[Congressional Record (Bound Edition), Volume 162 (2016), Part 5]
[House]
[Pages 6029-6033]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STOLEN IDENTITY REFUND FRAUD PREVENTION ACT OF 2016

  Mr. RENACCI. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3832) to amend the Internal Revenue Code of 1986 to prevent 
tax-related identity theft and tax fraud, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 3832

       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 ``Stolen Identity Refund Fraud 
     Prevention Act of 2016''.

[[Page 6030]]



     SEC. 2. CENTRALIZED POINT OF CONTACT FOR IDENTITY THEFT 
                   VICTIMS.

       The Secretary of the Treasury, or the Secretary's delegate, 
     shall establish and maintain an office at the Internal 
     Revenue Service and procedures to ensure that any taxpayer 
     whose return has been delayed or otherwise adversely affected 
     due to the theft of the taxpayer's identity has a centralized 
     point of contact throughout the processing of his or her 
     case. The office shall coordinate with other offices within 
     the Internal Revenue Service to resolve the taxpayer's case 
     as quickly as possible.

     SEC. 3. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY THEFT.

       (a) In General.--Chapter 77 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     section:

     ``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

       ``If the Secretary determines that there was an 
     unauthorized use of the identity of any taxpayer, the 
     Secretary shall--
       ``(1) as soon as practicable and without jeopardizing an 
     investigation relating to tax administration, notify the 
     taxpayer and include with that notice--
       ``(A) instructions to the taxpayer about filing a police 
     report, and
       ``(B) the forms the taxpayer must submit to allow 
     investigating law enforcement officials to access the 
     taxpayer's personal information, and
       ``(2) if any person is criminally charged by indictment or 
     information relating to such unauthorized use, notify such 
     taxpayer as soon as practicable of such charge.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     77 of such Code 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. REPORT ON ELECTRONIC FILING OPT OUT.

       The Secretary of the Treasury (or the Secretary's delegate) 
     shall submit a feasibility study to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate describing a program under which a 
     person who has filed an identity theft affidavit with the 
     Secretary may elect to prevent the processing of any Federal 
     tax return submitted in an electronic format by that taxpayer 
     or a person purporting to be that taxpayer. The study shall 
     be submitted within 180 days after the date of the enactment 
     of this Act and should also include a recommendation on 
     whether to implement such a program.

     SEC. 5. USE OF INFORMATION IN DO NOT PAY INITIATIVE IN 
                   PREVENTION OF IDENTITY THEFT REFUND FRAUD.

       The Secretary of the Treasury, and the Secretary's 
     delegate, shall use the information available under the Do 
     Not Pay Initiative established under section 5 of the 
     Improper Payments Elimination and Recovery Improvement Act of 
     2012 (31 U.S.C. 3321 note) to help prevent identity theft 
     refund fraud.

     SEC. 6. REPORT ON IDENTITY THEFT REFUND FRAUD.

       (a) In General.--Not later than September 30, 2018, and 
     biannually thereafter through September 30, 2023, the 
     Secretary of the Treasury (or the Secretary's delegate) shall 
     report to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate on 
     the extent and nature of fraud involving the use of a 
     misappropriated taxpayer identity with respect to claims for 
     refund under the Internal Revenue Code of 1986 during the 
     preceding completed income tax filing season, and the 
     detection, prevention, and enforcement activities undertaken 
     by the Internal Revenue Service with respect to such fraud, 
     including--
       (1) detailing efforts to combat identity theft fraud, 
     including an update on the victims' assistance unit;
       (2) information on both the average and maximum amounts of 
     time that elapsed before the cases of victims of such fraud 
     were resolved; and
       (3) discussing Internal Revenue Service efforts associated 
     with other avenues for addressing identity theft refund 
     fraud.
       (b) Additional Requirements.--In addition, each report 
     shall provide an update on the implementation of this Act and 
     identify the need for any further legislation to protect 
     taxpayer identities.
       (c) Progress on Outreach and Education.--In the first 
     biannual report on identity theft refund fraud under 
     subsection (a), the Secretary (or the Secretary's delegate) 
     shall include--
       (1) an assessment of the agency's progress on identity 
     theft outreach and education to the private sector, State 
     agencies, and external organizations; and
       (2) the results of a feasibility study on the costs and 
     benefits to enhancing its taxpayer authentication approach to 
     the electronic tax return filing process.

     SEC. 7. INFORMATION SHARING AND ANALYSIS CENTER.

