II 

113TH CONGRESS 

1ST SESSION S. 676 

To prevent tax-related identity theft and tax fraud. 

IN THE SENATE OF THE UNITED STATES 

APRIL 9, 2013 

Mr. NELSON (for himself, Mrs. FEINSTEIN, Mr. SCHUMER, and Mr. CARDIN) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To prevent tax-related identity theft and tax fraud. 

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, ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Identity Theft and Tax Fraud Prevention Act of 2013’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—PROTECTING VICTIMS OF TAX-RELATED IDENTITY 

THEFT 

Sec. 101. Expedited refunds for identity theft victims. 

Sec. 102. Single point of contact for identity theft victims. 

Sec. 103. Enhancements to IRS PIN Program. 

Sec. 104. Electronic filing opt out. 


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TITLE II—SHUTTING DOWN ABUSIVE IDENTITY THEFT AND TAX 

FRAUD SCHEMES 

Sec. 201. Restrictions on ability to use prepaid cards for tax fraud. 

Sec. 202. Limitation on multiple tax refunds to the same account. 

TITLE III—ADDING CRITICAL NEW PROTECTIONS TO SAFEGUARD 

SOCIAL SECURITY NUMBERS 

Sec. 301. Restriction on access to the death master file. 

Sec. 302. Prohibiting the display of Social Security account numbers on newly 

issued Medicare identification cards and communications provided to Medicare beneficiaries. 

Sec. 303. Prohibition of the display, sale, or purchase of Social Security numbers. 

Sec. 304. Criminal penalties for the misuse of a Social Security number. 

Sec. 305. Civil actions and civil penalties. 

TITLE IV—STRENGTHENING LAWS AND IMPROVING 

ENFORCEMENT AGAINST TAX-RELATED IDENTITY THEFT 

Sec. 401. Criminal penalty for using a false identity in connection with tax 

fraud. 

Sec. 402. Increased penalty for improper disclosure or use of information by 

preparers of returns. 

Sec. 403. Authority to transfer Internal Revenue Service appropriations to use 

for tax fraud enforcement. 

Sec. 404. Local law enforcement liaison. 

TITLE V—ACCELERATING TRANSITION TO A REAL-TIME TAX 

SYSTEM THAT PROTECTS TAXPAYERS AND REDUCES FRAUD 

Sec. 501. Improvement in access to information in the National Directory of 

New Hires for tax administration purposes. 

Sec. 502. Plan of action for transitioning to a real-time tax system. 

1 TITLE I—PROTECTING VICTIMS 

2 OF TAX-RELATED IDENTITY 

3 THEFT 

4 SEC. 101. EXPEDITED REFUNDS FOR IDENTITY THEFT VIC5 TIMS. 

6 Not later than 180 days after the date of enactment 

7 of this Act, the Secretary of the Treasury, or the Sec8 retary’s delegate, shall establish a plan of action to reduce 

9 the administrative time required to process and resolve 

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1 cluding the issuance of refunds to legitimate taxpayers, 

2 to no more than 90 days, on average. 

3 SEC. 102. SINGLE POINT OF CONTACT FOR IDENTITY THEFT 

4 VICTIMS. 

5 Not later than 180 days after the date of enactment 

6 of this Act, the Secretary of the Treasury, or the Sec7 retary’s delegate, shall establish new procedures to ensure 

8 that any taxpayer whose return has been delayed or other9 wise adversely affected due to identity theft has a single 

10 point of contact at the Internal Revenue Service through11 out the processing of his or her case. The single point of 

12 contact shall track the case of the taxpayer from start to 

13 finish and coordinate with other specialized units to re14 solve case issues as quickly as possible. 

15 SEC. 103. ENHANCEMENTS TO IRS PIN PROGRAM. 

16 (a) IN GENERAL.—The Secretary of the Treasury, or 

17 the Secretary’s delegate, shall issue a personal identifica18 tion number to identity theft victims as soon as practicable 

19 after their true identity has been established and verified. 

20 (b) REPORT.—Not later than 360 days after the date 

21 of enactment of this Act, the Secretary of the Treasury 

22 shall submit to Congress a report analyzing the effective23 ness of the program described in subsection (a) in reduc24 ing tax fraud. 


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1 SEC. 104. ELECTRONIC FILING OPT OUT. 

2 Not later than 180 days after the date of enactment 

3 of this Act, the Secretary of the Treasury, or the Sec4 retary’s delegate, shall implement a program under which 

5 a person who has filed an identity theft affidavit with the 

6 Secretary may elect to prevent the processing of any Fed7 eral tax return submitted in an electronic format by a per8 son purporting to be such a person. 

