[House Report 115-638]
[From the U.S. Government Publishing Office]


115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      115-638

======================================================================



 
                          21ST CENTURY IRS ACT

                                _______
                                

 April 13, 2018.--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. 5445]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5445) to amend the Internal Revenue Code of 1986 to 
improve cybersecurity and taxpayer identity protection, and 
modernize the information technology of the Internal Revenue 
Service, 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............................................9
        A. Purpose and Summary...................................     9
        B. Background and Need for Legislation...................     9
        C. Legislative History...................................     9
II. EXPLANATION OF THE BILL..........................................10
TITLE I--CYBER SECURITY AND IDENTITY PROTECTION..................    10
        1. Public-private partnership to address identity theft 
            tax refund fraud (sec. 101 of the bill)..............    10
        2. Recommendations of Electronic Tax Administration 
            Advisory Committee regarding identity theft and 
            refund fraud (sec. 102 of the bill)..................    11
        3. Information Sharing and Analysis Center (sec. 103 of 
            the bill and sec. 6103 of the Code)..................    12
        4. Compliance by contractors with confidentiality 
            safeguards (sec. 104 of the bill and sec. 6103 of the 
            Code)................................................    16
        5. Report on electronic payments (sec. 105 of the bill)..    18
TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY..................    19
        1. Management of IRS information technology (sec. 201 of 
            the bill and sec 7803 of the Code)...................    19
        2. Development of online accounts and portals (sec. 202 
            of the bill).........................................    21
        3. Internet platform for Form 1099 filings (sec. 203 of 
            the bill)............................................    22
TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION 
  SYSTEM.........................................................    23
        1. Disclosure of taxpayer information for third-party 
            income verification (sec. 301 of the bill and sec. 
            6103 of the Code)....................................    23
        2. Limit redisclosures and uses of consent-based 
            disclosures of tax return information (sec. 302 of 
            the bill and sec. 6103 of the Code)..................    25
TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS.....................    27
        1. Electronic filing of returns (sec. 401 of the bill and 
            sec. 6011 of the Code)...............................    27
        2. Uniform standards for the use of electronic signatures 
            for disclosure authorizations to, and other 
            authorizations of, practitioners (sec. 402 of the 
            bill and sec. 6061 of the Code)......................    28
        3. Payment of taxes by debit and credit cards (sec. 403 
            of the bill and sec. 6311 of the Code)...............    30
III.VOTES OF THE COMMITTEE...........................................30

IV. BUDGET EFFECTS OF THE BILL.......................................30
        A. Committee Estimate of Budgetary Effects...............    30
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................    31
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    31
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......31
        A. Committee Oversight Findings and Recommendations......    31
        B. Statement of General Performance Goals and Objectives.    31
        C. Information Relating to Unfunded Mandates.............    31
        D. Applicability of House Rule XXI 5(b)..................    32
        E. Tax Complexity Analysis...............................    32
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................    32
        G. Duplication of Federal Programs.......................    32
        H. Disclosure of Directed Rule Makings...................    32
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............33
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................    33
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    33

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; ETC.

  (a) Short Title.--This Act may be cited as the ``21st Century IRS 
Act''.
  (b) Amendment of 1986 Code.--Except as otherwise expressly provided, 
whenever in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Internal Revenue Code of 1986.
  (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.

             TITLE I--CYBERSECURITY AND IDENTITY PROTECTION

Sec. 101. Public-private partnership to address identity theft refund 
fraud.
Sec. 102. Recommendations of Electronic Tax Administration Advisory 
Committee regarding identity theft refund fraud.
Sec. 103. Information sharing and analysis center.
Sec. 104. Compliance by contractors with confidentiality safeguards.
Sec. 105. Report on electronic payments.

            TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY

Sec. 201. Management of Internal Revenue Service information 
technology.
Sec. 202. Development of online accounts and portals.
Sec. 203. Internet platform for Form 1099 filings.

  TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM

Sec. 301. Disclosure of taxpayer information for third-party income 
verification.
Sec. 302. Limit redisclosures and uses of consent-based disclosures of 
tax return information.

              TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS

Sec. 401. Electronic filing of returns.
Sec. 402. Uniform standards for the use of electronic signatures for 
disclosure authorizations to, and other authorizations of, 
practitioners.
Sec. 403. Payment of taxes by debit and credit cards.

             TITLE I--CYBERSECURITY AND IDENTITY PROTECTION

SEC. 101. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY THEFT REFUND 
                    FRAUD.

  The Secretary of the Treasury (or the Secretary's delegate) shall 
work collaboratively with the public and private sectors to protect 
taxpayers from identity theft refund fraud.

SEC. 102. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION ADVISORY 
                    COMMITTEE REGARDING IDENTITY THEFT REFUND FRAUD.

  The Secretary of the Treasury shall ensure that the advisory group 
convened by the Secretary pursuant to section 2001(b)(2) of the 
Internal Revenue Service Restructuring and Reform Act of 1998 (commonly 
known as the Electronic Tax Administration Advisory Committee) studies 
(including by providing organized public forums) and makes 
recommendations to the Secretary regarding methods to prevent identity 
theft and refund fraud.

SEC. 103. INFORMATION SHARING AND ANALYSIS CENTER.

  (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) may participate in 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 tax refund fraud.
  (b) Development of Performance Metrics.--The Secretary of the 
Treasury (or the Secretary's delegate) shall develop metrics for 
measuring the success of such center in detecting and preventing 
identity theft tax refund fraud.
  (c) Disclosure.--
          (1) In general.--Section 6103(k) is amended by adding at the 
        end the following new paragraph:
          ``(13) Disclosure of return information for purposes of 
        cybersecurity and the prevention of identity theft tax refund 
        fraud.--
                  ``(A) In general.--Under such procedures and subject 
                to such conditions as the Secretary may prescribe, the 
                Secretary may disclose specified return information to 
                specified ISAC participants to the extent that the 
                Secretary determines such disclosure is in furtherance 
                of effective Federal tax administration relating to the 
                detection or prevention of identity theft tax refund 
                fraud, validation of taxpayer identity, authentication 
                of taxpayer returns, or detection or prevention of 
                cybersecurity threats.
                  ``(B) Specified isac participants.--For purposes of 
                this paragraph--
                          ``(i) In general.--The term `specified ISAC 
                        participant' means--
                                  ``(I) any person designated by the 
                                Secretary as having primary 
                                responsibility for a function performed 
                                with respect to the information sharing 
                                and analysis center described in 
                                section 403(a) of the 21st Century IRS 
                                Act, and
                                  ``(II) any person subject to the 
                                requirements of section 7216 and which 
                                is a participant in such information 
                                sharing and analysis center.
                          ``(ii) Information sharing agreement.--Such 
                        term shall not include any person unless such 
                        person has entered into a written agreement 
                        with the Secretary setting forth the terms and 
                        conditions for the disclosure of information to 
                        such person under this paragraph, including 
                        requirements regarding the protection and 
                        safeguarding of such information by such 
                        person.
                  ``(C) Specified return information.--For purposes of 
                this paragraph, the term `specified return information' 
                means--
                          ``(i) in the case of a return which is in 
                        connection with a case of potential identity 
                        theft refund fraud--
                                  ``(I) in the case of such return 
                                filed electronically, the internet 
                                protocol address, device 
                                identification, email domain name, 
                                speed of completion, method of 
                                authentication, refund method, and such 
                                other return information related to the 
                                electronic filing characteristics of 
                                such return as the Secretary may 
                                identify for purposes of this 
                                subclause, and
                                  ``(II) in the case of such return 
                                prepared by a tax return preparer, 
                                identifying information with respect to 
                                such tax return preparer, including the 
                                preparer taxpayer identification number 
                                and electronic filer identification 
                                number of such preparer,
                          ``(ii) in the case of a return which is in 
                        connection with a case of a identity theft 
                        refund fraud which has been confirmed by the 
                        Secretary (pursuant to such procedures as the 
                        Secretary may provide), the information 
                        referred to in subclauses (I) and (II) of 
                        clause (i), the name and taxpayer 
                        identification number of the taxpayer as it 
                        appears on the return, and any bank account and 
                        routing information provided for making a 
                        refund in connection with such return, and
                          ``(iii) in the case of any cybersecurity 
                        threat to the Internal Revenue Service, 
                        information similar to the information 
                        described in subclauses (I) and (II) of clause 
                        (i) with respect to such threat.
                  ``(D) Restriction on use of disclosed information.--
                          ``(i) Designated third parties.--Any return 
                        information received by a person described in 
                        subparagraph (B)(i)(I) shall be used only for 
                        the purposes of and to the extent necessary 
                        in--
                                  ``(I) performing the function such 
                                person is designated to perform under 
                                such subparagraph,
                                  ``(II) facilitating disclosures 
                                authorized under subparagraph (A) to 
                                persons described in subparagraph 
                                (B)(i)(II), and
                                  ``(III) facilitating disclosures 
                                authorized under subsection (d) to 
                                participants in such information 
                                sharing and analysis center.
                          ``(ii) Return preparers.--Any return 
                        information received by a person described in 
                        subparagraph (B)(i)(II) shall be treated for 
                        purposes of section 7216 as information 
                        furnished to such person for, or in connection 
                        with, the preparation of a return of the tax 
                        imposed under chapter 1.
                  ``(E) Data protection and safeguards.--Return 
                information disclosed under this paragraph shall be 
                subject to such protections and safeguards as the 
                Secretary may require in regulations or other guidance 
                or in the written agreement referred to in subparagraph 
                (B)(ii). Such written agreement shall include a 
                requirement that any unauthorized access to information 
                disclosed under this paragraph, and any breach of any 
                system in which such information is held, be reported 
                to the Treasury Inspector General for Tax 
                Administration.''.
          (2) Application of civil and criminal penalties.--
                  (A) Section 6103(a)(3) is amended by striking 
                ``subsection (k)(10)'' and inserting ``paragraph (10) 
                or (13) of subsection (k)''.
                  (B) Section 7213(a)(2) is amended by inserting ``or 
                (13)'' after ``(k)(10)''.

SEC. 104. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.

  (a) In General.--Section 6103(p) is amended by adding at the end the 
following new paragraph:
          ``(9) Disclosure to contractors and other agents.--
        Notwithstanding any other provision of this section, no return 
        or return information shall be disclosed to any contractor or 
        other agent of a Federal, State, or local agency unless such 
        agency, to the satisfaction of the Secretary--
                  ``(A) has requirements in effect which require each 
                such contractor or other agent which would have access 
                to returns or return information to provide safeguards 
                (within the meaning of paragraph (4)) to protect the 
                confidentiality of such returns or return information,
                  ``(B) agrees to conduct an on-site review every 3 
                years (or a mid-point review in the case of contracts 
                or agreements of less than 3 years in duration) of each 
                contractor or other agent to determine compliance with 
                such requirements,
                  ``(C) submits the findings of the most recent review 
                conducted under subparagraph (B) to the Secretary as 
                part of the report required by paragraph (4)(E), and
                  ``(D) certifies to the Secretary for the most recent 
                annual period that such contractor or other agent is in 
                compliance with all such requirements.
        The certification required by subparagraph (D) shall include 
        the name and address of each contractor and other agent, a 
        description of the contract or agreement with such contractor 
        or other agent, and the duration of such contract or agreement. 
        The requirements of this paragraph shall not apply to 
        disclosures pursuant to subsection (n) for purposes of Federal 
        tax administration.''.
  (b) Conforming Amendment.--Section 6103(p)(8)(B) is amended by 
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
  (c) Effective Date.--The amendments made by this section shall apply 
to disclosures made after December 31, 2022.

SEC. 105. REPORT ON ELECTRONIC PAYMENTS.

  Not later than 2 years after the date of the enactment of this Act, 
the Secretary (or the Secretary's delegate), in coordination with the 
Bureau of Fiscal Service and the Internal Revenue Service, and in 
consultation with private sector financial institutions, shall submit a 
written report to Congress describing how the government can utilize 
new payment platforms to increase the number of tax refunds paid by 
electronic funds transfer. Such report shall weigh the interests of 
reducing identity theft tax refund fraud, reducing the Federal 
Government's costs in delivering tax refunds, the costs and any 
associated fees charged to taxpayers (including monthly and point-of-
service fees) to access their tax refunds, the impact on individuals 
who do not have access to financial accounts or institutions, and 
ensuring payments are made to accounts at a financial institution that 
complies with section 21 of the Federal Deposit Insurance Act, chapter 
2 of title I of Public Law 91-508, and subchapter II of chapter 53 of 
title 31, United States Code (commonly referred to collectively as the 
``Bank Secrecy Act'') and the USA PATRIOT Act. Such report shall 
include any legislative recommendations necessary to accomplish these 
goals.

            TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY

SEC. 201. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION 
                    TECHNOLOGY.

  (a) Duties and Responsibilities of Internal Revenue Service Chief 
Information Officer.--Section 7803 is amended by adding at the end the 
following new subsection:
  ``(f) Internal Revenue Service Chief Information Officer.--
          ``(1) In general.--There shall be in the Internal Revenue 
        Service an Internal Revenue Service Chief Information Officer 
        (hereafter referred to in this subsection as the `IRS CIO') who 
        shall be appointed by the Administrator of the Internal Revenue 
        Service.
          ``(2) Centralized responsibility for internal revenue service 
        information technology.--The Administrator of the Internal 
        Revenue Service (and the Secretary) shall act through the IRS 
        CIO with respect to all development, implementation, and 
        maintenance of information technology for the Internal Revenue 
        Service. Any reference in this subsection to the IRS CIO which 
        directs the IRS CIO to take any action, or to assume any 
        responsibility, shall be treated as a reference to the 
        Administrator of the Internal Revenue Service acting through 
        the IRS CIO.
          ``(3) General duties and responsibilities.--The IRS CIO 
        shall--
                  ``(A) be responsible for the development, 
                implementation, and maintenance of information 
                technology for the Internal Revenue Service,
                  ``(B) ensure that the information technology of the 
                Internal Revenue Service is secure and integrated,
                  ``(C) maintain operational control of all information 
                technology for the Internal Revenue Service,
                  ``(D) be the principal advocate for the information 
                technology needs of the Internal Revenue Service, and
                  ``(E) consult with the Chief Procurement Officer of 
                the Internal Revenue Service to ensure that the 
                information technology acquired for the Internal 
                Revenue Service is consistent with--
                          ``(i) the goals and requirements specified in 
                        subparagraphs (A) through (D), and
                          ``(ii) the strategic plan developed under 
                        paragraph (4).
          ``(4) Strategic plan.--
                  ``(A) In general.--The IRS CIO shall develop and 
                implement a multiyear strategic plan for the 
                information technology needs of the Internal Revenue 
                Service. Such plan shall--
                          ``(i) include performance measurements of 
                        such technology and of the implementation of 
                        such plan,
                          ``(ii) include a plan for an integrated 
                        enterprise architecture of the information 
                        technology of the Internal Revenue Service,
                          ``(iii) include and take into account the 
                        resources needed to accomplish such plan,
                          ``(iv) take into account planned major 
                        acquisitions of information technology by the 
                        Internal Revenue Service, including Customer 
                        Account Data Engine 2 and the Enterprise Case 
                        Management System, and
                          ``(v) align with the needs and strategic plan 
                        of the Internal Revenue Service.
                  ``(B) Plan updates.--The IRS CIO shall, not less 
                frequently than annually, review and update the 
                strategic plan under subparagraph (A) (including the 
                plan for an integrated enterprise architecture 
                described in subparagraph (A)(ii)) to take into account 
                the development of new information technology and the 
                needs of the Internal Revenue Service.
          ``(5) Scope of authority.--
                  ``(A) Information technology.--For purposes of this 
                subsection, the term `information technology' has the 
                meaning given such term by section 11101 of title 40, 
                United States Code.
                  ``(B) Internal revenue service.--Any reference in 
                this subsection to the Internal Revenue Service 
                includes a reference to all components of the Internal 
                Revenue Service, including--
                          ``(i) the Office of the Taxpayer Advocate,
                          ``(ii) the Criminal Investigation Division of 
                        the Internal Revenue Service, and
                          ``(iii) except as otherwise provided by the 
                        Secretary with respect to information 
                        technology related to matters described in 
                        subsection (b)(3)(B), the Office of the Chief 
                        Counsel.''.
  (b) Independent Verification and Validation of the Customer Account 
Data Engine 2 and Enterprise Case Management System.--
          (1) In general.--The Administrator of the Internal Revenue 
        Service shall enter into a contract with an independent 
        reviewer to verify and validate the implementation plans 
        (including the performance milestones and cost estimates 
        included in such plans) developed for the Customer Account Data 
        Engine 2 and the Enterprise Case Management System.
          (2) Deadline for completion.-- Such contract shall require 
        that such verification and validation be completed not later 
        than the date which is 1 year after the date of the enactment 
        of this Act.
          (3) Application to phases of cade 2.--
                  (A) In general.--Paragraphs (1) and (2) shall not 
                apply to phase 1 of the Customer Account Data Engine 2 
                and shall apply separately to each other phase.
                  (B) Deadline for completing plans.--Not later than 1 
                year after the date of the enactment of this Act, the 
                Administrator of the Internal Revenue Service shall 
                complete the development of plans for all phases of the 
                Customer Account Data Engine 2.
                  (C) Deadline for completion of verification and 
                validation of plans.--In the case of any phase after 
                phase 2 of the Customer Account Data Engine 2, 
                paragraph (2) shall be applied by substituting ``the 
                date on which the plan for such phase was completed'' 
                for ``the date of the enactment of this Act''.
  (c) Coordination of IRS CIO and Chief Procurement Officer of the 
Internal Revenue Service.--
          (1) In general.--The Chief Procurement Officer of the 
        Internal Revenue Service shall--
                  (A) identify all significant IRS information 
                technology acquisitions and provide written 
                notification to the Internal Revenue Service Chief 
                Information Officer (hereafter referred to in this 
                subsection as the ``IRS CIO'') of each such acquisition 
                in advance of such acquisition, and
                  (B) regularly consult with the IRS CIO regarding 
                acquisitions of information technology for the Internal 
                Revenue Service, including meeting with the IRS CIO 
                regarding such acquisitions upon request.
          (2) Significant irs information technology acquisitions.--For 
        purposes of this subsection, the term ``significant IRS 
        information technology acquisitions'' means--
                  (A) any acquisition of information technology for the 
                Internal Revenue Service in excess of $1,000,000, and
                  (B) such other acquisitions of information technology 
                for the Internal Revenue Service (or categories of such 
                acquisitions) as the IRS CIO, in consultation with the 
                Chief Procurement Officer of the Internal Revenue 
                Service, may identify.
          (3) Scope.--Terms used in this subsection which are also used 
        in section 7803(f) of the Internal Revenue Code of 1986 (as 
        amended by subsection (a)) shall have the same meaning as when 
        used in such section.

SEC. 202. DEVELOPMENT OF ONLINE ACCOUNTS AND PORTALS.

  (a) In General.--The Secretary of the Treasury or the Secretary's 
delegate (hereafter referred to in this section as the ``Secretary'') 
shall--
          (1) develop secure individualized online accounts to provide 
        services to taxpayers and their designated return preparers, 
        including obtaining taxpayer information, making payment of 
        taxes, sharing documentation, and (to the extent feasible) 
        addressing and correcting issues, and
          (2) develop a process for the acceptance of tax forms, and 
        supporting documentation, in digital or other electronic 
        format.
  (b) Electronic Services Treated as Supplemental; Application of 
Security Standards.--The Secretary shall ensure that the processes 
described in subsection (a)--
          (1) are a supplement to, and not a replacement for, other 
        services provided by the Internal Revenue Service to taxpayers, 
        including face-to-face taxpayer assistance and services 
        provided by phone, and
          (2) comply with applicable security standards and guidelines.
  (c) Process for Developing Online Accounts.--
          (1) Development of plan.--Not later than 1 year after the 
        date of the enactment of this Act, the Secretary shall submit 
        to Congress a written report describing the Secretary's plan 
        for developing the secure individualized online accounts 
        described in subsection (a)(1). Such plan shall address the 
        feasibility of taxpayers addressing and correcting issues 
        through such accounts and whether access to such accounts 
        should be restricted and in what manner.
          (2) Deadline.--The Secretary shall make every reasonable 
        effort to make the secure individualized online accounts 
        described in subsection (a)(1) available to taxpayers by 
        December 31, 2023.

SEC. 203. INTERNET PLATFORM FOR FORM 1099 FILINGS.

  (a) In General.--Not later than January 1, 2023, the Secretary of the 
Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall make available an Internet website 
or other electronic media, with a user interface and functionality 
similar to the Business Services Online Suite of Services provided by 
the Social Security Administration, that will provide access to 
resources and guidance provided by the Internal Revenue Service and 
will allow persons to--
          (1) prepare and file Forms 1099,
          (2) prepare Forms 1099 for distribution to recipients other 
        than the Internal Revenue Service, and
          (3) maintain a record of completed and submitted Forms 1099.
  (b) Electronic Services Treated as Supplemental; Application of 
Security Standards.--The Secretary shall ensure that the services 
described in subsection (a)--
          (1) are a supplement to, and not a replacement for, other 
        services provided by the Internal Revenue Service to taxpayers, 
        and
          (2) comply with applicable security standards and guidelines.

  TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM

SEC. 301. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY INCOME 
                    VERIFICATION.

  (a) In General.--Not later than 1 year after the close of the 2-year 
period described in subsection (d)(1), the Secretary of the Treasury or 
the Secretary's delegate (hereafter referred to in this section as the 
``Secretary'') shall implement a program to ensure that any qualified 
disclosure--
          (1) is fully automated and accomplished through the Internet, 
        and
          (2) is accomplished in as close to real-time as is 
        practicable.
  (b) Qualified Disclosure.--For purposes of this section, the term 
``qualified disclosure'' means a disclosure under section 6103(c) of 
the Internal Revenue Code of 1986 of returns or return information by 
the Secretary to a person seeking to verify the income or 
creditworthiness of a taxpayer who is a borrower in the process of a 
loan application.
  (c) Application of Security Standards.--The Secretary shall ensure 
that the program described in subsection (a) complies with applicable 
security standards and guidelines.
  (d) User Fee.--
          (1) In general.--During the 2-year period beginning on the 
        first day of the 6th calendar month beginning after the date of 
        the enactment of this Act, the Secretary shall assess and 
        collect a fee for qualified disclosures (in addition to any 
        other fee assessed and collected for such disclosures) at such 
        rates as the Secretary determines are sufficient to cover the 
        costs related to implementing the program described in 
        subsection (a), including the costs of any necessary 
        infrastructure or technology.
          (2) Deposit of collections.--Amounts received from fees 
        assessed and collected under paragraph (1) shall be deposited 
        in, and credited to, an account solely for the purpose of 
        carrying out the activities described in subsection (a). Such 
        amounts shall be available to carry out such activities without 
        need of further appropriation and without fiscal year 
        limitation.

SEC. 302. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF 
                    TAX RETURN INFORMATION.

  (a) In General.--Section 6103(c) is amended by adding at the end the 
following: ``Persons designated by the taxpayer under this subsection 
to receive return information shall not use the information for any 
purpose other than the express purpose for which consent was granted 
and shall not disclose return information to any other person without 
the express permission of, or request by, the taxpayer.''.
  (b) Application of Penalties.--Section 6103(a)(3) is amended by 
inserting ``subsection (c),'' after ``return information under''.
  (c) Effective Date.--The amendments made by this section shall apply 
to disclosures made after the date of the enactment of this Act.

              TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS

SEC. 401. ELECTRONIC FILING OF RETURNS.

  (a) In General.--Section 6011(e)(2)(A) is amended by striking ``250'' 
and inserting ``the applicable number of''.
  (b) Applicable Number.--Section 6011(e) is amended by adding at the 
end the following new paragraph:
          ``(6) Applicable number.--For purposes of paragraph (2)(A), 
        the applicable number shall be determined in accordance with 
        the following table:
                  ``(A) in the case of calendar years before 2020, 250,
                  ``(B) in the case of calendar year 2020, 100, and
                  ``(C) in the case of calendar years after 2020, 
                10.''.
  (c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is 
amended by adding at the end the following new subparagraph:
                  ``(D) Exception for certain preparers located in 
                areas without internet access.--The Secretary may waive 
                the requirement of subparagraph (A) if the Secretary 
                determines, on the basis of an application by the tax 
                return preparer, that the preparer cannot meet such 
                requirement by reason of being located in a geographic 
                area which does not have access to internet service 
                (other than dial-up or satellite service).''.
  (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 402. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES FOR 
                    DISCLOSURE AUTHORIZATIONS TO, AND OTHER 
                    AUTHORIZATIONS OF, PRACTITIONERS.

  Section 6061(b)(3) is amended to read as follows:
          ``(3) Published guidance.--
                  ``(A) In general.--The Secretary shall publish 
                guidance as appropriate to define and implement any 
                waiver of the signature requirements or any method 
                adopted under paragraph (1).
                  ``(B) Electronic signatures for disclosure 
                authorizations to, and other authorizations of, 
                practitioners.--Not later than 6 months after the date 
                of the enactment of this subparagraph, the Secretary 
                shall publish guidance to establish uniform standards 
                and procedures for the acceptance of taxpayers' 
                signatures appearing in electronic form with respect to 
                any request for disclosure of a taxpayer's return or 
                return information under section 6103(c) to a 
                practitioner or any power of attorney granted by a 
                taxpayer to a practitioner.
                  ``(C) Practitioner.--For purposes of subparagraph 
                (B), the term `practitioner' means any individual in 
                good standing who is regulated under section 330 of 
                title 31, United States Code.''.

SEC. 403. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.

  Section 6311(d)(2) is amended by adding at the end the following: 
``The preceding sentence shall not apply to the extent that the 
Secretary ensures that any such fee or other consideration is fully 
recouped by the Secretary in the form of fees paid to the Secretary by 
persons paying taxes imposed under subtitle A with credit, debit, or 
charge cards pursuant to such contract. Notwithstanding the preceding 
sentence, the Secretary shall seek to minimize the amount of any fee or 
other consideration that the Secretary pays under any such contract.''.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The ``21st Century IRS Act,'' H.R. 5445, as reported by the 
Committee on Ways and Means, would modernize the Internal 
Revenue Service's information technology (IT) infrastructure, 
enhance the role of the agency's Chief Information Officer 
(CIO), and provide additional tools to protect taxpayer 
information and to combat identity theft tax refund fraud.

                 B. Background and Need for Legislation

    Over the past two years, the Ways and Means Oversight 
Subcommittee has spent significant time reviewing the Internal 
Revenue Service's (IRS) use of information technology (IT). The 
Subcommittee found that the IRS relies heavily on an ageing IT 
infrastructure, some of which dates back to the 1960s, to 
administer the tax system. Additionally, the Committee found 
that, while the IRS spends approximately $2.4 billion annually 
on IT, it continues to struggle with undertaking and completing 
large IT modernization efforts. These issues result in the 
waste of billions of taxpayer dollars and time spent 
maintaining outdated legacy systems rather than deploying 
newer, more modern systems that are less costly to maintain.
    The IRS can no longer afford to continue running antiquated 
IT systems that are difficult, if not impossible, to maintain. 
Each year, the IRS is relying on fewer and fewer employees with 
the expertise to update outdated software. Failure of one of 
these legacy systems could be disastrous, potentially resulting 
in a range of issues from an inability to collect taxes to 
significant loss of taxpayer data. A lack of up-to-date, modern 
IRS IT systems also negatively impacts taxpayers seeking to 
comply with their tax responsibilities, often resulting in 
frustrating, prolonged interactions with the IRS that could be 
more easily and seamlessly resolved online. In addition, like 
many other public and private entities, the IRS has experienced 
cyberattacks and fraud schemes that seek to exploit stolen 
taxpayer information in order to steal tax refunds.
    This bipartisan legislation seeks to modernize the IRS and 
improve the ease and efficiency of the taxpayer experience when 
filing taxes, retrieving information, resolving issues, and 
making payments. The legislation also includes a number of 
provisions to strengthen the IRS's ability to proactively 
combat identity theft tax refund fraud.

                         C. Legislative History


Background

    H.R. 5445 was introduced on April 10, 2018 and was referred 
to the Committee on Financial Services and the Committee on 
Ways and Means.

Committee action

    The Committee on Ways and Means marked up H.R. 5445, the 
``21st Century IRS Act'' on April 11, 2018, and ordered the 
bill, as amended, favorably reported (with a quorum being 
present).

Committee hearings and roundtables

    During the 115th Congress, the Ways and Means Oversight 
Subcommittee held five hearings and four roundtables on 
reforming the IRS in terms of modernizing IT for a better 
taxpayer experience. Oversight Subcommittee hearings included:
           April 26, 2017: Examining the 2017 Tax 
        Filing Season;
           May 19, 2017: IRS Reform: Lessons Learned 
        from the National Taxpayer Advocate;
           October 4, 2017: IRS Reform: Challenges to 
        Modernizing IT Infrastructure;
           December 13, 2017: IRS Reform: The Taxpayer 
        Experience; and
           January 30, 2018: Member Day Hearing on 
        Legislation to Improve Tax Administration.
    Roundtables included:
           June 22, 2017: Reforming the IRS--Lessons 
        Learned from 1998, Roundtable Part I;
           July 12, 2017: Reforming the IRS--Lessons 
        Learned from 1998, Roundtable Part II;
           October 12, 2017: IRS Security Summit; and
           January 17, 2018: Briefing on the IRS's 
        Technology Roadmap.

                      II. EXPLANATION OF THE BILL


            TITLE I--CYBER SECURITY AND IDENTITY PROTECTION


  1. Public-Private Partnership To Address Identity Theft Tax Refund 
                      Fraud (sec. 101 of the bill)


                              PRESENT LAW

    The Security Summit, formed in 2015, is a partnership of 
the IRS, State tax agencies, and the private-sector tax 
industry to address tax refund fraud caused by identity theft. 
In 2016, the Security Summit group members identified and 
agreed to share more than 20 data components relating to 
Federal and State returns to improve fraud detection and 
prevention. For example, group members are sharing computer 
device identification data tied to the return's origin, as well 
as the improper or repetitive use of the numbers that identify 
the internet address from where the return originates.\1\ Tax 
software providers agreed to enhance identity requirements and 
strengthen validation procedures for new and returning 
customers to protect their accounts from theft. Along with the 
IRS, 40 State departments of revenue, and 21 tax industry 
members have signed onto a Memorandum of Understanding 
regarding roles, responsibilities and information sharing 
pathways among the IRS, States and industry.\2\
---------------------------------------------------------------------------
    \1\Internal Revenue Service, 2016 Security Summit: Protecting 
Taxpayers from Identity Theft Tax Refund Fraud (June 2016) at p. 3. 
https://www.irs.gov/pub/newsroom/6_2016_security_summit_report.pdf.
    \2\Ibid.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee believes the Security Summit has been a 
successful and productive venue for governmental and private 
organizations to work together to address the growing problem 
of identity theft tax refund fraud. The Committee is encouraged 
by the proactive steps that the IRS has taken to address this 
issue and wants to ensure that these efforts continue going 
forward.

