I 

112TH CONGRESS 

1ST SESSION H. R. 3215 

To prevent identity theft and tax fraud. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 14, 2011 

Ms. CASTOR of Florida (for herself and Mr. NUGENT) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To prevent identity theft and tax fraud. 

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 ‘‘Identify Theft and Tax 

5 Fraud Prevention Act’’. 

6 SEC. 2. CRIMINAL PENALTY FOR USING A FALSE IDENTITY 

7 IN CONNECTION WITH TAX FRAUD. 

8 (a) IN GENERAL.—Section 7207 of the Internal Rev9 enue Code of 1986 is amended— 

10 (1) by striking ‘‘Any person who willfully’’ and 

11 inserting the following: 

12 ‘‘(a) IN GENERAL.—Any person who willfully’’, 


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1 (2) by striking ‘‘Any person required’’ and in2 serting the following: 

3 ‘‘(b) INFORMATION IN CONNECTION WITH CERTAIN

4 EXEMPT ORGANIZATIONS.—Any person required’’, and 

5 (3) by adding at the end the following: 

6 ‘‘(c) MISAPPROPRIATION OF IDENTITY.—Any person 

7 who knowingly or willfully misappropriates another per8 son’s tax identification number in connection with any list, 

9 return, account, statement, or other document submitted 

10 to the Secretary shall be fined not less than $25,000 

11 ($200,000 in the case of a corporation), or imprisoned not 

12 more than 5 years, or both, together with the costs of 

13 prosecution.’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to returns and information sub16 mitted after the date of the enactment of this Act. 

17 SEC. 3. INCREASED PENALTY FOR IMPROPER DISCLOSURE 

18 OR USE OF INFORMATION BY PREPARERS OF 

19 RETURNS. 

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

21 Revenue Code of 1986 is amended— 

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

23 and 

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

25 ‘‘$50,000’’. 


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1 (b) CRIMINAL PENALTY.—Section 7216(a) of the In2 ternal Revenue Code of 1986 is amended by striking 

3 ‘‘$1,000’’ and inserting ‘‘$100,000’’. 

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

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

6 of the enactment of this Act. 

7 SEC. 4. PIN SYSTEM FOR PREVENTION OF IDENTITY THEFT 

8 TAX FRAUD. 

9 (a) IN GENERAL.—Not later than 1 year after the 

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

11 Treasury (or the Secretary’s delegate) shall implement an 

12 identify theft tax fraud prevention program under which— 

13 (1) a person who has filed an identity theft affi14 davit with the Secretary may elect— 

15 (A) to be provided with a unique personal 

16 identification number to be included on any 

17 Federal tax return filed by such person, or 

18 (B) to prevent the processing of any Fed19 eral tax return submitted in an electronic for20 mat by a person purporting to be such person, 

21 and 

22 (2) the Secretary will provide additional identity 

23 verification safeguards for the processing of any 

24 Federal tax return filed by a person described in 


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1 paragraph (1) in cases where a unique personal 

2 identification number is not included on the return. 

3 SEC. 5. AUTHORITY TO TRANSFER INTERNAL REVENUE 

4 SERVICE APPROPRIATIONS TO USE FOR TAX 

5 FRAUD ENFORCEMENT. 

6 For any fiscal year, the Commissioner of Internal 

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

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

9 from amounts appropriated to other Internal Revenue 

10 Service accounts. Any amounts so transferred shall be 

11 used solely for the purposes of preventing and resolving 

12 potential cases of tax fraud. 

13 SEC. 6. LOCAL LAW ENFORCEMENT LIAISON. 

14 (a) ESTABLISHMENT.—The Commissioner of Inter15 nal Revenue shall establish within the Criminal Investiga16 tion Division of the Internal Revenue Service the position 

17 of Local Law Enforcement Liaison. 

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

19 shall— 

20 (1) coordinate the investigation of tax fraud 

21 with State and local law enforcement agencies; 

22 (2) communicate the status of tax fraud cases 

23 involving identity theft, and 

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

25 the Commissioner of Internal Revenue. 


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1 SEC. 7. REPORT ON TAX FRAUD. 

2 Subsection (a) of section 7803 of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new paragraph: 

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

6 Commissioner shall submit to the Committee on Fi7 nance of the Senate and the Committee on Ways 

8 and Means of the House of Representatives an an9 nual report detailing— 

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

11 and suspected tax fraud received from State 

12 and local law enforcement agencies in the pre13 ceding year, and 

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

15 reports.’’. 