9 TITLE II—SHUTTING DOWN ABU10 SIVE IDENTITY THEFT AND 

11 TAX FRAUD SCHEMES 

12 SEC. 201. RESTRICTIONS ON ABILITY TO USE PREPAID 

13 CARDS FOR TAX FRAUD. 

14 (a) ACCOUNTS WITH ELEVATED RISK OF IDENTITY

15 THEFT.— 

16 (1) IN GENERAL.—Not later than 360 days 

17 after the date of the enactment this Act, the Federal 

18 primary financial regulatory agencies, in consulta19 tion with the Secretary of the Treasury, shall jointly 

20 prescribe regulations requiring newly issued deposit 

21 or transaction account numbers, as the case may be, 

22 to be distinguishable between verified accounts and 

23 at-risk accounts. 

24 (2) DEFINITIONS.—As used in this section— 

25 (A) the term ‘‘at-risk account’’ means any 

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1 ing accounts associated with a prepaid access 

2 arrangement, that is not a verified account; 

3 (B) the term ‘‘primary financial regulatory 

4 agency’’ has the same meaning as in section 

5 2(12) of the Dodd-Frank Wall Street Reform 

6 and Consumer Protection Act (12 U.S.C. 

7 5301(12)); and 

8 (C) the term ‘‘verified account’’ means any 

9 deposit account or transaction account in which 

10 the identity of the account holder and any pre11 paid access customer associated with the ac12 count is verified by— 

13 (i) customer identification procedures 

14 that comply with section 5318(l) of title 

15 31, United States Code; and 

16 (ii) direct review of an original, unex17 pired government-issued form of identifica18 tion bearing a photograph or similar safe19 guard, such as a driver’s license or pass20 port. 

21 (b) GAO AUDIT OF DEBIT CARD ISSUERS TO EN22 SURE COMPLIANCE WITH CUSTOMER IDENTIFICATION

23 REQUIREMENTS.— 

24 (1) REVIEW AND EVALUATION.—The Comp25 troller General of the United States shall review and 


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1 evaluate the effectiveness of the current Customer 

2 Identification Program rules implementing the cus3 tomer identification program requirements under 

4 section 5318(l) of title 31, United States Code, as 

5 such rules apply to the prepaid card industry. 

6 (2) REQUIRED CONSIDERATIONS.—The review 

7 and evaluation required under paragraph (1) shall— 

8 (A) consider whether weaknesses in cur9 rent customer identification programs are con10 tributing to identity theft and financial loss, 

11 particularly with respect to tax fraud; and 

12 (B) review whether— 

13 (i) current risk-based standards for 

14 customer identification are the best means 

15 to prevent criminal use of prepaid cards 

16 and provide sufficient guidance and cer17 tainty to the sellers and providers of pre18 paid access; 

19 (ii) current exclusions from customer 

20 identification requirements, such as exclu21 sions for government benefit programs, are 

22 appropriate; and 

23 (iii) Federal regulatory agencies exer24 cise adequate oversight and supervision of 


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1 customer identification practices of the 

2 prepaid card industry. 

3 (3) REPORT TO CONGRESS.—Not later than 

4 360 days after the date of the enactment this Act, 

5 the Comptroller General of the United States shall 

6 submit to Congress a report— 

7 (A) on the findings of the review and eval8 uation required under paragraph (1); and 

9 (B) containing any recommendations or 

10 proposals for legislative or administrative action 

11 to improve the customer identification practices 

12 of the prepaid card industry. 

13 SEC. 202. LIMITATION ON MULTIPLE TAX REFUNDS TO THE 

14 SAME ACCOUNT. 

15 (a) IN GENERAL.—Not later than 180 days after the 

16 date of enactment of this Act, the Secretary of the Treas17 ury, or the Secretary’s delegate, shall issue regulations 

18 that restrict the delivery or deposit of multiple tax refunds 

19 from the same tax year to the same individual account 

20 or mailing address. 

21 (b) EXCEPTION.—The regulation promulgated under 

22 subsection (a) shall provide that the restrictions shall not 

23 apply in cases and situations where the Secretary deter24 mines there is not a likelihood of tax fraud. 


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1 TITLE III—ADDING CRITICAL 

2 NEW PROTECTIONS TO SAFE3 GUARD SOCIAL SECURITY 

4 NUMBERS 

5 SEC. 301. RESTRICTION ON ACCESS TO THE DEATH MASTER 

6 FILE. 

7 (a) IN GENERAL.—Not later than 90 days after the 

8 date of the enactment of this Act, the Commissioner of 

9 the Social Security Administration shall vest all respon10 sibilities for the release of Social Security death records 

11 to non-governmental persons or entities with the Secretary 

12 of Commerce through a memorandum of understanding. 

