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paragraph (A) thereof) for such taxable
year,’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after the date
of the enactment of this Act.
SEC. 546. INCREASE IN INFORMATION RETURN PENALTIES.
(a) FAILURE TO FILE CORRECT INFORMATION RE-
TURNS.—
(1) 
IN
GENERAL.—Section 
6721(a)(1) 
is
amended—
(A) by striking ‘‘$50’’ and inserting
‘‘$250’’, and
(B) by striking ‘‘$250,000’’ and inserting
‘‘$3,000,000’’.
(2) REDUCTION WHERE CORRECTION IN SPECI-
FIED PERIOD.—
(A) CORRECTION WITHIN 30 DAYS.—Section
6721(b)(1) is amended—
(i) by striking ‘‘$15’’ and inserting
‘‘$50’’,
(ii) by striking ‘‘$50’’ and inserting
‘‘$250’’, and
(iii) by striking ‘‘$75,000’’ and insert-
ing ‘‘$500,000’’.
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(B) FAILURES CORRECTED ON OR BEFORE
AUGUST 1.—Section 6721(b)(2) is amended—
(i) by striking ‘‘$30’’ and inserting
‘‘$100’’,
(ii) by striking ‘‘$50’’ and inserting
‘‘$250’’, and
(iii) by striking ‘‘$150,000’’ and in-
serting ‘‘$1,500,000’’.
(3) LOWER
LIMITATION
FOR
PERSONS
WITH
GROSS RECEIPTS OF NOT MORE THAN $5,000,000.—
Section 6721(d)(1) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘$100,000’’ and insert-
ing ‘‘$1,000,000’’, and
(ii) by striking ‘‘$250,000’’ and insert-
ing ‘‘$3,000,000’’,
(B) in subparagraph (B)—
(i) by striking ‘‘$25,000’’ and inserting
‘‘$175,000’’, and
(ii) by striking ‘‘$75,000’’ and insert-
ing ‘‘$500,000’’, and
(C) in subparagraph (C)—
(i) by striking ‘‘$50,000’’ and inserting
‘‘$500,000’’, and
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(ii) by striking ‘‘$150,000’’ and insert-
ing ‘‘$1,500,000’’.
(4) PENALTY
IN
CASE
OF
INTENTIONAL
DIS-
REGARD.—Section 6721(e) is amended—
(A) by striking ‘‘$100’’ in paragraph (2)
and inserting ‘‘$500’’,
(B) by striking ‘‘$250,000’’ in paragraph
(3)(A) and inserting ‘‘$3,000,000’’.
(b) FAILURE TO FURNISH CORRECT PAYEE STATE-
MENTS.—
(1) IN GENERAL.—Section 6722(a) is amended—
(A) by striking ‘‘$50’’ and inserting
‘‘$250’’, and
(B) by striking ‘‘$100,000’’ and inserting
‘‘$1,000,000’’.
(2) PENALTY
IN
CASE
OF
INTENTIONAL
DIS-
REGARD.—Section 6722(c) is amended—
(A) by striking ‘‘$100’’ in paragraph (1)
and inserting ‘‘$500’’, and
(B) by striking ‘‘$100,000’’ in paragraph
(2)(A) and inserting ‘‘$1,000,000’’.
(c) FAILURE TO COMPLY WITH OTHER INFORMATION
REPORTING REQUIREMENTS.—Section 6723 is amended—
(1) by striking ‘‘$50’’ and inserting ‘‘$250’’, and
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(2) by striking ‘‘$100,000’’ and inserting
‘‘$1,000,000’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to information returns re-
quired to be filed on or after January 1, 2008.
SEC. 547. E-FILING REQUIREMENT FOR CERTAIN LARGE OR-
GANIZATIONS.
(a) IN
GENERAL.—The first sentence of section
6011(e)(2) is amended to read as follows: ‘‘In prescribing
regulations under paragraph (1), the Secretary shall take
into account (among other relevant factors) the ability of
the taxpayer to comply at reasonable cost with the require-
ments of such regulations.’’.
