Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?



114th Congress    }                                  {   Rept. 114-567
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                  {          Part 1

======================================================================



 
          STOLEN IDENTITY REFUND FRAUD PREVENTION ACT OF 2016

                                _______
                                

  May 13, 2016.--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. 3832]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 3832) to amend the Internal Revenue Code of 1986 to 
prevent tax-related identity theft and tax fraud, 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............................................4
        A. Purpose and Summary...................................     4
        B. Background and Need for Legislation...................     4
        C. Legislative History...................................     6
II. EXPLANATION OF THE BILL...........................................6
        A. Centralized Point of Contact for Identity Theft 
            Victims (sec. 2 of the bill).........................     6
        B. Taxpayer Notification of Suspected Identity Theft 
            (sec. 3 of the bill and new sec. 7529 of the Code)...     7
        C. Electronic Filing Opt-Out Feasibility Study (sec. 4 of 
            the bill)............................................     9
        D. Criminal Penalty for Using a False Identity in 
            Connection with Tax Fraud (sec. 5 of the bill).......    10
        E. Improvement in Access to Information Under the Do Not 
            Pay Initiative (sec. 6 of the bill)..................    11
        F. Require the IRS to Prepare a Report on Identity Theft 
            Refund Fraud (sec. 7 of the bill)....................    12
        G. Require the IRS to Establish an Information-Sharing 
            and Analysis Center (sec. 8 of the bill).............    13
        H. Local Law Enforcement Liaison (sec. 9 of the bill)....    14
        I. IRS Phone Scam Report (sec. 10 of the bill)...........    14
        J. Providing Identity Theft Prevention Information While 
            on Hold with Internal Revenue Service (sec. 11 of the 
            bill)................................................    15
III.VOTES OF THE COMMITTEE...........................................16

IV. BUDGET EFFECTS OF THE BILL.......................................16
        A. Committee Estimate of Budgetary Effects...............    16
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................    17
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    17
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE.......18
        A. Committee Oversight Findings and Recommendations......    18
        B. Statement of General Performance Goals and Objectives.    18
        C. Information Relating to Unfunded Mandates.............    18
        D. Applicability of House Rule XXI 5(b)..................    18
        E. Tax Complexity Analysis...............................    19
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................    19
        G. Duplication of Federal Programs.......................    19
        H. Disclosure of Directed Rule Makings...................    19
VI.  CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED...........20
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................    20
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    22

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Stolen Identity Refund Fraud 
Prevention Act of 2016''.

SEC. 2. CENTRALIZED POINT OF CONTACT FOR IDENTITY THEFT VICTIMS.

  The Secretary of the Treasury, or the Secretary's delegate, shall 
establish and maintain an office at the Internal Revenue Service and 
procedures to ensure that any taxpayer whose return has been delayed or 
otherwise adversely affected due to the theft of the taxpayer's 
identity has a centralized point of contact throughout the processing 
of his or her case. The office shall coordinate with other offices 
within the Internal Revenue Service to resolve the taxpayer's case as 
quickly as possible.

SEC. 3. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY THEFT.

  (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

  ``If the Secretary determines that there was an unauthorized use of 
the identity of any taxpayer, the Secretary shall--
          ``(1) as soon as practicable and without jeopardizing an 
        investigation relating to tax administration, notify the 
        taxpayer and include with that notice--
                  ``(A) instructions to the taxpayer about filing a 
                police report, and
                  ``(B) the forms the taxpayer must submit to allow 
                investigating law enforcement officials to access the 
                taxpayer's personal information, and
          ``(2) if any person is criminally charged by indictment or 
        information relating to such unauthorized use, notify such 
        taxpayer as soon as practicable of such charge.''.
  (b) Clerical Amendment.--The table of sections for chapter 77 of such 
Code is amended by adding at the end the following new item:

``Sec. 7529. Notification of suspected identity theft.''.

  (c) Effective Date.--The amendments made by this section shall apply 
to determinations made after the date of the enactment of this Act.

SEC. 4. REPORT ON ELECTRONIC FILING OPT OUT.

  The Secretary of the Treasury (or the Secretary's delegate) shall 
submit a feasibility study to the Committee on Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate 
describing a program under which a person who has filed an identity 
theft affidavit with the Secretary may elect to prevent the processing 
of any Federal tax return submitted in an electronic format by that 
taxpayer or a person purporting to be that taxpayer. The study shall be 
submitted within 180 days after the date of the enactment of this Act 
and should also include a recommendation on whether to implement such a 
program.

SEC. 5. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION WITH 
                    TAX FRAUD.

  (a) Aggravated Identity Theft.--Section 1028A(c) of title 18, United 
States Code, is amended by striking ``or'' at the end of paragraph 
(10), by striking the period at the end of paragraph (11) and inserting 
``; or'', and by adding at the end the following new paragraph:
          ``(12) section 7206(b) of the Internal Revenue Code of 1986 
        (relating to use of false identity in connection with tax 
        fraud).''.
  (b) Effective Date.--The amendments made by this section shall apply 
to offenses committed after the date of the enactment of this Act.

SEC. 6. USE OF INFORMATION IN DO NOT PAY INITIATIVE IN PREVENTION OF 
                    IDENTITY THEFT REFUND FRAUD.

  The Secretary of the Treasury, and the Secretary's delegate, shall 
use the information available under the Do Not Pay Initiative 
established under section 5 of the Improper Payments Elimination and 
Recovery Improvement Act of 2012 (31 U.S.C. 3321 note) to help prevent 
identity theft refund fraud.

SEC. 7. REPORT ON IDENTITY THEFT REFUND FRAUD.

