II 

114TH CONGRESS 

1ST SESSION S. 676 

To amend the Internal Revenue Code of 1986 to prevent tax-related identity 

theft and tax fraud, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2015 

Mr. NELSON (for himself, Mr. BROWN, Mr. CARDIN, Mrs. FEINSTEIN, Mrs. 

GILLIBRAND, Ms. KLOBUCHAR, and Mr. SCHUMER) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to prevent 

tax-related identity theft and tax fraud, 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; ETC. 

4 (a) IN GENERAL.—This Act may be cited as the 

5 ‘‘Identity Theft and Tax Fraud Prevention Act of 2015’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; etc. 

mstockstill on DSK4VPTVN1PROD with BILLS

2 

•S 676 IS

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. 

Sec. 105. Taxpayer notification of suspected identity theft. 

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. Reducing medical identity theft. 

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 combat tax fraud. 

Sec. 404. Local law enforcement liaison. 

Sec. 405. Extend Internal Revenue Service authority to require truncated social 

security numbers on Form W-2. 

Sec. 406. Clarification with respect to regulation of Federal tax return preparers. 

Sec. 407. Authentication of users of electronic services accounts. 

Sec. 408. Identity verification by tax return preparers required. 

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. 

mstockstill on DSK4VPTVN1PROD with BILLS

3 

•S 676 IS

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 the enact7 ment of this Act, the Secretary of the Treasury, or the 

8 Secretary’s delegate, shall establish a plan of action to re9 duce the administrative time required to process and re10 solve cases of identity theft in connection with tax returns, 

11 including the issuance of refunds to legitimate taxpayers, 

12 to no more than 90 days, on average. 

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

14 VICTIMS. 

15 Not later than 180 days after the date of the enact16 ment of this Act, the Secretary of the Treasury, or the 

17 Secretary’s delegate, shall establish new procedures to en18 sure that any taxpayer whose return has been delayed or 

19 otherwise adversely affected due to identity theft has a 

20 single point of contact at the Internal Revenue Service 

21 throughout the processing of his or her case. The single 

22 point of contact shall track the case of the taxpayer from 

23 start to finish and coordinate with other specialized units 

24 to resolve case issues as quickly as possible. 

mstockstill on DSK4VPTVN1PROD with BILLS

4 

•S 676 IS

1 SEC. 103. ENHANCEMENTS TO IRS PIN PROGRAM. 

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

3 the Secretary’s delegate, shall issue a personal identifica4 tion number to any individual requesting protection from 

5 identity theft-related tax fraud after the individual’s true 

6 identity has been established and verified. 

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

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

9 shall submit to Congress a report analyzing the effective10 ness of the program described in subsection (a) in reduc11 ing tax fraud. 

12 SEC. 104. ELECTRONIC FILING OPT OUT. 

13 Not later than 180 days after the date of the enact14 ment of this Act, the Secretary of the Treasury, or the 

15 Secretary’s delegate, shall implement a program under 

16 which a person who has filed an identity theft affidavit 

17 with the Secretary may elect to prevent the processing of 

18 any Federal tax return submitted in an electronic format 

19 by a person purporting to be such a person. 

20 SEC. 105. TAXPAYER NOTIFICATION OF SUSPECTED IDEN21 TITY THEFT. 

22 (a) IN GENERAL.—Chapter 77 of the Internal Rev23 enue Code of 1986 is amended by adding at the end the 

24 following new section: 

mstockstill on DSK4VPTVN1PROD with BILLS

5 

•S 676 IS

1 ‘‘SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY 

2 THEFT. 

3 ‘‘If the Secretary determines that there was an unau4 thorized use of the identity of any taxpayer, the Secretary 

5 shall— 

6 ‘‘(1) as soon as practicable and without jeop7 ardizing an investigation relating to tax administra8 tion, notify the taxpayer, and 

9 ‘‘(2) if any person is criminally charged by in10 dictment or information relating to such unauthor11 ized use, notify such taxpayer as soon as practicable 

12 of such charge.’’. 

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

14 for chapter 77 of the Internal Revenue Code of 1986 is 

15 amended by adding at the end the following new item: 

‘‘Sec. 7529. Notification of suspected identity theft.’’. 

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

17 this section shall apply to determinations made after the 

18 date of the enactment of this Act. 

19 TITLE II—SHUTTING DOWN ABU20 SIVE IDENTITY THEFT AND 

21 TAX FRAUD SCHEMES 

22 SEC. 201. RESTRICTIONS ON ABILITY TO USE PREPAID 

23 CARDS FOR TAX FRAUD. 

24 (a) ACCOUNTS WITH ELEVATED RISK OF IDENTITY

25 THEFT.— 

mstockstill on DSK4VPTVN1PROD with BILLS

6 

•S 676 IS

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

2 after the date of the enactment of this Act, the Fed3 eral primary financial regulatory agencies, in con4 sultation with the Secretary of the Treasury, shall 

5 jointly prescribe regulations requiring newly issued 

6 deposit or transaction account numbers, as the case 

7 may be, to be distinguishable between verified ac8 counts and at-risk accounts. 