(b) CONFORMING
AMENDMENT.—Section 6724 is
amended by striking subsection (c).
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years ending on or after De-
cember 31, 2008.
SEC. 548. EXPANSION OF IRS ACCESS TO INFORMATION IN
NATIONAL DIRECTORY OF NEW HIRES FOR
TAX ADMINISTRATION PURPOSES.
(a) IN GENERAL.—Paragraph (3) of section 453(j) of
the Social Security Act (42 U.S.C. 653(j)) is amended to
read as follows:
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‘‘(3) ADMINISTRATION OF FEDERAL TAX LAWS.—
The Secretary of the Treasury shall have access to the
information in the National Directory of New Hires
for purposes of administering the Internal Revenue
Code of 1986.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 549. DISCLOSURE OF PRISONER RETURN INFORMA-
TION TO FEDERAL BUREAU OF PRISONS.
(a) DISCLOSURE.—
(1) IN GENERAL.—Subsection (l) of section 6103
(relating to disclosure of returns and return informa-
tion for purposes other than tax administration) is
amended by adding at the end the following new
paragraph:
‘‘(22) DISCLOSURE OF RETURN INFORMATION OF
PRISONERS TO FEDERAL BUREAU OF PRISONS.—
‘‘(A) IN GENERAL.—Under such procedures
as the Secretary may prescribe, the Secretary
may disclose return information with respect to
persons incarcerated in Federal prisons whom
the Secretary believes filed or facilitated the fil-
ing of false or fraudulent returns to the head of
the Federal Bureau of Prisons if the Secretary
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determines that such disclosure is necessary to
permit effective tax administration.
‘‘(B) DISCLOSURE BY AGENCY TO EMPLOY-
EES.—The head of the Federal Bureau of Prisons
may redisclose information received under sub-
paragraph (A)—
‘‘(i) only to those officers and employ-
ees of the Bureau who are personally and
directly engaged in taking administrative
actions to address violations of administra-
tive rules and regulations of the prison fa-
cility, and
‘‘(ii) solely for the purposes described
in subparagraph (C).
‘‘(C) RESTRICTION ON USE OF DISCLOSED
INFORMATION.—Return 
information 
disclosed
under this paragraph may be used only for the
purposes of—
‘‘(i) preventing the filing of false or
fraudulent returns; and
‘‘(ii) taking administrative actions
against individuals who have filed or at-
tempted to file false or fraudulent returns.’’.
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(2) PROCEDURES
AND
RECORD
KEEPING
RE-
LATED TO DISCLOSURE.—Subsection (p)(4) of section
6103 is amended—
(A) by striking ‘‘(14), or (17)’’ in the mat-
ter before subparagraph (A) and inserting ‘‘(14),
(17), or (22)’’, and
(B) by striking ‘‘(9), or (16)’’ in subpara-
graph (F)(i) and inserting ‘‘(9), (16), or (22)’’.
(3) EVALUATION BY TREASURY INSPECTOR GEN-
ERAL FOR TAX ADMINISTRATION.—Paragraph (3) of
section 7803(d) is amended by striking ‘‘and’’ at the
end of subparagraph (A), by striking the period at the
end of subparagraph (B) and inserting ‘‘; and’’, and
by adding at the end the following new subparagraph:
‘‘(C) not later than 3 years after the date of
the enactment of section 6103(l)(22), submit a
written report to Congress on the implementa-
tion of such section.’’.
(b) ANNUAL REPORTS.—
(1) IN GENERAL.—The Secretary of the Treasury
shall submit to Congress and make publicly available
an annual report on the filing of false and fraudulent
returns by individuals incarcerated in Federal and
State prisons.
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(2) CONTENTS
OF
REPORT.—The report sub-
mitted under paragraph (1) shall contain statistics
on the number of false or fraudulent returns associ-
ated with each Federal and State prison and such
other information that the Secretary determines is
appropriate.