  (a) In General.--Not later than September 30, 2018, and biannually 
thereafter through September 30, 2023, the Secretary of the Treasury 
(or the Secretary's delegate) shall report to the Committee on Ways and 
Means of the House of Representatives and the Committee on Finance of 
the Senate on the extent and nature of fraud involving the use of a 
misappropriated taxpayer identity with respect to claims for refund 
under the Internal Revenue Code of 1986 during the preceding completed 
income tax filing season, and the detection, prevention, and 
enforcement activities undertaken by the Internal Revenue Service with 
respect to such fraud, including--
          (1) detailing efforts to combat identity theft fraud, 
        including an update on the victims' assistance unit;
          (2) information on both the average and maximum amounts of 
        time that elapsed before the cases of victims of such fraud 
        were resolved; and
          (3) discussing Internal Revenue Service efforts associated 
        with other avenues for addressing identity theft refund fraud.
  (b) Additional Requirements.--In addition, each report shall provide 
an update on the implementation of this Act and identify the need for 
any further legislation to protect taxpayer identities.
  (c) Progress on Outreach and Education.--In the first biannual report 
on identity theft refund fraud under subsection (a), the Secretary (or 
the Secretary's delegate) shall include--
          (1) an assessment of the agency's progress on identity theft 
        outreach and education to the private sector, State agencies, 
        and external organizations; and
          (2) the results of a feasibility study on the costs and 
        benefits to enhancing its taxpayer authentication approach to 
        the electronic tax return filing process.

SEC. 8. INFORMATION SHARING AND ANALYSIS CENTER.

  (a) In General.--The Secretary (or the Secretary's delegate) shall 
establish 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.
  (b) Report.--Not later than 1 year after establishment of the 
information sharing and analysis center, the Secretary (or the 
Secretary's delegate) shall submit a report to the Committee on Ways 
and Means of the House of Representatives and Committee on Finance of 
the Senate on the information sharing and analysis center described in 
subsection (a). The report shall include the data that was shared, the 
use of such data, and the results of the data sharing and analysis 
center in combating identity theft.

SEC. 9. 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.
  (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, having duties 
that shall include--
          (1) receiving information from State and local law 
        enforcement authorities;
          (2) responding to inquiries from State and local law 
        enforcement authorities;
          (3) administering authorized information-sharing initiatives 
        with State or local law enforcement authorities and reviewing 
        the performance of such initiatives;
          (4) ensuring any information provided through authorized 
        information-sharing initiatives with State or local law 
        enforcement authorities is used only for the prosecution of 
        identity theft-related crimes and not re-disclosed to third 
        parties; and
          (5) such other duties relating to tax-related identity theft 
        prevention as are delegated by the Commissioner of Internal 
        Revenue.

SEC. 10. IRS PHONE SCAM REPORT.

  (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Inspector General for Tax Administration, in 
consultation with the Federal Communications Commission and the Federal 
Trade Commission, shall submit a report to Congress regarding identity 
theft phone scams under which individuals attempt to obtain personal 
information over the phone from taxpayers by falsely claiming to be 
calling from or on behalf the Internal Revenue Service.
  (b) Contents of Report.--Such report shall include--
          (1) a description of the nature and form of such scams;
          (2) an estimate of the number of taxpayers contacted pursuant 
        to, and the number of taxpayers who have been victims of, such 
        scams;
          (3) an estimate of the amount of wrongful payments obtained 
        from such scams; and
          (4) details of potential solutions to combat and prevent such 
        scams, including best practices from the private sector and 
        technological solutions.

SEC. 11. PROVIDING IDENTITY THEFT PREVENTION INFORMATION WHILE ON HOLD 
                    WITH INTERNAL REVENUE SERVICE.

  The Secretary of the Treasury, or the Secretary's delegate, shall 
ensure that if a taxpayer is on hold with the Internal Revenue Service 
on a taxpayer service telephone call the following information is 
provided:
          (1) Basic information about common identity theft tax scams.
          (2) Directions on where to report such activity.
          (3) Tips on how to protect against identity theft tax scams.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 3832, reported by the Committee on Ways and Means, 
contains numerous provisions aimed at helping the Internal 
Revenue Service (``IRS'') prevent and detect identity theft tax 
fraud. It establishes a centralized point of contact at the IRS 
for victims of identity theft; requires the IRS to notify a 
taxpayer if the IRS determines that there was unauthorized use 
of the taxpayer's identity; requires the IRS to submit a study 
on the feasibility of establishing a program for victims of 
identity theft tax fraud to opt out of electronic filing; 
requires the Treasury Department and the IRS to use information 
from the Do Not Pay Initiative to help prevent identity theft; 
establishes an Information Sharing and Analysis Center (ISAC) 
to collect, analyze, and share actionable data and information 
to detect and prevent identity theft; requires the IRS to issue 
biannual reports from 2018 through 2023 on the extent and 
nature of identity theft tax fraud; requires the IRS to 
establish a local law enforcement liaison within the IRS 
Criminal Investigative Division to administer information-
sharing initiatives and respond to local law enforcement 
inquiries relating to identity theft; requires the Treasury 
Inspector General for Tax Administration (``TIGTA'') to report 
on solutions to IRS-impersonation phone scams; and requires the 
IRS to provide information over the phone on such scams if 
taxpayers are on hold with the IRS call center.