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

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

11 deposit account or transaction account, includ12 ing accounts associated with a prepaid access 

13 arrangement, that is not a verified account; 

14 (B) the term ‘‘primary financial regulatory 

15 agency’’ has the same meaning as in section 

16 2(12) of the Dodd-Frank Wall Street Reform 

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

18 5301(12)); and 

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

20 deposit account or transaction account in which 

21 the identity of the account holder and any pre22 paid access customer associated with the ac23 count is verified by— 

mstockstill on DSK4VPTVN1PROD with BILLS

7 

•S 676 IS

1 (i) customer identification procedures 

2 that comply with section 5318(l) of title 

3 31, United States Code; and 

4 (ii) direct review of an original, unex5 pired government-issued form of identifica6 tion bearing a photograph or similar safe7 guard, such as a driver’s license or pass8 port. 

9 (b) GAO AUDIT OF DEBIT CARD ISSUERS TO EN10 SURE COMPLIANCE WITH CUSTOMER IDENTIFICATION

11 REQUIREMENTS.— 

12 (1) REVIEW AND EVALUATION.—The Comp13 troller General of the United States shall review and 

14 evaluate the effectiveness of the current Customer 

15 Identification Program rules implementing the cus16 tomer identification program requirements under 

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

18 such rules apply to the prepaid card industry. 

19 (2) REQUIRED CONSIDERATIONS.—The review 

20 and evaluation required under paragraph (1) shall— 

21 (A) consider whether weaknesses in cur22 rent customer identification programs are con23 tributing to identity theft and financial loss, 

24 particularly with respect to tax fraud; and 

25 (B) review whether— 

mstockstill on DSK4VPTVN1PROD with BILLS

8 

•S 676 IS

1 (i) current risk-based standards for 

2 customer identification are the best means 

3 to prevent criminal use of prepaid cards 

4 and provide sufficient guidance and cer5 tainty to the sellers and providers of pre6 paid access; 

7 (ii) current exclusions from customer 

8 identification requirements, such as exclu9 sions for government benefit programs, are 

10 appropriate; and 

11 (iii) Federal regulatory agencies exer12 cise adequate oversight and supervision of 

13 customer identification practices of the 

14 prepaid card industry. 

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

16 360 days after the date of the enactment of this Act, 

17 the Comptroller General of the United States shall 

18 submit to Congress a report— 

19 (A) on the findings of the review and eval20 uation required under paragraph (1); and 

21 (B) containing any recommendations or 

22 proposals for legislative or administrative action 

23 to improve the customer identification practices 

24 of the prepaid card industry. 

mstockstill on DSK4VPTVN1PROD with BILLS

9 

•S 676 IS

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

2 SAME ACCOUNT. 

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

4 date of the enactment of this Act, the Secretary of the 

5 Treasury, or the Secretary’s delegate, shall issue regula6 tions that restrict the delivery or deposit of multiple tax 

7 refunds from the same tax year to the same individual 

8 account or mailing address. 

9 (b) EXCEPTION.—The regulation promulgated under 

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

11 apply in cases and situations where the Secretary deter12 mines there is not a likelihood of tax fraud. 

13 TITLE III—ADDING CRITICAL 

14 NEW PROTECTIONS TO SAFE15 GUARD SOCIAL SECURITY 

16 NUMBERS 

17 SEC. 301. REDUCING MEDICAL IDENTITY THEFT. 

18 (a) REDUCTION IN RELIANCE ON SOCIAL SECURITY

19 ACCOUNT NUMBERS IN ELECTRONIC HEALTH

20 RECORDS.—Section 3002 of the Public Health Service Act 

21 (42 U.S.C. 300jj–12) is amended by adding at the end 

22 the following: 

23 ‘‘(f) AUTHORIZATION TO DEVELOP CERTIFICATION

24 STANDARDS.— 

25 ‘‘(1) PLAN.— 

mstockstill on DSK4VPTVN1PROD with BILLS

10 

•S 676 IS

1 ‘‘(A) DEVELOPMENT.—The HIT Policy 

2 Committee shall develop a plan to provide for a 

3 reliable nationwide health information tech4 nology infrastructure that precludes the use of 

5 an individual’s social security account number 

6 for data matching, coordination of benefits, bill7 ing, and research purposes. 

8 ‘‘(B) REPORT TO CONGRESS.—Not later 

9 than 1 year after the date of the enactment of 

10 this subsection, the HIT Policy Committee shall 

11 submit to Congress a report detailing the plan 

12 developed under subparagraph (1), together 

13 with recommendations for such legislation and 

14 administrative action as the HIT Policy Com15 mittee determines appropriate. 

