I 

112TH CONGRESS 

1ST SESSION H. R. 3482 

To prevent identity theft and tax crimes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 18, 2011 

Ms. CASTOR of Florida introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on the 

Judiciary, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To prevent identity theft and tax crimes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tax Crimes and Iden5 tity Theft Prevention Act’’. 

6 SEC. 2. EXPEDITED RESOLUTION FROM INTERNAL REV7 ENUE SERVICE FOR IDENTITY THEFT VIC8 TIMS. 

9 Not later than 90 days after an individual notifies 

10 the Secretary of the Treasury that such individual’s idenVerDate Mar 15 2010 02:23 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3482.IH H3482

jbell on DSK7SPTVN1PROD with BILLS
2 

•HR 3482 IH

1 tity has been misused by another person in connection 

2 with the internal revenue laws, the Secretary shall, to the 

3 extent practicable, determine the extent to which the tax4 payer’s return and return information were affected by 

5 such misuse and shall take such actions as are necessary 

6 to correct such affected return or return information with 

7 respect to such misuse. 

8 SEC. 3. DISCLOSURE OF RETURN AND RETURN INFORMA9 TION IN FEDERAL AND STATE PROSECUTION 

10 RELATING TO IDENTITY FRAUD. 

11 (a) IN GENERAL.—Subsection (k) of section 6103 of 

12 the Internal Revenue Code of 1986 is amended by adding 

13 at the end the following new paragraph: 

14 ‘‘(11) DISCLOSURE OF CERTAIN RETURN IN15 FORMATION IN CONNECTION WITH IDENTITY THEFT

16 AND FRAUDULENT RETURNS.— 

17 ‘‘(A) IN GENERAL.—In the case of an in18 vestigation pertaining to the misuse of the iden19 tity of another person for purposes of filing a 

20 false or fraudulent return of tax, upon receipt 

21 of a written request which meets the require22 ments of subparagraph (C), the Secretary may 

23 disclose return information to officers and em24 ployees of any Federal law enforcement agency, 

25 or any officers and employees of any State or 


jbell on DSK7SPTVN1PROD with BILLS
3 

•HR 3482 IH

1 local law enforcement agency, who are person2 ally and directly engaged in the investigation of 

3 any crimes implicated in such misuse, but only 

4 if any such law enforcement agency is part of 

5 a team with the Internal Revenue Service in 

6 such investigation. 

7 ‘‘(B) LIMITATION ON USE OF INFORMA8 TION.—Information disclosed under this sub9 paragraph shall be solely for the use of such of10 ficers and employees to whom such information 

11 is disclosed in such investigation. 

12 ‘‘(C) REQUIREMENTS.—A request meets 

13 the requirements of this clause if— 

14 ‘‘(i) the request is made by the head 

15 of the agency (or his delegate) involved in 

16 such investigation, and 

17 ‘‘(ii) the request sets forth the specific 

18 reason why such disclosure may be rel19 evant to the investigation.’’. 

20 (b) CONFORMING AMENDMENTS.— 

21 (1) Paragraph (2) of section 6103(a) of such 

22 Code is amended by inserting ‘‘or (k)(11)’’ after 

23 ‘‘subsection (i)(7)(A)’’. 


jbell on DSK7SPTVN1PROD with BILLS
4 

•HR 3482 IH

1 (2) Paragraph (4) of section 6103(p) of such 

2 Code is amended in the matter preceding subpara3 graph (A) by inserting ‘‘or (11)’’ after ‘‘(k)(10)’’. 

4 (3) Paragraph (2) of section 7213(a) of such 

5 Code is amended by inserting ‘‘(k)(11),’’ after 

6 ‘‘(7)(A)(i),’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to disclosures after the date of the 

9 enactment of this Act. 