                 B. Background and Need for Legislation

    Tax fraud related to identity theft is a serious and 
rapidly evolving problem. Stolen taxpayer identifying 
information is used to file fraudulent returns with the IRS 
(and state tax authorities as well) in order to obtain tax 
refunds. Identity theft tax fraud is an attractive crime 
because it is viewed as having a high payoff with little risk 
of the perpetrator being caught.
    In 2012, TIGTA reported that billions of dollars in 
identity theft tax fraud were going undetected and being paid 
out by the IRS, and estimated that the IRS could pay out $21 
billion in fraudulent refunds over five years.\1\ The IRS 
estimated that it paid out $3.1 billion in fraudulent refunds 
in filing season 2014, a decrease from the IRS' estimate for 
filing season 2013 of $5.8 billion. While the IRS believes that 
it prevented $22.5 billion of potentially fraudulent refunds 
before they were paid out, the Government Accountability Office 
(``GAO'') noted that the IRS' estimates do not take into 
account the full extent of identity theft tax fraud because the 
IRS does not know how much fraud is not yet discovered or 
detected.\2\
---------------------------------------------------------------------------
    \1\TIGTA, ``Billions of Dollars in Identity-Theft-Related Tax 
Refund Fraud Go Undetected,'' August 2, 2012.
    \2\GAO, ``IRS Needs to Further Improve Controls over Taxpayer Data 
and Continue to Combat Identity Theft Refund Fraud,'' April 12, 2016.
---------------------------------------------------------------------------
    In addition to costing the government billions of dollars 
each year, identity theft tax fraud significantly harms 
individual victims, who typically spend months or years 
resolving their cases with the IRS. In March 2015, TIGTA 
estimated that it took the IRS an average of 278 days to 
resolve a case of identity theft, and about 17 percent of these 
cases were not resolved correctly.\3\ TIGTA also reported that 
the IRS was misrepresenting the amount of time it took to 
resolve cases, and was informing taxpayers it would take only 
180 days.\4\
---------------------------------------------------------------------------
    \3\TIGTA, ``Victims of Identity Theft Continue to Experience Delays 
and Errors in Receiving Refunds,'' March 20, 2015.
    \4\Id.
---------------------------------------------------------------------------
    IRS information technology systems used to detect potential 
identity theft tax fraud rely on filters that compare return 
data to previous years' information. Unfortunately, these 
traditional filters do not allow the IRS to detect cases where 
the identity thief has all of the taxpayer's correct 
information. In the past, identity thieves have typically 
stolen names and Social Security numbers to create a fake 
return. Increasingly, however, identity thieves have obtained 
accurate taxpayer information through cybersecurity breaches. 
In those cases, the fraudulent returns may appear to be 
identical to the return filed by the legitimate taxpayer. 
However, it may be possible to flag such returns by using other 
detection methods, such as comparing the Internet Protocol 
(``IP'') address to the address used on the return, identifying 
multiple refunds being deposited into the same bank account, or 
using data from tax preparation companies to find returns that 
were completed faster than a human preparer could.\5\
---------------------------------------------------------------------------
    \5\W&M; Committee Staff discussions with IRS.
---------------------------------------------------------------------------
    The IRS also has faced difficulty in protecting taxpayers 
who are known victims of identity theft. In the past few years, 
the IRS has issued Identity Protection Personal Identification 
Numbers (``IP PINs'') to victims, and would reject returns 
filed with the victim's information if the IP PIN was not 
included on the return. However, the IRS has had difficulty 
ensuring that the people requesting IP PINs are actually the 
victims and not the identity thief. Additionally, the IRS 
suspended its online tool to retrieve an IP PIN after it 
discovered that at least 800 returns were filed by fraudsters 
who had obtained stolen IP PINs.\6\
---------------------------------------------------------------------------
    \6\IRS, ``IRS Statement on IP PIN,'' March 7, 2016.
---------------------------------------------------------------------------
    By requiring the IRS to pursue additional protections and 
relief for taxpayers, H.R. 3832 will help the IRS combat 
identity theft more effectively and help victims of identity 
theft resolve their cases and restore their tax identities more 
quickly.

                         C. Legislative History


Background

    H.R. 3832, the Stolen Identity Refund Fraud Prevention Act 
of 2016, was introduced on October 26, 2015, and was referred 
to the Committee on Ways and Means.

Committee Action

    The Committee on Ways and Means marked up H.R. 3832, the 
Stolen Identity Refund Fraud Prevention Act of 2016, on April 
28, 2016, and ordered the bill, as amended, favorably reported 
(with a quorum being present).

Committee Hearings

    The need for improving the IRS' ability to combat identity 
theft and help taxpayers resolve their identity-theft cases was 
discussed at the Oversight Subcommittee hearing on the 2015 Tax 
Filing Season (April 22, 2015), and the Oversight Subcommittee 
hearing on the 2016 Tax Filing Season (April 19, 2016).

                      II. EXPLANATION OF THE BILL


 A. Centralized Point of Contact for Identity Theft Victims (sec. 2 of 
                               the bill)


Present Law

    Disparate elements in the tax laws and administration are 
implicated in identity theft. Tax-related identity theft can 
generally occur in one of two ways. In refund fraud, a 
perpetrator may obtain a taxpayer's identifying information, 
submit an individual income tax return using a falsified Form 
W-2, Wage and Tax Statement, and fraudulently claim a refund. 
In other cases, the stolen identifying information is used in 
order to obtain employment; the returns then filed by the 
persons employed using the stolen identity may be based on the 
actual wages and withholding. Victims of the fraud include the 
individuals whose identifying information was stolen as well as 
the businesses whose systems may have been breached to obtain 
that personal information.
    The IRS describes its procedures for addressing both types 
of fraud in the Internal Revenue Manual. The IRS initially 
established the Identity Protection Specialized Unit (``IPSU'') 
to assist victims of identity theft, but taxpayers were also 
referred to other operating units of the IRS to deal with 
various aspects of their case.\7\ Subsequently reorganized and 
renamed the Identity Theft Victim Assistance (``IDTVA'') 
organization, it is staffed with specially trained employees 
who are able to assess each case, identify issues, and assist 
the taxpayer in getting the correct return filed, refunds 
issued, etc.\8\ The IDTVA organization's work is coordinated by 
the IRS' Identity Protection Program through the auspices of an 
oversight office within the Wage and Investment Operating 
Division.\9\
---------------------------------------------------------------------------
    \7\TIGTA, Ref. No. 2012-40-050, Most Taxpayers Whose Identities 
Have Been Stolen to Commit Refund Fraud Do Not Receive Quality Customer 
Service (May 2012).
    \8\A description of the services provided by the IDTVA organization 
is available at https://www.irs.gov/uac/Newsroom/IRS-Identity-Theft-
Victim-Assistance-How-It-Works
    \9\Internal Revenue Service, Identity Protection and Victim 
Assistance, Internal Revenue Manual Chapter 23, paragraph 25.23.1 et 
seq. (September 2, 2015).
---------------------------------------------------------------------------
    If a victim thinks he or she is not being properly served 
by the IRS or the IDTVA organization, the taxpayer may be 
eligible for assistance from the Taxpayer Advocate Service 
(``TAS'') as in the case of economic hardship caused by the 
theft. In such instances, the TAS will assign a case advocate 
to the taxpayer's account.