                        EXPLANATION OF PROVISION

    The provision requires the Secretary to work 
collaboratively with the public and private sectors to protect 
taxpayers from identity theft tax refund fraud.

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

2. Recommendations of Electronic Tax Administration Advisory Committee 
    Regarding Identity Theft and Refund Fraud (sec. 102 of the bill)


                              PRESENT LAW

    The IRS Reform and Restructuring Act of 1998 (``RRA98'') 
authorized the Electronic Tax Administration Advisory Committee 
(``ETAAC''). ETAAC was intended to provide input to the IRS on 
electronic tax administration. ETAAC's responsibilities involve 
researching, analyzing, and making recommendations on a variety 
of electronic tax administration issues. Pursuant to RRA98, 
ETAAC reports to Congress annually concerning:
           IRS progress on reaching its goal to 
        electronically receive 80 percent of tax and 
        information returns;
           Legislative changes assisting the IRS in 
        meeting the 80 percent goal;
           Status of the IRS strategic plan for 
        electronic tax administration; and
           Effects of e-filing tax and information 
        returns on small businesses and the self-employed.
    According to the latest annual report, ETAAC members come 
from State departments of revenue, large tax preparation 
companies, solo tax practitioners, tax software companies, 
financial services industry and low income and consumer 
advocacy groups.\3\
---------------------------------------------------------------------------
    \3\Electronic Tax Administration Advisory Committee, Publication 
3415, Annual Report to Congress (June 2017), https://www.irs.gov/pub/
irs-pdf/p3415.pdf.
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    ETAAC's focus on electronic tax administration issues makes 
it a suitable entity to examine and make recommendations 
regarding methods to address identity theft and refund fraud 
after evaluating various stakeholder viewpoints. ETAAC has 
already amended its charter to focus on the issue of identity 
theft and refund fraud. This provision codifies the recent 
changes to ETAAC's charter and ensures that ETAAC will continue 
to examine this issue going forward. The Committee also finds 
ETAAC's annual reports to Congress, which include 
recommendations to improve the work of the Security Summit, to 
be valuable sources of information and would like to ensure 
that this work continues.

                        EXPLANATION OF PROVISION

    The provision requires ETAAC to study (including through 
organized public forums) and make recommendations to the 
Secretary regarding methods to prevent identity theft and 
refund fraud.

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

 3. Information Sharing and Analysis Center (sec. 103 of the bill and 
                       sec. 6103 of the Code\4\)

---------------------------------------------------------------------------
    \4\All section references herein are to the Internal Revenue Code 
of 1986, as amended (herein ``Code''), unless otherwise stated.
---------------------------------------------------------------------------

                              PRESENT LAW

Information Sharing and Analysis Center

    The Security Summit, formed in 2015, is a partnership of 
the IRS, State tax agencies, and the private-sector tax 
industry to address tax refund fraud caused by identity theft. 
In 2016, the Security Summit created an Identity Theft Tax 
Refund Fraud Information Sharing and Analysis Center 
(``ISAC'').\5\ The ISAC is a secure, web-based venue for 
States, industry and the IRS to share and exchange information. 
The ISAC enables the IRS and the States to work together with 
external third parties to serve as an early warning system for 
tax refund fraud, identity theft schemes, and cybersecurity 
issues. A third-party contractor, hosts, maintains, and 
facilitates the web-based leads reporting and information 
sharing process for the ISAC.
---------------------------------------------------------------------------
    \5\Internal Revenue Service, 2016 Security Summit: Protecting 
Taxpayers from Identity Theft Tax Refund Fraud (June 2016) https://
www.irs.gov/pub/newsroom/6_2016_security_summit_report.pdf.sec.
---------------------------------------------------------------------------

Confidentiality and disclosure of return information

    As a general rule, returns and return information are 
confidential and cannot be disclosed unless authorized by the 
Code.\6\ The definition of return information is very broad and 
generally includes any information received or collected by the 
IRS with respect to liability under the Code of any person for 
any tax, penalty, interest or offense. The term ``return 
information'' includes, among other items:

    \6\Sec. 6103(a).
---------------------------------------------------------------------------
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 . . . (emphasis 
added)\7\
---------------------------------------------------------------------------
    \7\Sec. 6103(b)(2)(A).
---------------------------------------------------------------------------
    There are several exceptions to the general rule of 
confidentiality. Such exceptions include provisions to permit 
disclosures to State tax administration officials, for IRS 
employees and officers to make investigative disclosures, and 
rules to allow one authorized party to disclose to another 
authorized party with the permission of the Commissioner.\8\
---------------------------------------------------------------------------
    \8\Sec. 6103(d) (disclosures to States), 6103(k)(6)(investigative 
disclosures) and the Treasury regulations under sec. 6103(p)(2)(B).
---------------------------------------------------------------------------
    The IRS exchanges confidential information with State tax 
agencies under the authority of section 6103(d). The 
disclosures are made pursuant to written request from the head 
of the State tax agency, which designates the State tax 
officials who can receive the information. The information can 
only be used for State tax purposes, not for general State 
civil or criminal law enforcement. The State officials can 
redisclose the information to other officers and employees of 
the State tax agency, the agency's legal representative, or the 
agency's contractors (but only for State tax administration 
purposes). The IRS uses this authority to alert State tax 
administration officials to tax refund fraud schemes.
    IRS officers and employees may disclose return information 
to the extent that such disclosure is necessary in obtaining 
information, which is not otherwise reasonably available, with 
respect to the correct determination of tax, liability for tax, 
or the amount to be collected, or with respect to the 
enforcement of any other provision of Title 26. Such 
disclosures are to be made only in such situations and under 
such conditions as the Secretary may prescribe by 
regulation.\9\ This provision generally cannot be used to 
provide confidential return information on an industry-wide 
basis to alert return preparers to potential fraud schemes.
---------------------------------------------------------------------------
    \9\Sec. 6103(k)(6); Treas. Reg. sec. 301.6103(k)(6)-1.
---------------------------------------------------------------------------
    Under the Treasury regulations, returns or return 
information that have been obtained by a Federal, State, or 
local agency, or its agents or contractors, in accordance with 
section 6103 (the first recipient) may be disclosed by the 
first recipient to another recipient authorized to receive such 
returns or return information under section 6103 (the second 
recipient).\10\ The disclosure must be approved by the 
Commissioner of the IRS. The second recipient may receive only 
such returns or return information as authorized by the 
provision of section 6103 applicable to such recipient and only 
for a purpose authorized by and subject to any conditions 
imposed by section 6103, including applicable safeguards.
---------------------------------------------------------------------------
    \10\Treas. Reg. sec. 301.6103(p)(2)(B)-1.
---------------------------------------------------------------------------

Preparer disclosure penalties

    The Code provides for a civil penalty for a tax return 
preparer who (i) discloses any information furnished to the 
preparer for, or in connection with, the preparation of such 
return or (ii) uses such information for any purpose other than 
to prepare or assist in preparing any such return.\11\ There is 
a corresponding criminal penalty under section 7216 of the Code 
for knowing or reckless conduct. The same exceptions from the 
imposition of the criminal penalty apply for purposes of the 
civil penalty. In general, the penalty does not apply for 
disclosures permitted by the Code or pursuant to an order of a 
court. Further, the penalty does not apply to the use of 
information in the preparation of, or in connection with the 
preparation of State and local tax returns and declarations of 
estimated tax of the person to whom the information relates. 
The Code also permits the Secretary to provide additional 
exceptions through regulations. The Secretary has prescribed by 
regulation the circumstances not involving tax preparation in 
which disclosure and use of a taxpayer's information by a tax 
return preparer is permitted.
---------------------------------------------------------------------------
    \11\ Sec. 6713.
---------------------------------------------------------------------------

Penalties for the unauthorized disclosure or inspection of return 
        information

    The unauthorized disclosure of a return or return 
information is a felony punishable by fine of up to $5,000, 
five years imprisonment or both. Unauthorized inspection is a 
misdemeanor, punishable by a fine of up to $1,000, one year 
imprisonment, or both.

                           REASONS FOR CHANGE

    As the profitability and ease of identity theft grows, the 
threat to the tax system from fraudulent tax refund filings 
increases. While the IRS has traditionally been more 
reactionary to external threats, the Committee is encouraged to 
see the IRS look for new and alternative ways to combat 
identity theft tax refund fraud, particularly through its 
participation in the ISAC pilot. The Committee believes there 
is a need for all parts of the tax system, including the IRS, 
State tax administrators, and return preparers, to work 
proactively together to combat identity theft tax refund fraud. 
To be effective in this collaboration, stakeholders with the 
ability to guard the tax system need to be able to receive the 
necessary information about potential risks quickly. Therefore, 
the Committee believes it is appropriate to provide a narrowly 
tailored exception to the general rules of confidentiality to 
facilitate alerts of potential tax refund fraud schemes and 
cyber security threats to the IRS.

                        EXPLANATION OF PROVISION

ISAC participation and performance metrics

    The provision provides that the Secretary may participate 
in an information sharing and analysis center. The purpose of 
such participation is to centralize, standardize and enhance 
data compilation and analysis to facilitate sharing actionable 
data and information with respect to identity theft tax refund 
fraud. The provision requires the Secretary to develop metrics 
for measuring the success of such center in detecting and 
preventing identity theft tax refund fraud.

Disclosure of return information to certain ISAC participants

            In general
    The provision authorizes the disclosure of specified return 
information to ISAC participants who have entered into a 
written information sharing agreement with the Secretary. Under 
such procedures and subject to such conditions as the Secretary 
may prescribe, the Secretary may disclose specified return 
information to specified ISAC participants if such disclosure 
is in furtherance of effective Federal tax administration 
relating to the following: (1) the detection or prevention of 
identity theft tax refund fraud; (2) validation of taxpayer 
identity; (3) authentication of taxpayer returns; or (4) the 
detection or prevention of cybersecurity threats to the IRS.
            Terminology
                Specified ISAC participant
    The term ``specified ISAC participant'' means any person 
designated by the Secretary as having primary responsibility 
for a function performed by the ISAC and any return preparer 
(or other person) subject to section 7216 and who is a 
participant in the ISAC. A person is only a specified ISAC 
participant if such person has entered into a written 
information sharing agreement with the Secretary. The 
information sharing agreement must set forth the terms and 
conditions for the disclosure of information to such person, 
including the requirements imposed on such person for the 
protection and safeguarding of such information. The 
information sharing agreement must require that recipients of 
return information under the provision are required to 
affirmatively report to the Treasury Inspector General for Tax 
Administration any unauthorized access or disclosure of 
information and any breaches of any system holding the 
information.
                Specified return information
    For purposes of the provision, the term ``specified return 
information'' means, in the case of a return filed 
electronically which is in connection with a case of potential 
identity theft tax refund fraud, return information related to 
the electronic filing characteristics of such return. Such 
characteristics include: internet protocol address, device 
identification, email domain name, speed of completion, method 
of authentication, refund method, and such other return 
information relating to the electronic filing characteristics 
of such return as the Secretary may prescribe. In addition, 
with respect to a return prepared by a tax return preparer in 
connection with a case of potential identity theft refund 
fraud, ``specified return information'' also includes 
identifying information with respect to such tax return 
preparer, including the preparer taxpayer identification number 
(``PTIN'') and electronic filer identification number 
(``EFIN'') of such preparer.
    With respect to a return for which identity theft refund 
fraud has been confirmed by the Secretary (pursuant to such 
procedures as the Secretary may provide), ``specified return 
information'' also includes the name and taxpayer 
identification number of the taxpayer as it appears on the 
return, and any bank account and routing information provided 
for making a refund in connection with such return.
    Finally, in the case of any cybersecurity threat to the 
IRS, information similar to that associated with cases of 
potential identity theft refund fraud (e.g. electronic 
characteristics and preparer identifying information) are 
considered specified return information with respect to such 
threat.
            Restriction on use of disclosed information
    Any return information received by a specified ISAC 
participant under the provision is to be used only for the 
purposes of and to the extent necessary in (1) performing the 
function the person is designated to perform with respect to 
the ISAC, (2) facilitating authorized disclosures to return 
preparers who are specified ISAC participants, and (3) 
facilitating disclosures authorized under section 6103(d) to 
State tax authorities who are participants in the ISAC. Return 
information received by specified ISAC participants who are 
return preparers is treated for purposes of section 7216 as 
information furnished to such person for, or in connection 
with, the preparation of a return of tax.
            Data protection, safeguards, penalties
    As noted above, to be a specified ISAC participant, the 
person must enter into an information sharing agreement that 
includes, among other responsibilities, requirements for the 
protection and safeguarding of information received under the 
provision. The return information disclosed under the provision 
is subject to such protections and safeguards as the Secretary 
may require by regulations, other guidance, or written 
information sharing agreement. Recipients of return information 
under the provision are subject to civil and criminal penalties 
for the unauthorized disclosure or inspection of returns or 
return information.

                             EFFECTIVE DATE

    The provision is generally effective on the date of 
enactment. The disclosure provisions are effective for 
disclosures made on or after the date of enactment.

4. Compliance By Contractors With Confidentiality Safeguards (sec. 104 
                 of the bill and sec. 6103 of the Code)


                              PRESENT LAW

    Section 6103 permits the disclosure of returns and return 
information to State agencies, as well as to other Federal 
agencies for specified purposes. Section 6103(p)(4) requires, 
as a condition of receiving returns and return information, 
that State agencies (and others) provide safeguards as 
prescribed by the Secretary of the Treasury by regulation that 
are necessary or appropriate to protect the confidentiality of 
returns or return information.\12\ It also requires that a 
report be furnished to the Secretary at such time and 
containing such information as prescribed by the Secretary 
regarding the procedures established and utilized for ensuring 
the confidentiality of returns and return information.\13\ 
After an administrative review, the Secretary may take such 
actions as are necessary to ensure these requirements are met, 
including the refusal to disclose returns and return 
information.\14\
---------------------------------------------------------------------------
    \12\Sec. 6103(p)(4)(D).
    \13\Sec. 6103(p)(4)(E).
    \14\Sec. 6103(p)(4) (flush language) and (7); Treas. Reg. sec. 
301.6103(p)(7)-1.
---------------------------------------------------------------------------
    Under present law, employees of a State tax agency may 
disclose returns and return information to contractors for tax 
administration purposes.\15\ These disclosures can be made only 
to the extent necessary to procure contractually equipment, 
other property, or services, related to tax administration.\16\
---------------------------------------------------------------------------
    \15\Sec. 6103(n) and Treas. Reg. sec. 301.6103(n)-1(a). ``Tax 
administration'' includes ``the administration, management, conduct, 
direction, and supervision of the execution and application of internal 
revenue laws or related statutes (or equivalent laws and statutes of a 
State) . . .'' Sec. 6103(b)(4).
    \16\Treas. Reg. sec. 301.6013(n)-1(a). Such services include the 
processing, storage, transmission or reproduction of such returns or 
return information, the programming, maintenance, repair, or testing of 
equipment or other property, or the providing of other services for 
purposes of tax administration.
---------------------------------------------------------------------------
    The contractors can make redisclosures of returns and 
return information to their employees as necessary to 
accomplish the tax administration purposes of the contract, but 
only to contractor personnel whose duties require 
disclosure.\17\ Treasury regulations prohibit redisclosure to 
anyone other than contractor personnel without the written 
approval of the IRS.\18\
---------------------------------------------------------------------------
    \17\Treas. Reg. sec. 301.6103(n)-1(a) and (b). A disclosure is 
necessary if such procurement or the performance of such services 
cannot otherwise be reasonably, properly, or economically accomplished 
without such disclosure. Treas. Reg. sec. 301.6103(n)-1(b). The 
regulations limit the quantity of information to that needed to perform 
the contract.
    \18\Treas. Reg. sec. 301.6103(n)-1(a).
---------------------------------------------------------------------------
    By regulation, all contracts must provide that the 
contractor will comply with all applicable restrictions and 
conditions for protecting confidentiality prescribed by 
regulation, published rules or procedures, or written 
communication to the contractor.\19\ Failure to comply with 
such restrictions or conditions may cause the IRS to terminate 
or suspend the duties under the contract or the disclosures of 
returns and return information to the contractor.\20\ In 
addition, the IRS can suspend disclosures to the State tax 
agency until the IRS determines that the conditions are or will 
be satisfied.\21\ The IRS may take such other actions as are 
deemed necessary to ensure that such conditions or requirements 
are or will be satisfied.\22\
---------------------------------------------------------------------------
    \19\Treas. Reg. sec. 301.6103(n)-1(d).
    \20\Treas. Reg. sec. 301.6103(n)-1(d)(1).
    \21\Treas. Reg. sec. 301.6103(n)-1(d)(2).
    \22\Treas. Reg. sec. 301.6103(n)-1(d).
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                           REASONS FOR CHANGE

    The Committee notes the increasing use of contractors by 
government agencies to perform the work of the government. In 
the Committee's view, the IRS has insufficient resources to 
monitor the compliance of every contractor in addition to its 
other duties. Further, the Committee finds that it is 
appropriate to require that Federal, State, and local agency 
recipients of tax information monitor and certify that their 
contractors and other agents have in place adequate safeguards 
to protect this information.

                        EXPLANATION OF PROVISION

    The provision requires that a State, local, or Federal 
agency conduct on-site reviews every three years of all of its 
contractors or other agents receiving Federal returns and 
return information. If the duration of the contract or 
agreement is less than three years, a review is required at the 
mid-point of the contract. The purpose of the review is to 
assess the contractor's efforts to safeguard Federal returns 
and return information. This review is intended to cover secure 
storage, restricting access, computer security, and other 
safeguards deemed appropriate by the Secretary. Under the 
provision, the State, local, or Federal agency is required to 
submit a report of its findings to the IRS and certify annually 
that such contractors and other agents are in compliance with 
the requirements to safeguard the confidentiality of Federal 
returns and return information. The certification is required 
to include the name and address of each contractor or other 
agent with the agency, the duration of the contract, and a 
description of the contract or agreement with the State, local, 
or Federal agency.
    The provision does not apply to contracts for purposes of 
Federal tax administration.
    This provision does not alter or affect in any way the 
right of the IRS to conduct safeguard reviews of State, local, 
or Federal agency contractors or other agents. It also does not 
affect the right of the IRS to initially approve the safeguard 
language in the contract or agreement and the safeguards in 
place prior to any disclosures made in connection with such 
contracts or agreements.

                             EFFECTIVE DATE

    The provision is effective for disclosures made after 
December 31, 2022.

        5. Report on Electronic Payments (sec. 105 of the bill)


                              PRESENT LAW

    The Secretary is not currently required by Congress to 
examine expansion of electronic fund transfers.

                           REASONS FOR CHANGE

    The Committee is interested in creating safe, efficient, 
and innovative ways for taxpayers to receive their federal 
income tax refunds electronically. The Committee believes that 
the report will be helpful in accomplishing these goals.

                        EXPLANATION OF PROVISION

    Not later than two years after the date of the enactment, 
the Secretary, or the Secretary's designee, in coordination 
with the Bureau of Fiscal Service and the Internal Revenue 
Service, and in consultation with private sector financial 
institutions, is required to submit a written report to 
Congress describing how the IRS can utilize new payment 
platforms to increase the number of tax refunds paid by 
electronic funds transfer. The report is required to consider 
the interests of reducing identity theft tax refund fraud, 
reducing the IRS's costs in delivering tax refunds, the costs 
and any associated fees charged to taxpayers (including monthly 
and point-of-service fees) to access their tax refunds, the 
impact on individuals who do not have access to financial 
accounts or institutions, and ensuring payments are made to 
accounts that comply with the Bank Secrecy Act\23\ and the USA 
PATRIOT Act of 2001.\24\ The report is required to include 
legislative recommendations necessary to accomplish these 
goals.
---------------------------------------------------------------------------
    \23\The Bank Secrecy Act, 31 U.S.C. secs. 5311-5332.
    \24\Pub. L. No. 107-56.
---------------------------------------------------------------------------

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

            TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY


 1. Management of IRS Information Technology (sec. 201 of the bill and 
                         sec. 7803 of the Code)


                              PRESENT LAW

    The Code describes duties and responsibilities for the 
Commissioner, the Chief Counsel, and the Office of the Taxpayer 
Advocate of the IRS.\25\ It does not presently enumerate duties 
and responsibilities of an IRS Chief Information Officer (``IRS 
CIO'').
---------------------------------------------------------------------------
    \25\Sec. 7803.
---------------------------------------------------------------------------
    Also, the Code does not explicitly provide for development 
and implementation of a multiyear strategic plan for the 
information technology needs of the IRS, and does not require 
verification and validation of major acquisitions of 
information technology by the IRS, including the Customer 
Account Data Engine 2 (``CADE 2'') and the Enterprise Case 
Management System (ECM).

                           REASONS FOR CHANGE

    The Committee believes it is important for the IRS to 
afford taxpayers peace of mind that their most sensitive 
information is being responsibly protected by their government, 
using the latest technology. The Committee believes the 
appointment of an IRS CIO with operational control of all 
information technology infrastructure for the IRS, and 
responsibility for the development and implementation of 
realistic multiyear strategic plans, in conjunction with the 
verification and validation of major acquisitions of 
information technology are important components in the 
development, maintenance, and implementation of information 
technology that is secure and integrated.
    The Committee also has concerns about audits from the IRS's 
oversight bodies, which report that offices or divisions within 
the IRS, other than the Office of Information Technology, have 
procured solutions that the Committee considers to be within 
the definition of IT, but for which the Office of Information 
Technology was not notified or consulted. The Committee 
believes that strengthening of the roles and responsibilities 
of the CIO and clarifying the definition of ``information 
technology'' will assist the IRS in better administering and 
overseeing its IT.
    The Committee believes that it is important to mandate the 
independent verification and validation of CADE 2 and ECM plans 
to ensure that the planning for each of these projects is 
reasonable and achievable. The Committee notes that the IRS has 
struggled for years to complete both of these projects. CADE 2, 
the IRS's replacement for the Individual Master File that 
houses individuals' tax account data, initially began 
development in 2009 with an estimated completion in 2015. 
However, to date, the IRS has spent almost $2 billion on this 
project and is not able to provide a completion date for all 
phases of the project. While the IRS initiated the ECM project 
in 2015, after initially selecting and procuring an ECM 
solution, the IRS later determined that this solution could not 
be deployed enterprise-wide. Both of these systems are central 
to the success of the IRS in meeting its mission. If Congress 
is to continue to support and fund these programs, certainty is 
needed that the IRS will be able to plan for and implement 
these programs.

                        EXPLANATION OF PROVISION

    Under the provision, the Administrator\26\ of the IRS will 
appoint an IRS CIO. The Administrator and the Secretary will 
act through the IRS CIO with respect to the development, 
implementation, and maintenance of information technology for 
the IRS. The IRS CIO will be responsible for the development, 
implementation, and maintenance of information technology for 
the IRS, for ensuring that the information technology of the 
IRS is secure and integrated, for maintaining operational 
control of all information technology for the IRS, for acting 
as the principal advocate for the information technology needs 
of the IRS, and for consulting with the Chief Procurement 
Officer of the IRS to ensure that the information technology 
acquired for the IRS is consistent with the strategic plan.
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    \26\ ``Administrator'' is used in lieu of ``Commissioner'' to 
reflect the proposed change made in H.R. 5444, the ``Taxpayer First 
Act,'' contemporaneously reported favorably out of Committee.
---------------------------------------------------------------------------
    The IRS CIO will also be responsible for developing and 
implementing a multiyear strategic plan for the information 
technology needs of the IRS. This plan should include 
performance measures of such technology and its implementation, 
and a plan for an integrated enterprise architecture of the 
information technology of the IRS. It should take into account 
the resources needed to accomplish such a plan, as well as 
planned major acquisitions of information technology by the 
IRS, including CADE 2 and the ECM System. The plan should also 
align with the needs and strategic plan of the IRS. The IRS CIO 
will review and update this plan at least once a year, taking 
into account the development of new information technology and 
the needs of the IRS.
    Under the provision, the Administrator of the IRS will 
develop plans for each phase except phase one of CADE 2 and 
enter into a contract with an independent reviewer to verify 
and validate implementation plans developed for each phase 
except phase one of CADE 2 and for the ECM System. Furthermore, 
the Chief Procurement Officer of the IRS is directed to 
regularly consult with the IRS CIO and to identify all 
significant IRS information technology acquisitions in excess 
of $1,000,000, providing written notification to the IRS CIO of 
each such acquisition in advance of acquisition.

                             EFFECTIVE DATE

    The provision is generally effective on the date of 
enactment.
    The verification and validation of phase two of CADE 2 and 
the ECM System are to be completed within one year after the 
date of enactment. The development of plans for all subsequent 
phases of CADE 2 should be completed within one year after the 
date of enactment and the verification and validation of each 
phase should be completed within one year after the date on 
which the plan for such phase is completed.

  2. Development of Online Accounts and Portals (sec. 202 of the bill)


                              PRESENT LAW

    The Code does not expressly provide for the development of 
individualized online accounts.

                           REASONS FOR CHANGE

    The Committee believes it is important for the IRS to 
provide customer service akin to that expected in the private 
sector by treating taxpayers with respect, ensuring that 
taxpayers can ask questions and receive assistance, and 
incorporating the latest technology, including online services, 
call-back options, and improved support on the phone. The 
Committee believes the development of secure, individualized 
online accounts will improve customer service to taxpayers by 
allowing taxpayers and their designated return preparers to 
access a variety of services including, for example, obtaining 
copies of their tax information, paying taxes, sharing 
documentation, and addressing and correcting issues.
    The Committee notes that the IRS has been slow to adopt 
online accounts as an additional means through which to provide 
taxpayer services. Furthermore, the online services currently 
offered are disjointed and not always easily accessible. 
Similar to the electronic filing goal laid out in RRA98, 
Congress has included this provision to signal to the IRS the 
need to provide robust, online services to taxpayers and their 
designated preparers as an alternatives service channel. The 
Committee believes that doing so would free up much needed 
resources to provide phone and in-person services to those who 
would prefer to use them.
    During hearings held on this issue, the Committee heard 
multiple reports of taxpayers or their preparers who were 
unable to submit needed forms and documentation to the IRS 
electronically, creating additional burdens on taxpayers and 
their preparers. The Committee also notes that the IRS 
currently has a number of forms, including those for amended 
returns, which cannot be filed electronically with the IRS. 
Those forms, even if prepared electronically, must then be 
printed and mailed to the IRS. In an effort to reduce taxpayer 
burden and shorten the time in which the IRS receives and 
processes forms and documents, the Committee would like the IRS 
to develop a portal for the receipt of forms and documentation.

                        EXPLANATION OF PROVISION

    Under the provision, the Secretary will develop secure, 
individualized online accounts to provide services to taxpayers 
and their designated return preparers, including, for example, 
obtaining taxpayer information, making payment of taxes, 
sharing documentation, and addressing and correcting issues. 
The Secretary will also develop a process for accepting returns 
of tax and supporting documentation in electronic format. These 
electronic services should be a supplement to, and not a 
replacement for, other services provided by the IRS to 
taxpayers, including face-to-face taxpayer assistance and 
services provided by phone. They should also comply with 
applicable security standards and guidelines. These electronic 
services are intended to enhance taxpayers' options for 
submitting their tax forms and supporting documents in a secure 
and cost-effective manner for faster, more efficient 
interactions with the IRS.
    The IRS will formulate a plan for development of online 
accounts and report the plan to Congress within a year of 
enactment. The IRS should consider as part of this plan, the 
feasibility of taxpayers addressing and correcting issues 
through such accounts, and whether access to these accounts 
should be restricted in any way.

                             EFFECTIVE DATE

    Not later than one year after the date of enactment, the 
Secretary will submit to Congress a written report describing 
the plan for development of online accounts.
    The Secretary will make every reasonable effort to make 
secure individualized online accounts available to taxpayers by 
December 31, 2023.

   3. Internet Platform for Form 1099 Filings (sec. 203 of the bill)


                              PRESENT LAW

    The Code does not presently require the IRS to make 
available an internet platform for the preparation or filing of 
information returns, such as the series, Form 1099.

                           REASONS FOR CHANGE

    The Committee believes that it is desirable to provide a 
simple and secure manner for small businesses to file critical 
tax information returns electronically. The Committee further 
believes that such a secure manner of filing can be modeled on 
an existing online platform, Social Security Administration 
(``SSA'') Business Services Online. The Committee believes that 
an online platform for submitting information returns to the 
IRS, similar to SSA Business Services Online, could improve 
compliance of small business taxpayers while reducing their 
administrative burden. Businesses would be able to prepare and 
file information returns such as IRS Form 1099-MISC, 
Miscellaneous Income, online while preparing the payee 
statements and creating necessary business records.

