory lending in testimony to the committee. I like
giving the Treasury Department authority to deal with people engaged in
predatory lending practices. I urge passage of the bill.
{time} 1345
Mr. RAMSTAD. Mr. Speaker, I reserve the balance of my time.
Mr. LEWIS of Georgia. Mr. Speaker, I yield 2 minutes to the gentleman
from Pennsylvania (Mr. Carney).
Mr. CARNEY. Mr. Speaker, I thank Mr. Lewis for his leadership on this
very important bill that we are discussing today.
I rise today in support of the Taxpayer Protection Act of 2007. I
have spent the last 2 weeks in northeast and central Pennsylvania
hearing from families in my district about matters
[[Page H3421]]
that concern them, and one thing was consistent. Our middle-class
families deserve a tax cut and tax protection.
It is time to start protecting our taxpayers, Mr. Speaker. This
bipartisan legislation will do just that. This legislation requires the
IRS to notify taxpayers if there has been an unauthorized use of their
identity. This is a serious issue, and the IRS must be actively
contacting those individuals who may have fallen victim to identity
theft.
This bill protects those who would receive a tax break, also. It
requires the IRS to notify those who would be eligible for a tax break.
For example, it requires the IRS to conduct additional earned income
tax credit outreach, including notifying those who are eligible about
how to apply for it.
The Taxpayer Protection Act supports small, family-owned businesses
and allows for spouses of the family-owned business to pay Social
Security and Medicare taxes as a sole proprietorship rather than as a
partnership. This will save our small businesses money, promoting
investment and growth in our communities.
I came to Congress to stand up for working families, both in my
State, Pennsylvania, and this country. This bipartisan bill protects
taxpayers, protects families and protects individuals; and I am proud
to support it today.
Mr. Speaker, I just want to mention our condolences for those at
Virginia Tech University. I think today everybody in this country is a
Hokie.
Mr. RAMSTAD. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Herger), a distinguished member of the Ways and Means
Committee and ranking member of the Trade Subcommittee.
Mr. HERGER. Mr. Speaker, in 2001 President Bush and Congress worked
to enact the most important tax relief since Ronald Reagan in the
1980s.
For individuals and families, we reduced marginal tax rates on
personal income, doubled the child tax credit, reduced the unfair
marriage tax penalty, phased out the onerous death tax, and
significantly lessened the impact of the alternative minimum tax. We
also provided essential tax relief on investment income.
Far from taxpayer protection, as this bill's title suggests, we are
now hearing proposals from the other side that would do away with the
tax relief of the last 6 years. Contrary to the naysayers, tax relief
has played a critical role in revitalizing our Nation's economy.
Over 7.5 million new jobs have been created since 2003. The national
unemployment rate has fallen to a very low 4.4 percent. Economic growth
has been steady and strong. Our investment markets are no longer
bursting; they are booming.
American families and small businesses did not just sit on the $1.1
trillion that we returned to them. They put much of it back into our
economy through investment and consumption. The result: Tax revenues
are up 35 percent and deficits are much lower than CBO anticipated.
Mr. Speaker, as we observe tax day, to truly protect taxpayers,
Congress should talk about ways to make the tax relief we have
permanent. Regrettably, the majority party and its budget anticipate
the opposite.
Mr. LEWIS of Georgia. Mr. Speaker, I yield 1 minute to the gentleman
from California (Mr. McNerney).
Mr. McNERNEY. Mr. Speaker, I rise today in strong support of the
Taxpayer Protection Act of 2007.
I would like to commend Chairman Rangel and Ranking Member McCrery
for bringing this bill to the floor and for working to simplify our tax
policies.
Today's Tax Code has become so complex that it takes more than 25
hours to complete an itemized tax return. That is about 10 hours longer
than in 1988.
Small business owners will also benefit significantly from this
legislation by streamlining the process that married couples use to
file returns.
Our reliance on technology and the openness of the Internet is
greater than ever, and we should improve security to defend American
taxpayers from identity theft.
I am pleased that provisions in the Taxpayer Protection Act increase
on-line security for individuals and allow them to have better recourse
in the event of a crime.
Mr. Speaker, I urge my colleagues to support H.R. 1677.
Mr. RAMSTAD. Mr. Speaker, I reserve the balance of my time.
Mr. LEWIS of Georgia. Mr. Speaker, I yield 3 minutes to the gentleman
from New York (Mr. Crowley), my colleague on the Ways and Means
Committee.
Mr. CROWLEY. Mr. Speaker, thank you for giving me the time.