Reasons for Change

    The Committee is concerned that taxpayers who are 
victimized by identity thieves experience delays in obtaining 
their tax refunds, and find it difficult to work with multiple 
offices within the IRS. Requiring a centralized point of 
contact at the IRS to provide the necessary level of personal 
assistance to these victims is a common sense measure that will 
simplify the resolution of cases for taxpayers. According to 
testimony provided by GAO recently, the IRS has improved its 
customer service to victims of identity theft, despite declines 
in customer service elsewhere.\10\ Although the IRS has shown 
flexibility in adapting new procedures for handling of identity 
theft cases, the Committee believes providing a centralized 
point of contact for a victim should not be left to the 
discretion of the IRS.
---------------------------------------------------------------------------
    \10\Government Accountability Office, Tax Filing: IRS Needs a 
Comprehensive Customer Service Strategy and Needs to Better Combat 
Identity Theft Refund Fraud and Protect Taxpayer Data (GAO-16-578T), 
April 19, 2016, available at http://www.gao.gov/products/GAO-0916-
09578T.
---------------------------------------------------------------------------

Explanation of Provision

    The provision requires the Secretary of the Treasury (or 
the Secretary's delegate) (``Secretary'') to establish 
procedures to implement a centralized point of contact for 
taxpayers adversely affected by identity theft of any type. The 
centralized point of contact may be a team or subset of 
specially trained employees who can work across functions to 
resolve problems for the victim and who is accountable for 
handling the case to completion. The makeup of the team may 
change as required to meet IRS needs, but the procedures must 
ensure continuity of records and case history and may require 
notice to the taxpayer in appropriate instances.

Effective Date

    The provision is effective on the date of enactment.

  B. Taxpayer Notification of Suspected Identity Theft (sec. 3 of the 
                  bill and new sec. 7529 of the Code)


Present Law

    Section 6103 provides that returns and return information 
are confidential and may not be disclosed by the IRS, other 
Federal employees, State employees, and certain others having 
access to the information except as provided in the Code.\11\ 
The definition of "return information" is very broad and 
includes any information gathered by the IRS with respect to a 
person's liability or possible liability under the Code for any 
tax, penalty, interest, fine, forfeiture, or other imposition 
or offense.\12\ Thus, information gathered by the IRS in 
connection with an investigation of a person for a Title 26 
offense, such as fraud, is the return information of the person 
being investigated and is subject to the confidentiality 
restrictions of section 6103.
---------------------------------------------------------------------------
    \11\Except where otherwise stated, all section references are to 
the Internal Revenue Code of 1986, as amended (herein "Code"). Sec. 
6103(a).
    \12\Sec. 6103(b)(2). Return information is:
      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,
      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)) that is not open to public inspection under 
section 6110,
      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
      any closing agreement under section 7121, and any similar 
agreement, and any background information related to such an agreement 
or request for such an agreement. Return information does not include 
data in a form that cannot be associated with, or otherwise identify, 
directly or indirectly, a particular taxpayer.
---------------------------------------------------------------------------
    As an exception to section 6103's general rule of 
confidentiality, the Code permits a taxpayer to receive his or 
her own tax return, and also can receive his or her return 
information if the Secretary determines that such disclosure 
would not seriously impair Federal tax administration.\13\ With 
respect to fraudulent tax returns, if the victim's name and 
Social Security number are listed as either the primary or 
secondary taxpayer on a fraudulent return, a victim of identity 
theft, or a person authorized to obtain the identity theft 
victim's tax information, may request a redacted copy (one with 
some information blacked-out) of a fraudulent return that was 
filed and accepted by the IRS using the identity theft victim's 
name and Social Security number.\14\
---------------------------------------------------------------------------
    \13\Sec. 6103(e)(1) and (7). The Code also permits the disclosure 
of returns and return information to such persons or persons the 
taxpayer may designate, if the request meets the requirements of the 
Treasury regulations and if it is determined that such disclosure would 
not seriously impair Federal tax administration. Sec. 6103(c).
    \14\See Internal Revenue Service, Instructions for Requesting Copy 
of Fraudulent Returns (March 28, 2016). https://www.irs.gov/
Individuals/Instructions-for-Requesting-Copy-of-Fraudulent-Returns.
---------------------------------------------------------------------------
    In cases not involving violations of Title 26, under a 
Privacy Act Notice, the Treasury Inspector General for Tax 
Administration is allowed to disclose information to 
complainants, victims, or their representatives (defined to be 
a complainant's or victim's legal counsel or a Senator or 
Representative whose assistance the complainant or victim has 
solicited) concerning the status and/or results of an 
investigation or case arising from the matters of which they 
complained and/or of which they were a victim, including, once 
the investigative subject has exhausted all reasonable appeals, 
any action taken. Information concerning the status of the 
investigation or case is limited strictly to whether the 
investigation or case is open or closed. Information concerning 
the results of the investigation or case is limited strictly to 
whether the allegations made in the complaint were 
substantiated or were not substantiated and, if the subject has 
exhausted all reasonable appeals, any action was taken.\15\
---------------------------------------------------------------------------
    \15\See 75 Fed. Reg. 20715 (April 20, 2010) (relating to TIGTA 
Office of Investigation files).
---------------------------------------------------------------------------

Reasons for Change

    The Committee is aware that victims of identity theft are 
often unaware that their identity has been stolen or 
compromised. As a result, they are unable to take timely 
measures to limit damage from the theft and to secure their 
identity against further compromise. The Committee is also 
aware that successful prosecution of identity thieves requires 
that the investigators exercise discretion in disclosing 
information to victims about an ongoing investigation. However, 
the Committee believes that victims must be provided an 
opportunity to safeguard their financial information and assets 
as soon as practicable.

Explanation of Provision

    The provision requires the Secretary to notify a person 
whose identity was used without authorization that such use 
occurred, as soon as practicable after determining such use 
occurred and without jeopardizing an investigation relating to 
tax administration.
    The provision also requires the Secretary to notify the 
person whose identity was used without authorization of any 
criminal charges that are brought against any person with 
respect to the unauthorized use, as soon as practicable.

Effective Date

    The provision applies to determinations made after the date 
of enactment.

