[House Report 118-570]
[From the U.S. Government Publishing Office]


118th Congress   }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                      {      118-570

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



 
                      TAXPAYER DATA PROTECTION ACT

                                _______
                                

 June 28, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Smith of Missouri, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 8292]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 8292) to amend the Internal Revenue Code of 1986 to 
increase penalties for unauthorized disclosure of taxpayer 
information, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
  I. SUMMARY AND BACKGROUND...........................................2
          A. Purpose and Summary.................................     2
          B. Background and Need for Legislation.................     2
          C. Legislative History.................................     3
                Background.......................................     3
                Committee Hearings...............................     3
                Committee Action.................................     4
          D. Designated Hearing..................................     4
 II. EXPLANATION OF THE BILL..........................................4
          A. Increase in Penalties for Unauthorized Disclosures 
              of Taxpayer Information (sec. 2 of the bill and 
              sec. 7213 of the Code).............................     4
          B. Reasons for Change..................................     6
          C. Explanation of Provisions...........................     7
          D. Effective Date......................................     7
III. VOTES OF THE COMMITTEE...........................................7
 IV. BUDGET EFFECTS OF THE BILL.......................................8
          A. Committee Estimate of Budgetary Effects.............     8
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures Budget Authority......................     8
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     8
  V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......9
          A. Committee Oversight Findings and Recommendations....     9
          B. Statement of General Performance Goals and 
              Objectives.........................................     9
          C. Applicability of House Rule XXI, Clause 5(b)........     9
          D. Information Relating to Unfunded Mandates...........     9
          E. Tax Complexity Analysis.............................    10
          F. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................    10
          G. Duplication of Federal Programs.....................    10
 VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........10
VII. DISSENTING VIEWS..................................................

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

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Taxpayer Data Protection Act''.

SEC. 2. INCREASE IN PENALTIES FOR UNAUTHORIZED DISCLOSURES OF TAXPAYER 
                    INFORMATION.

  (a) In General.--Paragraphs (1), (2), (3), (4), and (5) of section 
7213(a) of the Internal Revenue Code of 1986 are each amended by 
striking ``$5,000, or imprisonment of not more than 5 years'' and 
inserting ``$250,000, or imprisonment of not more than 10 years''.
  (b) Disclosures of Return Information of Multiple Taxpayers Treated 
as Multiple Violations.--Section 7213(a) of such Code is amended by 
adding at the end the following new paragraph:
          ``(6) Disclosures of return information of multiple taxpayers 
        treated as multiple violations.--For purposes of paragraphs 
        (1), (2), (3), (4), and (5), a separate violation occurs with 
        respect to each taxpayer whose return or return information is 
        disclosed in violation of any such paragraph.''.
  (c) Effective Date.--The amendments made by this section shall apply 
to disclosures made after the date of the enactment of this Act.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 8292, the ``Taxpayer Data Protection Act,'' 
as ordered by the Committee on Ways and Means on May 15, 2024. 
The Purpose of the bill is to increase the maximum penalty for 
the unauthorized disclosure of returns and return information 
and ensure that each taxpayer impacted by a disclosure will 
count as a separate and distinct violation of the law.
    The Taxpayer Data Protection Act amends paragraphs (1), 
(2), (3), (4), and (5) of 26 U.S.C. Sec. 7213(a) to increase 
the penalties for unauthorized disclosure of taxpayer 
information. Specifically, it increases the maximum fine and 
imprisonment period for an unauthorized disclosure of 26 U.S.C. 
Sec. 6103 information from ``$5,000, or imprisonment of not 
more than 5 years'' to ``$250,000, or imprisonment of not more 
than 10 years.'' This fine amount is consistent with 18 U.S.C. 
Sec. 3571. The bill also adds language to ensure every impacted 
taxpayer counts as a distinct instance of a disclosure. 
Imposing a more serious maximum sentence will help deter the 
unauthorized disclosure of taxpayer information in the future.

