I 

113TH CONGRESS 

1ST SESSION H. R. 531 

To prevent identity theft and tax crimes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 6, 2013 

Ms. CASTOR of Florida (for herself and Mr. NUGENT) 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 03:23 Feb 15, 2013 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H531.IH H531

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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 


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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)’’. 


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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 


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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. 


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

2 TAX FRAUD. 

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

4 of this Act, the Secretary of the Treasury (or the Sec5 retary’s delegate) shall implement an identify theft tax 

6 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. PREVENTION OF FRAUDULENT REFUNDS. 

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

23 the Secretary’s delegate) shall establish a fraudulent tax 

24 refund prevention program under which— 


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1 (1) additional triggers are added to the refund 

2 database to identify potentially fraudulent tax re3 funds, and 

4 (2) the legitimacy of the refund claim can be 

5 promptly determined before the distribution of the 

6 refund. 

7 (b) MULTIPLE REFUNDS TO SAME DEBIT CARD.— 

8 The additional triggers added under subsection (a)(1) 

9 shall include identification of requests for multiple refunds 

10 to be paid to the same debit card. 

11 SEC. 8. AUTHORITY TO TRANSFER INTERNAL REVENUE 

12 SERVICE APPROPRIATIONS TO USE FOR TAX 

13 FRAUD ENFORCEMENT. 

14 For any fiscal year, the Commissioner of Internal 

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

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

17 from amounts appropriated to other Internal Revenue 

18 Service accounts. Any amounts so transferred shall be 

19 used solely for the purposes of preventing and resolving 

20 potential cases of tax fraud. 

21 SEC. 9. LOCAL LAW ENFORCEMENT LIAISON. 

22 (a) ESTABLISHMENT.—The Commissioner of Inter23 nal Revenue shall establish within the Criminal Investiga24 tion Division of the Internal Revenue Service the position 

25 of Local Law Enforcement Liaison. 


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

2 shall— 

3 (1) coordinate the investigation of tax fraud 

4 with State and local law enforcement agencies; 

5 (2) communicate the status of tax fraud cases 

6 involving identity theft, and 

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

8 the Commissioner of Internal Revenue. 

9 SEC. 10. REPORT ON TAX FRAUD. 

10 Subsection (a) of section 7803 of the Internal Rev11 enue Code of 1986 is amended by adding at the end the 

12 following new paragraph: 

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

14 Commissioner shall submit to the Committee on Fi15 nance of the Senate and the Committee on Ways 

16 and Means of the House of Representatives an an17 nual report detailing— 

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

19 and suspected tax fraud received from State 

20 and local law enforcement agencies in the pre21 ceding year, and 

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

23 reports.’’. 


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1 SEC. 11. STUDY ON THE USE OF PREPAID DEBIT CARDS 

2 AND COMMERCIAL TAX PREPARATION SOFT3 WARE IN TAX FRAUD. 

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

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

6 and commercial tax preparation software in facilitating 

7 fraudulent tax returns through identity theft. 

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

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

10 submit to the Committee on Finance of the Senate and 

11 the Committee on Ways and Means of the House of Rep12 resentatives a report with the results of the study con13 ducted under subsection (a), together with any rec14 ommendations. 

15 SEC. 12. RESTRICTION ON ACCESS TO THE DEATH MASTER 

16 FILE. 

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

18 not disclose information contained on the Death Master 

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

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

21 request for disclosure is made or the succeeding calendar 

22 year unless such person is certified under the program es23 tablished under subsection (b). 

24 (b) CERTIFICATION PROGRAM.— 

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

26 shall establish a program to certify persons who are 


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1 eligible to access the information described in sub2 section (a) contained on the Death Master File. 

3 (2) CERTIFICATION.—A person shall not be cer4 tified under the program established under para5 graph (1) unless the Secretary determines that such 

6 person has a legitimate fraud prevention interest in 

7 accessing the information described in subsection 

8 (a). 

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

10 certified under the program established under subsection 

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

12 and who during the period of time described in subsection 

13 (a)— 

14 (1) discloses such information to any other per15 son, or 

16 (2) uses any such information for any purpose 

17 other than to detect or prevent fraud, 

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

19 use, but the total amount imposed under this subsection 

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

21 $50,000. 

22 (d) 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.—The Social Security Admin2 istration shall not be compelled to disclose to any 

3 person who is not certified under the program estab4 lished under section 9(b) the information described 

5 in section 9(a). 

6 (2) TREATMENT OF INFORMATION.—For pur7 poses of section 552 of title 5, United States Code, 

8 this section shall be considered a statute described 

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

10 SEC. 13. TREASURY REPORT ON INFORMATION SHARING 

11 BARRIERS WITH RESPECT TO IDENTITY 

12 THEFT. 

13 (a) REVIEW.— 

14 (1) IN GENERAL.—The Secretary of the Treas15 ury (or the Secretary’s delegate) shall review wheth16 er current Federal tax laws and regulations related 

17 to the confidentiality and disclosure of return infor18 mation prevent the effective enforcement of local, 

19 State, and Federal identity theft statutes. The re20 view shall consider whether greater information 

21 sharing between the Internal Revenue Service and 

22 State and local law enforcement authorities would 

23 improve the enforcement of criminal laws at all lev24 els of government. 


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1 (2) CONSULTATION.—In conducting the review 

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

3 views of, and consult with, State and local law en4 forcement officials. 

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

6 of enactment of this Act, the Secretary shall submit a re7 port with the results of the review conducted under sub8 section (a), along with any legislative recommendations, 

9 to the Committee on Finance of the Senate and the Com10 mittee on Ways and Means of the House of Representa11 tives. 

12 SEC. 14. GRANTS TO INVESTIGATE AND PROSECUTE STATE 

13 AND LOCAL TAX CRIMES. 

14 (a) GRANT PROGRAM AUTHORIZED.—The Attorney 

15 General is authorized to award grants to State and local 

16 law enforcement agencies to assist such agencies in the 

17 investigation and prosecution of tax crimes. 

18 (b) AUTHORIZATION OF APPROPRIATIONS.—For each 

19 fiscal year, there are authorized to be appropriated to 

20 carry out this section, from amounts made available in 

21 each such fiscal year to carry out the Edward Byrne Me22 morial Justice Assistance Grants program under part E 

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

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

Æ 


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