IRS Improper Payments Act
Bill: S.3221 | Sponsor: Sen. Braun, Mike (R-IN)
Policy area: Government Operations and Politics

Summary:
IRS Improper Payments Act
This bill directs the Office of Management and Budget (OMB), the Department of the Treasury, the Department of Justice (DOJ), executive agencies, and inspectors general to take specified steps to reduce improper payments and eliminate waste in federal programs.
Specifically, the OMB must (1) establish annual targets for reducing improper payments, (2) issue government-wide guidance on this bill's implementation, and (3) establish various working groups. The OMB must also develop policy recommendations, including potential legislative proposals, designed to reduce improper payments.
The Department of the Treasury, in coordination with DOJ and the OMB, must (1) publish information about improper payments under programs identified as having the highest dollar value or majority of improper payments (i.e., high priority programs); and (2) establish a central internet-based method to collect from the public information relating to suspected incidents of waste, fraud, and abuse.
Each agency that administers a high priority program shall designate a Senate-confirmed official to be accountable for meeting agency program reduction targets.
The bill requires an agency that fails to meet high priority program reduction targets of the agency, or fails to implement the plans for not less than two consecutive years, to submit a report that describes the likely causes of the failure and proposes a remedial plan.
The Chief Financial Officers Council must take specified actions.
The Federal Acquisition Regulatory Council must recommend to the President actions designed to enhance contractor accountability for improper payments.

To reduce improper payments and eliminate waste in Federal programs, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``IRS Improper Payments Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that when the Federal Government 
makes payments to individuals and businesses as beneficiaries, 
grantees, or contractors, or on behalf of beneficiaries, of Federal 
programs, the Federal Government must make every effort to confirm that 
the right recipient is receiving the right payment for the right reason 
at the right time.
    (b) Purpose.--The purpose of this Act is to--
            (1) reduce improper payments in the major programs 
        administered by the Federal Government--
                    (A) by intensifying efforts to eliminate payment 
                error, waste, fraud, and abuse in those programs; and
                    (B) continuing to ensure that Federal programs 
                serve and provide access to the intended beneficiaries 
                of those programs;
            (2) adopt a comprehensive set of policies, including--
                    (A) transparency and public scrutiny of significant 
                improper payments throughout the Federal Government;
                    (B) a focus on identifying and eliminating the 
                highest improper payments;
                    (C) accountability for reducing improper payments 
                among agencies and officials of agencies; and
                    (D) coordinated action by the Federal Government 
                and State and local governments in identifying and 
                eliminating improper payments; and
            (3) protect access to Federal programs by their intended 
        beneficiaries.

SEC. 3. TITLE 31 AMENDMENTS.

    (a) In General.--Subchapter IV of chapter 33 of title 31, United 
States Code, is amended--
            (1) in section 3351--
                    (A) by redesignating paragraphs (4), (5), (6), (7), 
                and (8) as paragraphs (5), (6), (7), (8), and (10), 
                respectively;
                    (B) by inserting after paragraph (3) the following:
            ``(5) High-priority program.--The term `high-priority 
        program' means a Federal program identified by the Director of 
        the Office of Management and Budget under section 
        3359(a)(1).''; and
                    (C) by inserting after paragraph (8), as so 
                redesignated, the following:
            ``(9) High-priority program reduction target.--The term 
        `high-priority program reduction target' means a target for 
        reducing improper payments associated with a high-priority 
        program under section 3359(a)(2).''; and
            (2) by adding at the end the following:
``Sec. 3359. Transparency and public participation
    ``(a) High Priority Programs.--Not later than 90 days after the 
date of enactment of this section, the Director of the Office of 
Management and Budget shall--
            ``(1) identify Federal programs in which the highest dollar 
        value or majority of Government-wide improper payments occur;
            ``(2) establish, in coordination with the head of each 
        executive agency responsible for administering a high-priority 
        program--
                    ``(A) annual targets for reducing improper payments 
                associated with the high-priority program; or
                    ``(B) if a target described in subparagraph (A) 
                exists as of the date of enactment of this Act, 
                supplemental targets for reducing improper payments 
                associated with the high-priority program; and
            ``(3) issue Government-wide guidance on the implementation 
        of this Act, including procedures for--
                    ``(A) identifying and publicizing the list of 
                entities described in subsection (c)(2)(E); and
                    ``(B) prior to publication, administratively 
                appealing the decision to publish the identity of those 
                entities.
