IB 
Union Calendar No. 489 
115TH CONGRESS 
2D SESSION 
H. R. 5445 
[Report No. 115–638] 
To amend the Internal Revenue Code of 1986 to improve cybersecurity 
and taxpayer identity protection, and modernize the information tech-
nology of the Internal Revenue Service, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 10, 2018 
Mr. BISHOP of Michigan (for himself and Ms. DELBENE) introduced the 
following bill; which was referred to the Committee on Ways and Means 
APRIL 13, 2018 
Additional sponsors: Mr. SESSIONS, Mr. RENACCI, Mr. CURBELO of Florida, 
Mr. MARCHANT, and Mr. LEWIS of Georgia 
APRIL 13, 2018 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on April 10, 2018] 
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A BILL 
To amend the Internal Revenue Code of 1986 to improve 
cybersecurity and taxpayer identity protection, and mod-
ernize the information technology of the Internal Rev-
enue Service, and for other purposes. 
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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) SHORT TITLE.—This Act may be cited as the ‘‘21st 
Century IRS Act’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise 
expressly provided, whenever in this Act an amendment or 
repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of this 
Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—CYBERSECURITY AND IDENTITY PROTECTION 
Sec. 101. Public-private partnership to address identity theft refund fraud. 
Sec. 102. Recommendations of Electronic Tax Administration Advisory Com-
mittee regarding identity theft refund fraud. 
Sec. 103. Information sharing and analysis center. 
Sec. 104. Compliance by contractors with confidentiality safeguards. 
Sec. 105. Report on electronic payments. 
TITLE II—DEVELOPMENT OF INFORMATION TECHNOLOGY 
Sec. 201. Management of Internal Revenue Service information technology. 
Sec. 202. Development of online accounts and portals. 
Sec. 203. Internet platform for Form 1099 filings. 
TITLE III—MODERNIZATION OF CONSENT-BASED INCOME 
VERIFICATION SYSTEM 
Sec. 301. Disclosure of taxpayer information for third-party income verification. 
Sec. 302. Limit redisclosures and uses of consent-based disclosures of tax return 
information. 
TITLE IV—EXPANDED USE OF ELECTRONIC SYSTEMS 
Sec. 401. Electronic filing of returns. 
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Sec. 402. Uniform standards for the use of electronic signatures for disclosure au-
thorizations to, and other authorizations of, practitioners. 
Sec. 403. Payment of taxes by debit and credit cards. 
TITLE I—CYBERSECURITY AND 
IDENTITY PROTECTION 
SEC. 101. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS 
IDENTITY THEFT REFUND FRAUD. 
The Secretary of the Treasury (or the Secretary’s dele-
gate) shall work collaboratively with the public and private 
sectors to protect taxpayers from identity theft refund fraud. 
SEC. 102. RECOMMENDATIONS OF ELECTRONIC TAX ADMIN-
ISTRATION ADVISORY COMMITTEE REGARD-
ING IDENTITY THEFT REFUND FRAUD. 
The Secretary of the Treasury shall ensure that the ad-
visory group convened by the Secretary pursuant to section 
2001(b)(2) of the Internal Revenue Service Restructuring 
and Reform Act of 1998 (commonly known as the Electronic 
Tax Administration Advisory Committee) studies (includ-
ing by providing organized public forums) and makes rec-
ommendations to the Secretary regarding methods to pre-
vent identity theft and refund fraud. 
SEC. 103. INFORMATION SHARING AND ANALYSIS CENTER. 
(a) IN GENERAL.—The Secretary of the Treasury (or 
the Secretary’s delegate) may participate in an information 
sharing and analysis center to centralize, standardize, and 
enhance data compilation and analysis to facilitate sharing 
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actionable data and information with respect to identity 
theft tax refund fraud. 
(b) DEVELOPMENT OF PERFORMANCE METRICS.—The 
Secretary of the Treasury (or the Secretary’s delegate) shall 
develop metrics for measuring the success of such center in 
detecting and preventing identity theft tax refund fraud. 
(c) DISCLOSURE.— 
(1) IN GENERAL.—Section 6103(k) is amended 
by adding at the end the following new paragraph: 
‘‘(13) DISCLOSURE
OF
RETURN
INFORMATION 
FOR PURPOSES OF CYBERSECURITY AND THE PREVEN-
TION OF IDENTITY THEFT TAX REFUND FRAUD.— 
‘‘(A) IN GENERAL.—Under such procedures 
and subject to such conditions as the Secretary 
may prescribe, the Secretary may disclose speci-
fied return information to specified ISAC par-
ticipants to the extent that the Secretary deter-
mines such disclosure is in furtherance of effec-
tive Federal tax administration relating to the 
detection or prevention of identity theft tax re-
fund fraud, validation of taxpayer identity, au-
thentication of taxpayer returns, or detection or 
prevention of cybersecurity threats. 
