I 
113TH CONGRESS 
1ST SESSION 
H. R. 531 
To prevent identity theft and tax crimes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 6, 2013 
Ms. CASTOR of Florida (for herself and Mr. NUGENT) introduced the following 
bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committee on the Judiciary, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To prevent identity theft and tax crimes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tax Crimes and Iden-
tity Theft Prevention Act’’. 
SEC. 2. EXPEDITED RESOLUTION FROM INTERNAL REV-
ENUE SERVICE FOR IDENTITY THEFT VIC-
TIMS. 
Not later than 90 days after an individual notifies 
the Secretary of the Treasury that such individual’s iden-
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tity has been misused by another person in connection 
with the internal revenue laws, the Secretary shall, to the 
extent practicable, determine the extent to which the tax-
payer’s return and return information were affected by 
such misuse and shall take such actions as are necessary 
to correct such affected return or return information with 
respect to such misuse. 
SEC. 3. DISCLOSURE OF RETURN AND RETURN INFORMA-
TION IN FEDERAL AND STATE PROSECUTION 
RELATING TO IDENTITY FRAUD. 
(a) IN GENERAL.—Subsection (k) of section 6103 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(11) DISCLOSURE
OF
CERTAIN
RETURN
IN-
FORMATION IN CONNECTION WITH IDENTITY THEFT 
AND FRAUDULENT RETURNS.— 
‘‘(A) IN GENERAL.—In the case of an in-
vestigation pertaining to the misuse of the iden-
tity of another person for purposes of filing a 
false or fraudulent return of tax, upon receipt 
of a written request which meets the require-
ments of subparagraph (C), the Secretary may 
disclose return information to officers and em-
ployees of any Federal law enforcement agency, 
or any officers and employees of any State or 
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local law enforcement agency, who are person-
ally and directly engaged in the investigation of 
any crimes implicated in such misuse, but only 
if any such law enforcement agency is part of 
a team with the Internal Revenue Service in 
such investigation. 
‘‘(B) LIMITATION
ON
USE
OF
INFORMA-
TION.—Information disclosed under this sub-
paragraph shall be solely for the use of such of-
ficers and employees to whom such information 
is disclosed in such investigation. 
‘‘(C) REQUIREMENTS.—A request meets 
the requirements of this clause if— 
‘‘(i) the request is made by the head 
of the agency (or his delegate) involved in 
such investigation, and 
‘‘(ii) the request sets forth the specific 
reason why such disclosure may be rel-
evant to the investigation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 6103(a) of such 
Code is amended by inserting ‘‘or (k)(11)’’ after 
‘‘subsection (i)(7)(A)’’. 
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(2) Paragraph (4) of section 6103(p) of such 
Code is amended in the matter preceding subpara-
graph (A) by inserting ‘‘or (11)’’ after ‘‘(k)(10)’’. 
(3) Paragraph (2) of section 7213(a) of such 
Code is amended by inserting ‘‘(k)(11),’’ after 
‘‘(7)(A)(i),’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures after the date of the 
enactment of this Act. 
SEC. 4. CRIMINAL PENALTY FOR USING A FALSE IDENTITY 
IN CONNECTION WITH TAX FRAUD. 
(a) IN GENERAL.—Section 7207 of the Internal Rev-
enue Code of 1986 is amended— 
(1) by striking ‘‘Any person who willfully’’ and 
inserting the following: 
‘‘(a) IN GENERAL.—Any person who willfully’’, 
(2) by striking ‘‘Any person required’’ and in-
serting the following: 
‘‘(b) INFORMATION IN CONNECTION WITH CERTAIN 
EXEMPT ORGANIZATIONS.—Any person required’’, and 
(3) by adding at the end the following: 
‘‘(c) MISAPPROPRIATION OF IDENTITY.—Any person 
who knowingly or willfully misappropriates another per-
son’s tax identification number in connection with any list, 
return, account, statement, or other document submitted 
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to the Secretary shall be fined not less than $25,000 
($200,000 in the case of a corporation), or imprisoned not 
more than 5 years, or both, together with the costs of 
prosecution.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns and information sub-
mitted after the date of the enactment of this Act. 
