I 

111TH CONGRESS 

2D SESSION H. R. 6491 

To authorize appropriations for the purpose of establishing an office within 

the Internal Revenue Service to focus on violations of the internal revenue laws by persons who are under investigation for conduct relating 

to the promotion of commercial sex acts and trafficking in persons 

crimes, and to increase the criminal monetary penalty limitations for 

the underpayment or overpayment of tax due to fraud. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 2, 2010 

Mrs. MALONEY introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To authorize appropriations for the purpose of establishing 

an office within the Internal Revenue Service to focus 

on violations of the internal revenue laws by persons 

who are under investigation for conduct relating to the 

promotion of commercial sex acts and trafficking in persons crimes, and to increase the criminal monetary penalty limitations for the underpayment or overpayment 

of tax due to fraud. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Human Trafficking 

3 Fraud Enforcement Act of 2010’’. 

4 SEC. 2. AUTHORIZATION OF APPROPRIATIONS FOR TAX 

5 LAW ENFORCEMENT RELATING TO HUMAN 

6 TRAFFICKING AND PROMOTION OF COMMER7 CIAL SEX ACTS. 

8 (a) AUTHORIZATION OF APPROPRIATIONS.— 

9 (1) IN GENERAL.—There is authorized to be 

10 appropriated $4,000,000 for fiscal year 2011 for the 

11 purpose of establishing an office within the Internal 

12 Revenue Service to investigate and prosecute viola13 tions of the internal revenue laws by persons that 

14 appear to be engaged in conduct in violation of sec15 tion 1591(a), section 2421, section 2422, subsection 

16 (a), (d), or (e) of section 2423, section 1952, section 

17 1589, section 1590, or section 1351 of title 18, 

18 United States Code, or section 1328 of title 8, 

19 United States Code, or the laws of any State or ter20 ritory that prohibit the promotion of prostitution or 

21 of any commercial sex act (as such term is defined 

22 in section 1591(e)(3) of title 18, United States 

23 Code). 

24 (2) AVAILABILITY.—Any amounts appropriated 

25 pursuant to the authority of paragraph (1) shall re26 main available for fiscal year 2011. 


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1 (b) ADDITIONAL FUNDING FOR OPERATIONS OF OF2 FICE.—Unless specifically appropriated otherwise, there is 

3 authorized to be appropriated and is appropriated to the 

4 office established under subsection (a)(1) for fiscal years 

5 2011 and 2012 for the administration of such office an 

6 amount equal to the amount of any tax under chapter 1 

7 of the Internal Revenue Code of 1986 (including any inter8 est) collected during such fiscal years as the result of the 

9 actions of such office, plus any civil or criminal monetary 

10 penalties imposed under such Code relating to such tax 

11 and so collected. 

12 (c) REPORT.—Not later than 1 year after the date 

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

14 shall report to the Committee of Ways and Means of the 

15 House of Representatives and the Committee on Finance 

16 of the Senate on the enforcement activities of the office 

17 established under subsection (a)(1) and shall include any 

18 recommendations for statutory changes to assist in future 

19 prosecutions under this section. 

20 (d) APPLICABILITY OF WHISTLEBLOWER AWARDS TO

21 VICTIMS OF HUMAN TRAFFICKING.—For purposes of 

22 making an award under paragraph (1) or (2) of section 

23 7623(b) of the Internal Revenue Code of 1986 with re24 spect to information provided by victims of any person 

25 convicted of violating section 1589, section 1590, section 


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1 1591(a), section 2421, section 2422, subsection (a), (d), 

2 or (e) of section 2423, or section 1952, or section 1351 

3 of title 18, United States Code, or section 1328 of title 

4 8, United States Code, or the laws of any State or terri5 tory that prohibit the promotion of prostitution or of any 

6 commercial sex act (as such term is defined in section 

7 1591(e)(3)) of title 18, United States Code), the deter8 mination of whether such person is described in such para9 graph shall be made without regard to paragraph (3) of 

10 section 7623(b) of such Code. 

11 SEC. 3. INCREASE IN CRIMINAL MONETARY PENALTY LIMI12 TATION FOR THE UNDERPAYMENT OR OVER13 PAYMENT OF TAX DUE TO FRAUD. 

14 (a) IN GENERAL.— 

15 (1) ATTEMPT TO EVADE OR DEFEAT TAX.— 

16 Section 7201 of the Internal Revenue Code of 1986 

17 (relating to attempt to evade or defeat tax) is 

18 amended— 

19 (A) by striking ‘‘Any person’’ and inserting 

20 the following: 

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

22 (B) by adding at the end the following new 

23 subsection: 


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1 ‘‘(b) ATTEMPT TO EVADE OR DEFEAT TAX ATTRIB2 UTABLE TO HUMAN TRAFFICKING AND COMMERCIAL SEX

3 ACTS.— 

4 ‘‘(1) IN GENERAL.—In the case of any attempt 

5 to evade or defeat any tax attributable to income de6 rived from an act described in paragraph (2), sub7 section (a) shall be applied— 

8 ‘‘(A) by substituting ‘$500,000 

9 ($1,000,000’ for ‘$100,000 ($500,000’, and 

10 ‘‘(B) by substituting ‘10 years’ for ‘5 

11 years’. 