16 ‘‘(2) INCORPORATION.—Not later than 5 years 

17 after the date of the enactment of this subsection, 

18 the Secretary, in consultation with the HIT Stand19 ards Committee and following notice and comment 

20 rulemaking, shall incorporate the plan developed 

21 under paragraph (1)(A) in certification criteria and 

22 use all means available to impose the plan on non23 certified health information systems.’’. 

24 (b) IMPROVED SECURITY STANDARDS.— 

mstockstill on DSK4VPTVN1PROD with BILLS

11 

•S 676 IS

1 (1) IN GENERAL.—Section 1173(d)(1) of the 

2 Social Security Act (42 U.S.C. 1320d–2(d)(1)) is 

3 amended— 

4 (A) in subparagraph (A)(v), by striking 

5 ‘‘and’’ at the end; 

6 (B) in subparagraph (B), by striking the 

7 period at the end and inserting ‘‘: and’’; and 

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

9 subparagraph: 

10 ‘‘(C) require a health care provider to dis11 continue, over an established period of time, the 

12 storage of an individual’s social security ac13 count number after the individual’s eligibility 

14 and financial responsibility for specific services 

15 has been determined, except when— 

16 ‘‘(i) the individual’s ability to pay for 

17 such services is in doubt; 

18 ‘‘(ii) the individual’s social security 

19 account number is needed for the coordina20 tion of benefits for services rendered prior 

21 to the effective date of this subparagraph; 

22 or 

23 ‘‘(iii) the health insurance claim num24 ber of the individual contains the individ25 ual’s full social security account number.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

12 

•S 676 IS

1 (2) EFFECTIVE DATE.—The amendments made 

2 by paragraph (1) shall take effect 90 days after the 

3 earlier of— 

4 (A) the date the Secretary of Health and 

5 Human Services implements section 302(b); or 

6 (B) the date that is 4 years after the date 

7 of the enactment of this Act. 

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

9 of the enactment of this Act, the Secretary of Health and 

10 Human Services shall submit to Congress a report on the 

11 state of information security at medical offices and facili12 ties. Such report shall include recommendations for such 

13 legislative actions as the Secretary determines appropriate 

14 to help prevent identity theft at such offices and facilities. 

15 SEC. 302. PROHIBITING THE DISPLAY OF SOCIAL SECURITY 

16 ACCOUNT NUMBERS ON NEWLY ISSUED 

17 MEDICARE IDENTIFICATION CARDS AND 

18 COMMUNICATIONS PROVIDED TO MEDICARE 

19 BENEFICIARIES. 

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

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

22 and Human Services, in consultation with the Commis23 sioner of Social Security, shall establish and begin to im24 plement procedures to eliminate the unnecessary collecmstockstill on DSK4VPTVN1PROD with BILLS

13 

•S 676 IS

1 tion, use, and display of Social Security account numbers 

2 of Medicare beneficiaries. 

3 (b) NEWLY ISSUED MEDICARE CARDS AND COMMU4 NICATIONS PROVIDED TO BENEFICIARIES.— 

5 (1) NEWLY ISSUED CARDS.— 

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

7 after the date of enactment of this Act, the Sec8 retary of Health and Human Services, in con9 sultation with the Commissioner of Social Secu10 rity, shall ensure that each newly issued Medi11 care identification card meets the requirements 

12 described in subparagraph (B). 

13 (B) REQUIREMENTS.— 

14 (i) IN GENERAL.—Subject to clause 

15 (ii), the requirements described in this sub16 paragraph are, with respect to a Medicare 

17 identification card, that the card does not 

18 display or electronically store (in an 

19 unencrypted format) a Medicare bene20 ficiary’s Social Security account number. 

21 (ii) USE OF PARTIAL ACCOUNT NUM22 BER.—The Secretary of Health and 

23 Human Services, in consultation with the 

24 Commissioner of Social Security, may pro25 vide for the use of a partial Social Security 

mstockstill on DSK4VPTVN1PROD with BILLS

14 

•S 676 IS

1 account number on a Medicare identifica2 tion card if the Secretary determines that 

3 such use does not allow an unacceptable 

4 risk of fraudulent use. 

5 (2) COMMUNICATIONS PROVIDED TO BENE6 FICIARIES.—Not later than 4 years after the date of 

7 enactment of this Act, the Secretary of Health and 

8 Human Services shall prohibit the display of a Medi9 care beneficiary’s Social Security account number on 

10 written or electronic communication provided to the 

11 beneficiary unless the Secretary, in consultation with 

12 the Commissioner of Social Security, determines 

13 that inclusion of Social Security account numbers on 

14 such communications is essential for the operation of 

15 the Medicare program. 