       (a) In General.--The Secretary (or the Secretary's 
     delegate) shall establish an information sharing and analysis 
     center to centralize, standardize, and enhance data 
     compilation and analysis to facilitate sharing actionable 
     data and information with respect to identity theft.
       (b) Report.--Not later than 1 year after establishment of 
     the information sharing and analysis center, the Secretary 
     (or the Secretary's delegate) shall submit a report to the 
     Committee on Ways and Means of the House of Representatives 
     and Committee on Finance of the Senate on the information 
     sharing and analysis center described in subsection (a). The 
     report shall include the data that was shared, the use of 
     such data, and the results of the data sharing and analysis 
     center in combating identity theft.

     SEC. 8. LOCAL LAW ENFORCEMENT LIAISON.

       (a) Establishment.--The Commissioner of Internal Revenue 
     shall establish within the Criminal Investigation Division of 
     the Internal Revenue Service the position of Local Law 
     Enforcement Liaison.
       (b) Duties.--The Local Law Enforcement Liaison shall serve 
     as the primary source of contact for State and local law 
     enforcement authorities with respect to tax-related identity 
     theft, having duties that shall include--
       (1) receiving information from State and local law 
     enforcement authorities;
       (2) responding to inquiries from State and local law 
     enforcement authorities;
       (3) administering authorized information-sharing 
     initiatives with State or local law enforcement authorities 
     and reviewing the performance of such initiatives;
       (4) ensuring any information provided through authorized 
     information-sharing initiatives with State or local law 
     enforcement authorities is used only for the prosecution of 
     identity theft-related crimes and not re-disclosed to third 
     parties; and
       (5) such other duties relating to tax-related identity 
     theft prevention as are delegated by the Commissioner of 
     Internal Revenue.

     SEC. 9. IRS PHONE SCAM REPORT.

       (a) In General.--Not later than 1 year after the date of 
     the enactment of this Act, the Inspector General for Tax 
     Administration, in consultation with the Federal 
     Communications Commission and the Federal Trade Commission, 
     shall submit a report to Congress regarding identity theft 
     phone scams under which individuals attempt to obtain 
     personal information over the phone from taxpayers by falsely 
     claiming to be calling from or on behalf the Internal Revenue 
     Service.
       (b) Contents of Report.--Such report shall include--
       (1) a description of the nature and form of such scams;
       (2) an estimate of the number of taxpayers contacted 
     pursuant to, and the number of taxpayers who have been 
     victims of, such scams;
       (3) an estimate of the amount of wrongful payments obtained 
     from such scams; and
       (4) details of potential solutions to combat and prevent 
     such scams, including best practices from the private sector 
     and technological solutions.

     SEC. 10. PROVIDING IDENTITY THEFT PREVENTION INFORMATION 
                   WHILE ON HOLD WITH INTERNAL REVENUE SERVICE.

       The Secretary of the Treasury, or the Secretary's delegate, 
     shall ensure that if a taxpayer is on hold with the Internal 
     Revenue Service on a taxpayer service telephone call the 
     following information is provided:
       (1) Basic information about common identity theft tax 
     scams.
       (2) Directions on where to report such activity.
       (3) Tips on how to protect against identity theft tax 
     scams.

     SEC. 11. NO ADDITIONAL FUNDS AUTHORIZED.

       No additional funds are authorized to carry out the 
     requirements of this Act and the amendments made by this Act. 
     Such requirements shall be carried out using amounts 
     otherwise authorized.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Renacci) and the gentleman from New Jersey (Mr. Pascrell) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. RENACCI. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and to include extraneous material on H.R. 3832, currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. RENACCI. Mr. Speaker, I yield myself such time as I may consume.
  I rise to urge approval of H.R. 3832, the Stolen Identity Refund 
Fraud Prevention Act of 2016.
  I introduced this bipartisan legislation with my friend and 
colleague, Mr. Lewis, to combat tax-related identity theft. On a 
personal note, it has been an honor to work with Mr. Lewis. He

[[Page 6031]]