I also just want to express briefly the support of my constituents in
Queens and The Bronx in New York. Their hearts and prayers are today in
Virginia with the students and faculty and parents of Virginia Tech
students.
Mr. Speaker, I rise in strong support of the Taxpayer Protection Act,
a bill that will work to protect and empower taxpayers.
I want to specifically recognize and thank Chairman Rangel not only
for crafting a solid, bipartisan bill, but also for continuing the
comity that has, this year, become the hallmark of our committee.
I would also like to express my gratitude to you, as well as to
Oversight Subcommittee Chairman Lewis and Ranking Member Ramstad for
including important new provisions dealing with the earned income tax
credit. The EITC has been a great benefit to my constituents, with
almost 114,000 of them claiming this credit, bringing home to Queens
and The Bronx $270 million. While impressive, I still have almost
23,000 constituents in my district who are eligible, but do not seek
this credit, thereby missing out on an estimated $54 million in
revenue, money these people need for everyday living and money that can
be turned back into our communities.
During both the oversight hearing on EITC and, later, the full
committee hearing with IRS Commissioner Everson, I highlighted the need
for the IRS to work with those who qualify for the EITC to make the
process of restating past returns easier. This bill does that.
Additionally, during private and, later, under committee questioning,
I asked Commissioner Everson about ways to outreach EITC to more
people, including those who may not file returns.
Again, the sponsors heard the concerns of many of us on this
committee and crafted a bill today that also mandates the IRS undertake
this outing by using IRS' existing resources and data to dig deeper and
find these eligible people.
The people who qualify and receive the earned income tax credit, the
people I am talking about, are the working poor, again poor people who
work, and they need our help. This bill provides them an important
helping hand. I thank the sponsors for putting working people first in
this legislation.
I also want to thank many of the not-for-profit groups that are
helping our constituents access EITC. Just yesterday, I met with the
leadership in New York City of ACORN, and they are starting a program
to help our mutual constituents reach out so that they can make access
of the EITC, the earned income tax credit.
I once again thank the sponsors of this legislation. I welcome this
new direction in Congress and in America.
Mr. RAMSTAD. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. LEWIS of Georgia. Mr. Speaker, I yield 1 minute to the gentleman
from North Carolina (Mr. Shuler).
Mr. SHULER. I thank the gentleman for yielding.
Mr. Speaker, before I begin, I would like to offer my thoughts and
prayers to the family of those who died yesterday at Virginia Tech and
all those affected by this senseless tragedy.
Mr. Speaker, I rise today in support of this legislation, H.R. 1677,
the Taxpayer Protection Act of 2007.
As we mark the deadline for Federal income taxes today, this bill
takes important steps to simplify the tax process for family-owned
small businesses, which are the backbone of our country and our
economy.
Mr. Speaker, this bill will allow both spouses in a family-owned
business to pay Social Security and Medicare taxes as a sole
proprietorship, not as a partnership.
Mr. Speaker, when a husband and wife owns a business together, they
are really collecting only one paycheck. They should only have to pay
taxes once.
[[Page H3422]]
Mr. RAMSTAD. Mr. Speaker, I yield 3 minutes to the gentleman from
Georgia (Mr. Price), a champion of the taxpayer.
(Mr. PRICE of Georgia asked and was given permission to revise and
extend his remarks.)
Mr. PRICE of Georgia. I appreciate the gentleman for yielding, and I
appreciate the leadership on both sides of the aisle for this issue.
I am heartened by the stated enthusiasm of the members of the
majority party for the Taxpayer Protection Act. I am remarkably
encouraged.
Today being tax day, it is appropriate that we speak about this
issue, and it is mostly good work. I would commend the individuals who
worked on this. It is mostly good work, but I would suggest, Mr.
Speaker, that real protection requires real reform, and the real
solution to the challenges that we face as Americans, all of us in our
tax system, is that we need fundamental reform.
This is an appropriate bill and kind of tinkers with the margins of
our tax system, and I think those modifications are, as I mentioned,
appropriate and a step in the right direction; but our current system
is extremely regressive and extremely unfair.
So, to talk about the earned income tax credit, it's an appropriate
thing to notify people who don't know that they are eligible for that.
However, there are embedded taxes in everything that we purchase that
make our system right now much more regressive than it ought be.
There is legislation available that would, in fact, promote
fundamental reform. It would capture all of the underground economy
that is fully a third of our current economy, nearly $1 trillion. It
would reward those kinds of things that we say that we want, like hard
work and success and entrepreneurship and vision and all those
wonderful American ideals.
