I 
114TH CONGRESS 
1ST SESSION H. R. 3981 
To amend the Internal Revenue Code of 1986 to prevent tax-related identity 
theft and tax fraud, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 5, 2015 
Mr. PASCRELL (for himself, Mr. BLUMENAUER, Mr. THOMPSON of California, 
and Mr. LARSON of Connecticut) introduced the following bill; which was 
referred to the Committee on Ways and Means, and in addition to the 
Committees on Energy and Commerce, the Judiciary, Financial Services, 
and Appropriations, 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 amend the Internal Revenue Code of 1986 to prevent 
tax-related identity theft and tax fraud, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) IN GENERAL.—This Act may be cited as the 
‘‘Identity Theft and Tax Fraud Prevention Act of 2015’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
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Sec. 1. Short title; etc. 
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. Prohibition of the display, sale, or purchase of Social Security num-
bers. 
Sec. 303. Criminal penalties for the misuse of a Social Security number. 
Sec. 304. 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 com-
bat 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 pre-
parers. 
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. 
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TITLE I—PROTECTING VICTIMS 
OF TAX-RELATED IDENTITY 
THEFT 
SEC. 101. EXPEDITED REFUNDS FOR IDENTITY THEFT VIC-
TIMS. 
Not later than 180 days after the date of the enact-
ment of this Act, the Secretary of the Treasury, or the 
Secretary’s delegate, shall establish a plan of action to re-
duce the administrative time required to process and re-
solve cases of identity theft in connection with tax returns, 
including the issuance of refunds to legitimate taxpayers, 
to no more than 90 days, on average. 
SEC. 102. SINGLE POINT OF CONTACT FOR IDENTITY THEFT 
VICTIMS. 
Not later than 180 days after the date of the enact-
ment of this Act, the Secretary of the Treasury, or the 
Secretary’s delegate, shall establish new procedures to en-
sure that any taxpayer whose return has been delayed or 
otherwise adversely affected due to identity theft has a 
single point of contact at the Internal Revenue Service 
throughout the processing of his or her case. The single 
point of contact shall track the case of the taxpayer from 
start to finish and coordinate with other specialized units 
to resolve case issues as quickly as possible. 
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SEC. 103. ENHANCEMENTS TO IRS PIN PROGRAM. 
(a) IN GENERAL.—The Secretary of the Treasury, or 
the Secretary’s delegate, shall issue a personal identifica-
tion number to any individual requesting protection from 
identity theft-related tax fraud after the individual’s true 
identity has been established and verified. 
(b) REPORT.—Not later than 360 days after the date 
of the enactment of this Act, the Secretary of the Treasury 
shall submit to Congress a report analyzing the effective-
ness of the program described in subsection (a) in reduc-
ing tax fraud. 
SEC. 104. ELECTRONIC FILING OPT OUT. 
Not later than 180 days after the date of the enact-
ment of this Act, the Secretary of the Treasury, or the 
Secretary’s delegate, shall implement a program under 
which a person who has filed an identity theft affidavit 
with the Secretary may elect to prevent the processing of 
any Federal tax return submitted in an electronic format 
by a person purporting to be such a person. 
SEC. 105. TAXPAYER NOTIFICATION OF SUSPECTED IDEN-
TITY THEFT. 
(a) IN GENERAL.—Chapter 77 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new section: 
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‘‘SEC. 
7529. 
NOTIFICATION 
OF 
SUSPECTED 
IDENTITY 
THEFT. 
‘‘If the Secretary determines that there was an unau-
thorized use of the identity of any taxpayer, the Secretary 
shall— 
‘‘(1) as soon as practicable and without jeop-
ardizing an investigation relating to tax administra-
tion, notify the taxpayer, and 
‘‘(2) if any person is criminally charged by in-
dictment or information relating to such unauthor-
ized use, notify such taxpayer as soon as practicable 
of such charge.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item: 
‘‘Sec. 7529. Notification of suspected identity theft.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to determinations made after the 
date of the enactment of this Act. 
TITLE II—SHUTTING DOWN ABU-
SIVE IDENTITY THEFT AND 
TAX FRAUD SCHEMES 
SEC. 201. RESTRICTIONS ON ABILITY TO USE PREPAID 
CARDS FOR TAX FRAUD. 
