II
112th CONGRESS
1st Session
S. 1534
IN THE SENATE OF THE UNITED STATES
September 8, 2011
Mr. Nelson of Florida introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To prevent identity theft and tax fraud.
Short title
This Act may be cited as
the Identify Theft and Tax Fraud
Prevention Act
.
Criminal penalty for using a false identity in connection with tax fraud
In general
Section 7207 of the Internal Revenue Code of 1986 is amended—
by striking
Any person who willfully
and inserting the following:
In general
Any person who willfully
,
by striking
Any person required
and inserting the following:
Information in connection with certain exempt organizations
Any person required
, and
by adding at the end the following:
Misappropriation of identity
Any person who knowingly or willfully misappropriates another person's tax identification number in connection with any list, return, account, statement, or other document submitted to the Secretary shall be fined not less than $25,000 ($200,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
.
Effective date
The amendments made by this section shall apply to returns and information submitted after the date of the enactment of this Act.
Increased penalty for improper disclosure or use of information by preparers of returns
In general
Section 6713(a) of the Internal Revenue Code of 1986 is amended—
by striking
$250
and inserting $1,000
, and
by striking
$10,000
and inserting $50,000
.
Criminal penalty
Section 7216(a) of the Internal Revenue Code of 1986 is
amended by striking $1,000
and inserting
$100,000
.
Effective date
The amendments made by this section shall apply to disclosures or uses after the date of the enactment of this Act.
PIN system for prevention of identity theft tax fraud
In general
Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary's delegate) shall implement an identify theft tax fraud prevention program under which—
a person who has filed an identity theft affidavit with the Secretary may elect—
to be provided with a unique personal identification number to be included on any Federal tax return filed by such person, or
to prevent the processing of any Federal tax return submitted in an electronic format by a person purporting to be such person, and
the Secretary will provide additional identity verification safeguards for the processing of any Federal tax return filed by a person described in paragraph (1) in cases where a unique personal identification number is not included on the return.
Authority to transfer Internal Revenue Service appropriations to use for tax fraud enforcement
For any fiscal
year, the Commissioner of Internal Revenue may transfer not more than
$10,000,000 to the Enforcement
account of the Internal Revenue
Service from amounts appropriated to other Internal Revenue Service accounts.
Any amounts so transferred shall be used solely for the purposes of preventing
and resolving potential cases of tax fraud.
Local Law Enforcement Liaison
Establishment
The Commissioner of Internal Revenue shall establish within the Criminal Investigation Division of the Internal Revenue Service the position of Local Law Enforcement Liaison.
Duties
The Local Law Enforcement Liaison shall—
coordinate the investigation of tax fraud with State and local law enforcement agencies;
communicate the status of tax fraud cases involving identity theft, and
carry out such other duties as delegated by the Commissioner of Internal Revenue.
Report on tax fraud
Subsection (a) of section 7803 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Annual report on tax fraud
The Commissioner shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House or Representatives an annual report detailing—
the number of reports of tax fraud and suspected tax fraud received from State and local law enforcement agencies in the preceding year, and
the actions taken in response to such reports.
.
Study on the use of prepaid debit cards and commercial tax preparation software in tax fraud
In general
The Comptroller General shall conduct a study to examine the role of prepaid debit cards and commercial tax preparation software in facilitating fraudulent tax returns through identity theft.
Report
Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report with the results of the study conducted under subsection (a), together with any recommendations.
Restriction on access to the death master file
In general
The Secretary of Commerce shall not disclose information contained on the Death Master File to any person with respect to any individual who has died at any time during the calendar year in which the request for disclosure is made or the succeeding calendar year unless such person is certified under the program established under subsection (b).
Certification program
In general
The Secretary of Commerce shall establish a program to certify persons who are eligible to access the information described in subsection (a) contained on the Death Master File.
Certification
A person shall not be certified under the program established under paragraph (1) unless the Secretary determines that such person has a legitimate fraud prevention interest in accessing the information described in subsection (a).
Imposition of penalty
Any person who is certified under the program established under subsection (b), who receives information described in subsection (a), and who during the period of time described in subsection (a)—
discloses such information to any other person, or
uses any such information for any purpose other than to detect or prevent fraud,
Exemption from Freedom of Information Act requirement with respect to certain records of deceased individuals
In General
The Social Security Administration shall not be compelled to disclose to any person who is not certified under the program established under section 9(b) the information described in section 9(a).
Treatment of Information
For purposes of section 552 of title 5, United States Code, this section shall be considered a statute described in subsection (b)(3)(B) of such section 552.
Extension of authority to disclose certain return information to prison officials
In general
Section 6103(k)(10) of the Internal Revenue Code of 1986 is amended by striking subparagraph (D).
Report from Federal Bureau of Prisons
Not later than 6 months after the date of the enactment of this Act, the head of the Federal Bureau of Prisons shall submit to Congress a detailed plan on how it will use the information provided from the Secretary of Treasury under section 6103(k)(10) of the Internal Revenue Code of 1986 to reduce prison tax fraud.
Sense of Senate regarding State prison authorities
It is the sense of the Senate that the heads of State agencies charged with the administration of prisons should—
develop plans for using the information provided by the Secretary of Treasury under section 6103(k)(10) of the Internal Revenue Code of 1986 to reduce prison tax fraud, and
coordinate with the Internal Revenue Service with respect to the use of such information.
Treasury report on information sharing barriers with respect to identity theft
Review
In general
The Secretary of the Treasury (or the Secretary's delegate) shall review whether current federal tax laws and regulations related to the confidentiality and disclosure of return information prevent the effective enforcement of local, State, and federal identity theft statutes. The review shall consider whether greater information sharing between the Internal Revenue Service and State and local law enforcement authorities would improve the enforcement of criminal laws at all levels of government.
Consultation
In conducting the review under paragraph (1), the Secretary shall solicit the views of, and consult with, State and local law enforcement officials.
Report
Not later than 180 days after the date of enactment of this Act, the Secretary shall submit a report with the results of the review conducted under subsection (a), along with any legislative recommendations, to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.