Title: Student Aid Simplification Act
Policy area: Taxation

Summary:
Student Aid Simplification Act
This bill requires the Internal Revenue Service (IRS) to disclose certain tax return information to the Department of Education (ED) for the purpose of administering financial aid and loan programs under the Higher Education Act of 1965. (Under current law, students must obtain their own tax return information from the IRS and submit it to ED.)
Upon receiving a request from ED, the IRS must disclose specified tax return information to ED for the purposes of
ED may only use the disclosed information for the purposes above and for mitigating risks related to the programs. Mitigating risks includes activities related to analyzing or estimating costs, conducting oversight, developing statistics, and reducing improper payments. It does not include conducting criminal investigations or prosecutions.
With the consent of the taxpayer, ED may disclose the return information to certain institutions of higher education, state higher education agencies, and scholarship organizations solely for the use in financial aid programs.
The bill also specifies notification and reporting requirements related to the disclosures and the implementation of this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 640 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 640

To amend the Internal Revenue Code of 1986 and the Higher Education Act 
of 1965 to facilitate the disclosure of tax return information to carry 
     out the Higher Education Act of 1965, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 17, 2019

  Mr. Doggett (for himself and Mr. Buchanan) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
 addition to the Committee on Education and Labor, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 and the Higher Education Act 
of 1965 to facilitate the disclosure of tax return information to carry 
     out the Higher Education Act of 1965, 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 ``Student Aid Simplification Act''.

SEC. 2. DISCLOSURE OF CERTAIN TAX RETURN INFORMATION TO THE SECRETARY 
              OF EDUCATION.