16 (c) MEDICARE BENEFICIARY DEFINED.—In this sec17 tion, the term ‘‘Medicare beneficiary’’ means an individual 

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

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

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

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

22 (d) CONFORMING AMENDMENTS.— 

23 (1) REFERENCE IN THE SOCIAL SECURITY

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

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

mstockstill on DSK4VPTVN1PROD with BILLS

15 

•S 676 IS

1 (A) by moving clause (x), as added by sec2 tion 1414(a)(2) of the Patient Protection and 

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

4 ems to the left; 

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

6 by section 2(a)(1) of the Social Security Num7 ber Protection Act of 2010 (42 U.S.C. 1305 

8 note), as clause (xi); 

9 (C) by redesignating clause (xi), as added 

10 by section 2(b)(1) of the Social Security Num11 ber Protection Act of 2010 (42 U.S.C. 1305 

12 note), as clause (xii); and 

13 (D) by adding after clause (xii), as redesig14 nated by subparagraph (C), the following new 

15 clause: 

16 ‘‘(xiii) Subject to the Identity Theft and Tax Fraud 

17 Prevention Act of 2015, social security account numbers 

18 shall not be displayed on Medicare identification cards or 

19 on communications provided to Medicare beneficiaries.’’. 

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

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

22 amended— 

23 (A) by moving paragraph (9) 2 ems to the 

24 left; and 

mstockstill on DSK4VPTVN1PROD with BILLS

16 

•S 676 IS

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

2 paragraph: 

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

4 Commissioner shall upon the request of the Attorney Gen5 eral or upon the request of the Secretary of Health and 

6 Human Services enter into a reimbursable agreement with 

7 the Attorney General or the Secretary to provide informa8 tion collected under paragraph (1) if— 

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

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

11 ‘‘(B) such agreement includes appropriate pro12 visions to protect the confidentiality of information 

13 provided by the Commissioner under such agree14 ment.’’. 

15 (e) PILOT PROGRAM.— 

16 (1) ESTABLISHMENT.—The Secretary shall es17 tablish a pilot program utilizing smart card tech18 nology to evaluate— 

19 (A) the applicability of smart card tech20 nology to the Medicare program under title 

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

22 1395 et seq.), including the applicability of such 

23 technology to Medicare beneficiaries or Medi24 care providers; and 

mstockstill on DSK4VPTVN1PROD with BILLS

17 

•S 676 IS

1 (B) whether such cards would be effective 

2 in preventing fraud under the Medicare pro3 gram. 

4 (2) IMPLEMENTATION.— 

5 (A) INITIAL IMPLEMENTATION.—The Sec6 retary shall implement the pilot program under 

7 this subsection not later than 1 year after the 

8 date of enactment of this Act. 

9 (B) SCOPE AND DURATION.—The Sec10 retary shall conduct the pilot program— 

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

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

13 days or more than 2 years. 

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

15 the completion of the pilot program under this sub16 section, the Secretary shall submit to the appro17 priate committees of Congress and make available to 

18 the public a report that includes the following: 

19 (A) A summary of the pilot program and 

20 findings, including— 

21 (i) the costs or savings to the Medi22 care program as a result of the implemen23 tation of the pilot program; 

24 (ii) whether the use of smart card 

25 technology resulted in improvements in the 

mstockstill on DSK4VPTVN1PROD with BILLS

18 

•S 676 IS

1 quality of care provided to Medicare bene2 ficiaries under the pilot program; and 

3 (iii) whether such technology was use4 ful in preventing or detecting fraud, waste, 

5 and abuse in the Medicare program. 

6 (B) Recommendations regarding whether 

7 the use of smart card technology should be ex8 panded under the Medicare program. 

9 (4) DEFINITIONS.—In this subsection: 

10 (A) MEDICARE PROVIDER.—The term 

11 ‘‘Medicare provider’’ includes a provider of serv12 ices (as defined in section 1861(u) of the Social 

13 Security Act (42 U.S.C. 1395x(u))) and a sup14 plier (as defined in section 1861(d) of such Act 

15 (42 U.S.C. 1395x(d))). 

