Human Trafficking Fraud Enforcement Act of 2017

Bill: 115-hr-889
Sponsor: full_name: Rep. Maloney, Carolyn B. [D-NY-12]
Introduced: 2017-02-06
Policy area: Taxation
Subjects: Crime victims

Crimes against children

Criminal investigation, prosecution, interrogation

Department of the Treasury

Executive agency funding and structure

Fraud offenses and financial crimes

Human trafficking

Internal Revenue Service (IRS)

Law enforcement administration and funding

Sex offenses

Tax administration and collection, taxpayers
Latest action: action_date: 2017-02-06
text: Referred to the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.

Summaries:
action_date: 2017-02-06
action_desc: Introduced in House
text: <p><strong>Human Trafficking Fraud Enforcement Act of 201</strong><b>7</b> </p> <p> This bill directs the Department of the Treasury to establish within the Internal Revenue Service an office to investigate and prosecute violations of tax laws by persons that appear to be violating specified federal laws prohibiting forced labor, trafficking of individuals, and transportation of minors or aliens for immoral purposes or state or territorial laws prohibiting the promotion of&nbsp;prostitution or of any commercial sex act. The office must cooperate with the Child Exploitation and Obscenity Section of the Department of Justice and the Innocence Lost National Initiative of the Federal Bureau of Investigation. </p> <p>The bill allows victims of human trafficking crimes to claim awards allowed for whistle-blowing. </p> <p>The bill amends the Internal Revenue Code to: (1) increase civil and criminal penalties for tax evasion attributable to income derived from human trafficking and commercial sex acts, and (2) make it a felony to fail to file a tax return including income derived from human trafficking or commercial sex acts. </p> <p>The bill appropriates to the Crime Victims Fund additional funds equal to the increase in receipts from increased civil and criminal penalties provided by this bill. The funds are provided for victim assistance grants under the Victims of Crime Act of 1984, including crisis intervention, emergency shelter and transportation, counseling, and criminal justice advocacy to victims of crime.</p> <p>

tv_txt: I 115th CONGRESS 1st Session H. R. 889 IN THE HOUSE OF REPRESENTATIVES February 6, 2017 Mrs. Carolyn B. Maloney of New York (for herself and Mr. Poe of Texas ) 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 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 provide for the establishment of an office within the Internal Revenue Service to focus on violations of the internal revenue laws by persons who are under investigation for conduct relating to the promotion of commercial sex acts and trafficking in persons crimes, and to increase the criminal monetary penalty limitations for the underpayment or overpayment of tax due to fraud.

