[House Report 114-567]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-567
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
STOLEN IDENTITY REFUND FRAUD PREVENTION ACT OF 2016
_______
May 13, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 3832]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred 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, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................4
A. Purpose and Summary................................... 4
B. Background and Need for Legislation................... 4
C. Legislative History................................... 6
II. EXPLANATION OF THE BILL...........................................6
A. Centralized Point of Contact for Identity Theft
Victims (sec. 2 of the bill)......................... 6
B. Taxpayer Notification of Suspected Identity Theft
(sec. 3 of the bill and new sec. 7529 of the Code)... 7
C. Electronic Filing Opt-Out Feasibility Study (sec. 4 of
the bill)............................................ 9
D. Criminal Penalty for Using a False Identity in
Connection with Tax Fraud (sec. 5 of the bill)....... 10
E. Improvement in Access to Information Under the Do Not
Pay Initiative (sec. 6 of the bill).................. 11
F. Require the IRS to Prepare a Report on Identity Theft
Refund Fraud (sec. 7 of the bill).................... 12
G. Require the IRS to Establish an Information-Sharing
and Analysis Center (sec. 8 of the bill)............. 13
H. Local Law Enforcement Liaison (sec. 9 of the bill).... 14
I. IRS Phone Scam Report (sec. 10 of the bill)........... 14
J. Providing Identity Theft Prevention Information While
on Hold with Internal Revenue Service (sec. 11 of the
bill)................................................ 15
III.VOTES OF THE COMMITTEE...........................................16
IV. BUDGET EFFECTS OF THE BILL.......................................16
A. Committee Estimate of Budgetary Effects............... 16
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 17
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 17
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......18
A. Committee Oversight Findings and Recommendations...... 18
B. Statement of General Performance Goals and Objectives. 18
C. Information Relating to Unfunded Mandates............. 18
D. Applicability of House Rule XXI 5(b).................. 18
E. Tax Complexity Analysis............................... 19
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 19
G. Duplication of Federal Programs....................... 19
H. Disclosure of Directed Rule Makings................... 19
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........20
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 20
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 22
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 ``Stolen Identity Refund Fraud
Prevention Act of 2016''.
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. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION WITH
TAX FRAUD.
(a) Aggravated Identity Theft.--Section 1028A(c) of title 18, United
States Code, is amended by striking ``or'' at the end of paragraph
(10), by striking the period at the end of paragraph (11) and inserting
``; or'', and by adding at the end the following new paragraph:
``(12) section 7206(b) of the Internal Revenue Code of 1986
(relating to use of false identity in connection with tax
fraud).''.
(b) Effective Date.--The amendments made by this section shall apply
to offenses committed after the date of the enactment of this Act.
SEC. 6. 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. 7. 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. 8. 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. 9. 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. 10. 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. 11. 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.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 3832, reported by the Committee on Ways and Means,
contains numerous provisions aimed at helping the Internal
Revenue Service (``IRS'') prevent and detect identity theft tax
fraud. It establishes a centralized point of contact at the IRS
for victims of identity theft; requires the IRS to notify a
taxpayer if the IRS determines that there was unauthorized use
of the taxpayer's identity; requires the IRS to submit a study
on the feasibility of establishing a program for victims of
identity theft tax fraud to opt out of electronic filing;
requires the Treasury Department and the IRS to use information
from the Do Not Pay Initiative to help prevent identity theft;
establishes an Information Sharing and Analysis Center (ISAC)
to collect, analyze, and share actionable data and information
to detect and prevent identity theft; requires the IRS to issue
biannual reports from 2018 through 2023 on the extent and
nature of identity theft tax fraud; requires the IRS to
establish a local law enforcement liaison within the IRS
Criminal Investigative Division to administer information-
sharing initiatives and respond to local law enforcement
inquiries relating to identity theft; requires the Treasury
Inspector General for Tax Administration (``TIGTA'') to report
on solutions to IRS-impersonation phone scams; and requires the
IRS to provide information over the phone on such scams if
taxpayers are on hold with the IRS call center.
B. Background and Need for Legislation
Tax fraud related to identity theft is a serious and
rapidly evolving problem. Stolen taxpayer identifying
information is used to file fraudulent returns with the IRS
(and state tax authorities as well) in order to obtain tax
refunds. Identity theft tax fraud is an attractive crime
because it is viewed as having a high payoff with little risk
of the perpetrator being caught.
In 2012, TIGTA reported that billions of dollars in
identity theft tax fraud were going undetected and being paid
out by the IRS, and estimated that the IRS could pay out $21
billion in fraudulent refunds over five years.\1\ The IRS
estimated that it paid out $3.1 billion in fraudulent refunds
in filing season 2014, a decrease from the IRS' estimate for
filing season 2013 of $5.8 billion. While the IRS believes that
it prevented $22.5 billion of potentially fraudulent refunds
before they were paid out, the Government Accountability Office
(``GAO'') noted that the IRS' estimates do not take into
account the full extent of identity theft tax fraud because the
IRS does not know how much fraud is not yet discovered or
detected.\2\
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\1\TIGTA, ``Billions of Dollars in Identity-Theft-Related Tax
Refund Fraud Go Undetected,'' August 2, 2012.
\2\GAO, ``IRS Needs to Further Improve Controls over Taxpayer Data
and Continue to Combat Identity Theft Refund Fraud,'' April 12, 2016.