That bill is H.R. 25. It is the fair tax, the national retail sales
tax. It would bring about true fundamental reform and would bring about
true protection for the American taxpayer.
So I commend the individuals who brought forward H.R. 1677, and I
would suggest, Mr. Speaker, that this is a small step in the right
direction. However, real reform requires real change. Fundamental
reform to our tax system is what is needed, and I am hopeful that in
relatively short order we will be able to embrace each other with real
fundamental reform to our entire tax system on the floor of this House.
Mr. LEWIS of Georgia. Madam Speaker, I yield 2 minutes to the
gentleman from Oregon (Mr. Blumenauer), a member of the Ways and Means
Committee.
Mr. BLUMENAUER. Madam Speaker, I appreciate my colleague from
Georgia, the distinguished chairman of the Oversight Committee, for
permitting me to speak on this bill, and I commend his hard work.
I find no small amount of irony hearing one of our friends from the
other side of the aisle talk about how it might be time now for tax
reform. The other side of the aisle was in charge for 12 years, and it
is interesting that in the last 6 years, when they controlled the White
House and Congress and had three major tax bills before us, the words
in the Tax Code increased 1.5 million; 1.5 million extra words,
special-interest provisions, while ignoring opportunities to simplify
the code and to deal meaningfully with the tax tsunami that is coming
at us, the alternative minimum tax.
{time} 1400
I appreciate the hard work that the subcommittee has done, dealing
with provisions like this that have no argument against them. These are
things that are long overdue. I am glad we are moving forward. I
commend the subcommittee Chair, and our Chair, Mr. Rangel, for looking
at other provisions that would level the playing field, that would deal
with simplification, deal with fairness, deal with some of the problems
that lower-income citizens have in terms of trying to cope with the
complexity, and being able to equip the Internal Revenue Service to
make sure that we deal with hundreds of billions of dollars that is
uncollected revenue that shifts the burden on the vast majority of
Americans who are hard working, who report their income, who pay their
taxes fairly and on time.
It isn't the fault of the worker who has got the W-2 that we have
this vast amount of uncollected income. We have the complexity. I
appreciate what this bill represents, a true effort at bipartisan
cooperation to establish a foundation. We can move forward to have an
Internal Revenue Code that is fair and effective for all.
Mr. RAMSTAD. Madam Speaker, may I just inquire as to how many
speakers the other side may have.
Mr. LEWIS of Georgia. That was my last speaker, Mr. Ranking Member.
Mr. RAMSTAD. Madam Speaker, before yielding back, I too want to
express my deepest sympathy to the entire Virginia Tech community. Like
every other Member of this body, my thoughts and prayers are with all
those affected by the tragic and senseless loss of lives.
Having no further speakers, I urge a strong ``yes'' vote for this
taxpayer protection.
Madam Speaker, I yield back the balance of my time.
Mr. LEWIS of Georgia. Madam Speaker, I too, before I close this
debate on this bill, join with my colleagues and others to mourn for
the victims of this unspeakable, unbelievable, senseless act of
violence at Virginia Tech. We mourn, we pray for the victims and for
their families.
I also want to thank my colleague, my friend, the ranking member, Mr.
Ramstad, for all of his help in bringing this piece of legislation, as
I stated before, before us today.
Madam Speaker, I fully support H.R. 1677, the Taxpayer Protection Act
of 2007. We must do more for Americans. We must protect taxpayers from
being victims of fraudulent tax schemes, misleading Web sites and
predatory refund loans.
H.R. 1677 does this. It provides higher penalties for deceptive Web
sites and mass e-mails. It requires the IRS to notify you if your
identity is stolen in a tax scam. It reduces predatory refund loans.
H.R. 1677 expands IRS outreach programs to millions of taxpayers
eligible for the earned income tax credit who have not claimed it. This
credit lifts millions of working Americans out of poverty each year.
Madam Speaker, this is a good bill. This is an important bill. This
is a necessary bill. On this tax day we must do more for taxpayers. I
urge my colleagues, all of my colleagues on both sides of the aisle to
vote ``yes'' for H.R. 1677.
Mr. MARKEY. Madam Speaker, I rise in strong support of H.R. 1677, the
``Taxpayer Protection Act of 2007.''
I would like to focus my remarks on Section 8 of this bill, which
clarifies the intent of the Congress that the existing legal
prohibitions on the misuse of Department of the Treasury names and
symbols also extend to misuse over the Internet. I support this
provision, which addresses a very real problem that currently exists
with potentially misleading commercial websites that taxpayers may
mistakenly believe to be affiliated with the IRS.
