[House Report 115-638]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-638
======================================================================
21ST CENTURY IRS ACT
_______
April 13, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 5445]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5445) to amend the Internal Revenue Code of 1986 to
improve cybersecurity and taxpayer identity protection, and
modernize the information technology of the Internal Revenue
Service, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................9
A. Purpose and Summary................................... 9
B. Background and Need for Legislation................... 9
C. Legislative History................................... 9
II. EXPLANATION OF THE BILL..........................................10
TITLE I--CYBER SECURITY AND IDENTITY PROTECTION.................. 10
1. Public-private partnership to address identity theft
tax refund fraud (sec. 101 of the bill).............. 10
2. Recommendations of Electronic Tax Administration
Advisory Committee regarding identity theft and
refund fraud (sec. 102 of the bill).................. 11
3. Information Sharing and Analysis Center (sec. 103 of
the bill and sec. 6103 of the Code).................. 12
4. Compliance by contractors with confidentiality
safeguards (sec. 104 of the bill and sec. 6103 of the
Code)................................................ 16
5. Report on electronic payments (sec. 105 of the bill).. 18
TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY.................. 19
1. Management of IRS information technology (sec. 201 of
the bill and sec 7803 of the Code)................... 19
2. Development of online accounts and portals (sec. 202
of the bill)......................................... 21
3. Internet platform for Form 1099 filings (sec. 203 of
the bill)............................................ 22
TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION
SYSTEM......................................................... 23
1. Disclosure of taxpayer information for third-party
income verification (sec. 301 of the bill and sec.
6103 of the Code).................................... 23
2. Limit redisclosures and uses of consent-based
disclosures of tax return information (sec. 302 of
the bill and sec. 6103 of the Code).................. 25
TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS..................... 27
1. Electronic filing of returns (sec. 401 of the bill and
sec. 6011 of the Code)............................... 27
2. Uniform standards for the use of electronic signatures
for disclosure authorizations to, and other
authorizations of, practitioners (sec. 402 of the
bill and sec. 6061 of the Code)...................... 28
3. Payment of taxes by debit and credit cards (sec. 403
of the bill and sec. 6311 of the Code)............... 30
III.VOTES OF THE COMMITTEE...........................................30
IV. BUDGET EFFECTS OF THE BILL.......................................30
A. Committee Estimate of Budgetary Effects............... 30
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 31
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 31
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......31
A. Committee Oversight Findings and Recommendations...... 31
B. Statement of General Performance Goals and Objectives. 31
C. Information Relating to Unfunded Mandates............. 31
D. Applicability of House Rule XXI 5(b).................. 32
E. Tax Complexity Analysis............................... 32
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 32
G. Duplication of Federal Programs....................... 32
H. Disclosure of Directed Rule Makings................... 32
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............33
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 33
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 33
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``21st Century IRS
Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--CYBERSECURITY AND IDENTITY PROTECTION
Sec. 101. Public-private partnership to address identity theft refund
fraud.
Sec. 102. Recommendations of Electronic Tax Administration Advisory
Committee regarding identity theft refund fraud.
Sec. 103. Information sharing and analysis center.
Sec. 104. Compliance by contractors with confidentiality safeguards.
Sec. 105. Report on electronic payments.
TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY
Sec. 201. Management of Internal Revenue Service information
technology.
Sec. 202. Development of online accounts and portals.
Sec. 203. Internet platform for Form 1099 filings.
TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM
Sec. 301. Disclosure of taxpayer information for third-party income
verification.
Sec. 302. Limit redisclosures and uses of consent-based disclosures of
tax return information.
TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS
Sec. 401. Electronic filing of returns.
Sec. 402. Uniform standards for the use of electronic signatures for
disclosure authorizations to, and other authorizations of,
practitioners.
Sec. 403. Payment of taxes by debit and credit cards.
TITLE I--CYBERSECURITY AND IDENTITY PROTECTION
SEC. 101. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY THEFT REFUND
FRAUD.
The Secretary of the Treasury (or the Secretary's delegate) shall
work collaboratively with the public and private sectors to protect
taxpayers from identity theft refund fraud.
SEC. 102. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION ADVISORY
COMMITTEE REGARDING IDENTITY THEFT REFUND FRAUD.
The Secretary of the Treasury shall ensure that the advisory group
convened by the Secretary pursuant to section 2001(b)(2) of the
Internal Revenue Service Restructuring and Reform Act of 1998 (commonly
known as the Electronic Tax Administration Advisory Committee) studies
(including by providing organized public forums) and makes
recommendations to the Secretary regarding methods to prevent identity
theft and refund fraud.
SEC. 103. INFORMATION SHARING AND ANALYSIS CENTER.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) may participate in an information sharing and analysis center
to centralize, standardize, and enhance data compilation and analysis
to facilitate sharing actionable data and information with respect to
identity theft tax refund fraud.
(b) Development of Performance Metrics.--The Secretary of the
Treasury (or the Secretary's delegate) shall develop metrics for
measuring the success of such center in detecting and preventing
identity theft tax refund fraud.
(c) Disclosure.--
(1) In general.--Section 6103(k) is amended by adding at the
end the following new paragraph:
``(13) Disclosure of return information for purposes of
cybersecurity and the prevention of identity theft tax refund
fraud.--
``(A) In general.--Under such procedures and subject
to such conditions as the Secretary may prescribe, the
Secretary may disclose specified return information to
specified ISAC participants to the extent that the
Secretary determines such disclosure is in furtherance
of effective Federal tax administration relating to the
detection or prevention of identity theft tax refund
fraud, validation of taxpayer identity, authentication
of taxpayer returns, or detection or prevention of
cybersecurity threats.
``(B) Specified isac participants.--For purposes of
this paragraph--
``(i) In general.--The term `specified ISAC
participant' means--
``(I) any person designated by the
Secretary as having primary
responsibility for a function performed
with respect to the information sharing
and analysis center described in
section 403(a) of the 21st Century IRS
Act, and
``(II) any person subject to the
requirements of section 7216 and which
is a participant in such information
sharing and analysis center.
``(ii) Information sharing agreement.--Such
term shall not include any person unless such
person has entered into a written agreement
with the Secretary setting forth the terms and
conditions for the disclosure of information to
such person under this paragraph, including
requirements regarding the protection and
safeguarding of such information by such
person.
``(C) Specified return information.--For purposes of
this paragraph, the term `specified return information'
means--
``(i) in the case of a return which is in
connection with a case of potential identity
theft refund fraud--
``(I) in the case of such return
filed electronically, the internet
protocol address, device
identification, email domain name,
speed of completion, method of
authentication, refund method, and such
other return information related to the
electronic filing characteristics of
such return as the Secretary may
identify for purposes of this
subclause, and
``(II) in the case of such return
prepared by a tax return preparer,
identifying information with respect to
such tax return preparer, including the
preparer taxpayer identification number
and electronic filer identification
number of such preparer,
``(ii) in the case of a return which is in
connection with a case of a identity theft
refund fraud which has been confirmed by the
Secretary (pursuant to such procedures as the
Secretary may provide), the information
referred to in subclauses (I) and (II) of
clause (i), the name and taxpayer
identification number of the taxpayer as it
appears on the return, and any bank account and
routing information provided for making a
refund in connection with such return, and
``(iii) in the case of any cybersecurity
threat to the Internal Revenue Service,
information similar to the information
described in subclauses (I) and (II) of clause
(i) with respect to such threat.
``(D) Restriction on use of disclosed information.--
``(i) Designated third parties.--Any return
information received by a person described in
subparagraph (B)(i)(I) shall be used only for
the purposes of and to the extent necessary
in--
``(I) performing the function such
person is designated to perform under
such subparagraph,
``(II) facilitating disclosures
authorized under subparagraph (A) to
persons described in subparagraph
(B)(i)(II), and
``(III) facilitating disclosures
authorized under subsection (d) to
participants in such information
sharing and analysis center.
``(ii) Return preparers.--Any return
information received by a person described in
subparagraph (B)(i)(II) shall be treated for
purposes of section 7216 as information
furnished to such person for, or in connection
with, the preparation of a return of the tax
imposed under chapter 1.
``(E) Data protection and safeguards.--Return
information disclosed under this paragraph shall be
subject to such protections and safeguards as the
Secretary may require in regulations or other guidance
or in the written agreement referred to in subparagraph
(B)(ii). Such written agreement shall include a
requirement that any unauthorized access to information
disclosed under this paragraph, and any breach of any
system in which such information is held, be reported
to the Treasury Inspector General for Tax
Administration.''.
(2) Application of civil and criminal penalties.--
(A) Section 6103(a)(3) is amended by striking
``subsection (k)(10)'' and inserting ``paragraph (10)
or (13) of subsection (k)''.
(B) Section 7213(a)(2) is amended by inserting ``or
(13)'' after ``(k)(10)''.
SEC. 104. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.
(a) In General.--Section 6103(p) is amended by adding at the end the
following new paragraph:
``(9) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no return
or return information shall be disclosed to any contractor or
other agent of a Federal, State, or local agency unless such
agency, to the satisfaction of the Secretary--
``(A) has requirements in effect which require each
such contractor or other agent which would have access
to returns or return information to provide safeguards
(within the meaning of paragraph (4)) to protect the
confidentiality of such returns or return information,
``(B) agrees to conduct an on-site review every 3
years (or a mid-point review in the case of contracts
or agreements of less than 3 years in duration) of each
contractor or other agent to determine compliance with
such requirements,
``(C) submits the findings of the most recent review
conducted under subparagraph (B) to the Secretary as
part of the report required by paragraph (4)(E), and
``(D) certifies to the Secretary for the most recent
annual period that such contractor or other agent is in
compliance with all such requirements.
The certification required by subparagraph (D) shall include
the name and address of each contractor and other agent, a
description of the contract or agreement with such contractor
or other agent, and the duration of such contract or agreement.
The requirements of this paragraph shall not apply to
disclosures pursuant to subsection (n) for purposes of Federal
tax administration.''.
(b) Conforming Amendment.--Section 6103(p)(8)(B) is amended by
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
(c) Effective Date.--The amendments made by this section shall apply
to disclosures made after December 31, 2022.
SEC. 105. REPORT ON ELECTRONIC PAYMENTS.
Not later than 2 years after the date of the enactment of this Act,
the Secretary (or the Secretary's delegate), in coordination with the
Bureau of Fiscal Service and the Internal Revenue Service, and in
consultation with private sector financial institutions, shall submit a
written report to Congress describing how the government can utilize
new payment platforms to increase the number of tax refunds paid by
electronic funds transfer. Such report shall weigh the interests of
reducing identity theft tax refund fraud, reducing the Federal
Government's costs in delivering tax refunds, the costs and any
associated fees charged to taxpayers (including monthly and point-of-
service fees) to access their tax refunds, the impact on individuals
who do not have access to financial accounts or institutions, and
ensuring payments are made to accounts at a financial institution that
complies with section 21 of the Federal Deposit Insurance Act, chapter
2 of title I of Public Law 91-508, and subchapter II of chapter 53 of
title 31, United States Code (commonly referred to collectively as the
``Bank Secrecy Act'') and the USA PATRIOT Act. Such report shall
include any legislative recommendations necessary to accomplish these
goals.
TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY
SEC. 201. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION
TECHNOLOGY.
(a) Duties and Responsibilities of Internal Revenue Service Chief
Information Officer.--Section 7803 is amended by adding at the end the
following new subsection:
``(f) Internal Revenue Service Chief Information Officer.--
``(1) In general.--There shall be in the Internal Revenue
Service an Internal Revenue Service Chief Information Officer
(hereafter referred to in this subsection as the `IRS CIO') who
shall be appointed by the Administrator of the Internal Revenue
Service.
``(2) Centralized responsibility for internal revenue service
information technology.--The Administrator of the Internal
Revenue Service (and the Secretary) shall act through the IRS
CIO with respect to all development, implementation, and
maintenance of information technology for the Internal Revenue
Service. Any reference in this subsection to the IRS CIO which
directs the IRS CIO to take any action, or to assume any
responsibility, shall be treated as a reference to the
Administrator of the Internal Revenue Service acting through
the IRS CIO.
``(3) General duties and responsibilities.--The IRS CIO
shall--
``(A) be responsible for the development,
implementation, and maintenance of information
technology for the Internal Revenue Service,
``(B) ensure that the information technology of the
Internal Revenue Service is secure and integrated,
``(C) maintain operational control of all information
technology for the Internal Revenue Service,
``(D) be the principal advocate for the information
technology needs of the Internal Revenue Service, and
``(E) consult with the Chief Procurement Officer of
the Internal Revenue Service to ensure that the
information technology acquired for the Internal
Revenue Service is consistent with--
``(i) the goals and requirements specified in
subparagraphs (A) through (D), and
``(ii) the strategic plan developed under
paragraph (4).
``(4) Strategic plan.--
``(A) In general.--The IRS CIO shall develop and
implement a multiyear strategic plan for the
information technology needs of the Internal Revenue
Service. Such plan shall--
``(i) include performance measurements of
such technology and of the implementation of
such plan,
``(ii) include a plan for an integrated
enterprise architecture of the information
technology of the Internal Revenue Service,
``(iii) include and take into account the
resources needed to accomplish such plan,
``(iv) take into account planned major
acquisitions of information technology by the
Internal Revenue Service, including Customer
Account Data Engine 2 and the Enterprise Case
Management System, and
``(v) align with the needs and strategic plan
of the Internal Revenue Service.
``(B) Plan updates.--The IRS CIO shall, not less
frequently than annually, review and update the
strategic plan under subparagraph (A) (including the
plan for an integrated enterprise architecture
described in subparagraph (A)(ii)) to take into account
the development of new information technology and the
needs of the Internal Revenue Service.
``(5) Scope of authority.--
``(A) Information technology.--For purposes of this
subsection, the term `information technology' has the
meaning given such term by section 11101 of title 40,
United States Code.
``(B) Internal revenue service.--Any reference in
this subsection to the Internal Revenue Service
includes a reference to all components of the Internal
Revenue Service, including--
``(i) the Office of the Taxpayer Advocate,
``(ii) the Criminal Investigation Division of
the Internal Revenue Service, and
``(iii) except as otherwise provided by the
Secretary with respect to information
technology related to matters described in
subsection (b)(3)(B), the Office of the Chief
Counsel.''.
(b) Independent Verification and Validation of the Customer Account
Data Engine 2 and Enterprise Case Management System.--
(1) In general.--The Administrator of the Internal Revenue
Service shall enter into a contract with an independent
reviewer to verify and validate the implementation plans
(including the performance milestones and cost estimates
included in such plans) developed for the Customer Account Data
Engine 2 and the Enterprise Case Management System.
(2) Deadline for completion.-- Such contract shall require
that such verification and validation be completed not later
than the date which is 1 year after the date of the enactment
of this Act.
(3) Application to phases of cade 2.--
(A) In general.--Paragraphs (1) and (2) shall not
apply to phase 1 of the Customer Account Data Engine 2
and shall apply separately to each other phase.
(B) Deadline for completing plans.--Not later than 1
year after the date of the enactment of this Act, the
Administrator of the Internal Revenue Service shall
complete the development of plans for all phases of the
Customer Account Data Engine 2.
(C) Deadline for completion of verification and
validation of plans.--In the case of any phase after
phase 2 of the Customer Account Data Engine 2,
paragraph (2) shall be applied by substituting ``the
date on which the plan for such phase was completed''
for ``the date of the enactment of this Act''.
(c) Coordination of IRS CIO and Chief Procurement Officer of the
Internal Revenue Service.--
(1) In general.--The Chief Procurement Officer of the
Internal Revenue Service shall--
(A) identify all significant IRS information
technology acquisitions and provide written
notification to the Internal Revenue Service Chief
Information Officer (hereafter referred to in this
subsection as the ``IRS CIO'') of each such acquisition
in advance of such acquisition, and
(B) regularly consult with the IRS CIO regarding
acquisitions of information technology for the Internal
Revenue Service, including meeting with the IRS CIO
regarding such acquisitions upon request.
(2) Significant irs information technology acquisitions.--For
purposes of this subsection, the term ``significant IRS
information technology acquisitions'' means--
(A) any acquisition of information technology for the
Internal Revenue Service in excess of $1,000,000, and
(B) such other acquisitions of information technology
for the Internal Revenue Service (or categories of such
acquisitions) as the IRS CIO, in consultation with the
Chief Procurement Officer of the Internal Revenue
Service, may identify.
(3) Scope.--Terms used in this subsection which are also used
in section 7803(f) of the Internal Revenue Code of 1986 (as
amended by subsection (a)) shall have the same meaning as when
used in such section.
SEC. 202. DEVELOPMENT OF ONLINE ACCOUNTS AND PORTALS.
(a) In General.--The Secretary of the Treasury or the Secretary's
delegate (hereafter referred to in this section as the ``Secretary'')
shall--
(1) develop secure individualized online accounts to provide
services to taxpayers and their designated return preparers,
including obtaining taxpayer information, making payment of
taxes, sharing documentation, and (to the extent feasible)
addressing and correcting issues, and
(2) develop a process for the acceptance of tax forms, and
supporting documentation, in digital or other electronic
format.
(b) Electronic Services Treated as Supplemental; Application of
Security Standards.--The Secretary shall ensure that the processes
described in subsection (a)--
(1) are a supplement to, and not a replacement for, other
services provided by the Internal Revenue Service to taxpayers,
including face-to-face taxpayer assistance and services
provided by phone, and
(2) comply with applicable security standards and guidelines.
(c) Process for Developing Online Accounts.--
(1) Development of plan.--Not later than 1 year after the
date of the enactment of this Act, the Secretary shall submit
to Congress a written report describing the Secretary's plan
for developing the secure individualized online accounts
described in subsection (a)(1). Such plan shall address the
feasibility of taxpayers addressing and correcting issues
through such accounts and whether access to such accounts
should be restricted and in what manner.
(2) Deadline.--The Secretary shall make every reasonable
effort to make the secure individualized online accounts
described in subsection (a)(1) available to taxpayers by
December 31, 2023.
SEC. 203. INTERNET PLATFORM FOR FORM 1099 FILINGS.
(a) In General.--Not later than January 1, 2023, the Secretary of the
Treasury or the Secretary's delegate (hereafter referred to in this
section as the ``Secretary'') shall make available an Internet website
or other electronic media, with a user interface and functionality
similar to the Business Services Online Suite of Services provided by
the Social Security Administration, that will provide access to
resources and guidance provided by the Internal Revenue Service and
will allow persons to--
(1) prepare and file Forms 1099,
(2) prepare Forms 1099 for distribution to recipients other
than the Internal Revenue Service, and
(3) maintain a record of completed and submitted Forms 1099.
(b) Electronic Services Treated as Supplemental; Application of
Security Standards.--The Secretary shall ensure that the services
described in subsection (a)--
(1) are a supplement to, and not a replacement for, other
services provided by the Internal Revenue Service to taxpayers,
and
(2) comply with applicable security standards and guidelines.
TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM
SEC. 301. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY INCOME
VERIFICATION.
(a) In General.--Not later than 1 year after the close of the 2-year
period described in subsection (d)(1), the Secretary of the Treasury or
the Secretary's delegate (hereafter referred to in this section as the
``Secretary'') shall implement a program to ensure that any qualified
disclosure--
(1) is fully automated and accomplished through the Internet,
and
(2) is accomplished in as close to real-time as is
practicable.
(b) Qualified Disclosure.--For purposes of this section, the term
``qualified disclosure'' means a disclosure under section 6103(c) of
the Internal Revenue Code of 1986 of returns or return information by
the Secretary to a person seeking to verify the income or
creditworthiness of a taxpayer who is a borrower in the process of a
loan application.
(c) Application of Security Standards.--The Secretary shall ensure
that the program described in subsection (a) complies with applicable
security standards and guidelines.
(d) User Fee.--
(1) In general.--During the 2-year period beginning on the
first day of the 6th calendar month beginning after the date of
the enactment of this Act, the Secretary shall assess and
collect a fee for qualified disclosures (in addition to any
other fee assessed and collected for such disclosures) at such
rates as the Secretary determines are sufficient to cover the
costs related to implementing the program described in
subsection (a), including the costs of any necessary
infrastructure or technology.
(2) Deposit of collections.--Amounts received from fees
assessed and collected under paragraph (1) shall be deposited
in, and credited to, an account solely for the purpose of
carrying out the activities described in subsection (a). Such
amounts shall be available to carry out such activities without
need of further appropriation and without fiscal year
limitation.
SEC. 302. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF
TAX RETURN INFORMATION.
(a) In General.--Section 6103(c) is amended by adding at the end the
following: ``Persons designated by the taxpayer under this subsection
to receive return information shall not use the information for any
purpose other than the express purpose for which consent was granted
and shall not disclose return information to any other person without
the express permission of, or request by, the taxpayer.''.
(b) Application of Penalties.--Section 6103(a)(3) is amended by
inserting ``subsection (c),'' after ``return information under''.
(c) Effective Date.--The amendments made by this section shall apply
to disclosures made after the date of the enactment of this Act.
TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS
SEC. 401. ELECTRONIC FILING OF RETURNS.
(a) In General.--Section 6011(e)(2)(A) is amended by striking ``250''
and inserting ``the applicable number of''.
(b) Applicable Number.--Section 6011(e) is amended by adding at the
end the following new paragraph:
``(6) Applicable number.--For purposes of paragraph (2)(A),
the applicable number shall be determined in accordance with
the following table:
``(A) in the case of calendar years before 2020, 250,
``(B) in the case of calendar year 2020, 100, and
``(C) in the case of calendar years after 2020,
10.''.
(c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is
amended by adding at the end the following new subparagraph:
``(D) Exception for certain preparers located in
areas without internet access.--The Secretary may waive
the requirement of subparagraph (A) if the Secretary
determines, on the basis of an application by the tax
return preparer, that the preparer cannot meet such
requirement by reason of being located in a geographic
area which does not have access to internet service
(other than dial-up or satellite service).''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 402. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES FOR
DISCLOSURE AUTHORIZATIONS TO, AND OTHER
AUTHORIZATIONS OF, PRACTITIONERS.
Section 6061(b)(3) is amended to read as follows:
``(3) Published guidance.--
``(A) In general.--The Secretary shall publish
guidance as appropriate to define and implement any
waiver of the signature requirements or any method
adopted under paragraph (1).
``(B) Electronic signatures for disclosure
authorizations to, and other authorizations of,
practitioners.--Not later than 6 months after the date
of the enactment of this subparagraph, the Secretary
shall publish guidance to establish uniform standards
and procedures for the acceptance of taxpayers'
signatures appearing in electronic form with respect to
any request for disclosure of a taxpayer's return or
return information under section 6103(c) to a
practitioner or any power of attorney granted by a
taxpayer to a practitioner.
``(C) Practitioner.--For purposes of subparagraph
(B), the term `practitioner' means any individual in
good standing who is regulated under section 330 of
title 31, United States Code.''.
SEC. 403. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.
Section 6311(d)(2) is amended by adding at the end the following:
``The preceding sentence shall not apply to the extent that the
Secretary ensures that any such fee or other consideration is fully
recouped by the Secretary in the form of fees paid to the Secretary by
persons paying taxes imposed under subtitle A with credit, debit, or
charge cards pursuant to such contract. Notwithstanding the preceding
sentence, the Secretary shall seek to minimize the amount of any fee or
other consideration that the Secretary pays under any such contract.''.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The ``21st Century IRS Act,'' H.R. 5445, as reported by the
Committee on Ways and Means, would modernize the Internal
Revenue Service's information technology (IT) infrastructure,
enhance the role of the agency's Chief Information Officer
(CIO), and provide additional tools to protect taxpayer
information and to combat identity theft tax refund fraud.
B. Background and Need for Legislation
Over the past two years, the Ways and Means Oversight
Subcommittee has spent significant time reviewing the Internal
Revenue Service's (IRS) use of information technology (IT). The
Subcommittee found that the IRS relies heavily on an ageing IT
infrastructure, some of which dates back to the 1960s, to
administer the tax system. Additionally, the Committee found
that, while the IRS spends approximately $2.4 billion annually
on IT, it continues to struggle with undertaking and completing
large IT modernization efforts. These issues result in the
waste of billions of taxpayer dollars and time spent
maintaining outdated legacy systems rather than deploying
newer, more modern systems that are less costly to maintain.
The IRS can no longer afford to continue running antiquated
IT systems that are difficult, if not impossible, to maintain.
Each year, the IRS is relying on fewer and fewer employees with
the expertise to update outdated software. Failure of one of
these legacy systems could be disastrous, potentially resulting
in a range of issues from an inability to collect taxes to
significant loss of taxpayer data. A lack of up-to-date, modern
IRS IT systems also negatively impacts taxpayers seeking to
comply with their tax responsibilities, often resulting in
frustrating, prolonged interactions with the IRS that could be
more easily and seamlessly resolved online. In addition, like
many other public and private entities, the IRS has experienced
cyberattacks and fraud schemes that seek to exploit stolen
taxpayer information in order to steal tax refunds.
This bipartisan legislation seeks to modernize the IRS and
improve the ease and efficiency of the taxpayer experience when
filing taxes, retrieving information, resolving issues, and
making payments. The legislation also includes a number of
provisions to strengthen the IRS's ability to proactively
combat identity theft tax refund fraud.
C. Legislative History
Background
H.R. 5445 was introduced on April 10, 2018 and was referred
to the Committee on Financial Services and the Committee on
Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 5445, the
``21st Century IRS Act'' on April 11, 2018, and ordered the
bill, as amended, favorably reported (with a quorum being
present).
Committee hearings and roundtables
During the 115th Congress, the Ways and Means Oversight
Subcommittee held five hearings and four roundtables on
reforming the IRS in terms of modernizing IT for a better
taxpayer experience. Oversight Subcommittee hearings included:
April 26, 2017: Examining the 2017 Tax
Filing Season;
May 19, 2017: IRS Reform: Lessons Learned
from the National Taxpayer Advocate;
October 4, 2017: IRS Reform: Challenges to
Modernizing IT Infrastructure;
December 13, 2017: IRS Reform: The Taxpayer
Experience; and
January 30, 2018: Member Day Hearing on
Legislation to Improve Tax Administration.
Roundtables included:
June 22, 2017: Reforming the IRS--Lessons
Learned from 1998, Roundtable Part I;
July 12, 2017: Reforming the IRS--Lessons
Learned from 1998, Roundtable Part II;
October 12, 2017: IRS Security Summit; and
January 17, 2018: Briefing on the IRS's
Technology Roadmap.
II. EXPLANATION OF THE BILL
TITLE I--CYBER SECURITY AND IDENTITY PROTECTION
1. Public-Private Partnership To Address Identity Theft Tax Refund
Fraud (sec. 101 of the bill)
PRESENT LAW
The Security Summit, formed in 2015, is a partnership of
the IRS, State tax agencies, and the private-sector tax
industry to address tax refund fraud caused by identity theft.