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In addition to costing the government billions of dollars
each year, identity theft tax fraud significantly harms
individual victims, who typically spend months or years
resolving their cases with the IRS. In March 2015, TIGTA
estimated that it took the IRS an average of 278 days to
resolve a case of identity theft, and about 17 percent of these
cases were not resolved correctly.\3\ TIGTA also reported that
the IRS was misrepresenting the amount of time it took to
resolve cases, and was informing taxpayers it would take only
180 days.\4\
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\3\TIGTA, ``Victims of Identity Theft Continue to Experience Delays
and Errors in Receiving Refunds,'' March 20, 2015.
\4\Id.
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IRS information technology systems used to detect potential
identity theft tax fraud rely on filters that compare return
data to previous years' information. Unfortunately, these
traditional filters do not allow the IRS to detect cases where
the identity thief has all of the taxpayer's correct
information. In the past, identity thieves have typically
stolen names and Social Security numbers to create a fake
return. Increasingly, however, identity thieves have obtained
accurate taxpayer information through cybersecurity breaches.
In those cases, the fraudulent returns may appear to be
identical to the return filed by the legitimate taxpayer.
However, it may be possible to flag such returns by using other
detection methods, such as comparing the Internet Protocol
(``IP'') address to the address used on the return, identifying
multiple refunds being deposited into the same bank account, or
using data from tax preparation companies to find returns that
were completed faster than a human preparer could.\5\
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\5\W&M Committee Staff discussions with IRS.
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The IRS also has faced difficulty in protecting taxpayers
who are known victims of identity theft. In the past few years,
the IRS has issued Identity Protection Personal Identification
Numbers (``IP PINs'') to victims, and would reject returns
filed with the victim's information if the IP PIN was not
included on the return. However, the IRS has had difficulty
ensuring that the people requesting IP PINs are actually the
victims and not the identity thief. Additionally, the IRS
suspended its online tool to retrieve an IP PIN after it
discovered that at least 800 returns were filed by fraudsters
who had obtained stolen IP PINs.\6\
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\6\IRS, ``IRS Statement on IP PIN,'' March 7, 2016.
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By requiring the IRS to pursue additional protections and
relief for taxpayers, H.R. 3832 will help the IRS combat
identity theft more effectively and help victims of identity
theft resolve their cases and restore their tax identities more
quickly.
C. Legislative History
Background
H.R. 3832, the Stolen Identity Refund Fraud Prevention Act
of 2016, was introduced on October 26, 2015, and was referred
to the Committee on Ways and Means.
Committee Action
The Committee on Ways and Means marked up H.R. 3832, the
Stolen Identity Refund Fraud Prevention Act of 2016, on April
28, 2016, and ordered the bill, as amended, favorably reported
(with a quorum being present).
Committee Hearings
The need for improving the IRS' ability to combat identity
theft and help taxpayers resolve their identity-theft cases was
discussed at the Oversight Subcommittee hearing on the 2015 Tax
Filing Season (April 22, 2015), and the Oversight Subcommittee
hearing on the 2016 Tax Filing Season (April 19, 2016).
II. EXPLANATION OF THE BILL
A. Centralized Point of Contact for Identity Theft Victims (sec. 2 of
the bill)
Present Law
Disparate elements in the tax laws and administration are
implicated in identity theft. Tax-related identity theft can
generally occur in one of two ways. In refund fraud, a
perpetrator may obtain a taxpayer's identifying information,
submit an individual income tax return using a falsified Form
W-2, Wage and Tax Statement, and fraudulently claim a refund.
In other cases, the stolen identifying information is used in
order to obtain employment; the returns then filed by the
persons employed using the stolen identity may be based on the
actual wages and withholding. Victims of the fraud include the
individuals whose identifying information was stolen as well as
the businesses whose systems may have been breached to obtain
that personal information.
The IRS describes its procedures for addressing both types
of fraud in the Internal Revenue Manual. The IRS initially
established the Identity Protection Specialized Unit (``IPSU'')
to assist victims of identity theft, but taxpayers were also
referred to other operating units of the IRS to deal with
various aspects of their case.\7\ Subsequently reorganized and
renamed the Identity Theft Victim Assistance (``IDTVA'')
organization, it is staffed with specially trained employees
who are able to assess each case, identify issues, and assist
the taxpayer in getting the correct return filed, refunds
issued, etc.\8\ The IDTVA organization's work is coordinated by
the IRS' Identity Protection Program through the auspices of an
oversight office within the Wage and Investment Operating
Division.\9\
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\7\TIGTA, Ref. No. 2012-40-050, Most Taxpayers Whose Identities
Have Been Stolen to Commit Refund Fraud Do Not Receive Quality Customer
Service (May 2012).
\8\A description of the services provided by the IDTVA organization
is available at https://www.irs.gov/uac/Newsroom/IRS-Identity-Theft-
Victim-Assistance-How-It-Works
\9\Internal Revenue Service, Identity Protection and Victim
Assistance, Internal Revenue Manual Chapter 23, paragraph 25.23.1 et
seq. (September 2, 2015).
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If a victim thinks he or she is not being properly served
by the IRS or the IDTVA organization, the taxpayer may be
eligible for assistance from the Taxpayer Advocate Service
(``TAS'') as in the case of economic hardship caused by the
theft. In such instances, the TAS will assign a case advocate
to the taxpayer's account.