                 B. Background and Need for Legislation

    Starting in approximately 2018, an Internal Revenue Service 
(IRS) contractor stole taxpayer data from the IRS, and starting 
in 2019, he leaked it to the New York Times and ProPublica.\1\ 
Those organizations then published a significant amount of 
confidential tax information targeting numerous American 
taxpayers using information that the IRS is tasked with keeping 
confidential and secure.\2\
---------------------------------------------------------------------------
    \1\Factual Basis for Plea, U.S. v. Charles Edward Littlejohn, 
D.D.C., Case No. 1:23-cr-00343-ACR (Oct. 12, 2023), https://
www.justice.gov/criminal/media/1319801/dl?inline.
    \2\Russ Buettner, et al., Trump's Taxes Show Chronic Losses and 
Years of Income Tax Avoidance, The New York Times (Sept. 27, 2020), 
https://www.nytimes.com/interactive/2020/09/27/us/donald-trump-
taxes.html; Jesse Eisinger, et al., The Secret IRS Files: Trove of 
Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax, 
ProPublica (June 8, 2021), https://www.propublica.org/article/the-
secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-
wealthiest-avoid-income-tax.
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    Starting in September 2020, the Committee questioned 
federal investigators and sought answers about who illegally 
stole and leaked confidential American taxpayer information and 
how the IRS allowed it to happen.\3\ Committee efforts 
continued after ProPublica began publishing articles with 
private taxpayer information in June 2021.\4\ In September 
2023, the U.S. Department of Justice (DOJ) announced it was 
charging IRS contractor Charles Littlejohn--who stole tax 
return information for thousands of individuals--with one count 
of disclosing tax return information without authorization.\5\
---------------------------------------------------------------------------
    \3\H. Comm. On Ways and Means Press Release, Brady Calls for 
Investigation into Potentially Criminal Leak of Trump's Private Tax 
Info (Sept. 28, 2020), https://waysandmeans.house.gov/brady-calls-for-
investigation-into-potentially-criminal-leak-of-trumps-private-tax-
info/.
    \4\H. Comm. On Ways and Means Press Release, Brady, Crapo to IRS: 
Breach of Taxpayer Data Cannot Be Tolerated: Top Republican Tax Writers 
Call for Transparency, Investigation Into Leak of Confidential Tax 
Information (June 9, 2021), https://waysandmeans.house.gov/brady-crapo-
to-irs-breach-of-taxpayer-data-cannot-be-tolerated/.
    \5\IRS Consultant Charged with Disclosing Tax Return Information to 
News Organizations, U.S. Dept. of Justice (Sept. 29, 2023), https://
www.justice.gov/opa/pr/irs-consultant-charged-dis
closing-tax-return-information-news-organizations.
---------------------------------------------------------------------------
    Committee Republicans sent a letter to the Judge who 
oversaw Mr. Littlejohn's case expressing disappointment that 
DOJ plead Mr. Littlejohn to a single count when the facts 
clearly warranted additional charges.\6\ The letter also 
encouraged the Judge to sentence Mr. Littlejohn to the maximum 
of 5 years imprisonment despite the anticipated sentencing 
range of 8 to 14 months.\7\ The Judge ultimately agreed and 
sentenced Mr. Littlejohn to 5 years in prison and a $5,000 
fine.\8\
---------------------------------------------------------------------------
    \6\Letter from The Hon. Jason Smith, Chairman, H. Comm. on Ways and 
Means, et al., to The Hon. Ana C. Reyes, D.D.C. (Jan. 23, 2024), 
https://waysandmeans.house.gov/wp-content/uploads/2024/01/Letter-to-
Court-on-ProPublica-Sentencing.pdf.
    \7\Id.
    \8\Former IRS Contractor Sentenced for Disclosing Tax Return 
Information to News Organizations, U.S. Dept. of Justice (Jan. 29, 
2024), https://www.justice.gov/opa/pr/former-irs-contractor-sentenced-
disclosing-tax-return-information-news-organizations; Daniel Barnes and 
Ryan J. Reilly, Ex-IRS contractor sentenced to 5 years in prison for 
leaking Trump tax records, NBC News (Jan. 29, 2024), https://
www.nbcnews.com/politics/justice-department/former-irs-contractor
-sentenced-5-years-prison-leaking-trump-tax-recor-rcna135908.
---------------------------------------------------------------------------
    Given the lack of deterrence created by the law as is, as 
well as the concern that such an unprecedented data breach 
could result in such a disproportionate charge and sentence, 
the Committee felt it was necessary to increase the penalties 
in 26 U.S.C. Sec. 7213.