(a) ACCOUNTS WITH ELEVATED RISK OF IDENTITY 
THEFT.— 
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(1) IN
GENERAL.—Not later than 360 days 
after the date of the enactment of this Act, the Fed-
eral primary financial regulatory agencies, in con-
sultation with the Secretary of the Treasury, shall 
jointly prescribe regulations requiring newly issued 
deposit or transaction account numbers, as the case 
may be, to be distinguishable between verified ac-
counts and at-risk accounts. 
(2) DEFINITIONS.—As used in this section— 
(A) the term ‘‘at-risk account’’ means any 
deposit account or transaction account, includ-
ing accounts associated with a prepaid access 
arrangement, that is not a verified account; 
(B) the term ‘‘primary financial regulatory 
agency’’ has the same meaning as in section 
2(12) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (12 U.S.C. 
5301(12)); and 
(C) the term ‘‘verified account’’ means any 
deposit account or transaction account in which 
the identity of the account holder and any pre-
paid access customer associated with the ac-
count is verified by— 
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(i) customer identification procedures 
that comply with section 5318(l) of title 
31, United States Code; and 
(ii) direct review of an original, unex-
pired government-issued form of identifica-
tion bearing a photograph or similar safe-
guard, such as a driver’s license or pass-
port. 
(b) GAO AUDIT OF DEBIT CARD ISSUERS TO EN-
SURE COMPLIANCE WITH CUSTOMER IDENTIFICATION 
REQUIREMENTS.— 
(1) REVIEW
AND
EVALUATION.—The Comp-
troller General of the United States shall review and 
evaluate the effectiveness of the current Customer 
Identification Program rules implementing the cus-
tomer identification program requirements under 
section 5318(l) of title 31, United States Code, as 
such rules apply to the prepaid card industry. 
(2) REQUIRED CONSIDERATIONS.—The review 
and evaluation required under paragraph (1) shall— 
(A) consider whether weaknesses in cur-
rent customer identification programs are con-
tributing to identity theft and financial loss, 
particularly with respect to tax fraud; and 
(B) review whether— 
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(i) current risk-based standards for 
customer identification are the best means 
to prevent criminal use of prepaid cards 
and provide sufficient guidance and cer-
tainty to the sellers and providers of pre-
paid access; 
(ii) current exclusions from customer 
identification requirements, such as exclu-
sions for government benefit programs, are 
appropriate; and 
(iii) Federal regulatory agencies exer-
cise adequate oversight and supervision of 
customer identification practices of the 
prepaid card industry. 
(3) REPORT
TO
CONGRESS.—Not later than 
360 days after the date of the enactment of this Act, 
the Comptroller General of the United States shall 
submit to Congress a report— 
(A) on the findings of the review and eval-
uation required under paragraph (1); and 
(B) containing any recommendations or 
proposals for legislative or administrative action 
to improve the customer identification practices 
of the prepaid card industry. 
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SEC. 202. LIMITATION ON MULTIPLE TAX REFUNDS TO THE 
SAME ACCOUNT. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary of the 
Treasury, or the Secretary’s delegate, shall issue regula-
tions that restrict the delivery or deposit of multiple tax 
refunds from the same tax year to the same individual 
account or mailing address. 
(b) EXCEPTION.—The regulation promulgated under 
subsection (a) shall provide that the restrictions shall not 
apply in cases and situations where the Secretary deter-
mines there is not a likelihood of tax fraud. 
TITLE 
III—ADDING 
CRITICAL 
NEW PROTECTIONS TO SAFE-
GUARD 
SOCIAL 
SECURITY 
NUMBERS 
SEC. 301. REDUCING MEDICAL IDENTITY THEFT. 
(a) REDUCTION IN RELIANCE ON SOCIAL SECURITY 
ACCOUNT
NUMBERS
IN
ELECTRONIC
HEALTH 
RECORDS.—Section 3002 of the Public Health Service Act 
(42 U.S.C. 300jj–12) is amended by adding at the end 
the following: 
‘‘(f) AUTHORIZATION TO DEVELOP CERTIFICATION 
STANDARDS.— 
‘‘(1) PLAN.— 
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‘‘(A) DEVELOPMENT.—The HIT Policy 
Committee shall develop a plan to provide for a 
reliable nationwide health information tech-
nology infrastructure that precludes the use of 
an individual’s social security account number 
for data matching, coordination of benefits, bill-
ing, and research purposes. 