Reasons for Change
The Committee is concerned that taxpayers who are
victimized by identity thieves experience delays in obtaining
their tax refunds, and find it difficult to work with multiple
offices within the IRS. Requiring a centralized point of
contact at the IRS to provide the necessary level of personal
assistance to these victims is a common sense measure that will
simplify the resolution of cases for taxpayers. According to
testimony provided by GAO recently, the IRS has improved its
customer service to victims of identity theft, despite declines
in customer service elsewhere.\10\ Although the IRS has shown
flexibility in adapting new procedures for handling of identity
theft cases, the Committee believes providing a centralized
point of contact for a victim should not be left to the
discretion of the IRS.
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\10\Government Accountability Office, Tax Filing: IRS Needs a
Comprehensive Customer Service Strategy and Needs to Better Combat
Identity Theft Refund Fraud and Protect Taxpayer Data (GAO-16-578T),
April 19, 2016, available at http://www.gao.gov/products/GAO-0916-
09578T.
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Explanation of Provision
The provision requires the Secretary of the Treasury (or
the Secretary's delegate) (``Secretary'') to establish
procedures to implement a centralized point of contact for
taxpayers adversely affected by identity theft of any type. The
centralized point of contact may be a team or subset of
specially trained employees who can work across functions to
resolve problems for the victim and who is accountable for
handling the case to completion. The makeup of the team may
change as required to meet IRS needs, but the procedures must
ensure continuity of records and case history and may require
notice to the taxpayer in appropriate instances.
Effective Date
The provision is effective on the date of enactment.
B. Taxpayer Notification of Suspected Identity Theft (sec. 3 of the
bill and new sec. 7529 of the Code)
Present Law
Section 6103 provides that returns and return information
are confidential and may not be disclosed by the IRS, other
Federal employees, State employees, and certain others having
access to the information except as provided in the Code.\11\
The definition of "return information" is very broad and
includes any information gathered by the IRS with respect to a
person's liability or possible liability under the Code for any
tax, penalty, interest, fine, forfeiture, or other imposition
or offense.\12\ Thus, information gathered by the IRS in
connection with an investigation of a person for a Title 26
offense, such as fraud, is the return information of the person
being investigated and is subject to the confidentiality
restrictions of section 6103.
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\11\Except where otherwise stated, all section references are to
the Internal Revenue Code of 1986, as amended (herein "Code"). Sec.
6103(a).
\12\Sec. 6103(b)(2). Return information is:
a taxpayer's identity, the nature, source, or amount of
his income, payments, receipts, deductions, exemptions, credits,
assets, liabilities, net worth, tax liability, tax withheld,
deficiencies, overassessments, or tax payments, whether the taxpayer's
return was, is being, or will be examined or subject to other
investigation or processing, or any other data, received by, recorded
by, prepared by, furnished to, or collected by the Secretary with
respect to a return or with respect to the determination of the
existence, or possible existence, of liability (or the amount thereof)
of any person under this title for any tax, penalty, interest, fine,
forfeiture, or other imposition, or offense,
any part of any written determination or any background
file document relating to such written determination (as such terms are
defined in section 6110(b)) that is not open to public inspection under
section 6110,
any advance pricing agreement entered into by a taxpayer
and the Secretary and any background information related to such
agreement or any application for an advance pricing agreement, and
any closing agreement under section 7121, and any similar
agreement, and any background information related to such an agreement
or request for such an agreement. Return information does not include
data in a form that cannot be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer.
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As an exception to section 6103's general rule of
confidentiality, the Code permits a taxpayer to receive his or
her own tax return, and also can receive his or her return
information if the Secretary determines that such disclosure
would not seriously impair Federal tax administration.\13\ With
respect to fraudulent tax returns, if the victim's name and
Social Security number are listed as either the primary or
secondary taxpayer on a fraudulent return, a victim of identity
theft, or a person authorized to obtain the identity theft
victim's tax information, may request a redacted copy (one with
some information blacked-out) of a fraudulent return that was
filed and accepted by the IRS using the identity theft victim's
name and Social Security number.\14\
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\13\Sec. 6103(e)(1) and (7). The Code also permits the disclosure
of returns and return information to such persons or persons the
taxpayer may designate, if the request meets the requirements of the
Treasury regulations and if it is determined that such disclosure would
not seriously impair Federal tax administration. Sec. 6103(c).
\14\See Internal Revenue Service, Instructions for Requesting Copy
of Fraudulent Returns (March 28, 2016). https://www.irs.gov/
Individuals/Instructions-for-Requesting-Copy-of-Fraudulent-Returns.
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In cases not involving violations of Title 26, under a
Privacy Act Notice, the Treasury Inspector General for Tax
Administration is allowed to disclose information to
complainants, victims, or their representatives (defined to be
a complainant's or victim's legal counsel or a Senator or
Representative whose assistance the complainant or victim has
solicited) concerning the status and/or results of an
investigation or case arising from the matters of which they
complained and/or of which they were a victim, including, once
the investigative subject has exhausted all reasonable appeals,
any action taken. Information concerning the status of the
investigation or case is limited strictly to whether the
investigation or case is open or closed. Information concerning
the results of the investigation or case is limited strictly to
whether the allegations made in the complaint were
substantiated or were not substantiated and, if the subject has
exhausted all reasonable appeals, any action was taken.\15\
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\15\See 75 Fed. Reg. 20715 (April 20, 2010) (relating to TIGTA
Office of Investigation files).