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

17 means the Secretary of Health and Human 

18 Services. 

19 (C) SMART CARD.—The term ‘‘smart 

20 card’’ means identification used by a Medicare 

21 beneficiary or a Medicare provider that includes 

22 anti-fraud attributes. Such a card— 

23 (i) may rely on existing commercial 

24 data transfer networks or on a network of 

25 proprietary card readers or databases; and 

mstockstill on DSK4VPTVN1PROD with BILLS

19 

•S 676 IS

1 (ii) may include— 

2 (I) cards using technology adapt3 ed from the financial services indus4 try; 

5 (II) cards containing individual 

6 biometric identification, provided that 

7 such identification is encrypted and 

8 not contained in any central database; 

9 (III) cards adapting technology 

10 and processes utilized in the 

11 TRICARE program under chapter 55 

12 of title 10, United States Code, or by 

13 the Veterans’ Administration; or 

14 (IV) such other technology as the 

15 Secretary determines appropriate. 

16 SEC. 303. PROHIBITION OF THE DISPLAY, SALE, OR PUR17 CHASE OF SOCIAL SECURITY NUMBERS. 

18 (a) PROHIBITION.— 

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

20 United States Code, is amended by inserting after 

21 section 1028A the following: 

22 ‘‘§ 1028B. Prohibition of the display, sale, or purchase 

23 of Social Security numbers 

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

mstockstill on DSK4VPTVN1PROD with BILLS

20 

•S 676 IS

1 ‘‘(1) DISPLAY.—The term ‘display’ means to in2 tentionally communicate or otherwise make available 

3 (on the Internet or in any other manner) to the gen4 eral public an individual’s Social Security number. 

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

6 individual, partnership, corporation, trust, estate, co7 operative, association, or any other entity. 

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

9 providing directly or indirectly, anything of value in 

10 exchange for a Social Security number. 

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

12 directly or indirectly, anything of value in exchange 

13 for a Social Security number. 

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

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

16 Puerto Rico, the Northern Mariana Islands, the 

17 United States Virgin Islands, Guam, American 

18 Samoa, and any territory or possession of the 

19 United States. 

20 ‘‘(b) LIMITATION ON DISPLAY.—No person may dis21 play any individual’s Social Security number to the gen22 eral public without the affirmatively expressed consent of 

23 the individual. 

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

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

mstockstill on DSK4VPTVN1PROD with BILLS

21 

•S 676 IS

1 or purchase any individual’s Social Security number with2 out the affirmatively expressed consent of the individual. 

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

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

5 displaying or seeking to display, selling or attempting to 

6 sell, or purchasing or attempting to purchase, an individ7 ual’s Social Security number shall— 

8 ‘‘(1) inform the individual of the general pur9 pose for which the number will be used, the types of 

10 persons to whom the number may be available, and 

11 the scope of transactions permitted by the consent; 

12 and 

13 ‘‘(2) obtain the affirmatively expressed consent 

14 (electronically or in writing) of the individual. 

15 ‘‘(e) EXCEPTIONS.— 

16 ‘‘(1) IN GENERAL.—Nothing in this section 

17 shall be construed to prohibit or limit the display, 

18 sale, or purchase of a Social Security number— 

19 ‘‘(A) required, authorized, or excepted 

20 under any Federal law; 

21 ‘‘(B) for a public health purpose, including 

22 the protection of the health or safety of an indi23 vidual in an emergency situation; 

24 ‘‘(C) for a national security purpose; 

mstockstill on DSK4VPTVN1PROD with BILLS

22 

•S 676 IS

1 ‘‘(D) for a law enforcement purpose, in2 cluding the investigation of fraud and the en3 forcement of a child support obligation; 

4 ‘‘(E) if the display, sale, or purchase of the 

5 number is for a use occurring as a result of an 

6 interaction between businesses, governments, or 

7 business and government (regardless of which 

8 entity initiates the interaction), including— 

9 ‘‘(i) the prevention of fraud (including 

10 fraud in protecting an employee’s right to 

11 employment benefits); 

12 ‘‘(ii) the facilitation of credit checks 

13 or the facilitation of background checks of 

14 employees, prospective employees, or volun15 teers; 

16 ‘‘(iii) the retrieval of other informa17 tion from other businesses, commercial en18 terprises, government entities, or private 

19 nonprofit organizations; or 

20 ‘‘(iv) when the transmission of the 

21 number is incidental to, and in the course 

22 of, the sale, lease, franchising, or merger 

23 of all, or a portion of, a business; 

mstockstill on DSK4VPTVN1PROD with BILLS

23 

•S 676 IS

1 ‘‘(F) if the transfer of such a number is 

2 part of a data matching program involving a 

3 Federal, State, or local agency; or 

4 ‘‘(G) if such number is required to be sub5 mitted as part of the process for applying for 

6 any type of Federal, State, or local government 

7 benefit or program. 

8 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

9 this subsection shall be construed as permitting a 

10 professional or commercial user to display or sell a 

11 Social Security number to the general public. 

12 ‘‘(f) LIMITATION.—Nothing in this section shall pro13 hibit or limit the display, sale, or purchase of Social Secu14 rity numbers as permitted under title V of the Gramm15 Leach-Bliley Act (15 U.S.C. 6801 et seq.), or for the pur16 pose of affiliate sharing as permitted under the Fair Cred17 it Reporting Act (15 U.S.C. 1681 et seq.), except that no 

18 entity regulated under such Acts may make Social Secu19 rity numbers available to the general public, as may be 

20 determined by the appropriate regulators under such Acts. 