13 (b) PROHIBITION.—The Secretary of Commerce shall 

14 not disclose information contained in Social Security death 

15 records to any non-governmental person or entity with re16 spect to any individual who has died at any time during 

17 the calendar year in which the request for disclosure is 

18 made or the succeeding 2 calendar years unless such per19 son is certified under the program established under sub20 section (c). 

21 (c) CERTIFICATION PROGRAM.— 

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

23 shall establish a program— 


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1 (A) to certify persons who are eligible to 

2 access the information described in subsection 

3 (b) contained on the Death Master File, and 

4 (B) to perform periodic and unscheduled 

5 audits of certified persons to determine the 

6 compliance by such certified persons with the 

7 requirements of the program. 

8 (2) CERTIFICATION.—A person shall not be cer9 tified nor remain certified under the program estab10 lished under paragraph (1) unless— 

11 (A) the Secretary of Commerce determines 

12 that access to the information described in sub13 section (b) is appropriate because— 

14 (i) such person has a legitimate inter15 est in preventing fraud or unauthorized fi16 nancial transactions, 

17 (ii) such access will facilitate compli18 ance by such person with an applicable 

19 law, regulation, court order, or fiduciary 

20 duty, 

21 (iii) such access will facilitate timely 

22 and proper administration by such person 

23 of an insurance policy or benefit program, 

24 or 


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1 (iv) such person is subject to disclo2 sure requirements under section 502 of the 

3 Gramm-Leach-Bliley Act (15 U.S.C. 

4 6802), section 620 of the Fair Credit Re5 porting Act (15 U.S.C. 1681r), or any 

6 other Federal statute that the Secretary 

7 determines, following notice and comment 

8 rulemaking, provides sufficient protection 

9 against improper disclosure of information 

10 described in subsection (b), and 

11 (B) the Secretary of Commerce verifies 

12 that such person has facilities and procedures 

13 in place to safeguard such information, and ex14 perience in maintaining the confidentiality, se15 curity, and appropriate use of such information. 

16 (3) FEES.—The Secretary of Commerce shall 

17 establish under section 9701 of title 31, United 

18 States Code, for the charge of fees sufficient to 

19 cover all costs associated with evaluating applica20 tions for certification and auditing, inspecting, and 

21 monitoring certified persons under the program. 

22 (d) IMPOSITION OF PENALTY.— 

23 (1) IN GENERAL.—Subject to paragraph (2), 

24 any person who is certified under the program estab25 lished under subsection (c), who receives information 


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1 described in subsection (b), and who during the pe2 riod of time described in subsection (b)— 

3 (A) discloses such information to any other 

4 person, or 

5 (B) uses any such information to commit, 

6 or aid or abet, any criminal offense, 

7 shall pay a penalty of $5,000 for each such disclo8 sure or use, but the total amount imposed under this 

9 subsection on such a person for any calendar year 

10 shall not exceed $500,000. 

11 (2) EXCEPTION.—A person who— 

12 (A) is certified under the program estab13 lished under subsection (c), 

14 (B) upon request by another person, 

15 verifies that an individual is or is not deceased 

16 pursuant to information contained on the Death 

17 Master File, and 

18 (C) does not disclose any additional infor19 mation described in subsection (b), 

20 shall not be subject to a penalty pursuant to para21 graph (1). 

22 (e) EXEMPTION FROM FREEDOM OF INFORMATION

23 ACT REQUIREMENT WITH RESPECT TO CERTAIN

24 RECORDS OF DECEASED INDIVIDUALS.— 


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1 (1) IN GENERAL.—Subsequent to the date on 

2 which the Secretary of Commerce establishes the 

3 program described in subsection (c)(1), the Social 

4 Security Administration shall not be compelled to 

5 disclose any information described in subsection (b) 

6 to any non-governmental person or entity who is not 

7 certified under such program. 

8 (2) TREATMENT OF INFORMATION.—For pur9 poses of section 552 of title 5, United States Code, 

10 this section shall be considered a statute described 

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

12 SEC. 302. PROHIBITING THE DISPLAY OF SOCIAL SECURITY 

13 ACCOUNT NUMBERS ON NEWLY ISSUED 

14 MEDICARE IDENTIFICATION CARDS AND 

15 COMMUNICATIONS PROVIDED TO MEDICARE 

16 BENEFICIARIES. 

17 (a) IN GENERAL.—Not later than 2 years after the 

18 date of the enactment of this Act, the Secretary of Health 

19 and Human Services, in consultation with the Commis20 sioner of Social Security, shall establish and begin to im21 plement procedures to eliminate the unnecessary collec22 tion, use, and display of Social Security account numbers 

23 of Medicare beneficiaries. 