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Reasons for Change
The Committee is aware that victims of identity theft are
often unaware that their identity has been stolen or
compromised. As a result, they are unable to take timely
measures to limit damage from the theft and to secure their
identity against further compromise. The Committee is also
aware that successful prosecution of identity thieves requires
that the investigators exercise discretion in disclosing
information to victims about an ongoing investigation. However,
the Committee believes that victims must be provided an
opportunity to safeguard their financial information and assets
as soon as practicable.
Explanation of Provision
The provision requires the Secretary to notify a person
whose identity was used without authorization that such use
occurred, as soon as practicable after determining such use
occurred and without jeopardizing an investigation relating to
tax administration.
The provision also requires the Secretary to notify the
person whose identity was used without authorization of any
criminal charges that are brought against any person with
respect to the unauthorized use, as soon as practicable.
Effective Date
The provision applies to determinations made after the date
of enactment.
C. Electronic Filing Opt-Out Feasibility Study (sec. 4 of the bill)
Present Law
The Internal Revenue Service Restructuring and Reform Act
of 1998 (``IRS Restructuring Act'')\16\ established a
Congressional policy to promote the paperless filing of Federal
tax returns and set a goal for the IRS to have at least 80
percent of all Federal tax and information returns filed
electronically by 2007.\17\ Section 2001(b) of the IRS
Restructuring Act requires the IRS to establish a 10-year
strategic plan to eliminate barriers to electronic filing.
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\16\Sec. 2001(a), Pub. L. No. 105-206.
\17\The Electronic Tax Administration Advisory Committee, the body
charged with oversight of IRS progress in reaching that goal, reported
that e-filing by most categories of taxpayers exceeded 80 percent in
the 2014 filing season, but projected an overall rate of 77.5 percent
based on all Federal returns. See Electronic Tax Administration
Advisory Committee, Annual Report to Congress, June 2015 IRS Pub. 3415,
page 9, available at https://www.irs.gov/pub/irs-pdf/p3415.pdf.
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Present law requires the Secretary to issue regulations
regarding electronic filing and specifies certain limitations
on the rules that may be included in such regulations.\18\ The
statute requires that Federal income tax returns prepared by
specified tax return preparers be filed electronically,\19\ and
that all partnerships with more than 100 partners be required
to file electronically. For taxpayers other than partnerships,
the statute prohibits any requirement that persons who file
fewer than 250 returns during a calendar year file
electronically. With respect to individuals, estates, and
trusts, the Secretary may permit, but generally cannot require,
electronic filing of income tax returns. In crafting any of
these required regulations, the Secretary must take into
account the ability of taxpayers to comply at a reasonable
cost.
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\18\Sec. 6011(e).
\19\Section 6011(e)(3)(B) defines a ``specified tax return
preparer'' as any return preparer who reasonably expects to file more
than 10 individual income tax returns during a calendar year.
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Individuals who either report to the IRS that they are
victims of identity theft or who the IRS determines
independently are victims of identity theft are eligible to
receive a special, six-digit identity protection personal
identification number (``IP PIN'') to use in lieu of their
Social Security number as a taxpayer identifying number on
returns the next filing season. If the taxpayer files
electronically, an additional e-file PIN is also required.
Reasons for Change
The Committee is aware that numerous taxpayers who have
experienced identity theft that was accomplished by
electronically filing a false return may wish to elect to
preclude any future electronic filing of a return on their
behalf. It is not known how widely shared that sentiment is,
nor is it clear whether such an election could be honored. The
Committee requires more information about the feasibility of
such an election and its effectiveness in preventing further
violations.
Explanation of Provision
The provision requires that the Secretary submit a
feasibility study of a program under which a taxpayer who is a
victim of identity theft may elect to prevent future electronic
submission of a return by or on behalf of that taxpayer.
Effective Date
The provision is effective on the date of enactment.
D. Criminal Penalty for Using a False Identity in Connection With Tax
Fraud (sec. 5 of the bill)
Present Law
The Code does not contain civil or criminal penalties
specifically targeted at identity theft. Instead, most claims
for tax refund-related identity theft are prosecuted as false
claims under section 287 of title 18, and are classified as
felonies, generally punishable by a penalty of up to $250,000
and imprisonment for up to five years. In addition, section
1028A of title 18 provides for the statutory crime of
``aggravated identity theft'' in cases where the identity of
another individual is used to commit enumerated crimes and
generally adds an additional two-year prison term (herein the
``Aggravated Identity Theft Statute''). However, that section
does not include any tax offenses under the Code.
The Code includes two provisions, sections 7206 and 7207,
which cover fraud and false statements and fraudulent returns.
Sections 7206(1) and (2) cover situations that could
potentially involve identity theft. Those provisions make it a
felony, punishable by a penalty of up to $100,000 ($500,000 for
a corporation), imprisonment for up to three years, or both,
plus prosecution costs, for a person who: (i) makes a false
declaration under penalties of perjury; and (ii) aids or
assists in the preparation or presentation of any return or
other document that is false as to a material matter. Section
7207 treats as a misdemeanor the willful delivery or disclosure
to any officer or employee of the IRS of fraudulent or false
lists, returns, accounts, statements, or other documents,
punishable by a penalty of up to $10,000 ($50,000 for
corporations), imprisonment for up to a year, or both.
Reasons for Change
The Committee believes that the current penalties for
criminal tax violations do not appropriately take into account
as an aggravating factor the use of misappropriated identity.