paid me a great compliment when he said I ``rained passion and truth'' 
on the important issue of identity theft. Truthfully, since Congressman 
Lewis was first elected, he has been a legislator who has brought great 
passion and truth to every endeavor of his storied career. I truly 
thank him for working with me on this legislation.
  Tax-related identity theft is an evolving criminal activity that 
targets innocent taxpayers nationwide and robs the Treasury of billions 
of dollars each year. I was grateful for the opportunity last month to 
testify before the Committee on Ways and Means about my experience with 
tax-related ID theft. Last year, my personal information was stolen, 
and someone used that information to electronically file a fraudulent 
tax return for my wife and me. That return, which included a fraudulent 
W-2 from the House of Representatives, claimed a significant refund, 
with the proceeds directed to a bank account outside the U.S. So when 
it comes to ID theft, I truly understand the impact that it has on 
taxpayers in northeast Ohio and across the country.
  I am committed to cracking down on the growing threat, and this 
bipartisan bill is an important first step forward. I was pleased that 
two core components from this bill were included in the PATH Act that 
passed last December. The remaining components of this bill will help 
further shield taxpayer dollars from thieves and reduce the hardships 
that are caused by this criminal activity. They include establishing a 
centralized point of contact at the IRS for ID theft victims. This will 
make it easier for victims to resolve their ID theft tax cases and 
ensure a unit at the IRS is held accountable for handling a taxpayer's 
case from start to finish.
  Another one would improve the taxpayer notification of suspected ID 
theft. When the IRS determines there has been the unauthorized use of a 
taxpayer's identity, the IRS would be required--as soon as practicable 
and without jeopardizing an investigation--to notify the taxpayer and 
give instructions to the taxpayer about filing a police report.
  The last one I will mention would require the IRS to submit a study 
on the feasibility of establishing a program for ID theft victims to be 
able to opt out of electronic filing. This provision would require the 
IRS to report back to Congress within 180 days on this issue.
  I also thank my friend, Mr. Pascrell, for his work on this issue and 
for his amendments that were incorporated into the bill during this 
markup last month.
  Mr. Speaker, tax-related identity theft is one of the most pressing 
challenges that we face in the world of tax administration. This 
complex and evolving threat requires cooperation from Congress, the 
IRS, State revenue agencies, and industry stakeholders. While I am 
aware that not every tax-related ID theft problem is best served with a 
congressional solution, this legislation is an important first step in 
fighting ID theft and in better protecting victims.
  I urge all Members to support this bipartisan legislation.
  Mr. Speaker, I reserve the balance of my time.

                                         House of Representatives,


                                   Committee on the Judiciary,

                                     Washington, DC, May 13, 2016.
     Hon. Kevin Brady,
     Chairman, Committee on Ways & Means,
     Washington, DC.
       Dear Chairman Brady: I am writing with respect to H.R. 
     3832, the ``Stolen Identity Refund Fraud Prevention Act,'' 
     which was referred to the Committee on Ways and Means and in 
     addition to the Committee on the Judiciary. As a result of 
     your having consulted with us on provisions in H.R. 3832 that 
     fall within the Rule X jurisdiction of the Committee on the 
     Judiciary, I agree to discharge our committee from further 
     consideration of this bill so that it may proceed 
     expeditiously to the House floor for consideration.
       The Judiciary Committee takes this action with our mutual 
     understanding that by foregoing consideration of H.R. 3832 at 
     this time, we do not waive any jurisdiction over subject 
     matter contained in this or similar legislation, and that our 
     committee will be appropriately consulted and involved as 
     this bill or similar legislation moves forward so that we may 
     address any remaining issues in our jurisdiction. Our 
     committee also reserves the right to seek appointment of an 
     appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation, and asks 
     that you support any such request.
       I would appreciate a response to this letter confirming 
     this understanding with respect to H.R. 3832, and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Congressional Record during Floor 
     consideration of H.R. 3832.
           Sincerely,
                                                    Bob Goodlatte,
     Chairman.
                                  ____

                                         House of Representatives,


                                  Committee on Ways and Means,

                                     Washington, DC, May 16, 2016.
     Hon. Bob Goodlatte,
     Chairman, Committee on the Judiciary,
     Washington, DC.
       Dear Chairman Goodlatte: Thank you for your letter 
     regarding H.R. 3832, the ``Stolen Identity Refund Fraud 
     Prevention Act of 2016.'' As you noted, the Committee on the 
     Judiciary was granted an additional referral of the bill.
       I am most appreciative of your decision to waive formal 
     consideration of H.R. 3832 so that it may proceed 
     expeditiously to the House floor. I acknowledge that although 
     you waived formal consideration of the bill, the Committee on 
     the Judiciary is in no way waiving its jurisdiction over the 
     subject matter contained in those provisions of the bill that 
     fall within your Rule X jurisdiction. I would support your 
     effort to seek appointment of an appropriate number of 
     conferees on any House-Senate conference involving this 
     legislation.
       I will include a copy of our letters in the Congressional 
     Record during consideration of this legislation on the House 
     floor.
           Sincerely,
                                                      Kevin Brady,
                                                         Chairman.