10 SEC. 4. CRIMINAL PENALTY FOR USING A FALSE IDENTITY 

11 IN CONNECTION WITH TAX FRAUD. 

12 (a) IN GENERAL.—Section 7207 of the Internal Rev13 enue Code of 1986 is amended— 

14 (1) by striking ‘‘Any person who willfully’’ and 

15 inserting the following: 

16 ‘‘(a) IN GENERAL.—Any person who willfully’’, 

17 (2) by striking ‘‘Any person required’’ and in18 serting the following: 

19 ‘‘(b) INFORMATION IN CONNECTION WITH CERTAIN

20 EXEMPT ORGANIZATIONS.—Any person required’’, and 

21 (3) by adding at the end the following: 

22 ‘‘(c) MISAPPROPRIATION OF IDENTITY.—Any person 

23 who knowingly or willfully misappropriates another per24 son’s tax identification number in connection with any list, 

25 return, account, statement, or other document submitted 


jbell on DSK7SPTVN1PROD with BILLS
5 

•HR 3482 IH

1 to the Secretary shall be fined not less than $25,000 

2 ($200,000 in the case of a corporation), or imprisoned not 

3 more than 5 years, or both, together with the costs of 

4 prosecution.’’. 

5 (b) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to returns and information sub7 mitted after the date of the enactment of this Act. 

8 SEC. 5. INCREASED PENALTY FOR IMPROPER DISCLOSURE 

9 OR USE OF INFORMATION BY PREPARERS OF 

10 RETURNS. 

11 (a) IN GENERAL.—Section 6713(a) of the Internal 

12 Revenue Code of 1986 is amended— 

13 (1) by striking ‘‘$250’’ and inserting ‘‘$1,000’’, 

14 and 

15 (2) by striking ‘‘$10,000’’ and inserting 

16 ‘‘$50,000’’. 

17 (b) CRIMINAL PENALTY.—Section 7216(a) of the In18 ternal Revenue Code of 1986 is amended by striking 

19 ‘‘$1,000’’ and inserting ‘‘$100,000’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to disclosures or uses after the date 

22 of the enactment of this Act. 


jbell on DSK7SPTVN1PROD with BILLS
6 

•HR 3482 IH

1 SEC. 6. PIN SYSTEM FOR PREVENTION OF IDENTITY THEFT 

2 TAX FRAUD. 

3 (a) IN GENERAL.—Not later than 1 year after the 

4 date of the enactment of this Act, the Secretary of the 

5 Treasury (or the Secretary’s delegate) shall implement an 

6 identify theft tax fraud prevention program under which— 

7 (1) a person who has filed an identity theft affi8 davit with the Secretary may elect— 

9 (A) to be provided with a unique personal 

10 identification number to be included on any 

11 Federal tax return filed by such person, or 

12 (B) to prevent the processing of any Fed13 eral tax return submitted in an electronic for14 mat by a person purporting to be such person, 

15 and 

16 (2) the Secretary will provide additional identity 

17 verification safeguards for the processing of any 

18 Federal tax return filed by a person described in 

19 paragraph (1) in cases where a unique personal 

20 identification number is not included on the return. 

21 SEC. 7. AUTHORITY TO TRANSFER INTERNAL REVENUE 

22 SERVICE APPROPRIATIONS TO USE FOR TAX 

23 FRAUD ENFORCEMENT. 

24 For any fiscal year, the Commissioner of Internal 

25 Revenue may transfer not more than $10,000,000 to the 

26 ‘‘Enforcement’’ account of the Internal Revenue Service 


jbell on DSK7SPTVN1PROD with BILLS
7 

•HR 3482 IH

1 from amounts appropriated to other Internal Revenue 

2 Service accounts. Any amounts so transferred shall be 

3 used solely for the purposes of preventing and resolving 

4 potential cases of tax fraud. 

5 SEC. 8. LOCAL LAW ENFORCEMENT LIAISON. 

6 (a) ESTABLISHMENT.—The Commissioner of Inter7 nal Revenue shall establish within the Criminal Investiga8 tion Division of the Internal Revenue Service the position 

9 of Local Law Enforcement Liaison. 