‘‘(B) REPORT
TO
CONGRESS.—Not later 
than 1 year after the date of the enactment of 
this subsection, the HIT Policy Committee shall 
submit to Congress a report detailing the plan 
developed under paragraph (1), together with 
recommendations for such legislation and ad-
ministrative action as the HIT Policy Com-
mittee determines appropriate. 
‘‘(2) INCORPORATION.—Not later than 5 years 
after the date of the enactment of this subsection, 
the Secretary, in consultation with the HIT Stand-
ards Committee and following notice and comment 
rulemaking, shall incorporate the plan developed 
under paragraph (1)(A) in certification criteria and 
use all means available to impose the plan on non- 
certified health information systems.’’. 
(b) IMPROVED SECURITY STANDARDS.— 
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(1) IN GENERAL.—Section 1173(d)(1) of the 
Social Security Act (42 U.S.C. 1320d–2(d)(1)) is 
amended— 
(A) in subparagraph (A)(v), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) require a health care provider to dis-
continue, over an established period of time, the 
storage of an individual’s social security ac-
count number after the individual’s eligibility 
and financial responsibility for specific services 
has been determined, except when— 
‘‘(i) the individual’s ability to pay for 
such services is in doubt; 
‘‘(ii) the individual’s social security 
account number is needed for the coordina-
tion of benefits for services rendered prior 
to the effective date of this subparagraph; 
or 
‘‘(iii) the health insurance claim num-
ber of the individual contains the individ-
ual’s full social security account number.’’. 
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(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall take effect 90 days after the 
date that is 4 years after the date of the enactment 
of this Act. 
(c) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of Health and 
Human Services shall submit to Congress a report on the 
state of information security at medical offices and facili-
ties. Such report shall include recommendations for such 
legislative actions as the Secretary determines appropriate 
to help prevent identity theft at such offices and facilities. 
SEC. 302. PROHIBITION OF THE DISPLAY, SALE, OR PUR-
CHASE OF SOCIAL SECURITY NUMBERS. 
(a) PROHIBITION.— 
(1) IN
GENERAL.—Chapter 47 of title 18, 
United States Code, is amended by inserting after 
section 1028A the following: 
‘‘§ 1028B. Prohibition of the display, sale, or purchase 
of Social Security numbers 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) DISPLAY.—The term ‘display’ means to in-
tentionally communicate or otherwise make available 
(on the Internet or in any other manner) to the gen-
eral public an individual’s Social Security number. 
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‘‘(2) PERSON.—The term ‘person’ means any 
individual, partnership, corporation, trust, estate, co-
operative, association, or any other entity. 
‘‘(3) PURCHASE.—The term ‘purchase’ means 
providing directly or indirectly, anything of value in 
exchange for a Social Security number. 
‘‘(4) SALE.—The term ‘sale’ means obtaining, 
directly or indirectly, anything of value in exchange 
for a Social Security number. 
‘‘(5) STATE.—The term ‘State’ means any 
State of the United States, the District of Columbia, 
Puerto Rico, the Northern Mariana Islands, the 
United States Virgin Islands, Guam, American 
Samoa, and any territory or possession of the 
United States. 
‘‘(b) LIMITATION ON DISPLAY.—No person may dis-
play any individual’s Social Security number to the gen-
eral public without the affirmatively expressed consent of 
the individual. 
‘‘(c) LIMITATION ON SALE OR PURCHASE.—Except 
as otherwise provided in this section, no person may sell 
or purchase any individual’s Social Security number with-
out the affirmatively expressed consent of the individual. 
‘‘(d) PREREQUISITES FOR CONSENT.—In order for 
consent to exist under subsection (b) or (c), the person 
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displaying or seeking to display, selling or attempting to 
sell, or purchasing or attempting to purchase, an individ-
ual’s Social Security number shall— 
‘‘(1) inform the individual of the general pur-
pose for which the number will be used, the types of 
persons to whom the number may be available, and 
the scope of transactions permitted by the consent; 
and 
‘‘(2) obtain the affirmatively expressed consent 
(electronically or in writing) of the individual. 
