[House Report 114-69]
[From the U.S. Government Publishing Office]


114th Congress     }                                {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                {        114-69
=====================================================================
 
                       IRS EMAIL TRANSPARENCY ACT

                                _______
                                

 April 13, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 1152]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1152) to prohibit officers and employees of the 
Internal Revenue Service from using personal email accounts to 
conduct official business, 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............................................2
        A. Purpose and Summary...................................     2
        B. Background and Need for Legislation...................     2
        C. Legislative History...................................     2
II. EXPLANATION OF THE BILL...........................................3
        A. Prohibition of Use of Personal E-mail for Official 
            Government Business (sec. 2 of the bill).............     3
III. VOTES OF THE COMMITTEE...........................................4

IV. BUDGET EFFECTS OF THE BILL........................................5
        A. Committee Estimate of Budgetary Effects...............     5
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................     5
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     5
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........6
        A. Committee Oversight Findings and Recommendations......     6
        B. Statement of General Performance Goals and Objectives.     6
        C. Information Relating to Unfunded Mandates.............     6
        D. Applicability of House Rule XXI 5(b)..................     6
        E. Tax Complexity Analysis...............................     7
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................     7
        G. Duplication of Federal Programs.......................     7
        H. Disclosure of Directed Rule Makings...................     7
VI.  CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............8

    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 ``IRS Email Transparency Act''.

SEC. 2. IRS EMPLOYEES PROHIBITED FROM USING PERSONAL EMAIL ACCOUNTS FOR 
                    OFFICIAL BUSINESS.

  No officer or employee of the Internal Revenue Service may use a 
personal email account to conduct any official business of the 
Government.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 1152, reported by the Committee on Ways and Means, 
prohibits employees of the Internal Revenue Service (``IRS'') 
from using a personal email account to conduct any official 
business, codifying an established administrative policy 
barring the use of personal email accounts by IRS employees for 
official governmental business.

                 B. Background and Need for Legislation

    Federal agencies are required to preserve certain documents 
defined as ``records'' under applicable law regardless of form. 
However, there is no requirement to retain all documents. 
Agencies' retention and disposal policies must comport with 
procedures dictated by the Archivist of the United States. 
Agencies are required to provide instruction to employees and 
contractors regarding the use of email. The use of personal 
email accounts for agency business is discouraged, but not 
actually prohibited by law or regulation.
    In addition to Federal record retention requirements, the 
IRS is entrusted with sensitive and confidential taxpayer 
information. The Tax Code imposes criminal and civil penalties 
for the unauthorized use, inspection, or disclosure of such 
information. Because of the sensitive nature of taxpayer 
information and the need to retain official records, the IRS 
has instituted policies restricting the use of personal email 
accounts. In 2012, the agency revised the Internal Revenue 
Manual, banning the use of non-IRS or Treasury email accounts 
for any official purpose.
    Notwithstanding internal IRS policy, the Committee's 
investigation of the agency's targeting practices revealed that 
the former Director of the IRS Exempt Organizations Division, 
Lois Lerner, among others, conducted official business 
involving taxpayer information, using a personal email account.

                         C. Legislative History


Background

    H.R. 1152 was introduced on February 27, 2015, and was 
referred to the Committee on Ways and Means. The same 
legislation, H.R. 5418, passed the House of Representatives in 
the 113th Congress under suspension of the rules by voice vote 
on September 16, 2014.

Committee action

    The Committee on Ways and Means marked up H.R. 1152, the 
``Email Transparency Act,'' on March 25, 2015, and ordered the 
bill, as amended, favorably reported (with a quorum being 
present) by voice vote.

Committee hearings

    The need for permanent rules against the use of personal 
email use for official purposes was discussed during multiple 
Committee hearings during the 113th Congress:
     Oversight Subcommittee Hearing on the IRS Exempt 
Organizations Division Post-U.S. Treasury Inspector General for 
Tax Administration Audit Report (September 18, 2013).
     Oversight Subcommittee Hearing with IRS 
Commissioner Koskinen (February 5, 2014).
     Oversight Subcommittee Hearing on the IRS 
Operations and the 2014 Tax Return Filing Season (May 7, 2014).
     Full Committee Hearing with IRS Commissioner 
Koskinen (June 20, 2014).