                         C. Legislative History


Background

    H.R. 8292 was introduced on May 8, 2024, and was referred 
to the Committee on Ways and Means.

Committee Hearings

    The Committee on Ways and Means held the following 
hearing(s) concerning the policy in H.R. 8292:
    On March 10, 2023, the Committee on Ways and Means held a 
hearing titled, ``President Biden's Fiscal Year 2024 Budget 
Request with Treasury Secretary Yellen'' to discuss the 
President's budget request.\9\ One of the topics Secretary 
Yellen was asked about was the leak of a vast trove of taxpayer 
information that were then published by media outlets.
---------------------------------------------------------------------------
    \9\H. Comm. on Ways and Means, President Biden's Fiscal Year 2024 
Budget Request with Treasury Secretary Yellen (Mar. 10, 2023).
---------------------------------------------------------------------------
    On April 27, 2023, the Committee on Ways and Means held a 
hearing titled, ``Accountability and Transparency at the 
Internal Revenue Service with IRS Commissioner Werfel'' to 
examine numerous issues within the IRS's purview, including the 
IRS consultant stealing tax return data and releasing it to 
media outlets.\10\
---------------------------------------------------------------------------
    \10\H. Comm. on Ways and Means, Accountability and Transparency at 
the Internal Revenue Service with IRS Commissioner Werfel (Apr. 27, 
2023).
---------------------------------------------------------------------------
    On February 15, 2024, the Committee on Ways and Means held 
a hearing titled, ``Hearing with IRS Commissioner Daniel 
Werfel'' to examine numerous issues within the IRS's purview, 
including the IRS consultant stealing tax return data and 
releasing it to media outlets.\11\
---------------------------------------------------------------------------
    \11\H. Comm. on Ways and Means, Hearing with IRS Commissioner 
Daniel Werfel (Feb. 15, 2024).
---------------------------------------------------------------------------

Committee Action

    The Committee on Ways and Means marked up H.R. 8292, the 
Taxpayer Data Protection Act, on May 15, 2024, and favorably 
reported the bill, as amended, to the House of Representatives 
(with quorum being present).

                         D. Designated Hearing

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop and consider H.R. 8292:
    ``Hearing with IRS Commissioner Daniel Werfel'' on February 
15, 2024.\12\
---------------------------------------------------------------------------
    \12\H. Comm. on Ways and Means, Hearing with IRS Commissioner 
Daniel Werfel (Feb. 15, 2024).
---------------------------------------------------------------------------

                      II. EXPLANATION OF THE BILL


   A. Increase in Penalties for Unauthorized Disclosures of Taxpayer 
       Information (sec. 2 of the bill and sec. 7213 of the Code)