In 2016, the Security Summit group members identified and
agreed to share more than 20 data components relating to
Federal and State returns to improve fraud detection and
prevention. For example, group members are sharing computer
device identification data tied to the return's origin, as well
as the improper or repetitive use of the numbers that identify
the internet address from where the return originates.\1\ Tax
software providers agreed to enhance identity requirements and
strengthen validation procedures for new and returning
customers to protect their accounts from theft. Along with the
IRS, 40 State departments of revenue, and 21 tax industry
members have signed onto a Memorandum of Understanding
regarding roles, responsibilities and information sharing
pathways among the IRS, States and industry.\2\
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\1\Internal Revenue Service, 2016 Security Summit: Protecting
Taxpayers from Identity Theft Tax Refund Fraud (June 2016) at p. 3.
https://www.irs.gov/pub/newsroom/6_2016_security_summit_report.pdf.
\2\Ibid.
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REASONS FOR CHANGE
The Committee believes the Security Summit has been a
successful and productive venue for governmental and private
organizations to work together to address the growing problem
of identity theft tax refund fraud. The Committee is encouraged
by the proactive steps that the IRS has taken to address this
issue and wants to ensure that these efforts continue going
forward.
EXPLANATION OF PROVISION
The provision requires the Secretary to work
collaboratively with the public and private sectors to protect
taxpayers from identity theft tax refund fraud.
EFFECTIVE DATE
The provision is effective on the date of enactment.
2. Recommendations of Electronic Tax Administration Advisory Committee
Regarding Identity Theft and Refund Fraud (sec. 102 of the bill)
PRESENT LAW
The IRS Reform and Restructuring Act of 1998 (``RRA98'')
authorized the Electronic Tax Administration Advisory Committee
(``ETAAC''). ETAAC was intended to provide input to the IRS on
electronic tax administration. ETAAC's responsibilities involve
researching, analyzing, and making recommendations on a variety
of electronic tax administration issues. Pursuant to RRA98,
ETAAC reports to Congress annually concerning:
IRS progress on reaching its goal to
electronically receive 80 percent of tax and
information returns;
Legislative changes assisting the IRS in
meeting the 80 percent goal;
Status of the IRS strategic plan for
electronic tax administration; and
Effects of e-filing tax and information
returns on small businesses and the self-employed.
According to the latest annual report, ETAAC members come
from State departments of revenue, large tax preparation
companies, solo tax practitioners, tax software companies,
financial services industry and low income and consumer
advocacy groups.\3\
---------------------------------------------------------------------------
\3\Electronic Tax Administration Advisory Committee, Publication
3415, Annual Report to Congress (June 2017), https://www.irs.gov/pub/
irs-pdf/p3415.pdf.
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REASONS FOR CHANGE
ETAAC's focus on electronic tax administration issues makes
it a suitable entity to examine and make recommendations
regarding methods to address identity theft and refund fraud
after evaluating various stakeholder viewpoints. ETAAC has
already amended its charter to focus on the issue of identity
theft and refund fraud. This provision codifies the recent
changes to ETAAC's charter and ensures that ETAAC will continue
to examine this issue going forward. The Committee also finds
ETAAC's annual reports to Congress, which include
recommendations to improve the work of the Security Summit, to
be valuable sources of information and would like to ensure
that this work continues.
EXPLANATION OF PROVISION
The provision requires ETAAC to study (including through
organized public forums) and make recommendations to the
Secretary regarding methods to prevent identity theft and
refund fraud.
EFFECTIVE DATE
The provision is effective on the date of enactment.
3. Information Sharing and Analysis Center (sec. 103 of the bill and
sec. 6103 of the Code\4\)
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\4\All section references herein are to the Internal Revenue Code
of 1986, as amended (herein ``Code''), unless otherwise stated.
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PRESENT LAW
Information Sharing and Analysis Center
The Security Summit, formed in 2015, is a partnership of
the IRS, State tax agencies, and the private-sector tax
industry to address tax refund fraud caused by identity theft.
In 2016, the Security Summit created an Identity Theft Tax
Refund Fraud Information Sharing and Analysis Center
(``ISAC'').\5\ The ISAC is a secure, web-based venue for
States, industry and the IRS to share and exchange information.
The ISAC enables the IRS and the States to work together with
external third parties to serve as an early warning system for
tax refund fraud, identity theft schemes, and cybersecurity
issues. A third-party contractor, hosts, maintains, and
facilitates the web-based leads reporting and information
sharing process for the ISAC.
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\5\Internal Revenue Service, 2016 Security Summit: Protecting
Taxpayers from Identity Theft Tax Refund Fraud (June 2016) https://
www.irs.gov/pub/newsroom/6_2016_security_summit_report.pdf.sec.
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Confidentiality and disclosure of return information
As a general rule, returns and return information are
confidential and cannot be disclosed unless authorized by the
Code.\6\ The definition of return information is very broad and
generally includes any information received or collected by the
IRS with respect to liability under the Code of any person for
any tax, penalty, interest or offense. The term ``return
information'' includes, among other items:
\6\Sec. 6103(a).
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a taxpayer's identity, the nature, source, or amount of his
income, payments, receipts, deductions, exemptions, credits,
assets, liabilities, net worth, tax liability, tax withheld,
deficiencies, overassessments, or tax payments, whether the
taxpayer's return was, is being, or will be examined or subject
to other investigation or processing, or any other data,
received by, recorded by, prepared by, furnished to, or
collected by the Secretary with respect to a return or with
respect to the determination of the existence, or possible
existence, of liability (or the amount thereof) of any person
under this title for any tax, penalty, interest, fine,
forfeiture, or other imposition, or offense . . . (emphasis
added)\7\
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\7\Sec. 6103(b)(2)(A).
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There are several exceptions to the general rule of
confidentiality. Such exceptions include provisions to permit
disclosures to State tax administration officials, for IRS
employees and officers to make investigative disclosures, and
rules to allow one authorized party to disclose to another
authorized party with the permission of the Commissioner.\8\
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\8\Sec. 6103(d) (disclosures to States), 6103(k)(6)(investigative
disclosures) and the Treasury regulations under sec. 6103(p)(2)(B).
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The IRS exchanges confidential information with State tax
agencies under the authority of section 6103(d). The
disclosures are made pursuant to written request from the head
of the State tax agency, which designates the State tax
officials who can receive the information. The information can
only be used for State tax purposes, not for general State
civil or criminal law enforcement. The State officials can
redisclose the information to other officers and employees of
the State tax agency, the agency's legal representative, or the
agency's contractors (but only for State tax administration
purposes). The IRS uses this authority to alert State tax
administration officials to tax refund fraud schemes.
IRS officers and employees may disclose return information
to the extent that such disclosure is necessary in obtaining
information, which is not otherwise reasonably available, with
respect to the correct determination of tax, liability for tax,
or the amount to be collected, or with respect to the
enforcement of any other provision of Title 26. Such
disclosures are to be made only in such situations and under
such conditions as the Secretary may prescribe by
regulation.\9\ This provision generally cannot be used to
provide confidential return information on an industry-wide
basis to alert return preparers to potential fraud schemes.
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\9\Sec. 6103(k)(6); Treas. Reg. sec. 301.6103(k)(6)-1.
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Under the Treasury regulations, returns or return
information that have been obtained by a Federal, State, or
local agency, or its agents or contractors, in accordance with
section 6103 (the first recipient) may be disclosed by the
first recipient to another recipient authorized to receive such
returns or return information under section 6103 (the second
recipient).\10\ The disclosure must be approved by the
Commissioner of the IRS. The second recipient may receive only
such returns or return information as authorized by the
provision of section 6103 applicable to such recipient and only
for a purpose authorized by and subject to any conditions
imposed by section 6103, including applicable safeguards.
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\10\Treas. Reg. sec. 301.6103(p)(2)(B)-1.
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Preparer disclosure penalties
The Code provides for a civil penalty for a tax return
preparer who (i) discloses any information furnished to the
preparer for, or in connection with, the preparation of such
return or (ii) uses such information for any purpose other than
to prepare or assist in preparing any such return.\11\ There is
a corresponding criminal penalty under section 7216 of the Code
for knowing or reckless conduct. The same exceptions from the
imposition of the criminal penalty apply for purposes of the
civil penalty. In general, the penalty does not apply for
disclosures permitted by the Code or pursuant to an order of a
court. Further, the penalty does not apply to the use of
information in the preparation of, or in connection with the
preparation of State and local tax returns and declarations of
estimated tax of the person to whom the information relates.
The Code also permits the Secretary to provide additional
exceptions through regulations. The Secretary has prescribed by
regulation the circumstances not involving tax preparation in
which disclosure and use of a taxpayer's information by a tax
return preparer is permitted.
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\11\ Sec. 6713.
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Penalties for the unauthorized disclosure or inspection of return
information
The unauthorized disclosure of a return or return
information is a felony punishable by fine of up to $5,000,
five years imprisonment or both. Unauthorized inspection is a
misdemeanor, punishable by a fine of up to $1,000, one year
imprisonment, or both.
REASONS FOR CHANGE
As the profitability and ease of identity theft grows, the
threat to the tax system from fraudulent tax refund filings
increases. While the IRS has traditionally been more
reactionary to external threats, the Committee is encouraged to
see the IRS look for new and alternative ways to combat
identity theft tax refund fraud, particularly through its
participation in the ISAC pilot. The Committee believes there
is a need for all parts of the tax system, including the IRS,
State tax administrators, and return preparers, to work
proactively together to combat identity theft tax refund fraud.
To be effective in this collaboration, stakeholders with the
ability to guard the tax system need to be able to receive the
necessary information about potential risks quickly. Therefore,
the Committee believes it is appropriate to provide a narrowly
tailored exception to the general rules of confidentiality to
facilitate alerts of potential tax refund fraud schemes and
cyber security threats to the IRS.
EXPLANATION OF PROVISION
ISAC participation and performance metrics
The provision provides that the Secretary may participate
in an information sharing and analysis center. The purpose of
such participation is to centralize, standardize and enhance
data compilation and analysis to facilitate sharing actionable
data and information with respect to identity theft tax refund
fraud. The provision requires the Secretary to develop metrics
for measuring the success of such center in detecting and
preventing identity theft tax refund fraud.
Disclosure of return information to certain ISAC participants
In general
The provision authorizes the disclosure of specified return
information to ISAC participants who have entered into a
written information sharing agreement with the Secretary. Under
such procedures and subject to such conditions as the Secretary
may prescribe, the Secretary may disclose specified return
information to specified ISAC participants if such disclosure
is in furtherance of effective Federal tax administration
relating to the following: (1) the detection or prevention of
identity theft tax refund fraud; (2) validation of taxpayer
identity; (3) authentication of taxpayer returns; or (4) the
detection or prevention of cybersecurity threats to the IRS.
Terminology
Specified ISAC participant
The term ``specified ISAC participant'' means any person
designated by the Secretary as having primary responsibility
for a function performed by the ISAC and any return preparer
(or other person) subject to section 7216 and who is a
participant in the ISAC. A person is only a specified ISAC
participant if such person has entered into a written
information sharing agreement with the Secretary. The
information sharing agreement must set forth the terms and
conditions for the disclosure of information to such person,
including the requirements imposed on such person for the
protection and safeguarding of such information. The
information sharing agreement must require that recipients of
return information under the provision are required to
affirmatively report to the Treasury Inspector General for Tax
Administration any unauthorized access or disclosure of
information and any breaches of any system holding the
information.
Specified return information
For purposes of the provision, the term ``specified return
information'' means, in the case of a return filed
electronically which is in connection with a case of potential
identity theft tax refund fraud, return information related to
the electronic filing characteristics of such return. Such
characteristics include: internet protocol address, device
identification, email domain name, speed of completion, method
of authentication, refund method, and such other return
information relating to the electronic filing characteristics
of such return as the Secretary may prescribe. In addition,
with respect to a return prepared by a tax return preparer in
connection with a case of potential identity theft refund
fraud, ``specified return information'' also includes
identifying information with respect to such tax return
preparer, including the preparer taxpayer identification number
(``PTIN'') and electronic filer identification number
(``EFIN'') of such preparer.
With respect to a return for which identity theft refund
fraud has been confirmed by the Secretary (pursuant to such
procedures as the Secretary may provide), ``specified return
information'' also includes the name and taxpayer
identification number of the taxpayer as it appears on the
return, and any bank account and routing information provided
for making a refund in connection with such return.
Finally, in the case of any cybersecurity threat to the
IRS, information similar to that associated with cases of
potential identity theft refund fraud (e.g. electronic
characteristics and preparer identifying information) are
considered specified return information with respect to such
threat.
Restriction on use of disclosed information
Any return information received by a specified ISAC
participant under the provision is to be used only for the
purposes of and to the extent necessary in (1) performing the
function the person is designated to perform with respect to
the ISAC, (2) facilitating authorized disclosures to return
preparers who are specified ISAC participants, and (3)
facilitating disclosures authorized under section 6103(d) to
State tax authorities who are participants in the ISAC. Return
information received by specified ISAC participants who are
return preparers is treated for purposes of section 7216 as
information furnished to such person for, or in connection
with, the preparation of a return of tax.
Data protection, safeguards, penalties
As noted above, to be a specified ISAC participant, the
person must enter into an information sharing agreement that
includes, among other responsibilities, requirements for the
protection and safeguarding of information received under the
provision. The return information disclosed under the provision
is subject to such protections and safeguards as the Secretary
may require by regulations, other guidance, or written
information sharing agreement. Recipients of return information
under the provision are subject to civil and criminal penalties
for the unauthorized disclosure or inspection of returns or
return information.
EFFECTIVE DATE
The provision is generally effective on the date of
enactment. The disclosure provisions are effective for
disclosures made on or after the date of enactment.
4. Compliance By Contractors With Confidentiality Safeguards (sec. 104
of the bill and sec. 6103 of the Code)
PRESENT LAW
Section 6103 permits the disclosure of returns and return
information to State agencies, as well as to other Federal
agencies for specified purposes. Section 6103(p)(4) requires,
as a condition of receiving returns and return information,
that State agencies (and others) provide safeguards as
prescribed by the Secretary of the Treasury by regulation that
are necessary or appropriate to protect the confidentiality of
returns or return information.\12\ It also requires that a
report be furnished to the Secretary at such time and
containing such information as prescribed by the Secretary
regarding the procedures established and utilized for ensuring
the confidentiality of returns and return information.\13\
After an administrative review, the Secretary may take such
actions as are necessary to ensure these requirements are met,
including the refusal to disclose returns and return
information.\14\
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\12\Sec. 6103(p)(4)(D).
\13\Sec. 6103(p)(4)(E).
\14\Sec. 6103(p)(4) (flush language) and (7); Treas. Reg. sec.
301.6103(p)(7)-1.
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Under present law, employees of a State tax agency may
disclose returns and return information to contractors for tax
administration purposes.\15\ These disclosures can be made only
to the extent necessary to procure contractually equipment,
other property, or services, related to tax administration.\16\
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\15\Sec. 6103(n) and Treas. Reg. sec. 301.6103(n)-1(a). ``Tax
administration'' includes ``the administration, management, conduct,
direction, and supervision of the execution and application of internal
revenue laws or related statutes (or equivalent laws and statutes of a
State) . . .'' Sec. 6103(b)(4).
\16\Treas. Reg. sec. 301.6013(n)-1(a). Such services include the
processing, storage, transmission or reproduction of such returns or
return information, the programming, maintenance, repair, or testing of
equipment or other property, or the providing of other services for
purposes of tax administration.
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The contractors can make redisclosures of returns and
return information to their employees as necessary to
accomplish the tax administration purposes of the contract, but
only to contractor personnel whose duties require
disclosure.\17\ Treasury regulations prohibit redisclosure to
anyone other than contractor personnel without the written
approval of the IRS.\18\
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\17\Treas. Reg. sec. 301.6103(n)-1(a) and (b). A disclosure is
necessary if such procurement or the performance of such services
cannot otherwise be reasonably, properly, or economically accomplished
without such disclosure. Treas. Reg. sec. 301.6103(n)-1(b). The
regulations limit the quantity of information to that needed to perform
the contract.
\18\Treas. Reg. sec. 301.6103(n)-1(a).
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By regulation, all contracts must provide that the
contractor will comply with all applicable restrictions and
conditions for protecting confidentiality prescribed by
regulation, published rules or procedures, or written
communication to the contractor.\19\ Failure to comply with
such restrictions or conditions may cause the IRS to terminate
or suspend the duties under the contract or the disclosures of
returns and return information to the contractor.\20\ In
addition, the IRS can suspend disclosures to the State tax
agency until the IRS determines that the conditions are or will
be satisfied.\21\ The IRS may take such other actions as are
deemed necessary to ensure that such conditions or requirements
are or will be satisfied.\22\
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\19\Treas. Reg. sec. 301.6103(n)-1(d).
\20\Treas. Reg. sec. 301.6103(n)-1(d)(1).
\21\Treas. Reg. sec. 301.6103(n)-1(d)(2).
\22\Treas. Reg. sec. 301.6103(n)-1(d).
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REASONS FOR CHANGE
The Committee notes the increasing use of contractors by
government agencies to perform the work of the government. In
the Committee's view, the IRS has insufficient resources to
monitor the compliance of every contractor in addition to its
other duties. Further, the Committee finds that it is
appropriate to require that Federal, State, and local agency
recipients of tax information monitor and certify that their
contractors and other agents have in place adequate safeguards
to protect this information.
EXPLANATION OF PROVISION
The provision requires that a State, local, or Federal
agency conduct on-site reviews every three years of all of its
contractors or other agents receiving Federal returns and
return information. If the duration of the contract or
agreement is less than three years, a review is required at the
mid-point of the contract. The purpose of the review is to
assess the contractor's efforts to safeguard Federal returns
and return information. This review is intended to cover secure
storage, restricting access, computer security, and other
safeguards deemed appropriate by the Secretary. Under the
provision, the State, local, or Federal agency is required to
submit a report of its findings to the IRS and certify annually
that such contractors and other agents are in compliance with
the requirements to safeguard the confidentiality of Federal
returns and return information. The certification is required
to include the name and address of each contractor or other
agent with the agency, the duration of the contract, and a
description of the contract or agreement with the State, local,
or Federal agency.
The provision does not apply to contracts for purposes of
Federal tax administration.
This provision does not alter or affect in any way the
right of the IRS to conduct safeguard reviews of State, local,
or Federal agency contractors or other agents. It also does not
affect the right of the IRS to initially approve the safeguard
language in the contract or agreement and the safeguards in
place prior to any disclosures made in connection with such
contracts or agreements.
EFFECTIVE DATE
The provision is effective for disclosures made after
December 31, 2022.
5. Report on Electronic Payments (sec. 105 of the bill)
PRESENT LAW
The Secretary is not currently required by Congress to
examine expansion of electronic fund transfers.
REASONS FOR CHANGE
The Committee is interested in creating safe, efficient,
and innovative ways for taxpayers to receive their federal
income tax refunds electronically. The Committee believes that
the report will be helpful in accomplishing these goals.
EXPLANATION OF PROVISION
Not later than two years after the date of the enactment,
the Secretary, or the Secretary's designee, in coordination
with the Bureau of Fiscal Service and the Internal Revenue
Service, and in consultation with private sector financial
institutions, is required to submit a written report to
Congress describing how the IRS can utilize new payment
platforms to increase the number of tax refunds paid by
electronic funds transfer. The report is required to consider
the interests of reducing identity theft tax refund fraud,
reducing the IRS's costs in delivering tax refunds, the costs
and any associated fees charged to taxpayers (including monthly
and point-of-service fees) to access their tax refunds, the
impact on individuals who do not have access to financial
accounts or institutions, and ensuring payments are made to
accounts that comply with the Bank Secrecy Act\23\ and the USA
PATRIOT Act of 2001.\24\ The report is required to include
legislative recommendations necessary to accomplish these
goals.
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\23\The Bank Secrecy Act, 31 U.S.C. secs. 5311-5332.
\24\Pub. L. No. 107-56.
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EFFECTIVE DATE
The provision is effective on the date of enactment.
TITLE II--DEVELOPMENT OF INFORMATION TECHNOLOGY
1. Management of IRS Information Technology (sec. 201 of the bill and
sec. 7803 of the Code)
PRESENT LAW
The Code describes duties and responsibilities for the
Commissioner, the Chief Counsel, and the Office of the Taxpayer
Advocate of the IRS.\25\ It does not presently enumerate duties
and responsibilities of an IRS Chief Information Officer (``IRS
CIO'').
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\25\Sec. 7803.
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Also, the Code does not explicitly provide for development
and implementation of a multiyear strategic plan for the
information technology needs of the IRS, and does not require
verification and validation of major acquisitions of
information technology by the IRS, including the Customer
Account Data Engine 2 (``CADE 2'') and the Enterprise Case
Management System (ECM).
REASONS FOR CHANGE
The Committee believes it is important for the IRS to
afford taxpayers peace of mind that their most sensitive
information is being responsibly protected by their government,
using the latest technology. The Committee believes the
appointment of an IRS CIO with operational control of all
information technology infrastructure for the IRS, and
responsibility for the development and implementation of
realistic multiyear strategic plans, in conjunction with the
verification and validation of major acquisitions of
information technology are important components in the
development, maintenance, and implementation of information
technology that is secure and integrated.
The Committee also has concerns about audits from the IRS's
oversight bodies, which report that offices or divisions within
the IRS, other than the Office of Information Technology, have
procured solutions that the Committee considers to be within
the definition of IT, but for which the Office of Information
Technology was not notified or consulted. The Committee
believes that strengthening of the roles and responsibilities
of the CIO and clarifying the definition of ``information
technology'' will assist the IRS in better administering and
overseeing its IT.
The Committee believes that it is important to mandate the
independent verification and validation of CADE 2 and ECM plans
to ensure that the planning for each of these projects is
reasonable and achievable. The Committee notes that the IRS has
struggled for years to complete both of these projects. CADE 2,
the IRS's replacement for the Individual Master File that
houses individuals' tax account data, initially began
development in 2009 with an estimated completion in 2015.
However, to date, the IRS has spent almost $2 billion on this
project and is not able to provide a completion date for all
phases of the project. While the IRS initiated the ECM project
in 2015, after initially selecting and procuring an ECM
solution, the IRS later determined that this solution could not
be deployed enterprise-wide. Both of these systems are central
to the success of the IRS in meeting its mission. If Congress
is to continue to support and fund these programs, certainty is
needed that the IRS will be able to plan for and implement
these programs.
EXPLANATION OF PROVISION
Under the provision, the Administrator\26\ of the IRS will
appoint an IRS CIO. The Administrator and the Secretary will
act through the IRS CIO with respect to the development,
implementation, and maintenance of information technology for
the IRS. The IRS CIO will be responsible for the development,
implementation, and maintenance of information technology for
the IRS, for ensuring that the information technology of the
IRS is secure and integrated, for maintaining operational
control of all information technology for the IRS, for acting
as the principal advocate for the information technology needs
of the IRS, and for consulting with the Chief Procurement
Officer of the IRS to ensure that the information technology
acquired for the IRS is consistent with the strategic plan.
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\26\ ``Administrator'' is used in lieu of ``Commissioner'' to
reflect the proposed change made in H.R. 5444, the ``Taxpayer First
Act,'' contemporaneously reported favorably out of Committee.
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The IRS CIO will also be responsible for developing and
implementing a multiyear strategic plan for the information
technology needs of the IRS. This plan should include
performance measures of such technology and its implementation,
and a plan for an integrated enterprise architecture of the
information technology of the IRS. It should take into account
the resources needed to accomplish such a plan, as well as
planned major acquisitions of information technology by the
IRS, including CADE 2 and the ECM System. The plan should also
align with the needs and strategic plan of the IRS. The IRS CIO
will review and update this plan at least once a year, taking
into account the development of new information technology and
the needs of the IRS.
Under the provision, the Administrator of the IRS will
develop plans for each phase except phase one of CADE 2 and
enter into a contract with an independent reviewer to verify
and validate implementation plans developed for each phase
except phase one of CADE 2 and for the ECM System. Furthermore,
the Chief Procurement Officer of the IRS is directed to
regularly consult with the IRS CIO and to identify all
significant IRS information technology acquisitions in excess
of $1,000,000, providing written notification to the IRS CIO of
each such acquisition in advance of acquisition.
EFFECTIVE DATE
The provision is generally effective on the date of
enactment.
The verification and validation of phase two of CADE 2 and
the ECM System are to be completed within one year after the
date of enactment. The development of plans for all subsequent
phases of CADE 2 should be completed within one year after the
date of enactment and the verification and validation of each
phase should be completed within one year after the date on
which the plan for such phase is completed.
2. Development of Online Accounts and Portals (sec. 202 of the bill)
PRESENT LAW
The Code does not expressly provide for the development of
individualized online accounts.
REASONS FOR CHANGE
The Committee believes it is important for the IRS to
provide customer service akin to that expected in the private
sector by treating taxpayers with respect, ensuring that
taxpayers can ask questions and receive assistance, and
incorporating the latest technology, including online services,
call-back options, and improved support on the phone. The
Committee believes the development of secure, individualized
online accounts will improve customer service to taxpayers by
allowing taxpayers and their designated return preparers to
access a variety of services including, for example, obtaining
copies of their tax information, paying taxes, sharing
documentation, and addressing and correcting issues.
The Committee notes that the IRS has been slow to adopt
online accounts as an additional means through which to provide
taxpayer services. Furthermore, the online services currently
offered are disjointed and not always easily accessible.
Similar to the electronic filing goal laid out in RRA98,
Congress has included this provision to signal to the IRS the
need to provide robust, online services to taxpayers and their
designated preparers as an alternatives service channel. The
Committee believes that doing so would free up much needed
resources to provide phone and in-person services to those who
would prefer to use them.
During hearings held on this issue, the Committee heard
multiple reports of taxpayers or their preparers who were
unable to submit needed forms and documentation to the IRS
electronically, creating additional burdens on taxpayers and
their preparers. The Committee also notes that the IRS
currently has a number of forms, including those for amended
returns, which cannot be filed electronically with the IRS.
Those forms, even if prepared electronically, must then be
printed and mailed to the IRS. In an effort to reduce taxpayer
burden and shorten the time in which the IRS receives and
processes forms and documents, the Committee would like the IRS
to develop a portal for the receipt of forms and documentation.
EXPLANATION OF PROVISION
Under the provision, the Secretary will develop secure,
individualized online accounts to provide services to taxpayers
and their designated return preparers, including, for example,
obtaining taxpayer information, making payment of taxes,
sharing documentation, and addressing and correcting issues.
The Secretary will also develop a process for accepting returns
of tax and supporting documentation in electronic format. These
electronic services should be a supplement to, and not a
replacement for, other services provided by the IRS to
taxpayers, including face-to-face taxpayer assistance and
services provided by phone. They should also comply with
applicable security standards and guidelines. These electronic
services are intended to enhance taxpayers' options for
submitting their tax forms and supporting documents in a secure
and cost-effective manner for faster, more efficient
interactions with the IRS.
The IRS will formulate a plan for development of online
accounts and report the plan to Congress within a year of
enactment. The IRS should consider as part of this plan, the
feasibility of taxpayers addressing and correcting issues
through such accounts, and whether access to these accounts
should be restricted in any way.
EFFECTIVE DATE
Not later than one year after the date of enactment, the
Secretary will submit to Congress a written report describing
the plan for development of online accounts.
The Secretary will make every reasonable effort to make
secure individualized online accounts available to taxpayers by
December 31, 2023.