24 (b) NEWLY ISSUED MEDICARE CARDS AND COMMU25 NICATIONS PROVIDED TO BENEFICIARIES.— 


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1 (1) NEWLY ISSUED CARDS.— 

2 (A) IN GENERAL.—Not later than 4 years 

3 after the date of enactment of this Act, the Sec4 retary of Health and Human Services, in con5 sultation with the Commissioner of Social Secu6 rity, shall ensure that each newly issued Medi7 care identification card meets the requirements 

8 described in subparagraph (B). 

9 (B) REQUIREMENTS.— 

10 (i) IN GENERAL.—Subject to clauses 

11 (ii) and (iii), the requirements described in 

12 this subparagraph are, with respect to a 

13 Medicare identification card, that the card 

14 does not display or electronically store (in 

15 an unencrypted format) a Medicare bene16 ficiary’s Social Security account number. 

17 (ii) EXCEPTION.—The Secretary may 

18 waive the requirements under clause (i) in 

19 the case where the health insurance claim 

20 number of a beneficiary is the Social Secu21 rity number of the beneficiary, the bene22 ficiary’s spouse, or another individual. 

23 (iii) USE OF PARTIAL ACCOUNT NUM24 BER.—The Secretary of Health and 

25 Human Services, in consultation with the 


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1 Commissioner of Social Security, may pro2 vide for the use of a partial Social Security 

3 account number on a Medicare identifica4 tion card if the Secretary determines that 

5 such use does not allow an unacceptable 

6 risk of fraudulent use. 

7 (2) COMMUNICATIONS PROVIDED TO BENE8 FICIARIES.—Not later than 4 years after the date of 

9 enactment of this Act, the Secretary of Health and 

10 Human Services shall prohibit the display of a Medi11 care beneficiary’s Social Security account number on 

12 written or electronic communication provided to the 

13 beneficiary unless the Secretary, in consultation with 

14 the Commissioner of Social Security, determines 

15 that inclusion of Social Security account numbers on 

16 such communications is essential for the operation of 

17 the Medicare program. 

18 (c) MEDICARE BENEFICIARY DEFINED.—In this sec19 tion, the term ‘‘Medicare beneficiary’’ means an individual 

20 entitled to, or enrolled for, benefits under part A of title 

21 XVIII of the Social Security Act (42 U.S.C. 1395c et seq.) 

22 or enrolled for benefits under part B of such title (42 

23 U.S.C. 1395j et seq.). 

24 (d) CONFORMING AMENDMENTS.— 


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1 (1) REFERENCE IN THE SOCIAL SECURITY

2 ACT.—Section 205(c)(2)(C) of the Social Security 

3 Act (42 U.S.C. 405(c)(2)(C)) is amended— 

4 (A) by moving clause (x), as added by sec5 tion 1414(a)(2) of the Patient Protection and 

6 Affordable Care Act (Public Law 111–148), 6 

7 ems to the left; 

8 (B) by redesignating clause (x), as added 

9 by section 2(a)(1) of the Social Security Num10 ber Protection Act of 2010 (42 U.S.C. 1305 

11 note), as clause (xii); and 

12 (C) by adding after clause (xii), as redesig13 nated by subparagraph (B), the following new 

14 clause: 

15 ‘‘(xiii) Subject to section 302 of the Identity Theft 

16 and Tax Fraud Prevention Act of 2013, social security 

17 account numbers shall not be displayed on Medicare iden18 tification cards or on communications provided to Medi19 care beneficiaries.’’. 

20 (2) ACCESS TO INFORMATION.—Section 205(r) 

21 of the Social Security Act (42 U.S.C. 405(r)) is 

22 amended by adding at the end the following new 

23 paragraph: 

24 ‘‘(10) To prevent and identify fraudulent activity, the 

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1 eral or upon the request of the Secretary of Health and 

2 Human Services enter into a reimbursable agreement with 

3 the Attorney General or the Secretary to provide informa4 tion collected under paragraph (1) if— 

5 ‘‘(A) the requirements of subparagraphs (A) 

6 and (B) of paragraph (3) are met; and 

7 ‘‘(B) such agreement includes appropriate pro8 visions to protect the confidentiality of information 

9 provided by the Commissioner under such agree10 ment.’’. 

11 (e) PILOT PROGRAM.— 

12 (1) ESTABLISHMENT.—The Secretary shall es13 tablish a pilot program utilizing smart card tech14 nology to evaluate— 

15 (A) the applicability of smart card tech16 nology to the Medicare program under title 

17 XVIII of the Social Security Act (42 U.S.C. 

18 1395 et seq.), including the applicability of such 

19 technology to Medicare beneficiaries or Medi20 care providers; and 

21 (B) whether such cards would be effective 

22 in preventing fraud under the Medicare pro23 gram. 

