I 

115TH CONGRESS 

1ST SESSION H. R. 889 

To provide for the establishment of 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 

FEBRUARY 6, 2017 

Mrs. CAROLYN B. MALONEY of New York (for herself and Mr. POE of Texas) 

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 provide for the establishment of 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 2017’’. 

4 SEC. 2. OFFICE FOR TAX LAW ENFORCEMENT RELATING TO 

5 HUMAN TRAFFICKING AND PROMOTION OF 

6 COMMERCIAL SEX ACTS. 

7 (a) ESTABLISHMENT.—The Secretary of the Treas8 ury shall establish an office within the Internal Revenue 

9 Service to investigate and prosecute violations of the inter10 nal revenue laws by persons that appear to be engaged 

11 in conduct in violation of any of the provisions specified 

12 in subsection (b). 

13 (b) CERTAIN CRIMINAL PROVISIONS RELATING TO

14 HUMAN TRAFFICKING AND PROMOTION OF COMMERCIAL

15 SEX ACTS.—The provisions of law referenced in this sub16 section are as follows: 

17 (1) The following provisions of title 18, United 

18 States Code: 

19 (A) Section 1351. 

20 (B) Section 1589. 

21 (C) Section 1590. 

22 (D) Section 1591(a). 

23 (E) Section 1952. 

24 (F) Section 2421. 

25 (G) Section 2422. 


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1 (H) Subsection (a), (d), or (e) of section 

2 2423. 

3 (2) Section 1328 of title 8, United States Code. 

4 (3) The laws of any State or territory that pro5 hibit the promotion of prostitution or of any com6 mercial sex act (as such term is defined in section 

7 1591(e)(3) of title 18, United States Code). 

8 (c) COOPERATION WITH DEPARTMENT OF JUS9 TICE.—To the extent possible, the office established under 

10 subsection (a) shall cooperate with the Child Exploitation 

11 and Obscenity Section of the Department of Justice and 

12 the Innocence Lost National Initiative of the Federal Bu13 reau of Investigation. 

14 (d) REPORT.—Not later than 1 year after the date 

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

16 shall report to the Committee on Ways and Means of the 

17 House of Representatives and the Committee on Finance 

18 of the Senate on the enforcement activities of the office 

19 established under subsection (a) and shall include any rec20 ommendations for statutory changes to assist in future 

21 prosecutions pursuant to this section. 

22 (e) APPLICABILITY OF WHISTLEBLOWER AWARDS TO

23 VICTIMS OF HUMAN TRAFFICKING.—For purposes of 

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

25 7623(b) of the Internal Revenue Code of 1986 with reVerDate Sep 11 2014 22:56 Feb 13, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H889.IH H889

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1 spect to information provided by victims of any person 

2 convicted of violating any of the provisions specified in 

3 subsection (b), the determination of whether such person 

4 is described in such paragraph shall be made without re5 gard to paragraph (3) of section 7623(b) of such Code. 

6 (f) AUTHORIZATION OF APPROPRIATIONS.— 

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

8 appropriated not more than $4,000,000 for fiscal 

9 year 2018 to carry out subsection (a). 

10 (2) ADDITIONAL FUNDING FOR ADMINISTRA11 TION OF OFFICE.—Unless specifically appropriated 

12 otherwise, there is authorized to be appropriated and 

13 is appropriated to the office established under sub14 section (a) for fiscal years 2018 and 2019 for the 

15 administration of such office an amount equal to the 

16 sum of— 

17 (A) the amount of any tax under chapter 

18 1 of the Internal Revenue Code of 1986 (in19 cluding any interest) collected during such fis20 cal years as the result of the actions of such of21 fice, plus 

22 (B) the amount of any civil or criminal 

23 monetary penalties imposed under such Code 

24 relating to such tax and so collected. 


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1 Amounts not expended under the preceding sentence 

2 shall be transferred to and deposited in the Crime 

3 Victims Fund in the Treasury (42 U.S.C. 10601). 

4 SEC. 3. INCREASE IN CRIMINAL MONETARY PENALTIES. 

5 (a) ATTEMPT TO EVADE OR DEFEAT TAX.—Section 

6 7201 of the Internal Revenue Code of 1986 (relating to 

7 attempt to evade or defeat tax) is amended— 

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

9 following: 

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

11 (2) by adding at the end the following new sub12 section: 

13 ‘‘(b) ATTEMPT TO EVADE OR DEFEAT TAX ATTRIB14 UTABLE TO HUMAN TRAFFICKING AND COMMERCIAL SEX

15 ACTS.— 

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

17 to evade or defeat any tax attributable to income de18 rived from an act described in paragraph (2), sub19 section (a) shall be applied— 

20 ‘‘(A) by substituting ‘$500,000 

21 ($1,000,000’ for ‘$100,000 ($500,000’, and 

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

23 years’. 