3. Internet Platform for Form 1099 Filings (sec. 203 of the bill)
PRESENT LAW
The Code does not presently require the IRS to make
available an internet platform for the preparation or filing of
information returns, such as the series, Form 1099.
REASONS FOR CHANGE
The Committee believes that it is desirable to provide a
simple and secure manner for small businesses to file critical
tax information returns electronically. The Committee further
believes that such a secure manner of filing can be modeled on
an existing online platform, Social Security Administration
(``SSA'') Business Services Online. The Committee believes that
an online platform for submitting information returns to the
IRS, similar to SSA Business Services Online, could improve
compliance of small business taxpayers while reducing their
administrative burden. Businesses would be able to prepare and
file information returns such as IRS Form 1099-MISC,
Miscellaneous Income, online while preparing the payee
statements and creating necessary business records.
EXPLANATION OF PROVISION
The provision requires the Secretary of the Treasury (or
his or her delegate) to make available, by January 1, 2023, an
internet website or other electronic medium (the ``website''),
with a user interface and functionality similar to the Business
Services Online Suite of Services provided by the Social
Security Administration.\27\ The website will allow persons,
with access to resources and guidance provided by the IRS, to
prepare, file, and distribute Forms 1099, and maintain a record
of completed and submitted Forms 1099. The Secretary is
required to ensure that the services provided on the website
are not a replacement for services currently provided by the
IRS, and that the website comply with applicable security
standards.
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\27\Available at http://www.ssa.gov/bso/bsowelcome.htm.
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EFFECTIVE DATE
The provision is effective on the date of enactment.
TITLE III--MODERNIZATION OF CONSENT-BASED INCOME VERIFICATION SYSTEM
1. Disclosure of Taxpayer Information for Third-Party Income
Verification (sec. 301 of the bill and sec. 6103 of the Code)
PRESENT LAW
Disclosure of return information with consent of the taxpayer
As a general rule, returns and return information are
confidential and cannot be disclosed unless authorized by Title
26.\28\ Under section 6103(c), the IRS may disclose the return
or return information of a taxpayer to a third party designated
by the taxpayer in a request for or consent to such disclosure.
Treasury regulations set forth the requirements for such
consent.\29\ A request for consent to disclosure in written
form must be a separate written document pertaining solely to
the authorized disclosure. At the time the consent is signed
and dated by the taxpayer, the written document must indicate:
(1) the taxpayer's taxpayer identity information; (2) the
identity of the person(s) to whom disclosure is to be made; (3)
the type of return (or specified portion of the return) or
return information (and the particular data) that is to be
disclosed; and (4) the taxable year(s) covered by the return or
return information. The regulations also require that the
consent be submitted within 120 days of the date signed and
dated by the taxpayer.
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\28\Sec. 6103(a).
\29\Treas. Reg. sec. 301.6103(c)-1. The regulations also specify
the requirements for a nonwritten request for information or consent to
disclosure to allow a third party to provide information or assistance
relating to the taxpayer's return or to a transaction or other contact
between the taxpayer and the IRS.
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INCOME VERIFICATION EXPRESS SERVICE (IVES)
Mortgage lenders and others in the financial community use
the IRS's Income Verification Express Service (IVES) to confirm
the income of a borrower during the processing of a loan
application.\30\ Customers of IVES fax to a specified IRS
office a signed Form 4506-T (``Request for Transcript of Tax
Return'') or Form 4506T-EZ (``Short Form Request for Individual
Tax Return Transcript''). The IRS provides three types of
transcript information as part of the IVES program: (1) a
return transcript; (2) Form W-2 (``Wage and Tax Statement'')
transcript information; and (3) Form 1099\31\ transcript
information.
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\30\Internal Revenue Service, Income Verification Express Service,
https://www.irs.gov/individuals/international-taxpayers/income-
verification-express-service (February 26, 2018).
\31\There are various Forms 1099: Form 1099-B, Proceeds From Broker
or Barter Exchange Transactions; Form 1099-DIV, Dividends and
Distributions; 1099-INT, Interest Income; 1099-MISC, Miscellaneous
Income; 1099-OID, Original Issue Discount; or 1099-R, Distributions
From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc.
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The IRS imposes a $2.00 fee for each transcript requested.
The requested transcript information is delivered to a secure
mailbox on the IRS's e-Services electronic platform, generally
within two to three business days.
To participate in the IVES program, companies must register
and identify employees to act as agents to receive transcripts
on the company's behalf.\32\ According to the Form 13803
(``Application to Participate in the Income Verification
Express Services (IVES) Program''), the IRS conducts a
suitability check on the applicant and all the principals
listed on the application to determine the applicant's
suitability to be an IVES participant. After an applicant
passes the suitability check and the IRS completes processing
the application, the IRS notifies the applicant of acceptance
to participate in the program.
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\32\Applicants also must choose one or more of the reasons listed
on the form as the basis for using the IVES program: mortgage services,
background check, credit check, banking service, licensing requirement,
or other (must be specified).
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REASONS FOR CHANGE
The Committee believes that fully automating the IVES
program to allow for electronic submissions, as well as
electronic responses, will reduce operational costs, and reduce
paperwork burdens for borrowers. The Committee also believes
that automating the IVES program will remove unnecessary delays
to allow small businesses to access capital more quickly,
thereby making borrowing more affordable, easier, and safer for
consumers and small business. The Committee intends that the
automated process be as close to real time as possible while
providing the same data fields currently provided by the non-
automated version. While convenience is important, the
Committee also wants to emphasize that convenience should not
compromise the security of information within the system.
Therefore, the Committee believes it is appropriate that the
Secretary ensure that the program comply with applicable
security standards, such as regulations and guidance provided
by the National Institute of Standards and Technology.
EXPLANATION OF PROVISION
As noted above, the current IVES program requires that
transcript information requests be submitted to the IRS by fax
and then the transcripts are furnished electronically to a
secure mailbox. After a specified time period, the provision
requires the Secretary (or his delegate) to implement a
qualified disclosure program that is fully automated,
accomplished through the Internet; and through which
disclosures are accomplished in as close to real-time as is
practicable. The program is to comply with applicable security
standards and guidelines. The term ``qualified disclosure''
means a disclosure made pursuant to section 6103(c) to a person
seeking to verify the income of a taxpayer who is a borrower in
the process of a loan application. ``Qualified disclosure'' is
intended as a reference to the types of disclosures made under
the current IVES program.
To cover the costs of implementing such a program, for a
two-year period beginning six months after the date of
enactment, the Secretary is authorized to assess and collect a
fee for qualified disclosures at such rates as the Secretary
determines are sufficient to cover the costs related to
implementing the program, including the costs of any necessary
infrastructure or technology. Such fees are in addition to any
other fee assessed and collected for such disclosures. The
amounts received from the fees assessed and collected are to be
deposited in and credited to an account solely for the purpose
of carrying out the activities associated with implementing the
qualified disclosure program. Not later than one year after the
close of the two-year period, the Secretary is required to
implement the program.
EFFECTIVE DATE
The provision is effective on the date of enactment.
2. Limit Redisclosures and Uses of Consent-Based Disclosures of Tax
Return Information (sec. 302 of the bill and sec. 6103 of the Code)
PRESENT LAW
In general
As a general rule, returns and return information are
confidential and cannot be disclosed unless authorized by the
Code.\33\ Under section 6103(c), a taxpayer may designate in a
request or consent to the disclosure by the IRS of his or her
return or return information to a third party. Treasury
regulations set forth the requirements for such consent.\34\
The Treasury regulations require that the taxpayer sign and
date a written consent. At the time the consent is signed and
dated by the taxpayer, the written document must indicate: (1)
the taxpayer's identity information; (2) the identity of the
person to whom disclosure is to be made; (3) the type of return
(or specified portion of the return) or return information (and
the particular data) that is to be disclosed; and (4) the
taxable year covered by the return or return information. The
regulations also require that the consent be submitted within
120 days of the date signed and dated by the taxpayer. Present
law does not require that a recipient receiving returns or
return information by consent maintain the confidentiality of
the information received. Under present law, the recipient is
also free to use the information for purposes other than for
which the information was solicited from the taxpayer.
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\33\Sec. 6103(a).
\34\Treas. Reg. sec. 301.6103(c)-1.
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Criminal penalties
Under section 7206, it is a felony to willfully make and
subscribe any document that contains or is verified by a
written declaration that it is made under penalties of perjury
and which the maker or subscriber does not believe to be true
and correct as to every material matter.\35\ Upon conviction,
such person may be fined up to $100,000 ($500,000 in the case
of a corporation) or imprisoned up to three years, or both,
together with the costs of prosecution.
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\35\Sec. 7206(1).
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Under section 7213, criminal penalties apply to: (1)
willful unauthorized disclosures of returns and return
information by Federal and State employees and other persons;
(2) the offering of any item of material value in exchange for
a return or return information and the receipt of such
information pursuant to such an offer; and (3) the unauthorized
disclosure of return information received by certain
shareholders under the material interest provision of section
6103. Under section 7213, a court can impose a fine up to
$5,000, up to five years imprisonment, or both, together with
the costs of prosecution. If the offense is committed by a
Federal employee or officer, the employee or officer will be
discharged from office upon conviction.
The willful and unauthorized inspection of returns and
return information can subject Federal and State employees and
others to a maximum fine of $1,000, up to a year in prison, or
both, in addition to the costs of prosecution. If the offense
is committed by a Federal employee or officer, the employee or
officer will be discharged from office upon conviction.
Civil damage remedies for unauthorized disclosure or inspection
If a Federal employee makes an unauthorized disclosure or
inspection, a taxpayer can bring suit against the United States
in Federal district court. If a person other than a Federal
employee makes an unauthorized disclosure or inspection, suit
may be brought directly against such person. No liability
results from a disclosure based on a good faith, but erroneous,
interpretation of section 6103. A disclosure or inspection made
at the request of the taxpayer will also relieve liability.
Upon a finding of liability, a taxpayer can recover the
greater of $1,000 per act of unauthorized disclosure (or
inspection), or the sum of actual damages plus, in the case of
an inspection or disclosure that was willful or the result of
gross negligence, punitive damages. The taxpayer may also
recover the costs of the action and, if found to be a
prevailing party, reasonable attorney fees.
The taxpayer has two years from the date of the discovery
of the unauthorized inspection or disclosure to bring suit. The
IRS is required to notify a taxpayer of an unauthorized
inspection or disclosure as soon as practicable after any
person is criminally charged by indictment or information for
unlawful inspection or disclosure.
REASONS FOR CHANGE
The Committee is concerned that information obtained by
consent is not subject to the same protection and limits on use
as other taxpayer information. The Committee believes that this
provision addresses the numerous privacy concerns raised by
current law.
EXPLANATION OF PROVISION
The provision provides that persons designated by the
taxpayer to receive return information shall not use the
information for any purpose other than the express purpose for
which consent was granted, and shall not disclose return
information to any other person without the express permission
of, or request by, the taxpayer.
EFFECTIVE DATE
The provision is effective for disclosures made after the
date of enactment.
TITLE IV--EXPANDED USE OF ELECTRONIC SYSTEMS
1. Electronic Filing of Returns (sec. 401 of the bill and sec. 6011 of
the Code)
PRESENT LAW
In general
The IRS Reform and Restructuring Act of 1998 (``RRA98'')
states a Congressional policy to promote the paperless filing
of Federal tax returns. Section 2001(a) of RRA98 set a goal for
the IRS to have at least 80 percent of all Federal tax and
information returns filed electronically by 2007.\36\ Section
2001(b) of RRA98 requires the IRS to establish a 10-year
strategic plan to eliminate barriers to electronic filing.
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\36\The Electronic Tax Administration Advisory Committee, the body
charged with oversight of IRS progress in reaching that goal projected
an overall e-filing rate of 80.1 percent in the 2017 filing season
based on all Federal returns. See Electronic Tax Administration
Advisory Committee, Annual Report to Congress, June 2017, IRS Pub.
3415, page 5.
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Present law requires the Secretary to issue regulations
regarding electronic filing and specifies certain limitations
on the rules that may be included in such regulations.\37\ The
statute requires that Federal income tax returns prepared by
specified tax return preparers be filed electronically,\38\ and
that all partnerships with more than 100 partners be required
to file electronically. For taxpayers other than partnerships,
the statute prohibits any requirement that persons who file
fewer than 250 returns during a calendar year file
electronically. With respect to individuals, estates, and
trusts, the Secretary may permit, but generally cannot require,
electronic filing of income tax returns. In crafting any of
these required regulations, the Secretary must take into
account the ability of taxpayers to comply at a reasonable
cost.
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\37\Sec. 6011(e).
\38\Section 6011(e)(3)(B) defines a ``specified tax return
preparer'' as any return preparer who reasonably expects to file more
than 10 individual income tax returns during a calendar year.
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The regulations require corporations that have assets of
$10 million or more and file at least 250 returns during a
calendar year to file electronically their Form 1120/1120S
income tax returns (U.S. Corporation Income Tax Return/U.S.
Income Tax Return for an S Corporation) and Form 990
information returns (Return of Organization Exempt from Income
Tax) for tax years ending on or after December 31, 2006. In
determining whether the 250 returns threshold is met, income
tax, information, excise tax, and employment tax returns filed
within one calendar year are counted.
REASONS FOR CHANGE
Consistent with the policy expressed in RRA98, the
Committee supports paperless filing as the preferred and most
convenient means of filing Federal tax and information returns.
Electronic filing produces a number of benefits both for
taxpayers and the IRS, including shorter processing times,
fewer errors, and better data. The Committee believes that the
efficiencies and cost savings achieved through electronic
filing justify expanding such requirements. The Committee is
aware that present law restricts the IRS's ability to expand
the scope of returns that are required to be filed
electronically. The Committee believes that the widespread
adoption of computer technology since RRA98 has reduced the
additional burden that mandatory e-filing imposes on taxpayers.
EXPLANATION OF PROVISION
The provision relaxes the current restrictions on the
authority of the Secretary to mandate electronic filing based
on the number of returns required to be filed by a taxpayer in
a given taxable period. First, it phases in a reduction in the
threshold requirement that taxpayers have an obligation to file
a specified number of returns and statements during a calendar
year in order to be subject to a regulatory mandate. That
threshold is reduced from 250 to 100 for calendar year 2020,
from 100 to 10 for calendar year 2021 and for calendar years
thereafter.
Second, the provision authorizes the Secretary to waive the
requirement that a Federal income tax return prepared by a
specified tax return preparer be filed electronically if a tax
return preparer applies for a waiver and demonstrates that the
inability to file electronically is due to lack of internet
availability (other than dial-up or satellite service) in the
geographic location in which the return preparation business is
operated.
EFFECTIVE DATE
The provision is effective on the date of enactment.
2. Uniform Standards for the Use of Electronic Signatures for
Disclosure Authorizations to, and Other Authorizations of,
Practitioners (sec. 402 of the bill and sec. 6061 of the Code)
PRESENT LAW
Disclosure of return information by consent of the taxpayer
As a general rule, returns and return information are
confidential and cannot be disclosed unless authorized by the
Code.\39\ Under section 6103(c), the IRS may disclose the
return or return information of a taxpayer to a third party
designated by the taxpayer in a request for or consent to such
disclosure. Treasury regulations set forth the requirements for
such consent.\40\ A request for consent to disclosure in
written form must be a separate written document pertaining
solely to the authorized disclosure. At the time the consent is
signed and dated by the taxpayer, the written document must
indicate (1) the taxpayer's taxpayer identity information; (2)
the identity of the person(s) to whom disclosure is to be made;
(3) the type of return (or specified portion of the return) or
return information (and the particular data) that is to be
disclosed; and (4) the taxable year(s) covered by the return or
return information. The regulations also require that the
consent be submitted within 120 days of the date signed and
dated by the taxpayer.
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\39\Sec. 6103(a).
\40\Treas. Reg. sec. 301.6103(c)-1.
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Electronic signatures
The Secretary is required to develop procedures for the
acceptance of signatures in digital and other electronic
form.\41\ Until such time as such procedures are in place, the
Secretary may waive the requirement of a signature for, or
provide for alternative methods of signing or subscribing, a
particular type or class of return, declaration, statement or
other document required or permitted to be made or written
under the internal revenue laws and regulations. The Secretary
is required to publish guidance as appropriate to define and
implement any waiver of the signature requirements or
alternative method of signing or subscribing.
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\41\Sec. 6061.
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IRS Forms
Form 2848 (Power of Attorney and Declaration of
Representative) is used to authorize an individual to represent
the taxpayer before the IRS. The individual must be eligible to
practice before the IRS.
Form 8821 (Tax Information Authorization) authorizes an
individual or organization to request and inspect a taxpayer's
confidential tax return information. Form 4506-T (Request for
Transcript of Tax Return) authorizes an individual or
organization to request and inspect transcripts of a taxpayer's
confidential return information. These forms do not authorize
an individual to represent the taxpayer before the IRS.
REASONS FOR CHANGE
In the private sector, electronic signatures are widely
accepted and there are many commercially available options to
facilitate the acceptance of electronic signatures. The
Committee believes that the establishment of uniform guidance
for verification of electronic signatures will reduce
operational costs and facilitate practitioner representation.
EXPLANATION OF PROVISION
For a request for disclosure to a practitioner with consent
of the taxpayer, or for any power of attorney granted by a
taxpayer to a practitioner, the provision requires the
Secretary to publish guidance to establish uniform standards
and procedures for the acceptance of taxpayers' signatures
appearing in electronic form with respect to such requests or
power of attorney. Such guidance must be published within six
months of the date of enactment. For purposes of the provision,
a ``practitioner'' means an individual in good standing who is
regulated under 31 U.S.C. sec. 330 (relating to practice before
the Department of the Treasury).
EFFECTIVE DATE
The provision is effective on the date of enactment.
3. Payment of Taxes by Debit and Credit Cards (sec. 403 of the bill and
sec. 6311 of the Code)
PRESENT LAW
The Code generally permits the payment of taxes by
commercially acceptable means such as credit cards.\42\ The
Secretary may not pay any fee or provide any other
consideration in connection with the use of credit, debit, or
charge cards for the payment of income taxes.\43\
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\42\Sec. 6311.
\43\Sec. 6311(d)(2).
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REASONS FOR CHANGE
The Committee believes that removing the prohibition on the
Secretary paying any fees or provide, any other consideration
in connection with the use of credit, debit, or charge cards
will allow the IRS to realize benefits similar to those
realized by any business that accepts payment by credit card,
including a guarantee that the funds will be paid over and a
reduction in the costs of handling paper checks. The Committee
believes that the proposal could result in increased
collections by allowing busy taxpayers to more easily make a
payment by credit card over the telephone without having to
wait for the IRS to connect them to third party providers.
EXPLANATION OF PROVISION
The provision removes the prohibition on paying any fees or
providing any other consideration in connection with the use of
credit, debit, or charge cards for the payment of income taxes
to the extent taxpayers paying in this manner are fully
responsible for any fees or consideration incurred. The
provision requires the Secretary to seek to minimize the amount
of any fee or other consideration that the Secretary pays under
any contract.
EFFECTIVE DATE
The provision is effective on the date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 5445, the ``21st Century IRS Act,'' on
April 11, 2018.
The bill, H.R. 5445, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 5445, as
reported.
The bill, as reported, is to increase Federal fiscal year
budget receipts by less than $500,000 for the period 2018
through 2028.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that the revenue-reducing tax
provision involves a new tax expenditure. See Part IV.A.,
above.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
Congressional Budget Office did not provide a cost estimate for
the resolution.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated into
the description portions of this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program, (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139, or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to section 6104 of
title 31, United States Code.
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (115th Congress),
the following statement is made concerning directed rule
makings: The Committee advises that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
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Subtitle F--Procedure and Administration
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CHAPTER 61--INFORMATION AND RETURNS
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Subchapter A--Returns and Records
* * * * * * *
PART II--TAX RETURNS OR STATEMENTS
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Subpart A--General Requirement
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SEC. 6011. GENERAL REQUIREMENT OF RETURN, STATEMENT, OR LIST.
(a) General Rule.--When required by regulations prescribed by
the Secretary any person made liable for any tax imposed by
this title, or with respect to the collection thereof, shall
make a return or statement according to the forms and
regulations prescribed by the Secretary. Every person required
to make a return or statement shall include therein the
information required by such forms or regulations.
(b) Identification of Taxpayer.--The Secretary is authorized
to require such information with respect to persons subject to
the taxes imposed by chapter 21 or chapter 24 as is necessary
or helpful in securing proper identification of such persons.
(c) Returns, Etc., of Discs and Former Discs and Former
Fsc's.--
(1) Records and information.--A DISC, former DISC, or
former FSC (as defined in section 922 as in effect
before its repeal by the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000) shall
for the taxable year--
(A) furnish such information to persons who
were shareholders at any time during such
taxable year, and to the Secretary, and
(B) keep such records, as may be required by
regulations prescribed by the Secretary.
(2) Returns.--A DISC shall file for the taxable year
such returns as may be prescribed by the Secretary by
forms or regulations.
(d) Authority to Require Information Concerning Section 912
Allowances.--The Secretary may by regulations require any
individual who receives allowances which are excluded from
gross income under section 912 for any taxable year to include
on his return of the taxes imposed by subtitle A for such
taxable year such information with respect to the amount and
type of such allowances as the Secretary determines to be
appropriate.
(e) Regulations Requiring Returns on Magnetic Media, Etc..--
(1) In general.--The Secretary shall prescribe
regulations providing standards for determining which
returns must be filed on magnetic media or in other
machine-readable form. Except as provided in paragraph
(3), the Secretary may not require returns of any tax
imposed by subtitle A on individuals, estates, and
trusts to be other than on paper forms supplied by the
Secretary.
(2) Requirements of regulations.--In prescribing
regulations under paragraph (1), the Secretary--
(A) shall not require any person to file
returns on magnetic media unless such person is
required to file at least [250] the applicable
number of returns during the calendar year, and
(B) shall take into account (among other
relevant factors) the ability of the taxpayer
to comply at reasonable cost with the
requirements of such regulations.
(3) Special rule for tax return preparers.--
(A) In general.--The Secretary shall require
that any individual income tax return prepared
by a tax return preparer be filed on magnetic
media if--
(i) such return is filed by such tax
return preparer, and
(ii) such tax return preparer is a
specified tax return preparer for the
calendar year during which such return
is filed.
(B) Specified tax return preparer.--For
purposes of this paragraph, the term
``specified tax return preparer'' means, with
respect to any calendar year, any tax return
preparer unless such preparer reasonably
expects to file 10 or fewer individual income
tax returns during such calendar year.
(C) Individual income tax return.--For
purposes of this paragraph, the term
``individual income tax return'' means any
return of the tax imposed by subtitle A on
individuals, estates, or trusts.
(D) Exception for certain preparers located
in areas without internet access.--The
Secretary may waive the requirement of
subparagraph (A) if the Secretary determines,
on the basis of an application by the tax
return preparer, that the preparer cannot meet
such requirement by reason of being located in
a geographic area which does not have access to
internet service (other than dial-up or
satellite service).
(4) Special rule for returns filed by financial
institutions with respect to withholding on foreign
transfers.--The numerical limitation under paragraph
(2)(A) shall not apply to any return filed by a
financial institution (as defined in section
1471(d)(5)) with respect to tax for which such
institution is made liable under section 1461 or
1474(a).
(5) Special rules for partnerships.--
(A) Partnerships permitted to be required to
file on magnetic media.--In the case of a
partnership, paragraph (2)(A) shall be applied
by substituting for ``250'' the following
amount:
(i) In the case of returns and
statements relating to calendar year
2018, ``200''.
(ii) In the case of returns and
statements relating to calendar year
2019, ``150''.
(iii) In the case of returns and
statements relating to calendar year
2020, ``100''.
(iv) In the case of returns and
statements relating to calendar year
2021, ``50''.
(v) In the case of returns and
statements relating to calendar years
after 2021, ``20''.
(B) Partnerships required to file on magnetic
media.--Notwithstanding subparagraph (A) and
paragraph (2)(A), the Secretary shall require
partnerships having more than 100 partners to
file returns on magnetic media.
(6) Applicable number.--For purposes of paragraph
(2)(A), the applicable number shall be determined in
accordance with the following table:
(A) in the case of calendar years before
2020, 250,
(B) in the case of calendar year 2020, 100,
and
(C) in the case of calendar years after 2020,
10.
(f) Promotion of Electronic Filing.--
(1) In general.--The Secretary is authorized to
promote the benefits of and encourage the use of
electronic tax administration programs, as they become
available, through the use of mass communications and
other means.
(2) Incentives.--The Secretary may implement
procedures to provide for the payment of appropriate
incentives for electronically filed returns.
(g) Disclosure of Reportable Transaction to Tax-Exempt
Entity.--Any taxable party to a prohibited tax shelter
transaction (as defined in section 4965(e)(1)) shall by
statement disclose to any tax-exempt entity (as defined in
section 4965(c)) which is a party to such transaction that such
transaction is such a prohibited tax shelter transaction.
(h) Income, Estate, and Gift Taxes for Requirement That
Returns of Income, Estate, and Gift.--taxes be made whether or
not there is tax liability, see subparts B and C.
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PART IV--SIGNING AND VERIFYING OF RETURNS AND OTHER DOCUMENTS
* * * * * * *
SEC. 6061. SIGNING OF RETURNS AND OTHER DOCUMENTS.
(a) General Rule.--Except as otherwise provided by subsection
(b) and sections 6062 and 6063, any return, statement, or other
document required to be made under any provision of the
internal revenue laws or regulations shall be signed in
accordance with forms or regulations prescribed by the
Secretary.
(b) Electronic Signatures.--
(1) In general.--The Secretary shall develop
procedures for the acceptance of signatures in digital
or other electronic form. Until such time as such
procedures are in place, the Secretary may--
(A) waive the requirement of a signature for;
or
(B) provide for alternative methods of
signing or subscribing,
a particular type or class of return, declaration,
statement, or other document required or permitted to
be made or written under internal revenue laws and
regulations.
(2) Treatment of alternative methods.--
Notwithstanding any other provision of law, any return,
declaration, statement, or other document filed and
verified, signed, or subscribed under any method
adopted under paragraph (1)(B) shall be treated for all
purposes (both civil and criminal, including penalties
for perjury) in the same manner as though signed or
subscribed.
[(3) Published guidance.--The Secretary shall publish
guidance as appropriate to define and implement any
waiver of the signature requirements or any method
adopted under paragraph (1).]
(3) Published guidance.--
(A) In general.--The Secretary shall publish
guidance as appropriate to define and implement
any waiver of the signature requirements or any
method adopted under paragraph (1).
(B) Electronic signatures for disclosure
authorizations to, and other authorizations of,
practitioners.--Not later than 6 months after
the date of the enactment of this subparagraph,
the Secretary shall publish guidance to
establish uniform standards and procedures for
the acceptance of taxpayers' signatures
appearing in electronic form with respect to
any request for disclosure of a taxpayer's
return or return information under section
6103(c) to a practitioner or any power of
attorney granted by a taxpayer to a
practitioner.
(C) Practitioner.--For purposes of
subparagraph (B), the term ``practitioner''
means any individual in good standing who is
regulated under section 330 of title 31, United
States Code.