    ``(b) Working Group.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of this section, the Director of the Office of 
        Management and Budget shall establish a working group to be 
        known as the `High Priority Program Working Group' (referred to 
        in this section as the `Working Group').
            ``(2) Members.--The Working Group shall consist of 
        officials of the Federal Government and State and local 
        governments.
            ``(3) Recommendations.--Not later than 180 days after the 
        date of enactment of this section, the Working Group, in 
        coordination with Council of the Inspectors General on 
        Integrity and Efficiency, shall submit to the Director of the 
        Office of Management and Budget recommendations designed to 
        improve the measurement by the Federal Government of access to 
        Federal programs by the intended beneficiaries of those 
        programs.
    ``(c) Published High-Priority Program Information.--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of this section, and annually thereafter, the 
        Secretary of the Treasury, in coordination with the Attorney 
        General and the Director of the Office of Management and 
        Budget, shall publish on the internet information about 
        improper payments under high-priority programs.
            ``(2) Contents.--The information published under paragraph 
        (1) shall include, subject to Federal privacy policies and to 
        the extent permitted by law--
                    ``(A) the names of the accountable officials 
                designated under section 3360(a);
                    ``(B) rates and amounts as of the date of enactment 
                of this section, and historical rates and amounts, of 
                improper payments in Federal programs of the Internal 
                Revenue Service, including, if known and appropriate, 
                the causes of the improper payments;
                    ``(C)(i) rates and amounts as of the date of 
                enactment of this section, and historical rates and 
                amounts, of the recovery of improper payments, where 
                appropriate; or
                    ``(ii) for high-priority programs in which improper 
                payments are identified solely on the basis of a 
                sample, rates and amounts of the recovery of improper 
                payments estimated on the basis of the applicable 
                sample;
                    ``(D) high-priority program reduction targets, 
                where appropriate; and
                    ``(E) the entities that--
                            ``(i) have received the greatest amount of 
                        unreturned improper payments; and
                            ``(ii) in Federal programs in which 
                        improper payments are identified solely on the 
                        basis of a sample, have received the greatest 
                        amount of outstanding improper payments in the 
                        applicable sample.
            ``(3) Measurements.--The Secretary of the Treasury may 
        include in the information published under paragraph (1) any 
        measurements included in the recommendations of the Working 
        Group submitted under subsection (b)(3).
            ``(4) Prohibition.--The information described in paragraph 
        (2)(E) may not include information relating to any referrals 
        the executive agency has made or anticipates making to the 
        Attorney General or any information provided in connection with 
        those referrals.
    ``(d) Collecting Information From the Public.--Not later than 180 
days after the date of enactment of this section, the Secretary of the 
Treasury, in coordination with the Attorney General and the Director of 
the Office of Management and Budget and in consultation with the 
Council of the Inspectors General on Integrity and Efficiency, shall 
establish a central internet-based method to collect from the public 
information relating to suspected incidents of waste, fraud, and abuse 
by an entity receiving Federal funds that have led or may lead to 
improper payments by the Federal Government.
    ``(e) Links.--The head of each executive agency shall prominently 
display on the homepage of the website of the executive agency a link 
to internet-based resources for addressing improper payments, including 
the information published under subsection (c)(1) and the internet-
based method established under subsection (d).
``Sec. 3360. Agency accountability and coordination
    ``(a) Accountable Officials.--Not later than 120 days after the 
date of enactment of this section, the head of each executive agency 
that administers a high-priority program shall designate a Senate-
confirmed official of the executive agency to be accountable for 
meeting the high-priority program reduction targets of the executive 
agency without unduly burdening access to the high-priority program and 
participation by eligible beneficiaries.
    ``(b) Second Official.--If an executive agency that administers a 
high-priority program for which the majority of payments are 
administered under a single component of the executive agency, the head 
of the executive agency shall designate an official of that component, 
who shall--
            ``(1) be responsible for program integrity activities; and
            ``(2) as appropriate, consolidate and coordinate each 
        program integrity activity of the component.
    ``(c) Report.--Not later than 180 days after the date of enactment 
of this section, and annually thereafter, each executive agency 
official who is designated by the Director of the Office of Management 
and Budget under subsection (a) or otherwise shall provide the 
inspector general of the executive agency served by the official a 
report that includes--
            ``(1) the methodology of the executive agency for 
        identifying and measuring improper payments by each high-
        priority program of the executive agency;
            ``(2) the plans of the executive agency and supporting 
        analysis for meeting high-priority program reduction targets; 
        and
            ``(3) the plans of the executive agency and supporting 
        analysis for ensuring that initiatives undertaken in accordance 
        with this subchapter do not unduly burden program access and 
        participation by eligible beneficiaries.