  C. Electronic Filing Opt-Out Feasibility Study (sec. 4 of the bill)


Present Law

    The Internal Revenue Service Restructuring and Reform Act 
of 1998 (``IRS Restructuring Act'')\16\ established a 
Congressional policy to promote the paperless filing of Federal 
tax returns and set a goal for the IRS to have at least 80 
percent of all Federal tax and information returns filed 
electronically by 2007.\17\ Section 2001(b) of the IRS 
Restructuring Act requires the IRS to establish a 10-year 
strategic plan to eliminate barriers to electronic filing.
---------------------------------------------------------------------------
    \16\Sec. 2001(a), Pub. L. No. 105-206.
    \17\The Electronic Tax Administration Advisory Committee, the body 
charged with oversight of IRS progress in reaching that goal, reported 
that e-filing by most categories of taxpayers exceeded 80 percent in 
the 2014 filing season, but projected an overall rate of 77.5 percent 
based on all Federal returns. See Electronic Tax Administration 
Advisory Committee, Annual Report to Congress, June 2015 IRS Pub. 3415, 
page 9, available at https://www.irs.gov/pub/irs-pdf/p3415.pdf.
---------------------------------------------------------------------------
    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.\18\ The 
statute requires that Federal income tax returns prepared by 
specified tax return preparers be filed electronically,\19\ 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.
---------------------------------------------------------------------------
    \18\Sec. 6011(e).
    \19\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.
---------------------------------------------------------------------------
    Individuals who either report to the IRS that they are 
victims of identity theft or who the IRS determines 
independently are victims of identity theft are eligible to 
receive a special, six-digit identity protection personal 
identification number (``IP PIN'') to use in lieu of their 
Social Security number as a taxpayer identifying number on 
returns the next filing season. If the taxpayer files 
electronically, an additional e-file PIN is also required.

Reasons for Change

    The Committee is aware that numerous taxpayers who have 
experienced identity theft that was accomplished by 
electronically filing a false return may wish to elect to 
preclude any future electronic filing of a return on their 
behalf. It is not known how widely shared that sentiment is, 
nor is it clear whether such an election could be honored. The 
Committee requires more information about the feasibility of 
such an election and its effectiveness in preventing further 
violations.

Explanation of Provision

    The provision requires that the Secretary submit a 
feasibility study of a program under which a taxpayer who is a 
victim of identity theft may elect to prevent future electronic 
submission of a return by or on behalf of that taxpayer.

Effective Date

    The provision is effective on the date of enactment.

 D. Criminal Penalty for Using a False Identity in Connection With Tax 
                       Fraud (sec. 5 of the bill)


Present Law

    The Code does not contain civil or criminal penalties 
specifically targeted at identity theft. Instead, most claims 
for tax refund-related identity theft are prosecuted as false 
claims under section 287 of title 18, and are classified as 
felonies, generally punishable by a penalty of up to $250,000 
and imprisonment for up to five years. In addition, section 
1028A of title 18 provides for the statutory crime of 
``aggravated identity theft'' in cases where the identity of 
another individual is used to commit enumerated crimes and 
generally adds an additional two-year prison term (herein the 
``Aggravated Identity Theft Statute''). However, that section 
does not include any tax offenses under the Code.
    The Code includes two provisions, sections 7206 and 7207, 
which cover fraud and false statements and fraudulent returns. 
Sections 7206(1) and (2) cover situations that could 
potentially involve identity theft. Those provisions make it a 
felony, punishable by a penalty of up to $100,000 ($500,000 for 
a corporation), imprisonment for up to three years, or both, 
plus prosecution costs, for a person who: (i) makes a false 
declaration under penalties of perjury; and (ii) aids or 
assists in the preparation or presentation of any return or 
other document that is false as to a material matter. Section 
7207 treats as a misdemeanor the willful delivery or disclosure 
to any officer or employee of the IRS of fraudulent or false 
lists, returns, accounts, statements, or other documents, 
punishable by a penalty of up to $10,000 ($50,000 for 
corporations), imprisonment for up to a year, or both.

Reasons for Change

    The Committee believes that the current penalties for 
criminal tax violations do not appropriately take into account 
as an aggravating factor the use of misappropriated identity.

Explanation of Provision

    The provision adds an unspecified felony under section 7206 
to the list of predicate offenses contained in the Aggravated 
Identity Theft Statute.\20\
---------------------------------------------------------------------------
    \20\An amendment by Mr. Lewis removed the criminal penalty for 
using a false identity in connection with tax fraud that would have 
been added to the Internal Revenue Code under section 5(a) of the 
amendment in the nature of a substitute. Corresponding changes to the 
provisions relating to Title 18 in section 5(b) of the amendment in the 
nature of a substitute were beyond the scope of the Committee's 
jurisdiction.
---------------------------------------------------------------------------

Effective Date

    The provision applies to offenses committed after the date 
of enactment.

E. Improvement in Access to Information Under the Do Not Pay Initiative 
                          (sec. 6 of the bill)


Present Law

    Payments made by executive agencies including the 
Department of the Treasury and the IRS are subject to the 
requirements of the Do Not Pay (``DNP'') Initiative.\21\ The 
DNP Initiative requires that agencies review pre-payment 
procedures and ensure that a thorough review of available 
databases with relevant information on eligibility occurs to 
prevent improper payments before the release of any Federal 
funds. Before issuing any payment, each agency is required to 
review as appropriate the following databases to verify 
eligibility of the payment: (i) the Death Master File of the 
Social Security Administration; (ii) the General Services 
Administration's Excluded Parties List System; (iii) the Debt 
Check Database of the Department of the Treasury; (iv) the 
Credit Alert System or Credit Alert Interactive Voice Response 
System of the Department of Housing and Urban Development; and 
(v) the List of Excluded Individuals/Entities of the Office of 
Inspector General of the Department of Health and Human 
Services. The Office of Management and Budget may, after 
providing notice as specified, designate additional databases 
for inclusion in consultation with the appropriate agencies.
---------------------------------------------------------------------------
    \21\Improper Payments Elimination and Recovery Improvement Act of 
2012, Pub. L. No. 112-248, sec. 5 (January 10, 2013).
---------------------------------------------------------------------------

Reasons for Change

    The Committee wishes to clarify that the Secretary and the 
Secretary's delegate are subject to the requirements of the DNP 
Initiative to help prevent, reduce and stop improper payments 
from being made especially in the context of identity theft 
refund fraud. The Committee believes that the review of the 
multiple data sources before payment under the DNP Initiative 
will help prevent identity theft refund fraud and ensure that 
taxpayers receive payments to which they are entitled, in a 
timely manner.

Explanation of Provision

    The provision requires that the Secretary and the 
Secretary's delegate, in order to help prevent identity theft, 
make use of databases enumerated in the Do Not Pay initiative, 
established by the Secretary under section 5 of the Improper 
Payments Elimination and Recovery Improvement Act of 2012.

Effective Date

    The provision is effective on the date of enactment.