* * * * * * *
Subchapter B--Miscellaneous Provisions
* * * * * * *
SEC. 6103. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN
INFORMATION.
(a) General Rule.--Returns and return information shall be
confidential, and except as authorized by this title--
(1) no officer or employee of the United States,
(2) no officer or employee of any State, any local
law enforcement agency receiving information under
subsection (i)(1)(C) or (7)(A), any local child support
enforcement agency, or any local agency administering a
program listed in subsection (l)(7)(D) who has or had
access to returns or return information under this
section or section 6104(c), and
(3) no other person (or officer or employee thereof)
who has or had access to returns or return information
under subsection (c), subsection (e)(1)(D)(iii),
[subsection (k)(10)] paragraph (10) or (13) of
subsection (k), paragraph (6), (10), (12), (16), (19),
(20), or (21) of subsection (l), paragraph (2) or
(4)(B) of subsection (m), or subsection (n),
shall disclose any return or return information obtained by him
in any manner in connection with his service as such an officer
or an employee or otherwise or under the provisions of this
section. For purposes of this subsection, the term ``officer or
employee'' includes a former officer or employee.
(b) Definitions.--For purposes of this section--
(1) Return.--The term ``return'' means any tax or
information return, declaration of estimated tax, or
claim for refund required by, or provided for or
permitted under, the provisions of this title which is
filed with the Secretary by, on behalf of, or with
respect to any person, and any amendment or supplement
thereto, including supporting schedules, attachments,
or lists which are supplemental to, or part of, the
return so filed.
(2) Return information.--The term ``return
information'' means--
(A) a taxpayer's identity, the nature,
source, or amount of his income, payments,
receipts, deductions, exemptions, credits,
assets, liabilities, net worth, tax liability,
tax withheld, deficiencies, overassessments, or
tax payments, whether the taxpayer's return
was, is being, or will be examined or subject
to other investigation or processing, or any
other data, received by, recorded by, prepared
by, furnished to, or collected by the Secretary
with respect to a return or with respect to the
determination of the existence, or possible
existence, of liability (or the amount thereof)
of any person under this title for any tax,
penalty, interest, fine, forfeiture, or other
imposition, or offense,
(B) any part of any written determination or
any background file document relating to such
written determination (as such terms are
defined in section 6110(b)) which is not open
to public inspection under section 6110,
(C) any advance pricing agreement entered
into by a taxpayer and the Secretary and any
background information related to such
agreement or any application for an advance
pricing agreement, and
(D) any agreement under section 7121, and any
similar agreement, and any background
information related to such an agreement or
request for such an agreement,
but such term does not include data in a form which
cannot be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer. Nothing
in the preceding sentence, or in any other provision of
law, shall be construed to require the disclosure of
standards used or to be used for the selection of
returns for examination, or data used or to be used for
determining such standards, if the Secretary determines
that such disclosure will seriously impair assessment,
collection, or enforcement under the internal revenue
laws.
(3) Taxpayer return information.--The term ``taxpayer
return information'' means return information as
defined in paragraph (2) which is filed with, or
furnished to, the Secretary by or on behalf of the
taxpayer to whom such return information relates.
(4) Tax administration.--The term ``tax
administration''--
(A) means--
(i) the administration, management,
conduct, direction, and supervision of
the execution and application of the
internal revenue laws or related
statutes (or equivalent laws and
statutes of a State) and tax
conventions to which the United States
is a party, and
(ii) the development and formulation
of Federal tax policy relating to
existing or proposed internal revenue
laws, related statutes, and tax
conventions, and
(B) includes assessment, collection,
enforcement, litigation, publication, and
statistical gathering functions under such
laws, statutes, or conventions.
(5) State.--
(A) In general.--The term ``State'' means--
(i) any of the 50 States, the
District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands,
Guam, American Samoa, and the
Commonwealth of the Northern Mariana
Islands,
(ii) for purposes of subsections
(a)(2), (b)(4), (d)(1), (h)(4), and
(p), any municipality--
(I) with a population in
excess of 250,000 (as
determined under the most
recent decennial United States
census data available),
(II) which imposes a tax on
income or wages, and
(III) with which the
Secretary (in his sole
discretion) has entered into an
agreement regarding disclosure,
and
(iii) for purposes of subsections
(a)(2), (b)(4), (d)(1), (h)(4), and
(p), any governmental entity--
(I) which is formed and
operated by a qualified group
of municipalities, and
(II) with which the Secretary
(in his sole discretion) has
entered into an agreement
regarding disclosure.
(B) Regional income tax agencies.--For
purposes of subparagraph (A)(iii)--
(i) Qualified group of
municipalities.--The term ``qualified
group of municipalities'' means, with
respect to any governmental entity, 2
or more municipalities--
(I) each of which imposes a
tax on income or wages,
(II) each of which, under the
authority of a State statute,
administers the laws relating
to the imposition of such taxes
through such entity, and
(III) which collectively have
a population in excess of
250,000 (as determined under
the most recent decennial
United States census data
available).
(ii) References to state law, etc.--
For purposes of applying subparagraph
(A)(iii) to the subsections referred to
in such subparagraph, any reference in
such subsections to State law,
proceedings, or tax returns shall be
treated as references to the law,
proceedings, or tax returns, as the
case may be, of the municipalities
which form and operate the governmental
entity referred to in such
subparagraph.
(iii) Disclosure to contractors and
other agents.--Notwithstanding any
other provision of this section, no
return or return information shall be
disclosed to any contractor or other
agent of a governmental entity referred
to in subparagraph (A)(iii) unless such
entity, to the satisfaction of the
Secretary--
(I) has requirements in
effect which require each such
contractor or other agent which
would have access to returns or
return information to provide
safeguards (within the meaning
of subsection (p)(4)) to
protect the confidentiality of
such returns or return
information,
(II) agrees to conduct an on-
site review every 3 years (or a
mid-point review in the case of
contracts or agreements of less
than 3 years in duration) of
each contractor or other agent
to determine compliance with
such requirements,
(III) submits the findings of
the most recent review
conducted under subclause (II)
to the Secretary as part of the
report required by subsection
(p)(4)(E), and
(IV) certifies to the
Secretary for the most recent
annual period that such
contractor or other agent is in
compliance with all such
requirements.
The certification required by subclause
(IV) shall include the name and address
of each contractor and other agent, a
description of the contract or
agreement with such contractor or other
agent, and the duration of such
contract or agreement. The requirements
of this clause shall not apply to
disclosures pursuant to subsection (n)
for purposes of Federal tax
administration and a rule similar to
the rule of subsection (p)(8)(B) shall
apply for purposes of this clause.
(6) Taxpayer identity.--The term ``taxpayer
identity'' means the name of a person with respect to
whom a return is filed, his mailing address, his
taxpayer identifying number (as described in section
6109), or a combination thereof.
(7) Inspection.--The terms ``inspected'' and
``inspection'' mean any examination of a return or
return information.
(8) Disclosure.--The term ``disclosure'' means the
making known to any person in any manner whatever a
return or return information.
(9) Federal agency.--The term ``Federal agency''
means an agency within the meaning of section 551(1) of
title 5, United States Code.
(10) Chief executive officer.--The term ``chief
executive officer'' means, with respect to any
municipality, any elected official and the chief
official (even if not elected) of such municipality.
(11) Terrorist incident, threat, or activity.--The
term ``terrorist incident, threat, or activity'' means
an incident, threat, or activity involving an act of
domestic terrorism (as defined in section 2331(5) of
title 18, United States Code) or international
terrorism (as defined in section 2331(1) of such
title).
(c) Disclosure of Returns and Return Information to Designee
of Taxpayer.--The Secretary may, subject to such requirements
and conditions as he may prescribe by regulations, disclose the
return of any taxpayer, or return information with respect to
such taxpayer, to such person or persons as the taxpayer may
designate in a request for or consent to such disclosure, or to
any other person at the taxpayer's request to the extent
necessary to comply with a request for information or
assistance made by the taxpayer to such other person. However,
return information shall not be disclosed to such person or
persons if the Secretary determines that such disclosure would
seriously impair Federal tax administration. Persons designated
by the taxpayer under this subsection to receive return
information shall not use the information for any purpose other
than the express purpose for which consent was granted and
shall not disclose return information to any other person
without the express permission of, or request by, the taxpayer.
(d) Disclosure to State Tax Officials and State and Local Law
Enforcement Agencies.--
(1) In general.--Returns and return information with
respect to taxes imposed by chapters 1, 2, 6, 11, 12,
21, 23, 24, 31, 32, 44, 51, and 52 and subchapter D of
chapter 36 shall be open to inspection by, or
disclosure to, any State agency, body, or commission,
or its legal representative, which is charged under the
laws of such State with responsibility for the
administration of State tax laws for the purpose of,
and only to the extent necessary in, the administration
of such laws, including any procedures with respect to
locating any person who may be entitled to a refund.
Such inspection shall be permitted, or such disclosure
made, only upon written request by the head of such
agency, body, or commission, and only to the
representatives of such agency, body, or commission
designated in such written request as the individuals
who are to inspect or to receive the returns or return
information on behalf of such agency, body, or
commission. Such representatives shall not include any
individual who is the chief executive officer of such
State or who is neither an employee or legal
representative of such agency, body, or commission nor
a person described in subsection (n). However, such
return information shall not be disclosed to the extent
that the Secretary determines that such disclosure
would identify a confidential informant or seriously
impair any civil or criminal tax investigation.
(2) Disclosure to State audit agencies.--
(A) In general.--Any returns or return
information obtained under paragraph (1) by any
State agency, body, or commission may be open
to inspection by, or disclosure to, officers
and employees of the State audit agency for the
purpose of, and only to the extent necessary
in, making an audit of the State agency, body,
or commission referred to in paragraph (1).
(B) State audit agency.--For purposes of
subparagraph (A), the term ``State audit
agency'' means any State agency, body, or
commission which is charged under the laws of
the State with the responsibility of auditing
State revenues and programs.
(3) Exception for reimbursement under section 7624.--
Nothing in this section shall be construed to prevent
the Secretary from disclosing to any State or local law
enforcement agency which may receive a payment under
section 7624 the amount of the recovered taxes with
respect to which such a payment may be made.
(4) Availability and use of death information.--
(A) In general.--No returns or return
information may be disclosed under paragraph
(1) to any agency, body, or commission of any
State (or any legal representative thereof)
during any period during which a contract
meeting the requirements of subparagraph (B) is
not in effect between such State and the
Secretary of Health and Human Services.
(B) Contractual requirements.--A contract
meets the requirements of this subparagraph
if--
(i) such contract requires the State
to furnish the Secretary of Health and
Human Services information concerning
individuals with respect to whom death
certificates (or equivalent documents
maintained by the State or any
subdivision thereof) have been
officially filed with it, and
(ii) such contract does not include
any restriction on the use of
information obtained by such Secretary
pursuant to such contract, except that
such contract may provide that such
information is only to be used by the
Secretary (or any other Federal agency)
for purposes of ensuring that Federal
benefits or other payments are not
erroneously paid to deceased
individuals.
Any information obtained by the Secretary of
Health and Human Services under such a contract
shall be exempt from disclosure under section
552 of title 5, United States Code, and from
the requirements of section 552a of such title
5.
(C) Special exception.--The provisions of
subparagraph (A) shall not apply to any State
which on July 1, 1993, was not, pursuant to a
contract, furnishing the Secretary of Health
and Human Services information concerning
individuals with respect to whom death
certificates (or equivalent documents
maintained by the State or any subdivision
thereof) have been officially filed with it.
(5) Disclosure for combined employment tax
reporting.--
(A) In general.--The Secretary may disclose
taxpayer identity information and signatures to
any agency, body, or commission of any State
for the purpose of carrying out with such
agency, body, or commission a combined Federal
and State employment tax reporting program
approved by the Secretary. Subsections (a)(2)
and (p)(4) and sections 7213 and 7213A shall
not apply with respect to disclosures or
inspections made pursuant to this paragraph.
(B) Termination.--The Secretary may not make
any disclosure under this paragraph after
December 31, 2007.
(6) Limitation on disclosure regarding regional
income tax agencies treated as States.--For purposes of
paragraph (1), inspection by or disclosure to an entity
described in subsection (b)(5)(A)(iii) shall be for the
purpose of, and only to the extent necessary in, the
administration of the laws of the member municipalities
in such entity relating to the imposition of a tax on
income or wages. Such entity may not redisclose any
return or return information received pursuant to
paragraph (1) to any such member municipality.
(e) Disclosure to Persons Having Material Interest.--
(1) In general.--The return of a person shall, upon
written request, be open to inspection by or disclosure
to--
(A) in the case of the return of an
individual--
(i) that individual,
(ii) the spouse of that individual if
the individual and such spouse have
signified their consent to consider a
gift reported on such return as made
one-half by him and one-half by the
spouse pursuant to the provisions of
section 2513; or
(iii) the child of that individual
(or such child's legal representative)
to the extent necessary to comply with
the provisions of section 1(g);
(B) in the case of an income tax return filed
jointly, either of the individuals with respect
to whom the return is filed;
(C) in the case of the return of a
partnership, any person who was a member of
such partnership during any part of the period
covered by the return;
(D) in the case of the return of a
corporation or a subsidiary thereof--
(i) any person designated by
resolution of its board of directors or
other similar governing body,
(ii) any officer or employee of such
corporation upon written request signed
by any principal officer and attested
to by the secretary or other officer,
(iii) any bona fide shareholder of
record owning 1 percent or more of the
outstanding stock of such corporation,
(iv) if the corporation was an S
corporation, any person who was a
shareholder during any part of the
period covered by such return during
which an election under section 1362(a)
was in effect, or
(v) if the corporation has been
dissolved, any person authorized by
applicable State law to act for the
corporation or any person who the
Secretary finds to have a material
interest which will be affected by
information contained therein;
(E) in the case of the return of an estate--
(i) the administrator, executor, or
trustee of such estate, and
(ii) any heir at law, next of kin, or
beneficiary under the will, of the
decedent, but only if the Secretary
finds that such heir at law, next of
kin, or beneficiary has a material
interest which will be affected by
information contained therein; and
(F) in the case of the return of a trust--
(i) the trustee or trustees, jointly
or separately, and
(ii) any beneficiary of such trust,
but only if the Secretary finds that
such beneficiary has a material
interest which will be affected by
information contained therein.
(2) Incompetency.--If an individual described in
paragraph (1) is legally incompetent, the applicable
return shall, upon written request, be open to
inspection by or disclosure to the committee, trustee,
or guardian of his estate.
(3) Deceased individuals.--The return of a decedent
shall, upon written request, be open to inspection by
or disclosure to--
(A) the administrator, executor, or trustee
of his estate, and
(B) any heir at law, next of kin, or
beneficiary under the will, of such decedent,
or a donee of property, but only if the
Secretary finds that such heir at law, next of
kin, beneficiary, or donee has a material
interest which will be affected by information
contained therein.
(4) Title 11 cases and receivership proceedings.--
If--
(A) there is a trustee in a title 11 case in
which the debtor is the person with respect to
whom the return is filed, or
(B) substantially all of the property of the
person with respect to whom the return is filed
is in the hands of a receiver,
such return or returns for prior years of such person
shall, upon written request, be open to inspection by
or disclosure to such trustee or receiver, but only if
the Secretary finds that such trustee or receiver, in
his fiduciary capacity, has a material interest which
will be affected by information contained therein.
(5) Individual's title 11 case.--
(A) In general.--In any case to which section
1398 applies (determined without regard to
section 1398(b)(1)), any return of the debtor
for the taxable year in which the case
commenced or any preceding taxable year shall,
upon written request, be open to inspection by
or disclosure to the trustee in such case.
(B) Return of estate available to debtor.--
Any return of an estate in a case to which
section 1398 applies shall, upon written
request, be open to inspection by or disclosure
to the debtor in such case.
(C) Special rule for involuntary cases.--In
an involuntary case, no disclosure shall be
made under subparagraph (A) until the order for
relief has been entered by the court having
jurisdiction of such case unless such court
finds that such disclosure is appropriate for
purposes of determining whether an order for
relief should be entered.
(6) Attorney in fact.--Any return to which this
subsection applies shall, upon written request, also be
open to inspection by or disclosure to the attorney in
fact duly authorized in writing by any of the persons
described in paragraph (1), (2), (3), (4), (5), (8), or
(9) to inspect the return or receive the information on
his behalf, subject to the conditions provided in such
paragraphs.
(7) Return information.--Return information with
respect to any taxpayer may be open to inspection by or
disclosure to any person authorized by this subsection
to inspect any return of such taxpayer if the Secretary
determines that such disclosure would not seriously
impair Federal tax administration.
(8) Disclosure of collection activities with respect
to joint return.--If any deficiency of tax with respect
to a joint return is assessed and the individuals
filing such return are no longer married or no longer
reside in the same household, upon request in writing
by either of such individuals, the Secretary shall
disclose in writing to the individual making the
request whether the Secretary has attempted to collect
such deficiency from such other individual, the general
nature of such collection activities, and the amount
collected. The preceding sentence shall not apply to
any deficiency which may not be collected by reason of
section 6502.
(9) Disclosure of certain information where more than
1 person subject to penalty under section 6672.--If the
Secretary determines that a person is liable for a
penalty under section 6672(a) with respect to any
failure, upon request in writing of such person, the
Secretary shall disclose in writing to such person--
(A) the name of any other person whom the
Secretary has determined to be liable for such
penalty with respect to such failure, and
(B) whether the Secretary has attempted to
collect such penalty from such other person,
the general nature of such collection
activities, and the amount collected.
(10) Limitation on certain disclosures under this
subsection.--In the case of an inspection or disclosure
under this subsection relating to the return of a
partnership, S corporation, trust, or an estate, the
information inspected or disclosed shall not include
any supporting schedule, attachment, or list which
includes the taxpayer identity information of a person
other than the entity making the return or the person
conducting the inspection or to whom the disclosure is
made.
(11) Disclosure of information regarding status of
investigation of violation of this section.--In the
case of a person who provides to the Secretary
information indicating a violation of section 7213,
7213A, or 7214 with respect to any return or return
information of such person, the Secretary may disclose
to such person (or such person's designee)--
(A) whether an investigation based on the
person's provision of such information has been
initiated and whether it is open or closed,
(B) whether any such investigation
substantiated such a violation by any
individual, and
(C) whether any action has been taken with
respect to such individual (including whether a
referral has been made for prosecution of such
individual).
(f) Disclosure to Committees of Congress.--
(1) Committee on Ways and Means, Committee on
Finance, and Joint Committee on Taxation.--Upon written
request from the chairman of the Committee on Ways and
Means of the House of Representatives, the chairman of
the Committee on Finance of the Senate, or the chairman
of the Joint Committee on Taxation, the Secretary shall
furnish such committee with any return or return
information specified in such request, except that any
return or return information which can be associated
with, or otherwise identify, directly or indirectly, a
particular taxpayer shall be furnished to such
committee only when sitting in closed executive session
unless such taxpayer otherwise consents in writing to
such disclosure.
(2) Chief of Staff of Joint Committee on Taxation.--
Upon written request by the Chief of Staff of the Joint
Committee on Taxation, the Secretary shall furnish him
with any return or return information specified in such
request. Such Chief of Staff may submit such return or
return information to any committee described in
paragraph (1), except that any return or return
information which can be associated with, or otherwise
identify, directly or indirectly, a particular taxpayer
shall be furnished to such committee only when sitting
in closed executive session unless such taxpayer
otherwise consents in writing to such disclosure.
(3) Other committees.--Pursuant to an action by, and
upon written request by the chairman of, a committee of
the Senate or the House of Representatives (other than
a committee specified in paragraph (1)) specially
authorized to inspect any return or return information
by a resolution of the Senate or the House of
Representatives or, in the case of a joint committee
(other than the joint committee specified in paragraph
(1)) by concurrent resolution, the Secretary shall
furnish such committee, or a duly authorized and
designated subcommittee thereof, sitting in closed
executive session, with any return or return
information which such resolution authorizes the
committee or subcommittee to inspect. Any resolution
described in this paragraph shall specify the purpose
for which the return or return information is to be
furnished and that such information cannot reasonably
be obtained from any other source.
(4) Agents of committees and submission of
information to Senate or House of Representatives.--
(A) Committees described in paragraph (1).--
Any committee described in paragraph (1) or the
Chief of Staff of the Joint Committee on
Taxation shall have the authority, acting
directly, or by or through such examiners or
agents as the chairman of such committee or
such chief of staff may designate or appoint,
to inspect returns and return information at
such time and in such manner as may be
determined by such chairman or chief of staff.
Any return or return information obtained by or
on behalf of such committee pursuant to the
provisions of this subsection may be submitted
by the committee to the Senate or the House of
Representatives, or to both. The Joint
Committee on Taxation may also submit such
return or return information to any other
committee described in paragraph (1), except
that any return or return information which can
be associated with, or otherwise identify,
directly or indirectly, a particular taxpayer
shall be furnished to such committee only when
sitting in closed executive session unless such
taxpayer otherwise consents in writing to such
disclosure.
(B) Other committees.--Any committee or
subcommittee described in paragraph (3) shall
have the right, acting directly, or by or
through no more than four examiners or agents,
designated or appointed in writing in equal
numbers by the chairman and ranking minority
member of such committee or subcommittee, to
inspect returns and return information at such
time and in such manner as may be determined by
such chairman and ranking minority member. Any
return or return information obtained by or on
behalf of such committee or subcommittee
pursuant to the provisions of this subsection
may be submitted by the committee to the Senate
or the House of Representatives, or to both,
except that any return or return information
which can be associated with, or otherwise
identify, directly or indirectly, a particular
taxpayer, shall be furnished to the Senate or
the House of Representatives only when sitting
in closed executive session unless such
taxpayer otherwise consents in writing to such
disclosure.
(5) Disclosure by whistleblower.--Any person who
otherwise has or had access to any return or return
information under this section may disclose such return
or return information to a committee referred to in
paragraph (1) or any individual authorized to receive
or inspect information under paragraph (4)(A) if such
person believes such return or return information may
relate to possible misconduct, maladministration, or
taxpayer abuse.
(g) Disclosure to President and Certain Other Persons.--
(1) In general.--Upon written request by the
President, signed by him personally, the Secretary
shall furnish to the President, or to such employee or
employees of the White House Office as the President
may designate by name in such request, a return or
return information with respect to any taxpayer named
in such request. Any such request shall state--
(A) the name and address of the taxpayer
whose return or return information is to be
disclosed,
(B) the kind of return or return information
which is to be disclosed,
(C) the taxable period or periods covered by
such return or return information, and
(D) the specific reason why the inspection or
disclosure is requested.
(2) Disclosure of return information as to
Presidential appointees and certain other Federal
Government appointees.--The Secretary may disclose to a
duly authorized representative of the Executive Office
of the President or to the head of any Federal agency,
upon written request by the President or head of such
agency, or to the Federal Bureau of Investigation on
behalf of and upon written request by the President or
such head, return information with respect to an
individual who is designated as being under
consideration for appointment to a position in the
executive or judicial branch of the Federal Government.
Such return information shall be limited to whether
such individual--
(A) has filed returns with respect to the
taxes imposed under chapter 1 for not more than
the immediately preceding 3 years;
(B) has failed to pay any tax within 10 days
after notice and demand, or has been assessed
any penalty under this title for negligence, in
the current year or immediately preceding 3
years;
(C) has been or is under investigation for
possible criminal offenses under the internal
revenue laws and the results of any such
investigation; or
(D) has been assessed any civil penalty under
this title for fraud.
Within 3 days of the receipt of any request for any
return information with respect to any individual under
this paragraph, the Secretary shall notify such
individual in writing that such information has been
requested under the provisions of this paragraph.
(3) Restriction on disclosure.--The employees to whom
returns and return information are disclosed under this
subsection shall not disclose such returns and return
information to any other person except the President or
the head of such agency without the personal written
direction of the President or the head of such agency.
(4) Restriction on disclosure to certain employees.--
Disclosure of returns and return information under this
subsection shall not be made to any employee whose
annual rate of basic pay is less than the annual rate
of basic pay specified for positions subject to section
5316 of title 5, United States Code.
(5) Reporting requirements.--Within 30 days after the
close of each calendar quarter, the President and the
head of any agency requesting returns and return
information under this subsection shall each file a
report with the Joint Committee on Taxation setting
forth the taxpayers with respect to whom such requests
were made during such quarter under this subsection,
the returns or return information involved, and the
reasons for such requests. The President shall not be
required to report on any request for returns and
return information pertaining to an individual who was
an officer or employee of the executive branch of the
Federal Government at the time such request was made.
Reports filed pursuant to this paragraph shall not be
disclosed unless the Joint Committee on Taxation
determines that disclosure thereof (including
identifying details) would be in the national interest.
Such reports shall be maintained by the Joint Committee
on Taxation for a period not exceeding 2 years unless,
within such period, the Joint Committee on Taxation
determines that a disclosure to the Congress is
necessary.
(h) Disclosure to Certain Federal Officers and Employees for
Purposes of Tax Administration, Etc..--
(1) Department of the Treasury.--Returns and return
information shall, without written request, be open to
inspection by or disclosure to officers and employees
of the Department of the Treasury whose official duties
require such inspection or disclosure for tax
administration purposes.
(2) Department of Justice.--In a matter involving tax
administration, a return or return information shall be
open to inspection by or disclosure to officers and
employees of the Department of Justice (including
United States attorneys) personally and directly
engaged in, and solely for their use in, any proceeding
before a Federal grand jury or preparation for any
proceeding (or investigation which may result in such a
proceeding) before a Federal grand jury or any Federal
or State court, but only if--
(A) the taxpayer is or may be a party to the
proceeding, or the proceeding arose out of, or
in connection with, determining the taxpayer's
civil or criminal liability, or the collection
of such civil liability in respect of any tax
imposed under this title;
(B) the treatment of an item reflected on
such return is or may be related to the
resolution of an issue in the proceeding or
investigation; or
(C) such return or return information relates
or may relate to a transactional relationship
between a person who is or may be a party to
the proceeding and the taxpayer which affects,
or may affect, the resolution of an issue in
such proceeding or investigation.
(3) Form of request.--In any case in which the
Secretary is authorized to disclose a return or return
information to the Department of Justice pursuant to
the provisions of this subsection--
(A) if the Secretary has referred the case to
the Department of Justice, or if the proceeding
is authorized by subchapter B of chapter 76,
the Secretary may make such disclosure on his
own motion, or
(B) if the Secretary receives a written
request from the Attorney General, the Deputy
Attorney General, or an Assistant Attorney
General for a return of, or return information
relating to, a person named in such request and
setting forth the need for the disclosure, the
Secretary shall disclose return or return the
information so requested.
(4) Disclosure in judicial and administrative tax
proceedings.--A return or return information may be
disclosed in a Federal or State judicial or
administrative proceeding pertaining to tax
administration, but only--
(A) if the taxpayer is a party to the
proceeding, or the proceeding arose out of, or
in connection with, determining the taxpayer's
civil or criminal liability, or the collection
of such civil liability, in respect of any tax
imposed under this title;
(B) if the treatment of an item reflected on
such return is directly related to the
resolution of an issue in the proceeding;
(C) if such return or return information
directly relates to a transactional
relationship between a person who is a party to
the proceeding and the taxpayer which directly
affects the resolution of an issue in the
proceeding; or
(D) to the extent required by order of a
court pursuant to section 3500 of title 18,
United States Code, or rule 16 of the Federal
Rules of Criminal Procedure, such court being
authorized in the issuance of such order to
give due consideration to congressional policy
favoring the confidentiality of returns and
return information as set forth in this title.