(3) EXCHANGE OF INFORMATION.—For the pur-
pose of gathering information necessary for the re-
ports required under paragraph (1), the Secretary of
the Treasury shall enter into agreements with the
head of the Federal Bureau of Prisons and the heads
of State agencies charged with responsibility for ad-
ministration of State prisons under which the head of
the Bureau or Agency provides to the Secretary not
less frequently than annually the names and other
identifying information of prisoners incarcerated at
each facility administered by the Bureau or Agency.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to disclosures on or after January 1,
2008.
SEC. 550. UNDERSTATEMENT OF TAXPAYER LIABILITY BY
RETURN PREPARERS.
(a) APPLICATION OF RETURN PREPARER PENALTIES
TO ALL TAX RETURNS.—
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(1) DEFINITION OF TAX RETURN PREPARER.—
Paragraph (36) of section 7701(a) (relating to income
tax preparer) is amended—
(A) by striking ‘‘income’’ each place it ap-
pears in the heading and the text, and
(B) in subparagraph (A), by striking ‘‘sub-
title A’’ each place it appears and inserting ‘‘this
title’’.
(2) CONFORMING AMENDMENTS.—
(A)(i) Section 6060 is amended by striking
‘‘INCOME TAX RETURN PREPARERS’’ in the
heading and inserting ‘‘TAX
RETURN
PRE-
PARERS’’.
(ii) Section 6060(a) is amended—
(I) by striking ‘‘an income tax return
preparer’’ each place it appears and insert-
ing ‘‘a tax return preparer’’,
(II) by striking ‘‘each income tax re-
turn preparer’’ and inserting ‘‘each tax re-
turn preparer’’, and
(III) by striking ‘‘another income tax
return preparer’’ and inserting ‘‘another
tax return preparer’’.
(iii) The item relating to section 6060 in
the table of sections for subpart F of part III of
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subchapter A of chapter 61 is amended by strik-
ing ‘‘income tax return preparers’’ and inserting
‘‘tax return preparers’’.
(iv) Subpart F of part III of subchapter A
of chapter 61 is amended by striking ‘‘Income
Tax Return Preparers’’ in the heading and
inserting ‘‘Tax Return Preparers’’.
(v) The item relating to subpart F in the
table of subparts for part III of subchapter A of
chapter 61 is amended by striking ‘‘income tax
return preparers’’ and inserting ‘‘tax return pre-
parers’’.
(B) Section 6103(k)(5) is amended—
(i) by striking ‘‘income tax return pre-
parer’’ each place it appears and inserting
‘‘tax return preparer’’, and
(ii) by striking ‘‘income tax return
preparers’’ each place it appears and insert-
ing ‘‘tax return preparers’’.
(C)(i) Section 6107 is amended—
(I) by striking ‘‘INCOME
TAX
RE-
TURN PREPARER’’ in the heading and in-
serting ‘‘TAX RETURN PREPARER’’,
(II) by striking ‘‘an income tax return
preparer’’ each place it appears in sub-
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sections (a) and (b) and inserting ‘‘a tax re-
turn preparer’’,
(III) by striking ‘‘INCOME TAX RE-
TURN PREPARER’’ in the heading for sub-
section (b) and inserting ‘‘TAX RETURN
PREPARER’’, and
(IV) in subsection (c), by striking ‘‘in-
come tax return preparers’’ and inserting
‘‘tax return preparers’’.
(ii) The item relating to section 6107 in the
table of sections for subchapter B of chapter 61
is amended by striking ‘‘Income tax return pre-
parer’’ and inserting ‘‘Tax return preparer’’.
(D) Section 6109(a)(4) is amended—
(i) by striking ‘‘an income tax return
preparer’’ and inserting ‘‘a tax return pre-
parer’’, and
(ii) by striking ‘‘INCOME RETURN PRE-
PARER’’ in the heading and inserting ‘‘TAX
RETURN PREPARER’’.
(E) Section 6503(k)(4) is amended by strik-
ing ‘‘Income tax return preparers’’ and inserting
‘‘Tax return preparers’’.
(F)(i) Section 6694 is amended—