S.3432 - Identity Theft and Tax Fraud Prevention Act
A bill to prevent identity theft and tax fraud.
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SECTION 1. SHORT TITLE.
SEC. 2. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION WITH TAX FRAUD.
‘(b) Use of False Identity- Any person who willfully misappropriates another person’s taxpayer identity (as defined in section 6103(b)(6)) for the purpose of making any list, return, account, statement, or other document submitted to the Secretary under the provisions of this title shall be guilty of a felony and, upon conviction thereof, shall be fined not more than $250,000 ($500,000 in the case of a corporation) or imprisoned not more than 5 years, or both, together with the costs of prosecution.’.CommentsClose CommentsPermalink
(b) Aggravated Identity Theft-
SEC. 3. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS.
SEC. 4. PIN SYSTEM FOR PREVENTION OF IDENTITY THEFT TAX FRAUD.
(a) In General- Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall implement an identity theft tax fraud prevention program under which--CommentsClose CommentsPermalink
(2) the Secretary will provide additional identity verification safeguards for the processing of any Federal tax return filed by a person described in paragraph (1) in cases where a unique personal identification number is not included on the return.CommentsClose CommentsPermalink
SEC. 5. AUTHORITY TO TRANSFER INTERNAL REVENUE SERVICE APPROPRIATIONS TO USE FOR TAX FRAUD ENFORCEMENT.
For any fiscal year, the Commissioner of Internal Revenue may transfer not more than $10,000,000 to the ‘Enforcement’ account of the Internal Revenue Service from amounts appropriated to other Internal Revenue Service accounts. Any amounts so transferred shall be used solely for the purposes of preventing and resolving potential cases of tax fraud.CommentsClose CommentsPermalink
SEC. 6. LOCAL LAW ENFORCEMENT LIAISON.
(a) Establishment- The Commissioner of Internal Revenue shall establish within the Criminal Investigation Division of the Internal Revenue Service the position of Local Law Enforcement Liaison.CommentsClose CommentsPermalink
(b) Duties- The Local Law Enforcement Liaison shall serve as the primary source of contact for State and local law enforcement authorities with respect to tax-related identity theft and other tax fraud matters, having duties that may include--CommentsClose CommentsPermalink
SEC. 7. REPORT ON TAX FRAUD.
‘(4) ANNUAL REPORT ON TAX FRAUD- The Commissioner shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives an annual report detailing--CommentsClose CommentsPermalink
SEC. 8. STUDY ON THE USE OF PREPAID DEBIT CARDS AND COMMERCIAL TAX PREPARATION SOFTWARE IN TAX FRAUD.
(a) In General- The Comptroller General of the United States shall conduct a study to examine the role of prepaid debit cards and commercial tax preparation software in facilitating fraudulent tax returns through identity theft.CommentsClose CommentsPermalink
(b) Report- Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report with the results of the study conducted under subsection (a), together with any recommendations.CommentsClose CommentsPermalink
SEC. 9. RESTRICTION ON ACCESS TO THE DEATH MASTER FILE.
(a) In General- The Secretary of Commerce shall not disclose information contained on the Death Master File to any person with respect to any individual who has died at any time during the calendar year in which the request for disclosure is made or the succeeding 2 calendar years unless such person is certified under the program established under subsection (b).CommentsClose CommentsPermalink
(B) the Secretary of Commerce verifies that such person has facilities and procedures in place to safeguard such information, and experience in maintaining the confidentiality, security, and appropriate use of such information.CommentsClose CommentsPermalink
(3) FEES- The Secretary of Commerce shall establish under
(c) Imposition of Penalty- Any person who is certified under the program established under subsection (b), who receives information described in subsection (a), and who during the period of time described in subsection (a)--CommentsClose CommentsPermalink
shall pay a penalty of $1,000 for each such disclosure or use, but the total amount imposed under this subsection on such a person for any calendar year shall not exceed $50,000.CommentsClose CommentsPermalink
(1) IN GENERAL- The Social Security Administration shall not be compelled to disclose to any person who is not certified under the program established under subsection (b) the information described in subsection (a).CommentsClose CommentsPermalink
(2) TREATMENT OF INFORMATION- For purposes of
SEC. 10. PROHIBITING THE DISPLAY OF SOCIAL SECURITY ACCOUNT NUMBERS ON NEWLY ISSUED MEDICARE IDENTIFICATION CARDS AND COMMUNICATIONS PROVIDED TO MEDICARE BENEFICIARIES.