However, such return or return information shall not be
disclosed as provided in subparagraph (A), (B), or (C)
if the Secretary determines that such disclosure would
identify a confidential informant or seriously impair a
civil or criminal tax investigation.
(5) Withholding of tax from social security
benefits.--Upon written request of the payor agency,
the Secretary may disclose available return information
from the master files of the Internal Revenue Service
with respect to the address and status of an individual
as a nonresident alien or as a citizen or resident of
the United States to the Social Security Administration
or the Railroad Retirement Board (whichever is
appropriate) for purposes of carrying out its
responsibilities for withholding tax under section 1441
from social security benefits (as defined in section
86(d)).
(6) Internal Revenue Service Oversight Board.--
(A) In general.--Notwithstanding paragraph
(1), and except as provided in subparagraph
(B), no return or return information may be
disclosed to any member of the Oversight Board
described in subparagraph (A) or (D) of section
7802(b)(1) or to any employee or detailee of
such Board by reason of their service with the
Board. Any request for information not
permitted to be disclosed under the preceding
sentence, and any contact relating to a
specific taxpayer, made by any such individual
to an officer or employee of the Internal
Revenue Service shall be reported by such
officer or employee to the Secretary, the
Treasury Inspector General for Tax
Administration, and the Joint Committee on
Taxation.
(B) Exception for reports to the Board.--If--
(i) the Commissioner or the Treasury
Inspector General for Tax
Administration prepares any report or
other matter for the Oversight Board in
order to assist the Board in carrying
out its duties; and
(ii) the Commissioner or such
Inspector General determines it is
necessary to include any return or
return information in such report or
other matter to enable the Board to
carry out such duties, such return or
return information (other than
information regarding taxpayer
identity) may be disclosed to members,
employees, or detailees of the Board
solely for the purpose of carrying out
such duties.
(i) Disclosure to Federal Officers or Employees for
Administration of Federal Laws Not Relating to Tax
Administration.--
(1) Disclosure of returns and return information for
use in criminal investigations.--
(A) In general.--Except as provided in
paragraph (6), any return or return information
with respect to any specified taxable period or
periods shall, pursuant to and upon the grant
of an ex parte order by a Federal district
court judge or magistrate judge under
subparagraph (B), be open (but only to the
extent necessary as provided in such order) to
inspection by, or disclosure to, officers and
employees of any Federal agency who are
personally and directly engaged in--
(i) preparation for any judicial or
administrative proceeding pertaining to
the enforcement of a specifically
designated Federal criminal statute
(not involving tax administration) to
which the United States or such agency
is or may be a party, or pertaining to
the case of a missing or exploited
child,
(ii) any investigation which may
result in such a proceeding, or
(iii) any Federal grand jury
proceeding pertaining to enforcement of
such a criminal statute to which the
United States or such agency is or may
be a party, or to such a case of a
missing or exploited child,
solely for the use of such officers and
employees in such preparation, investigation,
or grand jury proceeding.
(B) Application for order.--The Attorney
General, the Deputy Attorney General, the
Associate Attorney General, any Assistant
Attorney General, any United States attorney,
any special prosecutor appointed under section
593 of title 28, United States Code, or any
attorney in charge of a criminal division
organized crime strike force established
pursuant to section 510 of title 28, United
States Code, may authorize an application to a
Federal district court judge or magistrate
judge for the order referred to in subparagraph
(A). Upon such application, such judge or
magistrate judge may grant such order if he
determines on the basis of the facts submitted
by the applicant that--
(i) there is reasonable cause to
believe, based upon information
believed to be reliable, that a
specific criminal act has been
committed,
(ii) there is reasonable cause to
believe that the return or return
information is or may be relevant to a
matter relating to the commission of
such act, and
(iii) the return or return
information is sought exclusively for
use in a Federal criminal investigation
or proceeding concerning such act (or
any criminal investigation or
proceeding, in the case of a matter
relating to a missing or exploited
child), and the information sought to
be disclosed cannot reasonably be
obtained, under the circumstances, from
another source.
(C) Disclosure to State and local law
enforcement agencies in the case of matters
pertaining to a missing or exploited child.--
(i) In general.--In the case of an
investigation pertaining to a missing
or exploited child, the head of any
Federal agency, or his designee, may
disclose any return or return
information obtained under subparagraph
(A) to officers and employees of any
State or local law enforcement agency,
but only if--
(I) such State or local law
enforcement agency is part of a
team with the Federal agency in
such investigation, and
(II) such information is
disclosed only to such officers
and employees who are
personally and directly engaged
in such investigation.
(ii) Limitation on use of
information.--Information disclosed
under this subparagraph shall be solely
for the use of such officers and
employees in locating the missing
child, in a grand jury proceeding, or
in any preparation for, or
investigation which may result in, a
judicial or administrative proceeding.
(iii) Missing child.--For purposes of
this subparagraph, the term ``missing
child'' shall have the meaning given
such term by section 403 of the Missing
Children's Assistance Act (42 U.S.C.
5772).
(iv) Exploited child.--For purposes
of this subparagraph, the term
``exploited child'' means a minor with
respect to whom there is reason to
believe that a specified offense
against a minor (as defined by section
111(7) of the Sex Offender Registration
and Notification Act (42 U.S.C.
16911(7))) has or is occurring.
(2) Disclosure of return information other than
taxpayer return information for use in criminal
investigations.--
(A) In general.--Except as provided in
paragraph (6), upon receipt by the Secretary of
a request which meets the requirements of
subparagraph (B) from the head of any Federal
agency or the Inspector General thereof, or, in
the case of the Department of Justice, the
Attorney General, the Deputy Attorney General,
the Associate Attorney General, any Assistant
Attorney General, the Director of the Federal
Bureau of Investigation, the Administrator of
the Drug Enforcement Administration, any United
States attorney, any special prosecutor
appointed under section 593 of title 28, United
States Code, or any attorney in charge of a
criminal division organized crime strike force
established pursuant to section 510 of title
28, United States Code, the Secretary shall
disclose return information (other than
taxpayer return information) to officers and
employees of such agency who are personally and
directly engaged in--
(i) preparation for any judicial or
administrative proceeding described in
paragraph (1)(A)(i),
(ii) any investigation which may
result in such a proceeding, or
(iii) any grand jury proceeding
described in paragraph (1)(A)(iii),
solely for the use of such officers and
employees in such preparation, investigation,
or grand jury proceeding.
(B) Requirements.--A request meets the
requirements of this subparagraph if the
request is in writing and sets forth--
(i) the name and address of the
taxpayer with respect to whom the
requested return information relates;
(ii) the taxable period or periods to
which such return information relates;
(iii) the statutory authority under
which the proceeding or investigation
described in subparagraph (A) is being
conducted; and
(iv) the specific reason or reasons
why such disclosure is, or may be,
relevant to such proceeding or
investigation.
(C) Taxpayer identity.--For purposes of this
paragraph, a taxpayer's identity shall not be
treated as taxpayer return information.
(3) Disclosure of return information to apprise
appropriate officials of criminal or terrorist
activities or emergency circumstances.--
(A) Possible violations of Federal criminal
law.--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
disclose in writing return information
(other than taxpayer return
information) which may constitute
evidence of a violation of any Federal
criminal law (not involving tax
administration) to the extent necessary
to apprise the head of the appropriate
Federal agency charged with the
responsibility of enforcing such law.
The head of such agency may disclose
such return information to officers and
employees of such agency to the extent
necessary to enforce such law.
(ii) Taxpayer identity.--If there is
return information (other than taxpayer
return information) which may
constitute evidence of a violation by
any taxpayer of any Federal criminal
law (not involving tax administration),
such taxpayer's identity may also be
disclosed under clause (i).
(B) Emergency circumstances.--
(i) Danger of death or physical
injury.--Under circumstances involving
an imminent danger of death or physical
injury to any individual, the Secretary
may disclose return information to the
extent necessary to apprise appropriate
officers or employees of any Federal or
State law enforcement agency of such
circumstances.
(ii) Flight from Federal
prosecution.--Under circumstances
involving the imminent flight of any
individual from Federal prosecution,
the Secretary may disclose return
information to the extent necessary to
apprise appropriate officers or
employees of any Federal law
enforcement agency of such
circumstances.
(C) Terrorist activities, etc..--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
disclose in writing return information
(other than taxpayer return
information) that may be related to a
terrorist incident, threat, or activity
to the extent necessary to apprise the
head of the appropriate Federal law
enforcement agency responsible for
investigating or responding to such
terrorist incident, threat, or
activity. The head of the agency may
disclose such return information to
officers and employees of such agency
to the extent necessary to investigate
or respond to such terrorist incident,
threat, or activity.
(ii) Disclosure to the Department of
Justice.--Returns and taxpayer return
information may also be disclosed to
the Attorney General under clause (i)
to the extent necessary for, and solely
for use in preparing, an application
under paragraph (7)(D).
(iii) Taxpayer identity.--For
purposes of this subparagraph, a
taxpayer's identity shall not be
treated as taxpayer return information.
(4) Use of certain disclosed returns and return
information in judicial or administrative
proceedings.--
(A) Returns and taxpayer return
information.--Except as provided in
subparagraph (C), any return or taxpayer return
information obtained under paragraph (1) or
(7)(C) may be disclosed in any judicial or
administrative proceeding pertaining to
enforcement of a specifically designated
Federal criminal statute or related civil
forfeiture (not involving tax administration)
to which the United States or a Federal agency
is a party--
(i) if the court finds that such
return or taxpayer return information
is probative of a matter in issue
relevant in establishing the commission
of a crime or the guilt or liability of
a party, or
(ii) to the extent required by order
of the court pursuant to section 3500
of title 18, United States Code, or
rule 16 of the Federal Rules of
Criminal Procedure.
(B) Return information (other than taxpayer
return information).--Except as provided in
subparagraph (C), any return information (other
than taxpayer return information) obtained
under paragraph (1), (2), (3)(A) or (C), or (7)
may be disclosed in any judicial or
administrative proceeding pertaining to
enforcement of a specifically designated
Federal criminal statute or related civil
forfeiture (not involving tax administration)
to which the United States or a Federal agency
is a party.
(C) Confidential informant; impairment of
investigations.--No return or return
information shall be admitted into evidence
under subparagraph (A)(i) or (B) if the
Secretary determines and notifies the Attorney
General or his delegate or the head of the
Federal agency that such admission would
identify a confidential informant or seriously
impair a civil or criminal tax investigation.
(D) Consideration of confidentiality
policy.--In ruling upon the admissibility of
returns or return information, and in the
issuance of an order under subparagraph
(A)(ii), the court shall give due consideration
to congressional policy favoring the
confidentiality of returns and return
information as set forth in this title.
(E) Reversible error.--The admission into
evidence of any return or return information
contrary to the provisions of this paragraph
shall not, as such, constitute reversible error
upon appeal of a judgment in the proceeding.
(5) Disclosure to locate fugitives from justice.--
(A) In general.--Except as provided in
paragraph (6), the return of an individual or
return information with respect to such
individual shall, pursuant to and upon the
grant of an ex parte order by a Federal
district court judge or magistrate judge under
subparagraph (B), be open (but only to the
extent necessary as provided in such order) to
inspection by, or disclosure to, officers and
employees of any Federal agency exclusively for
use in locating such individual.
(B) Application for order.--Any person
described in paragraph (1)(B) may authorize an
application to a Federal district court judge
or magistrate judge for an order referred to in
subparagraph (A). Upon such application, such
judge or magistrate judge may grant such order
if he determines on the basis of the facts
submitted by the applicant that--
(i) a Federal arrest warrant relating
to the commission of a Federal felony
offense has been issued for an
individual who is a fugitive from
justice,
(ii) the return of such individual or
return information with respect to such
individual is sought exclusively for
use in locating such individual, and
(iii) there is reasonable cause to
believe that such return or return
information may be relevant in
determining the location of such
individual.
(6) Confidential informants; impairment of
investigations.--The Secretary shall not disclose any
return or return information under paragraph (1), (2),
(3)(A) or (C), (5), (7), or (8) if the Secretary
determines (and, in the case of a request for
disclosure pursuant to a court order described in
paragraph (1)(B) or (5)(B), certifies to the court)
that such disclosure would identify a confidential
informant or seriously impair a civil or criminal tax
investigation.
(7) Disclosure upon request of information relating
to terrorist activities, etc..--
(A) Disclosure to law enforcement agencies.--
(i) In general.--Except as provided
in paragraph (6), upon receipt by the
Secretary of a written request which
meets the requirements of clause (iii),
the Secretary may disclose return
information (other than taxpayer return
information) to officers and employees
of any Federal law enforcement agency
who are personally and directly engaged
in the response to or investigation of
any terrorist incident, threat, or
activity.
(ii) Disclosure to State and local
law enforcement agencies.--The head of
any Federal law enforcement agency may
disclose return information obtained
under clause (i) to officers and
employees of any State or local law
enforcement agency but only if such
agency is part of a team with the
Federal law enforcement agency in such
response or investigation and such
information is disclosed only to
officers and employees who are
personally and directly engaged in such
response or investigation.
(iii) Requirements.--A request meets
the requirements of this clause if--
(I) the request is made by
the head of any Federal law
enforcement agency (or his
delegate) involved in the
response to or investigation of
any terrorist incident, threat,
or activity, and
(II) the request sets forth
the specific reason or reasons
why such disclosure may be
relevant to a terrorist
incident, threat, or activity.
(iv) Limitation on use of
information.--Information disclosed
under this subparagraph shall be solely
for the use of the officers and
employees to whom such information is
disclosed in such response or
investigation.
(v) Taxpayer identity.--For purposes
of this subparagraph, a taxpayer's
identity shall not be treated as
taxpayer return information.
(B) Disclosure to intelligence agencies.--
(i) In general.--Except as provided
in paragraph (6), upon receipt by the
Secretary of a written request which
meets the requirements of clause (ii),
the Secretary may disclose return
information (other than taxpayer return
information) to those officers and
employees of the Department of Justice,
the Department of the Treasury, and
other Federal intelligence agencies who
are personally and directly engaged in
the collection or analysis of
intelligence and counterintelligence
information or investigation concerning
any terrorist incident, threat, or
activity. For purposes of the preceding
sentence, the information disclosed
under the preceding sentence shall be
solely for the use of such officers and
employees in such investigation,
collection, or analysis.
(ii) Requirements.--A request meets
the requirements of this subparagraph
if the request--
(I) is made by an individual
described in clause (iii), and
(II) sets forth the specific
reason or reasons why such
disclosure may be relevant to a
terrorist incident, threat, or
activity.
(iii) Requesting individuals.--An
individual described in this
subparagraph is an individual--
(I) who is an officer or
employee of the Department of
Justice or the Department of
the Treasury who is appointed
by the President with the
advice and consent of the
Senate or who is the Director
of the United States Secret
Service, and
(II) who is responsible for
the collection and analysis of
intelligence and
counterintelligence information
concerning any terrorist
incident, threat, or activity.
(iv) Taxpayer identity.--For purposes
of this subparagraph, a taxpayer's
identity shall not be treated as
taxpayer return information.
(C) Disclosure under ex parte orders.--
(i) In general.--Except as provided
in paragraph (6), any return or return
information with respect to any
specified taxable period or periods
shall, pursuant to and upon the grant
of an ex parte order by a Federal
district court judge or magistrate
judge under clause (ii), be open (but
only to the extent necessary as
provided in such order) to inspection
by, or disclosure to, officers and
employees of any Federal law
enforcement agency or Federal
intelligence agency who are personally
and directly engaged in any
investigation, response to, or analysis
of intelligence and counterintelligence
information concerning any terrorist
incident, threat, or activity. Return
or return information opened to
inspection or disclosure pursuant to
the preceding sentence shall be solely
for the use of such officers and
employees in the investigation,
response, or analysis, and in any
judicial, administrative, or grand jury
proceedings, pertaining to such
terrorist incident, threat, or
activity.
(ii) Application for order.--The
Attorney General, the Deputy Attorney
General, the Associate Attorney
General, any Assistant Attorney
General, or any United States attorney
may authorize an application to a
Federal district court judge or
magistrate judge for the order referred
to in clause (i). Upon such
application, such judge or magistrate
judge may grant such order if he
determines on the basis of the facts
submitted by the applicant that--
(I) there is reasonable cause
to believe, based upon
information believed to be
reliable, that the return or
return information may be
relevant to a matter relating
to such terrorist incident,
threat, or activity, and
(II) the return or return
information is sought
exclusively for use in a
Federal investigation,
analysis, or proceeding
concerning any terrorist
incident, threat, or activity.
(D) Special rule for ex parte disclosure by
the IRS.--
(i) In general.--Except as provided
in paragraph (6), the Secretary may
authorize an application to a Federal
district court judge or magistrate
judge for the order referred to in
subparagraph (C)(i). Upon such
application, such judge or magistrate
judge may grant such order if he
determines on the basis of the facts
submitted by the applicant that the
requirements of subparagraph (C)(ii)(I)
are met.
(ii) Limitation on use of
information.--Information disclosed
under clause (i)--
(I) may be disclosed only to
the extent necessary to apprise
the head of the appropriate
Federal law enforcement agency
responsible for investigating
or responding to a terrorist
incident, threat, or activity,
and
(II) shall be solely for use
in a Federal investigation,
analysis, or proceeding
concerning any terrorist
incident, threat, or activity.
The head of such Federal agency may
disclose such information to officers
and employees of such agency to the
extent necessary to investigate or
respond to such terrorist incident,
threat, or activity.
(8) Comptroller General.--
(A) Returns available for inspection.--Except
as provided in subparagraph (C), upon written
request by the Comptroller General of the
United States, returns and return information
shall be open to inspection by, or disclosure
to, officers and employees of the Government
Accountability Office for the purpose of, and
to the extent necessary in, making--
(i) an audit of the Internal Revenue
Service, the Bureau of Alcohol,
Tobacco, Firearms, and Explosives,
Department of Justice, or the Tax and
Trade Bureau, Department of the
Treasury, which may be required by
section 713 of title 31, United States
Code, or
(ii) any audit authorized by
subsection (p)(6),
except that no such officer or employee shall,
except to the extent authorized by subsection
(f) or (p)(6), disclose to any person, other
than another officer or employee of such office
whose official duties require such disclosure,
any return or return information described in
section 4424(a) in a form which can be
associated with, or otherwise identify,
directly or indirectly, a particular taxpayer,
nor shall such officer or employee disclose any
other return or return information, except as
otherwise expressly provided by law, to any
person other than such other officer or
employee of such office in a form which can be
associated with, or otherwise identify,
directly or indirectly, a particular taxpayer.
(B) Audits of other agencies.--
(i) In general.--Nothing in this
section shall prohibit any return or
return information obtained under this
title by any Federal agency (other than
an agency referred to in subparagraph
(A)) or by a Trustee as defined in the
District of Columbia Retirement
Protection Act of 1997, for use in any
program or activity from being open to
inspection by, or disclosure to,
officers and employees of the
Government Accountability Office if
such inspection or disclosure is--
(I) for purposes of, and to
the extent necessary in, making
an audit authorized by law of
such program or activity, and
(II) pursuant to a written
request by the Comptroller
General of the United States to
the head of such Federal
agency.
(ii) Information from Secretary.--If
the Comptroller General of the United
States determines that the returns or
return information available under
clause (i) are not sufficient for
purposes of making an audit of any
program or activity of a Federal agency
(other than an agency referred to in
subparagraph (A)), upon written request
by the Comptroller General to the
Secretary, returns and return
information (of the type authorized by
subsection (l) or (m) to be made
available to the Federal agency for use
in such program or activity) shall be
open to inspection by, or disclosure
to, officers and employees of the
Government Accountability Office for
the purpose of, and to the extent
necessary in, making such audit.
(iii) Requirement of notification
upon completion of audit.--Within 90
days after the completion of an audit
with respect to which returns or return
information were opened to inspection
or disclosed under clause (i) or (ii),
the Comptroller General of the United
States shall notify in writing the
Joint Committee on Taxation of such
completion. Such notice shall include--
(I) a description of the use
of the returns and return
information by the Federal
agency involved,
(II) such recommendations
with respect to the use of
returns and return information
by such Federal agency as the
Comptroller General deems
appropriate, and
(III) a statement on the
impact of any such
recommendations on
confidentiality of returns and
return information and the
administration of this title.
(iv) Certain restrictions made
applicable.--The restrictions contained
in subparagraph (A) on the disclosure
of any returns or return information
open to inspection or disclosed under
such subparagraph shall also apply to
returns and return information open to
inspection or disclosed under this
subparagraph.
(C) Disapproval by Joint Committee on
Taxation.--Returns and return information shall
not be open to inspection or disclosed under
subparagraph (A) or (B) with respect to an
audit--
(i) unless the Comptroller General of
the United States notifies in writing
the Joint Committee on Taxation of such
audit, and
(ii) if the Joint Committee on
Taxation disapproves such audit by a
vote of at least two-thirds of its
members within the 30-day period
beginning on the day the Joint
Committee on Taxation receives such
notice.
(j) Statistical Use.--
(1) Department of Commerce.--Upon request in writing
by the Secretary of Commerce, the Secretary shall
furnish--
(A) such returns, or return information
reflected thereon, to officers and employees of
the Bureau of the Census, and
(B) such return information reflected on
returns of corporations to officers and
employees of the Bureau of Economic Analysis,
as the Secretary may prescribe by regulation for the
purpose of, but only to the extent necessary in, the
structuring of censuses and national economic accounts
and conducting related statistical activities
authorized by law.
(2) Federal Trade Commission.--Upon request in
writing by the Chairman of the Federal Trade
Commission, the Secretary shall furnish such return
information reflected on any return of a corporation
with respect to the tax imposed by chapter 1 to
officers and employees of the Division of Financial
Statistics of the Bureau of Economics of such
commission as the Secretary may prescribe by regulation
for the purpose of, but only to the extent necessary
in, administration by such division of legally
authorized economic surveys of corporations.
(3) Department of Treasury.--Returns and return
information shall be open to inspection by or
disclosure to officers and employees of the Department
of the Treasury whose official duties require such
inspection or disclosure for the purpose of, but only
to the extent necessary in, preparing economic or
financial forecasts, projections, analyses, and
statistical studies and conducting related activities.
Such inspection or disclosure shall be permitted only
upon written request which sets forth the specific
reason or reasons why such inspection or disclosure is
necessary and which is signed by the head of the bureau
or office of the Department of the Treasury requesting
the inspection or disclosure.
(4) Anonymous form.--No person who receives a return
or return information under this subsection shall
disclose such return or return information to any
person other than the taxpayer to whom it relates
except in a form which cannot be associated with, or
otherwise identify, directly or indirectly, a
particular taxpayer.
(5) Department of Agriculture.--Upon request in
writing by the Secretary of Agriculture, the Secretary
shall furnish such returns, or return information
reflected thereon, as the Secretary may prescribe by
regulation to officers and employees of the Department
of Agriculture whose official duties require access to
such returns or information for the purpose of, but
only to the extent necessary in, structuring,
preparing, and conducting the census of agriculture
pursuant to the Census of Agriculture Act of 1997
(Public Law 105-113).
(6) Congressional Budget Office.--Upon written
request by the Director of the Congressional Budget
Office, the Secretary shall furnish to officers and
employees of the Congressional Budget Office return
information for the purpose of, but only to the extent
necessary for, long-term models of the social security
and medicare programs.
(k) Disclosure of Certain Returns and Return Information for
Tax Administration Purposes.--
(1) Disclosure of accepted offers-in-compromise.--
Return information shall be disclosed to members of the
general public to the extent necessary to permit
inspection of any accepted offer-in-compromise under
section 7122 relating to the liability for a tax
imposed by this title.
(2) Disclosure of amount of outstanding lien.--If a
notice of lien has been filed pursuant to section
6323(f), the amount of the outstanding obligation
secured by such lien may be disclosed to any person who
furnishes satisfactory written evidence that he has a
right in the property subject to such lien or intends
to obtain a right in such property.
(3) Disclosure of return information to correct
misstatements of fact.--The Secretary may, but only
following approval by the Joint Committee on Taxation,
disclose such return information or any other
information with respect to any specific taxpayer to
the extent necessary for tax administration purposes to
correct a misstatement of fact published or disclosed
with respect to such taxpayer's return or any
transaction of the taxpayer with the Internal Revenue
Service.
(4) Disclosure of competent authority under income
tax convention.--A return or return information may be
disclosed to a competent authority of a foreign
government which has an income tax or gift and estate
tax convention, or other convention or bilateral
agreement relating to the exchange of tax information,
with the United States but only to the extent provided
in, and subject to the terms and conditions of, such
convention or bilateral agreement.
(5) State agencies regulating tax return preparers.--
Taxpayer identity information with respect to any tax
return preparer, and information as to whether or not
any penalty has been assessed against such tax return
preparer under section 6694, 6695, or 7216, may be
furnished to any agency, body, or commission lawfully
charged under any State or local law with the
licensing, registration, or regulation of tax return
preparers. Such information may be furnished only upon
written request by the head of such agency, body, or
commission designating the officers or employees to
whom such information is to be furnished. Information
may be furnished and used under this paragraph only for
purposes of the licensing, registration, or regulation
of tax return preparers.
(6) Disclosure by certain officers and employees for
investigative purposes.--An internal revenue officer or
employee and an officer or employee of the Office of
Treasury Inspector General for Tax Administration may,
in connection with his official duties relating to any
audit, collection activity, or civil or criminal tax
investigation or any other offense under the internal
revenue laws, disclose return information to the extent
that such disclosure is necessary in obtaining
information, which is not otherwise reasonably
available, with respect to the correct determination of
tax, liability for tax, or the amount to be collected
or with respect to the enforcement of any other
provision of this title. Such disclosures shall be made
only in such situations and under such conditions as
the Secretary may prescribe by regulation.
(7) Disclosure of excise tax registration
information.--To the extent the Secretary determines
that disclosure is necessary to permit the effective
administration of subtitle D, the Secretary may
disclose--
(A) the name, address, and registration
number of each person who is registered under
any provision of subtitle D (and, in the case
of a registered terminal operator, the address
of each terminal operated by such operator),
and
(B) the registration status of any person.
(8) Levies on certain government payments.--
(A) Disclosure of return information in
levies on financial management service.--In
serving a notice of levy, or release of such
levy, with respect to any applicable government
payment, the Secretary may disclose to officers
and employees of the Financial Management
Service--
(i) return information, including
taxpayer identity information,
(ii) the amount of any unpaid
liability under this title (including
penalties and interest), and
(iii) the type of tax and tax period
to which such unpaid liability relates.
(B) Restriction on use of disclosed
information.--Return information disclosed
under subparagraph (A) may be used by officers
and employees of the Financial Management
Service only for the purpose of, and to the
extent necessary in, transferring levied funds
in satisfaction of the levy, maintaining
appropriate agency records in regard to such
levy or the release thereof, notifying the
taxpayer and the agency certifying such payment
that the levy has been honored, or in the
defense of any litigation ensuing from the
honor of such levy.