SEC. 5. INCREASED PENALTY FOR IMPROPER DISCLOSURE 
OR USE OF INFORMATION BY PREPARERS OF 
RETURNS. 
(a) IN GENERAL.—Section 6713(a) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘$250’’ and inserting ‘‘$1,000’’, 
and 
(2) by striking ‘‘$10,000’’ and inserting 
‘‘$50,000’’. 
(b) CRIMINAL PENALTY.—Section 7216(a) of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘$1,000’’ and inserting ‘‘$100,000’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to disclosures or uses after the date 
of the enactment of this Act. 
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SEC. 6. PIN SYSTEM FOR PREVENTION OF IDENTITY THEFT 
TAX FRAUD. 
Not later than 1 year after the date of the enactment 
of this Act, the Secretary of the Treasury (or the Sec-
retary’s delegate) shall implement an identify theft tax 
fraud prevention program under which— 
(1) a person who has filed an identity theft affi-
davit with the Secretary may elect— 
(A) to be provided with a unique personal 
identification number to be included on any 
Federal tax return filed by such person, or 
(B) to prevent the processing of any Fed-
eral tax return submitted in an electronic for-
mat by a person purporting to be such person, 
and 
(2) the Secretary will provide additional identity 
verification safeguards for the processing of any 
Federal tax return filed by a person described in 
paragraph (1) in cases where a unique personal 
identification number is not included on the return. 
SEC. 7. PREVENTION OF FRAUDULENT REFUNDS. 
(a) IN GENERAL.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall establish a fraudulent tax 
refund prevention program under which— 
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(1) additional triggers are added to the refund 
database to identify potentially fraudulent tax re-
funds, and 
(2) the legitimacy of the refund claim can be 
promptly determined before the distribution of the 
refund. 
(b) MULTIPLE REFUNDS TO SAME DEBIT CARD.— 
The additional triggers added under subsection (a)(1) 
shall include identification of requests for multiple refunds 
to be paid to the same debit card. 
SEC. 8. AUTHORITY TO TRANSFER INTERNAL REVENUE 
SERVICE APPROPRIATIONS TO USE FOR TAX 
FRAUD ENFORCEMENT. 
For any fiscal year, the Commissioner of Internal 
Revenue may transfer not more than $10,000,000 to the 
‘‘Enforcement’’ account of the Internal Revenue Service 
from amounts appropriated to other Internal Revenue 
Service accounts. Any amounts so transferred shall be 
used solely for the purposes of preventing and resolving 
potential cases of tax fraud. 
SEC. 9. LOCAL LAW ENFORCEMENT LIAISON. 
(a) ESTABLISHMENT.—The Commissioner of Inter-
nal Revenue shall establish within the Criminal Investiga-
tion Division of the Internal Revenue Service the position 
of Local Law Enforcement Liaison. 
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(b) DUTIES.—The Local Law Enforcement Liaison 
shall— 
(1) coordinate the investigation of tax fraud 
with State and local law enforcement agencies; 
(2) communicate the status of tax fraud cases 
involving identity theft, and 
(3) carry out such other duties as delegated by 
the Commissioner of Internal Revenue. 
SEC. 10. REPORT ON TAX FRAUD. 
Subsection (a) of section 7803 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new paragraph: 
‘‘(4) ANNUAL REPORT ON TAX FRAUD.—The 
Commissioner shall submit to the Committee on Fi-
nance of the Senate and the Committee on Ways 
and Means of the House of Representatives an an-
nual report detailing— 
‘‘(A) the number of reports of tax fraud 
and suspected tax fraud received from State 
and local law enforcement agencies in the pre-
ceding year, and 
‘‘(B) the actions taken in response to such 
reports.’’. 
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SEC. 11. STUDY ON THE USE OF PREPAID DEBIT CARDS 
AND COMMERCIAL TAX PREPARATION SOFT-
WARE IN TAX FRAUD. 
(a) IN GENERAL.—The Comptroller General shall 
conduct a study to examine the role of prepaid debit cards 
and commercial tax preparation software in facilitating 
fraudulent tax returns through identity theft. 