16 SEC. 8. STUDY ON THE USE OF PREPAID DEBIT CARDS AND 

17 COMMERCIAL TAX PREPARATION SOFTWARE 

18 IN TAX FRAUD. 

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

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

21 and commercial tax preparation software in facilitating 

22 fraudulent tax returns through identity theft. 

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

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

25 submit to the Committee on Finance of the Senate and 

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1 resentatives a report with the results of the study con2 ducted under subsection (a), together with any rec3 ommendations. 

4 SEC. 9. RESTRICTION ON ACCESS TO THE DEATH MASTER 

5 FILE. 

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

7 not disclose information contained on the Death Master 

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

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

10 request for disclosure is made or the succeeding calendar 

11 year unless such person is certified under the program es12 tablished under subsection (b). 

13 (b) CERTIFICATION PROGRAM.— 

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

15 shall establish a program to certify persons who are 

16 eligible to access the information described in sub17 section (a) contained on the Death Master File. 

18 (2) CERTIFICATION.—A person shall not be cer19 tified under the program established under para20 graph (1) unless the Secretary determines that such 

21 person has a legitimate fraud prevention interest in 

22 accessing the information described in subsection 

23 (a). 

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

25 certified under the program established under subsection 


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

2 and who during the period of time described in subsection 

3 (a)— 

4 (1) discloses such information to any other per5 son, or 

6 (2) uses any such information for any purpose 

7 other than to detect or prevent fraud, 

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

9 use, but the total amount imposed under this subsection 

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

11 $50,000. 

12 (d) EXEMPTION FROM FREEDOM OF INFORMATION

13 ACT REQUIREMENT WITH RESPECT TO CERTAIN

14 RECORDS OF DECEASED INDIVIDUALS.— 

15 (1) IN GENERAL.—The Social Security Admin16 istration shall not be compelled to disclose to any 

17 person who is not certified under the program estab18 lished under section 9(b) the information described 

19 in section 9(a). 

20 (2) TREATMENT OF INFORMATION.—For pur21 poses of section 552 of title 5, United States Code, 

22 this section shall be considered a statute described 

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


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1 SEC. 10. EXTENSION OF AUTHORITY TO DISCLOSE CERTAIN 

2 RETURN INFORMATION TO PRISON OFFI3 CIALS. 

4 (a) IN GENERAL.—Section 6103(k)(10) of the Inter5 nal Revenue Code of 1986 is amended by striking sub6 paragraph (D). 

7 (b) REPORT FROM FEDERAL BUREAU OF PRIS8 ONS.—Not later than 6 months after the date of the enact9 ment of this Act, the head of the Federal Bureau of Pris10 ons shall submit to Congress a detailed plan on how it 

11 will use the information provided from the Secretary of 

12 Treasury under section 6103(k)(10) of the Internal Rev13 enue Code of 1986 to reduce prison tax fraud. 

14 (c) SENSE OF SENATE REGARDING STATE PRISON

15 AUTHORITIES.—It is the sense of the Senate that the 

16 heads of State agencies charged with the administration 

17 of prisons should— 

18 (1) develop plans for using the information pro19 vided by the Secretary of Treasury under section 

20 6103(k)(10) of the Internal Revenue Code of 1986 

21 to reduce prison tax fraud, and 

22 (2) coordinate with the Internal Revenue Serv23 ice with respect to the use of such information. 


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1 SEC. 11. TREASURY REPORT ON INFORMATION SHARING 

2 BARRIERS WITH RESPECT TO IDENTITY 

3 THEFT. 

4 (a) REVIEW.— 

5 (1) IN GENERAL.—The Secretary of the Treas6 ury (or the Secretary’s delegate) shall review wheth7 er current Federal tax laws and regulations related 

8 to the confidentiality and disclosure of return infor9 mation prevent the effective enforcement of local, 

10 State, and Federal identity theft statutes. The re11 view shall consider whether greater information 

12 sharing between the Internal Revenue Service and 

13 State and local law enforcement authorities would 

14 improve the enforcement of criminal laws at all lev15 els of government. 

16 (2) CONSULTATION.—In conducting the review 

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

18 views of, and consult with, State and local law en19 forcement officials. 

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

21 of enactment of this Act, the Secretary shall submit a re22 port with the results of the review conducted under sub23 section (a), along with any legislative recommendations, 

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1 mittee on Ways and Means of the House of Representa2 tives. 

Æ 


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