                        EXPLANATION OF PROVISION

    The provision requires the Secretary of the Treasury (or 
his or her delegate) to make available, by January 1, 2023, an 
internet website or other electronic medium (the ``website''), 
with a user interface and functionality similar to the Business 
Services Online Suite of Services provided by the Social 
Security Administration.\27\ The website will allow persons, 
with access to resources and guidance provided by the IRS, to 
prepare, file, and distribute Forms 1099, and maintain a record 
of completed and submitted Forms 1099. The Secretary is 
required to ensure that the services provided on the website 
are not a replacement for services currently provided by the 
IRS, and that the website comply with applicable security 
standards.
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    \27\Available at http://www.ssa.gov/bso/bsowelcome.htm.
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                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

  TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM


     1. Disclosure of Taxpayer Information for Third-Party Income 
     Verification (sec. 301 of the bill and sec. 6103 of the Code)


                              PRESENT LAW

Disclosure of return information with consent of the taxpayer

    As a general rule, returns and return information are 
confidential and cannot be disclosed unless authorized by Title 
26.\28\ Under section 6103(c), the IRS may disclose the return 
or return information of a taxpayer to a third party designated 
by the taxpayer in a request for or consent to such disclosure. 
Treasury regulations set forth the requirements for such 
consent.\29\ A request for consent to disclosure in written 
form must be a separate written document pertaining solely to 
the authorized disclosure. At the time the consent is signed 
and dated by the taxpayer, the written document must indicate: 
(1) the taxpayer's taxpayer identity information; (2) the 
identity of the person(s) to whom disclosure is to be made; (3) 
the type of return (or specified portion of the return) or 
return information (and the particular data) that is to be 
disclosed; and (4) the taxable year(s) covered by the return or 
return information. The regulations also require that the 
consent be submitted within 120 days of the date signed and 
dated by the taxpayer.
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    \28\Sec. 6103(a).
    \29\Treas. Reg. sec. 301.6103(c)-1. The regulations also specify 
the requirements for a nonwritten request for information or consent to 
disclosure to allow a third party to provide information or assistance 
relating to the taxpayer's return or to a transaction or other contact 
between the taxpayer and the IRS.
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               INCOME VERIFICATION EXPRESS SERVICE (IVES)

    Mortgage lenders and others in the financial community use 
the IRS's Income Verification Express Service (IVES) to confirm 
the income of a borrower during the processing of a loan 
application.\30\ Customers of IVES fax to a specified IRS 
office a signed Form 4506-T (``Request for Transcript of Tax 
Return'') or Form 4506T-EZ (``Short Form Request for Individual 
Tax Return Transcript''). The IRS provides three types of 
transcript information as part of the IVES program: (1) a 
return transcript; (2) Form W-2 (``Wage and Tax Statement'') 
transcript information; and (3) Form 1099\31\ transcript 
information.
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    \30\Internal Revenue Service, Income Verification Express Service, 
https://www.irs.gov/individuals/international-taxpayers/income-
verification-express-service (February 26, 2018).
    \31\There are various Forms 1099: Form 1099-B, Proceeds From Broker 
or Barter Exchange Transactions; Form 1099-DIV, Dividends and 
Distributions; 1099-INT, Interest Income; 1099-MISC, Miscellaneous 
Income; 1099-OID, Original Issue Discount; or 1099-R, Distributions 
From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, 
Insurance Contracts, etc.
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    The IRS imposes a $2.00 fee for each transcript requested. 
The requested transcript information is delivered to a secure 
mailbox on the IRS's e-Services electronic platform, generally 
within two to three business days.
    To participate in the IVES program, companies must register 
and identify employees to act as agents to receive transcripts 
on the company's behalf.\32\ According to the Form 13803 
(``Application to Participate in the Income Verification 
Express Services (IVES) Program''), the IRS conducts a 
suitability check on the applicant and all the principals 
listed on the application to determine the applicant's 
suitability to be an IVES participant. After an applicant 
passes the suitability check and the IRS completes processing 
the application, the IRS notifies the applicant of acceptance 
to participate in the program.
---------------------------------------------------------------------------
    \32\Applicants also must choose one or more of the reasons listed 
on the form as the basis for using the IVES program: mortgage services, 
background check, credit check, banking service, licensing requirement, 
or other (must be specified).
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                           REASONS FOR CHANGE

    The Committee believes that fully automating the IVES 
program to allow for electronic submissions, as well as 
electronic responses, will reduce operational costs, and reduce 
paperwork burdens for borrowers. The Committee also believes 
that automating the IVES program will remove unnecessary delays 
to allow small businesses to access capital more quickly, 
thereby making borrowing more affordable, easier, and safer for 
consumers and small business. The Committee intends that the 
automated process be as close to real time as possible while 
providing the same data fields currently provided by the non-
automated version. While convenience is important, the 
Committee also wants to emphasize that convenience should not 
compromise the security of information within the system. 
Therefore, the Committee believes it is appropriate that the 
Secretary ensure that the program comply with applicable 
security standards, such as regulations and guidance provided 
by the National Institute of Standards and Technology.

                        EXPLANATION OF PROVISION

    As noted above, the current IVES program requires that 
transcript information requests be submitted to the IRS by fax 
and then the transcripts are furnished electronically to a 
secure mailbox. After a specified time period, the provision 
requires the Secretary (or his delegate) to implement a 
qualified disclosure program that is fully automated, 
accomplished through the Internet; and through which 
disclosures are accomplished in as close to real-time as is 
practicable. The program is to comply with applicable security 
standards and guidelines. The term ``qualified disclosure'' 
means a disclosure made pursuant to section 6103(c) to a person 
seeking to verify the income of a taxpayer who is a borrower in 
the process of a loan application. ``Qualified disclosure'' is 
intended as a reference to the types of disclosures made under 
the current IVES program.
    To cover the costs of implementing such a program, for a 
two-year period beginning six months after the date of 
enactment, the Secretary is authorized to assess and collect a 
fee for qualified disclosures at such rates as the Secretary 
determines are sufficient to cover the costs related to 
implementing the program, including the costs of any necessary 
infrastructure or technology. Such fees are in addition to any 
other fee assessed and collected for such disclosures. The 
amounts received from the fees assessed and collected are to be 
deposited in and credited to an account solely for the purpose 
of carrying out the activities associated with implementing the 
qualified disclosure program. Not later than one year after the 
close of the two-year period, the Secretary is required to 
implement the program.

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

  2. Limit Redisclosures and Uses of Consent-Based Disclosures of Tax 
  Return Information (sec. 302 of the bill and sec. 6103 of the Code)


                              PRESENT LAW

In general

    As a general rule, returns and return information are 
confidential and cannot be disclosed unless authorized by the 
Code.\33\ Under section 6103(c), a taxpayer may designate in a 
request or consent to the disclosure by the IRS of his or her 
return or return information to a third party. Treasury 
regulations set forth the requirements for such consent.\34\ 
The Treasury regulations require that the taxpayer sign and 
date a written consent. At the time the consent is signed and 
dated by the taxpayer, the written document must indicate: (1) 
the taxpayer's identity information; (2) the identity of the 
person to whom disclosure is to be made; (3) the type of return 
(or specified portion of the return) or return information (and 
the particular data) that is to be disclosed; and (4) the 
taxable year covered by the return or return information. The 
regulations also require that the consent be submitted within 
120 days of the date signed and dated by the taxpayer. Present 
law does not require that a recipient receiving returns or 
return information by consent maintain the confidentiality of 
the information received. Under present law, the recipient is 
also free to use the information for purposes other than for 
which the information was solicited from the taxpayer.
---------------------------------------------------------------------------
    \33\Sec. 6103(a).
    \34\Treas. Reg. sec. 301.6103(c)-1.
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Criminal penalties

    Under section 7206, it is a felony to willfully make and 
subscribe any document that contains or is verified by a 
written declaration that it is made under penalties of perjury 
and which the maker or subscriber does not believe to be true 
and correct as to every material matter.\35\ Upon conviction, 
such person may be fined up to $100,000 ($500,000 in the case 
of a corporation) or imprisoned up to three years, or both, 
together with the costs of prosecution.
---------------------------------------------------------------------------
    \35\Sec. 7206(1).
---------------------------------------------------------------------------
    Under section 7213, criminal penalties apply to: (1) 
willful unauthorized disclosures of returns and return 
information by Federal and State employees and other persons; 
(2) the offering of any item of material value in exchange for 
a return or return information and the receipt of such 
information pursuant to such an offer; and (3) the unauthorized 
disclosure of return information received by certain 
shareholders under the material interest provision of section 
6103. Under section 7213, a court can impose a fine up to 
$5,000, up to five years imprisonment, or both, together with 
the costs of prosecution. If the offense is committed by a 
Federal employee or officer, the employee or officer will be 
discharged from office upon conviction.
    The willful and unauthorized inspection of returns and 
return information can subject Federal and State employees and 
others to a maximum fine of $1,000, up to a year in prison, or 
both, in addition to the costs of prosecution. If the offense 
is committed by a Federal employee or officer, the employee or 
officer will be discharged from office upon conviction.

Civil damage remedies for unauthorized disclosure or inspection

    If a Federal employee makes an unauthorized disclosure or 
inspection, a taxpayer can bring suit against the United States 
in Federal district court. If a person other than a Federal 
employee makes an unauthorized disclosure or inspection, suit 
may be brought directly against such person. No liability 
results from a disclosure based on a good faith, but erroneous, 
interpretation of section 6103. A disclosure or inspection made 
at the request of the taxpayer will also relieve liability.
    Upon a finding of liability, a taxpayer can recover the 
greater of $1,000 per act of unauthorized disclosure (or 
inspection), or the sum of actual damages plus, in the case of 
an inspection or disclosure that was willful or the result of 
gross negligence, punitive damages. The taxpayer may also 
recover the costs of the action and, if found to be a 
prevailing party, reasonable attorney fees.
    The taxpayer has two years from the date of the discovery 
of the unauthorized inspection or disclosure to bring suit. The 
IRS is required to notify a taxpayer of an unauthorized 
inspection or disclosure as soon as practicable after any 
person is criminally charged by indictment or information for 
unlawful inspection or disclosure.

                           REASONS FOR CHANGE

    The Committee is concerned that information obtained by 
consent is not subject to the same protection and limits on use 
as other taxpayer information. The Committee believes that this 
provision addresses the numerous privacy concerns raised by 
current law.

                        EXPLANATION OF PROVISION

    The provision provides that persons designated by the 
taxpayer to receive return information shall not use the 
information for any purpose other than the express purpose for 
which consent was granted, and shall not disclose return 
information to any other person without the express permission 
of, or request by, the taxpayer.

                             EFFECTIVE DATE

    The provision is effective for disclosures made after the 
date of enactment.

              TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS


1. Electronic Filing of Returns (sec. 401 of the bill and sec. 6011 of 
                               the Code)


                              PRESENT LAW

In general

    The IRS Reform and Restructuring Act of 1998 (``RRA98'') 
states a Congressional policy to promote the paperless filing 
of Federal tax returns. Section 2001(a) of RRA98 set a goal for 
the IRS to have at least 80 percent of all Federal tax and 
information returns filed electronically by 2007.\36\ Section 
2001(b) of RRA98 requires the IRS to establish a 10-year 
strategic plan to eliminate barriers to electronic filing.
---------------------------------------------------------------------------
    \36\The Electronic Tax Administration Advisory Committee, the body 
charged with oversight of IRS progress in reaching that goal projected 
an overall e-filing rate of 80.1 percent in the 2017 filing season 
based on all Federal returns. See Electronic Tax Administration 
Advisory Committee, Annual Report to Congress, June 2017, IRS Pub. 
3415, page 5.
---------------------------------------------------------------------------
    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.\37\ The 
statute requires that Federal income tax returns prepared by 
specified tax return preparers be filed electronically,\38\ 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.
---------------------------------------------------------------------------
    \37\Sec. 6011(e).
    \38\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.
---------------------------------------------------------------------------
    The regulations require corporations that have assets of 
$10 million or more and file at least 250 returns during a 
calendar year to file electronically their Form 1120/1120S 
income tax returns (U.S. Corporation Income Tax Return/U.S. 
Income Tax Return for an S Corporation) and Form 990 
information returns (Return of Organization Exempt from Income 
Tax) for tax years ending on or after December 31, 2006. In 
determining whether the 250 returns threshold is met, income 
tax, information, excise tax, and employment tax returns filed 
within one calendar year are counted.

                           REASONS FOR CHANGE

    Consistent with the policy expressed in RRA98, the 
Committee supports paperless filing as the preferred and most 
convenient means of filing Federal tax and information returns. 
Electronic filing produces a number of benefits both for 
taxpayers and the IRS, including shorter processing times, 
fewer errors, and better data. The Committee believes that the 
efficiencies and cost savings achieved through electronic 
filing justify expanding such requirements. The Committee is 
aware that present law restricts the IRS's ability to expand 
the scope of returns that are required to be filed 
electronically. The Committee believes that the widespread 
adoption of computer technology since RRA98 has reduced the 
additional burden that mandatory e-filing imposes on taxpayers.

                        EXPLANATION OF PROVISION

    The provision relaxes the current restrictions on the 
authority of the Secretary to mandate electronic filing based 
on the number of returns required to be filed by a taxpayer in 
a given taxable period. First, it phases in a reduction in the 
threshold requirement that taxpayers have an obligation to file 
a specified number of returns and statements during a calendar 
year in order to be subject to a regulatory mandate. That 
threshold is reduced from 250 to 100 for calendar year 2020, 
from 100 to 10 for calendar year 2021 and for calendar years 
thereafter.
    Second, the provision authorizes the Secretary to waive the 
requirement that a Federal income tax return prepared by a 
specified tax return preparer be filed electronically if a tax 
return preparer applies for a waiver and demonstrates that the 
inability to file electronically is due to lack of internet 
availability (other than dial-up or satellite service) in the 
geographic location in which the return preparation business is 
operated.

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

     2. Uniform Standards for the Use of Electronic Signatures for 
      Disclosure Authorizations to, and Other Authorizations of, 
     Practitioners (sec. 402 of the bill and sec. 6061 of the Code)


                              PRESENT LAW

Disclosure of return information by consent of the taxpayer

    As a general rule, returns and return information are 
confidential and cannot be disclosed unless authorized by the 
Code.\39\ Under section 6103(c), the IRS may disclose the 
return or return information of a taxpayer to a third party 
designated by the taxpayer in a request for or consent to such 
disclosure. Treasury regulations set forth the requirements for 
such consent.\40\ A request for consent to disclosure in 
written form must be a separate written document pertaining 
solely to the authorized disclosure. At the time the consent is 
signed and dated by the taxpayer, the written document must 
indicate (1) the taxpayer's taxpayer identity information; (2) 
the identity of the person(s) to whom disclosure is to be made; 
(3) the type of return (or specified portion of the return) or 
return information (and the particular data) that is to be 
disclosed; and (4) the taxable year(s) covered by the return or 
return information. The regulations also require that the 
consent be submitted within 120 days of the date signed and 
dated by the taxpayer.
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    \39\Sec. 6103(a).
    \40\Treas. Reg. sec. 301.6103(c)-1.
---------------------------------------------------------------------------

Electronic signatures

    The Secretary is required to develop procedures for the 
acceptance of signatures in digital and other electronic 
form.\41\ Until such time as such procedures are in place, the 
Secretary may waive the requirement of a signature for, or 
provide for alternative methods of signing or subscribing, a 
particular type or class of return, declaration, statement or 
other document required or permitted to be made or written 
under the internal revenue laws and regulations. The Secretary 
is required to publish guidance as appropriate to define and 
implement any waiver of the signature requirements or 
alternative method of signing or subscribing.
---------------------------------------------------------------------------
    \41\Sec. 6061.
---------------------------------------------------------------------------

IRS Forms

    Form 2848 (Power of Attorney and Declaration of 
Representative) is used to authorize an individual to represent 
the taxpayer before the IRS. The individual must be eligible to 
practice before the IRS.
    Form 8821 (Tax Information Authorization) authorizes an 
individual or organization to request and inspect a taxpayer's 
confidential tax return information. Form 4506-T (Request for 
Transcript of Tax Return) authorizes an individual or 
organization to request and inspect transcripts of a taxpayer's 
confidential return information. These forms do not authorize 
an individual to represent the taxpayer before the IRS.

                           REASONS FOR CHANGE

    In the private sector, electronic signatures are widely 
accepted and there are many commercially available options to 
facilitate the acceptance of electronic signatures. The 
Committee believes that the establishment of uniform guidance 
for verification of electronic signatures will reduce 
operational costs and facilitate practitioner representation.

                        EXPLANATION OF PROVISION

    For a request for disclosure to a practitioner with consent 
of the taxpayer, or for any power of attorney granted by a 
taxpayer to a practitioner, the provision requires the 
Secretary to publish guidance to establish uniform standards 
and procedures for the acceptance of taxpayers' signatures 
appearing in electronic form with respect to such requests or 
power of attorney. Such guidance must be published within six 
months of the date of enactment. For purposes of the provision, 
a ``practitioner'' means an individual in good standing who is 
regulated under 31 U.S.C. sec. 330 (relating to practice before 
the Department of the Treasury).

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

3. Payment of Taxes by Debit and Credit Cards (sec. 403 of the bill and 
                         sec. 6311 of the Code)


                              PRESENT LAW

    The Code generally permits the payment of taxes by 
commercially acceptable means such as credit cards.\42\ The 
Secretary may not pay any fee or provide any other 
consideration in connection with the use of credit, debit, or 
charge cards for the payment of income taxes.\43\
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    \42\Sec. 6311.
    \43\Sec. 6311(d)(2).
---------------------------------------------------------------------------

                           REASONS FOR CHANGE

    The Committee believes that removing the prohibition on the 
Secretary paying any fees or provide, any other consideration 
in connection with the use of credit, debit, or charge cards 
will allow the IRS to realize benefits similar to those 
realized by any business that accepts payment by credit card, 
including a guarantee that the funds will be paid over and a 
reduction in the costs of handling paper checks. The Committee 
believes that the proposal could result in increased 
collections by allowing busy taxpayers to more easily make a 
payment by credit card over the telephone without having to 
wait for the IRS to connect them to third party providers.

                        EXPLANATION OF PROVISION

    The provision removes the prohibition on paying any fees or 
providing any other consideration in connection with the use of 
credit, debit, or charge cards for the payment of income taxes 
to the extent taxpayers paying in this manner are fully 
responsible for any fees or consideration incurred. The 
provision requires the Secretary to seek to minimize the amount 
of any fee or other consideration that the Secretary pays under 
any contract.

                             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 House of 
Representatives, the following statement is made concerning the 
vote of the Committee on Ways and Means during the markup 
consideration of H.R. 5445, the ``21st Century IRS Act,'' on 
April 11, 2018.
    The bill, H.R. 5445, 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. 5445, as 
reported.
    The bill, as reported, is to increase Federal fiscal year 
budget receipts by less than $500,000 for the period 2018 
through 2028.
    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 the revenue-reducing tax 
provision involves a new tax expenditure. See Part IV.A., 
above.

      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, the Committee advises that the 
Congressional Budget Office did not provide a cost estimate for 
the resolution.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated into 
the description portions of this report.

        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

    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(c)(5) of rule XIII of the Rules 
of the House of Representatives, 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 section 6104 of 
title 31, United States Code.

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee advises 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) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made 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 italic, and existing law in which no 
change is proposed is shown in roman):

                     INTERNAL REVENUE CODE OF 1986




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Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


CHAPTER 61--INFORMATION AND RETURNS

           *       *       *       *       *       *       *


Subchapter A--Returns and Records

           *       *       *       *       *       *       *


PART II--TAX RETURNS OR STATEMENTS

           *       *       *       *       *       *       *



Subpart A--General Requirement

           *       *       *       *       *       *       *



SEC. 6011. GENERAL REQUIREMENT OF RETURN, STATEMENT, OR LIST.

  (a) General Rule.--When required by regulations prescribed by 
the Secretary any person made liable for any tax imposed by 
this title, or with respect to the collection thereof, shall 
make a return or statement according to the forms and 
regulations prescribed by the Secretary. Every person required 
to make a return or statement shall include therein the 
information required by such forms or regulations.
  (b) Identification of Taxpayer.--The Secretary is authorized 
to require such information with respect to persons subject to 
the taxes imposed by chapter 21 or chapter 24 as is necessary 
or helpful in securing proper identification of such persons.
  (c) Returns, Etc., of Discs and Former Discs and Former 
Fsc's.--
          (1) Records and information.--A DISC, former DISC, or 
        former FSC (as defined in section 922 as in effect 
        before its repeal by the FSC Repeal and 
        Extraterritorial Income Exclusion Act of 2000) shall 
        for the taxable year--
                  (A) furnish such information to persons who 
                were shareholders at any time during such 
                taxable year, and to the Secretary, and
                  (B) keep such records, as may be required by 
                regulations prescribed by the Secretary.
          (2) Returns.--A DISC shall file for the taxable year 
        such returns as may be prescribed by the Secretary by 
        forms or regulations.
  (d) Authority to Require Information Concerning Section 912 
Allowances.--The Secretary may by regulations require any 
individual who receives allowances which are excluded from 
gross income under section 912 for any taxable year to include 
on his return of the taxes imposed by subtitle A for such 
taxable year such information with respect to the amount and 
type of such allowances as the Secretary determines to be 
appropriate.
  (e) Regulations Requiring Returns on Magnetic Media, Etc..--
          (1) In general.--The Secretary shall prescribe 
        regulations providing standards for determining which 
        returns must be filed on magnetic media or in other 
        machine-readable form. Except as provided in paragraph 
        (3), the Secretary may not require returns of any tax 
        imposed by subtitle A on individuals, estates, and 
        trusts to be other than on paper forms supplied by the 
        Secretary.
          (2) Requirements of regulations.--In prescribing 
        regulations under paragraph (1), the Secretary--
                  (A) shall not require any person to file 
                returns on magnetic media unless such person is 
                required to file at least [250] the applicable 
                number of returns during the calendar year, and
                  (B) shall take into account (among other 
                relevant factors) the ability of the taxpayer 
                to comply at reasonable cost with the 
                requirements of such regulations.
          (3) Special rule for tax return preparers.--
                  (A) In general.--The Secretary shall require 
                that any individual income tax return prepared 
                by a tax return preparer be filed on magnetic 
                media if--
                          (i) such return is filed by such tax 
                        return preparer, and
                          (ii) such tax return preparer is a 
                        specified tax return preparer for the 
                        calendar year during which such return 
                        is filed.
                  (B) Specified tax return preparer.--For 
                purposes of this paragraph, the term 
                ``specified tax return preparer'' means, with 
                respect to any calendar year, any tax return 
                preparer unless such preparer reasonably 
                expects to file 10 or fewer individual income 
                tax returns during such calendar year.
                  (C) Individual income tax return.--For 
                purposes of this paragraph, the term 
                ``individual income tax return'' means any 
                return of the tax imposed by subtitle A on 
                individuals, estates, or trusts.
                  (D) Exception for certain preparers located 
                in areas without internet access.--The 
                Secretary may waive the requirement of 
                subparagraph (A) if the Secretary determines, 
                on the basis of an application by the tax 
                return preparer, that the preparer cannot meet 
                such requirement by reason of being located in 
                a geographic area which does not have access to 
                internet service (other than dial-up or 
                satellite service).
          (4) Special rule for returns filed by financial 
        institutions with respect to withholding on foreign 
        transfers.--The numerical limitation under paragraph 
        (2)(A) shall not apply to any return filed by a 
        financial institution (as defined in section 
        1471(d)(5)) with respect to tax for which such 
        institution is made liable under section 1461 or 
        1474(a).
          (5) Special rules for partnerships.--
                  (A) Partnerships permitted to be required to 
                file on magnetic media.--In the case of a 
                partnership, paragraph (2)(A) shall be applied 
                by substituting for ``250'' the following 
                amount:
                          (i) In the case of returns and 
                        statements relating to calendar year 
                        2018, ``200''.
                          (ii) In the case of returns and 
                        statements relating to calendar year 
                        2019, ``150''.
                          (iii) In the case of returns and 
                        statements relating to calendar year 
                        2020, ``100''.
                          (iv) In the case of returns and 
                        statements relating to calendar year 
                        2021, ``50''.
                          (v) In the case of returns and 
                        statements relating to calendar years 
                        after 2021, ``20''.
                  (B) Partnerships required to file on magnetic 
                media.--Notwithstanding subparagraph (A) and 
                paragraph (2)(A), the Secretary shall require 
                partnerships having more than 100 partners to 
                file returns on magnetic media.
          (6) Applicable number.--For purposes of paragraph 
        (2)(A), the applicable number shall be determined in 
        accordance with the following table:
                  (A) in the case of calendar years before 
                2020, 250,
                  (B) in the case of calendar year 2020, 100, 
                and
                  (C) in the case of calendar years after 2020, 
                10.
  (f) Promotion of Electronic Filing.--
          (1) In general.--The Secretary is authorized to 
        promote the benefits of and encourage the use of 
        electronic tax administration programs, as they become 
        available, through the use of mass communications and 
        other means.
          (2) Incentives.--The Secretary may implement 
        procedures to provide for the payment of appropriate 
        incentives for electronically filed returns.
  (g) Disclosure of Reportable Transaction to Tax-Exempt 
Entity.--Any taxable party to a prohibited tax shelter 
transaction (as defined in section 4965(e)(1)) shall by 
statement disclose to any tax-exempt entity (as defined in 
section 4965(c)) which is a party to such transaction that such 
transaction is such a prohibited tax shelter transaction.
  (h) Income, Estate, and Gift Taxes for Requirement That 
Returns of Income, Estate, and Gift.--taxes be made whether or 
not there is tax liability, see subparts B and C.

           *       *       *       *       *       *       *


PART IV--SIGNING AND VERIFYING OF RETURNS AND OTHER DOCUMENTS

           *       *       *       *       *       *       *



SEC. 6061. SIGNING OF RETURNS AND OTHER DOCUMENTS.

  (a) General Rule.--Except as otherwise provided by subsection 
(b) and sections 6062 and 6063, any return, statement, or other 
document required to be made under any provision of the 
internal revenue laws or regulations shall be signed in 
accordance with forms or regulations prescribed by the 
Secretary.
  (b) Electronic Signatures.--
          (1) In general.--The Secretary shall develop 
        procedures for the acceptance of signatures in digital 
        or other electronic form. Until such time as such 
        procedures are in place, the Secretary may--
                  (A) waive the requirement of a signature for; 
                or
                  (B) provide for alternative methods of 
                signing or subscribing,
        a particular type or class of return, declaration, 
        statement, or other document required or permitted to 
        be made or written under internal revenue laws and 
        regulations.
          (2) Treatment of alternative methods.--
        Notwithstanding any other provision of law, any return, 
        declaration, statement, or other document filed and 
        verified, signed, or subscribed under any method 
        adopted under paragraph (1)(B) shall be treated for all 
        purposes (both civil and criminal, including penalties 
        for perjury) in the same manner as though signed or 
        subscribed.
          [(3) Published guidance.--The Secretary shall publish 
        guidance as appropriate to define and implement any 
        waiver of the signature requirements or any method 
        adopted under paragraph (1).]
          (3) Published guidance.--
                  (A) In general.--The Secretary shall publish 
                guidance as appropriate to define and implement 
                any waiver of the signature requirements or any 
                method adopted under paragraph (1).
                  (B) Electronic signatures for disclosure 
                authorizations to, and other authorizations of, 
                practitioners.--Not later than 6 months after 
                the date of the enactment of this subparagraph, 
                the Secretary shall publish guidance to 
                establish uniform standards and procedures for 
                the acceptance of taxpayers' signatures 
                appearing in electronic form with respect to 
                any request for disclosure of a taxpayer's 
                return or return information under section 
                6103(c) to a practitioner or any power of 
                attorney granted by a taxpayer to a 
                practitioner.
                  (C) Practitioner.--For purposes of 
                subparagraph (B), the term ``practitioner'' 
                means any individual in good standing who is 
                regulated under section 330 of title 31, United 
                States Code.

           *       *       *       *       *       *       *


Subchapter B--Miscellaneous Provisions

           *       *       *       *       *       *       *


SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN 
                    INFORMATION.