 F. Require the IRS to Prepare a Report on Identity Theft Refund Fraud 
                          (sec. 7 of the bill)


Present Law

    The IRS is not currently required to prepare reports to 
Congress on identity theft refund fraud.

Reasons for Change

    The Committee recognizes that tax-related identity theft is 
an evolving criminal activity that targets innocent taxpayers 
nationwide and robs the Treasury of billions of dollars each 
year. The Committee believes the report on identity theft 
refund fraud will help provide useful information on the scope 
of the problem and practical solutions necessary to reduce this 
growing threat.

Explanation of Provision

    The provision requires the IRS to report to the House 
Committee on Ways and Means and the Senate Committee on Finance 
no later than September 30, 2018, on the extent and nature of 
fraud involving the use of a misappropriated taxpayer identity 
with respect to claims for refund under the Code during the 
preceding completed income tax filing season. Similar reports 
are required biannually thereafter until September 30, 2023.
    The reports must detail IRS efforts to combat identity 
theft fraud, including an update on the victims' assistance 
unit; providing information on both the average and maximum 
amounts of time that elapsed before the cases of victims of 
such fraud were resolved; and discussing IRS efforts associated 
with other avenues for addressing identity theft refund fraud 
(e.g., the hash-based message authentication code).
    The provision also requires that the reports provide 
updates on the implementation of the bill and identify the 
needs for any further legislation to protect taxpayer 
identities. In addition the provision includes a requirement 
that the first report provide (1) an assessment of the agency's 
progress on identity theft outreach and education to the 
private sector, State agencies, and external organizations; and 
(2) the results of a feasibility study on the costs and 
benefits to enhancing its taxpayer authentication approach to 
the electronic tax return filing process.

Effective Date

    The provision is effective upon the date of enactment.

  G. Require the IRS To Establish an Information-Sharing and Analysis 
                      Center (sec. 8 of the bill)


Present Law

    In June 2015, the IRS joined with representatives of tax 
preparation and software firms, payroll and tax financial 
product processors, and State tax administrators to announce 
that they would look at establishing a formalized Refund Fraud 
Information Sharing and Assessment Center (``ISAC'') to share 
information more aggressively and efficiently between the 
public and private sector to help stop the proliferation of 
fraud schemes and reduce the risk to taxpayers.\22\ For 
example, ISAC would provide better data to law enforcement to 
improve the investigations and prosecution of identity thieves. 
The IRS does not currently have a center within which the 
private and public sectors, including State government and 
subsidiaries thereof can share data and information analysis to 
protect against identity theft.
---------------------------------------------------------------------------
    \22\IR-2015-87, June 11, 2015, available at http://www.irs.gov/uac/
Newsroom/IRS-and-Industry-and-States-Take-New-Steps-Together-to-Fight-
Identity-Theft-and-Protect-Taxpayers.
---------------------------------------------------------------------------

Reasons for Change

    The Committee believes it is desirable to establish a 
system under which both governmental and private organizations 
can share and analyze data to detect patterns and warn against 
potential risks. The Committee is aware that such information-
sharing centers have been successful in the fields of financial 
services and aviation, and believes formation of such a center 
in the field of tax administration will provide significant 
gains in detection and prevention of identity theft.

Explanation of Provision

    The provision requires that the Secretary establish an 
information sharing and analysis center to facilitate sharing 
data and information with respect to identity theft, and submit 
a report on the data shared and results achieved by the ISAC no 
later than one year after the ISAC is established.

Effective Date

    The provision is effective upon the date of enactment.

         H. Local Law Enforcement Liaison (sec. 9 of the bill)


Present Law

    The IRS Criminal Investigation Division (``CID'') is 
authorized to investigate potential criminal violations of the 
Code. The CID is involved in more than 70 multi-regional task 
forces or working groups including State/local and Federal law 
enforcement agencies solely focusing on identity theft.\23\ A 
specialized unit within the CID called the Identity Theft 
Clearinghouse (``ITC'') develops and refers identity theft 
schemes to CID field offices for investigation. In addition, 
the ITC provides coordination and administrative and 
investigative support to ongoing criminal investigations 
involving identity theft.
---------------------------------------------------------------------------
    \23\IRS, States and Tax Industry Combat Identity Theft and Refund 
Fraud on Many Fronts, FS-2016-1, January 2016, available at https://
www.irs.gov/uac/Newsroom/IRS,-States-and-Tax-Industry-Combat-Identity-
Theft-and-Refund-Fraud-on-Many-Fronts.
---------------------------------------------------------------------------
    The CID works with State and local law enforcement 
officials through a program called the Law Enforcement 
Assistance Program (``LEAP''), which provides for the 
disclosure of tax return information associated with the 
accounts of known and suspected victims of identity theft with 
the consent of those victims.

Reasons for Change

    The Committee believes it will be useful to create a local 
law enforcement liaison within the IRS to coordinate identity 
theft cases with local police and law enforcement agents. This 
position will provide State and local law enforcement 
authorities a primary source of contact at the IRS when they 
need to share information about a case, and thereby more 
efficiently help protect taxpayers from identity theft fraud.

Explanation of Provision

    The provision creates a local law enforcement liaison 
within the CID of the IRS to (i) receive information from State 
and local law enforcement authorities; (ii) respond to 
inquiries from State and local law enforcement authorities; 
(iii) administer information-sharing initiatives with State or 
local law enforcement authorities and review the performance of 
such initiatives; (iv) ensure any information provided through 
these information-sharing initiatives is used only for the 
prosecution of identity theft-related crimes and not re-
disclosed to third parties; and (v) carry out such other duties 
relating to tax-related identity theft prevention as are 
delegated by the Commissioner.

Effective Date

    The provision is effective on the date of enactment.