    ``(d) Duties of Inspector General.--Annually, the inspector general 
shall, with respect to each high-priority program of the executive 
agency--
            ``(1) assess the level of risk associated with the program;
            ``(2) determine the extent of oversight warranted; and
            ``(3) provide the head of the executive agency with 
        recommendations, if any, for modifying the methodology, 
        improper payment reduction plans, or program access and 
        participation plans of the executive agency.
    ``(e) Agency Failure.--
            ``(1) In general.--If an executive agency fails to meet the 
        high-priority program reduction targets of the executive agency 
        or implement the plans described in subsection (c)(3) for not 
        less than 2 consecutive years, the official of the executive 
        agency designated under subsection (a) shall submit to the head 
        of the executive agency, the inspector general of the executive 
        agency, and chief financial officer of the executive agency a 
        report that--
                    ``(A) describe the likely causes of the failure; 
                and
                    ``(B) proposes a remedial plan.
            ``(2) Review.--Annually, the head of an executive agency 
        described in paragraph (1) shall, with respect to a remedial 
        plan proposed under paragraph (1)(B)--
                    ``(A) review the remedial plan; and
                    ``(B) in consultation with the inspector general 
                and chief financial officer of the executive agency, 
                forward the remedial plan and any additional comments 
                and analysis to the Director of the Office of 
                Management and Budget.
    ``(f) CFOC Recommendations.--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of this section, the Chief Financial Officers 
        Council, in consultation with the Council of the Inspectors 
        General on Integrity and Efficiency, the Attorney General, and 
        Federal program experts, shall submit to the Director of the 
        Office of Management and Budget and the Secretary of the 
        Treasury recommendations on actions, including actions relating 
        to forensic accounting and audits, agencies should take to more 
        effectively tailor methodologies for identifying and measuring 
        improper payments to Federal programs, or components of Federal 
        programs, in which improper payments are most likely to occur.
            ``(2) Contents.--The recommendations submitted under 
        paragraph (1) shall address the manner in which the recommended 
        actions would affect program access and participation by 
        eligible beneficiaries.
    ``(g) Recommendations To Reduce Improper Payments.--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of this section, the Secretary of the Treasury and 
        the Director of the Office of Management and Budget, in 
        consultation with the Council of the Inspectors General on 
        Integrity and Efficiency, the Attorney General, and Federal 
        program experts, shall submit to the President recommendations 
        for actions designed to reduce improper payments by improving 
        information sharing among agencies and Federal programs, and 
        when applicable, State and local governments and other 
        stakeholders.
            ``(2) Contents.--The recommendations submitted under 
        paragraph (1) shall--
                    ``(A) address the ways in which information sharing 
                may improve eligibility verification and pre-payment 
                scrutiny;
                    ``(B) identify legal or regulatory impediments to 
                effective information sharing; and
                    ``(C) address the manner in which the recommended 
                actions would affect Federal program access and 
                participation by eligible beneficiaries.
    ``(h) Report.--
            ``(1) In general.--Subject to Federal privacy policies and 
        to the extent permitted by law, not later than 180 days after 
        the date of enactment of this section, and not less frequently 
        than quarterly thereafter, the head of each executive agency 
        shall submit to the inspector general of the executive agency 
        and the Council of the Inspectors General on Integrity and 
        Efficiency, and make available to the public, a report on any 
        high-dollar improper payments identified by the executive 
        agency.
            ``(2) Contents.--The report required under paragraph (1)--
                    ``(A) shall describe any actions that the executive 
                agency--
                            ``(i) has taken or plans to take to recover 
                        improper payments; and
                            ``(ii) intends to take to prevent improper 
                        payments from occurring in the future; and
                    ``(B) may not include any referrals the executive 
                agency made or anticipates making to the Attorney 
                General or any information provided in connection with 
                those referrals.