(C) Applicable government payment.--For
purposes of this paragraph, the term
``applicable government payment'' means--
(i) any Federal payment (other than a
payment for which eligibility is based
on the income or assets (or both) of a
payee) certified to the Financial
Management Service for disbursement,
and
(ii) any other payment which is
certified to the Financial Management
Service for disbursement and which the
Secretary designates by published
notice.
(9) Disclosure of information to administer section
6311.--The Secretary may disclose returns or return
information to financial institutions and others to the
extent the Secretary deems necessary for the
administration of section 6311. Disclosures of
information for purposes other than to accept payments
by checks or money orders shall be made only to the
extent authorized by written procedures promulgated by
the Secretary.
(10) Disclosure of certain returns and return
information to certain prison officials.--
(A) In general.--Under such procedures as the
Secretary may prescribe, the Secretary may
disclose to officers and employees of the
Federal Bureau of Prisons and of any State
agency charged with the responsibility for
administration of prisons any returns or return
information with respect to individuals
incarcerated in Federal or State prison systems
whom the Secretary has determined may have
filed or facilitated the filing of a false or
fraudulent return to the extent that the
Secretary determines that such disclosure is
necessary to permit effective Federal tax
administration.
(B) Disclosure to contractor-run prisons.--
Under such procedures as the Secretary may
prescribe, the disclosures authorized by
subparagraph (A) may be made to contractors
responsible for the operation of a Federal or
State prison on behalf of such Bureau or
agency.
(C) Restrictions on use of disclosed
information.--Any return or return information
received under this paragraph shall be used
only for the purposes of and to the extent
necessary in taking administrative action to
prevent the filing of false and fraudulent
returns, including administrative actions to
address possible violations of administrative
rules and regulations of the prison facility
and in administrative and judicial proceedings
arising from such administrative actions.
(D) Restrictions on redisclosure and
disclosure to legal representatives.--
Notwithstanding subsection (h)--
(i) Restrictions on redisclosure.--
Except as provided in clause (ii), any
officer, employee, or contractor of the
Federal Bureau of Prisons or of any
State agency charged with the
responsibility for administration of
prisons shall not disclose any
information obtained under this
paragraph to any person other than an
officer or employee or contractor of
such Bureau or agency personally and
directly engaged in the administration
of prison facilities on behalf of such
Bureau or agency.
(ii) Disclosure to legal
representatives.--The returns and
return information disclosed under this
paragraph may be disclosed to the duly
authorized legal representative of the
Federal Bureau of Prisons, State
agency, or contractor charged with the
responsibility for administration of
prisons, or of the incarcerated
individual accused of filing the false
or fraudulent return who is a party to
an action or proceeding described in
subparagraph (C), solely in preparation
for, or for use in, such action or
proceeding.
(11) Disclosure of return information to Department
of State for purposes of passport revocation under
section 7345.--
(A) In general.--The Secretary shall, upon
receiving a certification described in section
7345, disclose to the Secretary of State return
information with respect to a taxpayer who has
a seriously delinquent tax debt described in
such section. Such return information shall be
limited to--
(i) the taxpayer identity information
with respect to such taxpayer, and
(ii) the amount of such seriously
delinquent tax debt.
(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A)
may be used by officers and employees of the
Department of State for the purposes of, and to
the extent necessary in, carrying out the
requirements of section 32101 of the FAST Act.
(12) Qualified tax collection contractors.--Persons
providing services pursuant to a qualified tax
collection contract under section 6306 may, if speaking
to a person who has identified himself or herself as
having the name of the taxpayer to which a tax
receivable (within the meaning of such section)
relates, identify themselves as contractors of the
Internal Revenue Service and disclose the business name
of the contractor, and the nature, subject, and reason
for the contact. Disclosures under this paragraph shall
be made only in such situations and under such
conditions as have been approved by the Secretary.
(13) Disclosure of return information for purposes of
cybersecurity and the prevention of identity theft tax
refund fraud.--
(A) In general.--Under such procedures and
subject to such conditions as the Secretary may
prescribe, the Secretary may disclose specified
return information to specified ISAC
participants to the extent that the Secretary
determines such disclosure is in furtherance of
effective Federal tax administration relating
to the detection or prevention of identity
theft tax refund fraud, validation of taxpayer
identity, authentication of taxpayer returns,
or detection or prevention of cybersecurity
threats.
(B) Specified isac participants.--For
purposes of this paragraph--
(i) In general.--The term ``specified
ISAC participant'' means--
(I) any person designated by
the Secretary as having primary
responsibility for a function
performed with respect to the
information sharing and
analysis center described in
section 403(a) of the 21st
Century IRS Act, and
(II) any person subject to
the requirements of section
7216 and which is a participant
in such information sharing and
analysis center.
(ii) Information sharing agreement.--
Such term shall not include any person
unless such person has entered into a
written agreement with the Secretary
setting forth the terms and conditions
for the disclosure of information to
such person under this paragraph,
including requirements regarding the
protection and safeguarding of such
information by such person.
(C) Specified return information.--For
purposes of this paragraph, the term
``specified return information'' means--
(i) in the case of a return which is
in connection with a case of potential
identity theft refund fraud--
(I) in the case of such
return filed electronically,
the internet protocol address,
device identification, email
domain name, speed of
completion, method of
authentication, refund method,
and such other return
information related to the
electronic filing
characteristics of such return
as the Secretary may identify
for purposes of this subclause,
and
(II) in the case of such
return prepared by a tax return
preparer, identifying
information with respect to
such tax return preparer,
including the preparer taxpayer
identification number and
electronic filer identification
number of such preparer,
(ii) in the case of a return which is
in connection with a case of a identity
theft refund fraud which has been
confirmed by the Secretary (pursuant to
such procedures as the Secretary may
provide), the information referred to
in subclauses (I) and (II) of clause
(i), the name and taxpayer
identification number of the taxpayer
as it appears on the return, and any
bank account and routing information
provided for making a refund in
connection with such return, and
(iii) in the case of any
cybersecurity threat to the Internal
Revenue Service, information similar to
the information described in subclauses
(I) and (II) of clause (i) with respect
to such threat.
(D) Restriction on use of disclosed
information.--
(i) Designated third parties.--Any
return information received by a person
described in subparagraph (B)(i)(I)
shall be used only for the purposes of
and to the extent necessary in--
(I) performing the function
such person is designated to
perform under such
subparagraph,
(II) facilitating disclosures
authorized under subparagraph
(A) to persons described in
subparagraph (B)(i)(II), and
(III) facilitating
disclosures authorized under
subsection (d) to participants
in such information sharing and
analysis center.
(ii) Return preparers.--Any return
information received by a person
described in subparagraph (B)(i)(II)
shall be treated for purposes of
section 7216 as information furnished
to such person for, or in connection
with, the preparation of a return of
the tax imposed under chapter 1.
(E) Data protection and safeguards.--Return
information disclosed under this paragraph
shall be subject to such protections and
safeguards as the Secretary may require in
regulations or other guidance or in the written
agreement referred to in subparagraph (B)(ii).
Such written agreement shall include a
requirement that any unauthorized access to
information disclosed under this paragraph, and
any breach of any system in which such
information is held, be reported to the
Treasury Inspector General for Tax
Administration.
(l) Disclosure of Returns and Return Information for Purposes
Other Than Tax Administration.--
(1) Disclosure of certain returns and return
information to Social Security Administration and
Railroad Retirement Board.--The Secretary may, upon
written request, disclose returns and return
information with respect to--
(A) taxes imposed by chapters 2, 21, and 24,
to the Social Security Administration for
purposes of its administration of the Social
Security Act;
(B) a plan to which part I of subchapter D of
chapter 1 applies, to the Social Security
Administration for purposes of carrying out its
responsibility under section 1131 of the Social
Security Act, limited, however to return
information described in section 6057(d); and
(C) taxes imposed by chapter 22, to the
Railroad Retirement Board for purposes of its
administration of the Railroad Retirement Act.
(2) Disclosure of returns and return information to
the Department of Labor and Pension Benefit Guaranty
Corporation.--The Secretary may, upon written request,
furnish returns and return information to the proper
officers and employees of the Department of Labor and
the Pension Benefit Guaranty Corporation for purposes
of, but only to the extent necessary in, the
administration of titles I and IV of the Employee
Retirement Income Security Act of 1974.
(3) Disclosure that applicant for Federal loan has
tax delinquent account.--
(A) In general.--Upon written request, the
Secretary may disclose to the head of the
Federal agency administering any included
Federal loan program whether or not an
applicant for a loan under such program has a
tax delinquent account.
(B) Restriction on disclosure.--Any
disclosure under subparagraph (A) shall be made
only for the purpose of, and to the extent
necessary in, determining the creditworthiness
of the applicant for the loan in question.
(C) Included Federal loan program defined.--
For purposes of this paragraph, the term
``included Federal loan program'' means any
program under which the United States or a
Federal agency makes, guarantees, or insures
loans.
(4) Disclosure of returns and return information for
use in personnel or claimant representative matters.--
The Secretary may disclose returns and return
information--
(A) upon written request--
(i) to an employee or former employee
of the Department of the Treasury, or
to the duly authorized legal
representative of such employee or
former employee, who is or may be a
party to any administrative action or
proceeding affecting the personnel
rights of such employee or former
employee; or
(ii) to any person, or to the duly
authorized legal representative of such
person, whose rights are or may be
affected by an administrative action or
proceeding under section 330 of title
31, United States Code,
solely for use in the action or proceeding, or
in preparation for the action or proceeding,
but only to the extent that the Secretary
determines that such returns or return
information is or may be relevant and material
to the action or proceeding; or
(B) to officers and employees of the
Department of the Treasury for use in any
action or proceeding described in subparagraph
(A), or in preparation for such action or
proceeding, to the extent necessary to advance
or protect the interests of the United States.
(5) Social Security Administration.--Upon written
request by the Commissioner of Social Security, the
Secretary may disclose information returns filed
pursuant to part III of subchapter A of chapter 61 of
this subtitle for the purpose of--
(A) carrying out, in accordance with an
agreement entered into pursuant to section 232
of the Social Security Act, an effective return
processing program; or
(B) providing information regarding the
mortality status of individuals for
epidemiological and similar research in
accordance with section 1106(d) of the Social
Security Act.
(6) Disclosure of return information to Federal,
State, and local child support enforcement agencies.--
(A) Return information from Internal Revenue
Service.--The Secretary may, upon written
request, disclose to the appropriate Federal,
State, or local child support enforcement
agency--
(i) available return information from
the master files of the Internal
Revenue Service relating to the social
security account number (or numbers, if
the individual involved has more than
one such number), address, filing
status, amounts and nature of income,
and the number of dependents reported
on any return filed by, or with respect
to, any individual with respect to whom
child support obligations are sought to
be established or enforced pursuant to
the provisions of part D of title IV of
the Social Security Act and with
respect to any individual to whom such
support obligations are owing, and
(ii) available return information
reflected on any return filed by, or
with respect to, any individual
described in clause (i) relating to the
amount of such individual's gross
income (as defined in section 61) or
consisting of the names and addresses
of payors of such income and the names
of any dependents reported on such
return, but only if such return
information is not reasonably available
from any other source.
(B) Disclosure to certain agents.--The
following information disclosed to any child
support enforcement agency under subparagraph
(A) with respect to any individual with respect
to whom child support obligations are sought to
be established or enforced may be disclosed by
such agency to any agent of such agency which
is under contract with such agency to carry out
the purposes described in subparagraph (C):
(i) The address and social security
account number (or numbers) of such
individual.
(ii) The amount of any reduction
under section 6402(c) (relating to
offset of past-due support against
overpayments) in any overpayment
otherwise payable to such individual.
(C) Restriction on disclosure.--Information
may be disclosed under this paragraph only for
purposes of, and to the extent necessary in,
establishing and collecting child support
obligations from, and locating, individuals
owing such obligations.
(7) Disclosure of return information to Federal,
State, and local agencies administering certain
programs under the Social Security Act, the Food and
Nutrition Act of 2008 of 1977, or title 38, United
States Code, or certain housing assistance programs
(A) Return information from Social Security
Administration.--The Commissioner of Social
Security shall, upon written request, disclose
return information from returns with respect to
net earnings from self-employment (as defined
in section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income, which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5) of this subsection, to any
Federal, State, or local agency administering a
program listed in subparagraph (D).
(B) Return information from Internal Revenue
Service.--The Secretary shall, upon written
request, disclose current return information
from returns with respect to unearned income
from the Internal Revenue Service files to any
Federal, State, or local agency administering a
program listed in subparagraph (D).
(C) Restriction on disclosure.--The
Commissioner of Social Security and the
Secretary shall disclose return information
under subparagraphs (A) and (B) only for
purposes of, and to the extent necessary in,
determining eligibility for, or the correct
amount of, benefits under a program listed in
subparagraph (D).
(D) Programs to which rule applies.--The
programs to which this paragraph applies are:
(i) a State program funded under part
A of title IV of the Social Security
Act;
(ii) medical assistance provided
under a State plan approved under title
XIX of the Social Security Act or
subsidies provided under section 1860D-
14 of such Act;
(iii) supplemental security income
benefits provided under title XVI of
the Social Security Act, and federally
administered supplementary payments of
the type described in section 1616(a)
of such Act (including payments
pursuant to an agreement entered into
under section 212(a) of Public Law 93-
66);
(iv) any benefits provided under a
State plan approved under title I, X,
XIV, or XVI of the Social Security Act
(as those titles apply to Puerto Rico,
Guam, and the Virgin Islands);
(v) unemployment compensation
provided under a State law described in
section 3304 of this title;
(vi) assistance provided under the
Food and Nutrition Act of 2008;
(vii) State-administered
supplementary payments of the type
described in section 1616(a) of the
Social Security Act (including payments
pursuant to an agreement entered into
under section 212(a) of Public Law 93-
66);
(viii)(I) any needs-based pension
provided under chapter 15 of title 38,
United States Code, or under any other
law administered by the Secretary of
Veterans Affairs;
(II) parents' dependency and
indemnity compensation provided
under section 1315 of title 38,
United States Code;
(III) health-care services
furnished under sections
1710(a)(2)(G), 1710(a)(3), and
1710(b) of such title; and
(IV) compensation paid under
chapter 11 of title 38, United
States Code, at the 100 percent
rate based solely on
unemployability and without
regard to the fact that the
disability or disabilities are
not rated as 100 percent
disabling under the rating
schedule; and
(ix) any housing assistance program
administered by the Department of
Housing and Urban Development that
involves initial and periodic review of
an applicant's or participant's income,
except that return information may be
disclosed under this clause only on
written request by the Secretary of
Housing and Urban Development and only
for use by officers and employees of
the Department of Housing and Urban
Development with respect to applicants
for and participants in such programs.
Only return information from returns with
respect to net earnings from self-employment
and wages may be disclosed under this paragraph
for use with respect to any program described
in clause (viii)(IV).
(8) Disclosure of certain return information by
Social Security Administration to Federal, State, and
local child support enforcement agencies.--
(A) In general.--Upon written request, the
Commissioner of Social Security shall disclose
directly to officers and employees of a Federal
or State or local child support enforcement
agency return information from returns with
respect to social security account numbers, net
earnings from self-employment (as defined in
section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5) of this subsection.
(B) Restriction on disclosure.--The
Commissioner of Social Security shall disclose
return information under subparagraph (A) only
for purposes of, and to the extent necessary
in, establishing and collecting child support
obligations from, and locating, individuals
owing such obligations. For purposes of the
preceding sentence, the term ``child support
obligations'' only includes obligations which
are being enforced pursuant to a plan described
in section 454 of the Social Security Act which
has been approved by the Secretary of Health
and Human Services under part D of title IV of
such Act.
(C) State or local child support enforcement
agency.--For purposes of this paragraph, the
term ``State or local child support enforcement
agency'' means any agency of a State or
political subdivision thereof operating
pursuant to a plan described in subparagraph
(B).
(9) Disclosure of alcohol fuel producers to
administrators of State alcohol laws.--Notwithstanding
any other provision of this section, the Secretary may
disclose--
(A) the name and address of any person who is
qualified to produce alcohol for fuel use under
section 5181, and
(B) the location of any premises to be used
by such person in producing alcohol for fuel,
to any State agency, body, or commission, or its legal
representative, which is charged under the laws of such
State with responsibility for administration of State
alcohol laws solely for use in the administration of
such laws.
(10) Disclosure of certain information to agencies
requesting a reduction under subsection (c), (d), (e),
or (f) of section 6402.--
(A) Return information from Internal Revenue
Service.--The Secretary may, upon receiving a
written request, disclose to officers and
employees of any agency seeking a reduction
under subsection (c), (d), (e), or (f) of
section 6402, to officers and employees of the
Department of Labor for purposes of
facilitating the exchange of data in connection
with a request made under subsection (f)(5) of
section 6402, and to officers and employees of
the Department of the Treasury in connection
with such reduction--
(i) taxpayer identity information
with respect to the taxpayer against
whom such a reduction was made or not
made and with respect to any other
person filing a joint return with such
taxpayer,
(ii) the fact that a reduction has
been made or has not been made under
such subsection with respect to such
taxpayer,
(iii) the amount of such reduction,
(iv) whether such taxpayer filed a
joint return, and
(v) the fact that a payment was made
(and the amount of the payment) to the
spouse of the taxpayer on the basis of
a joint return.
(B)(i) Restriction on use of disclosed
information
Any officers and employees of an agency
receiving return information under subparagraph
(A) shall use such information only for the
purposes of, and to the extent necessary in,
establishing appropriate agency records,
locating any person with respect to whom a
reduction under subsection (c), (d), (e), or
(f) of section 6402 is sought for purposes of
collecting the debt with respect to which the
reduction is sought, or in the defense of any
litigation or administrative procedure ensuing
from a reduction made under subsection (c),
(d), (e), or (f) of section 6402 and to
officers and employees of the Department of the
Treasury in connection with such reduction.
(ii) Notwithstanding clause (i),
return information disclosed to
officers and employees of the
Department of Labor may be accessed by
agents who maintain and provide
technological support to the Department
of Labor's Interstate Connection
Network (ICON) solely for the purpose
of providing such maintenance and
support.
(11) Disclosure of return information to carry out
Federal Employees' Retirement System.--
(A) In general.--The Commissioner of Social
Security shall, on written request, disclose to
the Office of Personnel Management return
information from returns with respect to net
earnings from self-employment (as defined in
section 1402), wages (as defined in section
3121(a) or 3401(a)), and payments of retirement
income, which have been disclosed to the Social
Security Administration as provided by
paragraph (1) or (5).
(B) Restriction on disclosure.--The
Commissioner of Social Security shall disclose
return information under subparagraph (A) only
for purposes of, and to the extent necessary
in, the administration of chapters 83 and 84 of
title 5, United States Code.
(12) Disclosure of certain taxpayer identity
information for verification of employment status of
medicare beneficiary and spouse of medicare
beneficiary.--
(A) Return information from Internal Revenue
Service.--The Secretary shall, upon written
request from the Commissioner of Social
Security, disclose to the Commissioner
available filing status and taxpayer identity
information from the individual master files of
the Internal Revenue Service relating to
whether any medicare beneficiary identified by
the Commissioner was a married individual (as
defined in section 7703) for any specified year
after 1986, and, if so, the name of the spouse
of such individual and such spouse's TIN.
(B) Return information from Social Security
Administration.--The Commissioner of Social
Security shall, upon written request from the
Administrator of the Centers for Medicare &
Medicaid Services, disclose to the
Administrator the following information:
(i) The name and TIN of each medicare
beneficiary who is identified as having
received wages (as defined in section
3401(a)), above an amount (if any)
specified by the Secretary of Health
and Human Services, from a qualified
employer in a previous year.
(ii) For each medicare beneficiary
who was identified as married under
subparagraph (A) and whose spouse is
identified as having received wages,
above an amount (if any) specified by
the Secretary of Health and Human
Services, from a qualified employer in
a previous year--
(I) the name and TIN of the
medicare beneficiary, and
(II) the name and TIN of the
spouse.
(iii) With respect to each such
qualified employer, the name, address,
and TIN of the employer and the number
of individuals with respect to whom
written statements were furnished under
section 6051 by the employer with
respect to such previous year.
(C) Disclosure by Centers for Medicare &
Medicaid Services.--With respect to the
information disclosed under subparagraph (B),
the Administrator of the Centers for Medicare &
Medicaid Services may disclose--
(i) to the qualified employer
referred to in such subparagraph the
name and TIN of each individual
identified under such subparagraph as
having received wages from the employer
(hereinafter in this subparagraph
referred to as the ``employee'') for
purposes of determining during what
period such employee or the employee's
spouse may be (or have been) covered
under a group health plan of the
employer and what benefits are or were
covered under the plan (including the
name, address, and identifying number
of the plan),
(ii) to any group health plan which
provides or provided coverage to such
an employee or spouse, the name of such
employee and the employee's spouse (if
the spouse is a medicare beneficiary)
and the name and address of the
employer, and, for the purpose of
presenting a claim to the plan--
(I) the TIN of such employee
if benefits were paid under
title XVIII of the Social
Security Act with respect to
the employee during a period in
which the plan was a primary
plan (as defined in section
1862(b)(2)(A) of the Social
Security Act), and
(II) the TIN of such spouse
if benefits were paid under
such title with respect to the
spouse during such period, and
(iii) to any agent of such
Administrator the information referred
to in subparagraph (B) for purposes of
carrying out clauses (i) and (ii) on
behalf of such Administrator.
(D) Special rules.--
(i) Restrictions on disclosure.--
Information may be disclosed under this
paragraph only for purposes of, and to
the extent necessary in, determining
the extent to which any medicare
beneficiary is covered under any group
health plan.
(ii) Timely response to requests.--
Any request made under subparagraph (A)
or (B) shall be complied with as soon
as possible but in no event later than
120 days after the date the request was
made.
(E) Definitions.--For purposes of this
paragraph--
(i) Medicare beneficiary.--The term
``medicare beneficiary'' means an
individual entitled to benefits under
part A, or enrolled under part B, of
title XVIII of the Social Security Act,
but does not include such an individual
enrolled in part A under section 1818.
(ii) Group health plan.--The term
``group health plan'' means any group
health plan (as defined in section
5000(b)(1)).
(iii) Qualified employer.--The term
``qualified employer'' means, for a
calendar year, an employer which has
furnished written statements under
section 6051 with respect to at least
20 individuals for wages paid in the
year.
(13) Disclosure of return information to carry out
income contingent repayment of student loans.--
(A) In general.--The Secretary may, upon
written request from the Secretary of
Education, disclose to officers and employees
of the Department of Education return
information with respect to a taxpayer who has
received an applicable student loan and whose
loan repayment amounts are based in whole or in
part on the taxpayer's income. Such return
information shall be limited to--
(i) taxpayer identity information
with respect to such taxpayer,
(ii) the filing status of such
taxpayer, and
(iii) the adjusted gross income of
such taxpayer.
(B) Restriction on use of disclosed
information.--Return information disclosed
under subparagraph (A) may be used by officers
and employees of the Department of Education
only for the purposes of, and to the extent
necessary in, establishing the appropriate
income contingent repayment amount for an
applicable student loan.
(C) Applicable student loan.--For purposes of
this paragraph, the term ``applicable student
loan'' means--
(i) any loan made under the program
authorized under part D of title IV of
the Higher Education Act of 1965, and
(ii) any loan made under part B or E
of title IV of the Higher Education Act
of 1965 which is in default and has
been assigned to the Department of
Education.
(D) Termination.--This paragraph shall not
apply to any request made after December 31,
2007.
(14) Disclosure of return information to United
States Customs Service.--The Secretary may, upon
written request from the Commissioner of the United
States Customs Service, disclose to officers and
employees of the Department of the Treasury such return
information with respect to taxes imposed by chapters 1
and 6 as the Secretary may prescribe by regulations,
solely for the purpose of, and only to the extent
necessary in--
(A) ascertaining the correctness of any entry
in audits as provided for in section 509 of the
Tariff Act of 1930 (19 U.S.C. 1509), or
(B) other actions to recover any loss of
revenue, or to collect duties, taxes, and fees,
determined to be due and owing pursuant to such
audits.
(15) Disclosure of returns filed under section
6050I.--The Secretary may, upon written request,
disclose to officers and employees of--
(A) any Federal agency,
(B) any agency of a State or local
government, or
(C) any agency of the government of a foreign
country, information contained on returns filed
under section 6050I. Any such disclosure shall
be made on the same basis, and subject to the
same conditions, as apply to disclosures of
information on reports filed under section 5313
of title 31, United States Code; except that no
disclosure under this paragraph shall be made
for purposes of the administration of any tax
law.
(16) Disclosure of return information for purposes of
administering the District of Columbia Retirement
Protection Act of 1997.--
(A) In general.--Upon written request
available return information (including such
information disclosed to the Social Security
Administration under paragraph (1) or (5) of
this subsection), relating to the amount of
wage income (as defined in section 3121(a) or
3401(a)), the name, address, and identifying
number assigned under section 6109, of payors
of wage income, taxpayer identity (as defined
in subsection 6103 (b)(6)), and the
occupational status reflected on any return
filed by, or with respect to, any individual
with respect to whom eligibility for, or the
correct amount of, benefits under the District
of Columbia Retirement Protection Act of 1997,
is sought to be determined, shall be disclosed
by the Commissioner of Social Security, or to
the extent not available from the Social
Security Administration, by the Secretary, to
any duly authorized officer or employee of the
Department of the Treasury, or a Trustee or any
designated officer or employee of a Trustee (as
defined in the District of Columbia Retirement
Protection Act of 1997), or any actuary engaged
by a Trustee under the terms of the District of
Columbia Retirement Protection Act of 1997,
whose official duties require such disclosure,
solely for the purpose of, and to the extent
necessary in, determining an individual's
eligibility for, or the correct amount of,
benefits under the District of Columbia
Retirement Protection Act of 1997.
(B) Disclosure for use in judicial or
administrative proceedings.--Return information
disclosed to any person under this paragraph
may be disclosed in a judicial or
administrative proceeding relating to the
determination of an individual's eligibility
for, or the correct amount of, benefits under
the District of Columbia Retirement Protection
Act of 1997.
(17) Disclosure to National Archives and Records
Administration.--The Secretary shall, upon written
request from the Archivist of the United States,
disclose or authorize the disclosure of returns and
return information to officers and employees of the
National Archives and Records Administration for
purposes of, and only to the extent necessary in, the
appraisal of records for destruction or retention. No
such officer or employee shall, except to the extent
authorized by subsection (f), (i)(8), or (p), disclose
any return or return information disclosed under the
preceding sentence to any person other than to the
Secretary, or to another officer or employee of the
National Archives and Records Administration whose
official duties require such disclosure for purposes of
such appraisal.
(18) Disclosure of return information for purposes of
carrying out a program for advance payment of credit
for health insurance costs of eligible individuals.--
The Secretary may disclose to providers of health
insurance for any certified individual (as defined in
section 7527(c)) return information with respect to
such certified individual only to the extent necessary
to carry out the program established by section 7527
(relating to advance payment of credit for health
insurance costs of eligible individuals).