21 For purposes of this subsection, the general public shall 

22 not include affiliates or unaffiliated third-party business 

23 entities as may be defined by the appropriate regulators.’’. 

24 (2) CONFORMING AMENDMENT.—The chapter 

25 analysis for chapter 47 of title 18, United States 

mstockstill on DSK4VPTVN1PROD with BILLS

24 

•S 676 IS

1 Code, is amended by inserting after the item relating 

2 to section 1028 the following: 

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

3 (b) STUDY; REPORT.— 

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

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

6 uses of Social Security numbers permitted, required, 

7 authorized, or excepted under any Federal law. The 

8 report shall include a detailed description of the uses 

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

10 impact of such uses on privacy and data security, 

11 and shall evaluate whether such uses should be con12 tinued or discontinued by appropriate legislative ac13 tion. 

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

15 date of the enactment of this Act, the Attorney Gen16 eral shall report to Congress findings under this 

17 subsection. The report shall include such rec18 ommendations for legislation based on criteria the 

19 Attorney General determines to be appropriate. 

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

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

22 after the date on which the final regulations promulgated 

23 under section 1028B of title 18, United States Code, are 

24 published in the Federal Register. 

mstockstill on DSK4VPTVN1PROD with BILLS

25 

•S 676 IS

1 SEC. 304. CRIMINAL PENALTIES FOR THE MISUSE OF A SO2 CIAL SECURITY NUMBER. 

3 (a) PROHIBITION OF WRONGFUL USE AS PERSONAL

4 IDENTIFICATION NUMBER.—No person may obtain any 

5 individual’s Social Security number for purposes of locat6 ing or identifying an individual with the intent to phys7 ically injure, harm, or use the identity of the individual 

8 for any illegal purpose. 

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

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

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

12 the semicolon; and 

13 (2) by inserting after paragraph (8) the fol14 lowing: 

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

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

17 knowingly and willfully displays, sells, or purchases 

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

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

20 Security account number without having met the 

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

22 title 18, United States Code; or 

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

24 number for the purpose of locating or identifying the 

25 individual with the intent to injure or to harm that 

mstockstill on DSK4VPTVN1PROD with BILLS

26 

•S 676 IS

1 individual, or to use the identity of that individual 

2 for an illegal purpose;’’. 

3 SEC. 305. CIVIL ACTIONS AND CIVIL PENALTIES. 

4 (a) CIVIL ACTION IN STATE COURTS.— 

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

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

7 amendments made by this Act may, if otherwise per8 mitted by the laws or rules of the court of a State, 

9 bring in an appropriate court of that State— 

10 (A) an action to enjoin such violation; 

11 (B) an action to recover for actual mone12 tary loss from such a violation, or to receive up 

13 to $500 in damages for each such violation, 

14 whichever is greater; or 

15 (C) both such actions. 

16 It shall be an affirmative defense in any action 

17 brought under this paragraph that the defendant 

18 has established and implemented, with due care, rea19 sonable practices and procedures to effectively pre20 vent violations of the regulations prescribed under 

21 this Act. If the court finds that the defendant will22 fully or knowingly violated the regulations prescribed 

23 under this subsection, the court may, in its discre24 tion, increase the amount of the award to an amount 

mstockstill on DSK4VPTVN1PROD with BILLS

27 

•S 676 IS

1 equal to not more than 3 times the amount available 

2 under subparagraph (B). 

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

4 be commenced under this subsection not later than 

5 the earlier of— 

6 (A) 5 years after the date on which the al7 leged violation occurred; or 

8 (B) 3 years after the date on which the al9 leged violation was or should have been reason10 ably discovered by the aggrieved individual. 

11 (3) NONEXCLUSIVE REMEDY.—The remedy pro12 vided under this subsection shall be in addition to 

13 any other remedies available to the individual. 

14 (b) CIVIL PENALTIES.— 

15 (1) IN GENERAL.—Any person who the Attor16 ney General determines has violated any section of 

17 this Act or any of the amendments made by this Act 

18 shall be subject, in addition to any other penalties 

19 that may be prescribed by law— 

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

21 $5,000 for each such violation; and 

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

23 $50,000, if the violations have occurred with 

24 such frequency as to constitute a general busi25 ness practice. 

mstockstill on DSK4VPTVN1PROD with BILLS

28 

•S 676 IS

1 (2) DETERMINATION OF VIOLATIONS.—Any 

2 willful violation committed contemporaneously with 

3 respect to the Social Security numbers of 2 or more 

4 individuals by means of mail, telecommunication, or 

5 otherwise, shall be treated as a separate violation 

6 with respect to each such individual. 