Explanation of Provision
The provision adds an unspecified felony under section 7206
to the list of predicate offenses contained in the Aggravated
Identity Theft Statute.\20\
---------------------------------------------------------------------------
\20\An amendment by Mr. Lewis removed the criminal penalty for
using a false identity in connection with tax fraud that would have
been added to the Internal Revenue Code under section 5(a) of the
amendment in the nature of a substitute. Corresponding changes to the
provisions relating to Title 18 in section 5(b) of the amendment in the
nature of a substitute were beyond the scope of the Committee's
jurisdiction.
---------------------------------------------------------------------------
Effective Date
The provision applies to offenses committed after the date
of enactment.
E. Improvement in Access to Information Under the Do Not Pay Initiative
(sec. 6 of the bill)
Present Law
Payments made by executive agencies including the
Department of the Treasury and the IRS are subject to the
requirements of the Do Not Pay (``DNP'') Initiative.\21\ The
DNP Initiative requires that agencies review pre-payment
procedures and ensure that a thorough review of available
databases with relevant information on eligibility occurs to
prevent improper payments before the release of any Federal
funds. Before issuing any payment, each agency is required to
review as appropriate the following databases to verify
eligibility of the payment: (i) the Death Master File of the
Social Security Administration; (ii) the General Services
Administration's Excluded Parties List System; (iii) the Debt
Check Database of the Department of the Treasury; (iv) the
Credit Alert System or Credit Alert Interactive Voice Response
System of the Department of Housing and Urban Development; and
(v) the List of Excluded Individuals/Entities of the Office of
Inspector General of the Department of Health and Human
Services. The Office of Management and Budget may, after
providing notice as specified, designate additional databases
for inclusion in consultation with the appropriate agencies.
---------------------------------------------------------------------------
\21\Improper Payments Elimination and Recovery Improvement Act of
2012, Pub. L. No. 112-248, sec. 5 (January 10, 2013).
---------------------------------------------------------------------------
Reasons for Change
The Committee wishes to clarify that the Secretary and the
Secretary's delegate are subject to the requirements of the DNP
Initiative to help prevent, reduce and stop improper payments
from being made especially in the context of identity theft
refund fraud. The Committee believes that the review of the
multiple data sources before payment under the DNP Initiative
will help prevent identity theft refund fraud and ensure that
taxpayers receive payments to which they are entitled, in a
timely manner.
Explanation of Provision
The provision requires that the Secretary and the
Secretary's delegate, in order to help prevent identity theft,
make use of databases enumerated in the Do Not Pay initiative,
established by the Secretary under section 5 of the Improper
Payments Elimination and Recovery Improvement Act of 2012.
Effective Date
The provision is effective on the date of enactment.
F. Require the IRS to Prepare a Report on Identity Theft Refund Fraud
(sec. 7 of the bill)
Present Law
The IRS is not currently required to prepare reports to
Congress on identity theft refund fraud.
Reasons for Change
The Committee recognizes that tax-related identity theft is
an evolving criminal activity that targets innocent taxpayers
nationwide and robs the Treasury of billions of dollars each
year. The Committee believes the report on identity theft
refund fraud will help provide useful information on the scope
of the problem and practical solutions necessary to reduce this
growing threat.
Explanation of Provision
The provision requires the IRS to report to the House
Committee on Ways and Means and the Senate Committee on Finance
no later than September 30, 2018, on the extent and nature of
fraud involving the use of a misappropriated taxpayer identity
with respect to claims for refund under the Code during the
preceding completed income tax filing season. Similar reports
are required biannually thereafter until September 30, 2023.
The reports must detail IRS efforts to combat identity
theft fraud, including an update on the victims' assistance
unit; providing information on both the average and maximum
amounts of time that elapsed before the cases of victims of
such fraud were resolved; and discussing IRS efforts associated
with other avenues for addressing identity theft refund fraud
(e.g., the hash-based message authentication code).
The provision also requires that the reports provide
updates on the implementation of the bill and identify the
needs for any further legislation to protect taxpayer
identities. In addition the provision includes a requirement
that the first report provide (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.
Effective Date
The provision is effective upon the date of enactment.
G. Require the IRS To Establish an Information-Sharing and Analysis
Center (sec. 8 of the bill)
Present Law
In June 2015, the IRS joined with representatives of tax
preparation and software firms, payroll and tax financial
product processors, and State tax administrators to announce
that they would look at establishing a formalized Refund Fraud
Information Sharing and Assessment Center (``ISAC'') to share
information more aggressively and efficiently between the
public and private sector to help stop the proliferation of
fraud schemes and reduce the risk to taxpayers.\22\ For
example, ISAC would provide better data to law enforcement to
improve the investigations and prosecution of identity thieves.
The IRS does not currently have a center within which the
private and public sectors, including State government and
subsidiaries thereof can share data and information analysis to
protect against identity theft.
---------------------------------------------------------------------------
\22\IR-2015-87, June 11, 2015, available at http://www.irs.gov/uac/
Newsroom/IRS-and-Industry-and-States-Take-New-Steps-Together-to-Fight-
Identity-Theft-and-Protect-Taxpayers.
---------------------------------------------------------------------------
Reasons for Change
The Committee believes it is desirable to establish a
system under which both governmental and private organizations
can share and analyze data to detect patterns and warn against
potential risks. The Committee is aware that such information-
sharing centers have been successful in the fields of financial
services and aviation, and believes formation of such a center
in the field of tax administration will provide significant
gains in detection and prevention of identity theft.