(19) Disclosure of return information for purposes of
providing transitional assistance under medicare
discount card program.--
(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human
Services pursuant to carrying out section
1860D-31 of the Social Security Act, shall
disclose to officers, employees, and
contractors of the Department of Health and
Human Services with respect to a taxpayer for
the applicable year--
(i)(I) whether the adjusted gross
income, as modified in accordance with
specifications of the Secretary of
Health and Human Services for purposes
of carrying out such section, of such
taxpayer and, if applicable, such
taxpayer's spouse, for the applicable
year, exceeds the amounts specified by
the Secretary of Health and Human
Services in order to apply the 100 and
135 percent of the poverty lines under
such section, (II) whether the return
was a joint return, and (III) the
applicable year, or
(ii) if applicable, the fact that
there is no return filed for such
taxpayer for the applicable year.
(B) Definition of applicable year.--For the
purposes of this subsection, the term
``applicable year'' means the most recent
taxable year for which information is available
in the Internal Revenue Service's taxpayer data
information systems, or, if there is no return
filed for such taxpayer for such year, the
prior taxable year.
(C) Restriction on use of disclosed
information.--Return information disclosed
under this paragraph may be used only for the
purposes of determining eligibility for and
administering transitional assistance under
section 1860D-31 of the Social Security Act.
(20) Disclosure of return information to carry out
Medicare part B premium subsidy adjustment and part D
base beneficiary premium increase.--
(A) In general.--The Secretary shall, upon
written request from the Commissioner of Social
Security, disclose to officers, employees, and
contractors of the Social Security
Administration return information of a taxpayer
whose premium (according to the records of the
Secretary) may be subject to adjustment under
section 1839(i) or increase under section
1860D-13(a)(7) of the Social Security Act. Such
return information shall be limited to--
(i) taxpayer identity information
with respect to such taxpayer,
(ii) the filing status of such
taxpayer,
(iii) the adjusted gross income of
such taxpayer,
(iv) the amounts excluded from such
taxpayer's gross income under sections
135 and 911 to the extent such
information is available,
(v) the interest received or accrued
during the taxable year which is exempt
from the tax imposed by chapter 1 to
the extent such information is
available,
(vi) the amounts excluded from such
taxpayer's gross income by sections 931
and 933 to the extent such information
is available,
(vii) such other information relating
to the liability of the taxpayer as is
prescribed by the Secretary by
regulation as might indicate in the
case of a taxpayer who is an individual
described in subsection (i)(4)(B)(iii)
of section 1839 of the Social Security
Act that the amount of the premium of
the taxpayer under such section may be
subject to adjustment under subsection
(i) of such section or increase under
section 1860D-13(a)(7) of such Act and
the amount of such adjustment, and
(viii) the taxable year with respect
to which the preceding information
relates.
(B) Restriction on use of disclosed
information.--
(i) In general.--Return information
disclosed under subparagraph (A) may be
used by officers, employees, and
contractors of the Social Security
Administration only for the purposes
of, and to the extent necessary in,
establishing the appropriate amount of
any premium adjustment under such
section 1839(i) or increase under such
section 1860D-13(a)(7) or for the
purpose of resolving taxpayer appeals
with respect to any such premium
adjustment or increase.
(ii) Disclosure to other agencies.--
Officers, employees, and contractors of
the Social Security Administration may
disclose--
(I) the taxpayer identity
information and the amount of
the premium subsidy adjustment
or premium increase with
respect to a taxpayer described
in subparagraph (A) to
officers, employees, and
contractors of the Centers for
Medicare and Medicaid Services,
to the extent that such
disclosure is necessary for the
collection of the premium
subsidy amount or the increased
premium amount,
(II) the taxpayer identity
information and the amount of
the premium subsidy adjustment
or the increased premium amount
with respect to a taxpayer
described in subparagraph (A)
to officers and employees of
the Office of Personnel
Management and the Railroad
Retirement Board, to the extent
that such disclosure is
necessary for the collection of
the premium subsidy amount or
the increased premium amount,
(III) return information with
respect to a taxpayer described
in subparagraph (A) to officers
and employees of the Department
of Health and Human Services to
the extent necessary to resolve
administrative appeals of such
premium subsidy adjustment or
increased premium, and
(IV) return information with
respect to a taxpayer described
in subparagraph (A) to officers
and employees of the Department
of Justice for use in judicial
proceedings to the extent
necessary to carry out the
purposes described in clause
(i).
(21) Disclosure of return information to carry out
eligibility requirements for certain programs.--
(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human
Services, shall disclose to officers,
employees, and contractors of the Department of
Health and Human Services return information of
any taxpayer whose income is relevant in
determining any premium tax credit under
section 36B or any cost-sharing reduction under
section 1402 of the Patient Protection and
Affordable Care Act or eligibility for
participation in a State medicaid program under
title XIX of the Social Security Act, a State's
children's health insurance program under title
XXI of the Social Security Act, or a basic
health program under section 1331 of Patient
Protection and Affordable Care Act. Such return
information shall be limited to--
(i) taxpayer identity information
with respect to such taxpayer,
(ii) the filing status of such
taxpayer,
(iii) the number of individuals for
whom a deduction is allowed under
section 151 with respect to the
taxpayer (including the taxpayer and
the taxpayer's spouse),
(iv) the modified adjusted gross
income (as defined in section 36B) of
such taxpayer and each of the other
individuals included under clause (iii)
who are required to file a return of
tax imposed by chapter 1 for the
taxable year,
(v) such other information as is
prescribed by the Secretary by
regulation as might indicate whether
the taxpayer is eligible for such
credit or reduction (and the amount
thereof), and
(vi) the taxable year with respect to
which the preceding information relates
or, if applicable, the fact that such
information is not available.
(B) Information to Exchange and State
agencies.--The Secretary of Health and Human
Services may disclose to an Exchange
established under the Patient Protection and
Affordable Care Act or its contractors, or to a
State agency administering a State program
described in subparagraph (A) or its
contractors, any inconsistency between the
information provided by the Exchange or State
agency to the Secretary and the information
provided to the Secretary under subparagraph
(A).
(C) Restriction on use of disclosed
information.--Return information disclosed
under subparagraph (A) or (B) may be used by
officers, employees, and contractors of the
Department of Health and Human Services, an
Exchange, or a State agency only for the
purposes of, and to the extent necessary in--
(i) establishing eligibility for
participation in the Exchange, and
verifying the appropriate amount of,
any credit or reduction described in
subparagraph (A),
(ii) determining eligibility for
participation in the State programs
described in subparagraph (A).
(22) Disclosure of return information to Department
of Health and Human Services for purposes of enhancing
Medicare program integrity.--
(A) In general.--The Secretary shall, upon
written request from the Secretary of Health
and Human Services, disclose to officers and
employees of the Department of Health and Human
Services return information with respect to a
taxpayer who has applied to enroll, or
reenroll, as a provider of services or supplier
under the Medicare program under title XVIII of
the Social Security Act. Such return
information shall be limited to--
(i) the taxpayer identity information
with respect to such taxpayer;
(ii) the amount of the delinquent tax
debt owed by that taxpayer; and
(iii) the taxable year to which the
delinquent tax debt pertains.
(B) Restriction on disclosure.--Return
information disclosed under subparagraph (A)
may be used by officers and employees of the
Department of Health and Human Services for the
purposes of, and to the extent necessary in,
establishing the taxpayer's eligibility for
enrollment or reenrollment in the Medicare
program, or in any administrative or judicial
proceeding relating to, or arising from, a
denial of such enrollment or reenrollment, or
in determining the level of enhanced oversight
to be applied with respect to such taxpayer
pursuant to section 1866(j)(3) of the Social
Security Act.
(C) Delinquent tax debt.--For purposes of
this paragraph, the term ``delinquent tax
debt'' means an outstanding debt under this
title for which a notice of lien has been filed
pursuant to section 6323, but the term does not
include a debt that is being paid in a timely
manner pursuant to an agreement under section
6159 or 7122, or a debt with respect to which a
collection due process hearing under section
6330 is requested, pending, or completed and no
payment is required.
(m) Disclosure of Taxpayer Identity Information.--
(1) Tax refunds.--The Secretary may disclose taxpayer
identity information to the press and other media for
purposes of notifying persons entitled to tax refunds
when the Secretary, after reasonable effort and lapse
of time, has been unable to locate such persons.
(2) Federal claims.--
(A) In general.--Except as provided in
subparagraph (B), the Secretary may, upon
written request, disclose the mailing address
of a taxpayer for use by officers, employees,
or agents of a Federal agency for purposes of
locating such taxpayer to collect or compromise
a Federal claim against the taxpayer in
accordance with sections 3711, 3717, and 3718
of title 31.
(B) Special rule for consumer reporting
agency.--In the case of an agent of a Federal
agency which is a consumer reporting agency
(within the meaning of section 603(f) of the
Fair Credit Reporting Act (15 U.S.C.
1681a(f))), the mailing address of a taxpayer
may be disclosed to such agent under
subparagraph (A) only for the purpose of
allowing such agent to prepare a commercial
credit report on the taxpayer for use by such
Federal agency in accordance with sections
3711, 3717, and 3718 of title 31.
(3) National Institute for Occupational Safety and
Health.--Upon written request, the Secretary may
disclose the mailing address of taxpayers to officers
and employees of the National Institute for
Occupational Safety and Health solely for the purpose
of locating individuals who are, or may have been,
exposed to occupational hazards in order to determine
the status of their health or to inform them of the
possible need for medical care and treatment.
(4) Individuals who owe an overpayment of Federal
Pell Grants or who have defaulted on student loans
administered by the Department of Education.--
(A) In general.--Upon written request by the
Secretary of Education, the Secretary may
disclose the mailing address of any taxpayer--
(i) who owes an overpayment of a
grant awarded to such taxpayer under
subpart 1 of part A of title IV of the
Higher Education Act of 1965, or
(ii) who has defaulted on a loan--
(I) made under part B, D, or
E of title IV of the Higher
Education Act of 1965, or
(II) made pursuant to section
3(a)(1) of the Migration and
Refugee Assistance Act of 1962
to a student at an institution
of higher education,
for use only by officers, employees, or agents
of the Department of Education for purposes of
locating such taxpayer for purposes of
collecting such overpayment or loan.
(B) Disclosure to educational institutions,
etc..--Any mailing address disclosed under
subparagraph (A)(i) may be disclosed by the
Secretary of Education to--
(i) any lender, or any State or
nonprofit guarantee agency, which is
participating under part B or D of
title IV of the Higher Education Act of
1965, or
(ii) any educational institution with
which the Secretary of Education has an
agreement under subpart 1 of part A, or
part D or E, of title IV of such Act,
for use only by officers, employees, or agents
of such lender, guarantee agency, or
institution whose duties relate to the
collection of student loans for purposes of
locating individuals who have defaulted on
student loans made under such loan programs for
purposes of collecting such loans.
(5) Individuals who have defaulted on student loans
administered by the Department of Health and Human
Services.--
(A) In general.--Upon written request by the
Secretary of Health and Human Services, the
Secretary may disclose the mailing address of
any taxpayer who has defaulted on a loan made
under part C of title VII of the Public Health
Service Act or under subpart II of part B of
title VIII of such Act, for use only by
officers, employees, or agents of the
Department of Health and Human Services for
purposes of locating such taxpayer for purposes
of collecting such loan.
(B) Disclosure to schools and eligible
lenders.--Any mailing address disclosed under
subparagraph (A) may be disclosed by the
Secretary of Health and Human Services to--
(i) any school with which the
Secretary of Health and Human Services
has an agreement under subpart II of
part C of title VII of the Public
Health Service Act or subpart II of
part B of title VIII of such Act, or
(ii) any eligible lender (within the
meaning of section 737(4) of such Act)
participating under subpart I of part C
of title VII of such Act,
for use only by officers, employees, or agents
of such school or eligible lender whose duties
relate to the collection of student loans for
purposes of locating individuals who have
defaulted on student loans made under such
subparts for the purposes of collecting such
loans.
(6) Blood Donor Locator Service.--
(A) In general.--Upon written request
pursuant to section 1141 of the Social Security
Act, the Secretary shall disclose the mailing
address of taxpayers to officers and employees
of the Blood Donor Locator Service in the
Department of Health and Human Services.
(B) Restriction on disclosure.--The Secretary
shall disclose return information under
subparagraph (A) only for purposes of, and to
the extent necessary in, assisting under the
Blood Donor Locator Service authorized persons
(as defined in section 1141(h)(1) of the Social
Security Act) in locating blood donors who, as
indicated by donated blood or products derived
therefrom or by the history of the subsequent
use of such blood or blood products, have or
may have the virus for acquired immune
deficiency syndrome, in order to inform such
donors of the possible need for medical care
and treatment.
(C) Safeguards.--The Secretary shall destroy
all related blood donor records (as defined in
section 1141(h)(2) of the Social Security Act)
in the possession of the Department of the
Treasury upon completion of their use in making
the disclosure required under subparagraph (A),
so as to make such records undisclosable.
(7) Social security account statement furnished by
Social Security Administration.--Upon written request
by the Commissioner of Social Security, the Secretary
may disclose the mailing address of any taxpayer who is
entitled to receive a social security account statement
pursuant to section 1143(c) of the Social Security Act,
for use only by officers, employees or agents of the
Social Security Administration for purposes of mailing
such statement to such taxpayer.
(n) Certain Other Persons.--Pursuant to regulations
prescribed by the Secretary, returns and return information may
be disclosed to any person, including any person described in
section 7513(a), to the extent necessary in connection with the
processing, storage, transmission, and reproduction of such
returns and return information, the programming, maintenance,
repair, testing, and procurement of equipment, and the
providing of other services, for purposes of tax
administration.
(o) Disclosure of Returns and Return Information With Respect
to Certain Taxes.--
(1) Taxes imposed by subtitle E.--
(A) In general.--Returns and return
information with respect to taxes imposed by
subtitle E (relating to taxes on alcohol,
tobacco, and firearms) shall be open to
inspection by or disclosure to officers and
employees of a Federal agency whose official
duties require such inspection or disclosure.
(B) Use in certain proceedings.--Returns and
return information disclosed to a Federal
agency under subparagraph (A) may be used in an
action or proceeding (or in preparation for
such action or proceeding) brought under
section 625 of the American Jobs Creation Act
of 2004 for the collection of any unpaid
assessment or penalty arising under such Act.
(2) Taxes imposed by chapter 35.--Returns and return
information with respect to taxes imposed by chapter 35
(relating to taxes on wagering) shall, notwithstanding
any other provision of this section, be open to
inspection by or disclosure only to such person or
persons and for such purpose or purposes as are
prescribed by section 4424.
(p) Procedure and Recordkeeping.--
(1) Manner, time, and place of inspections.--Requests
for the inspection or disclosure of a return or return
information and such inspection or disclosure shall be
made in such manner and at such time and place as shall
be prescribed by the Secretary.
(2) Procedure.--
(A) Reproduction of returns.--A reproduction
or certified reproduction of a return shall,
upon written request, be furnished to any
person to whom disclosure or inspection of such
return is authorized under this section. A
reasonable fee may be prescribed for furnishing
such reproduction or certified reproduction.
(B) Disclosure of return information.--Return
information disclosed to any person under the
provisions of this title may be provided in the
form of written documents, reproductions of
such documents, films or photoimpressions, or
electronically produced tapes, disks, or
records, or by any other mode or means which
the Secretary determines necessary or
appropriate. A reasonable fee may be prescribed
for furnishing such return information.
(C) Use of reproductions.--Any reproduction
of any return, document, or other matter made
in accordance with this paragraph shall have
the same legal status as the original, and any
such reproduction shall, if properly
authenticated, be admissible in evidence in any
judicial or administrative proceeding as if it
were the original, whether or not the original
is in existence.
(3) Records of inspection and disclosure.--
(A) System of recordkeeping.--Except as
otherwise provided by this paragraph, the
Secretary shall maintain a permanent system of
standardized records or accountings of all
requests for inspection or disclosure of
returns and return information (including the
reasons for and dates of such requests) and of
returns and return information inspected or
disclosed under this section and section
6104(c). Notwithstanding the provisions of
section 552a(c) of title 5, United States Code,
the Secretary shall not be required to maintain
a record or accounting of requests for
inspection or disclosure of returns and return
information, or of returns and return
information inspected or disclosed, under the
authority of subsections (c), (e), (f)(5),
(h)(1), (3)(A), or (4), (i)(4), or
(8)(A)(ii),(k)(1), (2),(6), (8), or (9),
(l)(1), (4)(B), (5), (7), (8), (9), (10), (11),
(12), (13), (14), (15), (16), (17), or (18),
(m), or (n). The records or accountings
required to be maintained under this paragraph
shall be available for examination by the Joint
Committee on Taxation or the Chief of Staff of
such joint committee. Such record or accounting
shall also be available for examination by such
person or persons as may be, but only to the
extent, authorized to make such examination
under section 552a(c)(3) of title 5, United
States Code.
(B) Report by the Secretary.--The Secretary
shall, within 90 days after the close of each
calendar year, furnish to the Joint Committee
on Taxation a report with respect to, or
summary of, the records or accountings
described in subparagraph (A) in such form and
containing such information as such joint
committee or the Chief of Staff of such joint
committee may designate. Such report or summary
shall not, however, include a record or
accounting of any request by the President
under subsection (g) for, or the disclosure in
response to such request of, any return or
return information with respect to any
individual who, at the time of such request,
was an officer or employee of the executive
branch of the Federal Government. Such report
or summary, or any part thereof, may be
disclosed by such joint committee to such
persons and for such purposes as the joint
committee may, by record vote of a majority of
the members of the joint committee, determine.
(C) Public report on disclosures.--The
Secretary shall, within 90 days after the close
of each calendar year, furnish to the Joint
Committee on Taxation for disclosure to the
public a report with respect to the records or
accountings described in subparagraph (A)
which--
(i) provides with respect to each
Federal agency, each agency, body, or
commission described in subsection (d),
(i)(3)(B)(i) or (7)(A)(ii), or (l)(6),
and the Government Accountability
Office the number of--
(I) requests for disclosure
of returns and return
information,
(II) instances in which
returns and return information
were disclosed pursuant to such
requests or otherwise,
(III) taxpayers whose
returns, or return information
with respect to whom, were
disclosed pursuant to such
requests, and
(ii) describes the general purposes
for which such requests were made,
(4) Safeguards.--Any Federal agency described in
subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or
(7), (j)(1), (2), or (5), (k)(8), (10), or (11),
(l)(1), (2), (3), (5), (10), (11), (13), (14), (17), or
(22) or (o)(1)(A), the Government Accountability
Office, the Congressional Budget Office, or any agency,
body, or commission described in subsection (d),
(i)(1)(C), (3)(B)(i), or 7(A)(ii), or (k)(10), (l)(6),
(7), (8), (9), (12), (15), or (16), any appropriate
State officer (as defined in section 6104(c)), or any
other person described in subsection (k)(10),
subsection (l)(10), (16), (18), (19), or (20), or any
entity described in subsection (l)(21), shall, as a
condition for receiving returns or return information--
(A) establish and maintain, to the
satisfaction of the Secretary, a permanent
system of standardized records with respect to
any request, the reason for such request, and
the date of such request made by or of it and
any disclosure of return or return information
made by or to it;
(B) establish and maintain, to the
satisfaction of the Secretary, a secure area or
place in which such returns or return
information shall be stored;
(C) restrict, to the satisfaction of the
Secretary, access to the returns or return
information only to persons whose duties or
responsibilities require access and to whom
disclosure may be made under the provisions of
this title;
(D) provide such other safeguards which the
Secretary determines (and which he prescribes
in regulations) to be necessary or appropriate
to protect the confidentiality of the returns
or return information;
(E) furnish a report to the Secretary, at
such time and containing such information as
the Secretary may prescribe, which describes
the procedures established and utilized by such
agency, body, or commission, the Government
Accountability Office, or the Congressional
Budget Office for ensuring the confidentiality
of returns and return information required by
this paragraph; and
(F) upon completion of use of such returns or
return information--
(i) in the case of an agency, body,
or commission described in subsection
(d), (i)(3)(B)(i), (k)(10), or (l)(6),
(7), (8), (9), or (16), any appropriate
State officer (as defined in section
6104(c)), or any other person described
in subsection (k)(10) or subsection
(l)(10), (16), (18), (19), or (20)
return to the Secretary such returns or
return information (along with any
copies made therefrom) or make such
returns or return information
undisclosable in any manner and furnish
a written report to the Secretary
describing such manner,
(ii) in the case of an agency
described in subsections (h)(2),
(h)(5), (i)(1), (2), (3), (5) or (7),
(j)(1), (2), or (5), (k)(8), (10), or
(11), (l)(1), (2), (3), (5), (10),
(11), (12), (13), (14), (15), (17), or
(22), or (o)(1)(A) or any entity
described in subsection (l)(21),,, the
Government Accountability Office, or
the Congressional Budget Office,
either--
(I) return to the Secretary
such returns or return
information (along with any
copies made therefrom),
(II) otherwise make such
returns or return information
undisclosable, or
(III) to the extent not so
returned or made undisclosable,
ensure that the conditions of
subparagraphs (A), (B), (C),
(D), and (E) of this paragraph
continue to be met with respect
to such returns or return
information, and
(iii) in the case of the Department
of Health and Human Services for
purposes of subsection (m)(6), destroy
all such return information upon
completion of its use in providing the
notification for which the information
was obtained, so as to make such
information undisclosable;
except that the conditions of subparagraphs (A), (B),
(C), (D), and (E) shall cease to apply with respect to
any return or return information if, and to the extent
that, such return or return information is disclosed in
the course of any judicial or administrative proceeding
and made a part of the public record thereof. If the
Secretary determines that any such agency, body, or
commission, including an agency, an appropriate State
officer (as defined in section 6104(c)), or any other
person described in subsection (k)(10) or subsection
(l)(10), (16), (18), (19), or (20) or any entity
described in subsection (l)(21),, or the Government
Accountability Office or the Congressional Budget
Office, has failed to, or does not, meet the
requirements of this paragraph, he may, after any
proceedings for review established under paragraph (7),
take such actions as are necessary to ensure such
requirements are met, including refusing to disclose
returns or return information to such agency, body, or
commission, including an agency, an appropriate State
officer (as defined in section 6104(c)), or any other
person described in subsection (k)(10) or subsection
(l)(10), (16), (18), (19), or (20) or any entity
described in subsection (l)(21),, or the Government
Accountability Office or the Congressional Budget
Office, until he determines that such requirements have
been or will be met. In the case of any agency which
receives any mailing address under paragraph (2), (4),
(6), or (7) of subsection (m) and which discloses any
such mailing address to any agent or which receives any
information under paragraph (6)(A), (10), (12)(B), or
(16) of subsection (l) and which discloses any such
information to any agent, or any person including an
agent described in subsection (l)(10) or (16), this
paragraph shall apply to such agency and each such
agent or other person (except that, in the case of an
agent, or any person including an agent described in
subsection (l)(10) or (16), any report to the Secretary
or other action with respect to the Secretary shall be
made or taken through such agency). For purposes of
applying this paragraph in any case to which subsection
(m)(6) applies, the term ``return information''
includes related blood donor records (as defined in
section 1141(h)(2) of the Social Security Act).
(5) Report on procedures and safeguards.--After the
close of each calendar year, the Secretary shall
furnish to each committee described in subsection
(f)(1) a report which describes the procedures and
safeguards established and utilized by such agencies,
bodies, or commissions, the Government Accountability
Office, and the Congressional Budget Office for
ensuring the confidentiality of returns and return
information as required by this subsection. Such report
shall also describe instances of deficiencies in, and
failure to establish or utilize, such procedures.
(6) Audit of procedures and safeguards.--
(A) Audit by Comptroller General.--The
Comptroller General may audit the procedures
and safeguards established by such agencies,
bodies, or commissions and the Congressional
Budget Office pursuant to this subsection to
determine whether such safeguards and
procedures meet the requirements of this
subsection and ensure the confidentiality of
returns and return information. The Comptroller
General shall notify the Secretary before any
such audit is conducted.
(B) Records of inspection and reports by the
Comptroller General.--The Comptroller General
shall--
(i) maintain a permanent system of
standardized records and accountings of
returns and return information
inspected by officers and employees of
the Government Accountability Office
under subsection (i)(8)(A)(ii) and
shall, within 90 days after the close
of each calendar year, furnish to the
Secretary a report with respect to, or
summary of, such records or accountings
in such form and containing such
information as the Secretary may
prescribe, and
(ii) furnish an annual report to each
committee described in subsection (f)
and to the Secretary setting forth his
findings with respect to any audit
conducted pursuant to subparagraph (A).
The Secretary may disclose to the Joint
Committee any report furnished to him under
clause (i).
(7) Administrative review.--The Secretary shall by
regulations prescribe procedures which provide for
administrative review of any determination under
paragraph (4) that any agency, body, or commission
described in subsection (d) has failed to meet the
requirements of such paragraph.
(8) State law requirements.--
(A) Safeguards.--Notwithstanding any other
provision of this section, no return or return
information shall be disclosed after December
31, 1978, to any officer or employee of any
State which requires a taxpayer to attach to,
or include in, any State tax return a copy of
any portion of his Federal return, or
information reflected on such Federal return,
unless such State adopts provisions of law
which protect the confidentiality of the copy
of the Federal return (or portion thereof)
attached to, or the Federal return information
reflected on, such State tax return.
(B) Disclosure of returns or return
information in State returns.--Nothing in
subparagraph (A) or paragraph (9) shall be
construed to prohibit the disclosure by an
officer or employee of any State of any copy of
any portion of a Federal return or any
information on a Federal return which is
required to be attached or included in a State
return to another officer or employee of such
State (or political subdivision of such State)
if such disclosure is specifically authorized
by State law.
(9) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no
return or return information shall be disclosed to any
contractor or other agent of a Federal, State, or local
agency unless such agency, to the satisfaction of the
Secretary--
(A) has requirements in effect which require
each such contractor or other agent which would
have access to returns or return information to
provide safeguards (within the meaning of
paragraph (4)) to protect the confidentiality
of such returns or return information,
(B) agrees to conduct an on-site review every
3 years (or a mid-point review in the case of
contracts or agreements of less than 3 years in
duration) of each contractor or other agent to
determine compliance with such requirements,
(C) submits the findings of the most recent
review conducted under subparagraph (B) to the
Secretary as part of the report required by
paragraph (4)(E), and
(D) certifies to the Secretary for the most
recent annual period that such contractor or
other agent is in compliance with all such
requirements.
The certification required by subparagraph (D) shall
include the name and address of each contractor and
other agent, a description of the contract or agreement
with such contractor or other agent, and the duration
of such contract or agreement. The requirements of this
paragraph shall not apply to disclosures pursuant to
subsection (n) for purposes of Federal tax
administration.
(q) Regulations.--The Secretary is authorized to prescribe
such other regulations as are necessary to carry out the
provisions of this section.
* * * * * * *
CHAPTER 64--COLLECTION
* * * * * * *
Subchapter B--Receipt of Payment
* * * * * * *
SEC. 6311. PAYMENT OF TAX BY COMMERCIALLY ACCEPTABLE MEANS.