12 ‘‘(2) HUMAN TRAFFICKING AND COMMERCIAL

13 SEX ACTS.—For purposes of paragraph (1), an act 

14 described in this paragraph is any act which is a vio15 lation of section 1591(a), section 2421, section 

16 2422, subsection (a), (d), or (e) of section 2423, sec17 tion 1952, section 1589, section 1590, or section 

18 1351 of title 18, United States Code, or section 

19 1328 of title 8, United States Code, or the laws of 

20 any State or territory that prohibit the promotion of 

21 prostitution or of any commercial sex act (as such 

22 term is defined in section 1591(e)(3) of title 18, 

23 United States Code).’’. 

24 (2) WILLFUL FAILURE TO FILE RETURN, SUP25 PLY INFORMATION, OR PAY TAX.—Section 7203 of 


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1 such Code (relating to willful failure to file return, 

2 supply information, or pay tax) is amended— 

3 (A) in the first sentence— 

4 (i) by striking ‘‘Any person’’ and in5 serting the following: 

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

7 (ii) by striking ‘‘$25,000’’ and insert8 ing ‘‘$50,000’’, 

9 (B) in the third sentence, by striking ‘‘sec10 tion’’ and inserting ‘‘subsection’’, and 

11 (C) by adding at the end the following new 

12 subsection: 

13 ‘‘(b) FAILURE TO FILE WITH RESPECT TO TAX AT14 TRIBUTABLE TO HUMAN TRAFFICKING AND COMMERCIAL

15 SEX ACTS.—In the case of any failure with respect to any 

16 tax attributable to income derived from an act described 

17 in paragraph (2) of section 7201(b), the first sentence of 

18 subsection (a) shall be applied by substituting— 

19 ‘‘(1) ‘felony’ for ‘misdemeanor’, 

20 ‘‘(2) ‘$500,000 ($1,000,000’ for ‘$50,000 

21 ($100,000’, and 

22 ‘‘(3) ‘10 years’ for ‘1 year’.’’. 

23 (3) FRAUD AND FALSE STATEMENTS.—Section 

24 7206 of such Code (relating to fraud and false state25 ments) is amended— 


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1 (A) by striking ‘‘Any person’’ and inserting 

2 the following: 

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

4 (B) by adding at the end the following new 

5 subsection: 

6 ‘‘(b) FRAUD AND FALSE STATEMENTS WITH RE7 SPECT TO TAX ATTRIBUTABLE TO HUMAN TRAFFICKING

8 AND COMMERCIAL SEX ACTS.—In the case of any viola9 tion of subsection (a) relating to any tax attributable to 

10 income derived from an act described in paragraph (2) of 

11 section 7201(b), subsection (a) shall be applied— 

12 ‘‘(1) by substituting ‘$500,000 ($1,000,000’ for 

13 ‘$100,000 ($500,000’, and 

14 ‘‘(2) by substituting ‘5 years’ for ‘3 years’.’’. 

15 (4) PENALTIES MAY BE APPLIED IN ADDITION

16 TO OTHER PENALTIES.—Section 7204 of such Code 

17 (relating to fraudulent statement or failure to make 

18 statement to employees) is amended by striking ‘‘the 

19 penalty provided in section 6674’’ and inserting ‘‘the 

20 penalties provided in sections 6674, 7201, and 

21 7203’’. 

22 (b) INCREASE IN MONETARY LIMITATION FOR UN23 DERPAYMENT OR OVERPAYMENT OF TAX DUE TO

24 FRAUD.—Section 7206 of such Code (relating to fraud 

25 and false statements), as amended by subsection (a)(3), 


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1 is amended by adding at the end the following new sub2 section: 

3 ‘‘(c) INCREASE IN MONETARY LIMITATION FOR UN4 DERPAYMENT OR OVERPAYMENT OF TAX DUE TO

5 FRAUD.—If any portion of any underpayment (as defined 

6 in section 6664(a)) or overpayment (as defined in section 

7 6401(a)) of tax required to be shown on a return is attrib8 utable to fraudulent action described in subsection (a), the 

9 applicable dollar amount under subsection (a) shall in no 

10 event be less than an amount equal to such portion. A 

11 rule similar to the rule under section 6663(b) shall apply 

12 for purposes of determining the portion so attributable.’’. 

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

14 this section shall apply to actions, and failures to act, oc15 curring after the date of the enactment of this Act. 

Æ 


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