  Mr. PASCRELL. Mr. Speaker, I yield myself such time as I may consume.
  I commend my friend from Ohio (Mr. Renacci) for his work on this 
bill. As he knows, I have been interested in this issue of tax fraud 
and identity theft for some time.
  I am pleased that the bill we are marking up today, H.R. 3832, 
includes many provisions included in the bill that I put forth, H.R. 
3981, the Identity Theft and Tax Fraud Prevention Act. These provisions 
include having a central point of contact for a victim of identity 
theft and taxpayer notification of suspected identity theft. In 
addition, two of my amendments were included in the bill.
  The first would create a local law enforcement liaison within the 
Criminal Investigation Division of the IRS. Our police and law 
enforcement officers are out every day, keeping our communities safe 
and tracking down criminals. Too often, coordinating their efforts with 
the IRS when it comes to identity theft is not as easy as it should be.
  My amendment helps law enforcement officers do their jobs by creating 
a local law enforcement liaison at the IRS. This position will be 
tasked with sharing information and responding to local law enforcement 
when they have information or inquiries about identity theft cases. It 
is common sense, and it will make it easier for police officers to go 
to a single place at the IRS when they want to work a case.
  The second amendment included in this bill deals with the IRS phone 
scam, and this is growing by the day. Imagine sitting at home when you 
receive a call from a threatening voice on the other end of the line 
that claims to be the IRS. For too many Americans, this experience is 
all too familiar. These criminals may ask unsuspecting citizens for 
their personal information, for their Social Security numbers, or even 
for bank account information--that has been done; it is very common--
and will threaten them with arrest or other penalties if the listeners 
don't comply. These phone scams have become increasingly aggressive and 
harmful to taxpayers.
  My amendment addresses this problem in practical ways. First, it 
requires the Treasury Inspector General for Tax Administration to issue 
a report that identifies potential technological solutions to the phone 
scam.
  Second, it would have the IRS provide information to callers who may 
be put on hold, when calling in, regarding common identity theft tax 
scams and how to avoid them.
  We need to do all we can to make sure taxpayers are informed and 
armed

[[Page 6032]]

against these scams. Identity theft and tax fraud is a growing problem 
in the United States of America. As technology changes and as criminal 
syndicates target American citizens' tax returns, we have an obligation 
to address the issue.
  This bill does not go quite as far as I would have liked, and I urge 
my colleagues to take a look at H.R. 3981. I am also proud to be a 
cosponsor of Congressman John Lewis' bill, the Taxpayer Protection Act 
of 2016, which takes additional steps to increase funding for taxpayer 
services and to end the use of private debt collectors.
  This bill is a step in the right direction. I congratulate its 
sponsor as it is a good example of how we can work together across the 
aisle and find commonsense solutions for the American people. I hope 
this is a harbinger of things to come. Who knows?
  I reserve the balance of my time.
  Mr. RENACCI. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Kelly).
  Mr. KELLY of Pennsylvania. Mr. Speaker, I strongly support H.R. 3832. 
Mr. Renacci and I are very good friends, as I am with Mr. Lewis, and it 
is good to see Mr. Pascrell here today.
  The gentleman is right in that it is nice to see us working together 
to do something about people. This is about people. This is policy that 
concerns people, and it works in the right direction. I don't think 
there is anything quite as unnerving as finding out that somebody has 
stolen your identity. I think Shakespeare sums it up right in Othello 
by putting it really succinctly when he says: ``But he that filches 
from me my good name, robs me of that which not enriches him, and makes 
me poor indeed.''

