I 

117TH CONGRESS 

1ST SESSION H. R. 1200 

To provide appropriations for the Internal Revenue Service to overhaul 

technology and strengthen enforcement, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 22, 2021 

Mr. KHANNA introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To provide appropriations for the Internal Revenue Service 

to overhaul technology and strengthen enforcement, and 

for other purposes. 

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 ‘‘Stop Corporations and 

5 High Earners from Avoiding Taxes and Enforce the Rules 

6 Strictly Act’’ or the ‘‘Stop CHEATERS Act’’. 

7 SEC. 2. POLICY OF CONGRESS. 

8 It is the policy of Congress that— 

9 (1) tax compliance, to raise revenue for national 

10 needs, restore fairness, and protect the integrity of 


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1 the tax system, high-income United States citizens 

2 and corporations should pay all of the taxes they 

3 owe, 

4 (2) tax compliance, as indicated by the fraction 

5 of taxes due that are reported and paid, should be 

6 comparable among groups of taxpayers regardless of 

7 the legal entity, 

8 (3) the Internal Revenue Service should be 

9 given resources to increase audits and enforcement 

10 of tax compliance of high-income individuals to re11 duce the tax gap, with an emphasis on the auditing 

12 and enforcement of tax compliance by individuals 

13 with gross income of not less than $1,000,000 and 

14 of large corporations, and to modernize its tech15 nology in order to better serve taxpayers and enforce 

16 the tax laws, 

17 (4) pursuing non-filers is one of the most effi18 cient enforcement strategies of the Internal Revenue 

19 Service because issuing non-filer notices can be a 

20 cost-effective tool that requires little more than auto21 mated notices, 

22 (5) priorities for actions and resources to im23 prove compliance should be guided by the relative 

24 revenue loss from non-compliance, 


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1 (6) it should be the goal of the Internal Rev2 enue Service that, by the tenth tax year after the ef3 fective date of this statute, the net tax gap, as meas4 ured by the fraction of taxes that are due that are 

5 not reported and paid, should be reduced by at least 

6 one-third, as compared with the fraction estimated 

7 in the most recent Internal Revenue Service study 

8 prior to enactment of this statute, and 

9 (7) it should be the goal of the Internal Rev10 enue Service to provide quality, timely, and accurate 

11 assistance to all taxpayers interacting with the In12 ternal Revenue Service. 

13 SEC. 3. ADDITIONAL APPROPRIATIONS FOR THE INTERNAL 

14 REVENUE SERVICE. 

15 (a) ENFORCEMENT.— 

16 (1) There is appropriated each amount listed in 

17 paragraph (2) for additional amounts for the ‘‘De18 partment of the Treasury—Internal Revenue Serv19 ice—Enforcement’’ account for the salaries and ex20 penses of additional staff to strengthen the enforce21 ment capacity of the IRS and increase audits yearly 

22 until 2025 so that the following minimum targets 

23 are reached: 


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1 (A) 50 percent of individual tax returns 

2 with a disclosed total income of not less than 

3 $10,000,000. 

4 (B) 33 percent of individual tax returns 

5 with a disclosed total income of not less than 

6 $5,000,000 and less than $10,000,000. 

7 (C) 20 percent of individual tax returns 

8 with a disclosed total income of not less than 

9 $1,000,000 and less than $5,000,000. 

10 (D) 95 percent of corporations with more 

11 than $20,000,000,000 in assets reported on 

12 Schedule L. 

13 (E) 40 percent of returns reflecting taxes 

14 related to estates larger than $10,000,000. 

15 (F) 1.2 percent of returns reflecting taxes 

16 related to gifts. 

17 (G) 0.22 percent of tax returns filed by an 

18 employer with respect to employee compensa19 tion. 

20 (2) The amounts listed in this paragraph are 

21 the following: 

22 (A) For fiscal year 2022, $2,000,000,000. 

23 (B) For fiscal year 2023, $4,000,000,000. 

24 (C) For fiscal year 2024, $5,000,000,000. 

25 (D) For fiscal year 2025, $8,000,000,000. 


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1 (E) For fiscal year 2026, $8,500,000,000. 

2 (F) For fiscal year 2027, $8,500,000,000. 

3 (G) For fiscal year 2028, $8,500,000,000. 

4 (H) For fiscal year 2029, $8,500,000,000. 

5 (I) For fiscal year 2030, $8,500,000,000. 

6 (J) For fiscal year 2031, $8,500,000,000. 