In February, the Subcommittee on Telecommunications and the Internet,
which I chair, became aware of three commercial websites operating
under domain names which may confuse the public into believing them to
be official IRS websites: IRS.com, IRS.net and IRS.org. In response to
this situation, I wrote to the Federal Trade Commission Chairman
Majoras, Secretary of the Treasury Paulson, and Internal Revenue
Service Commissioner Everson to express my concerns that consumers who
visited these sites might provide the operators with personally
identifiable information and tax return information, enabling the
operators to either market or sell this information to others, or to
sell and market all manner of products and services to these taxpayers.
A consumer survey and study presented to the IRS and FTC in early
January of this year by the Computer and Communications Industry
Association suggested that a significant proportion of consumers
misinterpreted these three non-governmental Websites as being sites
hosted by the IRS. The survey showed, for example, that before viewing
the website IRS.com, 47 percent of those surveyed believed the site
represented the Internet address of the Internal Revenue Service. Even
after viewing the site, \1/3\ of those surveyed still believed the site
was the IRS website.
Now, the IRS.com website bears a remarkable resemblance to the
official IRS.gov site. Both websites have the same color blue banner at
the very top, a grey search bar right below, and a white background
with various links and search features covering the bulk of the page.
Back in February, the IRS.com site even had an actual image of the U.S.
Treasury headquarters building on the top of the
[[Page H3423]]
page. At the time, there was only a fine-print disclaimer at the bottom
of these sites stating that that it was a non-governmental site. This
disclaimer was so far down on the webpage that few consumers were
likely to view it.
I continue to be concerned about the potential for unfair or
deceptive trade practices associated with these commercial websites,
and I believe that we need to do more to ensure that the public does
not continue to be exposed to these potentially misleading or confusing
websites. There is no relationship between a citizen and our government
more sensitive, nor information more private, than that involving
individual taxes and the annual voluntary compliance obligation. The
federal government has a duty to protect taxpayers from predatory
behaviors as they seek to meet their obligation to pay taxes.
I am hopeful that, by clarifying the intent of the Congress that the
existing legal prohibitions on misuse of Treasury Department and IRS
names and symbols are and should be applied to commercial activity on
the Internet, this bill will better protect the public from this kind
of operation in the future.
I urge adoption of the bill.
Mr. EMANUEL. Madam Speaker, I rise today in support of H.R. 1677, the
Taxpayer Protection Act of 2007. Too often, middle-class taxpayers find
themselves confused and frustrated by the complexity of the tax code.
Over 60 percent of taxpayers now use a paid preparer to file their tax
return, costing them hundreds or thousands of dollars that they could
have used for college, health care, or retirement.
This legislation provides overdue relief for taxpayers that will
protect them from fraud, require the IRS to do a better job of
communicating which tax credits a taxpayer can qualify for, and hold
tax cheats accountable for their actions. Today is Tax Day, and this
legislation sends a message to taxpayers that help is on the way.
Hearings held by Chairman John Lewis provided ample evidence that
taxpayers are too often exposed to identify theft or unaware of
potential benefits. The Taxpayer Protection Act will require the IRS to
notify taxpayers involved in tax fraud investigations that there may
have been an unauthorized use of their identities, will provide filers
with a longer period of time to seek restitution from the IRS for a
wrongful penalty, punish predatory lenders, and require the IRS to
promote the Earned Income Tax Credit so that more Americans can take
care of a tax benefit they have earned but have not been notified.
Madam Speaker, Tax Day can be a difficult day for many Americans. Let
us do our part to make common-sense reforms that put the government
back on the side of the average taxpayer.
I thank Mr. Rangel, the Chairman of the Ways and Means Committee, for
his leadership on this issue, and I urge my colleagues to join me in
voting for H.R. 1677, the Taxpayer Protection Act of 2007.
Mr. LEVIN. Madam Speaker, I rise today in strong support of H.R.
1677, the Taxpayer Protection Act.
I would note that its consideration today is particularly timely as
millions of hardworking Americans file their tax returns. Those workers
and families deserve to know that their government is taking every step
to protect the sensitive data contained in those returns and to enhance
taxpayer rights.
Identity theft is a large and growing problem in our society, and
unfortunately, a lack of vigilance on the part of the IRS has
contributed to that problem. One criminal who testified before the
Senate Finance Committee last week detailed how he stole $1.1 million
from the Treasury by using stolen identities to claim fraudulent
refunds. While this individual is rightly serving time in prison, we
must act to prevent such crimes in the future.