24 (2) IMPLEMENTATION.— 


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1 (A) INITIAL IMPLEMENTATION.—The Sec2 retary shall implement the pilot program under 

3 this subsection not later than 1 year after the 

4 date of enactment of this Act. 

5 (B) SCOPE AND DURATION.—The Sec6 retary shall conduct the pilot program— 

7 (i) in not less than 2 States; and 

8 (ii) for a period of not less than 180 

9 days or more than 2 years. 

10 (3) REPORT.—Not later than 12 months after 

11 the completion of the pilot program under this sub12 section, the Secretary shall submit to the appro13 priate committees of Congress and make available to 

14 the public a report that includes the following: 

15 (A) A summary of the pilot program and 

16 findings, including— 

17 (i) the costs or savings to the Medi18 care program as a result of the implemen19 tation of the pilot program; 

20 (ii) whether the use of smart card 

21 technology resulted in improvements in the 

22 quality of care provided to Medicare bene23 ficiaries under the pilot program; and 


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1 (iii) whether such technology was use2 ful in preventing or detecting fraud, waste, 

3 and abuse in the Medicare program. 

4 (B) Recommendations regarding whether 

5 the use of smart card technology should be ex6 panded under the Medicare program. 

7 (4) DEFINITIONS.—In this subsection: 

8 (A) MEDICARE PROVIDER.—The term 

9 ‘‘Medicare provider’’ includes a provider of serv10 ices (as defined in section 1861(u) of the Social 

11 Security Act (42 U.S.C. 1395x(u))) and a sup12 plier (as defined in section 1861(d) of such Act 

13 (42 U.S.C. 1395x(d))). 

14 (B) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of Health and Human 

16 Services. 

17 (C) SMART CARD.—The term ‘‘smart 

18 card’’ means identification used by a Medicare 

19 beneficiary or a Medicare provider that includes 

20 anti-fraud attributes. Such a card— 

21 (i) may rely on existing commercial 

22 data transfer networks or on a network of 

23 proprietary card readers or databases; and 

24 (ii) may include— 


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1 (I) cards using technology adapt2 ed from the financial services indus3 try; 

4 (II) cards containing individual 

5 biometric identification, provided that 

6 such identification is encrypted and 

7 not contained in any central database; 

8 (III) cards adapting technology 

9 and processes utilized in the 

10 TRICARE program under chapter 55 

11 of title 10, United States Code, or by 

12 the Veterans’ Administration; or 

13 (IV) such other technology as the 

14 Secretary determines appropriate. 

15 SEC. 303. PROHIBITION OF THE DISPLAY, SALE, OR PUR16 CHASE OF SOCIAL SECURITY NUMBERS. 

17 (a) PROHIBITION.— 

18 (1) IN GENERAL.—Chapter 47 of title 18, 

19 United States Code, is amended by inserting after 

20 section 1028A the following: 

21 ‘‘§ 1028B. Prohibition of the display, sale, or purchase 

22 of Social Security numbers 

23 ‘‘(a) DEFINITIONS.—In this section: 

24 ‘‘(1) DISPLAY.—The term ‘display’ means to in25 tentionally communicate or otherwise make available 


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1 (on the Internet or in any other manner) to the gen2 eral public an individual’s Social Security number. 

3 ‘‘(2) PERSON.—The term ‘person’ means any 

4 individual, partnership, corporation, trust, estate, co5 operative, association, or any other entity. 

6 ‘‘(3) PURCHASE.—The term ‘purchase’ means 

7 providing directly or indirectly, anything of value in 

8 exchange for a Social Security number. 

9 ‘‘(4) SALE.—The term ‘sale’ means obtaining, 

10 directly or indirectly, anything of value in exchange 

11 for a Social Security number. 

12 ‘‘(5) STATE.—The term ‘State’ means any 

13 State of the United States, the District of Columbia, 

14 Puerto Rico, the Northern Mariana Islands, the 

15 United States Virgin Islands, Guam, American 

16 Samoa, and any territory or possession of the 

17 United States. 

18 ‘‘(b) LIMITATION ON DISPLAY.—No person may dis19 play any individual’s Social Security number to the gen20 eral public without the affirmatively expressed consent of 

21 the individual. 

22 ‘‘(c) LIMITATION ON SALE OR PURCHASE.—Except 

23 as otherwise provided in this section, no person may sell 

24 or purchase any individual’s Social Security number with25 out the affirmatively expressed consent of the individual. 


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1 ‘‘(d) PREREQUISITES FOR CONSENT.—In order for 

2 consent to exist under subsection (b) or (c), the person 

3 displaying or seeking to display, selling or attempting to 

4 sell, or purchasing or attempting to purchase, an individ5 ual’s Social Security number shall— 

6 ‘‘(1) inform the individual of the general pur7 pose for which the number will be used, the types of 

8 persons to whom the number may be available, and 

9 the scope of transactions permitted by the consent; 

10 and 

11 ‘‘(2) obtain the affirmatively expressed consent 

12 (electronically or in writing) of the individual. 