7 (b) TAXPAYER SERVICES.—There are appropriated 

8 the following additional amounts for the ‘‘Department of 

9 the Treasury—Internal Revenue Service—Taxpayer Serv10 ices’’ account to carry out this Act: 

11 (1) For fiscal year 2022, $1,000,000,000. 

12 (2) For fiscal year 2023, $1,000,000,000. 

13 (3) For fiscal year 2024, $1,000,000,000. 

14 (4) For fiscal year 2025, $2,500,000,000. 

15 (5) For fiscal year 2026, $2,500,000,000. 

16 (6) For fiscal year 2027, $2,500,000,000. 

17 (7) For fiscal year 2028, $2,500,000,000. 

18 (8) For fiscal year 2029, $2,500,000,000. 

19 (9) For fiscal year 2030, $2,500,000,000. 

20 (10) For fiscal year 2031, $2,500,000,000. 

21 (c) OPERATIONS SUPPORT.—There are appropriated 

22 the following additional amounts for the ‘‘Department of 

23 the Treasury—Internal Revenue Service—Operations 

24 Support’’ account to overhaul outdated technology of the 


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1 IRS and improve the capacity of the IRS to detect fraud 

2 related to income from a trade or business: 

3 (1) For fiscal year 2022, $1,000,000,000. 

4 (2) For fiscal year 2023, $1,000,000,000. 

5 (3) For fiscal year 2024, $1,000,000,000. 

6 (4) For fiscal year 2025, $1,000,000,000. 

7 (5) For fiscal year 2026, $1,000,000,000. 

8 (6) For fiscal year 2027, $1,000,000,000. 

9 (7) For fiscal year 2028, $1,000,000,000. 

10 (8) For fiscal year 2029, $1,000,000,000. 

11 (9) For fiscal year 2030, $1,000,000,000. 

12 (10) For fiscal year 2031, $1,000,000,000. 

13 (d) AVAILABILITY.—Each additional amount appro14 priated by this section shall remain available until ex15 pended. 

16 SEC. 4. RETURNS RELATING TO CERTAIN BUSINESS TRANS17 ACTIONS. 

18 (a) IN GENERAL.—Subpart B of part III of sub19 chapter A of chapter 61 of the Internal Revenue Code of 

20 1986 is amended by adding at the end the following new 

21 section: 

22 ‘‘SEC. 6050Z. RETURNS RELATING TO CERTAIN TRANS23 ACTIONS. 

24 ‘‘(a) REQUIREMENT OF REPORTING.—Any bank or 

25 other financial institution prescribed by the Secretary by 


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1 regulation which, in the course of any calendar year, main2 tains an account for a covered taxpayer shall make the 

3 information return described in subsection (b) with respect 

4 to each such taxpayer at such time as the Secretary may 

5 by regulations prescribe. 

6 ‘‘(b) RETURN.—A return is described in this sub7 section if such return— 

8 ‘‘(1) is in such form as the Secretary may pre9 scribe, and 

10 ‘‘(2) contains— 

11 ‘‘(A) the name, address, and TIN of the 

12 covered taxpayer on behalf of whom such bank 

13 or financial institution managed an account, 

14 ‘‘(B) a summary report of total deposits 

15 received and total withdrawals made in each 

16 such account of such covered taxpayer, and 

17 ‘‘(C) such other information as the Sec18 retary may require. 

19 ‘‘(c) COVERED ACCOUNT.— 

20 ‘‘(1) IN GENERAL.—For purposes of this sec21 tion, the term ‘covered account’ means any account 

22 belonging to a covered taxpayer the Internal Rev23 enue Service identifies to a bank or financial institu24 tion via electronic communication with such bank or 

25 financial institution. 


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1 ‘‘(2) REGULATIONS AND GUIDANCE.—The Sec2 retary may prescribe such regulations and other 

3 guidance as may be appropriate or necessary to fa4 cilitate— 

5 ‘‘(A) the identification of a covered account 

6 by the Internal Revenue Service, 

7 ‘‘(B) the exchange of electronic informa8 tion between the Internal Revenue Service and 

9 a bank or financial institution, and 

10 ‘‘(C) the reconciliation of covered accounts 

11 with the tax return of a covered taxpayer. 

12 ‘‘(d) COVERED TAXPAYER.—For purposes of this 

13 section, the term ‘covered taxpayer’ means— 

14 ‘‘(1) an individual who, with respect to the ap15 plicable taxable year— 

16 ‘‘(A) has an adjusted gross income of 

17 $400,000 or more, and 

18 ‘‘(B) has any income that is not otherwise 

19 reported on any other return or statement sub20 mitted to the Internal Revenue Service by a 

21 third party, or 

22 ‘‘(2) a pass-thru business entity, including a 

23 partnership or S corporation, in which an individual 

24 described in paragraph (1) has an ownership inter25 est. 