  (a) General Rule.--Returns and return information shall be 
confidential, and except as authorized by this title--
          (1) no officer or employee of the United States,
          (2) no officer or employee of any State, any local 
        law enforcement agency receiving information under 
        subsection (i)(1)(C) or (7)(A), any local child support 
        enforcement agency, or any local agency administering a 
        program listed in subsection (l)(7)(D) who has or had 
        access to returns or return information under this 
        section or section 6104(c), and
          (3) no other person (or officer or employee thereof) 
        who has or had access to returns or return information 
        under subsection (c), subsection (e)(1)(D)(iii), 
        [subsection (k)(10)] paragraph (10) or (13) of 
        subsection (k), paragraph (6), (10), (12), (16), (19), 
        (20), or (21) of subsection (l), paragraph (2) or 
        (4)(B) of subsection (m), or subsection (n),
shall disclose any return or return information obtained by him 
in any manner in connection with his service as such an officer 
or an employee or otherwise or under the provisions of this 
section. For purposes of this subsection, the term ``officer or 
employee'' includes a former officer or employee.
  (b) Definitions.--For purposes of this section--
          (1) Return.--The term ``return'' means any tax or 
        information return, declaration of estimated tax, or 
        claim for refund required by, or provided for or 
        permitted under, the provisions of this title which is 
        filed with the Secretary by, on behalf of, or with 
        respect to any person, and any amendment or supplement 
        thereto, including supporting schedules, attachments, 
        or lists which are supplemental to, or part of, the 
        return so filed.
          (2) Return information.--The term ``return 
        information'' means--
                  (A) 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,
                  (B) 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)) which is not open 
                to public inspection under section 6110,
                  (C) 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
                  (D) any agreement under section 7121, and any 
                similar agreement, and any background 
                information related to such an agreement or 
                request for such an agreement,
        but such term does not include data in a form which 
        cannot be associated with, or otherwise identify, 
        directly or indirectly, a particular taxpayer. Nothing 
        in the preceding sentence, or in any other provision of 
        law, shall be construed to require the disclosure of 
        standards used or to be used for the selection of 
        returns for examination, or data used or to be used for 
        determining such standards, if the Secretary determines 
        that such disclosure will seriously impair assessment, 
        collection, or enforcement under the internal revenue 
        laws.
          (3) Taxpayer return information.--The term ``taxpayer 
        return information'' means return information as 
        defined in paragraph (2) which is filed with, or 
        furnished to, the Secretary by or on behalf of the 
        taxpayer to whom such return information relates.
          (4) Tax administration.--The term ``tax 
        administration''--
                  (A) means--
                          (i) the administration, management, 
                        conduct, direction, and supervision of 
                        the execution and application of the 
                        internal revenue laws or related 
                        statutes (or equivalent laws and 
                        statutes of a State) and tax 
                        conventions to which the United States 
                        is a party, and
                          (ii) the development and formulation 
                        of Federal tax policy relating to 
                        existing or proposed internal revenue 
                        laws, related statutes, and tax 
                        conventions, and
                  (B) includes assessment, collection, 
                enforcement, litigation, publication, and 
                statistical gathering functions under such 
                laws, statutes, or conventions.
          (5) State.--
                  (A) In general.--The term ``State'' means--
                          (i) any of the 50 States, the 
                        District of Columbia, the Commonwealth 
                        of Puerto Rico, the Virgin Islands, 
                        Guam, American Samoa, and the 
                        Commonwealth of the Northern Mariana 
                        Islands,
                          (ii) for purposes of subsections 
                        (a)(2), (b)(4), (d)(1), (h)(4), and 
                        (p), any municipality--
                                  (I) with a population in 
                                excess of 250,000 (as 
                                determined under the most 
                                recent decennial United States 
                                census data available),
                                  (II) which imposes a tax on 
                                income or wages, and
                                  (III) with which the 
                                Secretary (in his sole 
                                discretion) has entered into an 
                                agreement regarding disclosure, 
                                and
                          (iii) for purposes of subsections 
                        (a)(2), (b)(4), (d)(1), (h)(4), and 
                        (p), any governmental entity--
                                  (I) which is formed and 
                                operated by a qualified group 
                                of municipalities, and
                                  (II) with which the Secretary 
                                (in his sole discretion) has 
                                entered into an agreement 
                                regarding disclosure.
                  (B) Regional income tax agencies.--For 
                purposes of subparagraph (A)(iii)--
                          (i) Qualified group of 
                        municipalities.--The term ``qualified 
                        group of municipalities'' means, with 
                        respect to any governmental entity, 2 
                        or more municipalities--
                                  (I) each of which imposes a 
                                tax on income or wages,
                                  (II) each of which, under the 
                                authority of a State statute, 
                                administers the laws relating 
                                to the imposition of such taxes 
                                through such entity, and
                                  (III) which collectively have 
                                a population in excess of 
                                250,000 (as determined under 
                                the most recent decennial 
                                United States census data 
                                available).
                          (ii) References to state law, etc.--
                        For purposes of applying subparagraph 
                        (A)(iii) to the subsections referred to 
                        in such subparagraph, any reference in 
                        such subsections to State law, 
                        proceedings, or tax returns shall be 
                        treated as references to the law, 
                        proceedings, or tax returns, as the 
                        case may be, of the municipalities 
                        which form and operate the governmental 
                        entity referred to in such 
                        subparagraph.
                          (iii) Disclosure to contractors and 
                        other agents.--Notwithstanding any 
                        other provision of this section, no 
                        return or return information shall be 
                        disclosed to any contractor or other 
                        agent of a governmental entity referred 
                        to in subparagraph (A)(iii) unless such 
                        entity, to the satisfaction of the 
                        Secretary--
                                  (I) has requirements in 
                                effect which require each such 
                                contractor or other agent which 
                                would have access to returns or 
                                return information to provide 
                                safeguards (within the meaning 
                                of subsection (p)(4)) to 
                                protect the confidentiality of 
                                such returns or return 
                                information,
                                  (II) agrees to conduct an on-
                                site review every 3 years (or a 
                                mid-point review in the case of 
                                contracts or agreements of less 
                                than 3 years in duration) of 
                                each contractor or other agent 
                                to determine compliance with 
                                such requirements,
                                  (III) submits the findings of 
                                the most recent review 
                                conducted under subclause (II) 
                                to the Secretary as part of the 
                                report required by subsection 
                                (p)(4)(E), and
                                  (IV) certifies to the 
                                Secretary for the most recent 
                                annual period that such 
                                contractor or other agent is in 
                                compliance with all such 
                                requirements.
                        The certification required by subclause 
                        (IV) shall include the name and address 
                        of each contractor and other agent, a 
                        description of the contract or 
                        agreement with such contractor or other 
                        agent, and the duration of such 
                        contract or agreement. The requirements 
                        of this clause shall not apply to 
                        disclosures pursuant to subsection (n) 
                        for purposes of Federal tax 
                        administration and a rule similar to 
                        the rule of subsection (p)(8)(B) shall 
                        apply for purposes of this clause.
          (6) Taxpayer identity.--The term ``taxpayer 
        identity'' means the name of a person with respect to 
        whom a return is filed, his mailing address, his 
        taxpayer identifying number (as described in section 
        6109), or a combination thereof.
          (7) Inspection.--The terms ``inspected'' and 
        ``inspection'' mean any examination of a return or 
        return information.
          (8) Disclosure.--The term ``disclosure'' means the 
        making known to any person in any manner whatever a 
        return or return information.
          (9) Federal agency.--The term ``Federal agency'' 
        means an agency within the meaning of section 551(1) of 
        title 5, United States Code.
          (10) Chief executive officer.--The term ``chief 
        executive officer'' means, with respect to any 
        municipality, any elected official and the chief 
        official (even if not elected) of such municipality.
          (11) Terrorist incident, threat, or activity.--The 
        term ``terrorist incident, threat, or activity'' means 
        an incident, threat, or activity involving an act of 
        domestic terrorism (as defined in section 2331(5) of 
        title 18, United States Code) or international 
        terrorism (as defined in section 2331(1) of such 
        title).
  (c) Disclosure of Returns and Return Information to Designee 
of Taxpayer.--The Secretary may, subject to such requirements 
and conditions as he may prescribe by regulations, disclose the 
return of any taxpayer, or return information with respect to 
such taxpayer, to such person or persons as the taxpayer may 
designate in a request for or consent to such disclosure, or to 
any other person at the taxpayer's request to the extent 
necessary to comply with a request for information or 
assistance made by the taxpayer to such other person. However, 
return information shall not be disclosed to such person or 
persons if the Secretary determines that such disclosure would 
seriously impair Federal tax administration. Persons designated 
by the taxpayer under this subsection to receive return 
information shall not use the information for any purpose other 
than the express purpose for which consent was granted and 
shall not disclose return information to any other person 
without the express permission of, or request by, the taxpayer.
  (d) Disclosure to State Tax Officials and State and Local Law 
Enforcement Agencies.--
          (1) In general.--Returns and return information with 
        respect to taxes imposed by chapters 1, 2, 6, 11, 12, 
        21, 23, 24, 31, 32, 44, 51, and 52 and subchapter D of 
        chapter 36 shall be open to inspection by, or 
        disclosure to, any State agency, body, or commission, 
        or its legal representative, which is charged under the 
        laws of such State with responsibility for the 
        administration of State tax laws for the purpose of, 
        and only to the extent necessary in, the administration 
        of such laws, including any procedures with respect to 
        locating any person who may be entitled to a refund. 
        Such inspection shall be permitted, or such disclosure 
        made, only upon written request by the head of such 
        agency, body, or commission, and only to the 
        representatives of such agency, body, or commission 
        designated in such written request as the individuals 
        who are to inspect or to receive the returns or return 
        information on behalf of such agency, body, or 
        commission. Such representatives shall not include any 
        individual who is the chief executive officer of such 
        State or who is neither an employee or legal 
        representative of such agency, body, or commission nor 
        a person described in subsection (n). However, such 
        return information shall not be disclosed to the extent 
        that the Secretary determines that such disclosure 
        would identify a confidential informant or seriously 
        impair any civil or criminal tax investigation.
          (2) Disclosure to State audit agencies.--
                  (A) In general.--Any returns or return 
                information obtained under paragraph (1) by any 
                State agency, body, or commission may be open 
                to inspection by, or disclosure to, officers 
                and employees of the State audit agency for the 
                purpose of, and only to the extent necessary 
                in, making an audit of the State agency, body, 
                or commission referred to in paragraph (1).
                  (B) State audit agency.--For purposes of 
                subparagraph (A), the term ``State audit 
                agency'' means any State agency, body, or 
                commission which is charged under the laws of 
                the State with the responsibility of auditing 
                State revenues and programs.
          (3) Exception for reimbursement under section 7624.--
        Nothing in this section shall be construed to prevent 
        the Secretary from disclosing to any State or local law 
        enforcement agency which may receive a payment under 
        section 7624 the amount of the recovered taxes with 
        respect to which such a payment may be made.
          (4) Availability and use of death information.--
                  (A) In general.--No returns or return 
                information may be disclosed under paragraph 
                (1) to any agency, body, or commission of any 
                State (or any legal representative thereof) 
                during any period during which a contract 
                meeting the requirements of subparagraph (B) is 
                not in effect between such State and the 
                Secretary of Health and Human Services.
                  (B) Contractual requirements.--A contract 
                meets the requirements of this subparagraph 
                if--
                          (i) such contract requires the State 
                        to furnish the Secretary of Health and 
                        Human Services information concerning 
                        individuals with respect to whom death 
                        certificates (or equivalent documents 
                        maintained by the State or any 
                        subdivision thereof) have been 
                        officially filed with it, and
                          (ii) such contract does not include 
                        any restriction on the use of 
                        information obtained by such Secretary 
                        pursuant to such contract, except that 
                        such contract may provide that such 
                        information is only to be used by the 
                        Secretary (or any other Federal agency) 
                        for purposes of ensuring that Federal 
                        benefits or other payments are not 
                        erroneously paid to deceased 
                        individuals.
                Any information obtained by the Secretary of 
                Health and Human Services under such a contract 
                shall be exempt from disclosure under section 
                552 of title 5, United States Code, and from 
                the requirements of section 552a of such title 
                5.
                  (C) Special exception.--The provisions of 
                subparagraph (A) shall not apply to any State 
                which on July 1, 1993, was not, pursuant to a 
                contract, furnishing the Secretary of Health 
                and Human Services information concerning 
                individuals with respect to whom death 
                certificates (or equivalent documents 
                maintained by the State or any subdivision 
                thereof) have been officially filed with it.
          (5) Disclosure for combined employment tax 
        reporting.--
                  (A) In general.--The Secretary may disclose 
                taxpayer identity information and signatures to 
                any agency, body, or commission of any State 
                for the purpose of carrying out with such 
                agency, body, or commission a combined Federal 
                and State employment tax reporting program 
                approved by the Secretary. Subsections (a)(2) 
                and (p)(4) and sections 7213 and 7213A shall 
                not apply with respect to disclosures or 
                inspections made pursuant to this paragraph.
                  (B) Termination.--The Secretary may not make 
                any disclosure under this paragraph after 
                December 31, 2007.
          (6) Limitation on disclosure regarding regional 
        income tax agencies treated as States.--For purposes of 
        paragraph (1), inspection by or disclosure to an entity 
        described in subsection (b)(5)(A)(iii) shall be for the 
        purpose of, and only to the extent necessary in, the 
        administration of the laws of the member municipalities 
        in such entity relating to the imposition of a tax on 
        income or wages. Such entity may not redisclose any 
        return or return information received pursuant to 
        paragraph (1) to any such member municipality.
  (e) Disclosure to Persons Having Material Interest.--
          (1) In general.--The return of a person shall, upon 
        written request, be open to inspection by or disclosure 
        to--
                  (A) in the case of the return of an 
                individual--
                          (i) that individual,
                          (ii) the spouse of that individual if 
                        the individual and such spouse have 
                        signified their consent to consider a 
                        gift reported on such return as made 
                        one-half by him and one-half by the 
                        spouse pursuant to the provisions of 
                        section 2513; or
                          (iii) the child of that individual 
                        (or such child's legal representative) 
                        to the extent necessary to comply with 
                        the provisions of section 1(g);
                  (B) in the case of an income tax return filed 
                jointly, either of the individuals with respect 
                to whom the return is filed;
                  (C) in the case of the return of a 
                partnership, any person who was a member of 
                such partnership during any part of the period 
                covered by the return;
                  (D) in the case of the return of a 
                corporation or a subsidiary thereof--
                          (i) any person designated by 
                        resolution of its board of directors or 
                        other similar governing body,
                          (ii) any officer or employee of such 
                        corporation upon written request signed 
                        by any principal officer and attested 
                        to by the secretary or other officer,
                          (iii) any bona fide shareholder of 
                        record owning 1 percent or more of the 
                        outstanding stock of such corporation,
                          (iv) if the corporation was an S 
                        corporation, any person who was a 
                        shareholder during any part of the 
                        period covered by such return during 
                        which an election under section 1362(a) 
                        was in effect, or
                          (v) if the corporation has been 
                        dissolved, any person authorized by 
                        applicable State law to act for the 
                        corporation or any person who the 
                        Secretary finds to have a material 
                        interest which will be affected by 
                        information contained therein;
                  (E) in the case of the return of an estate--
                          (i) the administrator, executor, or 
                        trustee of such estate, and
                          (ii) any heir at law, next of kin, or 
                        beneficiary under the will, of the 
                        decedent, but only if the Secretary 
                        finds that such heir at law, next of 
                        kin, or beneficiary has a material 
                        interest which will be affected by 
                        information contained therein; and
                  (F) in the case of the return of a trust--
                          (i) the trustee or trustees, jointly 
                        or separately, and
                          (ii) any beneficiary of such trust, 
                        but only if the Secretary finds that 
                        such beneficiary has a material 
                        interest which will be affected by 
                        information contained therein.
          (2) Incompetency.--If an individual described in 
        paragraph (1) is legally incompetent, the applicable 
        return shall, upon written request, be open to 
        inspection by or disclosure to the committee, trustee, 
        or guardian of his estate.
          (3) Deceased individuals.--The return of a decedent 
        shall, upon written request, be open to inspection by 
        or disclosure to--
                  (A) the administrator, executor, or trustee 
                of his estate, and
                  (B) any heir at law, next of kin, or 
                beneficiary under the will, of such decedent, 
                or a donee of property, but only if the 
                Secretary finds that such heir at law, next of 
                kin, beneficiary, or donee has a material 
                interest which will be affected by information 
                contained therein.
          (4) Title 11 cases and receivership proceedings.--
        If--
                  (A) there is a trustee in a title 11 case in 
                which the debtor is the person with respect to 
                whom the return is filed, or
                  (B) substantially all of the property of the 
                person with respect to whom the return is filed 
                is in the hands of a receiver,
        such return or returns for prior years of such person 
        shall, upon written request, be open to inspection by 
        or disclosure to such trustee or receiver, but only if 
        the Secretary finds that such trustee or receiver, in 
        his fiduciary capacity, has a material interest which 
        will be affected by information contained therein.
          (5) Individual's title 11 case.--
                  (A) In general.--In any case to which section 
                1398 applies (determined without regard to 
                section 1398(b)(1)), any return of the debtor 
                for the taxable year in which the case 
                commenced or any preceding taxable year shall, 
                upon written request, be open to inspection by 
                or disclosure to the trustee in such case.
                  (B) Return of estate available to debtor.--
                Any return of an estate in a case to which 
                section 1398 applies shall, upon written 
                request, be open to inspection by or disclosure 
                to the debtor in such case.
                  (C) Special rule for involuntary cases.--In 
                an involuntary case, no disclosure shall be 
                made under subparagraph (A) until the order for 
                relief has been entered by the court having 
                jurisdiction of such case unless such court 
                finds that such disclosure is appropriate for 
                purposes of determining whether an order for 
                relief should be entered.
          (6) Attorney in fact.--Any return to which this 
        subsection applies shall, upon written request, also be 
        open to inspection by or disclosure to the attorney in 
        fact duly authorized in writing by any of the persons 
        described in paragraph (1), (2), (3), (4), (5), (8), or 
        (9) to inspect the return or receive the information on 
        his behalf, subject to the conditions provided in such 
        paragraphs.
          (7) Return information.--Return information with 
        respect to any taxpayer may be open to inspection by or 
        disclosure to any person authorized by this subsection 
        to inspect any return of such taxpayer if the Secretary 
        determines that such disclosure would not seriously 
        impair Federal tax administration.
          (8) Disclosure of collection activities with respect 
        to joint return.--If any deficiency of tax with respect 
        to a joint return is assessed and the individuals 
        filing such return are no longer married or no longer 
        reside in the same household, upon request in writing 
        by either of such individuals, the Secretary shall 
        disclose in writing to the individual making the 
        request whether the Secretary has attempted to collect 
        such deficiency from such other individual, the general 
        nature of such collection activities, and the amount 
        collected. The preceding sentence shall not apply to 
        any deficiency which may not be collected by reason of 
        section 6502.
          (9) Disclosure of certain information where more than 
        1 person subject to penalty under section 6672.--If the 
        Secretary determines that a person is liable for a 
        penalty under section 6672(a) with respect to any 
        failure, upon request in writing of such person, the 
        Secretary shall disclose in writing to such person--
                  (A) the name of any other person whom the 
                Secretary has determined to be liable for such 
                penalty with respect to such failure, and
                  (B) whether the Secretary has attempted to 
                collect such penalty from such other person, 
                the general nature of such collection 
                activities, and the amount collected.
          (10) Limitation on certain disclosures under this 
        subsection.--In the case of an inspection or disclosure 
        under this subsection relating to the return of a 
        partnership, S corporation, trust, or an estate, the 
        information inspected or disclosed shall not include 
        any supporting schedule, attachment, or list which 
        includes the taxpayer identity information of a person 
        other than the entity making the return or the person 
        conducting the inspection or to whom the disclosure is 
        made.
          (11) Disclosure of information regarding status of 
        investigation of violation of this section.--In the 
        case of a person who provides to the Secretary 
        information indicating a violation of section 7213, 
        7213A, or 7214 with respect to any return or return 
        information of such person, the Secretary may disclose 
        to such person (or such person's designee)--
                  (A) whether an investigation based on the 
                person's provision of such information has been 
                initiated and whether it is open or closed,
                  (B) whether any such investigation 
                substantiated such a violation by any 
                individual, and
                  (C) whether any action has been taken with 
                respect to such individual (including whether a 
                referral has been made for prosecution of such 
                individual).
  (f) Disclosure to Committees of Congress.--
          (1) Committee on Ways and Means, Committee on 
        Finance, and Joint Committee on Taxation.--Upon written 
        request from the chairman of the Committee on Ways and 
        Means of the House of Representatives, the chairman of 
        the Committee on Finance of the Senate, or the chairman 
        of the Joint Committee on Taxation, the Secretary shall 
        furnish such committee with any return or return 
        information specified in such request, except that any 
        return or return information which can be associated 
        with, or otherwise identify, directly or indirectly, a 
        particular taxpayer shall be furnished to such 
        committee only when sitting in closed executive session 
        unless such taxpayer otherwise consents in writing to 
        such disclosure.
          (2) Chief of Staff of Joint Committee on Taxation.--
        Upon written request by the Chief of Staff of the Joint 
        Committee on Taxation, the Secretary shall furnish him 
        with any return or return information specified in such 
        request. Such Chief of Staff may submit such return or 
        return information to any committee described in 
        paragraph (1), except that any return or return 
        information which can be associated with, or otherwise 
        identify, directly or indirectly, a particular taxpayer 
        shall be furnished to such committee only when sitting 
        in closed executive session unless such taxpayer 
        otherwise consents in writing to such disclosure.
          (3) Other committees.--Pursuant to an action by, and 
        upon written request by the chairman of, a committee of 
        the Senate or the House of Representatives (other than 
        a committee specified in paragraph (1)) specially 
        authorized to inspect any return or return information 
        by a resolution of the Senate or the House of 
        Representatives or, in the case of a joint committee 
        (other than the joint committee specified in paragraph 
        (1)) by concurrent resolution, the Secretary shall 
        furnish such committee, or a duly authorized and 
        designated subcommittee thereof, sitting in closed 
        executive session, with any return or return 
        information which such resolution authorizes the 
        committee or subcommittee to inspect. Any resolution 
        described in this paragraph shall specify the purpose 
        for which the return or return information is to be 
        furnished and that such information cannot reasonably 
        be obtained from any other source.
          (4) Agents of committees and submission of 
        information to Senate or House of Representatives.--
                  (A) Committees described in paragraph (1).--
                Any committee described in paragraph (1) or the 
                Chief of Staff of the Joint Committee on 
                Taxation shall have the authority, acting 
                directly, or by or through such examiners or 
                agents as the chairman of such committee or 
                such chief of staff may designate or appoint, 
                to inspect returns and return information at 
                such time and in such manner as may be 
                determined by such chairman or chief of staff. 
                Any return or return information obtained by or 
                on behalf of such committee pursuant to the 
                provisions of this subsection may be submitted 
                by the committee to the Senate or the House of 
                Representatives, or to both. The Joint 
                Committee on Taxation may also submit such 
                return or return information to any other 
                committee described in paragraph (1), except 
                that any return or return information which can 
                be associated with, or otherwise identify, 
                directly or indirectly, a particular taxpayer 
                shall be furnished to such committee only when 
                sitting in closed executive session unless such 
                taxpayer otherwise consents in writing to such 
                disclosure.
                  (B) Other committees.--Any committee or 
                subcommittee described in paragraph (3) shall 
                have the right, acting directly, or by or 
                through no more than four examiners or agents, 
                designated or appointed in writing in equal 
                numbers by the chairman and ranking minority 
                member of such committee or subcommittee, to 
                inspect returns and return information at such 
                time and in such manner as may be determined by 
                such chairman and ranking minority member. Any 
                return or return information obtained by or on 
                behalf of such committee or subcommittee 
                pursuant to the provisions of this subsection 
                may be submitted by the committee to the Senate 
                or the House of Representatives, or to both, 
                except that any return or return information 
                which can be associated with, or otherwise 
                identify, directly or indirectly, a particular 
                taxpayer, shall be furnished to the Senate or 
                the House of Representatives only when sitting 
                in closed executive session unless such 
                taxpayer otherwise consents in writing to such 
                disclosure.
          (5) Disclosure by whistleblower.--Any person who 
        otherwise has or had access to any return or return 
        information under this section may disclose such return 
        or return information to a committee referred to in 
        paragraph (1) or any individual authorized to receive 
        or inspect information under paragraph (4)(A) if such 
        person believes such return or return information may 
        relate to possible misconduct, maladministration, or 
        taxpayer abuse.
  (g) Disclosure to President and Certain Other Persons.--
          (1) In general.--Upon written request by the 
        President, signed by him personally, the Secretary 
        shall furnish to the President, or to such employee or 
        employees of the White House Office as the President 
        may designate by name in such request, a return or 
        return information with respect to any taxpayer named 
        in such request. Any such request shall state--
                  (A) the name and address of the taxpayer 
                whose return or return information is to be 
                disclosed,
                  (B) the kind of return or return information 
                which is to be disclosed,
                  (C) the taxable period or periods covered by 
                such return or return information, and
                  (D) the specific reason why the inspection or 
                disclosure is requested.
          (2) Disclosure of return information as to 
        Presidential appointees and certain other Federal 
        Government appointees.--The Secretary may disclose to a 
        duly authorized representative of the Executive Office 
        of the President or to the head of any Federal agency, 
        upon written request by the President or head of such 
        agency, or to the Federal Bureau of Investigation on 
        behalf of and upon written request by the President or 
        such head, return information with respect to an 
        individual who is designated as being under 
        consideration for appointment to a position in the 
        executive or judicial branch of the Federal Government. 
        Such return information shall be limited to whether 
        such individual--
                  (A) has filed returns with respect to the 
                taxes imposed under chapter 1 for not more than 
                the immediately preceding 3 years;
                  (B) has failed to pay any tax within 10 days 
                after notice and demand, or has been assessed 
                any penalty under this title for negligence, in 
                the current year or immediately preceding 3 
                years;
                  (C) has been or is under investigation for 
                possible criminal offenses under the internal 
                revenue laws and the results of any such 
                investigation; or
                  (D) has been assessed any civil penalty under 
                this title for fraud.
        Within 3 days of the receipt of any request for any 
        return information with respect to any individual under 
        this paragraph, the Secretary shall notify such 
        individual in writing that such information has been 
        requested under the provisions of this paragraph.
          (3) Restriction on disclosure.--The employees to whom 
        returns and return information are disclosed under this 
        subsection shall not disclose such returns and return 
        information to any other person except the President or 
        the head of such agency without the personal written 
        direction of the President or the head of such agency.
          (4) Restriction on disclosure to certain employees.--
        Disclosure of returns and return information under this 
        subsection shall not be made to any employee whose 
        annual rate of basic pay is less than the annual rate 
        of basic pay specified for positions subject to section 
        5316 of title 5, United States Code.
          (5) Reporting requirements.--Within 30 days after the 
        close of each calendar quarter, the President and the 
        head of any agency requesting returns and return 
        information under this subsection shall each file a 
        report with the Joint Committee on Taxation setting 
        forth the taxpayers with respect to whom such requests 
        were made during such quarter under this subsection, 
        the returns or return information involved, and the 
        reasons for such requests. The President shall not be 
        required to report on any request for returns and 
        return information pertaining to an individual who was 
        an officer or employee of the executive branch of the 
        Federal Government at the time such request was made. 
        Reports filed pursuant to this paragraph shall not be 
        disclosed unless the Joint Committee on Taxation 
        determines that disclosure thereof (including 
        identifying details) would be in the national interest. 
        Such reports shall be maintained by the Joint Committee 
        on Taxation for a period not exceeding 2 years unless, 
        within such period, the Joint Committee on Taxation 
        determines that a disclosure to the Congress is 
        necessary.
  (h) Disclosure to Certain Federal Officers and Employees for 
Purposes of Tax Administration, Etc..--
          (1) Department of the Treasury.--Returns and return 
        information shall, without written request, be open to 
        inspection by or disclosure to officers and employees 
        of the Department of the Treasury whose official duties 
        require such inspection or disclosure for tax 
        administration purposes.
          (2) Department of Justice.--In a matter involving tax 
        administration, a return or return information shall be 
        open to inspection by or disclosure to officers and 
        employees of the Department of Justice (including 
        United States attorneys) personally and directly 
        engaged in, and solely for their use in, any proceeding 
        before a Federal grand jury or preparation for any 
        proceeding (or investigation which may result in such a 
        proceeding) before a Federal grand jury or any Federal 
        or State court, but only if--
                  (A) the taxpayer is or may be a party to the 
                proceeding, or the proceeding arose out of, or 
                in connection with, determining the taxpayer's 
                civil or criminal liability, or the collection 
                of such civil liability in respect of any tax 
                imposed under this title;
                  (B) the treatment of an item reflected on 
                such return is or may be related to the 
                resolution of an issue in the proceeding or 
                investigation; or
                  (C) such return or return information relates 
                or may relate to a transactional relationship 
                between a person who is or may be a party to 
                the proceeding and the taxpayer which affects, 
                or may affect, the resolution of an issue in 
                such proceeding or investigation.
          (3) Form of request.--In any case in which the 
        Secretary is authorized to disclose a return or return 
        information to the Department of Justice pursuant to 
        the provisions of this subsection--
                  (A) if the Secretary has referred the case to 
                the Department of Justice, or if the proceeding 
                is authorized by subchapter B of chapter 76, 
                the Secretary may make such disclosure on his 
                own motion, or
                  (B) if the Secretary receives a written 
                request from the Attorney General, the Deputy 
                Attorney General, or an Assistant Attorney 
                General for a return of, or return information 
                relating to, a person named in such request and 
                setting forth the need for the disclosure, the 
                Secretary shall disclose return or return the 
                information so requested.
          (4) Disclosure in judicial and administrative tax 
        proceedings.--A return or return information may be 
        disclosed in a Federal or State judicial or 
        administrative proceeding pertaining to tax 
        administration, but only--
                  (A) if the taxpayer is a party to the 
                proceeding, or the proceeding arose out of, or 
                in connection with, determining the taxpayer's 
                civil or criminal liability, or the collection 
                of such civil liability, in respect of any tax 
                imposed under this title;
                  (B) if the treatment of an item reflected on 
                such return is directly related to the 
                resolution of an issue in the proceeding;
                  (C) if such return or return information 
                directly relates to a transactional 
                relationship between a person who is a party to 
                the proceeding and the taxpayer which directly 
                affects the resolution of an issue in the 
                proceeding; or
                  (D) to the extent required by order of a 
                court pursuant to section 3500 of title 18, 
                United States Code, or rule 16 of the Federal 
                Rules of Criminal Procedure, such court being 
                authorized in the issuance of such order to 
                give due consideration to congressional policy 
                favoring the confidentiality of returns and 
                return information as set forth in this title.
        However, such return or return information shall not be 
        disclosed as provided in subparagraph (A), (B), or (C) 
        if the Secretary determines that such disclosure would 
        identify a confidential informant or seriously impair a 
        civil or criminal tax investigation.
          (5) Withholding of tax from social security 
        benefits.--Upon written request of the payor agency, 
        the Secretary may disclose available return information 
        from the master files of the Internal Revenue Service 
        with respect to the address and status of an individual 
        as a nonresident alien or as a citizen or resident of 
        the United States to the Social Security Administration 
        or the Railroad Retirement Board (whichever is 
        appropriate) for purposes of carrying out its 
        responsibilities for withholding tax under section 1441 
        from social security benefits (as defined in section 
        86(d)).
          (6) Internal Revenue Service Oversight Board.--
                  (A) In general.--Notwithstanding paragraph 
                (1), and except as provided in subparagraph 
                (B), no return or return information may be 
                disclosed to any member of the Oversight Board 
                described in subparagraph (A) or (D) of section 
                7802(b)(1) or to any employee or detailee of 
                such Board by reason of their service with the 
                Board. Any request for information not 
                permitted to be disclosed under the preceding 
                sentence, and any contact relating to a 
                specific taxpayer, made by any such individual 
                to an officer or employee of the Internal 
                Revenue Service shall be reported by such 
                officer or employee to the Secretary, the 
                Treasury Inspector General for Tax 
                Administration, and the Joint Committee on 
                Taxation.
                  (B) Exception for reports to the Board.--If--
                          (i) the Commissioner or the Treasury 
                        Inspector General for Tax 
                        Administration prepares any report or 
                        other matter for the Oversight Board in 
                        order to assist the Board in carrying 
                        out its duties; and
                          (ii) the Commissioner or such 
                        Inspector General determines it is 
                        necessary to include any return or 
                        return information in such report or 
                        other matter to enable the Board to 
                        carry out such duties, such return or 
                        return information (other than 
                        information regarding taxpayer 
                        identity) may be disclosed to members, 
                        employees, or detailees of the Board 
                        solely for the purpose of carrying out 