13 ‘‘(e) EXCEPTIONS.—Nothing in this section shall be 

14 construed to prohibit or limit the display, sale, or purchase 

15 of a Social Security number— 

16 ‘‘(1) required, authorized, or excepted under 

17 any Federal law; 

18 ‘‘(2) for a public health purpose, including the 

19 protection of the health or safety of an individual in 

20 an emergency situation; 

21 ‘‘(3) for a national security purpose; 

22 ‘‘(4) for a law enforcement purpose, including 

23 the investigation of fraud and the enforcement of a 

24 child support obligation; 


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1 ‘‘(5) if the display, sale, or purchase of the 

2 number is for a use occurring as a result of an inter3 action between businesses, governments, or business 

4 and government (regardless of which entity initiates 

5 the interaction), including, but not limited to— 

6 ‘‘(A) the prevention of fraud (including 

7 fraud in protecting an employee’s right to em8 ployment benefits); 

9 ‘‘(B) the facilitation of credit checks or the 

10 facilitation of background checks of employees, 

11 prospective employees, or volunteers; 

12 ‘‘(C) the retrieval of other information 

13 from other businesses, commercial enterprises, 

14 government entities, or private nonprofit orga15 nizations; or 

16 ‘‘(D) when the transmission of the number 

17 is incidental to, and in the course of, the sale, 

18 lease, franchising, or merger of all, or a portion 

19 of, a business; 

20 ‘‘(6) if the transfer of such a number is part of 

21 a data matching program involving a Federal, State, 

22 or local agency; or 

23 ‘‘(7) if such number is required to be submitted 

24 as part of the process for applying for any type of 


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1 Federal, State, or local government benefit or pro2 gram; 

3 except that, nothing in this subsection shall be construed 

4 as permitting a professional or commercial user to display 

5 or sell a Social Security number to the general public. 

6 ‘‘(f) LIMITATION.—Nothing in this section shall pro7 hibit or limit the display, sale, or purchase of Social Secu8 rity numbers as permitted under title V of the Gramm9 Leach-Bliley Act, or for the purpose of affiliate sharing 

10 as permitted under the Fair Credit Reporting Act, except 

11 that no entity regulated under such Acts may make Social 

12 Security numbers available to the general public, as may 

13 be determined by the appropriate regulators under such 

14 Acts. For purposes of this subsection, the general public 

15 shall not include affiliates or unaffiliated third-party busi16 ness entities as may be defined by the appropriate regu17 lators.’’. 

18 (2) CONFORMING AMENDMENT.—The chapter 

19 analysis for chapter 47 of title 18, United States 

20 Code, is amended by inserting after the item relating 

21 to section 1028 the following: 

‘‘1028B. Prohibition of the display, sale, or purchase of Social Security numbers.’’. 

22 (b) STUDY; REPORT.— 

23 (1) IN GENERAL.—The Attorney General shall 

24 conduct a study and prepare a report on all of the 


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1 uses of Social Security numbers permitted, required, 

2 authorized, or excepted under any Federal law. The 

3 report shall include a detailed description of the uses 

4 allowed as of the date of enactment of this Act, the 

5 impact of such uses on privacy and data security, 

6 and shall evaluate whether such uses should be con7 tinued or discontinued by appropriate legislative ac8 tion. 

9 (2) REPORT.—Not later than 1 year after the 

10 date of enactment of this Act, the Attorney General 

11 shall report to Congress findings under this sub12 section. The report shall include such recommenda13 tions for legislation based on criteria the Attorney 

14 General determines to be appropriate. 

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

16 this section shall take effect on the date that is 30 days 

17 after the date on which the final regulations promulgated 

18 under section 5 are published in the Federal Register. 

19 SEC. 304. CRIMINAL PENALTIES FOR THE MISUSE OF A SO20 CIAL SECURITY NUMBER. 

21 (a) PROHIBITION OF WRONGFUL USE AS PERSONAL

22 IDENTIFICATION NUMBER.—No person may obtain any 

23 individual’s Social Security number for purposes of locat24 ing or identifying an individual with the intent to physVerDate Mar 15 2010 01:59 Apr 10, 2013 Jkt 029200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S676.IS S676

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1 ically injure, harm, or use the identity of the individual 

2 for any illegal purpose. 