This legislation contains a number of common sense provisions to
accomplish just that, including a requirement that the IRS notify a
taxpayer if it discovers that there may have been an unauthorized use
of the taxpayer's identity during the course of a tax fraud
investigation and the authority for the IRS to notify taxpayers on the
Internet about unclaimed tax refunds. It also increases penalties on
misleading websites that use government names and symbols to engage in
the fraudulent practice known as ``phishing. ``
I am also pleased that it enhances Earned Income Tax Credit outreach
so that every taxpayer who is eligible for this credit realizes its
benefits.
Madam Speaker, I urge my colleagues to support the legislation.
Mr. MARKEY. Madam Speaker, I rise in strong support of H.R. 1677, the
``Taxpayer Protection Act of 2007.''
I would like to focus my remarks on Section 8 of this bill, which
clarifies the intent of the Congress that the existing legal
prohibitions on the misuse of Department of Treasury names and symbols
extend to misuse over the Internet. I support this provision, which
addresses a very real problem that currently exists with potentially
misleading commercial Web sites that taxpayers may mistakenly believe
to be affiliated with the IRS.
In February, the Subcommittee on Telecommunications and the Internet,
which I chair, became aware of three commercial Web sites operating
under domain names which may confuse the public into believing them to
be official IRS Web sites: IRS.com, IRS.net, and IRS.org. In response
to this situation, I wrote to the Federal Trade Commission Chairman
Majoras, Secretary of the Treasury Paulson, and Internal Revenue
Service Commissioner Everson to express my concerns that consumers who
visited these sites might provide the operators with personally
identifiable information and tax return information, enabling the
operators to either market or sell this information to others, or to
sell and market all manner of products and services to these taxpayers.
Since the taxpayers who provide personal information to these sites
might be doing so under the misimpression that they were dealing with
an official government Web site subject to applicable federal privacy
protections, I felt there was a serious potential for consumer
confusion, deception, and abuse.
In fact, a consumer survey and study presented to the IRS and FTC in
early January of this year by the Computer and Communications Industry
Association suggested that a significant proportion of consumers
misinterpreted these three nongovernmental Web sites as being sites
hosted by the IRS. The survey showed, for example, that before viewing
the Web site IRS.com, 47 percent of those surveyed believed the site
represented the Internet address of the Internal Revenue Service. Even
after viewing the site, one third of those surveyed still believed the
site was the IRS Web site.
Now, the IRS.com Web site bears a remarkable resemblance to the
official IRS.gov site. Both Web sites have the same color blue banner
at the very top, a grey search bar right below, and a white background
with various links and search features covering the bulk of the page.
Back in February, the IRS.com site even had an actual image of the U.S.
Treasury headquarters building on the top of the page. At the time,
there was only a fine-print disclaimer at the bottom of this site
stating that it was a non-governmental site. This disclaimer was so far
down on the Web page that few consumers were likely to view it.
I asked the FTC, the Treasury, and the IRS to look into the issues
raised by this Web site, as well as the IRS.org and IRS.net sites. The
IRS and the Treasury Department have never formally responded to my
inquiry. However, the IRS has issued a press statement warning
taxpayers about these potentially misleading sites. The FTC did respond
to my letter, but in that response merely noted that in response to the
concerns I had raised, the operator had ``made a number of changes to
distinguish it from the official IRS Web site, and to better highlight
the disclaimers included on the Web site.''
I continue to be concerned about the potential for unfair or
deceptive trade practices associated with these commercial Web sites,
and I believe that we need to do more to ensure that the public does
not continue to be exposed to these potentially misleading or confusing
Web sites. There is no relationship between a citizen and our
government more sensitive, nor information more private, than that
involving individual taxes and the annual voluntary compliance
obligation. The federal government has a duty to protect taxpayers from
predatory behaviors as they seek to meet their obligation to pay taxes.
I am hopeful that by clarifying the intent of the Congress that the
existing legal prohibitions on misuse of Treasury Department and IRS
names and symbols is and should be applied to commercial activity on
the Internet, that this bill will better protect the public from this
kind of operation in the future.
I urge adoption of the bill.
Mr. LEWIS of Georgia. Madam Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mrs. Tauscher). The question is on the
motion offered by the gentleman from Georgia (Mr. Lewis) that the House
suspend the rules and pass the bill, H.R. 1677, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. LEWIS of Georgia. Madam Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this question will
be postponed.
____________________