                        such duties.
  (i) Disclosure to Federal Officers or Employees for 
Administration of Federal Laws Not Relating to Tax 
Administration.--
          (1) Disclosure of returns and return information for 
        use in criminal investigations.--
                  (A) In general.--Except as provided in 
                paragraph (6), any return or return information 
                with respect to any specified taxable period or 
                periods shall, pursuant to and upon the grant 
                of an ex parte order by a Federal district 
                court judge or magistrate judge under 
                subparagraph (B), be open (but only to the 
                extent necessary as provided in such order) to 
                inspection by, or disclosure to, officers and 
                employees of any Federal agency who are 
                personally and directly engaged in--
                          (i) preparation for any judicial or 
                        administrative proceeding pertaining to 
                        the enforcement of a specifically 
                        designated Federal criminal statute 
                        (not involving tax administration) to 
                        which the United States or such agency 
                        is or may be a party, or pertaining to 
                        the case of a missing or exploited 
                        child,
                          (ii) any investigation which may 
                        result in such a proceeding, or
                          (iii) any Federal grand jury 
                        proceeding pertaining to enforcement of 
                        such a criminal statute to which the 
                        United States or such agency is or may 
                        be a party, or to such a case of a 
                        missing or exploited child,
                solely for the use of such officers and 
                employees in such preparation, investigation, 
                or grand jury proceeding.
                  (B) Application for order.--The Attorney 
                General, the Deputy Attorney General, the 
                Associate Attorney General, any Assistant 
                Attorney General, any United States attorney, 
                any special prosecutor appointed under section 
                593 of title 28, United States Code, or any 
                attorney in charge of a criminal division 
                organized crime strike force established 
                pursuant to section 510 of title 28, United 
                States Code, may authorize an application to a 
                Federal district court judge or magistrate 
                judge for the order referred to in subparagraph 
                (A). Upon such application, such judge or 
                magistrate judge may grant such order if he 
                determines on the basis of the facts submitted 
                by the applicant that--
                          (i) there is reasonable cause to 
                        believe, based upon information 
                        believed to be reliable, that a 
                        specific criminal act has been 
                        committed,
                          (ii) there is reasonable cause to 
                        believe that the return or return 
                        information is or may be relevant to a 
                        matter relating to the commission of 
                        such act, and
                          (iii) the return or return 
                        information is sought exclusively for 
                        use in a Federal criminal investigation 
                        or proceeding concerning such act (or 
                        any criminal investigation or 
                        proceeding, in the case of a matter 
                        relating to a missing or exploited 
                        child), and the information sought to 
                        be disclosed cannot reasonably be 
                        obtained, under the circumstances, from 
                        another source.
                  (C) Disclosure to State and local law 
                enforcement agencies in the case of matters 
                pertaining to a missing or exploited child.--
                          (i) In general.--In the case of an 
                        investigation pertaining to a missing 
                        or exploited child, the head of any 
                        Federal agency, or his designee, may 
                        disclose any return or return 
                        information obtained under subparagraph 
                        (A) to officers and employees of any 
                        State or local law enforcement agency, 
                        but only if--
                                  (I) such State or local law 
                                enforcement agency is part of a 
                                team with the Federal agency in 
                                such investigation, and
                                  (II) such information is 
                                disclosed only to such officers 
                                and employees who are 
                                personally and directly engaged 
                                in such investigation.
                          (ii) Limitation on use of 
                        information.--Information disclosed 
                        under this subparagraph shall be solely 
                        for the use of such officers and 
                        employees in locating the missing 
                        child, in a grand jury proceeding, or 
                        in any preparation for, or 
                        investigation which may result in, a 
                        judicial or administrative proceeding.
                          (iii) Missing child.--For purposes of 
                        this subparagraph, the term ``missing 
                        child'' shall have the meaning given 
                        such term by section 403 of the Missing 
                        Children's Assistance Act (42 U.S.C. 
                        5772).
                          (iv) Exploited child.--For purposes 
                        of this subparagraph, the term 
                        ``exploited child'' means a minor with 
                        respect to whom there is reason to 
                        believe that a specified offense 
                        against a minor (as defined by section 
                        111(7) of the Sex Offender Registration 
                        and Notification Act (42 U.S.C. 
                        16911(7))) has or is occurring.
          (2) Disclosure of return information other than 
        taxpayer return information for use in criminal 
        investigations.--
                  (A) In general.--Except as provided in 
                paragraph (6), upon receipt by the Secretary of 
                a request which meets the requirements of 
                subparagraph (B) from the head of any Federal 
                agency or the Inspector General thereof, or, in 
                the case of the Department of Justice, the 
                Attorney General, the Deputy Attorney General, 
                the Associate Attorney General, any Assistant 
                Attorney General, the Director of the Federal 
                Bureau of Investigation, the Administrator of 
                the Drug Enforcement Administration, any United 
                States attorney, any special prosecutor 
                appointed under section 593 of title 28, United 
                States Code, or any attorney in charge of a 
                criminal division organized crime strike force 
                established pursuant to section 510 of title 
                28, United States Code, the Secretary shall 
                disclose return information (other than 
                taxpayer return information) to officers and 
                employees of such agency who are personally and 
                directly engaged in--
                          (i) preparation for any judicial or 
                        administrative proceeding described in 
                        paragraph (1)(A)(i),
                          (ii) any investigation which may 
                        result in such a proceeding, or
                          (iii) any grand jury proceeding 
                        described in paragraph (1)(A)(iii),
                solely for the use of such officers and 
                employees in such preparation, investigation, 
                or grand jury proceeding.
                  (B) Requirements.--A request meets the 
                requirements of this subparagraph if the 
                request is in writing and sets forth--
                          (i) the name and address of the 
                        taxpayer with respect to whom the 
                        requested return information relates;
                          (ii) the taxable period or periods to 
                        which such return information relates;
                          (iii) the statutory authority under 
                        which the proceeding or investigation 
                        described in subparagraph (A) is being 
                        conducted; and
                          (iv) the specific reason or reasons 
                        why such disclosure is, or may be, 
                        relevant to such proceeding or 
                        investigation.
                  (C) Taxpayer identity.--For purposes of this 
                paragraph, a taxpayer's identity shall not be 
                treated as taxpayer return information.
          (3) Disclosure of return information to apprise 
        appropriate officials of criminal or terrorist 
        activities or emergency circumstances.--
                  (A) Possible violations of Federal criminal 
                law.--
                          (i) In general.--Except as provided 
                        in paragraph (6), the Secretary may 
                        disclose in writing return information 
                        (other than taxpayer return 
                        information) which may constitute 
                        evidence of a violation of any Federal 
                        criminal law (not involving tax 
                        administration) to the extent necessary 
                        to apprise the head of the appropriate 
                        Federal agency charged with the 
                        responsibility of enforcing such law. 
                        The head of such agency may disclose 
                        such return information to officers and 
                        employees of such agency to the extent 
                        necessary to enforce such law.
                          (ii) Taxpayer identity.--If there is 
                        return information (other than taxpayer 
                        return information) which may 
                        constitute evidence of a violation by 
                        any taxpayer of any Federal criminal 
                        law (not involving tax administration), 
                        such taxpayer's identity may also be 
                        disclosed under clause (i).
                  (B) Emergency circumstances.--
                          (i) Danger of death or physical 
                        injury.--Under circumstances involving 
                        an imminent danger of death or physical 
                        injury to any individual, the Secretary 
                        may disclose return information to the 
                        extent necessary to apprise appropriate 
                        officers or employees of any Federal or 
                        State law enforcement agency of such 
                        circumstances.
                          (ii) Flight from Federal 
                        prosecution.--Under circumstances 
                        involving the imminent flight of any 
                        individual from Federal prosecution, 
                        the Secretary may disclose return 
                        information to the extent necessary to 
                        apprise appropriate officers or 
                        employees of any Federal law 
                        enforcement agency of such 
                        circumstances.
                  (C) Terrorist activities, etc..--
                          (i) In general.--Except as provided 
                        in paragraph (6), the Secretary may 
                        disclose in writing return information 
                        (other than taxpayer return 
                        information) that may be related to a 
                        terrorist incident, threat, or activity 
                        to the extent necessary to apprise the 
                        head of the appropriate Federal law 
                        enforcement agency responsible for 
                        investigating or responding to such 
                        terrorist incident, threat, or 
                        activity. The head of the agency may 
                        disclose such return information to 
                        officers and employees of such agency 
                        to the extent necessary to investigate 
                        or respond to such terrorist incident, 
                        threat, or activity.
                          (ii) Disclosure to the Department of 
                        Justice.--Returns and taxpayer return 
                        information may also be disclosed to 
                        the Attorney General under clause (i) 
                        to the extent necessary for, and solely 
                        for use in preparing, an application 
                        under paragraph (7)(D).
                          (iii) Taxpayer identity.--For 
                        purposes of this subparagraph, a 
                        taxpayer's identity shall not be 
                        treated as taxpayer return information.
          (4) Use of certain disclosed returns and return 
        information in judicial or administrative 
        proceedings.--
                  (A) Returns and taxpayer return 
                information.--Except as provided in 
                subparagraph (C), any return or taxpayer return 
                information obtained under paragraph (1) or 
                (7)(C) may be disclosed in any judicial or 
                administrative proceeding pertaining to 
                enforcement of a specifically designated 
                Federal criminal statute or related civil 
                forfeiture (not involving tax administration) 
                to which the United States or a Federal agency 
                is a party--
                          (i) if the court finds that such 
                        return or taxpayer return information 
                        is probative of a matter in issue 
                        relevant in establishing the commission 
                        of a crime or the guilt or liability of 
                        a party, or
                          (ii) to the extent required by order 
                        of the court pursuant to section 3500 
                        of title 18, United States Code, or 
                        rule 16 of the Federal Rules of 
                        Criminal Procedure.
                  (B) Return information (other than taxpayer 
                return information).--Except as provided in 
                subparagraph (C), any return information (other 
                than taxpayer return information) obtained 
                under paragraph (1), (2), (3)(A) or (C), or (7) 
                may be disclosed in any judicial or 
                administrative proceeding pertaining to 
                enforcement of a specifically designated 
                Federal criminal statute or related civil 
                forfeiture (not involving tax administration) 
                to which the United States or a Federal agency 
                is a party.
                  (C) Confidential informant; impairment of 
                investigations.--No return or return 
                information shall be admitted into evidence 
                under subparagraph (A)(i) or (B) if the 
                Secretary determines and notifies the Attorney 
                General or his delegate or the head of the 
                Federal agency that such admission would 
                identify a confidential informant or seriously 
                impair a civil or criminal tax investigation.
                  (D) Consideration of confidentiality 
                policy.--In ruling upon the admissibility of 
                returns or return information, and in the 
                issuance of an order under subparagraph 
                (A)(ii), the court shall give due consideration 
                to congressional policy favoring the 
                confidentiality of returns and return 
                information as set forth in this title.
                  (E) Reversible error.--The admission into 
                evidence of any return or return information 
                contrary to the provisions of this paragraph 
                shall not, as such, constitute reversible error 
                upon appeal of a judgment in the proceeding.
          (5) Disclosure to locate fugitives from justice.--
                  (A) In general.--Except as provided in 
                paragraph (6), the return of an individual or 
                return information with respect to such 
                individual shall, pursuant to and upon the 
                grant of an ex parte order by a Federal 
                district court judge or magistrate judge under 
                subparagraph (B), be open (but only to the 
                extent necessary as provided in such order) to 
                inspection by, or disclosure to, officers and 
                employees of any Federal agency exclusively for 
                use in locating such individual.
                  (B) Application for order.--Any person 
                described in paragraph (1)(B) may authorize an 
                application to a Federal district court judge 
                or magistrate judge for an order referred to in 
                subparagraph (A). Upon such application, such 
                judge or magistrate judge may grant such order 
                if he determines on the basis of the facts 
                submitted by the applicant that--
                          (i) a Federal arrest warrant relating 
                        to the commission of a Federal felony 
                        offense has been issued for an 
                        individual who is a fugitive from 
                        justice,
                          (ii) the return of such individual or 
                        return information with respect to such 
                        individual is sought exclusively for 
                        use in locating such individual, and
                          (iii) there is reasonable cause to 
                        believe that such return or return 
                        information may be relevant in 
                        determining the location of such 
                        individual.
          (6) Confidential informants; impairment of 
        investigations.--The Secretary shall not disclose any 
        return or return information under paragraph (1), (2), 
        (3)(A) or (C), (5), (7), or (8) if the Secretary 
        determines (and, in the case of a request for 
        disclosure pursuant to a court order described in 
        paragraph (1)(B) or (5)(B), certifies to the court) 
        that such disclosure would identify a confidential 
        informant or seriously impair a civil or criminal tax 
        investigation.
          (7) Disclosure upon request of information relating 
        to terrorist activities, etc..--
                  (A) Disclosure to law enforcement agencies.--
                          (i) In general.--Except as provided 
                        in paragraph (6), upon receipt by the 
                        Secretary of a written request which 
                        meets the requirements of clause (iii), 
                        the Secretary may disclose return 
                        information (other than taxpayer return 
                        information) to officers and employees 
                        of any Federal law enforcement agency 
                        who are personally and directly engaged 
                        in the response to or investigation of 
                        any terrorist incident, threat, or 
                        activity.
                          (ii) Disclosure to State and local 
                        law enforcement agencies.--The head of 
                        any Federal law enforcement agency may 
                        disclose return information obtained 
                        under clause (i) to officers and 
                        employees of any State or local law 
                        enforcement agency but only if such 
                        agency is part of a team with the 
                        Federal law enforcement agency in such 
                        response or investigation and such 
                        information is disclosed only to 
                        officers and employees who are 
                        personally and directly engaged in such 
                        response or investigation.
                          (iii) Requirements.--A request meets 
                        the requirements of this clause if--
                                  (I) the request is made by 
                                the head of any Federal law 
                                enforcement agency (or his 
                                delegate) involved in the 
                                response to or investigation of 
                                any terrorist incident, threat, 
                                or activity, and
                                  (II) the request sets forth 
                                the specific reason or reasons 
                                why such disclosure may be 
                                relevant to a terrorist 
                                incident, threat, or activity.
                          (iv) Limitation on use of 
                        information.--Information disclosed 
                        under this subparagraph shall be solely 
                        for the use of the officers and 
                        employees to whom such information is 
                        disclosed in such response or 
                        investigation.
                          (v) Taxpayer identity.--For purposes 
                        of this subparagraph, a taxpayer's 
                        identity shall not be treated as 
                        taxpayer return information.
                  (B) Disclosure to intelligence agencies.--
                          (i) In general.--Except as provided 
                        in paragraph (6), upon receipt by the 
                        Secretary of a written request which 
                        meets the requirements of clause (ii), 
                        the Secretary may disclose return 
                        information (other than taxpayer return 
                        information) to those officers and 
                        employees of the Department of Justice, 
                        the Department of the Treasury, and 
                        other Federal intelligence agencies who 
                        are personally and directly engaged in 
                        the collection or analysis of 
                        intelligence and counterintelligence 
                        information or investigation concerning 
                        any terrorist incident, threat, or 
                        activity. For purposes of the preceding 
                        sentence, the information disclosed 
                        under the preceding sentence shall be 
                        solely for the use of such officers and 
                        employees in such investigation, 
                        collection, or analysis.
                          (ii) Requirements.--A request meets 
                        the requirements of this subparagraph 
                        if the request--
                                  (I) is made by an individual 
                                described in clause (iii), and
                                  (II) sets forth the specific 
                                reason or reasons why such 
                                disclosure may be relevant to a 
                                terrorist incident, threat, or 
                                activity.
                          (iii) Requesting individuals.--An 
                        individual described in this 
                        subparagraph is an individual--
                                  (I) who is an officer or 
                                employee of the Department of 
                                Justice or the Department of 
                                the Treasury who is appointed 
                                by the President with the 
                                advice and consent of the 
                                Senate or who is the Director 
                                of the United States Secret 
                                Service, and
                                  (II) who is responsible for 
                                the collection and analysis of 
                                intelligence and 
                                counterintelligence information 
                                concerning any terrorist 
                                incident, threat, or activity.
                          (iv) Taxpayer identity.--For purposes 
                        of this subparagraph, a taxpayer's 
                        identity shall not be treated as 
                        taxpayer return information.
                  (C) Disclosure under ex parte orders.--
                          (i) In general.--Except as provided 
                        in paragraph (6), any return or return 
                        information with respect to any 
                        specified taxable period or periods 
                        shall, pursuant to and upon the grant 
                        of an ex parte order by a Federal 
                        district court judge or magistrate 
                        judge under clause (ii), be open (but 
                        only to the extent necessary as 
                        provided in such order) to inspection 
                        by, or disclosure to, officers and 
                        employees of any Federal law 
                        enforcement agency or Federal 
                        intelligence agency who are personally 
                        and directly engaged in any 
                        investigation, response to, or analysis 
                        of intelligence and counterintelligence 
                        information concerning any terrorist 
                        incident, threat, or activity. Return 
                        or return information opened to 
                        inspection or disclosure pursuant to 
                        the preceding sentence shall be solely 
                        for the use of such officers and 
                        employees in the investigation, 
                        response, or analysis, and in any 
                        judicial, administrative, or grand jury 
                        proceedings, pertaining to such 
                        terrorist incident, threat, or 
                        activity.
                          (ii) Application for order.--The 
                        Attorney General, the Deputy Attorney 
                        General, the Associate Attorney 
                        General, any Assistant Attorney 
                        General, or any United States attorney 
                        may authorize an application to a 
                        Federal district court judge or 
                        magistrate judge for the order referred 
                        to in clause (i). Upon such 
                        application, such judge or magistrate 
                        judge may grant such order if he 
                        determines on the basis of the facts 
                        submitted by the applicant that--
                                  (I) there is reasonable cause 
                                to believe, based upon 
                                information believed to be 
                                reliable, that the return or 
                                return information may be 
                                relevant to a matter relating 
                                to such terrorist incident, 
                                threat, or activity, and
                                  (II) the return or return 
                                information is sought 
                                exclusively for use in a 
                                Federal investigation, 
                                analysis, or proceeding 
                                concerning any terrorist 
                                incident, threat, or activity.
                  (D) Special rule for ex parte disclosure by 
                the IRS.--
                          (i) In general.--Except as provided 
                        in paragraph (6), the Secretary may 
                        authorize an application to a Federal 
                        district court judge or magistrate 
                        judge for the order referred to in 
                        subparagraph (C)(i). Upon such 
                        application, such judge or magistrate 
                        judge may grant such order if he 
                        determines on the basis of the facts 
                        submitted by the applicant that the 
                        requirements of subparagraph (C)(ii)(I) 
                        are met.
                          (ii) Limitation on use of 
                        information.--Information disclosed 
                        under clause (i)--
                                  (I) may be disclosed only to 
                                the extent necessary to apprise 
                                the head of the appropriate 
                                Federal law enforcement agency 
                                responsible for investigating 
                                or responding to a terrorist 
                                incident, threat, or activity, 
                                and
                                  (II) shall be solely for use 
                                in a Federal investigation, 
                                analysis, or proceeding 
                                concerning any terrorist 
                                incident, threat, or activity.
                        The head of such Federal agency may 
                        disclose such information to officers 
                        and employees of such agency to the 
                        extent necessary to investigate or 
                        respond to such terrorist incident, 
                        threat, or activity.
          (8) Comptroller General.--
                  (A) Returns available for inspection.--Except 
                as provided in subparagraph (C), upon written 
                request by the Comptroller General of the 
                United States, returns and return information 
                shall be open to inspection by, or disclosure 
                to, officers and employees of the Government 
                Accountability Office for the purpose of, and 
                to the extent necessary in, making--
                          (i) an audit of the Internal Revenue 
                        Service, the Bureau of Alcohol, 
                        Tobacco, Firearms, and Explosives, 
                        Department of Justice, or the Tax and 
                        Trade Bureau, Department of the 
                        Treasury, which may be required by 
                        section 713 of title 31, United States 
                        Code, or
                          (ii) any audit authorized by 
                        subsection (p)(6),
                except that no such officer or employee shall, 
                except to the extent authorized by subsection 
                (f) or (p)(6), disclose to any person, other 
                than another officer or employee of such office 
                whose official duties require such disclosure, 
                any return or return information described in 
                section 4424(a) in a form which can be 
                associated with, or otherwise identify, 
                directly or indirectly, a particular taxpayer, 
                nor shall such officer or employee disclose any 
                other return or return information, except as 
                otherwise expressly provided by law, to any 
                person other than such other officer or 
                employee of such office in a form which can be 
                associated with, or otherwise identify, 
                directly or indirectly, a particular taxpayer.
                  (B) Audits of other agencies.--
                          (i) In general.--Nothing in this 
                        section shall prohibit any return or 
                        return information obtained under this 
                        title by any Federal agency (other than 
                        an agency referred to in subparagraph 
                        (A)) or by a Trustee as defined in the 
                        District of Columbia Retirement 
                        Protection Act of 1997, for use in any 
                        program or activity from being open to 
                        inspection by, or disclosure to, 
                        officers and employees of the 
                        Government Accountability Office if 
                        such inspection or disclosure is--
                                  (I) for purposes of, and to 
                                the extent necessary in, making 
                                an audit authorized by law of 
                                such program or activity, and
                                  (II) pursuant to a written 
                                request by the Comptroller 
                                General of the United States to 
                                the head of such Federal 
                                agency.
                          (ii) Information from Secretary.--If 
                        the Comptroller General of the United 
                        States determines that the returns or 
                        return information available under 
                        clause (i) are not sufficient for 
                        purposes of making an audit of any 
                        program or activity of a Federal agency 
                        (other than an agency referred to in 
                        subparagraph (A)), upon written request 
                        by the Comptroller General to the 
                        Secretary, returns and return 
                        information (of the type authorized by 
                        subsection (l) or (m) to be made 
                        available to the Federal agency for use 
                        in such program or activity) shall be 
                        open to inspection by, or disclosure 
                        to, officers and employees of the 
                        Government Accountability Office for 
                        the purpose of, and to the extent 
                        necessary in, making such audit.
                          (iii) Requirement of notification 
                        upon completion of audit.--Within 90 
                        days after the completion of an audit 
                        with respect to which returns or return 
                        information were opened to inspection 
                        or disclosed under clause (i) or (ii), 
                        the Comptroller General of the United 
                        States shall notify in writing the 
                        Joint Committee on Taxation of such 
                        completion. Such notice shall include--
                                  (I) a description of the use 
                                of the returns and return 
                                information by the Federal 
                                agency involved,
                                  (II) such recommendations 
                                with respect to the use of 
                                returns and return information 
                                by such Federal agency as the 
                                Comptroller General deems 
                                appropriate, and
                                  (III) a statement on the 
                                impact of any such 
                                recommendations on 
                                confidentiality of returns and 
                                return information and the 
                                administration of this title.
                          (iv) Certain restrictions made 
                        applicable.--The restrictions contained 
                        in subparagraph (A) on the disclosure 
                        of any returns or return information 
                        open to inspection or disclosed under 
                        such subparagraph shall also apply to 
                        returns and return information open to 
                        inspection or disclosed under this 
                        subparagraph.
                  (C) Disapproval by Joint Committee on 
                Taxation.--Returns and return information shall 
                not be open to inspection or disclosed under 
                subparagraph (A) or (B) with respect to an 
                audit--
                          (i) unless the Comptroller General of 
                        the United States notifies in writing 
                        the Joint Committee on Taxation of such 
                        audit, and
                          (ii) if the Joint Committee on 
                        Taxation disapproves such audit by a 
                        vote of at least two-thirds of its 
                        members within the 30-day period 
                        beginning on the day the Joint 
                        Committee on Taxation receives such 
                        notice.
  (j) Statistical Use.--
          (1) Department of Commerce.--Upon request in writing 
        by the Secretary of Commerce, the Secretary shall 
        furnish--
                  (A) such returns, or return information 
                reflected thereon, to officers and employees of 
                the Bureau of the Census, and
                  (B) such return information reflected on 
                returns of corporations to officers and 
                employees of the Bureau of Economic Analysis,
        as the Secretary may prescribe by regulation for the 
        purpose of, but only to the extent necessary in, the 
        structuring of censuses and national economic accounts 
        and conducting related statistical activities 
        authorized by law.
          (2) Federal Trade Commission.--Upon request in 
        writing by the Chairman of the Federal Trade 
        Commission, the Secretary shall furnish such return 
        information reflected on any return of a corporation 
        with respect to the tax imposed by chapter 1 to 
        officers and employees of the Division of Financial 
        Statistics of the Bureau of Economics of such 
        commission as the Secretary may prescribe by regulation 
        for the purpose of, but only to the extent necessary 
        in, administration by such division of legally 
        authorized economic surveys of corporations.
          (3) Department of Treasury.--Returns and return 
        information shall be open to inspection by or 
        disclosure to officers and employees of the Department 
        of the Treasury whose official duties require such 
        inspection or disclosure for the purpose of, but only 
        to the extent necessary in, preparing economic or 
        financial forecasts, projections, analyses, and 
        statistical studies and conducting related activities. 
        Such inspection or disclosure shall be permitted only 
        upon written request which sets forth the specific 
        reason or reasons why such inspection or disclosure is 
        necessary and which is signed by the head of the bureau 
        or office of the Department of the Treasury requesting 
        the inspection or disclosure.
          (4) Anonymous form.--No person who receives a return 
        or return information under this subsection shall 
        disclose such return or return information to any 
        person other than the taxpayer to whom it relates 
        except in a form which cannot be associated with, or 
        otherwise identify, directly or indirectly, a 
        particular taxpayer.
          (5) Department of Agriculture.--Upon request in 
        writing by the Secretary of Agriculture, the Secretary 
        shall furnish such returns, or return information 
        reflected thereon, as the Secretary may prescribe by 
        regulation to officers and employees of the Department 
        of Agriculture whose official duties require access to 
        such returns or information for the purpose of, but 
        only to the extent necessary in, structuring, 
        preparing, and conducting the census of agriculture 
        pursuant to the Census of Agriculture Act of 1997 
        (Public Law 105-113).
          (6) Congressional Budget Office.--Upon written 
        request by the Director of the Congressional Budget 
        Office, the Secretary shall furnish to officers and 
        employees of the Congressional Budget Office return 
        information for the purpose of, but only to the extent 
        necessary for, long-term models of the social security 
        and medicare programs.
  (k) Disclosure of Certain Returns and Return Information for 
Tax Administration Purposes.--
          (1) Disclosure of accepted offers-in-compromise.--
        Return information shall be disclosed to members of the 
        general public to the extent necessary to permit 
        inspection of any accepted offer-in-compromise under 
        section 7122 relating to the liability for a tax 
        imposed by this title.
          (2) Disclosure of amount of outstanding lien.--If a 
        notice of lien has been filed pursuant to section 
        6323(f), the amount of the outstanding obligation 
        secured by such lien may be disclosed to any person who 
        furnishes satisfactory written evidence that he has a 
        right in the property subject to such lien or intends 
        to obtain a right in such property.
          (3) Disclosure of return information to correct 
        misstatements of fact.--The Secretary may, but only 
        following approval by the Joint Committee on Taxation, 
        disclose such return information or any other 
        information with respect to any specific taxpayer to 
        the extent necessary for tax administration purposes to 
        correct a misstatement of fact published or disclosed 
        with respect to such taxpayer's return or any 
        transaction of the taxpayer with the Internal Revenue 
        Service.
          (4) Disclosure of competent authority under income 
        tax convention.--A return or return information may be 
        disclosed to a competent authority of a foreign 
        government which has an income tax or gift and estate 
        tax convention, or other convention or bilateral 
        agreement relating to the exchange of tax information, 
        with the United States but only to the extent provided 
        in, and subject to the terms and conditions of, such 
        convention or bilateral agreement.
          (5) State agencies regulating tax return preparers.--
        Taxpayer identity information with respect to any tax 
        return preparer, and information as to whether or not 
        any penalty has been assessed against such tax return 
        preparer under section 6694, 6695, or 7216, may be 
        furnished to any agency, body, or commission lawfully 
        charged under any State or local law with the 
        licensing, registration, or regulation of tax return 
        preparers. Such information may be furnished only upon 
        written request by the head of such agency, body, or 
        commission designating the officers or employees to 
        whom such information is to be furnished. Information 
        may be furnished and used under this paragraph only for 
        purposes of the licensing, registration, or regulation 
        of tax return preparers.
          (6) Disclosure by certain officers and employees for 
        investigative purposes.--An internal revenue officer or 
        employee and an officer or employee of the Office of 
        Treasury Inspector General for Tax Administration may, 
        in connection with his official duties relating to any 
        audit, collection activity, or civil or criminal tax 
        investigation or any other offense under the internal 
        revenue laws, disclose return information to the extent 
        that such disclosure is necessary in obtaining 
        information, which is not otherwise reasonably 
        available, with respect to the correct determination of 
        tax, liability for tax, or the amount to be collected 
        or with respect to the enforcement of any other 
        provision of this title. Such disclosures shall be made 
        only in such situations and under such conditions as 
        the Secretary may prescribe by regulation.
          (7) Disclosure of excise tax registration 
        information.--To the extent the Secretary determines 
        that disclosure is necessary to permit the effective 
        administration of subtitle D, the Secretary may 
        disclose--
                  (A) the name, address, and registration 
                number of each person who is registered under 
                any provision of subtitle D (and, in the case 
                of a registered terminal operator, the address 
                of each terminal operated by such operator), 
                and
                  (B) the registration status of any person.
          (8) Levies on certain government payments.--
                  (A) Disclosure of return information in 
                levies on financial management service.--In 
                serving a notice of levy, or release of such 
                levy, with respect to any applicable government 
                payment, the Secretary may disclose to officers 
                and employees of the Financial Management 
                Service--
                          (i) return information, including 
                        taxpayer identity information,
                          (ii) the amount of any unpaid 
                        liability under this title (including 
                        penalties and interest), and
                          (iii) the type of tax and tax period 
                        to which such unpaid liability relates.
                  (B) Restriction on use of disclosed 
                information.--Return information disclosed 
                under subparagraph (A) may be used by officers 
                and employees of the Financial Management 
                Service only for the purpose of, and to the 
                extent necessary in, transferring levied funds 
                in satisfaction of the levy, maintaining 
                appropriate agency records in regard to such 
                levy or the release thereof, notifying the 
                taxpayer and the agency certifying such payment 
                that the levy has been honored, or in the 
                defense of any litigation ensuing from the 
                honor of such levy.
                  (C) Applicable government payment.--For 
                purposes of this paragraph, the term 
                ``applicable government payment'' means--
                          (i) any Federal payment (other than a 
                        payment for which eligibility is based 
                        on the income or assets (or both) of a 
                        payee) certified to the Financial 
                        Management Service for disbursement, 
                        and
                          (ii) any other payment which is 
                        certified to the Financial Management 
                        Service for disbursement and which the 