                              {time}  1615

  Now, Pennsylvania is sixth in population but second when it comes to 
fraud, tax fraud. This is incredible that this could happen.
  As we sit here today--and as Mr. Pascrell so clearly pointed out, and 
Mr. Renacci--this is about protecting people from people who wish to do 
them harm. They not only wish to take their tax returns, but it robs 
them of their identity. There is nothing that could be more chilling 
than losing your identity.
  As we look at how this goes forward--and I think that this phone 
fraud is the one that is particularly interesting. When the IRS calls 
on you, it is not on the phone. It is in writing. And I tell 
constituents all the time, I also have received those calls saying 
that: Hey, you know what? You need to get in touch with us right now. 
We can handle this over the phone with you.
  I said: Fine. You know what? Leave your name and number, and I will 
get back to you because I am really busy right now.
  That is followed by a very quick click.
  There is so much going on in our world today. We are so vulnerable at 
every single turn. We put so much information out there on ourselves. 
This is a piece of legislation that protects people. It protects not 
only their returns, but protects their identity.
  So I am glad that Mr. Renacci has done this with Mr. Lewis and my 
good friend Mr. Pascrell. We stand here today with the same purpose, 
and that is to protect the people who sent us here to represent them. 
It is the least we can do.
  Mr. PASCRELL. Mr. Speaker, I yield myself such time as I may consume.
  I just want to quickly say that what is really happening out there is 
that many seniors are being preyed upon. When you get a threatening 
phone call, you don't know what to think. And when you are up there in 
age, as some of us are, Mr. Kelly, you don't know what to expect, and 
you don't know who to turn to.
  So this is very important, what Mr. Renacci is putting forth right 
now. I just want everyone to understand that. It has good bipartisan 
support, and I hope that we can move this very, very quickly.
  I reserve the balance of my time.
  Mr. RENACCI. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. Reed).
  Mr. REED. Mr. Speaker, I thank the gentleman from Ohio for yielding.
  I rise today, Mr. Speaker, to join my colleagues on both sides of the 
aisle--Mr. Pascrell, Mr. Lewis, Mr. Renacci, and Mr. Kelly--in a common 
refrain. What Mr. Renacci, Mr. Lewis, and Mr. Pascrell have identified 
here is something we have been working on in the committee for quite 
some time, and that is to make sure that we have a tax administration 
and a Tax Code that respects the privacy of individuals.
  When that privacy is violated--I cannot speak like my colleague from 
Pennsylvania and quote Shakespeare, as I am a simple country lawyer 
from western New York--simply, what we need to do is to stand on the 
side of our taxpayers. When tax fraud occurs, real people suffer as a 
result of it.
  What Mr. Renacci and all of us have come together here to support are 
simple, commonsense reforms that are going to help people out like 
Terry. Terry is from Hornell in my district. He reached out to us, Mr. 
Speaker, about 1\1/2\ years to 2 years ago. He, too, was the victim of 
identity fraud and identity theft.
  When he went to file his return, he found out that he would not be 
getting that refund because someone had already stolen that money from 
the U.S. Government. Terry relied on that money, Mr. Speaker. He needed 
that money. After many phone calls, after many efforts from our office, 
we were able to work it out and get that taken care of for Terry.
  Terry is representative of millions of Americans who have found 
themselves in this situation, just like Mr. Renacci did. So I applaud 
Mr. Renacci for developing these commonsense reforms that are going to 
give a point of contact at the IRS, that are going to make sure when 
people engage in identity theft in the tax arena that there are real 
penalties and consequences to that behavior.
  I strongly support this legislation, Mr. Speaker, and I urge my 
colleagues, just as has been demonstrated here today, to come together 
as we care deeply about the American taxpayer and stand for them as the 
victims of this crime.
  Mr. PASCRELL. Mr. Speaker, I yield back the balance of my time.
  Mr. RENACCI. Mr. Speaker, I yield myself such time as I may consume.
  I again want to thank my colleague, Mr. Lewis, for his work with me 
and this legislation. I also truly want to thank Mr. Pascrell. As he 
said, I hope it is a sign of things to come, where we can work together 
on important issues that face the American people.
  I urge all Members to support H.R. 3832, the Stolen Identity Refund 
Fraud Prevention Act of 2016.
  I yield back the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I rise in opposition to H.R. 
3832, the Stolen Identity Refund Fraud Prevention Act of 2016, as 
amended. While I support the legislation's underlying goal of deterring 
and preventing tax-related identity theft and tax fraud, I strongly 
oppose the bill's expansion of mandatory minimum sentencing.
  Section 5 of the bill would expand the mandatory minimums found in 
Title 18 Section 1028A of the United States Code. This section of Title 
18 imposes a mandatory minimum sentence of two years for ``aggravated 
identity theft.'' Under section 5 of this bill, a violation of section 
7206(b) of the Internal Revenue Code would require a judge to impose a 
two year mandatory minimum regardless of the circumstances of the case. 
While a two year sentence may be appropriate for most individuals 
convicted under this bill, it should be left to the discretion of the 
sentencing judge to determine the exact sentence based on all the 
relevant facts and circumstances.
  Research and evidence in the past few decades has demonstrated that 
mandatory minimums are ineffective deterrents, waste the taxpayers' 
money, force judges to impose irrational sentences, and discriminate 
against minorities, particularly with regards to drug offenses. 
Unfortunately, there are too many mandatory minimums in the federal 
code.
  Mr. Speaker, if we expect to do anything about that problem, the 
first step has to be to stop passing new ones. The mandatory minimums 
in the code today did not get there all at once--they got there one at 
a time, each one part of a larger bill, which on balance might have 
been a good idea. Therefore, the only way to stop passing new mandatory 
minimums is to stop passing bills that contain mandatory minimums.

[[Page 6033]]

  Therefore, I urge my colleagues to vote No on H.R. 3832.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Ohio (Mr. Renacci) that the House suspend the rules and 
pass the bill, H.R. 3832, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________