‘‘(e) EXCEPTIONS.— 
‘‘(1) IN
GENERAL.—Nothing in this section 
shall be construed to prohibit or limit the display, 
sale, or purchase of a Social Security number— 
‘‘(A) required, authorized, or excepted 
under any Federal law; 
‘‘(B) for a public health purpose, including 
the protection of the health or safety of an indi-
vidual in an emergency situation; 
‘‘(C) for a national security purpose; 
‘‘(D) for a law enforcement purpose, in-
cluding the investigation of fraud and the en-
forcement of a child support obligation; 
‘‘(E) if the display, sale, or purchase of the 
number is for a use occurring as a result of an 
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interaction between businesses, governments, or 
business and government (regardless of which 
entity initiates the interaction), including— 
‘‘(i) the prevention of fraud (including 
fraud in protecting an employee’s right to 
employment benefits); 
‘‘(ii) the facilitation of credit checks 
or the facilitation of background checks of 
employees, prospective employees, or volun-
teers; 
‘‘(iii) the retrieval of other informa-
tion from other businesses, commercial en-
terprises, government entities, or private 
nonprofit organizations; or 
‘‘(iv) when the transmission of the 
number is incidental to, and in the course 
of, the sale, lease, franchising, or merger 
of all, or a portion of, a business; 
‘‘(F) if the transfer of such a number is 
part of a data matching program involving a 
Federal, State, or local agency; or 
‘‘(G) if such number is required to be sub-
mitted as part of the process for applying for 
any type of Federal, State, or local government 
benefit or program. 
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‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as permitting a 
professional or commercial user to display or sell a 
Social Security number to the general public. 
‘‘(f) LIMITATION.—Nothing in this section shall pro-
hibit or limit the display, sale, or purchase of Social Secu-
rity numbers as permitted under title V of the Gramm- 
Leach-Bliley Act (15 U.S.C. 6801 et seq.), or for the pur-
pose of affiliate sharing as permitted under the Fair Cred-
it Reporting Act (15 U.S.C. 1681 et seq.), except that no 
entity regulated under such Acts may make Social Secu-
rity numbers available to the general public, as may be 
determined by the appropriate regulators under such Acts. 
For purposes of this subsection, the general public shall 
not include affiliates or unaffiliated third-party business 
entities as may be defined by the appropriate regulators.’’. 
(2) CONFORMING
AMENDMENT.—The chapter 
analysis for chapter 47 of title 18, United States 
Code, is amended by inserting after the item relating 
to section 1028 the following: 
‘‘1028B. Prohibition of the display, sale, or purchase of Social Security num-
bers.’’. 
(b) STUDY; REPORT.— 
(1) IN GENERAL.—The Attorney General shall 
conduct a study and prepare a report on all of the 
uses of Social Security numbers permitted, required, 
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authorized, or excepted under any Federal law. The 
report shall include a detailed description of the uses 
allowed as of the date of enactment of this Act, the 
impact of such uses on privacy and data security, 
and shall evaluate whether such uses should be con-
tinued or discontinued by appropriate legislative ac-
tion. 
(2) REPORT.—Not later than 1 year after the 
date of the enactment of this Act, the Attorney Gen-
eral shall report to Congress findings under this 
subsection. The report shall include such rec-
ommendations for legislation based on criteria the 
Attorney General determines to be appropriate. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date that is 30 days 
after the date on which the final regulations promulgated 
under section 1028B of title 18, United States Code, are 
published in the Federal Register. 
SEC. 303. CRIMINAL PENALTIES FOR THE MISUSE OF A SO-
CIAL SECURITY NUMBER. 
(a) PROHIBITION OF WRONGFUL USE AS PERSONAL 
IDENTIFICATION NUMBER.—No person may obtain any 
individual’s Social Security number for purposes of locat-
ing or identifying an individual with the intent to phys-
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ically injure, harm, or use the identity of the individual 
for any illegal purpose. 