Explanation of Provision
The provision requires that the Secretary establish an
information sharing and analysis center to facilitate sharing
data and information with respect to identity theft, and submit
a report on the data shared and results achieved by the ISAC no
later than one year after the ISAC is established.
Effective Date
The provision is effective upon the date of enactment.
H. Local Law Enforcement Liaison (sec. 9 of the bill)
Present Law
The IRS Criminal Investigation Division (``CID'') is
authorized to investigate potential criminal violations of the
Code. The CID is involved in more than 70 multi-regional task
forces or working groups including State/local and Federal law
enforcement agencies solely focusing on identity theft.\23\ A
specialized unit within the CID called the Identity Theft
Clearinghouse (``ITC'') develops and refers identity theft
schemes to CID field offices for investigation. In addition,
the ITC provides coordination and administrative and
investigative support to ongoing criminal investigations
involving identity theft.
---------------------------------------------------------------------------
\23\IRS, States and Tax Industry Combat Identity Theft and Refund
Fraud on Many Fronts, FS-2016-1, January 2016, available at https://
www.irs.gov/uac/Newsroom/IRS,-States-and-Tax-Industry-Combat-Identity-
Theft-and-Refund-Fraud-on-Many-Fronts.
---------------------------------------------------------------------------
The CID works with State and local law enforcement
officials through a program called the Law Enforcement
Assistance Program (``LEAP''), which provides for the
disclosure of tax return information associated with the
accounts of known and suspected victims of identity theft with
the consent of those victims.
Reasons for Change
The Committee believes it will be useful to create a local
law enforcement liaison within the IRS to coordinate identity
theft cases with local police and law enforcement agents. This
position will provide State and local law enforcement
authorities a primary source of contact at the IRS when they
need to share information about a case, and thereby more
efficiently help protect taxpayers from identity theft fraud.
Explanation of Provision
The provision creates a local law enforcement liaison
within the CID of the IRS to (i) receive information from State
and local law enforcement authorities; (ii) respond to
inquiries from State and local law enforcement authorities;
(iii) administer information-sharing initiatives with State or
local law enforcement authorities and review the performance of
such initiatives; (iv) ensure any information provided through
these information-sharing initiatives is used only for the
prosecution of identity theft-related crimes and not re-
disclosed to third parties; and (v) carry out such other duties
relating to tax-related identity theft prevention as are
delegated by the Commissioner.
Effective Date
The provision is effective on the date of enactment.
I. IRS Phone Scam Report (sec. 10 of the bill)
Present Law
The IRS Restructuring Act\24\ established the Treasury
Inspector General for Tax Administration (``TIGTA'') to provide
independent oversight over of the IRS.\25\ Its duties include
conducting investigations of problems affecting programs at the
IRS, including potential criminal violations, and reporting to
Congress, with recommendations about potential solutions to the
problems. In its reports to Congress, TIGTA includes its
assessment of external factors that pose a risk to the
integrity of tax administration, such as the large volume of
telephone scams in recent years in which individuals call
potential victims and impersonate IRS agents or employees in an
attempt to persuade the victim to pay taxes or fines supposedly
due. Although TIGTA has reported on efforts to prevent such
scams, the subject is not specifically included in the lists of
various annual and semiannual reports that TIGTA must submit to
Congress.\26\
---------------------------------------------------------------------------
\24\Sec. 1103, Pub. L. No. 105-206.
\25\Sections 2 and 8D, Inspectors General Act of 1978 (Pub. Law 95-
452), as amended; 5 U.S.C. App. Secs. 1 and 8D.
\26\Sec. 7803(d).
---------------------------------------------------------------------------
Reasons for Change
The Committee has observed the steep growth in the number
of telephone scams involving impersonation of IRS agents or
other Federal officials in recent years. The large volume of
complaints about such telephone calls, the amount of money lost
by the victims, and the ability of the perpetrators to shift
their activities and thwart law enforcement efforts are of
great concern to the Committee. Accordingly, the Committee
believes that a thorough analysis of the problem is needed to
develop more effective strategies to prevent such scams.
Explanation of Provision
TIGTA, in consultation with Federal Communications
Commission and Federal Trade Commission, must report to
Congress no later than one year after enactment on telephone
scams involving impersonation of IRS agents or other Federal
officials collecting tax. The report must include a description
of the scams; an estimate of the number of persons contacted;
an estimate of the number of persons who have been victims; an
estimate of total wrongful payments made by victims; and
details of potential solutions, including descriptions of
private-sector best practices and technological solutions that
may be relevant.
Effective Date
The provision is effective on the date of enactment.
J. Providing Identity Theft Prevention Information While on Hold With
Internal Revenue Service (sec. 11 of the bill)
Present Law
There are presently no statutory provisions that address
whether or how the IRS should alert the public about possible
telephone scams. The IRS publishes alerts on its website under
a heading, ``Phishing and Tax Scams,'' and advises taxpayers to
report IRS-related email scams to the IRS at phishing@irs.gov
and IRS-impersonation telephone scams to www.tigta.gov. Both
TIGTA and the IRS have posted public service announcements on
www.youtube.com about ways that taxpayers can protect
themselves against such scams.