                              PRESENT LAW

General rule of confidentiality

    As a general rule, section 6103 provides that returns and 
return information are confidential. The definition of return 
information is very broad and includes any information received 
or collected by the Internal Revenue Service (``IRS'') with 
respect to the liability under the Code of any person for any 
tax, penalty, interest, or offense. Returns and return 
information cannot be disclosed unless there is an applicable 
exception in the Code.
    Section 6103 contains over 95 specific exceptions to the 
general rule of confidentiality, grouped into 13 categories 
(paragraphs (c) through (o)): (1) disclosures or return or 
return information to designees of the taxpayer (consent); (2) 
disclosures to State tax officials and State and local law 
enforcement; (3) disclosures to persons having material 
interest; (4) disclosure to committees of Congress; (5) 
disclosures to the President and certain other persons; (6) 
disclosure to certain Federal officers and employees for 
purposes of tax administration, etc.; (7) disclosure to Federal 
officers and employees for administration of Federal laws not 
relating to tax administration (generally disclosures relating 
to criminal law enforcement and GAO for audits of the IRS and 
certain other agencies), (8) statistical use; (9) disclosure of 
certain return and return information for tax administration 
purposes (including investigative disclosures and passport 
revocation); (10) disclosures of returns and return information 
for purposes other than tax administration (this is one of the 
largest categories, including 22 different exceptions); (11) 
disclosure of taxpayer identity information; (12) certain other 
persons (tax administration contractors); and (13) disclosure 
of return and return information with respect to certain taxes 
(alcohol, tobacco, firearms, wagering and the heavy vehicle use 
tax).
    To protect the confidentiality of returns and return 
information, section 6103 imposes recordkeeping and safeguard 
requirements. By March 31 of each year, the IRS is required to 
report on the number of certain disclosures made in the 
previous calendar year. As a condition of receiving returns and 
return information, specified recipients are required to meet 
safeguard requirements to the satisfaction of the Secretary to 
protect the confidential returns and return information. In 
addition, the IRS performs periodic onsite inspections and is 
required to submit a report which describes the procedures and 
safeguards established and utilized by such recipients for 
ensuring the confidentiality of returns and return information 
they receive. The report is also required to describe instances 
of deficiencies in, and failure to establish or utilize, such 
procedures.

Criminal penalties for the unauthorized disclosure or inspection of 
        returns or return information

    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 proposal of section 
6103.
    Under section 7213, a person can be subject to a fine of up 
to $5,000, up to five years imprisonment, or both, together 
with the costs of prosecution.\13\ If the offense is committed 
by a Federal employee or officer, the employee or officer will 
be discharged from office upon conviction.
---------------------------------------------------------------------------
    \13\A fine of up to $250,000 can be imposed pursuant to 18 U.S.C. 
sec. 3571. Section 3559 of Title 18 specifies that an offense with a 
maximum authorized term of imprisonment of ``less than ten years but 
five or more years'' is a ``Class D felony,'' and that an offense with 
a maximum authorized term of imprisonment of ``less than twenty-five 
years but ten or more years'' is a ``Class C felony.''
---------------------------------------------------------------------------
    Under section 7213A, 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.\14\ If the offense is committed by a 
Federal employee or officer, the employee or officer will be 
discharged from office upon conviction.
---------------------------------------------------------------------------
    \14\A fine of up to $100,000 can be imposed pursuant to 18 U.S.C. 
sec. 3571(b)(4), applicable to Class A misdemeanors, defined in section 
3559 of Title 18 as an offense with a maximum authorized term of 
imprisonment of ``one year or less but more than six months.''
---------------------------------------------------------------------------
    In addition, any person who intentionally accesses a 
computer ``without authorization or exceeds authorized access, 
and thereby obtains . . . information from any department or 
agency of the United States'' can be prosecuted under 18 U.S.C. 
section 1030(a)(2) and upon conviction may be imprisoned for a 
year, or fined, or both.

Civil damage remedies for unauthorized disclosure or inspection

    If a Federal employee makes an unauthorized disclosure or 
inspection, under section 7431, 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. In addition, if the IRS or a 
Federal or State agency (upon notice to the Secretary by such 
Federal or State agency) proposes an administrative 
determination as to disciplinary or adverse action against an 
employee arising from the employee's unauthorized inspection or 
disclosure of the taxpayer's return or return information, the 
taxpayer is also required to be notified.