(a) In General- Not later than 2 years after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, shall establish and begin to implement procedures to eliminate the unnecessary collection, use, and display of Social Security account numbers of Medicare beneficiaries.CommentsClose CommentsPermalink
(A) IN GENERAL- Not later than 4 years after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, shall ensure that each newly issued Medicare identification card meets the requirements described in subparagraph (B).CommentsClose CommentsPermalink
(i) IN GENERAL- Subject to clauses (ii) and (iii), the requirements described in this subparagraph are, with respect to a Medicare identification card, that the card does not display or electronically store (in an unencrypted format) a Medicare beneficiary’s Social Security account number.CommentsClose CommentsPermalink
(ii) EXCEPTION- The Secretary may waive the requirements under clause (i) in the case where the health insurance claim number of a beneficiary is the Social Security number of the beneficiary, the beneficiary’s spouse, or another individual.CommentsClose CommentsPermalink
(iii) USE OF PARTIAL ACCOUNT NUMBER- The Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, may provide for the use of a partial Social Security account number on a Medicare identification card if the Secretary determines that such use does not allow an unacceptable risk of fraudulent use.CommentsClose CommentsPermalink
(2) COMMUNICATIONS PROVIDED TO BENEFICIARIES- Not later than 4 years after the date of enactment of this Act, the Secretary of Health and Human Services shall prohibit the display of a Medicare beneficiary’s Social Security account number on written or electronic communication provided to the beneficiary unless the Secretary, in consultation with the Commissioner of Social Security, determines that inclusion of Social Security account numbers on such communications is essential for the operation of the Medicare program.CommentsClose CommentsPermalink
(c) Medicare Beneficiary Defined- In this section, the term ‘Medicare beneficiary’ means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act or enrolled under part B of such title.CommentsClose CommentsPermalink
‘(xiii) Subject to section 203 of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act, social security account numbers shall not be displayed on Medicare identification cards or on communications provided to Medicare beneficiaries.’.CommentsClose CommentsPermalink
‘(10) To prevent and identify fraudulent activity, the Commissioner shall upon the request of the Attorney General or upon the request of the Secretary of Health and Human Services enter into a reimbursable agreement with the Attorney General or the Secretary to provide information collected under paragraph (1) if--CommentsClose CommentsPermalink
(A) the applicability of smart card technology to the Medicare program under title XVIII of the Social Security Act (
(3) REPORT- Not later than 12 months after the completion of the pilot program under this subsection, the Secretary shall submit to the appropriate committees of Congress and make available to the public a report that includes the following:CommentsClose CommentsPermalink
(A) MEDICARE BENEFICIARY- The term ‘Medicare beneficiary’ means an individual entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (
(B) MEDICARE PROVIDER- The term ‘Medicare provider’ includes a provider of services (as defined in section 1861(u) of the Social Security Act (
SEC. 11. IMPROVE AND MAKE PERMANENT THE PROVISION AUTHORIZING THE INTERNAL REVENUE SERVICE TO DISCLOSE 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.CommentsClose CommentsPermalink
‘(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.CommentsClose CommentsPermalink
‘(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.CommentsClose CommentsPermalink
‘(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.CommentsClose CommentsPermalink
‘(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.’.CommentsClose CommentsPermalink
SEC. 12. TREASURY REPORT ON INFORMATION SHARING BARRIERS WITH RESPECT TO IDENTITY THEFT.
(1) IN GENERAL- The Secretary of the Treasury (or the Secretary’s delegate) shall review whether current Federal tax laws and regulations related to the confidentiality and disclosure of return information prevent the effective enforcement of local, State, and Federal identity theft statutes. The review shall consider whether greater information sharing between the Internal Revenue Service and State and local law enforcement authorities would improve the enforcement of criminal laws at all levels of government.CommentsClose CommentsPermalink
(2) CONSULTATION- In conducting the review under paragraph (1), the Secretary of the Treasury (or the Secretary’s delegate) shall solicit the views of, and consult with, State and local law enforcement officials.CommentsClose CommentsPermalink
(b) Report- Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall submit a report with the results of the review conducted under subsection (a), along with any legislative recommendations, to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.CommentsClose CommentsPermalink