(b) CRIMINAL SANCTIONS.—Section 208(a) of the 
Social Security Act (42 U.S.C. 408(a)) is amended— 
(1) in paragraph (8), by inserting ‘‘or’’ after 
the semicolon; and 
(2) by inserting after paragraph (8) the fol-
lowing: 
‘‘(9) except as provided in subsections (e) and 
(f) of section 1028B of title 18, United States Code, 
knowingly and willfully displays, sells, or purchases 
(as those terms are defined in section 1028B(a) of 
title 18, United States Code) any individual’s Social 
Security account number without having met the 
prerequisites for consent under section 1028B(d) of 
title 18, United States Code; or 
‘‘(10) obtains any individual’s Social Security 
number for the purpose of locating or identifying the 
individual with the intent to injure or to harm that 
individual, or to use the identity of that individual 
for an illegal purpose;’’. 
SEC. 304. CIVIL ACTIONS AND CIVIL PENALTIES. 
(a) CIVIL ACTION IN STATE COURTS.— 
(1) IN GENERAL.—Any individual aggrieved by 
an act of any person in violation of this Act or any 
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amendments made by this Act may, if otherwise per-
mitted by the laws or rules of the court of a State, 
bring in an appropriate court of that State— 
(A) an action to enjoin such violation; 
(B) an action to recover for actual mone-
tary loss from such a violation, or to receive up 
to $500 in damages for each such violation, 
whichever is greater; or 
(C) both such actions. 
It shall be an affirmative defense in any action 
brought under this paragraph that the defendant 
has established and implemented, with due care, rea-
sonable practices and procedures to effectively pre-
vent violations of the regulations prescribed under 
this Act. If the court finds that the defendant will-
fully or knowingly violated the regulations prescribed 
under this subsection, the court may, in its discre-
tion, increase the amount of the award to an amount 
equal to not more than 3 times the amount available 
under subparagraph (B). 
(2) STATUTE OF LIMITATIONS.—An action may 
be commenced under this subsection not later than 
the earlier of— 
(A) 5 years after the date on which the al-
leged violation occurred; or 
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(B) 3 years after the date on which the al-
leged violation was or should have been reason-
ably discovered by the aggrieved individual. 
(3) NONEXCLUSIVE REMEDY.—The remedy pro-
vided under this subsection shall be in addition to 
any other remedies available to the individual. 
(b) CIVIL PENALTIES.— 
(1) IN GENERAL.—Any person who the Attor-
ney General determines has violated any section of 
this Act or any of the amendments made by this Act 
shall be subject, in addition to any other penalties 
that may be prescribed by law— 
(A) to a civil penalty of not more than 
$5,000 for each such violation; and 
(B) to a civil penalty of not more than 
$50,000, if the violations have occurred with 
such frequency as to constitute a general busi-
ness practice. 
(2) DETERMINATION
OF
VIOLATIONS.—Any 
willful violation committed contemporaneously with 
respect to the Social Security numbers of 2 or more 
individuals by means of mail, telecommunication, or 
otherwise, shall be treated as a separate violation 
with respect to each such individual. 
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(3) ENFORCEMENT PROCEDURES.—The provi-
sions of section 1128A of the Social Security Act 
(42 U.S.C. 1320a–7a), other than subsections (a), 
(b), (f), (h), (i), (j), (m), and (n) and the first sen-
tence of subsection (c) of such section, and the pro-
visions of subsections (d) and (e) of section 205 of 
such Act (42 U.S.C. 405) shall apply to a civil pen-
alty action under this subsection in the same man-
ner as such provisions apply to a penalty or pro-
ceeding under section 1128A(a) of such Act (42 
U.S.C. 1320a–7a(a)), except that, for purposes of 
this paragraph, any reference in section 1128A of 
such Act (42 U.S.C. 1320a–7a) to the Secretary 
shall be deemed to be a reference to the Attorney 
General. 
TITLE 
IV—STRENGTHENING 
LAWS AND IMPROVING EN-
FORCEMENT 
AGAINST 
TAX- 
RELATED IDENTITY THEFT 
SEC. 401. CRIMINAL PENALTY FOR USING A FALSE IDEN-
TITY IN CONNECTION WITH TAX FRAUD. 
(a) IN GENERAL.—Section 7206 of the Internal Rev-
enue Code of 1986 is amended— 
(1) by striking ‘‘Any person’’ and inserting the 
following: 
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