                         B. Reasons for Change

    Charles Littlejohn, a contractor for the IRS, stole 
confidential tax return information for thousands of the 
nation's wealthiest individuals and disclosed this information 
to two news organizations, which published articles on the 
information. Although the information of thousands of taxpayers 
was involved, Mr. Littlejohn was charged with only a single 
count of willful unauthorized disclosure.\15\ Mr. Littlejohn 
was sentenced to the maximum provided by section 7213, $5,000 
and five years in prison. The Committee believes that the 
penalties for unauthorized disclosure should be strengthened by 
increasing the maximum penalty to a $250,000 fine and 10 years 
imprisonment, to serve as a deterrent to future violations of 
the law. In addition, the bill ensures that each taxpayer 
impacted by a disclosure will count as a separate and distinct 
violation of the law.
---------------------------------------------------------------------------
    \15\Details of the Littlejohn prosecution, including court filings, 
are available at https://www.justice.gov/criminal/criminal-vns/case/
united-states-v-charles-littlejohn.
---------------------------------------------------------------------------

                      C. Explanation of Provisions

    The provision increases the specified maximum fine in 
section 7213 from $5,000 to $250,000, consistent with 18 U.S.C. 
section 3571. The provision also increases from five years to 
10 years the maximum term of imprisonment upon conviction of a 
section 7213 violation. Under the provision, for a willful 
unauthorized disclosure involving the returns or return 
information of multiple taxpayers, a separate violation occurs 
with respect to each such taxpayer whose return or return 
information is disclosed.

                           D. Effective Date

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

                      III. VOTES OF THE COMMITTEE

    In compliance with the Rules 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. 8292, the ``Taxpayer Data Protection 
Act,'' on May 15, 2024.
    H.R. 8292 was ordered favorably reported to the House of 
Representatives as amended by a roll call vote of 40 yeas to 1 
nay (with a quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
           Representative              Yea     Nay    Present       Representative       Yea     Nay    Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO).....................      X   ......  .........  Mr. Neal.............      X   ......  .........
Mr. Buchanan.......................      X   ......  .........  Mr. Doggett..........  ......  ......  .........
Mr. Smith (NE).....................      X   ......  .........  Mr. Thompson.........      X   ......  .........
Mr. Kelly..........................      X   ......  .........  Mr. Larson...........      X   ......  .........
Mr. Schweikert.....................      X   ......  .........  Mr. Blumenauer.......      X   ......  .........
Mr. Lahood.........................      X   ......  .........  Mr. Pascrell.........  ......      X   .........
Dr. Wenstrup.......................      X   ......  .........  Mr. Davis............      X   ......  .........
Mr. Arrington......................      X   ......  .........  Ms. Sanchez..........      X   ......  .........
Dr. Ferguson.......................      X   ......  .........  Ms. Sewell...........      X   ......  .........
Mr. Estes..........................      X   ......  .........  Ms. DelBene..........      X   ......  .........
Mr. Smucker........................      X   ......  .........  Ms. Chu..............      X   ......  .........
Mr. Hern...........................      X   ......  .........  Ms. Moore............      X   ......  .........
Ms. Miller.........................      X   ......  .........  Mr. Kildee...........      X   ......  .........
Dr. Murphy.........................      X   ......  .........  Mr. Beyer............      X   ......  .........
Mr. Kustoff........................      X   ......  .........  Mr. Evans............  ......  ......  .........
Mr. Fitzpatrick....................      X   ......  .........  Mr. Schneider........      X   ......  .........
Mr. Steube.........................      X   ......  .........  Mr. Panetta..........      X   ......  .........
Ms. Tenney.........................      X   ......  .........  Mr. Gomez............      X   ......  .........
Mrs. Fischbach.....................      X   ......  .........
Mr. Moore..........................      X   ......  .........
Mrs. Steel.........................      X   ......  .........
Ms. Van Duyne......................      X   ......  .........
Mr. Feenstra.......................      X   ......  .........
Ms. Malliotakis....................      X   ......  .........
Mr. Carey..........................      X   ......  .........
----------------------------------------------------------------------------------------------------------------

                     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. 8292 as 
reported.
    The bill is estimated to have a negligible effect on 
Federal fiscal year budget receipts over the 2024-2034 budget 
period.