3 (b) CRIMINAL SANCTIONS.—Section 208(a) of the 

4 Social Security Act (42 U.S.C. 408(a)) is amended— 

5 (1) in paragraph (8), by inserting ‘‘or’’ after 

6 the semicolon; and 

7 (2) by inserting after paragraph (8) the fol8 lowing: 

9 ‘‘(9) except as provided in subsections (e) and 

10 (f) of section 1028B of title 18, United States Code, 

11 knowingly and willfully displays, sells, or purchases 

12 (as those terms are defined in section 1028B(a) of 

13 title 18, United States Code) any individual’s Social 

14 Security account number without having met the 

15 prerequisites for consent under section 1028B(d) of 

16 title 18, United States Code; or 

17 ‘‘(10) obtains any individual’s Social Security 

18 number for the purpose of locating or identifying the 

19 individual with the intent to injure or to harm that 

20 individual, or to use the identity of that individual 

21 for an illegal purpose;’’. 

22 SEC. 305. CIVIL ACTIONS AND CIVIL PENALTIES. 

23 (a) CIVIL ACTION IN STATE COURTS.— 

24 (1) IN GENERAL.—Any individual aggrieved by 

25 an act of any person in violation of this Act or any 


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1 amendments made by this Act may, if otherwise per2 mitted by the laws or rules of the court of a State, 

3 bring in an appropriate court of that State— 

4 (A) an action to enjoin such violation; 

5 (B) an action to recover for actual mone6 tary loss from such a violation, or to receive up 

7 to $500 in damages for each such violation, 

8 whichever is greater; or 

9 (C) both such actions. 

10 It shall be an affirmative defense in any action 

11 brought under this paragraph that the defendant 

12 has established and implemented, with due care, rea13 sonable practices and procedures to effectively pre14 vent violations of the regulations prescribed under 

15 this Act. If the court finds that the defendant will16 fully or knowingly violated the regulations prescribed 

17 under this subsection, the court may, in its discre18 tion, increase the amount of the award to an amount 

19 equal to not more than 3 times the amount available 

20 under subparagraph (B). 

21 (2) STATUTE OF LIMITATIONS.—An action may 

22 be commenced under this subsection not later than 

23 the earlier of— 

24 (A) 5 years after the date on which the al25 leged violation occurred; or 


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1 (B) 3 years after the date on which the al2 leged violation was or should have been reason3 ably discovered by the aggrieved individual. 

4 (3) NONEXCLUSIVE REMEDY.—The remedy pro5 vided under this subsection shall be in addition to 

6 any other remedies available to the individual. 

7 (b) CIVIL PENALTIES.— 

8 (1) IN GENERAL.—Any person who the Attor9 ney General determines has violated any section of 

10 this Act or of any amendments made by this Act 

11 shall be subject, in addition to any other penalties 

12 that may be prescribed by law— 

13 (A) to a civil penalty of not more than 

14 $5,000 for each such violation; and 

15 (B) to a civil penalty of not more than 

16 $50,000, if the violations have occurred with 

17 such frequency as to constitute a general busi18 ness practice. 

19 (2) DETERMINATION OF VIOLATIONS.—Any 

20 willful violation committed contemporaneously with 

21 respect to the Social Security numbers of 2 or more 

22 individuals by means of mail, telecommunication, or 

23 otherwise, shall be treated as a separate violation 

24 with respect to each such individual. 


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1 (3) ENFORCEMENT PROCEDURES.—The provi2 sions of section 1128A of the Social Security Act 

3 (42 U.S.C. 1320a–7a), other than subsections (a), 

4 (b), (f), (h), (i), (j), (m), and (n) and the first sen5 tence of subsection (c) of such section, and the pro6 visions of subsections (d) and (e) of section 205 of 

7 such Act (42 U.S.C. 405) shall apply to a civil pen8 alty action under this subsection in the same man9 ner as such provisions apply to a penalty or pro10 ceeding under section 1128A(a) of such Act (42 

11 U.S.C. 1320a–7a(a)), except that, for purposes of 

12 this paragraph, any reference in section 1128A of 

13 such Act (42 U.S.C. 1320a–7a) to the Secretary 

14 shall be deemed to be a reference to the Attorney 

15 General. 

16 TITLE IV—STRENGTHENING 

17 LAWS AND IMPROVING EN18 FORCEMENT AGAINST TAX19 RELATED IDENTITY THEFT 

20 SEC. 401. CRIMINAL PENALTY FOR USING A FALSE IDEN21 TITY IN CONNECTION WITH TAX FRAUD. 

22 (a) IN GENERAL.—Section 7206 of the Internal Rev23 enue Code of 1986 is amended— 

24 (1) by striking ‘‘Any person’’ and inserting the 

25 following: 


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1 ‘‘(a) IN GENERAL.—Any person’’, and 

2 (2) by adding at the end the following new sub3 section: 

4 ‘‘(b) USE OF FALSE IDENTITY.—Any person who 

5 willfully misappropriates another person’s taxpayer iden6 tity (as defined in section 6103(b)(6)) for the purpose of 

7 making any list, return, account, statement, or other docu8 ment submitted to the Secretary under the provisions of 

9 this title shall be guilty of a felony and, upon conviction 

10 thereof, shall be fined not more than $250,000 ($500,000 

11 in the case of a corporation) or imprisoned not more than 

12 5 years, or both, together with the costs of prosecution.’’. 