10 (b) DUTIES.—The Local Law Enforcement Liaison 

11 shall— 

12 (1) coordinate the investigation of tax fraud 

13 with State and local law enforcement agencies; 

14 (2) communicate the status of tax fraud cases 

15 involving identity theft, and 

16 (3) carry out such other duties as delegated by 

17 the Commissioner of Internal Revenue. 

18 SEC. 9. REPORT ON TAX FRAUD. 

19 Subsection (a) of section 7803 of the Internal Rev20 enue Code of 1986 is amended by adding at the end the 

21 following new paragraph: 

22 ‘‘(4) ANNUAL REPORT ON TAX FRAUD.—The 

23 Commissioner shall submit to the Committee on Fi24 nance of the Senate and the Committee on Ways 


jbell on DSK7SPTVN1PROD with BILLS
8 

•HR 3482 IH

1 and Means of the House of Representatives an an2 nual report detailing— 

3 ‘‘(A) the number of reports of tax fraud 

4 and suspected tax fraud received from State 

5 and local law enforcement agencies in the pre6 ceding year, and 

7 ‘‘(B) the actions taken in response to such 

8 reports.’’. 

9 SEC. 10. STUDY ON THE USE OF PREPAID DEBIT CARDS 

10 AND COMMERCIAL TAX PREPARATION SOFT11 WARE IN TAX FRAUD. 

12 (a) IN GENERAL.—The Comptroller General shall 

13 conduct a study to examine the role of prepaid debit cards 

14 and commercial tax preparation software in facilitating 

15 fraudulent tax returns through identity theft. 

16 (b) REPORT.—Not later than 1 year after the date 

17 of the enactment of this Act, the Comptroller General shall 

18 submit to the Committee on Finance of the Senate and 

19 the Committee on Ways and Means of the House of Rep20 resentatives a report with the results of the study con21 ducted under subsection (a), together with any rec22 ommendations. 


jbell on DSK7SPTVN1PROD with BILLS
9 

•HR 3482 IH

1 SEC. 11. RESTRICTION ON ACCESS TO THE DEATH MASTER 

2 FILE. 

3 (a) IN GENERAL.—The Secretary of Commerce shall 

4 not disclose information contained on the Death Master 

5 File to any person with respect to any individual who has 

6 died at any time during the calendar year in which the 

7 request for disclosure is made or the succeeding calendar 

8 year unless such person is certified under the program es9 tablished under subsection (b). 

10 (b) CERTIFICATION PROGRAM.— 

11 (1) IN GENERAL.—The Secretary of Commerce 

12 shall establish a program to certify persons who are 

13 eligible to access the information described in sub14 section (a) contained on the Death Master File. 

15 (2) CERTIFICATION.—A person shall not be cer16 tified under the program established under para17 graph (1) unless the Secretary determines that such 

18 person has a legitimate fraud prevention interest in 

19 accessing the information described in subsection 

20 (a). 

21 (c) IMPOSITION OF PENALTY.—Any person who is 

22 certified under the program established under subsection 

23 (b), who receives information described in subsection (a), 

24 and who during the period of time described in subsection 

25 (a)— 


jbell on DSK7SPTVN1PROD with BILLS
10 

•HR 3482 IH

1 (1) discloses such information to any other per2 son, or 

3 (2) uses any such information for any purpose 

4 other than to detect or prevent fraud, 

5 shall pay a penalty of $1,000 for each such disclosure or 

6 use, but the total amount imposed under this subsection 

7 on such a person for any calendar year shall not exceed 

8 $50,000. 

9 (d) EXEMPTION FROM FREEDOM OF INFORMATION

10 ACT REQUIREMENT WITH RESPECT TO CERTAIN

11 RECORDS OF DECEASED INDIVIDUALS.— 

12 (1) IN GENERAL.—The Social Security Admin13 istration shall not be compelled to disclose to any 

14 person who is not certified under the program estab15 lished under section 9(b) the information described 

16 in section 9(a). 