            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.

                    C. Cost Estimate Prepared by the
                      Congressional Budget Office

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Congressional Budget 
Office cost estimate is attached.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    H.R. 8292 would increase the maximum penalties for the 
unauthorized disclosure of the tax return information of a 
person. Under current law, such unauthorized disclosure is a 
felony punishable by a fine of up to $5,000, imprisonment of up 
to 5 years, or both. H.R. 8292 would increase the maximum 
penalty to a fine of up to $250,000, imprisonment of not more 
than 10 years, or both. The bill also would clarify that any 
unauthorized disclosure which affects more than one taxpayer 
shall be treated as a separate, distinct violation for each 
taxpayer affected.
    The Congressional Budget Act of 1974, as amended, 
stipulates that revenue estimates provided by the staff of the 
Joint Committee on Taxation (JCT) will be the official 
estimates for all tax legislation considered by the Congress. 
As such, CBO incorporates those estimates into its cost 
estimates of the effects of legislation. All of the estimates 
for the revenue provisions of H.R. 8292 were provided by 
JCT.\1\
---------------------------------------------------------------------------
    \1\See Joint Committee on Taxation, Description of the Chairman's 
Amendment in the Nature of a Substitute to H.R. 8292, The ``Taxpayer 
Data Protection Act'', JCX-22-24 (May 14, 2024), https://www.jct.gov/
publications/2024/jcx-22-24/, and Description of H.R. 8292, The 
``Taxpayer Data Protection Act'', JCX-17-24 (May 13, 2024), https://
www.jct.gov/publications/2024/
jcx-17-24/.
---------------------------------------------------------------------------
    For this estimate, CBO and JCT assume that the bill will be 
enacted in fiscal year 2024.
    JCT estimates that enacting H.R. 8292 would result in a 
negligible increase in revenues over the 2024-2034 period.
    CBO estimates that implementing H.R. 8292 would increase 
administrative costs for the Internal Revenue Service by less 
than $500,000 over the 2024-2029 period; any related spending 
would be subject to the availability of appropriated funds.
    The CBO staff contact for this estimate is Nathaniel 
Frentz. The estimate was reviewed by John McClelland, Director 
of Tax Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

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


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee made findings and 
recommendations that are reflected in 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 does not authorize funding, so no statement of general 
performance goals and objectives is required.

            C. Applicability of House Rule XXI, Clause 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 
provide such a Federal income tax rate increase.

              D. 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.

                       E. Tax Complexity Analysis

    Section 4022(b) of the Internal Revenue Service Reform and 
Restructuring 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 
and has widespread applicability to individuals or small 
businesses. The staff of the Joint Committee on Taxation has 
determined that there are no provisions that are of widespread 
applicability to individuals or small businesses.

  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 clause 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 the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

             VI. 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.

         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 italics, and existing law in which no 
change is proposed is shown in roman):

                     INTERNAL REVENUE CODE OF 1986



           *       *       *       *       *       *       *
Subtitle F--Procedure and Administration

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CHAPTER 75--CRIMES, OTHER OFFENSES, AND FORFEITURES

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Subchapter A--CRIMES

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PART I--GENERAL PROVISIONS

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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] $250,000, or imprisonment of not 
        more than 10 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), (13), (14), or (15), 
        (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] $250,000, or imprisonment of not 
        more than 10 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] $250,000, or imprisonment of not 
        more than 10 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] 
        $250,000, or imprisonment of not more than 10 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] $250,000, or imprisonment of not 
        more than 10 years, or both, together with the costs of 
        prosecution.
          (6) Disclosures of return information of multiple 
        taxpayers treated as multiple violations.--For purposes 
        of paragraphs (1), (2), (3), (4), and (5), a separate 
        violation occurs with respect to each taxpayer whose 
        return or return information is disclosed in violation 
        of any such paragraph.
  (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.

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