‘‘(B) SPECIFIED ISAC PARTICIPANTS.—For 
purposes of this paragraph— 
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‘‘(i) IN GENERAL.—The term ‘specified 
ISAC participant’ means— 
‘‘(I) any person designated by the 
Secretary as having primary responsi-
bility for a function performed with re-
spect to the information sharing and 
analysis center described in section 
403(a) of the 21st Century IRS Act, 
and 
‘‘(II) any person subject to the re-
quirements of section 7216 and which 
is a participant in such information 
sharing and analysis center. 
‘‘(ii) INFORMATION
SHARING
AGREE-
MENT.—Such term shall not include any 
person unless such person has entered into 
a written agreement with the Secretary set-
ting forth the terms and conditions for the 
disclosure of information to such person 
under this paragraph, including require-
ments regarding the protection and safe-
guarding of such information by such per-
son. 
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‘‘(C) SPECIFIED
RETURN
INFORMATION.— 
For purposes of this paragraph, the term ‘speci-
fied return information’ means— 
‘‘(i) in the case of a return which is in 
connection with a case of potential identity 
theft refund fraud— 
‘‘(I) in the case of such return 
filed electronically, the internet pro-
tocol address, device identification, 
email domain name, speed of comple-
tion, method of authentication, refund 
method, and such other return infor-
mation related to the electronic filing 
characteristics of such return as the 
Secretary may identify for purposes of 
this subclause, and 
‘‘(II) in the case of such return 
prepared by a tax return preparer, 
identifying information with respect to 
such tax return preparer, including the 
preparer taxpayer identification num-
ber and electronic filer identification 
number of such preparer, 
‘‘(ii) in the case of a return which is 
in connection with a case of a identity theft 
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refund fraud which has been confirmed by 
the Secretary (pursuant to such procedures 
as the Secretary may provide), the informa-
tion referred to in subclauses (I) and (II) of 
clause (i), the name and taxpayer identi-
fication number of the taxpayer as it ap-
pears on the return, and any bank account 
and routing information provided for mak-
ing a refund in connection with such re-
turn, and 
‘‘(iii) in the case of any cybersecurity 
threat to the Internal Revenue Service, in-
formation similar to the information de-
scribed in subclauses (I) and (II) of clause 
(i) with respect to such threat. 
‘‘(D) RESTRICTION ON USE OF DISCLOSED 
INFORMATION.— 
‘‘(i) DESIGNATED
THIRD
PARTIES.— 
Any return information received by a per-
son described in subparagraph (B)(i)(I) 
shall be used only for the purposes of and 
to the extent necessary in— 
‘‘(I) performing the function such 
person is designated to perform under 
such subparagraph, 
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‘‘(II) facilitating disclosures au-
thorized under subparagraph (A) to 
persons described in subparagraph 
(B)(i)(II), and 
‘‘(III) facilitating disclosures au-
thorized under subsection (d) to par-
ticipants in such information sharing 
and analysis center. 
‘‘(ii) RETURN
PREPARERS.—Any re-
turn information received by a person de-
scribed in subparagraph (B)(i)(II) shall be 
treated for purposes of section 7216 as in-
formation furnished to such person for, or 
in connection with, the preparation of a re-
turn of the tax imposed under chapter 1. 
‘‘(E) 
DATA
PROTECTION
AND
SAFE-
GUARDS.—Return information disclosed under 
this paragraph shall be subject to such protec-
tions and safeguards as the Secretary may re-
quire in regulations or other guidance or in the 
written agreement referred to in subparagraph 
(B)(ii). Such written agreement shall include a 
requirement that any unauthorized access to in-
formation disclosed under this paragraph, and 
any breach of any system in which such infor-
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mation is held, be reported to the Treasury In-
spector General for Tax Administration.’’. 
(2) APPLICATION OF CIVIL AND CRIMINAL PEN-
ALTIES.— 
(A) Section 6103(a)(3) is amended by strik-
ing ‘‘subsection (k)(10)’’ and inserting ‘‘para-
graph (10) or (13) of subsection (k)’’. 
(B) Section 7213(a)(2) is amended by in-
serting ‘‘or (13)’’ after ‘‘(k)(10)’’. 
SEC. 104. COMPLIANCE BY CONTRACTORS WITH CONFIDEN-
TIALITY SAFEGUARDS. 