1. Short title This Act may be cited as the Human Trafficking Fraud Enforcement Act of 2017 . 2. Office for tax law enforcement relating to human trafficking and promotion of commercial sex acts (a) Establishment The Secretary of the Treasury shall establish an office within the Internal Revenue Service to investigate and prosecute violations of the internal revenue laws by persons that appear to be engaged in conduct in violation of any of the provisions specified in subsection (b). (b) Certain criminal provisions relating to human trafficking and promotion of commercial sex acts The provisions of law referenced in this subsection are as follows: (1) The following provisions of title 18, United States Code: (A) Section 1351. (B) Section 1589. (C) Section 1590. (D) Section 1591(a). (E) Section 1952. (F) Section 2421. (G) Section 2422. (H) Subsection (a), (d), or (e) of section 2423. (2) Section 1328 of title 8, United States Code. (3) The laws of any State or territory that prohibit the promotion of prostitution or of any commercial sex act (as such term is defined in section 1591(e)(3) of title 18, United States Code). (c) Cooperation with Department of Justice To the extent possible, the office established under subsection (a) shall cooperate with the Child Exploitation and Obscenity Section of the Department of Justice and the Innocence Lost National Initiative of the Federal Bureau of Investigation. (d) 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 on 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) and shall include any recommendations for statutory changes to assist in future prosecutions pursuant to this section. (e) Applicability of whistleblower awards to victims of human trafficking For purposes of making an award under paragraph (1) or (2) of section 7623(b) of the Internal Revenue Code of 1986 with respect to information provided by victims of any person convicted of violating any of the provisions specified in subsection (b), the determination of whether such person is described in such paragraph shall be made without regard to paragraph (3) of section 7623(b) of such Code. (f) Authorization of appropriations (1) In general There is authorized to be appropriated not more than $4,000,000 for fiscal year 2018 to carry out subsection (a). (2) Additional funding for administration of office Unless specifically appropriated otherwise, there is authorized to be appropriated and is appropriated to the office established under subsection (a) for fiscal years 2018 and 2019 for the administration of such office an amount equal to the sum of— (A) the amount of any tax under chapter 1 of the Internal Revenue Code of 1986 (including any interest) collected during such fiscal years as the result of the actions of such office, plus (B) the amount of any civil or criminal monetary penalties imposed under such Code relating to such tax and so collected. Amounts not expended under the preceding sentence shall be transferred to and deposited in the Crime Victims Fund in the Treasury ( 42 U.S.C. 10601 ). 3. Increase in criminal monetary penalties (a) Attempt To evade or defeat tax Section 7201 of the Internal Revenue Code of 1986 (relating to attempt to evade or defeat tax) is amended— (1) by striking Any person and inserting the following: (a) In general Any person , and (2) by adding at the end the following new subsection: (b) Attempt To evade or defeat tax attributable to human trafficking and commercial sex acts (1) In general In the case of any attempt to evade or defeat any tax attributable to income derived from an act described in paragraph (2), subsection (a) shall be applied— (A) by substituting $500,000 ($1,000,000 for $100,000 ($500,000 , and (B) by substituting 10 years for 5 years . (2) Human trafficking and commercial sex acts For purposes of paragraph (1), an act described in this paragraph is any act which is a violation of any of the provisions specified in section 2(b) of the Human Trafficking Fraud Enforcement Act of 2017 . . (b) Willful failure To file return, supply information, or pay tax (1) General increase in monetary penalty Section 7203 of the Internal Revenue Code of 1986 (relating to willful failure to file return, supply information, or pay tax) is amended by striking $25,000 and inserting $50,000 . (2) Increase in penalties for failure to file with respect to tax attributable to human trafficking and commercial sex acts (A) In general Section 7203 of the Internal Revenue Code of 1986 (relating to willful failure to file return, supply information, or pay tax), as amended by paragraph (1), is amended by striking Any person in the first sentence and inserting the following: (a) In general Any person , and (B) by adding at the end the following new subsection: (b) Failure To file with respect to tax attributable to human trafficking and commercial sex acts In the case of any failure with respect to any tax attributable to income derived from an act described in paragraph (2) of section 7201(b), the first sentence of subsection (a) shall be applied by substituting— (1) felony for misdemeanor , (2) $500,000 ($1,000,000 for $50,000 ($100,000 , and (3) 10 years for 1 year . . (3) Conforming amendment The third sentence of section 7203(a) of the Internal Revenue Code of 1986 (as amended by paragraph (1)) is amended by striking this section and inserting this subsection . (c) Fraud and false statements Section 7206 of the Internal Revenue Code of 1986 (relating to fraud and false statements) is amended— (1) by striking Any person and inserting the following: (a) In general Any person , and (2) by adding at the end the following new subsection: (b) Fraud and false statements with respect to tax attributable to human trafficking and commercial sex acts In the case of any violation of subsection (a) relating to any tax attributable to income derived from an act described in paragraph (2) of section 7201(b), subsection (a) shall be applied— (1) by substituting $500,000 ($1,000,000 for $100,000 ($500,000 , and (2) by substituting 5 years for 3 years . . (d) Penalties may be applied in addition to other penalties Section 7204 of the Internal Revenue Code of 1986 (relating 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, 7201, and 7203 . (e) Increase in monetary limitation for underpayment or overpayment of tax due to fraud Section 7206 of the Internal Revenue Code of 1986 (relating to fraud and false statements), as amended by subsection (c), is amended by adding at the end the following new subsection: (c) Increase in monetary limitation for underpayment 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 attributable to fraudulent action described in subsection (a), the applicable dollar amount under subsection (a) shall in no event be less than an amount equal to such portion. A rule similar to the rule under section 6663(b) shall apply for purposes of determining the portion so attributable. . (f) Moneys available To assist victims of crime There are hereby appropriated to the Crime Victims Fund ( 42 U.S.C. 10601 ) amounts equivalent to the increase in receipts to the Treasury by reason of the amendments made by this section. Such amounts shall be available for victim assistance grants under the Victims of Crime Act of 1984, including crisis intervention, emergency shelter and transportation, counseling, and criminal justice advocacy to victims of crime. (g) Effective date The amendments made by this section shall apply to actions, and failures to act, occurring after the date of the enactment of this Act.