             I. IRS Phone Scam Report (sec. 10 of the bill)


Present Law

    The IRS Restructuring Act\24\ established the Treasury 
Inspector General for Tax Administration (``TIGTA'') to provide 
independent oversight over of the IRS.\25\ Its duties include 
conducting investigations of problems affecting programs at the 
IRS, including potential criminal violations, and reporting to 
Congress, with recommendations about potential solutions to the 
problems. In its reports to Congress, TIGTA includes its 
assessment of external factors that pose a risk to the 
integrity of tax administration, such as the large volume of 
telephone scams in recent years in which individuals call 
potential victims and impersonate IRS agents or employees in an 
attempt to persuade the victim to pay taxes or fines supposedly 
due. Although TIGTA has reported on efforts to prevent such 
scams, the subject is not specifically included in the lists of 
various annual and semiannual reports that TIGTA must submit to 
Congress.\26\
---------------------------------------------------------------------------
    \24\Sec. 1103, Pub. L. No. 105-206.
    \25\Sections 2 and 8D, Inspectors General Act of 1978 (Pub. Law 95-
452), as amended; 5 U.S.C. App. Secs. 1 and 8D.
    \26\Sec. 7803(d).
---------------------------------------------------------------------------

Reasons for Change

    The Committee has observed the steep growth in the number 
of telephone scams involving impersonation of IRS agents or 
other Federal officials in recent years. The large volume of 
complaints about such telephone calls, the amount of money lost 
by the victims, and the ability of the perpetrators to shift 
their activities and thwart law enforcement efforts are of 
great concern to the Committee. Accordingly, the Committee 
believes that a thorough analysis of the problem is needed to 
develop more effective strategies to prevent such scams.

Explanation of Provision

    TIGTA, in consultation with Federal Communications 
Commission and Federal Trade Commission, must report to 
Congress no later than one year after enactment on telephone 
scams involving impersonation of IRS agents or other Federal 
officials collecting tax. The report must include a description 
of the scams; an estimate of the number of persons contacted; 
an estimate of the number of persons who have been victims; an 
estimate of total wrongful payments made by victims; and 
details of potential solutions, including descriptions of 
private-sector best practices and technological solutions that 
may be relevant.

Effective Date

    The provision is effective on the date of enactment.

 J. Providing Identity Theft Prevention Information While on Hold With 
             Internal Revenue Service (sec. 11 of the bill)


Present Law

    There are presently no statutory provisions that address 
whether or how the IRS should alert the public about possible 
telephone scams. The IRS publishes alerts on its website under 
a heading, ``Phishing and Tax Scams,'' and advises taxpayers to 
report IRS-related email scams to the IRS at [email protected] 
and IRS-impersonation telephone scams to www.tigta.gov. Both 
TIGTA and the IRS have posted public service announcements on 
www.youtube.com about ways that taxpayers can protect 
themselves against such scams.

Reasons for Change

    The Committee is aware that TIGTA has received over one 
million complaints since October 2013 from taxpayers reporting 
threatening telephone calls from IRS impersonators demanding 
immediate payment in the form of wire transfers or prepaid 
debit cards. The Committee believes that any waiting time 
experienced by callers to the taxpayer assistance numbers at 
the IRS could be leveraged to educate those callers about the 
various scams. In doing so, the IRS may be reaching a segment 
of the population that is unlikely to visit the IRS website or 
find IRS messages on social media.

Explanation of Provision

    The provision requires that the IRS play taped messages 
about current schemes or scams while taxpayers are on hold 
waiting for a customer service representative.

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 Rules of 
the House of Representatives, the following statement is made 
concerning the votes of the Committee on Ways and Means in its 
consideration of H.R. 3832, a bill require that protects 
against theft of taxpayer identities and refund fraud.
    The amendment by Mr. Lewis to the amendment in the nature 
of a substitute, which would strike the criminal penalty for 
using a false identity in connection with tax fraud in section 
5(a) of the amendment in the nature of a substitute, was agreed 
to by voice vote (with a quorum being present).
    The amendment by Mr. Pascrell to the amendment in the 
nature of a substitute, which would require the Commissioner of 
Internal Revenue to establish a local law enforcement liaison, 
was agreed to by voice vote (with a quorum being present).
    The amendment by Mr. Pascrell to the amendment in the 
nature of a substitute, which would require the Treasury 
Inspector General for Tax Administration to submit a report to 
Congress on telephone scams relating to the Internal Revenue 
Service and which would require that taxpayers be provided 
identity theft prevention information while on hold with the 
Internal Revenue Service, was agreed to by voice vote (with a 
quorum being present).
    The Chairman's amendment in the nature of a substitute was 
adopted by a voice vote (with a quorum being present).
    The bill, H.R. 3832, 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. 3832, as 
reported.
    The bill, as reported, is estimated to have no effect on 
Federal fiscal year budget receipts for the period 2016-2026.
    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 there are no new or increased tax 
expenditures.

      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, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 9, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3832, the Stolen 
Identity Refund Fraud Prevention Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 3832--Stolen Identity Refund Fraud Prevention Act of 2016

    H.R. 3832 would amend current law with an aim to reduce 
identity theft related to federal tax administration. 
Specifically, the bill would require the Internal Revenue 
Service (IRS) to maintain a central office for identity theft 
issues, to notify taxpayers of any instances of identity theft 
detected by the IRS, and to provide affected taxpayers with 
information on the circumstances of such theft. The bill also 
would require the IRS to report to the Congress on electronic 
tax filings and the problem of identity theft and to provide 
biannual reports on identity theft and fraudulent tax refunds. 
Finally, H.R. 3832 would establish specific civil and criminal 
penalties for tax fraud involving identity theft.
    Based on information from the Government Accountability 
Office and the IRS, CBO estimates that implementing H.R. 3832 
would cost about $2 million annually or $10 million over the 
2017-2021 period to notify taxpayers of instances of identity 
theft and to provide reports on this subject to the Congress; 
such spending would be subject to the availability of 
appropriated funds.
    Enacting the legislation could increase federal revenues 
from individuals subject to criminal and civil penalties under 
H.R. 3832 as well as associated direct spending of those 
criminal penalties; therefore pay-as-you-go procedures apply. 
However, CBO estimates that such effects would not be 
significant in any year because of the small number of cases 
likely to be involved. The staff of the Joint Committee on 
Taxation (JCT) estimates that enacting the bill would not 
affect revenues collected under the Internal Revenue Code.
    CBO and JCT estimate that enacting H.R. 3832 would not 
increase net direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2027.
    CBO has determined that the nontax provisions of the bill 
contain no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act (UMRA). Similarly, 
JCT has determined that the tax provisions of the bill contain 
no intergovernmental or private-sector mandates as defined in 
UMRA.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was as a result of the 
Committee's review of the provisions of H.R. 3832 that the 
Committee concluded that it is appropriate to report the bill, 
as amended, favorably to the House of Representatives with the 
recommendation that the bill do pass.