7 (3) ENFORCEMENT PROCEDURES.—The provi8 sions of section 1128A of the Social Security Act 

9 (42 U.S.C. 1320a–7a), other than subsections (a), 

10 (b), (f), (h), (i), (j), (m), and (n) and the first sen11 tence of subsection (c) of such section, and the pro12 visions of subsections (d) and (e) of section 205 of 

13 such Act (42 U.S.C. 405) shall apply to a civil pen14 alty action under this subsection in the same man15 ner as such provisions apply to a penalty or pro16 ceeding under section 1128A(a) of such Act (42 

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

18 this paragraph, any reference in section 1128A of 

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

20 shall be deemed to be a reference to the Attorney 

21 General. 

mstockstill on DSK4VPTVN1PROD with BILLS

29 

•S 676 IS

1 TITLE IV—STRENGTHENING 

2 LAWS AND IMPROVING EN3 FORCEMENT AGAINST TAX4 RELATED IDENTITY THEFT 

5 SEC. 401. CRIMINAL PENALTY FOR USING A FALSE IDEN6 TITY IN CONNECTION WITH TAX FRAUD. 

7 (a) IN GENERAL.—Section 7206 of the Internal Rev8 enue Code of 1986 is amended— 

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

10 following: 

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

12 (2) by adding at the end the following new sub13 section: 

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

15 willfully misappropriates another person’s taxpayer iden16 tity (as defined in section 6103(b)(6)) for the purpose of 

17 making any list, return, account, statement, or other docu18 ment submitted to the Secretary under the provisions of 

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

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

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

22 5 years, or both, together with the costs of prosecution.’’. 

23 (b) AGGRAVATED IDENTITY THEFT.—Section 

24 1028A(c) of title 18, United States Code, is amended by 

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

mstockstill on DSK4VPTVN1PROD with BILLS

30 

•S 676 IS

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

2 or’’, and by adding at the end the following new para3 graph: 

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

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

6 connection with tax fraud).’’. 

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

8 this section shall apply to offenses committed after the 

9 date of the enactment of this Act. 

10 SEC. 402. INCREASED PENALTY FOR IMPROPER DISCLO11 SURE OR USE OF INFORMATION BY PRE12 PARERS OF RETURNS. 

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

14 Revenue Code of 1986 is amended— 

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

16 and 

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

18 ‘‘$50,000’’. 

19 (b) CRIMINAL PENALTY.—Section 7216(a) of the In20 ternal Revenue Code of 1986 is amended by striking 

21 ‘‘$1,000’’ and inserting ‘‘$100,000’’. 

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

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

24 of the enactment of this Act. 

mstockstill on DSK4VPTVN1PROD with BILLS

31 

•S 676 IS

1 SEC. 403. AUTHORITY TO TRANSFER INTERNAL REVENUE 

2 SERVICE APPROPRIATIONS TO COMBAT TAX 

3 FRAUD. 

4 For any fiscal year, the Commissioner of Internal 

5 Revenue may transfer not more than $10,000,000 to any 

6 account of the Internal Revenue Service from amounts ap7 propriated to other Internal Revenue Service accounts. 

8 Any amounts so transferred shall be used solely for the 

9 purposes of preventing, detecting, and resolving potential 

10 cases of tax fraud. 

11 SEC. 404. LOCAL LAW ENFORCEMENT LIAISON. 

12 (a) ESTABLISHMENT.—The Commissioner of Inter13 nal Revenue shall establish within the Criminal Investiga14 tion Division of the Internal Revenue Service the position 

15 of Local Law Enforcement Liaison. 

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

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

18 local law enforcement authorities with respect to tax-re19 lated identity theft and other tax fraud matters, having 

20 duties that shall include— 

21 (1) receiving information from State and local 

22 law enforcement authorities; 

23 (2) responding to inquiries from State and local 

24 law enforcement authorities; 

25 (3) administering authorized information-shar26 ing initiatives with State or local law enforcement 

mstockstill on DSK4VPTVN1PROD with BILLS

32 

•S 676 IS

1 authorities and reviewing the performance of such 

2 initiatives; 

3 (4) ensuring any information provided through 

4 authorized information-sharing initiatives with State 

5 or local law enforcement authorities is used only for 

6 the prosecution of identity theft-related crimes and 

7 not re-disclosed to third parties; and 

8 (5) any other duties as delegated by the Com9 missioner of Internal Revenue. 

10 SEC. 405. EXTEND INTERNAL REVENUE SERVICE AUTHOR11 ITY TO REQUIRE TRUNCATED SOCIAL SECU12 RITY NUMBERS ON FORM W-2. 

13 (a) IN GENERAL.—Paragraph (2) of section 6051(a) 

14 of the Internal Revenue Code of 1986 is amended by strik15 ing ‘‘his social security number’’ and inserting ‘‘an identi16 fying number for the employee’’. 