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1 ‘‘(e) STATEMENT TO BE FURNISHED TO TAXPAYERS

2 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.— 

3 ‘‘(1) IN GENERAL.—Every bank or other finan4 cial institution prescribed by the Secretary by regu5 lation that is required to make a return under sub6 section (a) shall furnish to a covered taxpayer whose 

7 identity is required to be set forth in such return a 

8 written statement showing the name, address, and 

9 phone number of the information contact of the 

10 qualified entity required to make such a return. 

11 ‘‘(2) FURNISHING OF INFORMATION.—The 

12 written statement required under paragraph (1) 

13 shall be furnished to the taxpayer on or before Janu14 ary 31 of the year following the calendar year for 

15 which the return under subsection (a) is required to 

16 be made. 

17 ‘‘(f) APPLICABLE TAXABLE YEAR.—For purposes of 

18 this section, the term ‘applicable taxable year’ means the 

19 taxable year ending in the calendar year with respect to 

20 which a report is made under subsection (a). 

21 ‘‘(g) REGULATIONS AND GUIDANCE.—The Secretary 

22 may prescribe such regulations and other guidance as may 

23 be appropriate or necessary to carry out the purposes of 

24 this section, including guidance that facilitates the fol25 lowing objectives: 


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1 ‘‘(1) Annually on a date to be determined by 

2 the Secretary, banks and financial institutions will 

3 provide to the Internal Revenue Service an electronic 

4 file containing a complete list of the accounts of cov5 ered taxpayers and their corresponding taxpayer ID 

6 numbers. 

7 ‘‘(2) The Secretary shall compare the files de8 scribed in paragraph (1) with the tax returns of tax9 payers and use such comparison to determine if a 

10 taxpayer is a covered taxpayer, and inform the prop11 er bank or financial institution if such taxpayer is 

12 a covered taxpayer. 

13 ‘‘(3) Banks and financial institutions shall issue 

14 a 1099 or other Form, as designated by the Sec15 retary, to accounts identified under paragraph (2).’’. 

16 (b) CLERICAL AMENDMENT.—The table of sections 

17 for subchapter A of chapter 61 of such Code is amended 

18 by adding at the end the following new item: 

‘‘Sec. 6050Z. Returns relating to certain transactions.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2022. 

22 SEC. 5. REPORTS TO CONGRESS. 

23 Not later than 1 year after the date of the enactment 

24 of this Act and every 2 years thereafter, the Commissioner 

25 of the Internal Revenue Service, after consultation with 


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1 the Comptroller General, shall submit to Congress a report 

2 containing— 

3 (1) a comprehensive description of— 

4 (A) a plan to— 

5 (i) shift more of the auditing and en6 forcement assets of the Internal Revenue 

7 Service toward high-income tax filers, and 

8 (ii) recruit and retain auditors with 

9 the skills essential to audit high-income in10 dividuals, and 

11 (B) the progress made in implementing 

12 such plan, 

13 (2) an estimate of revenue loss from offshore 

14 tax evasion, and 

15 (3) information with respect to revenue loss due 

16 to such tax evasion, organized by groups of tax17 payers arranged by the true income level of such 

18 taxpayers, as determined by the Secretary. 

19 SEC. 6. IRS ENFORCEMENT PENALTIES INCREASED FOR 

20 CERTAIN TAXPAYERS. 

21 (a) IN GENERAL.—Subsection (a) of section 6662 of 

22 the Internal Revenue Code of 1986 is amended to read 

23 as follows: 

24 ‘‘(a) IMPOSITION OF PENALTY.— 


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1 ‘‘(1) IN GENERAL.—If this section applies to 

2 any portion of an underpayment of tax required to 

3 be shown on a return, there shall be added to the 

4 tax an amount equal to the applicable percentage of 

5 the portion of the underpayment to which this sec6 tion applies. 

7 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

8 of paragraph (1), the term ‘applicable percentage’ 

9 means— 

10 ‘‘(A) in the case of a taxpayer with a tax11 able income of less than $2 million, 20 percent, 

12 ‘‘(B) in the case of a taxpayer with a tax13 able income greater than $2 million but less 

14 than $5 million, 30 percent, and 

15 ‘‘(C) in the case of a taxpayer with a tax16 able income greater than $5 million, 40 per17 cent.’’. 

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

19 this section shall apply to returns on the due date which 

20 (determined without regard to extensions) is after Decem21 ber 31, 2022. 

Æ 


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