    (a) In General.--Paragraph (13) of section 6103(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(13) Disclosure of return information to the secretary of 
        education.--
                    ``(A) Income-contingent or income-based repayment 
                and total and permanent disability discharge.--The 
                Secretary shall, upon written request from the 
                Secretary of Education, disclose to officers, 
                employees, and contractors of the Department of 
                Education, as specifically authorized and designated by 
                the Secretary of Education, only for the purpose of 
                (and to the extent necessary in) establishing, 
                renewing, administering, and conducting analyses and 
                forecasts for estimating costs related to income-
                contingent or income-based repayment programs, and the 
                discharge of loans based on a total and permanent 
                disability (within the meaning of section 437(a) of the 
                Higher Education Act of 1965), under title IV of the 
                Higher Education Act of 1965 (as in effect on the date 
                of enactment of this paragraph), the following return 
                information (as defined in subsection (b)(2)) with 
                respect to taxpayers identified by the Secretary of 
                Education as participating in the loan programs under 
                title IV of such Act, for taxable years specified by 
                such Secretary:
                            ``(i) Taxpayer identity information with 
                        respect to such taxpayer.
                            ``(ii) The filing status of such taxpayer.
                            ``(iii) Type of tax return from which the 
                        return information is provided.
                            ``(iv) The adjusted gross income of such 
                        taxpayer.
                            ``(v) Total number of exemptions claimed, 
                        or total number of individuals and dependents 
                        claimed, as applicable, on the return.
                            ``(vi) Number of children with respect to 
                        which tax credits under section 24 are claimed 
                        on the return.
                    ``(B) Federal student financial aid.--The Secretary 
                shall, upon written request from the Secretary of 
                Education, disclose to officers, employees, and 
                contractors of the Department of Education, as 
                specifically authorized and designated by the Secretary 
                of Education, only for the purpose of (and to the 
                extent necessary in) determining eligibility for, and 
                amount of, Federal student financial aid under programs 
                authorized by title IV of the Higher Education Act of 
                1965 (as in effect on the date of enactment of this 
                paragraph) and conducting analyses and forecasts for 
                estimating costs related to such programs, the 
                following return information (as defined in subsection 
                (b)(2)) with respect to taxpayers identified by the 
                Secretary of Education as applicants for Federal 
                student financial aid under title IV of such Act, for 
                taxable years specified by such Secretary:
                            ``(i) Taxpayer identity information with 
                        respect to such taxpayer.
                            ``(ii) The filing status of such taxpayer.
                            ``(iii) Type of tax return from which the 
                        return information is provided.
                            ``(iv) The adjusted gross income of such 
                        taxpayer.
                            ``(v) The amount of any net earnings from 
                        self-employment (as defined in section 1402), 
                        wages (as defined in section 3121(a) or 
                        3401(a)), and taxable income from a farming 
                        business (as defined in section 236A(e)(4)) for 
                        the period reported on the return.
                            ``(vi) The total income tax of such 
                        taxpayer.
                            ``(vii) Total number of exemptions claimed, 
                        or total number of individuals and dependents 
                        claimed, as applicable, on the return.
                            ``(viii) Number of children with respect to 
                        which tax credits under section 24 are claimed 
                        on the return.
                            ``(ix) Amount of any credit claimed under 
                        section 25A for the taxable year.
                            ``(x) Amount of individual retirement 
                        account distributions not included in adjusted 
                        gross income for the taxable year.
                            ``(xi) Amount of individual retirement 
                        account contributions and payments to self-
                        employed SEP, Keogh, and other qualified plans 
                        which were deducted from income for the taxable 
                        year.
                            ``(xii) The amount of tax-exempt interest.
                            ``(xiii) Amounts from retirement pensions 
                        and annuities not included in adjusted gross 
                        income for the taxable year.
                            ``(xiv) If applicable, the fact that there 
                        is no return filed for such taxpayer for the 
                        applicable year.
                    ``(C) Restriction on use of disclosed 
                information.--
                            ``(i) In general.--Return information 
                        disclosed under subparagraphs (A) and (B) may 
                        be used by officers, employees, and contractors 
                        of the Department of Education, as specifically 
                        authorized and designated by the Secretary of 
                        Education, only for the purposes and to the 
                        extent necessary described in such 
                        subparagraphs and for mitigating risks (as 
                        defined in clause (ii)) relating to the 
                        programs described in such subparagraphs.
                            ``(ii) Mitigating risks.--For purposes of 
                        this subparagraph, the term `mitigating risks' 
                        means, with respect to the programs described 
                        in subparagraphs (A) and (B)--
                                    ``(I) analyzing or estimating costs 
                                associated with potential changes to 
                                the need-analysis formula,
                                    ``(II) oversight activities by the 
                                Office of Inspector General of the 
                                Department of Education as authorized 
                                by the Inspector General Act of 1978, 
                                as amended,
                                    ``(III) developing or administering 
                                statistical models that inform support 
                                to populations of Federal student loan 
                                borrowers who are at risk of default or 
                                delinquency,
                                    ``(IV) reducing the net cost of 
                                improper payments to Federal financial 
                                aid recipients, and
                                    ``(V) producing aggregate 
                                statistics for reporting, research, or 
                                consumer information on the performance 
                                of programs or institutions of higher 
                                education participating in the programs 
                                under title IV of the Higher Education 
                                Act of 1965.
                        Such term does not include the conduct of 
                        criminal investigations or prosecutions.
                            ``(iii) Redisclosure to institutions of 
                        higher education, state higher education 
                        agencies, and designated scholarship 
                        organizations.--The Secretary of Education, and 
                        officers, employees, and contractors of the 
                        Department of Education, may disclose return 
                        information received under subparagraph (B), 
                        solely for the use in the application, award, 
                        and administration of Federal student financial 
                        aid, State aid, or aid awarded by eligible 
                        institutions or such entities as the Secretary 
                        of Education may designate, to the following 
                        persons:
                                    ``(I) An institution of higher 
                                education with which the Secretary of 
                                Education has an agreement under 
                                subpart 1 of part A, or part D or E, of 
                                title IV of the Higher Education Act of 
                                1965.
                                    ``(II) A State higher education 
                                agency.
                                    ``(III) A scholarship organization 
                                which is designated by the Secretary of 
                                Education as of the date of the 
                                enactment of the Student Aid 
                                Simplification Act as an organization 
                                eligible to receive the information 
                                provided under this clause.
                        The preceding sentence shall only apply to the 
                        extent that the taxpayer with respect to whom 
                        the return information relates provides consent 
                        for such disclosure to the Secretary of 
                        Education as part of the application for 
                        Federal student financial aid under title IV of 
                        the Higher Education Act of 1965.
                    ``(D) Required notification periods.--
                            ``(i) Notification to congress.--The 
                        Secretary and the Secretary of Education shall 
                        issue joint notifications to the Committees on 
                        Finance and Health, Education, Labor, and 
                        Pensions of the Senate and the Committees on 
                        Ways and Means and Education and Labor of the 
                        House of Representatives not less than 120 days 
                        prior to the first disclosure of any type of 
                        return information under subparagraph (A)(vii) 
                        or (B)(xv) with respect to which such a 
                        notification has not been previously made.
                            ``(ii) Public notice and comment.--There 
                        shall be a public notice and comment period 
                        beginning not less than 60 days prior to the 
                        first disclosure of any type of return 
                        information under subparagraph (A)(vii) or 
                        (B)(xv) with respect to which such a 
                        notification has not been previously made, 
                        subsequent to the period allotted for 
                        Congressional comment under clause (i).
                    ``(E) Notification of taxpayers.--The Secretary of 
                Education may not submit a written request under this 
                paragraph with respect to any taxpayer unless such 
                Secretary has advised such taxpayer that such Secretary 
                has the authority to request that the Internal Revenue 
                Service disclose under this section the tax return 
                information of such taxpayer, and of parents and 
                spouses who sign an application or request or a Master 
                Promissory Note on behalf of such taxpayer.
                    ``(F) Additional restriction on disclosure to 
                contractors.--For purposes of this paragraph, the 
                Secretary shall not consider any contractors to be 
                specifically authorized and designated by the Secretary 
                of Education with respect to a disclosure unless the 
                Secretary of Education finds that no officer or 
                employee can carry out the purpose for which such 
                disclosure is requested.''.
    (b) Confidentiality of Return Information.--Section 6103(a)(3) of 
such Code is amended by inserting ``, (13)(A), (13)(B)'' after 
``(12)''.
    (c) Conforming Amendments.--Section 6103(p)(4) of such Code is 
amended--
            (1) by inserting ``(A), (13)(B)'' after ``(13)'' each place 
        it occurs, and
            (2) by inserting ``, (13)(A), (13)(B)'' after ``(l)(10)'' 
        each place it occurs.
    (d) Effective Date.--The amendments made by this section shall 
apply to disclosures made under section 6103(l)(13) of the Internal 
Revenue Code of 1986 (as amended by this section) after the date of the 
enactment of this Act.

SEC. 3. REPORTS ON IMPLEMENTATION.

    (a) In General.--Not later than each specified date, the Secretary 
of Education and the Secretary of the Treasury shall issue joint 
reports to the Committees on Health, Education, Labor, and Pensions and 
Finance of the Senate and the Committees on Education and Labor and 
Ways and Means of the House of Representatives regarding the amendments 
made by section 2.
    (b) Specified Date Defined.--For purposes of subsection (a), the 
term ``specified date'' means--
            (1) the date that is 90 days after the date of the 
        enactment of this Act,
            (2) the date that is 120 days after the first day that the 
        disclosure process established under section 6103(l)(13) of the 
        Internal Revenue Code of 1986, as amended by section 2, is 
        operational, and
            (3) the date that is 1 year after the report date described 
        in paragraph (2).
                                 <all>