17 (2) TREATMENT OF INFORMATION.—For pur18 poses of section 552 of title 5, United States Code, 

19 this section shall be considered a statute described 

20 in subsection (b)(3)(B) of such section 552. 


jbell on DSK7SPTVN1PROD with BILLS
11 

•HR 3482 IH

1 SEC. 12. EXTENSION OF AUTHORITY TO DISCLOSE CERTAIN 

2 RETURN INFORMATION TO PRISON OFFI3 CIALS. 

4 (a) IN GENERAL.—Section 6103(k)(10) of the Inter5 nal Revenue Code of 1986 is amended by striking sub6 paragraph (D). 

7 (b) REPORT FROM FEDERAL BUREAU OF PRIS8 ONS.—Not later than 6 months after the date of the enact9 ment of this Act, the head of the Federal Bureau of Pris10 ons shall submit to Congress a detailed plan on how it 

11 will use the information provided from the Secretary of 

12 Treasury under section 6103(k)(10) of the Internal Rev13 enue Code of 1986 to reduce prison tax fraud. 

14 (c) SENSE OF SENATE REGARDING STATE PRISON

15 AUTHORITIES.—It is the sense of the Senate that the 

16 heads of State agencies charged with the administration 

17 of prisons should — 

18 (1) develop plans for using the information pro19 vided by the Secretary of Treasury under section 

20 6103(k)(10) of the Internal Revenue Code of 1986 

21 to reduce prison tax fraud, and 

22 (2) coordinate with the Internal Revenue Serv23 ice with respect to the use of such information. 


jbell on DSK7SPTVN1PROD with BILLS
12 

•HR 3482 IH

1 SEC. 13. TREASURY REPORT ON INFORMATION SHARING 

2 BARRIERS WITH RESPECT TO IDENTITY 

3 THEFT. 

4 (a) REVIEW.— 

5 (1) IN GENERAL.—The Secretary of the Treas6 ury (or the Secretary’s delegate) shall review wheth7 er current Federal tax laws and regulations related 

8 to the confidentiality and disclosure of return infor9 mation prevent the effective enforcement of local, 

10 State, and Federal identity theft statutes. The re11 view shall consider whether greater information 

12 sharing between the Internal Revenue Service and 

13 State and local law enforcement authorities would 

14 improve the enforcement of criminal laws at all lev15 els of government. 

16 (2) CONSULTATION.—In conducting the review 

17 under paragraph (1), the Secretary shall solicit the 

18 views of, and consult with, State and local law en19 forcement officials. 

20 (b) REPORT.—Not later than 180 days after the date 

21 of enactment of this Act, the Secretary shall submit a re22 port with the results of the review conducted under sub23 section (a), along with any legislative recommendations, 

24 to the Committee on Finance of the Senate and the Com25 mittee on Ways and Means of the House of Representa26 tives. 


jbell on DSK7SPTVN1PROD with BILLS
13 

•HR 3482 IH

1 SEC. 14. GRANTS TO INVESTIGATE AND PROSECUTE STATE 

2 AND LOCAL TAX CRIMES. 

3 (a) GRANT PROGRAM AUTHORIZED.—The Attorney 

4 General is authorized to award grants to State and local 

5 law enforcement agencies to assist such agencies in the 

6 investigation and prosecution of tax crimes. 

7 (b) AUTHORIZATION OF APPROPRIATIONS.—For each 

8 fiscal year, there are authorized to be appropriated to 

9 carry out this section, from amounts made available in 

10 each such fiscal year to carry out the Edward Byrne Me11 morial Justice Assistance Grants program under part E 

12 of title I of the Omnibus Crime Control and Safe Streets 

13 Act of 1968 (42 U.S.C. 3750 et seq.), $50,000,000. 

Æ 


jbell on DSK7SPTVN1PROD with BILLS