                        Secretary designates by published 
                        notice.
          (9) Disclosure of information to administer section 
        6311.--The Secretary may disclose returns or return 
        information to financial institutions and others to the 
        extent the Secretary deems necessary for the 
        administration of section 6311. Disclosures of 
        information for purposes other than to accept payments 
        by checks or money orders shall be made only to the 
        extent authorized by written procedures promulgated by 
        the Secretary.
          (10) Disclosure of certain returns and return 
        information to certain prison officials.--
                  (A) In general.--Under such procedures as the 
                Secretary may prescribe, the Secretary may 
                disclose to officers and employees of the 
                Federal Bureau of Prisons and of any State 
                agency charged with the responsibility for 
                administration of prisons any returns or return 
                information with respect to individuals 
                incarcerated in Federal or State prison systems 
                whom the Secretary has determined may have 
                filed or facilitated the filing of a false or 
                fraudulent return to the extent that the 
                Secretary determines that such disclosure is 
                necessary to permit effective Federal tax 
                administration.
                  (B) Disclosure to contractor-run prisons.--
                Under such procedures as the Secretary may 
                prescribe, the disclosures authorized by 
                subparagraph (A) may be made to contractors 
                responsible for the operation of a Federal or 
                State prison on behalf of such Bureau or 
                agency.
                  (C) Restrictions on use of disclosed 
                information.--Any return or return information 
                received under this paragraph shall be used 
                only for the purposes of and to the extent 
                necessary in taking administrative action to 
                prevent the filing of false and fraudulent 
                returns, including administrative actions to 
                address possible violations of administrative 
                rules and regulations of the prison facility 
                and in administrative and judicial proceedings 
                arising from such administrative actions.
                  (D) Restrictions on redisclosure and 
                disclosure to legal representatives.--
                Notwithstanding subsection (h)--
                          (i) Restrictions on redisclosure.--
                        Except as provided in clause (ii), any 
                        officer, employee, or contractor of the 
                        Federal Bureau of Prisons or of any 
                        State agency charged with the 
                        responsibility for administration of 
                        prisons shall not disclose any 
                        information obtained under this 
                        paragraph to any person other than an 
                        officer or employee or contractor of 
                        such Bureau or agency personally and 
                        directly engaged in the administration 
                        of prison facilities on behalf of such 
                        Bureau or agency.
                          (ii) Disclosure to legal 
                        representatives.--The returns and 
                        return information disclosed under this 
                        paragraph may be disclosed to the duly 
                        authorized legal representative of the 
                        Federal Bureau of Prisons, State 
                        agency, or contractor charged with the 
                        responsibility for administration of 
                        prisons, or of the incarcerated 
                        individual accused of filing the false 
                        or fraudulent return who is a party to 
                        an action or proceeding described in 
                        subparagraph (C), solely in preparation 
                        for, or for use in, such action or 
                        proceeding.
          (11) Disclosure of return information to Department 
        of State for purposes of passport revocation under 
        section 7345.--
                  (A) In general.--The Secretary shall, upon 
                receiving a certification described in section 
                7345, disclose to the Secretary of State return 
                information with respect to a taxpayer who has 
                a seriously delinquent tax debt described in 
                such section. Such return information shall be 
                limited to--
                          (i) the taxpayer identity information 
                        with respect to such taxpayer, and
                          (ii) the amount of such seriously 
                        delinquent tax debt.
                  (B) Restriction on disclosure.--Return 
                information disclosed under subparagraph (A) 
                may be used by officers and employees of the 
                Department of State for the purposes of, and to 
                the extent necessary in, carrying out the 
                requirements of section 32101 of the FAST Act.
          (12) Qualified tax collection contractors.--Persons 
        providing services pursuant to a qualified tax 
        collection contract under section 6306 may, if speaking 
        to a person who has identified himself or herself as 
        having the name of the taxpayer to which a tax 
        receivable (within the meaning of such section) 
        relates, identify themselves as contractors of the 
        Internal Revenue Service and disclose the business name 
        of the contractor, and the nature, subject, and reason 
        for the contact. Disclosures under this paragraph shall 
        be made only in such situations and under such 
        conditions as have been approved by the Secretary.
          (13) Disclosure of return information for purposes of 
        cybersecurity and the prevention of identity theft tax 
        refund fraud.--
                  (A) In general.--Under such procedures and 
                subject to such conditions as the Secretary may 
                prescribe, the Secretary may disclose specified 
                return information to specified ISAC 
                participants to the extent that the Secretary 
                determines such disclosure is in furtherance of 
                effective Federal tax administration relating 
                to the detection or prevention of identity 
                theft tax refund fraud, validation of taxpayer 
                identity, authentication of taxpayer returns, 
                or detection or prevention of cybersecurity 
                threats.
                  (B) Specified isac participants.--For 
                purposes of this paragraph--
                          (i) In general.--The term ``specified 
                        ISAC participant'' means--
                                  (I) any person designated by 
                                the Secretary as having primary 
                                responsibility for a function 
                                performed with respect to the 
                                information sharing and 
                                analysis center described in 
                                section 403(a) of the 21st 
                                Century IRS Act, and
                                  (II) any person subject to 
                                the requirements of section 
                                7216 and which is a participant 
                                in such information sharing and 
                                analysis center.
                          (ii) Information sharing agreement.--
                        Such term shall not include any person 
                        unless such person has entered into a 
                        written agreement with the Secretary 
                        setting forth the terms and conditions 
                        for the disclosure of information to 
                        such person under this paragraph, 
                        including requirements regarding the 
                        protection and safeguarding of such 
                        information by such person.
                  (C) Specified return information.--For 
                purposes of this paragraph, the term 
                ``specified return information'' means--
                          (i) in the case of a return which is 
                        in connection with a case of potential 
                        identity theft refund fraud--
                                  (I) in the case of such 
                                return filed electronically, 
                                the internet protocol address, 
                                device identification, email 
                                domain name, speed of 
                                completion, method of 
                                authentication, refund method, 
                                and such other return 
                                information related to the 
                                electronic filing 
                                characteristics of such return 
                                as the Secretary may identify 
                                for purposes of this subclause, 
                                and
                                  (II) in the case of such 
                                return prepared by a tax return 
                                preparer, identifying 
                                information with respect to 
                                such tax return preparer, 
                                including the preparer taxpayer 
                                identification number and 
                                electronic filer identification 
                                number of such preparer,
                          (ii) in the case of a return which is 
                        in connection with a case of a identity 
                        theft refund fraud which has been 
                        confirmed by the Secretary (pursuant to 
                        such procedures as the Secretary may 
                        provide), the information referred to 
                        in subclauses (I) and (II) of clause 
                        (i), the name and taxpayer 
                        identification number of the taxpayer 
                        as it appears on the return, and any 
                        bank account and routing information 
                        provided for making a refund in 
                        connection with such return, and
                          (iii) in the case of any 
                        cybersecurity threat to the Internal 
                        Revenue Service, information similar to 
                        the information described in subclauses 
                        (I) and (II) of clause (i) with respect 
                        to such threat.
                  (D) Restriction on use of disclosed 
                information.--
                          (i) Designated third parties.--Any 
                        return information received by a person 
                        described in subparagraph (B)(i)(I) 
                        shall be used only for the purposes of 
                        and to the extent necessary in--
                                  (I) performing the function 
                                such person is designated to 
                                perform under such 
                                subparagraph,
                                  (II) facilitating disclosures 
                                authorized under subparagraph 
                                (A) to persons described in 
                                subparagraph (B)(i)(II), and
                                  (III) facilitating 
                                disclosures authorized under 
                                subsection (d) to participants 
                                in such information sharing and 
                                analysis center.
                          (ii) Return preparers.--Any return 
                        information received by a person 
                        described in subparagraph (B)(i)(II) 
                        shall be treated for purposes of 
                        section 7216 as information furnished 
                        to such person for, or in connection 
                        with, the preparation of a return of 
                        the tax imposed under chapter 1.
                  (E) Data protection and safeguards.--Return 
                information disclosed under this paragraph 
                shall be subject to such protections and 
                safeguards as the Secretary may require in 
                regulations or other guidance or in the written 
                agreement referred to in subparagraph (B)(ii). 
                Such written agreement shall include a 
                requirement that any unauthorized access to 
                information disclosed under this paragraph, and 
                any breach of any system in which such 
                information is held, be reported to the 
                Treasury Inspector General for Tax 
                Administration.
  (l) Disclosure of Returns and Return Information for Purposes 
Other Than Tax Administration.--
          (1) Disclosure of certain returns and return 
        information to Social Security Administration and 
        Railroad Retirement Board.--The Secretary may, upon 
        written request, disclose returns and return 
        information with respect to--
                  (A) taxes imposed by chapters 2, 21, and 24, 
                to the Social Security Administration for 
                purposes of its administration of the Social 
                Security Act;
                  (B) a plan to which part I of subchapter D of 
                chapter 1 applies, to the Social Security 
                Administration for purposes of carrying out its 
                responsibility under section 1131 of the Social 
                Security Act, limited, however to return 
                information described in section 6057(d); and
                  (C) taxes imposed by chapter 22, to the 
                Railroad Retirement Board for purposes of its 
                administration of the Railroad Retirement Act.
          (2) Disclosure of returns and return information to 
        the Department of Labor and Pension Benefit Guaranty 
        Corporation.--The Secretary may, upon written request, 
        furnish returns and return information to the proper 
        officers and employees of the Department of Labor and 
        the Pension Benefit Guaranty Corporation for purposes 
        of, but only to the extent necessary in, the 
        administration of titles I and IV of the Employee 
        Retirement Income Security Act of 1974.
          (3) Disclosure that applicant for Federal loan has 
        tax delinquent account.--
                  (A) In general.--Upon written request, the 
                Secretary may disclose to the head of the 
                Federal agency administering any included 
                Federal loan program whether or not an 
                applicant for a loan under such program has a 
                tax delinquent account.
                  (B) Restriction on disclosure.--Any 
                disclosure under subparagraph (A) shall be made 
                only for the purpose of, and to the extent 
                necessary in, determining the creditworthiness 
                of the applicant for the loan in question.
                  (C) Included Federal loan program defined.--
                For purposes of this paragraph, the term 
                ``included Federal loan program'' means any 
                program under which the United States or a 
                Federal agency makes, guarantees, or insures 
                loans.
          (4) Disclosure of returns and return information for 
        use in personnel or claimant representative matters.--
        The Secretary may disclose returns and return 
        information--
                  (A) upon written request--
                          (i) to an employee or former employee 
                        of the Department of the Treasury, or 
                        to the duly authorized legal 
                        representative of such employee or 
                        former employee, who is or may be a 
                        party to any administrative action or 
                        proceeding affecting the personnel 
                        rights of such employee or former 
                        employee; or
                          (ii) to any person, or to the duly 
                        authorized legal representative of such 
                        person, whose rights are or may be 
                        affected by an administrative action or 
                        proceeding under section 330 of title 
                        31, United States Code,
                solely for use in the action or proceeding, or 
                in preparation for the action or proceeding, 
                but only to the extent that the Secretary 
                determines that such returns or return 
                information is or may be relevant and material 
                to the action or proceeding; or
                  (B) to officers and employees of the 
                Department of the Treasury for use in any 
                action or proceeding described in subparagraph 
                (A), or in preparation for such action or 
                proceeding, to the extent necessary to advance 
                or protect the interests of the United States.
          (5) Social Security Administration.--Upon written 
        request by the Commissioner of Social Security, the 
        Secretary may disclose information returns filed 
        pursuant to part III of subchapter A of chapter 61 of 
        this subtitle for the purpose of--
                  (A) carrying out, in accordance with an 
                agreement entered into pursuant to section 232 
                of the Social Security Act, an effective return 
                processing program; or
                  (B) providing information regarding the 
                mortality status of individuals for 
                epidemiological and similar research in 
                accordance with section 1106(d) of the Social 
                Security Act.
          (6) Disclosure of return information to Federal, 
        State, and local child support enforcement agencies.--
                  (A) Return information from Internal Revenue 
                Service.--The Secretary may, upon written 
                request, disclose to the appropriate Federal, 
                State, or local child support enforcement 
                agency--
                          (i) available return information from 
                        the master files of the Internal 
                        Revenue Service relating to the social 
                        security account number (or numbers, if 
                        the individual involved has more than 
                        one such number), address, filing 
                        status, amounts and nature of income, 
                        and the number of dependents reported 
                        on any return filed by, or with respect 
                        to, any individual with respect to whom 
                        child support obligations are sought to 
                        be established or enforced pursuant to 
                        the provisions of part D of title IV of 
                        the Social Security Act and with 
                        respect to any individual to whom such 
                        support obligations are owing, and
                          (ii) available return information 
                        reflected on any return filed by, or 
                        with respect to, any individual 
                        described in clause (i) relating to the 
                        amount of such individual's gross 
                        income (as defined in section 61) or 
                        consisting of the names and addresses 
                        of payors of such income and the names 
                        of any dependents reported on such 
                        return, but only if such return 
                        information is not reasonably available 
                        from any other source.
                  (B) Disclosure to certain agents.--The 
                following information disclosed to any child 
                support enforcement agency under subparagraph 
                (A) with respect to any individual with respect 
                to whom child support obligations are sought to 
                be established or enforced may be disclosed by 
                such agency to any agent of such agency which 
                is under contract with such agency to carry out 
                the purposes described in subparagraph (C):
                          (i) The address and social security 
                        account number (or numbers) of such 
                        individual.
                          (ii) The amount of any reduction 
                        under section 6402(c) (relating to 
                        offset of past-due support against 
                        overpayments) in any overpayment 
                        otherwise payable to such individual.
                  (C) Restriction on disclosure.--Information 
                may be disclosed under this paragraph only for 
                purposes of, and to the extent necessary in, 
                establishing and collecting child support 
                obligations from, and locating, individuals 
                owing such obligations.
          (7) Disclosure of return information to Federal, 
        State, and local agencies administering certain 
        programs under the Social Security Act, the Food and 
        Nutrition Act of 2008 of 1977, or title 38, United 
        States Code, or certain housing assistance programs
                  (A) Return information from Social Security 
                Administration.--The Commissioner of Social 
                Security shall, upon written request, disclose 
                return information from returns with respect to 
                net earnings from self-employment (as defined 
                in section 1402), wages (as defined in section 
                3121(a) or 3401(a)), and payments of retirement 
                income, which have been disclosed to the Social 
                Security Administration as provided by 
                paragraph (1) or (5) of this subsection, to any 
                Federal, State, or local agency administering a 
                program listed in subparagraph (D).
                  (B) Return information from Internal Revenue 
                Service.--The Secretary shall, upon written 
                request, disclose current return information 
                from returns with respect to unearned income 
                from the Internal Revenue Service files to any 
                Federal, State, or local agency administering a 
                program listed in subparagraph (D).
                  (C) Restriction on disclosure.--The 
                Commissioner of Social Security and the 
                Secretary shall disclose return information 
                under subparagraphs (A) and (B) only for 
                purposes of, and to the extent necessary in, 
                determining eligibility for, or the correct 
                amount of, benefits under a program listed in 
                subparagraph (D).
                  (D) Programs to which rule applies.--The 
                programs to which this paragraph applies are:
                          (i) a State program funded under part 
                        A of title IV of the Social Security 
                        Act;
                          (ii) medical assistance provided 
                        under a State plan approved under title 
                        XIX of the Social Security Act or 
                        subsidies provided under section 1860D-
                        14 of such Act;
                          (iii) supplemental security income 
                        benefits provided under title XVI of 
                        the Social Security Act, and federally 
                        administered supplementary payments of 
                        the type described in section 1616(a) 
                        of such Act (including payments 
                        pursuant to an agreement entered into 
                        under section 212(a) of Public Law 93-
                        66);
                          (iv) any benefits provided under a 
                        State plan approved under title I, X, 
                        XIV, or XVI of the Social Security Act 
                        (as those titles apply to Puerto Rico, 
                        Guam, and the Virgin Islands);
                          (v) unemployment compensation 
                        provided under a State law described in 
                        section 3304 of this title;
                          (vi) assistance provided under the 
                        Food and Nutrition Act of 2008;
                          (vii) State-administered 
                        supplementary payments of the type 
                        described in section 1616(a) of the 
                        Social Security Act (including payments 
                        pursuant to an agreement entered into 
                        under section 212(a) of Public Law 93-
                        66);
                          (viii)(I) any needs-based pension 
                        provided under chapter 15 of title 38, 
                        United States Code, or under any other 
                        law administered by the Secretary of 
                        Veterans Affairs;
                                  (II) parents' dependency and 
                                indemnity compensation provided 
                                under section 1315 of title 38, 
                                United States Code;
                                  (III) health-care services 
                                furnished under sections 
                                1710(a)(2)(G), 1710(a)(3), and 
                                1710(b) of such title; and
                                  (IV) compensation paid under 
                                chapter 11 of title 38, United 
                                States Code, at the 100 percent 
                                rate based solely on 
                                unemployability and without 
                                regard to the fact that the 
                                disability or disabilities are 
                                not rated as 100 percent 
                                disabling under the rating 
                                schedule; and
                          (ix) any housing assistance program 
                        administered by the Department of 
                        Housing and Urban Development that 
                        involves initial and periodic review of 
                        an applicant's or participant's income, 
                        except that return information may be 
                        disclosed under this clause only on 
                        written request by the Secretary of 
                        Housing and Urban Development and only 
                        for use by officers and employees of 
                        the Department of Housing and Urban 
                        Development with respect to applicants 
                        for and participants in such programs.
                Only return information from returns with 
                respect to net earnings from self-employment 
                and wages may be disclosed under this paragraph 
                for use with respect to any program described 
                in clause (viii)(IV).
          (8) Disclosure of certain return information by 
        Social Security Administration to Federal, State, and 
        local child support enforcement agencies.--
                  (A) In general.--Upon written request, the 
                Commissioner of Social Security shall disclose 
                directly to officers and employees of a Federal 
                or State or local child support enforcement 
                agency return information from returns with 
                respect to social security account numbers, net 
                earnings from self-employment (as defined in 
                section 1402), wages (as defined in section 
                3121(a) or 3401(a)), and payments of retirement 
                income which have been disclosed to the Social 
                Security Administration as provided by 
                paragraph (1) or (5) of this subsection.
                  (B) Restriction on disclosure.--The 
                Commissioner of Social Security shall disclose 
                return information under subparagraph (A) only 
                for purposes of, and to the extent necessary 
                in, establishing and collecting child support 
                obligations from, and locating, individuals 
                owing such obligations. For purposes of the 
                preceding sentence, the term ``child support 
                obligations'' only includes obligations which 
                are being enforced pursuant to a plan described 
                in section 454 of the Social Security Act which 
                has been approved by the Secretary of Health 
                and Human Services under part D of title IV of 
                such Act.
                  (C) State or local child support enforcement 
                agency.--For purposes of this paragraph, the 
                term ``State or local child support enforcement 
                agency'' means any agency of a State or 
                political subdivision thereof operating 
                pursuant to a plan described in subparagraph 
                (B).
          (9) Disclosure of alcohol fuel producers to 
        administrators of State alcohol laws.--Notwithstanding 
        any other provision of this section, the Secretary may 
        disclose--
                  (A) the name and address of any person who is 
                qualified to produce alcohol for fuel use under 
                section 5181, and
                  (B) the location of any premises to be used 
                by such person in producing alcohol for fuel,
        to any State agency, body, or commission, or its legal 
        representative, which is charged under the laws of such 
        State with responsibility for administration of State 
        alcohol laws solely for use in the administration of 
        such laws.
          (10) Disclosure of certain information to agencies 
        requesting a reduction under subsection (c), (d), (e), 
        or (f) of section 6402.--
                  (A) Return information from Internal Revenue 
                Service.--The Secretary may, upon receiving a 
                written request, disclose to officers and 
                employees of any agency seeking a reduction 
                under subsection (c), (d), (e), or (f) of 
                section 6402, to officers and employees of the 
                Department of Labor for purposes of 
                facilitating the exchange of data in connection 
                with a request made under subsection (f)(5) of 
                section 6402, and to officers and employees of 
                the Department of the Treasury in connection 
                with such reduction--
                          (i) taxpayer identity information 
                        with respect to the taxpayer against 
                        whom such a reduction was made or not 
                        made and with respect to any other 
                        person filing a joint return with such 
                        taxpayer,
                          (ii) the fact that a reduction has 
                        been made or has not been made under 
                        such subsection with respect to such 
                        taxpayer,
                          (iii) the amount of such reduction,
                          (iv) whether such taxpayer filed a 
                        joint return, and
                          (v) the fact that a payment was made 
                        (and the amount of the payment) to the 
                        spouse of the taxpayer on the basis of 
                        a joint return.
                  (B)(i) Restriction on use of disclosed 
                information
                  Any officers and employees of an agency 
                receiving return information under subparagraph 
                (A) shall use such information only for the 
                purposes of, and to the extent necessary in, 
                establishing appropriate agency records, 
                locating any person with respect to whom a 
                reduction under subsection (c), (d), (e), or 
                (f) of section 6402 is sought for purposes of 
                collecting the debt with respect to which the 
                reduction is sought, or in the defense of any 
                litigation or administrative procedure ensuing 
                from a reduction made under subsection (c), 
                (d), (e), or (f) of section 6402 and to 
                officers and employees of the Department of the 
                Treasury in connection with such reduction.
                          (ii) Notwithstanding clause (i), 
                        return information disclosed to 
                        officers and employees of the 
                        Department of Labor may be accessed by 
                        agents who maintain and provide 
                        technological support to the Department 
                        of Labor's Interstate Connection 
                        Network (ICON) solely for the purpose 
                        of providing such maintenance and 
                        support.
          (11) Disclosure of return information to carry out 
        Federal Employees' Retirement System.--
                  (A) In general.--The Commissioner of Social 
                Security shall, on written request, disclose to 
                the Office of Personnel Management return 
                information from returns with respect to net 
                earnings from self-employment (as defined in 
                section 1402), wages (as defined in section 
                3121(a) or 3401(a)), and payments of retirement 
                income, which have been disclosed to the Social 
                Security Administration as provided by 
                paragraph (1) or (5).
                  (B) Restriction on disclosure.--The 
                Commissioner of Social Security shall disclose 
                return information under subparagraph (A) only 
                for purposes of, and to the extent necessary 
                in, the administration of chapters 83 and 84 of 
                title 5, United States Code.
          (12) Disclosure of certain taxpayer identity 
        information for verification of employment status of 
        medicare beneficiary and spouse of medicare 
        beneficiary.--
                  (A) Return information from Internal Revenue 
                Service.--The Secretary shall, upon written 
                request from the Commissioner of Social 
                Security, disclose to the Commissioner 
                available filing status and taxpayer identity 
                information from the individual master files of 
                the Internal Revenue Service relating to 
                whether any medicare beneficiary identified by 
                the Commissioner was a married individual (as 
                defined in section 7703) for any specified year 
                after 1986, and, if so, the name of the spouse 
                of such individual and such spouse's TIN.
                  (B) Return information from Social Security 
                Administration.--The Commissioner of Social 
                Security shall, upon written request from the 
                Administrator of the Centers for Medicare & 
                Medicaid Services, disclose to the 
                Administrator the following information:
                          (i) The name and TIN of each medicare 
                        beneficiary who is identified as having 
                        received wages (as defined in section 
                        3401(a)), above an amount (if any) 
                        specified by the Secretary of Health 
                        and Human Services, from a qualified 
                        employer in a previous year.
                          (ii) For each medicare beneficiary 
                        who was identified as married under 
                        subparagraph (A) and whose spouse is 
                        identified as having received wages, 
                        above an amount (if any) specified by 
                        the Secretary of Health and Human 
                        Services, from a qualified employer in 
                        a previous year--
                                  (I) the name and TIN of the 
                                medicare beneficiary, and
                                  (II) the name and TIN of the 
                                spouse.
                          (iii) With respect to each such 
                        qualified employer, the name, address, 
                        and TIN of the employer and the number 
                        of individuals with respect to whom 
                        written statements were furnished under 
                        section 6051 by the employer with 
                        respect to such previous year.
                  (C) Disclosure by Centers for Medicare & 
                Medicaid Services.--With respect to the 
                information disclosed under subparagraph (B), 
                the Administrator of the Centers for Medicare & 
                Medicaid Services may disclose--
                          (i) to the qualified employer 
                        referred to in such subparagraph the 
                        name and TIN of each individual 
                        identified under such subparagraph as 
                        having received wages from the employer 
                        (hereinafter in this subparagraph 
                        referred to as the ``employee'') for 
                        purposes of determining during what 
                        period such employee or the employee's 
                        spouse may be (or have been) covered 
                        under a group health plan of the 
                        employer and what benefits are or were 
                        covered under the plan (including the 
                        name, address, and identifying number 
                        of the plan),
                          (ii) to any group health plan which 
                        provides or provided coverage to such 
                        an employee or spouse, the name of such 
                        employee and the employee's spouse (if 
                        the spouse is a medicare beneficiary) 
                        and the name and address of the 
                        employer, and, for the purpose of 
                        presenting a claim to the plan--
                                  (I) the TIN of such employee 
                                if benefits were paid under 
                                title XVIII of the Social 
                                Security Act with respect to 
                                the employee during a period in 
                                which the plan was a primary 
                                plan (as defined in section 
                                1862(b)(2)(A) of the Social 
                                Security Act), and
                                  (II) the TIN of such spouse 
                                if benefits were paid under 
                                such title with respect to the 
                                spouse during such period, and
                          (iii) to any agent of such 
                        Administrator the information referred 
                        to in subparagraph (B) for purposes of 
                        carrying out clauses (i) and (ii) on 
                        behalf of such Administrator.
                  (D) Special rules.--
                          (i) Restrictions on disclosure.--
                        Information may be disclosed under this 
                        paragraph only for purposes of, and to 
                        the extent necessary in, determining 
                        the extent to which any medicare 
                        beneficiary is covered under any group 
                        health plan.
                          (ii) Timely response to requests.--
                        Any request made under subparagraph (A) 
                        or (B) shall be complied with as soon 
                        as possible but in no event later than 
                        120 days after the date the request was 
                        made.
                  (E) Definitions.--For purposes of this 
                paragraph--
                          (i) Medicare beneficiary.--The term 
                        ``medicare beneficiary'' means an 
                        individual entitled to benefits under 
                        part A, or enrolled under part B, of 
                        title XVIII of the Social Security Act, 
                        but does not include such an individual 
                        enrolled in part A under section 1818.
                          (ii) Group health plan.--The term 
                        ``group health plan'' means any group 
                        health plan (as defined in section 
                        5000(b)(1)).
                          (iii) Qualified employer.--The term 
                        ``qualified employer'' means, for a 
                        calendar year, an employer which has 
                        furnished written statements under 
                        section 6051 with respect to at least 
                        20 individuals for wages paid in the 
                        year.
          (13) Disclosure of return information to carry out 
        income contingent repayment of student loans.--
                  (A) In general.--The Secretary may, upon 
                written request from the Secretary of 
                Education, disclose to officers and employees 
                of the Department of Education return 
                information with respect to a taxpayer who has 
                received an applicable student loan and whose 
                loan repayment amounts are based in whole or in 
                part on the taxpayer's income. Such return 
                information shall be limited to--
                          (i) taxpayer identity information 
                        with respect to such taxpayer,
                          (ii) the filing status of such 
                        taxpayer, and
                          (iii) the adjusted gross income of 
                        such taxpayer.
                  (B) Restriction on use of disclosed 
                information.--Return information disclosed 
                under subparagraph (A) may be used by officers 
                and employees of the Department of Education 
                only for the purposes of, and to the extent 
                necessary in, establishing the appropriate 
                income contingent repayment amount for an 
                applicable student loan.
                  (C) Applicable student loan.--For purposes of 
                this paragraph, the term ``applicable student 
                loan'' means--
                          (i) any loan made under the program 
                        authorized under part D of title IV of 
                        the Higher Education Act of 1965, and
                          (ii) any loan made under part B or E 
                        of title IV of the Higher Education Act 
                        of 1965 which is in default and has 
                        been assigned to the Department of 
                        Education.
                  (D) Termination.--This paragraph shall not 
                apply to any request made after December 31, 
                2007.
          (14) Disclosure of return information to United 
        States Customs Service.--The Secretary may, upon 
        written request from the Commissioner of the United 
        States Customs Service, disclose to officers and 
        employees of the Department of the Treasury such return 
        information with respect to taxes imposed by chapters 1 
        and 6 as the Secretary may prescribe by regulations, 
        solely for the purpose of, and only to the extent 
        necessary in--
                  (A) ascertaining the correctness of any entry 
                in audits as provided for in section 509 of the 
                Tariff Act of 1930 (19 U.S.C. 1509), or
                  (B) other actions to recover any loss of 
                revenue, or to collect duties, taxes, and fees, 
                determined to be due and owing pursuant to such 
                audits.
          (15) Disclosure of returns filed under section 
        6050I.--The Secretary may, upon written request, 
        disclose to officers and employees of--
                  (A) any Federal agency,
                  (B) any agency of a State or local 
                government, or
                  (C) any agency of the government of a foreign 
                country, information contained on returns filed 
                under section 6050I. Any such disclosure shall 
                be made on the same basis, and subject to the 
                same conditions, as apply to disclosures of 
                information on reports filed under section 5313 
                of title 31, United States Code; except that no 
                disclosure under this paragraph shall be made 
                for purposes of the administration of any tax 
                law.
          (16) Disclosure of return information for purposes of 
        administering the District of Columbia Retirement 
        Protection Act of 1997.--
                  (A) In general.--Upon written request 
                available return information (including such 
                information disclosed to the Social Security 
                Administration under paragraph (1) or (5) of 
                this subsection), relating to the amount of 
                wage income (as defined in section 3121(a) or 
                3401(a)), the name, address, and identifying 
                number assigned under section 6109, of payors 
                of wage income, taxpayer identity (as defined 
                in subsection 6103 (b)(6)), and the 
                occupational status reflected on any return 
                filed by, or with respect to, any individual 
                with respect to whom eligibility for, or the 
                correct amount of, benefits under the District 
                of Columbia Retirement Protection Act of 1997, 
                is sought to be determined, shall be disclosed 
                by the Commissioner of Social Security, or to 
                the extent not available from the Social 
                Security Administration, by the Secretary, to 
                any duly authorized officer or employee of the 
                Department of the Treasury, or a Trustee or any 
                designated officer or employee of a Trustee (as 
                defined in the District of Columbia Retirement 
                Protection Act of 1997), or any actuary engaged 
                by a Trustee under the terms of the District of 
                Columbia Retirement Protection Act of 1997, 
                whose official duties require such disclosure, 
                solely for the purpose of, and to the extent 
                necessary in, determining an individual's 
                eligibility for, or the correct amount of, 
                benefits under the District of Columbia 
                Retirement Protection Act of 1997.
                  (B) Disclosure for use in judicial or 
                administrative proceedings.--Return information 
                disclosed to any person under this paragraph 