            ``(3) Review.--Not later than 60 days after the date on 
        which the head of an executive agency submits a report under 
        paragraph (1), the inspector general of each executive agency 
        and the Council of the Inspectors General on Integrity and 
        Efficiency shall--
                    ``(A) assess the level of risk associated with the 
                Federal program under which a high-dollar improper 
                payment described in paragraph (1) was made;
                    ``(B) determine the extent of oversight of the 
                Federal program described in subparagraph (A) that is 
                warranted; and
                    ``(C) provide the head of the executive agency with 
                recommendations, if any, for modifying the plans of the 
                executive agency.
``Sec. 3361. Enhanced focus on contractors and working with State and 
              local stakeholders
    ``(a) Enhanced Focus on Contractors.--Not later than 180 days after 
the date of enactment of this section, the Federal Acquisition 
Regulatory Council, in coordination with the Director of the Office of 
Management and Budget and in consultation with the National Procurement 
Fraud Task Force (or its successor group), the Council of the 
Inspectors General on Integrity and Efficiency, and appropriate 
executive agency officials, shall recommend to the President actions 
designed to enhance contractor accountability for improper payments, 
which may include subjecting contractors to debarment, suspension, 
financial penalties, and identification through a public internet 
website, subject to Federal privacy policies and to the extent 
permitted by law and where the identification would not interfere with 
or compromise an ongoing criminal or civil investigation, for knowingly 
failing timely to disclose credible evidence of significant 
overpayments received under Federal contracts.
    ``(b) Working Group for Audits.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this section, the Director of the Office of 
        Management and Budget shall establish a working group to be 
        known as the `Auditing Working Group'.
            ``(2) Members.--The working group established under 
        paragraph (1) shall consist of officials of the Federal 
        Government and elected officials of State and local 
        governments.
            ``(3) Chair.--The Director of the Office of Management and 
        Budget may designate an appropriate official to serve as the 
        Chair of the working group established under paragraph (1) to 
        convene the meetings and direct the work of the working group.
            ``(4) Duties.--Not later than 180 days after the date of 
        enactment of this section, the working group established under 
        paragraph (1), in coordination with the Council of the 
        Inspectors General on Integrity and Efficiency, shall submit to 
        the Director of the Office of Management and Budget 
        recommendations designed to improve the effectiveness of single 
        audits of State and local governments and nonprofit 
        organizations that expend Federal funds.
            ``(5) Contents.--The recommendations required under 
        paragraph (4) shall address--
                    ``(A) the effectiveness of the audits described in 
                that paragraph in identifying improper payments; and
                    ``(B) opportunities to streamline or eliminate 
                single audit requirements in situations in which the 
                value of those requirements is minimal.
    ``(c) Working Group for Accountability.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this section, the Director of the Office of 
        Management and Budget shall establish a working group, which 
        may be a component of the working group established under 
        subsection (b), to be known as the `Accountability Working 
        Group'.
            ``(2) Members.--The working group established under 
        paragraph (1) shall consist of officials of the Federal 
        Government and elected officials of State and local 
        governments.
            ``(3) Chair.--The Director of the Office of Management and 
        Budget may designate an appropriate official to serve as the 
        Chair of the working group established under paragraph (1) to 
        convene the meetings and direct the work of the working group.
            ``(4) Duties.--Not later than 180 days after the date of 
        enactment of this section, the working group established under 
        paragraph (1), in consultation with the Council of the 
        Inspectors General on Integrity and Efficiency, shall submit to 
        the Director of the Office of Management and Budget 
        recommendations for administrative actions designed to improve 
        the incentives and accountability of State and local 
        governments and other entities receiving Federal funds for 
        reducing improper payments.
``Sec. 3362. Policy proposals
    ``(a) In General.--Not later than 180 days after the date of 
enactment of this section, the Director of the Office of Management and 
Budget, in consultation with the heads of appropriate agencies and the 
Council of the Inspectors General on Integrity and Efficiency, shall 
develop policy recommendations, including potential legislative 
proposals, designed to reduce improper payments, including improper 
payments caused by error, waste, fraud, and abuse, across Federal 
programs without compromising program access.
    ``(b) Inclusion.--The recommendations developed under subsection 
(a) shall be included, as appropriate, in the budget of the President 
under section 1105(a) of title 31, United States Code for fiscal year 
2023 and each fiscal year thereafter.''.
    (b) Clerical Amendment.--The table of sections for subchapter IV of 
chapter 33 of title 31, United States Code, is amended by adding at the 
end the following:

``3359. Transparency and public participation.
``3360. Agency accountability and coordination.
``3361. Enhanced focus on contractors and working with State and local 
                            stakeholders.
``3362. Policy proposals.''.
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