(a) IN GENERAL.—Section 6103(p) is amended by 
adding at the end the following new paragraph: 
‘‘(9) DISCLOSURE TO CONTRACTORS AND OTHER 
AGENTS.—Notwithstanding any other provision of 
this section, no return or return information shall be 
disclosed to any contractor or other agent of a Fed-
eral, State, or local agency unless such agency, to the 
satisfaction of the Secretary— 
‘‘(A) has requirements in effect which re-
quire each such contractor or other agent which 
would have access to returns or return informa-
tion to provide safeguards (within the meaning 
of paragraph (4)) to protect the confidentiality 
of such returns or return information, 
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‘‘(B) agrees to conduct an on-site review 
every 3 years (or a mid-point review in the case 
of contracts or agreements of less than 3 years in 
duration) of each contractor or other agent to de-
termine compliance with such requirements, 
‘‘(C) submits the findings of the most recent 
review conducted under subparagraph (B) to the 
Secretary as part of the report required by para-
graph (4)(E), and 
‘‘(D) certifies to the Secretary for the most 
recent annual period that such contractor or 
other agent is in compliance with all such re-
quirements. 
The certification required by subparagraph (D) shall 
include the name and address of each contractor and 
other agent, a description of the contract or agreement 
with such contractor or other agent, and the duration 
of such contract or agreement. The requirements of 
this paragraph shall not apply to disclosures pursu-
ant to subsection (n) for purposes of Federal tax ad-
ministration.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
6103(p)(8)(B) is amended by inserting ‘‘or paragraph (9)’’ 
after ‘‘subparagraph (A)’’. 
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(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to disclosures made after December 31, 
2022. 
SEC. 105. REPORT ON ELECTRONIC PAYMENTS. 
Not later than 2 years after the date of the enactment 
of this Act, the Secretary (or the Secretary’s delegate), in 
coordination with the Bureau of Fiscal Service and the In-
ternal Revenue Service, and in consultation with private 
sector financial institutions, shall submit a written report 
to Congress describing how the government can utilize new 
payment platforms to increase the number of tax refunds 
paid by electronic funds transfer. Such report shall weigh 
the interests of reducing identity theft tax refund fraud, re-
ducing the Federal Government’s costs in delivering tax re-
funds, the costs and any associated fees charged to tax-
payers (including monthly and point-of-service fees) to ac-
cess their tax refunds, the impact on individuals who do 
not have access to financial accounts or institutions, and 
ensuring payments are made to accounts at a financial in-
stitution that complies with section 21 of the Federal De-
posit Insurance Act, chapter 2 of title I of Public Law 91- 
508, and subchapter II of chapter 53 of title 31, United 
States Code (commonly referred to collectively as the ‘‘Bank 
Secrecy Act’’) and the USA PATRIOT Act. Such report 
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shall include any legislative recommendations necessary to 
accomplish these goals. 
TITLE II—DEVELOPMENT OF 
INFORMATION TECHNOLOGY 
SEC. 201. MANAGEMENT OF INTERNAL REVENUE SERVICE 
INFORMATION TECHNOLOGY. 
(a) DUTIES
AND RESPONSIBILITIES
OF INTERNAL 
REVENUE SERVICE CHIEF INFORMATION OFFICER.—Sec-
tion 7803 is amended by adding at the end the following 
new subsection: 
‘‘(f) INTERNAL REVENUE SERVICE CHIEF INFORMA-
TION OFFICER.— 
‘‘(1) IN GENERAL.—There shall be in the Inter-
nal Revenue Service an Internal Revenue Service 
Chief Information Officer (hereafter referred to in this 
subsection as the ‘IRS CIO’) who shall be appointed 
by the Administrator of the Internal Revenue Service. 
‘‘(2) CENTRALIZED RESPONSIBILITY FOR INTER-
NAL REVENUE SERVICE INFORMATION TECHNOLOGY.— 
The Administrator of the Internal Revenue Service 
(and the Secretary) shall act through the IRS CIO 
with respect to all development, implementation, and 
maintenance of information technology for the Inter-
nal Revenue Service. Any reference in this subsection 
to the IRS CIO which directs the IRS CIO to take 
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prise architecture described in subparagraph 
(A)(ii)) to take into account the development of 
new information technology and the needs of the 
Internal Revenue Service. 
‘‘(5) SCOPE OF AUTHORITY.— 
‘‘(A) 
INFORMATION
TECHNOLOGY.—For 
purposes of this subsection, the term ‘information 
technology’ has the meaning given such term by 
section 11101 of title 40, United States Code. 
‘‘(B) INTERNAL
REVENUE
SERVICE.—Any 
reference in this subsection to the Internal Rev-
enue Service includes a reference to all compo-
nents of the Internal Revenue Service, includ-
ing— 
‘‘(i) the Office of the Taxpayer Advo-
cate, 
‘‘(ii) the Criminal Investigation Divi-
sion of the Internal Revenue Service, and 
‘‘(iii) except as otherwise provided by 
the Secretary with respect to information 
technology related to matters described in 
subsection (b)(3)(B), the Office of the Chief 
Counsel.’’. 