                may be disclosed in a judicial or 
                administrative proceeding relating to the 
                determination of an individual's eligibility 
                for, or the correct amount of, benefits under 
                the District of Columbia Retirement Protection 
                Act of 1997.
          (17) Disclosure to National Archives and Records 
        Administration.--The Secretary shall, upon written 
        request from the Archivist of the United States, 
        disclose or authorize the disclosure of returns and 
        return information to officers and employees of the 
        National Archives and Records Administration for 
        purposes of, and only to the extent necessary in, the 
        appraisal of records for destruction or retention. No 
        such officer or employee shall, except to the extent 
        authorized by subsection (f), (i)(8), or (p), disclose 
        any return or return information disclosed under the 
        preceding sentence to any person other than to the 
        Secretary, or to another officer or employee of the 
        National Archives and Records Administration whose 
        official duties require such disclosure for purposes of 
        such appraisal.
          (18) Disclosure of return information for purposes of 
        carrying out a program for advance payment of credit 
        for health insurance costs of eligible individuals.--
        The Secretary may disclose to providers of health 
        insurance for any certified individual (as defined in 
        section 7527(c)) return information with respect to 
        such certified individual only to the extent necessary 
        to carry out the program established by section 7527 
        (relating to advance payment of credit for health 
        insurance costs of eligible individuals).
          (19) Disclosure of return information for purposes of 
        providing transitional assistance under medicare 
        discount card program.--
                  (A) In general.--The Secretary, upon written 
                request from the Secretary of Health and Human 
                Services pursuant to carrying out section 
                1860D-31 of the Social Security Act, shall 
                disclose to officers, employees, and 
                contractors of the Department of Health and 
                Human Services with respect to a taxpayer for 
                the applicable year--
                          (i)(I) whether the adjusted gross 
                        income, as modified in accordance with 
                        specifications of the Secretary of 
                        Health and Human Services for purposes 
                        of carrying out such section, of such 
                        taxpayer and, if applicable, such 
                        taxpayer's spouse, for the applicable 
                        year, exceeds the amounts specified by 
                        the Secretary of Health and Human 
                        Services in order to apply the 100 and 
                        135 percent of the poverty lines under 
                        such section, (II) whether the return 
                        was a joint return, and (III) the 
                        applicable year, or
                          (ii) if applicable, the fact that 
                        there is no return filed for such 
                        taxpayer for the applicable year.
                  (B) Definition of applicable year.--For the 
                purposes of this subsection, the term 
                ``applicable year'' means the most recent 
                taxable year for which information is available 
                in the Internal Revenue Service's taxpayer data 
                information systems, or, if there is no return 
                filed for such taxpayer for such year, the 
                prior taxable year.
                  (C) Restriction on use of disclosed 
                information.--Return information disclosed 
                under this paragraph may be used only for the 
                purposes of determining eligibility for and 
                administering transitional assistance under 
                section 1860D-31 of the Social Security Act.
          (20) Disclosure of return information to carry out 
        Medicare part B premium subsidy adjustment and part D 
        base beneficiary premium increase.--
                  (A) In general.--The Secretary shall, upon 
                written request from the Commissioner of Social 
                Security, disclose to officers, employees, and 
                contractors of the Social Security 
                Administration return information of a taxpayer 
                whose premium (according to the records of the 
                Secretary) may be subject to adjustment under 
                section 1839(i) or increase under section 
                1860D-13(a)(7) of the Social Security Act. Such 
                return information shall be limited to--
                          (i) taxpayer identity information 
                        with respect to such taxpayer,
                          (ii) the filing status of such 
                        taxpayer,
                          (iii) the adjusted gross income of 
                        such taxpayer,
                          (iv) the amounts excluded from such 
                        taxpayer's gross income under sections 
                        135 and 911 to the extent such 
                        information is available,
                          (v) the interest received or accrued 
                        during the taxable year which is exempt 
                        from the tax imposed by chapter 1 to 
                        the extent such information is 
                        available,
                          (vi) the amounts excluded from such 
                        taxpayer's gross income by sections 931 
                        and 933 to the extent such information 
                        is available,
                          (vii) such other information relating 
                        to the liability of the taxpayer as is 
                        prescribed by the Secretary by 
                        regulation as might indicate in the 
                        case of a taxpayer who is an individual 
                        described in subsection (i)(4)(B)(iii) 
                        of section 1839 of the Social Security 
                        Act that the amount of the premium of 
                        the taxpayer under such section may be 
                        subject to adjustment under subsection 
                        (i) of such section or increase under 
                        section 1860D-13(a)(7) of such Act and 
                        the amount of such adjustment, and
                          (viii) the taxable year with respect 
                        to which the preceding information 
                        relates.
                  (B) Restriction on use of disclosed 
                information.--
                          (i) In general.--Return information 
                        disclosed under subparagraph (A) may be 
                        used by officers, employees, and 
                        contractors of the Social Security 
                        Administration only for the purposes 
                        of, and to the extent necessary in, 
                        establishing the appropriate amount of 
                        any premium adjustment under such 
                        section 1839(i) or increase under such 
                        section 1860D-13(a)(7) or for the 
                        purpose of resolving taxpayer appeals 
                        with respect to any such premium 
                        adjustment or increase.
                          (ii) Disclosure to other agencies.--
                        Officers, employees, and contractors of 
                        the Social Security Administration may 
                        disclose--
                                  (I) the taxpayer identity 
                                information and the amount of 
                                the premium subsidy adjustment 
                                or premium increase with 
                                respect to a taxpayer described 
                                in subparagraph (A) to 
                                officers, employees, and 
                                contractors of the Centers for 
                                Medicare and Medicaid Services, 
                                to the extent that such 
                                disclosure is necessary for the 
                                collection of the premium 
                                subsidy amount or the increased 
                                premium amount,
                                  (II) the taxpayer identity 
                                information and the amount of 
                                the premium subsidy adjustment 
                                or the increased premium amount 
                                with respect to a taxpayer 
                                described in subparagraph (A) 
                                to officers and employees of 
                                the Office of Personnel 
                                Management and the Railroad 
                                Retirement Board, to the extent 
                                that such disclosure is 
                                necessary for the collection of 
                                the premium subsidy amount or 
                                the increased premium amount,
                                  (III) return information with 
                                respect to a taxpayer described 
                                in subparagraph (A) to officers 
                                and employees of the Department 
                                of Health and Human Services to 
                                the extent necessary to resolve 
                                administrative appeals of such 
                                premium subsidy adjustment or 
                                increased premium, and
                                  (IV) return information with 
                                respect to a taxpayer described 
                                in subparagraph (A) to officers 
                                and employees of the Department 
                                of Justice for use in judicial 
                                proceedings to the extent 
                                necessary to carry out the 
                                purposes described in clause 
                                (i).
          (21) Disclosure of return information to carry out 
        eligibility requirements for certain programs.--
                  (A) In general.--The Secretary, upon written 
                request from the Secretary of Health and Human 
                Services, shall disclose to officers, 
                employees, and contractors of the Department of 
                Health and Human Services return information of 
                any taxpayer whose income is relevant in 
                determining any premium tax credit under 
                section 36B or any cost-sharing reduction under 
                section 1402 of the Patient Protection and 
                Affordable Care Act or eligibility for 
                participation in a State medicaid program under 
                title XIX of the Social Security Act, a State's 
                children's health insurance program under title 
                XXI of the Social Security Act, or a basic 
                health program under section 1331 of Patient 
                Protection and Affordable Care Act. Such return 
                information shall be limited to--
                          (i) taxpayer identity information 
                        with respect to such taxpayer,
                          (ii) the filing status of such 
                        taxpayer,
                          (iii) the number of individuals for 
                        whom a deduction is allowed under 
                        section 151 with respect to the 
                        taxpayer (including the taxpayer and 
                        the taxpayer's spouse),
                          (iv) the modified adjusted gross 
                        income (as defined in section 36B) of 
                        such taxpayer and each of the other 
                        individuals included under clause (iii) 
                        who are required to file a return of 
                        tax imposed by chapter 1 for the 
                        taxable year,
                          (v) such other information as is 
                        prescribed by the Secretary by 
                        regulation as might indicate whether 
                        the taxpayer is eligible for such 
                        credit or reduction (and the amount 
                        thereof), and
                          (vi) the taxable year with respect to 
                        which the preceding information relates 
                        or, if applicable, the fact that such 
                        information is not available.
                  (B) Information to Exchange and State 
                agencies.--The Secretary of Health and Human 
                Services may disclose to an Exchange 
                established under the Patient Protection and 
                Affordable Care Act or its contractors, or to a 
                State agency administering a State program 
                described in subparagraph (A) or its 
                contractors, any inconsistency between the 
                information provided by the Exchange or State 
                agency to the Secretary and the information 
                provided to the Secretary under subparagraph 
                (A).
                  (C) Restriction on use of disclosed 
                information.--Return information disclosed 
                under subparagraph (A) or (B) may be used by 
                officers, employees, and contractors of the 
                Department of Health and Human Services, an 
                Exchange, or a State agency only for the 
                purposes of, and to the extent necessary in--
                          (i) establishing eligibility for 
                        participation in the Exchange, and 
                        verifying the appropriate amount of, 
                        any credit or reduction described in 
                        subparagraph (A),
                          (ii) determining eligibility for 
                        participation in the State programs 
                        described in subparagraph (A).
          (22) Disclosure of return information to Department 
        of Health and Human Services for purposes of enhancing 
        Medicare program integrity.--
                  (A) In general.--The Secretary shall, upon 
                written request from the Secretary of Health 
                and Human Services, disclose to officers and 
                employees of the Department of Health and Human 
                Services return information with respect to a 
                taxpayer who has applied to enroll, or 
                reenroll, as a provider of services or supplier 
                under the Medicare program under title XVIII of 
                the Social Security Act. Such return 
                information shall be limited to--
                          (i) the taxpayer identity information 
                        with respect to such taxpayer;
                          (ii) the amount of the delinquent tax 
                        debt owed by that taxpayer; and
                          (iii) the taxable year to which the 
                        delinquent tax debt pertains.
                  (B) Restriction on disclosure.--Return 
                information disclosed under subparagraph (A) 
                may be used by officers and employees of the 
                Department of Health and Human Services for the 
                purposes of, and to the extent necessary in, 
                establishing the taxpayer's eligibility for 
                enrollment or reenrollment in the Medicare 
                program, or in any administrative or judicial 
                proceeding relating to, or arising from, a 
                denial of such enrollment or reenrollment, or 
                in determining the level of enhanced oversight 
                to be applied with respect to such taxpayer 
                pursuant to section 1866(j)(3) of the Social 
                Security Act.
                  (C) Delinquent tax debt.--For purposes of 
                this paragraph, the term ``delinquent tax 
                debt'' means an outstanding debt under this 
                title for which a notice of lien has been filed 
                pursuant to section 6323, but the term does not 
                include a debt that is being paid in a timely 
                manner pursuant to an agreement under section 
                6159 or 7122, or a debt with respect to which a 
                collection due process hearing under section 
                6330 is requested, pending, or completed and no 
                payment is required.
  (m) Disclosure of Taxpayer Identity Information.--
          (1) Tax refunds.--The Secretary may disclose taxpayer 
        identity information to the press and other media for 
        purposes of notifying persons entitled to tax refunds 
        when the Secretary, after reasonable effort and lapse 
        of time, has been unable to locate such persons.
          (2) Federal claims.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Secretary may, upon 
                written request, disclose the mailing address 
                of a taxpayer for use by officers, employees, 
                or agents of a Federal agency for purposes of 
                locating such taxpayer to collect or compromise 
                a Federal claim against the taxpayer in 
                accordance with sections 3711, 3717, and 3718 
                of title 31.
                  (B) Special rule for consumer reporting 
                agency.--In the case of an agent of a Federal 
                agency which is a consumer reporting agency 
                (within the meaning of section 603(f) of the 
                Fair Credit Reporting Act (15 U.S.C. 
                1681a(f))), the mailing address of a taxpayer 
                may be disclosed to such agent under 
                subparagraph (A) only for the purpose of 
                allowing such agent to prepare a commercial 
                credit report on the taxpayer for use by such 
                Federal agency in accordance with sections 
                3711, 3717, and 3718 of title 31.
          (3) National Institute for Occupational Safety and 
        Health.--Upon written request, the Secretary may 
        disclose the mailing address of taxpayers to officers 
        and employees of the National Institute for 
        Occupational Safety and Health solely for the purpose 
        of locating individuals who are, or may have been, 
        exposed to occupational hazards in order to determine 
        the status of their health or to inform them of the 
        possible need for medical care and treatment.
          (4) Individuals who owe an overpayment of Federal 
        Pell Grants or who have defaulted on student loans 
        administered by the Department of Education.--
                  (A) In general.--Upon written request by the 
                Secretary of Education, the Secretary may 
                disclose the mailing address of any taxpayer--
                          (i) who owes an overpayment of a 
                        grant awarded to such taxpayer under 
                        subpart 1 of part A of title IV of the 
                        Higher Education Act of 1965, or
                          (ii) who has defaulted on a loan--
                                  (I) made under part B, D, or 
                                E of title IV of the Higher 
                                Education Act of 1965, or
                                  (II) made pursuant to section 
                                3(a)(1) of the Migration and 
                                Refugee Assistance Act of 1962 
                                to a student at an institution 
                                of higher education,
                for use only by officers, employees, or agents 
                of the Department of Education for purposes of 
                locating such taxpayer for purposes of 
                collecting such overpayment or loan.
                  (B) Disclosure to educational institutions, 
                etc..--Any mailing address disclosed under 
                subparagraph (A)(i) may be disclosed by the 
                Secretary of Education to--
                          (i) any lender, or any State or 
                        nonprofit guarantee agency, which is 
                        participating under part B or D of 
                        title IV of the Higher Education Act of 
                        1965, or
                          (ii) any educational institution with 
                        which the Secretary of Education has an 
                        agreement under subpart 1 of part A, or 
                        part D or E, of title IV of such Act,
                for use only by officers, employees, or agents 
                of such lender, guarantee agency, or 
                institution whose duties relate to the 
                collection of student loans for purposes of 
                locating individuals who have defaulted on 
                student loans made under such loan programs for 
                purposes of collecting such loans.
          (5) Individuals who have defaulted on student loans 
        administered by the Department of Health and Human 
        Services.--
                  (A) In general.--Upon written request by the 
                Secretary of Health and Human Services, the 
                Secretary may disclose the mailing address of 
                any taxpayer who has defaulted on a loan made 
                under part C of title VII of the Public Health 
                Service Act or under subpart II of part B of 
                title VIII of such Act, for use only by 
                officers, employees, or agents of the 
                Department of Health and Human Services for 
                purposes of locating such taxpayer for purposes 
                of collecting such loan.
                  (B) Disclosure to schools and eligible 
                lenders.--Any mailing address disclosed under 
                subparagraph (A) may be disclosed by the 
                Secretary of Health and Human Services to--
                          (i) any school with which the 
                        Secretary of Health and Human Services 
                        has an agreement under subpart II of 
                        part C of title VII of the Public 
                        Health Service Act or subpart II of 
                        part B of title VIII of such Act, or
                          (ii) any eligible lender (within the 
                        meaning of section 737(4) of such Act) 
                        participating under subpart I of part C 
                        of title VII of such Act,
                for use only by officers, employees, or agents 
                of such school or eligible lender whose duties 
                relate to the collection of student loans for 
                purposes of locating individuals who have 
                defaulted on student loans made under such 
                subparts for the purposes of collecting such 
                loans.
          (6) Blood Donor Locator Service.--
                  (A) In general.--Upon written request 
                pursuant to section 1141 of the Social Security 
                Act, the Secretary shall disclose the mailing 
                address of taxpayers to officers and employees 
                of the Blood Donor Locator Service in the 
                Department of Health and Human Services.
                  (B) Restriction on disclosure.--The Secretary 
                shall disclose return information under 
                subparagraph (A) only for purposes of, and to 
                the extent necessary in, assisting under the 
                Blood Donor Locator Service authorized persons 
                (as defined in section 1141(h)(1) of the Social 
                Security Act) in locating blood donors who, as 
                indicated by donated blood or products derived 
                therefrom or by the history of the subsequent 
                use of such blood or blood products, have or 
                may have the virus for acquired immune 
                deficiency syndrome, in order to inform such 
                donors of the possible need for medical care 
                and treatment.
                  (C) Safeguards.--The Secretary shall destroy 
                all related blood donor records (as defined in 
                section 1141(h)(2) of the Social Security Act) 
                in the possession of the Department of the 
                Treasury upon completion of their use in making 
                the disclosure required under subparagraph (A), 
                so as to make such records undisclosable.
          (7) Social security account statement furnished by 
        Social Security Administration.--Upon written request 
        by the Commissioner of Social Security, the Secretary 
        may disclose the mailing address of any taxpayer who is 
        entitled to receive a social security account statement 
        pursuant to section 1143(c) of the Social Security Act, 
        for use only by officers, employees or agents of the 
        Social Security Administration for purposes of mailing 
        such statement to such taxpayer.
  (n) Certain Other Persons.--Pursuant to regulations 
prescribed by the Secretary, returns and return information may 
be disclosed to any person, including any person described in 
section 7513(a), to the extent necessary in connection with the 
processing, storage, transmission, and reproduction of such 
returns and return information, the programming, maintenance, 
repair, testing, and procurement of equipment, and the 
providing of other services, for purposes of tax 
administration.
  (o) Disclosure of Returns and Return Information With Respect 
to Certain Taxes.--
          (1) Taxes imposed by subtitle E.--
                  (A) In general.--Returns and return 
                information with respect to taxes imposed by 
                subtitle E (relating to taxes on alcohol, 
                tobacco, and firearms) shall be open to 
                inspection by or disclosure to officers and 
                employees of a Federal agency whose official 
                duties require such inspection or disclosure.
                  (B) Use in certain proceedings.--Returns and 
                return information disclosed to a Federal 
                agency under subparagraph (A) may be used in an 
                action or proceeding (or in preparation for 
                such action or proceeding) brought under 
                section 625 of the American Jobs Creation Act 
                of 2004 for the collection of any unpaid 
                assessment or penalty arising under such Act.
          (2) Taxes imposed by chapter 35.--Returns and return 
        information with respect to taxes imposed by chapter 35 
        (relating to taxes on wagering) shall, notwithstanding 
        any other provision of this section, be open to 
        inspection by or disclosure only to such person or 
        persons and for such purpose or purposes as are 
        prescribed by section 4424.
  (p) Procedure and Recordkeeping.--
          (1) Manner, time, and place of inspections.--Requests 
        for the inspection or disclosure of a return or return 
        information and such inspection or disclosure shall be 
        made in such manner and at such time and place as shall 
        be prescribed by the Secretary.
          (2) Procedure.--
                  (A) Reproduction of returns.--A reproduction 
                or certified reproduction of a return shall, 
                upon written request, be furnished to any 
                person to whom disclosure or inspection of such 
                return is authorized under this section. A 
                reasonable fee may be prescribed for furnishing 
                such reproduction or certified reproduction.
                  (B) Disclosure of return information.--Return 
                information disclosed to any person under the 
                provisions of this title may be provided in the 
                form of written documents, reproductions of 
                such documents, films or photoimpressions, or 
                electronically produced tapes, disks, or 
                records, or by any other mode or means which 
                the Secretary determines necessary or 
                appropriate. A reasonable fee may be prescribed 
                for furnishing such return information.
                  (C) Use of reproductions.--Any reproduction 
                of any return, document, or other matter made 
                in accordance with this paragraph shall have 
                the same legal status as the original, and any 
                such reproduction shall, if properly 
                authenticated, be admissible in evidence in any 
                judicial or administrative proceeding as if it 
                were the original, whether or not the original 
                is in existence.
          (3) Records of inspection and disclosure.--
                  (A) System of recordkeeping.--Except as 
                otherwise provided by this paragraph, the 
                Secretary shall maintain a permanent system of 
                standardized records or accountings of all 
                requests for inspection or disclosure of 
                returns and return information (including the 
                reasons for and dates of such requests) and of 
                returns and return information inspected or 
                disclosed under this section and section 
                6104(c). Notwithstanding the provisions of 
                section 552a(c) of title 5, United States Code, 
                the Secretary shall not be required to maintain 
                a record or accounting of requests for 
                inspection or disclosure of returns and return 
                information, or of returns and return 
                information inspected or disclosed, under the 
                authority of subsections (c), (e), (f)(5), 
                (h)(1), (3)(A), or (4), (i)(4), or 
                (8)(A)(ii),(k)(1), (2),(6), (8), or (9), 
                (l)(1), (4)(B), (5), (7), (8), (9), (10), (11), 
                (12), (13), (14), (15), (16), (17), or (18), 
                (m), or (n). The records or accountings 
                required to be maintained under this paragraph 
                shall be available for examination by the Joint 
                Committee on Taxation or the Chief of Staff of 
                such joint committee. Such record or accounting 
                shall also be available for examination by such 
                person or persons as may be, but only to the 
                extent, authorized to make such examination 
                under section 552a(c)(3) of title 5, United 
                States Code.
                  (B) Report by the Secretary.--The Secretary 
                shall, within 90 days after the close of each 
                calendar year, furnish to the Joint Committee 
                on Taxation a report with respect to, or 
                summary of, the records or accountings 
                described in subparagraph (A) in such form and 
                containing such information as such joint 
                committee or the Chief of Staff of such joint 
                committee may designate. Such report or summary 
                shall not, however, include a record or 
                accounting of any request by the President 
                under subsection (g) for, or the disclosure in 
                response to such request of, any return or 
                return information with respect to any 
                individual who, at the time of such request, 
                was an officer or employee of the executive 
                branch of the Federal Government. Such report 
                or summary, or any part thereof, may be 
                disclosed by such joint committee to such 
                persons and for such purposes as the joint 
                committee may, by record vote of a majority of 
                the members of the joint committee, determine.
                  (C) Public report on disclosures.--The 
                Secretary shall, within 90 days after the close 
                of each calendar year, furnish to the Joint 
                Committee on Taxation for disclosure to the 
                public a report with respect to the records or 
                accountings described in subparagraph (A) 
                which--
                          (i) provides with respect to each 
                        Federal agency, each agency, body, or 
                        commission described in subsection (d), 
                        (i)(3)(B)(i) or (7)(A)(ii), or (l)(6), 
                        and the Government Accountability 
                        Office the number of--
                                  (I) requests for disclosure 
                                of returns and return 
                                information,
                                  (II) instances in which 
                                returns and return information 
                                were disclosed pursuant to such 
                                requests or otherwise,
                                  (III) taxpayers whose 
                                returns, or return information 
                                with respect to whom, were 
                                disclosed pursuant to such 
                                requests, and
                          (ii) describes the general purposes 
                        for which such requests were made,
          (4) Safeguards.--Any Federal agency described in 
        subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or 
        (7), (j)(1), (2), or (5), (k)(8), (10), or (11), 
        (l)(1), (2), (3), (5), (10), (11), (13), (14), (17), or 
        (22) or (o)(1)(A), the Government Accountability 
        Office, the Congressional Budget Office, or any agency, 
        body, or commission described in subsection (d), 
        (i)(1)(C), (3)(B)(i), or 7(A)(ii), or (k)(10), (l)(6), 
        (7), (8), (9), (12), (15), or (16), any appropriate 
        State officer (as defined in section 6104(c)), or any 
        other person described in subsection (k)(10), 
        subsection (l)(10), (16), (18), (19), or (20), or any 
        entity described in subsection (l)(21), shall, as a 
        condition for receiving returns or return information--
                  (A) establish and maintain, to the 
                satisfaction of the Secretary, a permanent 
                system of standardized records with respect to 
                any request, the reason for such request, and 
                the date of such request made by or of it and 
                any disclosure of return or return information 
                made by or to it;
                  (B) establish and maintain, to the 
                satisfaction of the Secretary, a secure area or 
                place in which such returns or return 
                information shall be stored;
                  (C) restrict, to the satisfaction of the 
                Secretary, access to the returns or return 
                information only to persons whose duties or 
                responsibilities require access and to whom 
                disclosure may be made under the provisions of 
                this title;
                  (D) provide such other safeguards which the 
                Secretary determines (and which he prescribes 
                in regulations) to be necessary or appropriate 
                to protect the confidentiality of the returns 
                or return information;
                  (E) furnish a report to the Secretary, at 
                such time and containing such information as 
                the Secretary may prescribe, which describes 
                the procedures established and utilized by such 
                agency, body, or commission, the Government 
                Accountability Office, or the Congressional 
                Budget Office for ensuring the confidentiality 
                of returns and return information required by 
                this paragraph; and
                  (F) upon completion of use of such returns or 
                return information--
                          (i) in the case of an agency, body, 
                        or commission described in subsection 
                        (d), (i)(3)(B)(i), (k)(10), or (l)(6), 
                        (7), (8), (9), or (16), any appropriate 
                        State officer (as defined in section 
                        6104(c)), or any other person described 
                        in subsection (k)(10) or subsection 
                        (l)(10), (16), (18), (19), or (20) 
                        return to the Secretary such returns or 
                        return information (along with any 
                        copies made therefrom) or make such 
                        returns or return information 
                        undisclosable in any manner and furnish 
                        a written report to the Secretary 
                        describing such manner,
                          (ii) in the case of an agency 
                        described in subsections (h)(2), 
                        (h)(5), (i)(1), (2), (3), (5) or (7), 
                        (j)(1), (2), or (5), (k)(8), (10), or 
                        (11), (l)(1), (2), (3), (5), (10), 
                        (11), (12), (13), (14), (15), (17), or 
                        (22), or (o)(1)(A) or any entity 
                        described in subsection (l)(21),,, the 
                        Government Accountability Office, or 
                        the Congressional Budget Office, 
                        either--
                                  (I) return to the Secretary 
                                such returns or return 
                                information (along with any 
                                copies made therefrom),
                                  (II) otherwise make such 
                                returns or return information 
                                undisclosable, or
                                  (III) to the extent not so 
                                returned or made undisclosable, 
                                ensure that the conditions of 
                                subparagraphs (A), (B), (C), 
                                (D), and (E) of this paragraph 
                                continue to be met with respect 
                                to such returns or return 
                                information, and
                          (iii) in the case of the Department 
                        of Health and Human Services for 
                        purposes of subsection (m)(6), destroy 
                        all such return information upon 
                        completion of its use in providing the 
                        notification for which the information 
                        was obtained, so as to make such 
                        information undisclosable;
        except that the conditions of subparagraphs (A), (B), 
        (C), (D), and (E) shall cease to apply with respect to 
        any return or return information if, and to the extent 
        that, such return or return information is disclosed in 
        the course of any judicial or administrative proceeding 
        and made a part of the public record thereof. If the 
        Secretary determines that any such agency, body, or 
        commission, including an agency, an appropriate State 
        officer (as defined in section 6104(c)), or any other 
        person described in subsection (k)(10) or subsection 
        (l)(10), (16), (18), (19), or (20) or any entity 
        described in subsection (l)(21),, or the Government 
        Accountability Office or the Congressional Budget 
        Office, has failed to, or does not, meet the 
        requirements of this paragraph, he may, after any 
        proceedings for review established under paragraph (7), 
        take such actions as are necessary to ensure such 
        requirements are met, including refusing to disclose 
        returns or return information to such agency, body, or 
        commission, including an agency, an appropriate State 
        officer (as defined in section 6104(c)), or any other 
        person described in subsection (k)(10) or subsection 
        (l)(10), (16), (18), (19), or (20) or any entity 
        described in subsection (l)(21),, or the Government 
        Accountability Office or the Congressional Budget 
        Office, until he determines that such requirements have 
        been or will be met. In the case of any agency which 
        receives any mailing address under paragraph (2), (4), 
        (6), or (7) of subsection (m) and which discloses any 
        such mailing address to any agent or which receives any 
        information under paragraph (6)(A), (10), (12)(B), or 
        (16) of subsection (l) and which discloses any such 
        information to any agent, or any person including an 
        agent described in subsection (l)(10) or (16), this 
        paragraph shall apply to such agency and each such 
        agent or other person (except that, in the case of an 
        agent, or any person including an agent described in 
        subsection (l)(10) or (16), any report to the Secretary 
        or other action with respect to the Secretary shall be 
        made or taken through such agency). For purposes of 
        applying this paragraph in any case to which subsection 
        (m)(6) applies, the term ``return information'' 
        includes related blood donor records (as defined in 
        section 1141(h)(2) of the Social Security Act).
          (5) Report on procedures and safeguards.--After the 
        close of each calendar year, the Secretary shall 
        furnish to each committee described in subsection 
        (f)(1) a report which describes the procedures and 
        safeguards established and utilized by such agencies, 
        bodies, or commissions, the Government Accountability 
        Office, and the Congressional Budget Office for 
        ensuring the confidentiality of returns and return 
        information as required by this subsection. Such report 
        shall also describe instances of deficiencies in, and 
        failure to establish or utilize, such procedures.
          (6) Audit of procedures and safeguards.--
                  (A) Audit by Comptroller General.--The 
                Comptroller General may audit the procedures 
                and safeguards established by such agencies, 
                bodies, or commissions and the Congressional 
                Budget Office pursuant to this subsection to 
                determine whether such safeguards and 
                procedures meet the requirements of this 
                subsection and ensure the confidentiality of 
                returns and return information. The Comptroller 
                General shall notify the Secretary before any 
                such audit is conducted.
                  (B) Records of inspection and reports by the 
                Comptroller General.--The Comptroller General 
                shall--
                          (i) maintain a permanent system of 
                        standardized records and accountings of 
                        returns and return information 
                        inspected by officers and employees of 
                        the Government Accountability Office 
                        under subsection (i)(8)(A)(ii) and 
                        shall, within 90 days after the close 
                        of each calendar year, furnish to the 
                        Secretary a report with respect to, or 
                        summary of, such records or accountings 
                        in such form and containing such 
                        information as the Secretary may 
                        prescribe, and
                          (ii) furnish an annual report to each 
                        committee described in subsection (f) 
                        and to the Secretary setting forth his 
                        findings with respect to any audit 
                        conducted pursuant to subparagraph (A).
                The Secretary may disclose to the Joint 
                Committee any report furnished to him under 
                clause (i).
          (7) Administrative review.--The Secretary shall by 
        regulations prescribe procedures which provide for 
        administrative review of any determination under 
        paragraph (4) that any agency, body, or commission 
        described in subsection (d) has failed to meet the 
        requirements of such paragraph.
          (8) State law requirements.--
                  (A) Safeguards.--Notwithstanding any other 
                provision of this section, no return or return 
                information shall be disclosed after December 
                31, 1978, to any officer or employee of any 
                State which requires a taxpayer to attach to, 
                or include in, any State tax return a copy of 
                any portion of his Federal return, or 
                information reflected on such Federal return, 
                unless such State adopts provisions of law 
                which protect the confidentiality of the copy 
                of the Federal return (or portion thereof) 
                attached to, or the Federal return information 
                reflected on, such State tax return.
                  (B) Disclosure of returns or return 
                information in State returns.--Nothing in 
                subparagraph (A) or paragraph (9) shall be 
                construed to prohibit the disclosure by an 
                officer or employee of any State of any copy of 
                any portion of a Federal return or any 
                information on a Federal return which is 
                required to be attached or included in a State 
                return to another officer or employee of such 
                State (or political subdivision of such State) 
                if such disclosure is specifically authorized 
                by State law.
          (9) Disclosure to contractors and other agents.--
        Notwithstanding any other provision of this section, no 
        return or return information shall be disclosed to any 
        contractor or other agent of a Federal, State, or local 
        agency unless such agency, to the satisfaction of the 
        Secretary--
                  (A) has requirements in effect which require 
                each such contractor or other agent which would 
                have access to returns or return information to 
                provide safeguards (within the meaning of 
                paragraph (4)) to protect the confidentiality 
                of such returns or return information,
                  (B) agrees to conduct an on-site review every 
                3 years (or a mid-point review in the case of 
                contracts or agreements of less than 3 years in 
                duration) of each contractor or other agent to 
                determine compliance with such requirements,
                  (C) submits the findings of the most recent 
                review conducted under subparagraph (B) to the 
                Secretary as part of the report required by 
                paragraph (4)(E), and
                  (D) certifies to the Secretary for the most 
                recent annual period that such contractor or 
                other agent is in compliance with all such 
                requirements.
        The certification required by subparagraph (D) shall 
        include the name and address of each contractor and 
        other agent, a description of the contract or agreement 
        with such contractor or other agent, and the duration 
        of such contract or agreement. The requirements of this 
        paragraph shall not apply to disclosures pursuant to 
        subsection (n) for purposes of Federal tax 
        administration.
  (q) Regulations.--The Secretary is authorized to prescribe 
such other regulations as are necessary to carry out the 
provisions of this section.