Reasons for Change
The Committee is aware that TIGTA has received over one
million complaints since October 2013 from taxpayers reporting
threatening telephone calls from IRS impersonators demanding
immediate payment in the form of wire transfers or prepaid
debit cards. The Committee believes that any waiting time
experienced by callers to the taxpayer assistance numbers at
the IRS could be leveraged to educate those callers about the
various scams. In doing so, the IRS may be reaching a segment
of the population that is unlikely to visit the IRS website or
find IRS messages on social media.
Explanation of Provision
The provision requires that the IRS play taped messages
about current schemes or scams while taxpayers are on hold
waiting for a customer service representative.
Effective Date
The provision is effective on the date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the votes of the Committee on Ways and Means in its
consideration of H.R. 3832, a bill require that protects
against theft of taxpayer identities and refund fraud.
The amendment by Mr. Lewis to the amendment in the nature
of a substitute, which would strike the criminal penalty for
using a false identity in connection with tax fraud in section
5(a) of the amendment in the nature of a substitute, was agreed
to by voice vote (with a quorum being present).
The amendment by Mr. Pascrell to the amendment in the
nature of a substitute, which would require the Commissioner of
Internal Revenue to establish a local law enforcement liaison,
was agreed to by voice vote (with a quorum being present).
The amendment by Mr. Pascrell to the amendment in the
nature of a substitute, which would require the Treasury
Inspector General for Tax Administration to submit a report to
Congress on telephone scams relating to the Internal Revenue
Service and which would require that taxpayers be provided
identity theft prevention information while on hold with the
Internal Revenue Service, was agreed to by voice vote (with a
quorum being present).
The Chairman's amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 3832, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3832, as
reported.
The bill, as reported, is estimated to have no effect on
Federal fiscal year budget receipts for the period 2016-2026.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that there are no new or increased tax
expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 9, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3832, the Stolen
Identity Refund Fraud Prevention Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
H.R. 3832--Stolen Identity Refund Fraud Prevention Act of 2016
H.R. 3832 would amend current law with an aim to reduce
identity theft related to federal tax administration.
Specifically, the bill would require the Internal Revenue
Service (IRS) to maintain a central office for identity theft
issues, to notify taxpayers of any instances of identity theft
detected by the IRS, and to provide affected taxpayers with
information on the circumstances of such theft. The bill also
would require the IRS to report to the Congress on electronic
tax filings and the problem of identity theft and to provide
biannual reports on identity theft and fraudulent tax refunds.
Finally, H.R. 3832 would establish specific civil and criminal
penalties for tax fraud involving identity theft.
Based on information from the Government Accountability
Office and the IRS, CBO estimates that implementing H.R. 3832
would cost about $2 million annually or $10 million over the
2017-2021 period to notify taxpayers of instances of identity
theft and to provide reports on this subject to the Congress;
such spending would be subject to the availability of
appropriated funds.
Enacting the legislation could increase federal revenues
from individuals subject to criminal and civil penalties under
H.R. 3832 as well as associated direct spending of those
criminal penalties; therefore pay-as-you-go procedures apply.
However, CBO estimates that such effects would not be
significant in any year because of the small number of cases
likely to be involved. The staff of the Joint Committee on
Taxation (JCT) estimates that enacting the bill would not
affect revenues collected under the Internal Revenue Code.
CBO and JCT estimate that enacting H.R. 3832 would not
increase net direct spending or on-budget deficits in any of
the four consecutive 10-year periods beginning in 2027.
CBO has determined that the nontax provisions of the bill
contain no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act (UMRA). Similarly,
JCT has determined that the tax provisions of the bill contain
no intergovernmental or private-sector mandates as defined in
UMRA.
The CBO staff contact for this estimate is Matthew
Pickford. This estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 3832 that the
Committee concluded that it is appropriate to report the bill,
as amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill contains no
unfunded mandate on the private sector, nor does it impose a
Federal intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 47--FRAUD AND FALSE STATEMENTS
* * * * * * *
Sec. 1028A. Aggravated identity theft
(a) Offenses.--
(1) In general.--Whoever, during and in relation to
any felony violation enumerated in subsection (c),
knowingly transfers, possesses, or uses, without lawful
authority, a means of identification of another person
shall, in addition to the punishment provided for such
felony, be sentenced to a term of imprisonment of 2
years.
(2) Terrorism offense.--Whoever, during and in
relation to any felony violation enumerated in section
2332b(g)(5)(B), knowingly transfers, possesses, or
uses, without lawful authority, a means of
identification of another person or a false
identification document shall, in addition to the
punishment provided for such felony, be sentenced to a
term of imprisonment of 5 years.
(b) Consecutive Sentence.--Notwithstanding any other
provision of law--
(1) a court shall not place on probation any person
convicted of a violation of this section;
(2) except as provided in paragraph (4), no term of
imprisonment imposed on a person under this section
shall run concurrently with any other term of
imprisonment imposed on the person under any other
provision of law, including any term of imprisonment
imposed for the felony during which the means of
identification was transferred, possessed, or used;
(3) in determining any term of imprisonment to be
imposed for the felony during which the means of
identification was transferred, possessed, or used, a
court shall not in any way reduce the term to be
imposed for such crime so as to compensate for, or
otherwise take into account, any separate term of
imprisonment imposed or to be imposed for a violation
of this section; and
(4) a term of imprisonment imposed on a person for a
violation of this section may, in the discretion of the
court, run concurrently, in whole or in part, only with
another term of imprisonment that is imposed by the
court at the same time on that person for an additional
violation of this section, provided that such
discretion shall be exercised in accordance with any
applicable guidelines and policy statements issued by
the Sentencing Commission pursuant to section 994 of
title 28.
