SECTION 1. AUTHORIZATION OF APPROPRIATIONS FOR 
TAX 
LAW 
ENFORCEMENT 
RELATING 
TO 
HUMAN SEX TRAFFICKING. 
(a) AUTHORIZATION OF APPROPRIATIONS.— 
(1) IN GENERAL.—There is authorized to be 
appropriated $4,000,000 for fiscal year 2008 for the 
purpose of establishing an office within the Internal 
Revenue Service to investigate and prosecute viola-
tions of the internal revenue laws by persons that 
appear to be engaged in conduct in violation of sec-
tion 1591(a), section 2421, section 2422, subsection 
(a), (d), or (e) of section 2423, or section 1952 of 
title 18, United States Code, or the laws of any 
State or territory that prohibit the promotion of 
prostitution or any commercial sex act (as such term 
is defined in section 1591(c)(1) of title 18, United 
States Code). 
(2) AVAILABILITY.—Any amounts appropriated 
pursuant to the authority of paragraph (1) shall re-
main available for fiscal year 2009. 
(b) ADDITIONAL FUNDING FOR OPERATIONS OF OF-
FICE.—Unless specifically appropriated otherwise, there is 
authorized to be appropriated and is appropriated to the 
office established under subsection (a)(1) for fiscal years 
2008 and 2009 for the administration of such office an 
amount equal to the amount of any tax under chapter 1 
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of the Internal Revenue Code of 1986 (including any inter-
est) collected during such fiscal years as the result of the 
actions of such office, plus any civil or criminal monetary 
penalties imposed under such Code relating to such tax 
and so collected. 
(c) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of the Treasury 
shall report to the Committee of Ways and Means of the 
House of Representatives and the Committee on Finance 
of the Senate on the enforcement activities of the office 
established under subsection (a)(1) and shall include any 
recommendations for statutory changes to assist in future 
prosecutions under this section. 
(d) APPLICABILITY OF WHISTLEBLOWER AWARDS TO 
VICTIMS OF HUMAN SEX TRAFFICKING.—For purposes of 
making an award under paragraph (1) or (2) of section 
7623(b) of the Internal Revenue Code of 1986 with re-
spect to information provided by victims of any person 
convicted of violating section 1591(a), section 2421, sec-
tion 2422, subsection (a), (d), or (e) of section 2423, or 
section 1952 of title 18, United States Code, or the laws 
of any State or territory that prohibit the promotion of 
prostitution or any commercial sex act (as such term is 
defined in section 1591(c)(1) of title 18, United States 
Code), the determination of whether such person is de-
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scribed in such paragraph shall be made without regard 
to paragraph (3) of section 7623(b) of such Code. 
SEC. 2. INCREASE IN CRIMINAL MONETARY PENALTY LIMI-
TATION FOR THE UNDERPAYMENT OR OVER-
PAYMENT OF TAX DUE TO FRAUD. 
(a) IN GENERAL.— 
(1) ATTEMPT TO EVADE OR DEFEAT TAX.— 
Section 7201 (relating to attempt to evade or defeat 
tax) is amended— 
(A) by striking ‘‘$100,000 ($500,000’’ and 
inserting ‘‘$500,000 ($1,000,000’’, and 
(B) by striking ‘‘5 years’’ and inserting 
‘‘10 years’’. 
(2) WILLFUL FAILURE TO FILE RETURN, SUP-
PLY INFORMATION, OR PAY TAX.— 
(A) IN GENERAL.—Section 7203 (relating 
to willful failure to file return, supply informa-
tion, or pay tax) is amended— 
(i) in the first sentence— 
(I) by striking ‘‘Any person’’ and 
inserting the following: 
‘‘(a) IN GENERAL.—Any person’’, and 
(II) by striking ‘‘$25,000’’ and 
inserting ‘‘$50,000’’, 
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(ii) in the third sentence, by striking 
‘‘section’’ and inserting ‘‘subsection’’, and 
(iii) by adding at the end the fol-
lowing new subsection: 
‘‘(b) AGGRAVATED FAILURE TO FILE.— 
‘‘(1) IN GENERAL.—In the case of any failure 
described in paragraph (2), the first sentence of sub-
section (a) shall be applied by substituting— 
‘‘(A) ‘felony’ for ‘misdemeanor’, 
‘‘(B) ‘$500,000 ($1,000,000’ for ‘$50,000 
($100,000’, and 
‘‘(C) ‘10 years’ for ‘1 year’. 
‘‘(2) FAILURE DESCRIBED.—A failure described 
in this paragraph is— 
‘‘(A) a failure to make a return described 
in subsection (a) for a period of 3 or more con-
secutive taxable years if the aggregate tax li-
ability for such period is not less than 
$100,000, or 
‘‘(B) a failure to make a return if the tax 
liability giving rise to the requirement to make 
such return is attributable to an activity which 
is a felony under any State or Federal law.’’. 
(B) PENALTY MAY BE APPLIED IN ADDI-
TION TO OTHER PENALTIES.—Section 7204 (re-
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lating to fraudulent statement or failure to 
make statement to employees) is amended by 
striking ‘‘the penalty provided in section 6674’’ 
and inserting ‘‘the penalties provided in sections 
6674 and 7203’’. 
(3) FRAUD AND FALSE STATEMENTS.—Section 
7206 (relating to fraud and false statements) is 
amended— 
(A) by striking ‘‘$100,000 ($500,000’’ and 
inserting ‘‘$500,000 ($1,000,000’’, and 
(B) by striking ‘‘3 years’’ and inserting ‘‘5 
years’’. 
(b) INCREASE IN MONETARY LIMITATION FOR UN-
DERPAYMENT
OR
OVERPAYMENT
OF
TAX
DUE
TO 
FRAUD.—Section 7206 (relating to fraud and false state-
ments), as amended by subsection (a)(3), is amended— 
(1) by striking ‘‘Any person who—’’ and insert-
ing ‘‘(a) IN GENERAL.—Any person who—’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) INCREASE IN MONETARY LIMITATION FOR UN-
DERPAYMENT
OR
OVERPAYMENT
OF
TAX
DUE
TO 
FRAUD.—If any portion of any underpayment (as defined 
in section 6664(a)) or overpayment (as defined in section 
6401(a)) of tax required to be shown on a return is attrib-
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