13 (b) AGGRAVATED IDENTITY THEFT.—Section 

14 1028A(c) of title 18, United States Code, is amended by 

15 striking ‘‘or’’ at the end of paragraph (10), by striking 

16 the period at the end of paragraph (11) and inserting ‘‘; 

17 or’’, and by adding at the end the following new para18 graph: 

19 ‘‘(12) section 7206(b) of the Internal Revenue 

20 Code of 1986 (relating to use of false identity in 

21 connection with tax fraud).’’. 

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

23 this section shall apply to offenses committed after the 

24 date of the enactment of this Act. 


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1 SEC. 402. INCREASED PENALTY FOR IMPROPER DISCLO2 SURE OR USE OF INFORMATION BY PRE3 PARERS OF RETURNS. 

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

5 Revenue Code of 1986 is amended— 

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

7 and 

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

9 ‘‘$50,000’’. 

10 (b) CRIMINAL PENALTY.—Section 7216(a) of the In11 ternal Revenue Code of 1986 is amended by striking 

12 ‘‘$1,000’’ and inserting ‘‘$100,000’’. 

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

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

15 of the enactment of this Act. 

16 SEC. 403. AUTHORITY TO TRANSFER INTERNAL REVENUE 

17 SERVICE APPROPRIATIONS TO USE FOR TAX 

18 FRAUD ENFORCEMENT. 

19 For any fiscal year, the Commissioner of Internal 

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

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

22 from amounts appropriated to other Internal Revenue 

23 Service accounts. Any amounts so transferred shall be 

24 used solely for the purposes of preventing and resolving 

25 potential cases of tax fraud. 


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1 SEC. 404. LOCAL LAW ENFORCEMENT LIAISON. 

2 (a) ESTABLISHMENT.—The Commissioner of Inter3 nal Revenue shall establish within the Criminal Investiga4 tion Division of the Internal Revenue Service the position 

5 of Local Law Enforcement Liaison. 

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

7 shall serve as the primary source of contact for State and 

8 local law enforcement authorities with respect to tax-re9 lated identity theft and other tax fraud matters, having 

10 duties that shall include— 

11 (1) receiving information from State and local 

12 law enforcement authorities; 

13 (2) responding to inquiries from State and local 

14 law enforcement authorities; 

15 (3) administering authorized information-shar16 ing initiatives with State or local law enforcement 

17 authorities and reviewing the performance of such 

18 initiatives; 

19 (4) ensuring any information provided through 

20 authorized information-sharing initiatives with State 

21 or local law enforcement authorities is used only for 

22 the prosecution of identity theft-related crimes and 

23 not re-disclosed to third parties; and 

24 (5) any other duties as delegated by the Com25 missioner of Internal Revenue. 


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1 TITLE V—ACCELERATING TRAN2 SITION TO A REAL-TIME TAX 

3 SYSTEM THAT PROTECTS 

4 TAXPAYERS AND REDUCES 

5 FRAUD 

6 SEC. 501. IMPROVEMENT IN ACCESS TO INFORMATION IN 

7 THE NATIONAL DIRECTORY OF NEW HIRES 

8 FOR TAX ADMINISTRATION PURPOSES. 

9 (a) IN GENERAL.—Paragraph (3) of section 453(i) 

10 of the Social Security Act (42 U.S.C. 653(i)) is amended 

11 to read as follows: 

12 ‘‘(3) ADMINISTRATION OF FEDERAL TAX

13 LAWS.—The Secretary of the Treasury shall have 

14 access to the information in the National Directory 

15 of New Hires for purposes of administering the In16 ternal Revenue Code of 1986.’’. 

17 (b) EFFECTIVE DATE.—The amendment made by 

18 this section shall take effect on the date of the enactment 

19 of this Act. 

20 SEC. 502. PLAN OF ACTION FOR TRANSITIONING TO A 

21 REAL-TIME TAX SYSTEM. 

22 Not later than 270 days after the date of enactment 

23 of this Act, the Secretary of the Treasury, or the Sec24 retary’s delegate, shall submit to Congress a report ana25 lyzing and outlining options and potential timelines for 


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1 moving toward a tax system that reduces burdens on tax2 payers and decreases tax fraud through real-time informa3 tion matching. 

Æ 


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