(c) Definition.--For purposes of this section, the term
``felony violation enumerated in subsection (c)'' means any
offense that is a felony violation of--
(1) section 641 (relating to theft of public money,
property, or rewards ), section 656 (relating to theft,
embezzlement, or misapplication by bank officer or
employee), or section 664 (relating to theft from
employee benefit plans);
(2) section 911 (relating to false personation of
citizenship);
(3) section 922(a)(6) (relating to false statements
in connection with the acquisition of a firearm);
(4) any provision contained in this chapter (relating
to fraud and false statements), other than this section
or section 1028(a)(7);
(5) any provision contained in chapter 63 (relating
to mail, bank, and wire fraud);
(6) any provision contained in chapter 69 (relating
to nationality and citizenship);
(7) any provision contained in chapter 75 (relating
to passports and visas);
(8) section 523 of the Gramm-Leach-Bliley Act (15
U.S.C. 6823) (relating to obtaining customer
information by false pretenses);
(9) section 243 or 266 of the Immigration and
Nationality Act (8 U.S.C. 1253 and 1306) (relating to
willfully failing to leave the United States after
deportation and creating a counterfeit alien
registration card);
(10) any provision contained in chapter 8 of title II
of the Immigration and Nationality Act (8 U.S.C. 1321
et seq.) (relating to various immigration offenses); or
(11) section 208, 811, 1107(b), 1128B(a), or 1632 of
the Social Security Act (42 U.S.C. 408, 1011, 1307(b),
1320a-7b(a), and 1383a) (relating to false statements
relating to programs under the Act).
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, and existing law in
which no change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 77--MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 7529. Notification of suspected identity theft.
* * * * * * *
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.
* * * * * * *
----------
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 47--FRAUD AND FALSE STATEMENTS
* * * * * * *
Sec. 1028A. Aggravated identity theft
(a) Offenses.--
(1) In general.--Whoever, during and in relation to
any felony violation enumerated in subsection (c),
knowingly transfers, possesses, or uses, without lawful
authority, a means of identification of another person
shall, in addition to the punishment provided for such
felony, be sentenced to a term of imprisonment of 2
years.
(2) Terrorism offense.--Whoever, during and in
relation to any felony violation enumerated in section
2332b(g)(5)(B), knowingly transfers, possesses, or
uses, without lawful authority, a means of
identification of another person or a false
identification document shall, in addition to the
punishment provided for such felony, be sentenced to a
term of imprisonment of 5 years.
(b) Consecutive Sentence.--Notwithstanding any other
provision of law--
(1) a court shall not place on probation any person
convicted of a violation of this section;
(2) except as provided in paragraph (4), no term of
imprisonment imposed on a person under this section
shall run concurrently with any other term of
imprisonment imposed on the person under any other
provision of law, including any term of imprisonment
imposed for the felony during which the means of
identification was transferred, possessed, or used;
(3) in determining any term of imprisonment to be
imposed for the felony during which the means of
identification was transferred, possessed, or used, a
court shall not in any way reduce the term to be
imposed for such crime so as to compensate for, or
otherwise take into account, any separate term of
imprisonment imposed or to be imposed for a violation
of this section; and
(4) a term of imprisonment imposed on a person for a
violation of this section may, in the discretion of the
court, run concurrently, in whole or in part, only with
another term of imprisonment that is imposed by the
court at the same time on that person for an additional
violation of this section, provided that such
discretion shall be exercised in accordance with any
applicable guidelines and policy statements issued by
the Sentencing Commission pursuant to section 994 of
title 28.
(c) Definition.--For purposes of this section, the term
``felony violation enumerated in subsection (c)'' means any
offense that is a felony violation of--
(1) section 641 (relating to theft of public money,
property, or rewards ), section 656 (relating to theft,
embezzlement, or misapplication by bank officer or
employee), or section 664 (relating to theft from
employee benefit plans);
(2) section 911 (relating to false personation of
citizenship);
(3) section 922(a)(6) (relating to false statements
in connection with the acquisition of a firearm);
(4) any provision contained in this chapter (relating
to fraud and false statements), other than this section
or section 1028(a)(7);
(5) any provision contained in chapter 63 (relating
to mail, bank, and wire fraud);
(6) any provision contained in chapter 69 (relating
to nationality and citizenship);
(7) any provision contained in chapter 75 (relating
to passports and visas);
(8) section 523 of the Gramm-Leach-Bliley Act (15
U.S.C. 6823) (relating to obtaining customer
information by false pretenses);
(9) section 243 or 266 of the Immigration and
Nationality Act (8 U.S.C. 1253 and 1306) (relating to
willfully failing to leave the United States after
deportation and creating a counterfeit alien
registration card);
(10) any provision contained in chapter 8 of title II
of the Immigration and Nationality Act (8 U.S.C. 1321
et seq.) (relating to various immigration offenses);
[or]
(11) section 208, 811, 1107(b), 1128B(a), or 1632 of
the Social Security Act (42 U.S.C. 408, 1011, 1307(b),
1320a-7b(a), and 1383a) (relating to false statements
relating to programs under the Act)[.]; or
(12) section 7206(b) of the Internal Revenue Code of
1986 (relating to use of false identity in connection
with tax fraud).
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