(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Comptroller General shall 
submit to the Committee on Finance of the Senate and 
the Committee on Ways and Means of the House of Rep-
resentatives a report with the results of the study con-
ducted under subsection (a), together with any rec-
ommendations. 
SEC. 12. RESTRICTION ON ACCESS TO THE DEATH MASTER 
FILE. 
(a) IN GENERAL.—The Secretary of Commerce shall 
not disclose information contained on the Death Master 
File to any person with respect to any individual who has 
died at any time during the calendar year in which the 
request for disclosure is made or the succeeding calendar 
year unless such person is certified under the program es-
tablished under subsection (b). 
(b) CERTIFICATION PROGRAM.— 
(1) IN GENERAL.—The Secretary of Commerce 
shall establish a program to certify persons who are 
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eligible to access the information described in sub-
section (a) contained on the Death Master File. 
(2) CERTIFICATION.—A person shall not be cer-
tified under the program established under para-
graph (1) unless the Secretary determines that such 
person has a legitimate fraud prevention interest in 
accessing the information described in subsection 
(a). 
(c) IMPOSITION OF PENALTY.—Any person who is 
certified under the program established under subsection 
(b), who receives information described in subsection (a), 
and who during the period of time described in subsection 
(a)— 
(1) discloses such information to any other per-
son, or 
(2) uses any such information for any purpose 
other than to detect or prevent fraud, 
shall pay a penalty of $1,000 for each such disclosure or 
use, but the total amount imposed under this subsection 
on such a person for any calendar year shall not exceed 
$50,000. 
(d) EXEMPTION FROM FREEDOM OF INFORMATION 
ACT
REQUIREMENT
WITH
RESPECT
TO
CERTAIN 
RECORDS OF DECEASED INDIVIDUALS.— 
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(1) IN GENERAL.—The Social Security Admin-
istration shall not be compelled to disclose to any 
person who is not certified under the program estab-
lished under section 9(b) the information described 
in section 9(a). 
(2) TREATMENT OF INFORMATION.—For pur-
poses of section 552 of title 5, United States Code, 
this section shall be considered a statute described 
in subsection (b)(3)(B) of such section 552. 
SEC. 13. TREASURY REPORT ON INFORMATION SHARING 
BARRIERS 
WITH 
RESPECT 
TO 
IDENTITY 
THEFT. 
(a) REVIEW.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury (or the Secretary’s delegate) shall review wheth-
er current Federal tax laws and regulations related 
to the confidentiality and disclosure of return infor-
mation prevent the effective enforcement of local, 
State, and Federal identity theft statutes. The re-
view shall consider whether greater information 
sharing between the Internal Revenue Service and 
State and local law enforcement authorities would 
improve the enforcement of criminal laws at all lev-
els of government. 
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(2) CONSULTATION.—In conducting the review 
under paragraph (1), the Secretary shall solicit the 
views of, and consult with, State and local law en-
forcement officials. 
(b) REPORT.—Not later than 180 days after the date 
of enactment of this Act, the Secretary shall submit a re-
port with the results of the review conducted under sub-
section (a), along with any legislative recommendations, 
to the Committee on Finance of the Senate and the Com-
mittee on Ways and Means of the House of Representa-
tives. 
SEC. 14. GRANTS TO INVESTIGATE AND PROSECUTE STATE 
AND LOCAL TAX CRIMES. 
(a) GRANT PROGRAM AUTHORIZED.—The Attorney 
General is authorized to award grants to State and local 
law enforcement agencies to assist such agencies in the 
investigation and prosecution of tax crimes. 
(b) AUTHORIZATION OF APPROPRIATIONS.—For each 
fiscal year, there are authorized to be appropriated to 
carry out this section, from amounts made available in 
each such fiscal year to carry out the Edward Byrne Me-
morial Justice Assistance Grants program under part E 
of title I of the Omnibus Crime Control and Safe Streets 
Act of 1968 (42 U.S.C. 3750 et seq.), $50,000,000. 
Æ 
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