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(b) INDEPENDENT VERIFICATION AND VALIDATION OF 
THE CUSTOMER ACCOUNT DATA ENGINE 2 AND ENTER-
PRISE CASE MANAGEMENT SYSTEM.— 
(1) IN GENERAL.—The Administrator of the In-
ternal Revenue Service shall enter into a contract 
with an independent reviewer to verify and validate 
the implementation plans (including the performance 
milestones and cost estimates included in such plans) 
developed for the Customer Account Data Engine 2 
and the Enterprise Case Management System. 
(2) DEADLINE FOR COMPLETION.—Such contract 
shall require that such verification and validation be 
completed not later than the date which is 1 year 
after the date of the enactment of this Act. 
(3) APPLICATION TO PHASES OF CADE 2.— 
(A) IN GENERAL.—Paragraphs (1) and (2) 
shall not apply to phase 1 of the Customer Ac-
count Data Engine 2 and shall apply separately 
to each other phase. 
(B) DEADLINE FOR COMPLETING PLANS.— 
Not later than 1 year after the date of the enact-
ment of this Act, the Administrator of the Inter-
nal Revenue Service shall complete the develop-
ment of plans for all phases of the Customer Ac-
count Data Engine 2. 
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(C) 
DEADLINE
FOR
COMPLETION
OF 
VERIFICATION AND VALIDATION OF PLANS.—In 
the case of any phase after phase 2 of the Cus-
tomer Account Data Engine 2, paragraph (2) 
shall be applied by substituting ‘‘the date on 
which the plan for such phase was completed’’ 
for ‘‘the date of the enactment of this Act’’. 
(c) COORDINATION OF IRS CIO AND CHIEF PROCURE-
MENT OFFICER OF THE INTERNAL REVENUE SERVICE.— 
(1) IN GENERAL.—The Chief Procurement Offi-
cer of the Internal Revenue Service shall— 
(A) identify all significant IRS information 
technology acquisitions and provide written noti-
fication to the Internal Revenue Service Chief 
Information Officer (hereafter referred to in this 
subsection as the ‘‘IRS CIO’’) of each such acqui-
sition in advance of such acquisition, and 
(B) regularly consult with the IRS CIO re-
garding acquisitions of information technology 
for the Internal Revenue Service, including meet-
ing with the IRS CIO regarding such acquisi-
tions upon request. 
(2) SIGNIFICANT IRS INFORMATION TECHNOLOGY 
ACQUISITIONS.—For purposes of this subsection, the 
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term ‘‘significant IRS information technology acqui-
sitions’’ means— 
(A) any acquisition of information tech-
nology for the Internal Revenue Service in excess 
of $1,000,000, and 
(B) such other acquisitions of information 
technology for the Internal Revenue Service (or 
categories of such acquisitions) as the IRS CIO, 
in consultation with the Chief Procurement Offi-
cer of the Internal Revenue Service, may iden-
tify. 
(3) SCOPE.—Terms used in this subsection which 
are also used in section 7803(f) of the Internal Rev-
enue Code of 1986 (as amended by subsection (a)) 
shall have the same meaning as when used in such 
section. 
SEC. 202. DEVELOPMENT OF ONLINE ACCOUNTS AND POR-
TALS. 
(a) IN GENERAL.—The Secretary of the Treasury or 
the Secretary’s delegate (hereafter referred to in this section 
as the ‘‘Secretary’’) shall— 
(1) develop secure individualized online accounts 
to provide services to taxpayers and their designated 
return preparers, including obtaining taxpayer infor-
mation, making payment of taxes, sharing docu-
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mentation, and (to the extent feasible) addressing and 
correcting issues, and 
(2) develop a process for the acceptance of tax 
forms, and supporting documentation, in digital or 
other electronic format. 
(b) ELECTRONIC SERVICES TREATED
AS SUPPLE-
MENTAL; APPLICATION
OF SECURITY STANDARDS.—The 
Secretary shall ensure that the processes described in sub-
section (a)— 
(1) are a supplement to, and not a replacement 
for, other services provided by the Internal Revenue 
Service to taxpayers, including face-to-face taxpayer 
assistance and services provided by phone, and 
(2) comply with applicable security standards 
and guidelines. 
(c) PROCESS FOR DEVELOPING ONLINE ACCOUNTS.— 
(1) DEVELOPMENT OF PLAN.—Not later than 1 
year after the date of the enactment of this Act, the 
Secretary shall submit to Congress a written report 
describing the Secretary’s plan for developing the se-
cure individualized online accounts described in sub-
section (a)(1). Such plan shall address the feasibility 
of taxpayers addressing and correcting issues through 
such accounts and whether access to such accounts 
should be restricted and in what manner. 
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