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. 406. CLARIFICATION WITH RESPECT TO REGULATION 

21 OF FEDERAL TAX RETURN PREPARERS. 

22 (a) IN GENERAL.—Subsection (a) of section 330 of 

23 title 31, United States Code, is amended— 

24 (1) by striking paragraph (1) and inserting the 

25 following: 

mstockstill on DSK4VPTVN1PROD with BILLS

33 

•S 676 IS

1 ‘‘(1) regulate— 

2 ‘‘(A) the practice of representatives of per3 sons before the Department of the Treasury; 

4 and 

5 ‘‘(B) the practice of tax return preparers; 

6 and’’, and 

7 (2) in paragraph (2)— 

8 (A) by inserting ‘‘or tax return preparer’’ 

9 after ‘‘representative’’ each place it appears, 

10 and 

11 (B) by inserting ‘‘or in preparing their tax 

12 returns, claims for refund, or documents in con13 nection with tax returns or claims for refund’’ 

14 after ‘‘cases’’ in subparagraph (D). 

15 (b) AUTHORITY TO SANCTION REGULATED TAX RE16 TURN PREPARERS.—Subsection (b) of section 330 of title 

17 31, United States Code, is amended— 

18 (1) by striking ‘‘before the Department’’, 

19 (2) by inserting ‘‘or tax return preparer’’ after 

20 ‘‘representative’’ each place it appears, and 

21 (3) in paragraph (4), by striking ‘‘misleads or 

22 threatens’’ and all that follows and inserting ‘‘mis23 leads or threatens— 

24 ‘‘(A) any person being represented or any 

25 prospective person being represented; or 

mstockstill on DSK4VPTVN1PROD with BILLS

34 

•S 676 IS

1 ‘‘(B) any person or prospective person 

2 whose tax return, claim for refund, or document 

3 in connection with a tax return or claim for re4 fund, is being or may be prepared.’’. 

5 (c) TAX RETURN PREPARER DEFINED.—Section 330 

6 of title 31, United States Code, is amended by adding at 

7 the end the following new subsection: 

8 ‘‘(e) TAX RETURN PREPARER.—For purposes of this 

9 section— 

10 ‘‘(1) IN GENERAL.—The term ‘tax return pre11 parer’ has the meaning given such term under sec12 tion 7701(a)(36) of the Internal Revenue Code of 

13 1986. 

14 ‘‘(2) TAX RETURN.—The term ‘tax return’ has 

15 the meaning given to the term ‘return’ under section 

16 6696(e)(1) of the Internal Revenue Code of 1986. 

17 ‘‘(3) CLAIM FOR REFUND.—The term ‘claim for 

18 refund’ has the meaning given such term under sec19 tion 6696(e)(2) of such Code.’’. 

20 SEC. 407. AUTHENTICATION OF USERS OF ELECTRONIC 

21 SERVICES ACCOUNTS. 

22 (a) IN GENERAL.—The Commissioner of Internal 

23 Revenue shall establish a program to verify the identity 

24 of any individual opening an e-Services account with the 

mstockstill on DSK4VPTVN1PROD with BILLS

35 

•S 676 IS

1 Internal Revenue Service before such individual is able to 

2 use the e-Services tools. 

3 (b) REPORT.—The Commissioner of Internal Rev4 enue shall report to the Committee on Finance of the Sen5 ate and the Committee on Ways and Means of the House 

6 of Representatives, not later than 1 year after the date 

7 of the enactment of this Act, on any further legislative 

8 recommendations to prevent fraud relating to the Internal 

9 Revenue Service e-Services tools, including an authorized 

10 e-file provider program. 

11 SEC. 408. IDENTITY VERIFICATION BY TAX RETURN PRE12 PARERS REQUIRED. 

13 (a) IN GENERAL.—Section 6695 of the Internal Rev14 enue Code of 1986 is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(i) FAILURE TO VERIFY TAXPAYER IDENTITY.— 

17 Any person who is a tax return preparer with respect to 

18 any return or claim for refund who fails to verify (in such 

19 manner and with such documentation as the Secretary 

20 shall provide) the identity of the taxpayer with respect to 

21 such return or claim for refund shall pay a penalty of 

22 $500 for each such failure.’’. 

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

24 this section shall apply to returns or claims for refund 

25 filed after December 31, 2014. 

mstockstill on DSK4VPTVN1PROD with BILLS

36 

•S 676 IS

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 the enact23 ment of this Act, the Secretary of the Treasury, or the 

24 Secretary’s delegate, shall submit to Congress a report 

25 analyzing and outlining options and potential timelines for 

mstockstill on DSK4VPTVN1PROD with BILLS

37 

•S 676 IS

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

Æ 

mstockstill on DSK4VPTVN1PROD with BILLS