           *       *       *       *       *       *       *


CHAPTER 64--COLLECTION

           *       *       *       *       *       *       *


Subchapter B--Receipt of Payment

           *       *       *       *       *       *       *


SEC. 6311. PAYMENT OF TAX BY COMMERCIALLY ACCEPTABLE MEANS.

  (a) Authority to Receive.--It shall be lawful for the 
Secretary to receive for internal revenue taxes (or in payment 
for internal revenue stamps) any commercially acceptable means 
that the Secretary deems appropriate to the extent and under 
the conditions provided in regulations prescribed by the 
Secretary.
  (b) Ultimate Liability.--If a check, money order, or other 
method of payment, including payment by credit card, debit 
card, or charge card so received is not duly paid, or is paid 
and subsequently charged back to the Secretary, the person by 
whom such check, or money order, or other method of payment has 
been tendered shall remain liable for the payment of the tax or 
for the stamps, and for all legal penalties and additions, to 
the same extent as if such check, money order, or other method 
of payment had not been tendered.
  (c) Liability of Banks and Others.--If any certified, 
treasurer's, or cashier's check (or other guaranteed draft), or 
any money order, or any other means of payment that has been 
guaranteed by a financial institution (such as a credit card, 
debit card, or charge card transaction which has been 
guaranteed expressly by a financial institution) so received is 
not duly paid, the United States shall, in addition to its 
right to exact payment from the party originally indebted 
therefor, have a lien for--
          (1) the amount of such check (or draft) upon all 
        assets of the financial institution on which drawn,
          (2) the amount of such money order upon all the 
        assets of the issuer thereof, or
          (3) the guaranteed amount of any other transaction 
        upon all the assets of the institution making such 
        guarantee,
and such amount shall be paid out of such assets in preference 
to any other claims whatsoever against such financial 
institution, issuer, or guaranteeing institution, except the 
necessary costs and expenses of administration and the 
reimbursement of the United States for the amount expended in 
the redemption of the circulating notes of such financial 
institution.
  (d) Payment by Other Means.--
          (1) Authority to prescribe regulations.--The 
        Secretary shall prescribe such regulations as the 
        Secretary deems necessary to receive payment by 
        commercially acceptable means, including regulations 
        that--
                  (A) specify which methods of payment by 
                commercially acceptable means will be 
                acceptable,
                  (B) specify when payment by such means will 
                be considered received,
                  (C) identify types of nontax matters related 
                to payment by such means that are to be 
                resolved by persons ultimately liable for 
                payment and financial intermediaries, without 
                the involvement of the Secretary, and
                  (D) ensure that tax matters will be resolved 
                by the Secretary, without the involvement of 
                financial intermediaries.
          (2) Authority to enter into contracts.--
        Notwithstanding section 3718(f) of title 31, United 
        States Code, the Secretary is authorized to enter into 
        contracts to obtain services related to receiving 
        payment by other means where cost beneficial to the 
        Government. The Secretary may not pay any fee or 
        provide any other consideration under any such contract 
        for the use of credit, debit, or charge cards for the 
        payment of taxes imposed by subtitle A. The preceding 
        sentence shall not apply to the extent that the 
        Secretary ensures that any such fee or other 
        consideration is fully recouped by the Secretary in the 
        form of fees paid to the Secretary by persons paying 
        taxes imposed under subtitle A with credit, debit, or 
        charge cards pursuant to such contract. Notwithstanding 
        the preceding sentence, the Secretary shall seek to 
        minimize the amount of any fee or other consideration 
        that the Secretary pays under any such contract.
          (3) Special provisions for use of credit cards.--If 
        use of credit cards is accepted as a method of payment 
        of taxes pursuant to subsection (a)--
                  (A) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) by a 
                person by use of a credit card shall not be 
                subject to section 161 of the Truth in Lending 
                Act (15 U.S.C. 1666), or to any similar 
                provisions of State law, if the error alleged 
                by the person is an error relating to the 
                underlying tax liability, rather than an error 
                relating to the credit card account such as a 
                computational error or numerical transposition 
                in the credit card transaction or an issue as 
                to whether the person authorized payment by use 
                of the credit card,
                  (B) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) shall not 
                be subject to section 170 of the Truth in 
                Lending Act (15 U.S.C. 1666i), or to any 
                similar provisions of State law,
                  (C) a payment of internal revenue taxes (or a 
                payment for internal revenue stamps) by a 
                person by use of a debit card shall not be 
                subject to section 908 of the Electronic Fund 
                Transfer Act (15 U.S.C. 1693f), or to any 
                similar provisions of State law, if the error 
                alleged by the person is an error relating to 
                the underlying tax liability, rather than an 
                error relating to the debit card account such 
                as a computational error or numerical 
                transposition in the debit card transaction or 
                an issue as to whether the person authorized 
                payment by use of the debit card,
                  (D) the term ``creditor'' under section 
                103(f) of the Truth in Lending Act (15 U.S.C. 
                1602(f)) shall not include the Secretary with 
                respect to credit card transactions in payment 
                of internal revenue taxes (or payment for 
                internal revenue stamps), and
                  (E) notwithstanding any other provision of 
                law to the contrary, in the case of payment 
                made by credit card or debit card transaction 
                of an amount owed to a person as the result of 
                the correction of an error under section 161 of 
                the Truth in Lending Act (15 U.S.C. 1666) or 
                section 908 of the Electronic Fund Transfer Act 
                (15 U.S.C. 1693f), the Secretary is authorized 
                to provide such amount to such person as a 
                credit to that person's credit card or debit 
                card account through the applicable credit card 
                or debit card system.
  (e) Confidentiality of Information.--
          (1) In general.--Except as otherwise authorized by 
        this subsection, no person may use or disclose any 
        information relating to credit or debit card 
        transactions obtained pursuant to section 6103(k)(9) 
        other than for purposes directly related to the 
        processing of such transactions, or the billing or 
        collection of amounts charged or debited pursuant 
        thereto.
          (2) Exceptions.--
                  (A) Debit or credit card issuers or others 
                acting on behalf of such issuers may also use 
                and disclose such information for purposes 
                directly related to servicing an issuer's 
                accounts.
                  (B) Debit or credit card issuers or others 
                directly involved in the processing of credit 
                or debit card transactions or the billing or 
                collection of amounts charged or debited 
                thereto may also use and disclose such 
                information for purposes directly related to--
                          (i) statistical risk and 
                        profitability assessment;
                          (ii) transferring receivables, 
                        accounts, or interest therein;
                          (iii) auditing the account 
                        information;
                          (iv) complying with Federal, State, 
                        or local law; and
                          (v) properly authorized civil, 
                        criminal, or regulatory investigation 
                        by Federal, State, or local 
                        authorities.
          (3) Procedures.--Use and disclosure of information 
        under this paragraph shall be made only to the extent 
        authorized by written procedures promulgated by the 
        Secretary.
          (4) Cross reference.--For provision providing for 
        civil damages for violation of paragraph (1), see 
        section 7431.

           *       *       *       *       *       *       *


CHAPTER 75--CRIMES, OTHER OFFENSES, AND FORFEITURES

           *       *       *       *       *       *       *


Subchapter A--Crimes

           *       *       *       *       *       *       *


PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 7213. UNAUTHORIZED DISCLOSURE OF INFORMATION.

  (a) Returns and Return Information.--
          (1) Federal employees and other persons.--It shall be 
        unlawful for any officer or employee of the United 
        States or any person described in section 6103(n) (or 
        an officer or employee of any such person), or any 
        former officer or employee, willfully to disclose to 
        any person, except as authorized in this title, any 
        return or return information (as defined in section 
        6103(b)). Any violation of this paragraph shall be a 
        felony punishable upon conviction by a fine in any 
        amount not exceeding $5,000, or imprisonment of not 
        more than 5 years, or both, together with the costs of 
        prosecution, and if such offense is committed by any 
        officer or employee of the United States, he shall, in 
        addition to any other punishment, be dismissed from 
        office or discharged from employment upon conviction 
        for such offense.
          (2) State and other employees.--It shall be unlawful 
        for any person (not described in paragraph (1)) 
        willfully to disclose to any person, except as 
        authorized in this title, any return or return 
        information (as defined in section 6103(b)) acquired by 
        him or another person under subsection (d), (i)(1)(C), 
        (3)(B)(i), or (7)(A)(ii), (k)(10) or (13), (l)(6), (7), 
        (8), (9), (10), (12), (15), (16), (19), (20), or (21) 
        or (m)(2), (4), (5), (6), or (7) of section 6103 or 
        under section 6104(c). Any violation of this paragraph 
        shall be a felony punishable by a fine in any amount 
        not exceeding $5,000, or imprisonment of not more than 
        5 years, or both, together with the costs of 
        prosecution.
          (3) Other persons.--It shall be unlawful for any 
        person to whom any return or return information (as 
        defined in section 6103(b)) is disclosed in a manner 
        unauthorized by this title thereafter willfully to 
        print or publish in any manner not provided by law any 
        such return or return information. Any violation of 
        this paragraph shall be a felony punishable by a fine 
        in any amount not exceeding $5,000, or imprisonment of 
        not more than 5 years, or both, together with the costs 
        of prosecution.
          (4) Solicitation.--It shall be unlawful for any 
        person willfully to offer any item of material value in 
        exchange for any return or return information (as 
        defined in section 6103(b)) and to receive as a result 
        of such solicitation any such return or return 
        information. Any violation of this paragraph shall be a 
        felony punishable by a fine in any amount not exceeding 
        $5,000, or imprisonment of not more than 5 years, or 
        both, together with the costs of prosecution.
          (5) Shareholders.--It shall be unlawful for any 
        person to whom a return or return information (as 
        defined in section 6103(b)) is disclosed pursuant to 
        the provisions of section 6103(e)(1)(D)(iii) willfully 
        to disclose such return or return information in any 
        manner not provided by law. Any violation of this 
        paragraph shall be a felony punishable by a fine in any 
        amount not to exceed $5,000, or imprisonment of not 
        more than 5 years, or both, together with the costs of 
        prosecution.
  (b) Disclosure of Operations of Manufacturer or Producer.--
Any officer or employee of the United States who divulges or 
makes known in any manner whatever not provided by law to any 
person the operations, style of work, or apparatus of any 
manufacturer or producer visited by him in the discharge of his 
official duties shall be guilty of a misdemeanor and, upon 
conviction thereof, shall be fined not more than $1,000, or 
imprisoned not more than 1 year, or both, together with the 
costs of prosecution; and the offender shall be dismissed from 
office or discharged from employment.
  (c) Disclosures by Certain Delegates of Secretary.--All 
provisions of law relating to the disclosure of information, 
and all provisions of law relating to penalties for 
unauthorized disclosure of information, which are applicable in 
respect of any function under this title when performed by an 
officer or employee of the Treasury Department are likewise 
applicable in respect of such function when performed by any 
person who is a ``delegate'' within the meaning of section 
7701(a)(12)(B).
  (d) Disclosure of Software.--Any person who willfully 
divulges or makes known software (as defined in section 
7612(d)(1)) to any person in violation of section 7612 shall be 
guilty of a felony and, upon conviction thereof, shall be fined 
not more than $5,000, or imprisoned not more than 5 years, or 
both, together with the costs of prosecution.
  (e) Cross References.--
          (1) Penalties for disclosure of information by 
        preparers of returns.--For penalty for disclosure or 
        use of information by preparers of returns, see section 
        7216.
          (2) Penalties for disclosure of confidential 
        information For penalties for disclosure of 
        confidential information by.--any officer or employee 
        of the United States or any department or agency 
        thereof, see 18 U.S.C. 1905.

           *       *       *       *       *       *       *


CHAPTER 80--GENERAL RULES

           *       *       *       *       *       *       *


Subchapter A--Application of Internal Revenue Laws

           *       *       *       *       *       *       *


SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.

  (a) Commissioner of Internal Revenue.--
          (1) Appointment.--
                  (A) In general.--There shall be in the 
                Department of the Treasury a Commissioner of 
                Internal Revenue who shall be appointed by the 
                President, by and with the advice and consent 
                of the Senate. Such appointment shall be made 
                from individuals who, among other 
                qualifications, have a demonstrated ability in 
                management.
                  (B) Term.--The term of the Commissioner of 
                Internal Revenue shall be a 5-year term, 
                beginning with a term to commence on November 
                13, 1997. Each subsequent term shall begin on 
                the day after the date on which the previous 
                term expires.
                  (C) Vacancy.--Any individual appointed as 
                Commissioner of Internal Revenue during a term 
                as defined in subparagraph (B) shall be 
                appointed for the remainder of that term.
                  (D) Removal.--The Commissioner may be removed 
                at the will of the President.
                  (E) Reappointment.--The Commissioner may be 
                appointed to serve more than one term.
          (2) Duties.--The Commissioner shall have such duties 
        and powers as the Secretary may prescribe, including 
        the power to--
                  (A) administer, manage, conduct, direct, and 
                supervise the execution and application of the 
                internal revenue laws or related statutes and 
                tax conventions to which the United States is a 
                party; and
                  (B) recommend to the President a candidate 
                for appointment as Chief Counsel for the 
                Internal Revenue Service when a vacancy occurs, 
                and recommend to the President the removal of 
                such Chief Counsel.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A) or (B), such 
        determination may not take effect until 30 days after 
        the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Execution of duties in accord with taxpayer 
        rights.--In discharging his duties, the Commissioner 
        shall ensure that employees of the Internal Revenue 
        Service are familiar with and act in accord with 
        taxpayer rights as afforded by other provisions of this 
        title, including--
                  (A) the right to be informed,
                  (B) the right to quality service,
                  (C) the right to pay no more than the correct 
                amount of tax,
                  (D) the right to challenge the position of 
                the Internal Revenue Service and be heard,
                  (E) the right to appeal a decision of the 
                Internal Revenue Service in an independent 
                forum,
                  (F) the right to finality,
                  (G) the right to privacy,
                  (H) the right to confidentiality,
                  (I) the right to retain representation, and
                  (J) the right to a fair and just tax system.
          (4) Consultation with Board.--The Commissioner shall 
        consult with the Oversight Board on all matters set 
        forth in paragraphs (2) and (3) (other than paragraph 
        (3)(A)) of section 7802(d).
  (b) Chief Counsel for the Internal Revenue Service.--
          (1) Appointment.--There shall be in the Department of 
        the Treasury a Chief Counsel for the Internal Revenue 
        Service who shall be appointed by the President, by and 
        with the consent of the Senate.
          (2) Duties.--The Chief Counsel shall be the chief law 
        officer for the Internal Revenue Service and shall 
        perform such duties as may be prescribed by the 
        Secretary, including the duty--
                  (A) to be legal advisor to the Commissioner 
                and the Commissioner's officers and employees;
                  (B) to furnish legal opinions for the 
                preparation and review of rulings and memoranda 
                of technical advice;
                  (C) to prepare, review, and assist in the 
                preparation of proposed legislation, treaties, 
                regulations, and Executive orders relating to 
                laws which affect the Internal Revenue Service;
                  (D) to represent the Commissioner in cases 
                before the Tax Court; and
                  (E) to determine which civil actions should 
                be litigated under the laws relating to the 
                Internal Revenue Service and prepare 
                recommendations for the Department of Justice 
                regarding the commencement of such actions.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A), (B), (C), (D), or (E), 
        such determination may not take effect until 30 days 
        after the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Persons to whom Chief Counsel reports.--The Chief 
        Counsel shall report directly to the Commissioner of 
        Internal Revenue, except that--
                  (A) the Chief Counsel shall report to both 
                the Commissioner and the General Counsel for 
                the Department of the Treasury with respect 
                to--
                          (i) legal advice or interpretation of 
                        the tax law not relating solely to tax 
                        policy;
                          (ii) tax litigation; and (B) the 
                        Chief Counsel shall report to the 
                        General Counsel with respect to legal 
                        advice or interpretation of the tax law 
                        relating solely to tax policy.
        If there is any disagreement between the Commissioner 
        and the General Counsel with respect to any matter 
        jointly referred to them under subparagraph (A), such 
        matter shall be submitted to the Secretary or Deputy 
        Secretary for resolution.
          (4) Chief Counsel personnel.--All personnel in the 
        Office of Chief Counsel shall report to the Chief 
        Counsel.
  (c) Office of the Taxpayer Advocate.--
          (1) Establishment.--
                  (A) In general.--There is established in the 
                Internal Revenue Service an office to be known 
                as the ``Office of the Taxpayer Advocate''.
                  (B) National Taxpayer Advocate.--
                          (i) In general.--The Office of the 
                        Taxpayer Advocate shall be under the 
                        supervision and direction of an 
                        official to be known as the ``National 
                        Taxpayer Advocate''. The National 
                        Taxpayer Advocate shall report directly 
                        to the Commissioner of Internal Revenue 
                        and shall be entitled to compensation 
                        at the same rate as the highest rate of 
                        basic pay established for the Senior 
                        Executive Service under section 5382 of 
                        title 5, United States Code, or, if the 
                        Secretary of the Treasury so 
                        determines, at a rate fixed under 
                        section 9503 of such title.
                          (ii) Appointment.--The National 
                        Taxpayer Advocate shall be appointed by 
                        the Secretary of the Treasury after 
                        consultation with the Commissioner of 
                        Internal Revenue and the Oversight 
                        Board and without regard to the 
                        provisions of title 5, United States 
                        Code, relating to appointments in the 
                        competitive service or the Senior 
                        Executive Service.
                          (iii) Qualifications.--An individual 
                        appointed under clause (ii) shall 
                        have--
                                  (I) a background in customer 
                                service as well as tax law; and
                                  (II) experience in 
                                representing individual 
                                taxpayers.
                          (iv) Restriction on employment.--An 
                        individual may be appointed as the 
                        National Taxpayer Advocate only if such 
                        individual was not an officer or 
                        employee of the Internal Revenue 
                        Service during the 2-year period ending 
                        with such appointment and such 
                        individual agrees not to accept any 
                        employment with the Internal Revenue 
                        Service for at least 5 years after 
                        ceasing to be the National Taxpayer 
                        Advocate. Service as an officer or 
                        employee of the Office of the Taxpayer 
                        Advocate shall not be taken into 
                        account in applying this clause.
          (2) Functions of office.--
                  (A) In general.--It shall be the function of 
                the Office of the Taxpayer Advocate to--
                          (i) assist taxpayers in resolving 
                        problems with the Internal Revenue 
                        Service;
                          (ii) identify areas in which 
                        taxpayers have problems in dealings 
                        with the Internal Revenue Service;
                          (iii) to the extent possible, propose 
                        changes in the administrative practices 
                        of the Internal Revenue Service to 
                        mitigate problems identified under 
                        clause (ii); and
                          (iv) identify potential legislative 
                        changes which may be appropriate to 
                        mitigate such problems.
                  (B) Annual reports.--
                          (i) Objectives.--Not later than June 
                        30 of each calendar year, the National 
                        Taxpayer Advocate shall report to the 
                        Committee on Ways and Means of the 
                        House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the objectives of the Office of the 
                        Taxpayer Advocate for the fiscal year 
                        beginning in such calendar year. Any 
                        such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information.
                          (ii) Activities.--Not later than 
                        December 31 of each calendar year, the 
                        National Taxpayer Advocate shall report 
                        to the Committee on Ways and Means of 
                        the House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the activities of the Office of the 
                        Taxpayer Advocate during the fiscal 
                        year ending during such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information, and shall--
                                  (I) identify the initiatives 
                                the Office of the Taxpayer 
                                Advocate has taken on improving 
                                taxpayer services and Internal 
                                Revenue Service responsiveness;
                                  (II) contain recommendations 
                                received from individuals with 
                                the authority to issue Taxpayer 
                                Assistance Orders under section 
                                7811;
                                  (III) contain a summary of at 
                                least 20 of the most serious 
                                problems encountered by 
                                taxpayers, including a 
                                description of the nature of 
                                such problems;
                                  (IV) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action has been taken 
                                and the result of such action;
                                  (V) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action remains to be 
                                completed and the period during 
                                which each item has remained on 
                                such inventory;
                                  (VI) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which no action has been 
                                taken, the period during which 
                                each item has remained on such 
                                inventory, the reasons for the 
                                inaction, and identify any 
                                Internal Revenue Service 
                                official who is responsible for 
                                such inaction;
                                  (VII) identify any Taxpayer 
                                Assistance Order which was not 
                                honored by the Internal Revenue 
                                Service in a timely manner, as 
                                specified under section 
                                7811(b);
                                  (VIII) contain 
                                recommendations for such 
                                administrative and legislative 
                                action as may be appropriate to 
                                resolve problems encountered by 
                                taxpayers;
                                  (IX) identify areas of the 
                                tax law that impose significant 
                                compliance burdens on taxpayers 
                                or the Internal Revenue 
                                Service, including specific 
                                recommendations for remedying 
                                these problems;
                                  (X) identify the 10 most 
                                litigated issues for each 
                                category of taxpayers, 
                                including recommendations for 
                                mitigating such disputes; and
                                  (XI) include such other 
                                information as the National 
                                Taxpayer Advocate may deem 
                                advisable.
                          (iii) Report to be submitted 
                        directly.--Each report required under 
                        this subparagraph shall be provided 
                        directly to the committees described in 
                        clause (i) without any prior review or 
                        comment from the Commissioner, the 
                        Secretary of the Treasury, the 
                        Oversight Board, any other officer or 
                        employee of the Department of the 
                        Treasury, or the Office of Management 
                        and Budget.
                          (iv) Coordination with report of 
                        Treasury Inspector General for Tax 
                        Administration.--To the extent that 
                        information required to be reported 
                        under clause (ii) is also required to 
                        be reported under paragraph (1) or (2) 
                        of subsection (d) by the Treasury 
                        Inspector General for Tax 
                        Administration, the National Taxpayer 
                        Advocate shall not contain such 
                        information in the report submitted 
                        under such clause.
                  (C) Other responsibilities.--The National 
                Taxpayer Advocate shall--
                          (i) monitor the coverage and 
                        geographic allocation of local offices 
                        of taxpayer advocates;
                          (ii) develop guidance to be 
                        distributed to all Internal Revenue 
                        Service officers and employees 
                        outlining the criteria for referral of 
                        taxpayer inquiries to local offices of 
                        taxpayer advocates;
                          (iii) ensure that the local telephone 
                        number for each local office of the 
                        taxpayer advocate is published and 
                        available to taxpayers served by the 
                        office; and
                          (iv) in conjunction with the 
                        Commissioner, develop career paths for 
                        local taxpayer advocates choosing to 
                        make a career in the Office of the 
                        Taxpayer Advocate.
                  (D) Personnel actions.--
                          (i) In general.--The National 
                        Taxpayer Advocate shall have the 
                        responsibility and authority to--
                                  (I) appoint local taxpayer 
                                advocates and make available at 
                                least 1 such advocate for each 
                                State; and
                                  (II) evaluate and take 
                                personnel actions (including 
                                dismissal) with respect to any 
                                employee of any local office of 
                                a taxpayer advocate described 
                                in subclause (I).
                          (ii) Consultation.--The National 
                        Taxpayer Advocate may consult with the 
                        appropriate supervisory personnel of 
                        the Internal Revenue Service in 
                        carrying out the National Taxpayer 
                        Advocate's responsibilities under this 
                        subparagraph.
          (3) Responsibilities of Commissioner.--The 
        Commissioner shall establish procedures requiring a 
        formal response to all recommendations submitted to the 
        Commissioner by the National Taxpayer Advocate within 3 
        months after submission to the Commissioner.
          (4) Operation of local offices.--
                  (A) In general.--Each local taxpayer 
                advocate--
                          (i) shall report to the National 
                        Taxpayer Advocate or delegate thereof;
                          (ii) may consult with the appropriate 
                        supervisory personnel of the Internal 
                        Revenue Service regarding the daily 
                        operation of the local office of the 
                        taxpayer advocate;
                          (iii) shall, at the initial meeting 
                        with any taxpayer seeking the 
                        assistance of a local office of the 
                        taxpayer advocate, notify such taxpayer 
                        that the taxpayer advocate offices 
                        operate independently of any other 
                        Internal Revenue Service office and 
                        report directly to Congress through the 
                        National Taxpayer Advocate; and
                          (iv) may, at the taxpayer advocate's 
                        discretion, not disclose to the 
                        Internal Revenue Service contact with, 
                        or information provided by, such 
                        taxpayer.
                  (B) Maintenance of independent 
                communications.--Each local office of the 
                taxpayer advocate shall maintain a separate 
                phone, facsimile, and other electronic 
                communication access, and a separate post 
                office address.
  (d) Additional Duties of the Treasury Inspector General for 
Tax Administration.--
          (1) Annual reporting.--The Treasury Inspector General 
        for Tax Administration shall include in one of the 
        semiannual reports under section 5 of the Inspector 
        General Act of 1978--
                  (A) an evaluation of the compliance of the 
                Internal Revenue Service with--
                          (i) restrictions under section 1204 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        the use of enforcement statistics to 
                        evaluate Internal Revenue Service 
                        employees;
                          (ii) restrictions under section 7521 
                        on directly contacting taxpayers who 
                        have indicated that they prefer their 
                        representatives be contacted;
                          (iii) required procedures under 
                        section 6320 upon the filing of a 
                        notice of a lien;
                          (iv) required procedures under 
                        subchapter D of chapter 64 for seizure 
                        of property for collection of taxes, 
                        including required procedures under 
                        section 6330 regarding levies; and
                          (v) restrictions under section 3707 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        designation of taxpayers;
                  (B) a review and a certification of whether 
                or not the Secretary is complying with the 
                requirements of section 6103(e)(8) to disclose 
                information to an individual filing a joint 
                return on collection activity involving the 
                other individual filing the return;
                  (C) information regarding extensions of the 
                statute of limitations for assessment and 
                collection of tax under section 6501 and the 
                provision of notice to taxpayers regarding 
                requests for such extension;
                  (D) an evaluation of the adequacy and 
                security of the technology of the Internal 
                Revenue Service;
                  (E) any termination or mitigation under 
                section 1203 of the Internal Revenue Service 
                Restructuring and Reform Act of 1998;
                  (F) information regarding improper denial of 
                requests for information from the Internal 
                Revenue Service identified under paragraph 
                (3)(A); and
                  (G) information regarding any administrative 
                or civil actions with respect to violations of 
                the fair debt collection provisions of section 
                6304, including--
                          (i) a summary of such actions 
                        initiated since the date of the last 
                        report; and
                          (ii) a summary of any judgments or 
                        awards granted as a result of such 
                        actions.
          (2) Semiannual reports.--
                  (A) In general.--The Treasury Inspector 
                General for Tax Administration shall include in 
                each semiannual report under section 5 of the 
                Inspector General Act of 1978--
                          (i) the number of taxpayer complaints 
                        during the reporting period;
                          (ii) the number of employee 
                        misconduct and taxpayer abuse 
                        allegations received by the Internal 
                        Revenue Service or the Inspector 
                        General during the period from 
                        taxpayers, Internal Revenue Service 
                        employees, and other sources;
                          (iii) a summary of the status of such 
                        complaints and allegations; and
                          (iv) a summary of the disposition of 
                        such complaints and allegations, 
                        including the outcome of any Department 
                        of Justice action and any monies paid 
                        as a settlement of such complaints and 
                        allegations.
                  (B) Clauses (iii) and (iv) of subparagraph 
                (A) shall only apply to complaints and 
                allegations of serious employee misconduct.
          (3) Other responsibilities.--The Treasury Inspector 
        General for Tax Administration shall--
                  (A) conduct periodic audits of a 
                statistically valid sample of the total number 
                of determinations made by the Internal Revenue 
                Service to deny written requests to disclose 
                information to taxpayers on the basis of 
                section 6103 of this title or section 552(b)(7) 
                of title 5, United States Code;
                  (B) establish and maintain a toll-free 
                telephone number for taxpayers to use to 
                confidentially register complaints of 
                misconduct by Internal Revenue Service 
                employees and incorporate the telephone number 
                in the statement required by section 6227 of 
                the Omnibus Taxpayer Bill of Rights (Internal 
                Revenue Service Publication No. 1); and
                  (C) not later than December 31, 2010, submit 
                a written report to Congress on the 
                implementation of section 6103(k)(10).
  (f) Internal Revenue Service Chief Information Officer.--
          (1) In general.--There shall be in the Internal 
        Revenue Service an Internal Revenue Service Chief 
        Information Officer (hereafter referred to in this 
        subsection as the ``IRS CIO'') who shall be appointed 
        by the Administrator of the Internal Revenue Service.
          (2) Centralized responsibility for internal revenue 
        service information technology.--The Administrator of 
        the Internal Revenue Service (and the Secretary) shall 
        act through the IRS CIO with respect to all 
        development, implementation, and maintenance of 
        information technology for the Internal Revenue 
        Service. Any reference in this subsection to the IRS 
        CIO which directs the IRS CIO to take any action, or to 
        assume any responsibility, shall be treated as a 
        reference to the Administrator of the Internal Revenue 
        Service acting through the IRS CIO.
          (3) General duties and responsibilities.--The IRS CIO 
        shall--
                  (A) be responsible for the development, 
                implementation, and maintenance of information 
                technology for the Internal Revenue Service,
                  (B) ensure that the information technology of 
                the Internal Revenue Service is secure and 
                integrated,
                  (C) maintain operational control of all 
                information technology for the Internal Revenue 
                Service,
                  (D) be the principal advocate for the 
                information technology needs of the Internal 
                Revenue Service, and
                  (E) consult with the Chief Procurement 
                Officer of the Internal Revenue Service to 
                ensure that the information technology acquired 
                for the Internal Revenue Service is consistent 
                with--
                          (i) the goals and requirements 
                        specified in subparagraphs (A) through 
                        (D), and
                          (ii) the strategic plan developed 
                        under paragraph (4).
          (4) Strategic plan.--
                  (A) In general.--The IRS CIO shall develop 
                and implement a multiyear strategic plan for 
                the information technology needs of the 
                Internal Revenue Service. Such plan shall--
                          (i) include performance measurements 
                        of such technology and of the 
                        implementation of such plan,
                          (ii) include a plan for an integrated 
                        enterprise architecture of the 
                        information technology of the Internal 
                        Revenue Service,
                          (iii) include and take into account 
                        the resources needed to accomplish such 
                        plan,
                          (iv) take into account planned major 
                        acquisitions of information technology 
                        by the Internal Revenue Service, 
                        including Customer Account Data Engine 
                        2 and the Enterprise Case Management 
                        System, and
                          (v) align with the needs and 
                        strategic plan of the Internal Revenue 
                        Service.
                  (B) Plan updates.--The IRS CIO shall, not 
                less frequently than annually, review and 
                update the strategic plan under subparagraph 
                (A) (including the plan for an integrated 
                enterprise architecture described in 
                subparagraph (A)(ii)) to take into account the 
                development of new information technology and 
                the needs of the Internal Revenue Service.
          (5) Scope of authority.--
                  (A) Information technology.--For purposes of 
                this subsection, the term ``information 
                technology'' has the meaning given such term by 
                section 11101 of title 40, United States Code.
                  (B) Internal revenue service.--Any reference 
                in this subsection to the Internal Revenue 
                Service includes a reference to all components 
                of the Internal Revenue Service, including--
                          (i) the Office of the Taxpayer 
                        Advocate,
                          (ii) the Criminal Investigation 
                        Division of the Internal Revenue 
                        Service, and
                          (iii) except as otherwise provided by 
                        the Secretary with respect to 
                        information technology related to 
                        matters described in subsection 
                        (b)(3)(B), the Office of the Chief 
                        Counsel.

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