                      II. EXPLANATION OF THE BILL


   A. Prohibition of Use of Personal E-mail for Official Government 
                     Business (sec. 2 of the bill)


                              PRESENT LAW

    Federal executive agencies are required to maintain and 
preserve Federal records,\1\ whether in paper or electronic 
form, and protect against unauthorized removal of such records. 
Policies for the retention and disposal of records must conform 
to the requirements of the record-management procedures, as 
implemented by the Archivist of the United States.\2\ Email 
accounts are specifically included within the scope of records 
subject to the record-retention policies.\3\ Each agency is 
required to provide instruction and guidance to persons 
conducting business on behalf of the agency, including 
employees, officers and contractors, and use of personal email 
accounts for agency business is to be discouraged.\4\
---------------------------------------------------------------------------
    \1\44 U.S.C. sec. 3101. See 44 U.S.C. sec. 3301 for a definition of 
Federal records that generally includes all documentary materials that 
agencies receive or create in the conduct of official business and that 
may have evidentiary value with respect to official business, 
regardless of the physical form of the materials.
    \2\See generally Title 44, at chapter 29 (records management by the 
Archivist of the United States and the General Services 
Administration), chapter 31 (records management of Federal agencies) 
and chapter 33 (disposal of records).
    \3\36 CFR sec. 1236.22(a).
    \4\A quarterly bulletin published by the National Archives and 
Records Administration provides guidance to executive agencies. See 
generally NARA Bulletin 2013-03, available at http://www.archives.gov/
records-mgmt/bulletins/2013/2013-03.html. 
---------------------------------------------------------------------------
    The government-wide record-management requirements are in 
addition to the obligations to protect the sensitive 
information for which IRS is responsible. Tax information is 
sensitive and confidential.\5\ The Code imposes civil and 
criminal penalties to protect it from unauthorized use, 
inspection or disclosure.\6\ As a condition of receiving tax 
data, outside agencies must establish to the satisfaction of 
the IRS that they have adequate programs and security protocols 
in place to protect the data received.\7\ Personal email 
computer storage systems are not inspected by the IRS for 
security.
---------------------------------------------------------------------------
    \5\Sec. 6103(a).
    \6\See secs. 7213 (criminal unauthorized disclosure), 7213A 
(criminal unauthorized inspection) and 7431 (civil remedy for 
unauthorized inspection or disclosure).
    \7\Sec. 6103(p)(4).
---------------------------------------------------------------------------
    Given the sensitive and confidential nature of the 
information handled by the IRS and the need to be accountable 
for all agency records, IRS policies restrict the use of email 
accounts.\8\ Transmission of Federal tax information is only 
permitted outside the IRS in limited circumstances. In 2012, 
the IRS published a revised section of its manual in which it 
updated its administrative rules on e-records generally, and 
banned use of non-IRS/Treasury email for any governmental or 
official purpose.\9\
---------------------------------------------------------------------------
    \8\I.R.M. paragraphs 1.10.3 et seq., and 11.3.1.
    \9\I.R.M. paragraph 10.8.1.4.6.3.1, ``Privately Owned E-Mail 
Accounts.'' (May 3, 2012).
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee is concerned that IRS employees have 
continued to use personal email to conduct official business, 
contrary to administrative rules. By doing so, IRS employees 
place sensitive information at risk of disclosure, whether 
deliberately or inadvertently. In addition, to the extent that 
official conduct is reflected in emails on personal accounts 
and not in the IRS systems, the integrity of IRS record systems 
is compromised, making tax administration less transparent and 
officials less accountable. The Committee believes that the 
security and confidentiality of information gathered in the 
course of official business must be safeguarded, and records of 
official actions with respect to such material must be properly 
maintained in order to maintain public trust in the 
accountability of the IRS. Accordingly, notwithstanding the 
existing administrative rules that discourage the use of email 
for official business, the Committee believes that a statutory 
ban on use of nongovernmental email accounts by IRS employees 
conducting official business is necessary.

                        EXPLANATION OF PROVISION

    The provision bars use of personal email accounts by IRS 
employees for official government business.

                             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 vote of the Committee on Ways and Means in its 
consideration of H.R. 1152, the ``IRS Email Transparency Act,'' 
on March 25, 2015.
    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. 1152, 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. 1152 as 
reported.
    The bill, as reported, is estimated to have no effect on 
Federal budget receipts for fiscal years 2015-2025.
    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, April 3, 2015.
Hon. Paul Ryan,
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. 1152, the IRS 
Email Transparency Act.
    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,
                                                          Director.
    Enclosure.

H.R. 1152--IRS Email Transparency Act

    H.R. 1152 would amend federal law to prohibit Internal 
Revenue Service (IRS) employees from using personal email 
accounts to perform any official government business. CBO 
estimates that enacting the legislation would have no 
significant impact on the federal budget.
    Under current law, email records (official and personal) 
created in the course of official business are considered to be 
federal records. Guidance from the National Archives and 
Records Administration states that employees should generally 
not use personal email accounts to conduct official business. 
The IRS currently has a policy that employees should not 
contact taxpayers through social media or text messages. 
Consequently, CBO estimates that implementing this bill would 
not have a significant effect on the agency's operations or 
administrative costs. CBO and the staff of the Joint Committee 
on Taxation (JCT) estimate that enacting the bill would not 
affect direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    CBO and JCT have determined that H.R. 1152 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would not affect the budgets 
of state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, 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. 1152 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 does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not 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

    The following statement is made pursuant to clause 3(h)(1) 
of rule XIII of the Rules of the House of Representatives. 
Section 4022(b) of the Internal Revenue Service Restructuring 
and Reform Act of 1998 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 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 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

    With respect to clause 3(e) of rule XIII of the Rules of 
the House of Representatives, the bill, as reported, includes 
no provisions proposing to repeal or amend an existing statute 
or part thereof. Therefore, no additional materials otherwise 
required to be included in this report or an accompanying 
document under that clause are required to be included with 
respect to this bill.

                                  [all]