(a) Authority to Receive.--It shall be lawful for the
Secretary to receive for internal revenue taxes (or in payment
for internal revenue stamps) any commercially acceptable means
that the Secretary deems appropriate to the extent and under
the conditions provided in regulations prescribed by the
Secretary.
(b) Ultimate Liability.--If a check, money order, or other
method of payment, including payment by credit card, debit
card, or charge card so received is not duly paid, or is paid
and subsequently charged back to the Secretary, the person by
whom such check, or money order, or other method of payment has
been tendered shall remain liable for the payment of the tax or
for the stamps, and for all legal penalties and additions, to
the same extent as if such check, money order, or other method
of payment had not been tendered.
(c) Liability of Banks and Others.--If any certified,
treasurer's, or cashier's check (or other guaranteed draft), or
any money order, or any other means of payment that has been
guaranteed by a financial institution (such as a credit card,
debit card, or charge card transaction which has been
guaranteed expressly by a financial institution) so received is
not duly paid, the United States shall, in addition to its
right to exact payment from the party originally indebted
therefor, have a lien for--
(1) the amount of such check (or draft) upon all
assets of the financial institution on which drawn,
(2) the amount of such money order upon all the
assets of the issuer thereof, or
(3) the guaranteed amount of any other transaction
upon all the assets of the institution making such
guarantee,
and such amount shall be paid out of such assets in preference
to any other claims whatsoever against such financial
institution, issuer, or guaranteeing institution, except the
necessary costs and expenses of administration and the
reimbursement of the United States for the amount expended in
the redemption of the circulating notes of such financial
institution.
(d) Payment by Other Means.--
(1) Authority to prescribe regulations.--The
Secretary shall prescribe such regulations as the
Secretary deems necessary to receive payment by
commercially acceptable means, including regulations
that--
(A) specify which methods of payment by
commercially acceptable means will be
acceptable,
(B) specify when payment by such means will
be considered received,
(C) identify types of nontax matters related
to payment by such means that are to be
resolved by persons ultimately liable for
payment and financial intermediaries, without
the involvement of the Secretary, and
(D) ensure that tax matters will be resolved
by the Secretary, without the involvement of
financial intermediaries.
(2) Authority to enter into contracts.--
Notwithstanding section 3718(f) of title 31, United
States Code, the Secretary is authorized to enter into
contracts to obtain services related to receiving
payment by other means where cost beneficial to the
Government. The Secretary may not pay any fee or
provide any other consideration under any such contract
for the use of credit, debit, or charge cards for the
payment of taxes imposed by subtitle A. The preceding
sentence shall not apply to the extent that the
Secretary ensures that any such fee or other
consideration is fully recouped by the Secretary in the
form of fees paid to the Secretary by persons paying
taxes imposed under subtitle A with credit, debit, or
charge cards pursuant to such contract. Notwithstanding
the preceding sentence, the Secretary shall seek to
minimize the amount of any fee or other consideration
that the Secretary pays under any such contract.
(3) Special provisions for use of credit cards.--If
use of credit cards is accepted as a method of payment
of taxes pursuant to subsection (a)--
(A) a payment of internal revenue taxes (or a
payment for internal revenue stamps) by a
person by use of a credit card shall not be
subject to section 161 of the Truth in Lending
Act (15 U.S.C. 1666), or to any similar
provisions of State law, if the error alleged
by the person is an error relating to the
underlying tax liability, rather than an error
relating to the credit card account such as a
computational error or numerical transposition
in the credit card transaction or an issue as
to whether the person authorized payment by use
of the credit card,
(B) a payment of internal revenue taxes (or a
payment for internal revenue stamps) shall not
be subject to section 170 of the Truth in
Lending Act (15 U.S.C. 1666i), or to any
similar provisions of State law,
(C) a payment of internal revenue taxes (or a
payment for internal revenue stamps) by a
person by use of a debit card shall not be
subject to section 908 of the Electronic Fund
Transfer Act (15 U.S.C. 1693f), or to any
similar provisions of State law, if the error
alleged by the person is an error relating to
the underlying tax liability, rather than an
error relating to the debit card account such
as a computational error or numerical
transposition in the debit card transaction or
an issue as to whether the person authorized
payment by use of the debit card,
(D) the term ``creditor'' under section
103(f) of the Truth in Lending Act (15 U.S.C.
1602(f)) shall not include the Secretary with
respect to credit card transactions in payment
of internal revenue taxes (or payment for
internal revenue stamps), and
(E) notwithstanding any other provision of
law to the contrary, in the case of payment
made by credit card or debit card transaction
of an amount owed to a person as the result of
the correction of an error under section 161 of
the Truth in Lending Act (15 U.S.C. 1666) or
section 908 of the Electronic Fund Transfer Act
(15 U.S.C. 1693f), the Secretary is authorized
to provide such amount to such person as a
credit to that person's credit card or debit
card account through the applicable credit card
or debit card system.
(e) Confidentiality of Information.--
(1) In general.--Except as otherwise authorized by
this subsection, no person may use or disclose any
information relating to credit or debit card
transactions obtained pursuant to section 6103(k)(9)
other than for purposes directly related to the
processing of such transactions, or the billing or
collection of amounts charged or debited pursuant
thereto.
(2) Exceptions.--
(A) Debit or credit card issuers or others
acting on behalf of such issuers may also use
and disclose such information for purposes
directly related to servicing an issuer's
accounts.
(B) Debit or credit card issuers or others
directly involved in the processing of credit
or debit card transactions or the billing or
collection of amounts charged or debited
thereto may also use and disclose such
information for purposes directly related to--
(i) statistical risk and
profitability assessment;
(ii) transferring receivables,
accounts, or interest therein;
(iii) auditing the account
information;
(iv) complying with Federal, State,
or local law; and
(v) properly authorized civil,
criminal, or regulatory investigation
by Federal, State, or local
authorities.
(3) Procedures.--Use and disclosure of information
under this paragraph shall be made only to the extent
authorized by written procedures promulgated by the
Secretary.
(4) Cross reference.--For provision providing for
civil damages for violation of paragraph (1), see
section 7431.
* * * * * * *
CHAPTER 75--CRIMES, OTHER OFFENSES, AND FORFEITURES
* * * * * * *
Subchapter A--Crimes
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 7213. UNAUTHORIZED DISCLOSURE OF INFORMATION.
(a) Returns and Return Information.--
(1) Federal employees and other persons.--It shall be
unlawful for any officer or employee of the United
States or any person described in section 6103(n) (or
an officer or employee of any such person), or any
former officer or employee, willfully to disclose to
any person, except as authorized in this title, any
return or return information (as defined in section
6103(b)). Any violation of this paragraph shall be a
felony punishable upon conviction by a fine in any
amount not exceeding $5,000, or imprisonment of not
more than 5 years, or both, together with the costs of
prosecution, and if such offense is committed by any
officer or employee of the United States, he shall, in
addition to any other punishment, be dismissed from
office or discharged from employment upon conviction
for such offense.
(2) State and other employees.--It shall be unlawful
for any person (not described in paragraph (1))
willfully to disclose to any person, except as
authorized in this title, any return or return
information (as defined in section 6103(b)) acquired by
him or another person under subsection (d), (i)(1)(C),
(3)(B)(i), or (7)(A)(ii), (k)(10) or (13), (l)(6), (7),
(8), (9), (10), (12), (15), (16), (19), (20), or (21)
or (m)(2), (4), (5), (6), or (7) of section 6103 or
under section 6104(c). Any violation of this paragraph
shall be a felony punishable by a fine in any amount
not exceeding $5,000, or imprisonment of not more than
5 years, or both, together with the costs of
prosecution.
(3) Other persons.--It shall be unlawful for any
person to whom any return or return information (as
defined in section 6103(b)) is disclosed in a manner
unauthorized by this title thereafter willfully to
print or publish in any manner not provided by law any
such return or return information. Any violation of
this paragraph shall be a felony punishable by a fine
in any amount not exceeding $5,000, or imprisonment of
not more than 5 years, or both, together with the costs
of prosecution.
(4) Solicitation.--It shall be unlawful for any
person willfully to offer any item of material value in
exchange for any return or return information (as
defined in section 6103(b)) and to receive as a result
of such solicitation any such return or return
information. Any violation of this paragraph shall be a
felony punishable by a fine in any amount not exceeding
$5,000, or imprisonment of not more than 5 years, or
both, together with the costs of prosecution.
(5) Shareholders.--It shall be unlawful for any
person to whom a return or return information (as
defined in section 6103(b)) is disclosed pursuant to
the provisions of section 6103(e)(1)(D)(iii) willfully
to disclose such return or return information in any
manner not provided by law. Any violation of this
paragraph shall be a felony punishable by a fine in any
amount not to exceed $5,000, or imprisonment of not
more than 5 years, or both, together with the costs of
prosecution.
(b) Disclosure of Operations of Manufacturer or Producer.--
Any officer or employee of the United States who divulges or
makes known in any manner whatever not provided by law to any
person the operations, style of work, or apparatus of any
manufacturer or producer visited by him in the discharge of his
official duties shall be guilty of a misdemeanor and, upon
conviction thereof, shall be fined not more than $1,000, or
imprisoned not more than 1 year, or both, together with the
costs of prosecution; and the offender shall be dismissed from
office or discharged from employment.
(c) Disclosures by Certain Delegates of Secretary.--All
provisions of law relating to the disclosure of information,
and all provisions of law relating to penalties for
unauthorized disclosure of information, which are applicable in
respect of any function under this title when performed by an
officer or employee of the Treasury Department are likewise
applicable in respect of such function when performed by any
person who is a ``delegate'' within the meaning of section
7701(a)(12)(B).
(d) Disclosure of Software.--Any person who willfully
divulges or makes known software (as defined in section
7612(d)(1)) to any person in violation of section 7612 shall be
guilty of a felony and, upon conviction thereof, shall be fined
not more than $5,000, or imprisoned not more than 5 years, or
both, together with the costs of prosecution.
(e) Cross References.--
(1) Penalties for disclosure of information by
preparers of returns.--For penalty for disclosure or
use of information by preparers of returns, see section
7216.
(2) Penalties for disclosure of confidential
information For penalties for disclosure of
confidential information by.--any officer or employee
of the United States or any department or agency
thereof, see 18 U.S.C. 1905.
* * * * * * *
CHAPTER 80--GENERAL RULES
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Subchapter A--Application of Internal Revenue Laws
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SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.
(a) Commissioner of Internal Revenue.--
(1) Appointment.--
(A) In general.--There shall be in the
Department of the Treasury a Commissioner of
Internal Revenue who shall be appointed by the
President, by and with the advice and consent
of the Senate. Such appointment shall be made
from individuals who, among other
qualifications, have a demonstrated ability in
management.
(B) Term.--The term of the Commissioner of
Internal Revenue shall be a 5-year term,
beginning with a term to commence on November
13, 1997. Each subsequent term shall begin on
the day after the date on which the previous
term expires.
(C) Vacancy.--Any individual appointed as
Commissioner of Internal Revenue during a term
as defined in subparagraph (B) shall be
appointed for the remainder of that term.
(D) Removal.--The Commissioner may be removed
at the will of the President.
(E) Reappointment.--The Commissioner may be
appointed to serve more than one term.
(2) Duties.--The Commissioner shall have such duties
and powers as the Secretary may prescribe, including
the power to--
(A) administer, manage, conduct, direct, and
supervise the execution and application of the
internal revenue laws or related statutes and
tax conventions to which the United States is a
party; and
(B) recommend to the President a candidate
for appointment as Chief Counsel for the
Internal Revenue Service when a vacancy occurs,
and recommend to the President the removal of
such Chief Counsel.
If the Secretary determines not to delegate a power
specified in subparagraph (A) or (B), such
determination may not take effect until 30 days after
the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Execution of duties in accord with taxpayer
rights.--In discharging his duties, the Commissioner
shall ensure that employees of the Internal Revenue
Service are familiar with and act in accord with
taxpayer rights as afforded by other provisions of this
title, including--
(A) the right to be informed,
(B) the right to quality service,
(C) the right to pay no more than the correct
amount of tax,
(D) the right to challenge the position of
the Internal Revenue Service and be heard,
(E) the right to appeal a decision of the
Internal Revenue Service in an independent
forum,
(F) the right to finality,
(G) the right to privacy,
(H) the right to confidentiality,
(I) the right to retain representation, and
(J) the right to a fair and just tax system.
(4) Consultation with Board.--The Commissioner shall
consult with the Oversight Board on all matters set
forth in paragraphs (2) and (3) (other than paragraph
(3)(A)) of section 7802(d).
(b) Chief Counsel for the Internal Revenue Service.--
(1) Appointment.--There shall be in the Department of
the Treasury a Chief Counsel for the Internal Revenue
Service who shall be appointed by the President, by and
with the consent of the Senate.
(2) Duties.--The Chief Counsel shall be the chief law
officer for the Internal Revenue Service and shall
perform such duties as may be prescribed by the
Secretary, including the duty--
(A) to be legal advisor to the Commissioner
and the Commissioner's officers and employees;
(B) to furnish legal opinions for the
preparation and review of rulings and memoranda
of technical advice;
(C) to prepare, review, and assist in the
preparation of proposed legislation, treaties,
regulations, and Executive orders relating to
laws which affect the Internal Revenue Service;
(D) to represent the Commissioner in cases
before the Tax Court; and
(E) to determine which civil actions should
be litigated under the laws relating to the
Internal Revenue Service and prepare
recommendations for the Department of Justice
regarding the commencement of such actions.
If the Secretary determines not to delegate a power
specified in subparagraph (A), (B), (C), (D), or (E),
such determination may not take effect until 30 days
after the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Persons to whom Chief Counsel reports.--The Chief
Counsel shall report directly to the Commissioner of
Internal Revenue, except that--
(A) the Chief Counsel shall report to both
the Commissioner and the General Counsel for
the Department of the Treasury with respect
to--
(i) legal advice or interpretation of
the tax law not relating solely to tax
policy;
(ii) tax litigation; and (B) the
Chief Counsel shall report to the
General Counsel with respect to legal
advice or interpretation of the tax law
relating solely to tax policy.
If there is any disagreement between the Commissioner
and the General Counsel with respect to any matter
jointly referred to them under subparagraph (A), such
matter shall be submitted to the Secretary or Deputy
Secretary for resolution.
(4) Chief Counsel personnel.--All personnel in the
Office of Chief Counsel shall report to the Chief
Counsel.
(c) Office of the Taxpayer Advocate.--
(1) Establishment.--
(A) In general.--There is established in the
Internal Revenue Service an office to be known
as the ``Office of the Taxpayer Advocate''.
(B) National Taxpayer Advocate.--
(i) In general.--The Office of the
Taxpayer Advocate shall be under the
supervision and direction of an
official to be known as the ``National
Taxpayer Advocate''. The National
Taxpayer Advocate shall report directly
to the Commissioner of Internal Revenue
and shall be entitled to compensation
at the same rate as the highest rate of
basic pay established for the Senior
Executive Service under section 5382 of
title 5, United States Code, or, if the
Secretary of the Treasury so
determines, at a rate fixed under
section 9503 of such title.
(ii) Appointment.--The National
Taxpayer Advocate shall be appointed by
the Secretary of the Treasury after
consultation with the Commissioner of
Internal Revenue and the Oversight
Board and without regard to the
provisions of title 5, United States
Code, relating to appointments in the
competitive service or the Senior
Executive Service.
(iii) Qualifications.--An individual
appointed under clause (ii) shall
have--
(I) a background in customer
service as well as tax law; and
(II) experience in
representing individual
taxpayers.
(iv) Restriction on employment.--An
individual may be appointed as the
National Taxpayer Advocate only if such
individual was not an officer or
employee of the Internal Revenue
Service during the 2-year period ending
with such appointment and such
individual agrees not to accept any
employment with the Internal Revenue
Service for at least 5 years after
ceasing to be the National Taxpayer
Advocate. Service as an officer or
employee of the Office of the Taxpayer
Advocate shall not be taken into
account in applying this clause.
(2) Functions of office.--
(A) In general.--It shall be the function of
the Office of the Taxpayer Advocate to--
(i) assist taxpayers in resolving
problems with the Internal Revenue
Service;
(ii) identify areas in which
taxpayers have problems in dealings
with the Internal Revenue Service;
(iii) to the extent possible, propose
changes in the administrative practices
of the Internal Revenue Service to
mitigate problems identified under
clause (ii); and
(iv) identify potential legislative
changes which may be appropriate to
mitigate such problems.
(B) Annual reports.--
(i) Objectives.--Not later than June
30 of each calendar year, the National
Taxpayer Advocate shall report to the
Committee on Ways and Means of the
House of Representatives and the
Committee on Finance of the Senate on
the objectives of the Office of the
Taxpayer Advocate for the fiscal year
beginning in such calendar year. Any
such report shall contain full and
substantive analysis, in addition to
statistical information.
(ii) Activities.--Not later than
December 31 of each calendar year, the
National Taxpayer Advocate shall report
to the Committee on Ways and Means of
the House of Representatives and the
Committee on Finance of the Senate on
the activities of the Office of the
Taxpayer Advocate during the fiscal
year ending during such calendar year.
Any such report shall contain full and
substantive analysis, in addition to
statistical information, and shall--
(I) identify the initiatives
the Office of the Taxpayer
Advocate has taken on improving
taxpayer services and Internal
Revenue Service responsiveness;
(II) contain recommendations
received from individuals with
the authority to issue Taxpayer
Assistance Orders under section
7811;
(III) contain a summary of at
least 20 of the most serious
problems encountered by
taxpayers, including a
description of the nature of
such problems;
(IV) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action has been taken
and the result of such action;
(V) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action remains to be
completed and the period during
which each item has remained on
such inventory;
(VI) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which no action has been
taken, the period during which
each item has remained on such
inventory, the reasons for the
inaction, and identify any
Internal Revenue Service
official who is responsible for
such inaction;
(VII) identify any Taxpayer
Assistance Order which was not
honored by the Internal Revenue
Service in a timely manner, as
specified under section
7811(b);
(VIII) contain
recommendations for such
administrative and legislative
action as may be appropriate to
resolve problems encountered by
taxpayers;
(IX) identify areas of the
tax law that impose significant
compliance burdens on taxpayers
or the Internal Revenue
Service, including specific
recommendations for remedying
these problems;
(X) identify the 10 most
litigated issues for each
category of taxpayers,
including recommendations for
mitigating such disputes; and
(XI) include such other
information as the National
Taxpayer Advocate may deem
advisable.
(iii) Report to be submitted
directly.--Each report required under
this subparagraph shall be provided
directly to the committees described in
clause (i) without any prior review or
comment from the Commissioner, the
Secretary of the Treasury, the
Oversight Board, any other officer or
employee of the Department of the
Treasury, or the Office of Management
and Budget.
(iv) Coordination with report of
Treasury Inspector General for Tax
Administration.--To the extent that
information required to be reported
under clause (ii) is also required to
be reported under paragraph (1) or (2)
of subsection (d) by the Treasury
Inspector General for Tax
Administration, the National Taxpayer
Advocate shall not contain such
information in the report submitted
under such clause.
(C) Other responsibilities.--The National
Taxpayer Advocate shall--
(i) monitor the coverage and
geographic allocation of local offices
of taxpayer advocates;
(ii) develop guidance to be
distributed to all Internal Revenue
Service officers and employees
outlining the criteria for referral of
taxpayer inquiries to local offices of
taxpayer advocates;
(iii) ensure that the local telephone
number for each local office of the
taxpayer advocate is published and
available to taxpayers served by the
office; and
(iv) in conjunction with the
Commissioner, develop career paths for
local taxpayer advocates choosing to
make a career in the Office of the
Taxpayer Advocate.
(D) Personnel actions.--
(i) In general.--The National
Taxpayer Advocate shall have the
responsibility and authority to--
(I) appoint local taxpayer
advocates and make available at
least 1 such advocate for each
State; and
(II) evaluate and take
personnel actions (including
dismissal) with respect to any
employee of any local office of
a taxpayer advocate described
in subclause (I).
(ii) Consultation.--The National
Taxpayer Advocate may consult with the
appropriate supervisory personnel of
the Internal Revenue Service in
carrying out the National Taxpayer
Advocate's responsibilities under this
subparagraph.
(3) Responsibilities of Commissioner.--The
Commissioner shall establish procedures requiring a
formal response to all recommendations submitted to the
Commissioner by the National Taxpayer Advocate within 3
months after submission to the Commissioner.
(4) Operation of local offices.--
(A) In general.--Each local taxpayer
advocate--
(i) shall report to the National
Taxpayer Advocate or delegate thereof;
(ii) may consult with the appropriate
supervisory personnel of the Internal
Revenue Service regarding the daily
operation of the local office of the
taxpayer advocate;
(iii) shall, at the initial meeting
with any taxpayer seeking the
assistance of a local office of the
taxpayer advocate, notify such taxpayer
that the taxpayer advocate offices
operate independently of any other
Internal Revenue Service office and
report directly to Congress through the
National Taxpayer Advocate; and
(iv) may, at the taxpayer advocate's
discretion, not disclose to the
Internal Revenue Service contact with,
or information provided by, such
taxpayer.
(B) Maintenance of independent
communications.--Each local office of the
taxpayer advocate shall maintain a separate
phone, facsimile, and other electronic
communication access, and a separate post
office address.
(d) Additional Duties of the Treasury Inspector General for
Tax Administration.--
(1) Annual reporting.--The Treasury Inspector General
for Tax Administration shall include in one of the
semiannual reports under section 5 of the Inspector
General Act of 1978--
(A) an evaluation of the compliance of the
Internal Revenue Service with--
(i) restrictions under section 1204
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
the use of enforcement statistics to
evaluate Internal Revenue Service
employees;
(ii) restrictions under section 7521
on directly contacting taxpayers who
have indicated that they prefer their
representatives be contacted;
(iii) required procedures under
section 6320 upon the filing of a
notice of a lien;
(iv) required procedures under
subchapter D of chapter 64 for seizure
of property for collection of taxes,
including required procedures under
section 6330 regarding levies; and
(v) restrictions under section 3707
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
designation of taxpayers;
(B) a review and a certification of whether
or not the Secretary is complying with the
requirements of section 6103(e)(8) to disclose
information to an individual filing a joint
return on collection activity involving the
other individual filing the return;
(C) information regarding extensions of the
statute of limitations for assessment and
collection of tax under section 6501 and the
provision of notice to taxpayers regarding
requests for such extension;
(D) an evaluation of the adequacy and
security of the technology of the Internal
Revenue Service;
(E) any termination or mitigation under
section 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998;
(F) information regarding improper denial of
requests for information from the Internal
Revenue Service identified under paragraph
(3)(A); and
(G) information regarding any administrative
or civil actions with respect to violations of
the fair debt collection provisions of section
6304, including--
(i) a summary of such actions
initiated since the date of the last
report; and
(ii) a summary of any judgments or
awards granted as a result of such
actions.
(2) Semiannual reports.--
(A) In general.--The Treasury Inspector
General for Tax Administration shall include in
each semiannual report under section 5 of the
Inspector General Act of 1978--
(i) the number of taxpayer complaints
during the reporting period;
(ii) the number of employee
misconduct and taxpayer abuse
allegations received by the Internal
Revenue Service or the Inspector
General during the period from
taxpayers, Internal Revenue Service
employees, and other sources;
(iii) a summary of the status of such
complaints and allegations; and
(iv) a summary of the disposition of
such complaints and allegations,
including the outcome of any Department
of Justice action and any monies paid
as a settlement of such complaints and
allegations.
(B) Clauses (iii) and (iv) of subparagraph
(A) shall only apply to complaints and
allegations of serious employee misconduct.
(3) Other responsibilities.--The Treasury Inspector
General for Tax Administration shall--
(A) conduct periodic audits of a
statistically valid sample of the total number
of determinations made by the Internal Revenue
Service to deny written requests to disclose
information to taxpayers on the basis of
section 6103 of this title or section 552(b)(7)
of title 5, United States Code;
(B) establish and maintain a toll-free
telephone number for taxpayers to use to
confidentially register complaints of
misconduct by Internal Revenue Service
employees and incorporate the telephone number
in the statement required by section 6227 of
the Omnibus Taxpayer Bill of Rights (Internal
Revenue Service Publication No. 1); and
(C) not later than December 31, 2010, submit
a written report to Congress on the
implementation of section 6103(k)(10).
(f) Internal Revenue Service Chief Information Officer.--
(1) In general.--There shall be in the Internal
Revenue Service an Internal Revenue Service Chief
Information Officer (hereafter referred to in this
subsection as the ``IRS CIO'') who shall be appointed
by the Administrator of the Internal Revenue Service.
(2) Centralized responsibility for internal revenue
service information technology.--The Administrator of
the Internal Revenue Service (and the Secretary) shall
act through the IRS CIO with respect to all
development, implementation, and maintenance of
information technology for the Internal Revenue
Service. Any reference in this subsection to the IRS
CIO which directs the IRS CIO to take any action, or to
assume any responsibility, shall be treated as a
reference to the Administrator of the Internal Revenue
Service acting through the IRS CIO.
(3) General duties and responsibilities.--The IRS CIO
shall--
(A) be responsible for the development,
implementation, and maintenance of information
technology for the Internal Revenue Service,
(B) ensure that the information technology of
the Internal Revenue Service is secure and
integrated,
(C) maintain operational control of all
information technology for the Internal Revenue
Service,
(D) be the principal advocate for the
information technology needs of the Internal
Revenue Service, and
(E) consult with the Chief Procurement
Officer of the Internal Revenue Service to
ensure that the information technology acquired
for the Internal Revenue Service is consistent
with--
(i) the goals and requirements
specified in subparagraphs (A) through
(D), and
(ii) the strategic plan developed
under paragraph (4).
(4) Strategic plan.--
(A) In general.--The IRS CIO shall develop
and implement a multiyear strategic plan for
the information technology needs of the
Internal Revenue Service. Such plan shall--
(i) include performance measurements
of such technology and of the
implementation of such plan,
(ii) include a plan for an integrated
enterprise architecture of the
information technology of the Internal
Revenue Service,
(iii) include and take into account
the resources needed to accomplish such
plan,
(iv) take into account planned major
acquisitions of information technology
by the Internal Revenue Service,
including Customer Account Data Engine
2 and the Enterprise Case Management
System, and
(v) align with the needs and
strategic plan of the Internal Revenue
Service.
(B) Plan updates.--The IRS CIO shall, not
less frequently than annually, review and
update the strategic plan under subparagraph
(A) (including the plan for an integrated
enterprise architecture described in
subparagraph (A)(ii)) to take into account the
development of new information technology and
the needs of the Internal Revenue Service.
(5) Scope of authority.--
(A) Information technology.--For purposes of
this subsection, the term ``information
technology'' has the meaning given such term by
section 11101 of title 40, United States Code.
(B) Internal revenue service.--Any reference
in this subsection to the Internal Revenue
Service includes a reference to all components
of the Internal Revenue Service, including--
(i) the Office of the Taxpayer
Advocate,
(ii) the Criminal Investigation
Division of the Internal Revenue
Service, and
(iii) except as otherwise provided by
the Secretary with respect to
information technology related to
matters described in subsection
(b)(3)(B), the Office of the Chief
Counsel.
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