24 ‘‘(2) HUMAN TRAFFICKING AND COMMERCIAL

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


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1 described in this paragraph is any act which is a vio2 lation of any of the provisions specified in section 

3 2(b) of the Human Trafficking Fraud Enforcement 

4 Act of 2017.’’. 

5 (b) WILLFUL FAILURE TO FILE RETURN, SUPPLY

6 INFORMATION, OR PAY TAX.— 

7 (1) GENERAL INCREASE IN MONETARY PEN8 ALTY.—Section 7203 of the Internal Revenue Code 

9 of 1986 (relating to willful failure to file return, sup10 ply information, or pay tax) is amended by striking 

11 ‘‘$25,000’’ and inserting ‘‘$50,000’’. 

12 (2) INCREASE IN PENALTIES FOR FAILURE TO

13 FILE WITH RESPECT TO TAX ATTRIBUTABLE TO

14 HUMAN TRAFFICKING AND COMMERCIAL SEX

15 ACTS.— 

16 (A) IN GENERAL.—Section 7203 of the In17 ternal Revenue Code of 1986 (relating to willful 

18 failure to file return, supply information, or pay 

19 tax), as amended by paragraph (1), is amended 

20 by striking ‘‘Any person’’ in the first sentence 

21 and inserting the following: 

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

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

24 subsection: 


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1 ‘‘(b) FAILURE TO FILE WITH RESPECT TO TAX AT2 TRIBUTABLE TO HUMAN TRAFFICKING AND COMMERCIAL

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

4 tax attributable to income derived from an act described 

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

6 subsection (a) shall be applied by substituting— 

7 ‘‘(1) ‘felony’ for ‘misdemeanor’, 

8 ‘‘(2) ‘$500,000 ($1,000,000’ for ‘$50,000 

9 ($100,000’, and 

10 ‘‘(3) ‘10 years’ for ‘1 year’.’’. 

11 (3) CONFORMING AMENDMENT.—The third sen12 tence of section 7203(a) of the Internal Revenue 

13 Code of 1986 (as amended by paragraph (1)) is 

14 amended by striking ‘‘this section’’ and inserting 

15 ‘‘this subsection’’. 

16 (c) FRAUD AND FALSE STATEMENTS.—Section 7206 

17 of the Internal Revenue Code of 1986 (relating to fraud 

18 and false statements) is amended— 

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

20 following: 

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

22 (2) by adding at the end the following new sub23 section: 

24 ‘‘(b) FRAUD AND FALSE STATEMENTS WITH RE25 SPECT TO TAX ATTRIBUTABLE TO HUMAN TRAFFICKING


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1 AND COMMERCIAL SEX ACTS.—In the case of any viola2 tion of subsection (a) relating to any tax attributable to 

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

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

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

6 ‘$100,000 ($500,000’, and 

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

8 (d) PENALTIES MAY BE APPLIED IN ADDITION TO

9 OTHER PENALTIES.—Section 7204 of the Internal Rev10 enue Code of 1986 (relating to fraudulent statement or 

11 failure to make statement to employees) is amended by 

12 striking ‘‘the penalty provided in section 6674’’ and insert13 ing ‘‘the penalties provided in sections 6674, 7201, and 

14 7203’’. 

15 (e) INCREASE IN MONETARY LIMITATION FOR UN16 DERPAYMENT OR OVERPAYMENT OF TAX DUE TO

17 FRAUD.—Section 7206 of the Internal Revenue Code of 

18 1986 (relating to fraud and false statements), as amended 

19 by subsection (c), is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(c) INCREASE IN MONETARY LIMITATION FOR UN22 DERPAYMENT OR OVERPAYMENT OF TAX DUE TO

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

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

25 6401(a)) of tax required to be shown on a return is attribVerDate Sep 11 2014 22:56 Feb 13, 2017 Jkt 069200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H889.IH H889

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1 utable to fraudulent action described in subsection (a), the 

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

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

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

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

6 (f) MONEYS AVAILABLE TO ASSIST VICTIMS OF

7 CRIME.—There are hereby appropriated to the Crime Vic8 tims Fund (42 U.S.C. 10601) amounts equivalent to the 

9 increase in receipts to the Treasury by reason of the 

10 amendments made by this section. Such amounts shall be 

11 available for victim assistance grants under the Victims 

12 of Crime Act of 1984, including crisis intervention, emer13 gency shelter and transportation, counseling, and criminal 

14 justice advocacy to victims of crime. 

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

16 this section shall apply to actions, and failures to act, oc17 curring after the date of the enactment of this Act. 

Æ 


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