        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 contains no 
unfunded mandate on the private sector, nor does it 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(g)(2) of H. Res. 5 (114th 
Congress), 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 the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169).

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates 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)(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:

TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 47--FRAUD AND FALSE STATEMENTS

           *       *       *       *       *       *       *



Sec. 1028A. Aggravated identity theft

  (a) Offenses.--
          (1) In general.--Whoever, during and in relation to 
        any felony violation enumerated in subsection (c), 
        knowingly transfers, possesses, or uses, without lawful 
        authority, a means of identification of another person 
        shall, in addition to the punishment provided for such 
        felony, be sentenced to a term of imprisonment of 2 
        years.
          (2) Terrorism offense.--Whoever, during and in 
        relation to any felony violation enumerated in section 
        2332b(g)(5)(B), knowingly transfers, possesses, or 
        uses, without lawful authority, a means of 
        identification of another person or a false 
        identification document shall, in addition to the 
        punishment provided for such felony, be sentenced to a 
        term of imprisonment of 5 years.
  (b) Consecutive Sentence.--Notwithstanding any other 
provision of law--
          (1) a court shall not place on probation any person 
        convicted of a violation of this section;
          (2) except as provided in paragraph (4), no term of 
        imprisonment imposed on a person under this section 
        shall run concurrently with any other term of 
        imprisonment imposed on the person under any other 
        provision of law, including any term of imprisonment 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used;
          (3) in determining any term of imprisonment to be 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used, a 
        court shall not in any way reduce the term to be 
        imposed for such crime so as to compensate for, or 
        otherwise take into account, any separate term of 
        imprisonment imposed or to be imposed for a violation 
        of this section; and
          (4) a term of imprisonment imposed on a person for a 
        violation of this section may, in the discretion of the 
        court, run concurrently, in whole or in part, only with 
        another term of imprisonment that is imposed by the 
        court at the same time on that person for an additional 
        violation of this section, provided that such 
        discretion shall be exercised in accordance with any 
        applicable guidelines and policy statements issued by 
        the Sentencing Commission pursuant to section 994 of 
        title 28.
  (c) Definition.--For purposes of this section, the term 
``felony violation enumerated in subsection (c)'' means any 
offense that is a felony violation of--
          (1) section 641 (relating to theft of public money, 
        property, or rewards ), section 656 (relating to theft, 
        embezzlement, or misapplication by bank officer or 
        employee), or section 664 (relating to theft from 
        employee benefit plans);
          (2) section 911 (relating to false personation of 
        citizenship);
          (3) section 922(a)(6) (relating to false statements 
        in connection with the acquisition of a firearm);
          (4) any provision contained in this chapter (relating 
        to fraud and false statements), other than this section 
        or section 1028(a)(7);
          (5) any provision contained in chapter 63 (relating 
        to mail, bank, and wire fraud);
          (6) any provision contained in chapter 69 (relating 
        to nationality and citizenship);
          (7) any provision contained in chapter 75 (relating 
        to passports and visas);
          (8) section 523 of the Gramm-Leach-Bliley Act (15 
        U.S.C. 6823) (relating to obtaining customer 
        information by false pretenses);
          (9) section 243 or 266 of the Immigration and 
        Nationality Act (8 U.S.C. 1253 and 1306) (relating to 
        willfully failing to leave the United States after 
        deportation and creating a counterfeit alien 
        registration card);
          (10) any provision contained in chapter 8 of title II 
        of the Immigration and Nationality Act (8 U.S.C. 1321 
        et seq.) (relating to various immigration offenses); or
          (11) section 208, 811, 1107(b), 1128B(a), or 1632 of 
        the Social Security Act (42 U.S.C. 408, 1011, 1307(b), 
        1320a-7b(a), and 1383a) (relating to false statements 
        relating to programs under the Act).

           *       *       *       *       *       *       *


      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed 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 italics, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed 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 italics, and existing law in 
which no change is proposed is shown in roman):

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *



Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


                  CHAPTER 77--MISCELLANEOUS PROVISIONS

     * * * * * * *
Sec. 7529. Notification of suspected identity theft.

           *       *       *       *       *       *       *


SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

  If the Secretary determines that there was an unauthorized 
use of the identity of any taxpayer, the Secretary shall--
          (1) as soon as practicable and without jeopardizing 
        an investigation relating to tax administration, notify 
        the taxpayer and include with that notice--
                  (A) instructions to the taxpayer about filing 
                a police report, and
                  (B) the forms the taxpayer must submit to 
                allow investigating law enforcement officials 
                to access the taxpayer's personal information, 
                and
          (2) if any person is criminally charged by indictment 
        or information relating to such unauthorized use, 
        notify such taxpayer as soon as practicable of such 
        charge.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 47--FRAUD AND FALSE STATEMENTS

           *       *       *       *       *       *       *



Sec. 1028A. Aggravated identity theft

  (a) Offenses.--
          (1) In general.--Whoever, during and in relation to 
        any felony violation enumerated in subsection (c), 
        knowingly transfers, possesses, or uses, without lawful 
        authority, a means of identification of another person 
        shall, in addition to the punishment provided for such 
        felony, be sentenced to a term of imprisonment of 2 
        years.
          (2) Terrorism offense.--Whoever, during and in 
        relation to any felony violation enumerated in section 
        2332b(g)(5)(B), knowingly transfers, possesses, or 
        uses, without lawful authority, a means of 
        identification of another person or a false 
        identification document shall, in addition to the 
        punishment provided for such felony, be sentenced to a 
        term of imprisonment of 5 years.
  (b) Consecutive Sentence.--Notwithstanding any other 
provision of law--
          (1) a court shall not place on probation any person 
        convicted of a violation of this section;
          (2) except as provided in paragraph (4), no term of 
        imprisonment imposed on a person under this section 
        shall run concurrently with any other term of 
        imprisonment imposed on the person under any other 
        provision of law, including any term of imprisonment 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used;
          (3) in determining any term of imprisonment to be 
        imposed for the felony during which the means of 
        identification was transferred, possessed, or used, a 
        court shall not in any way reduce the term to be 
        imposed for such crime so as to compensate for, or 
        otherwise take into account, any separate term of 
        imprisonment imposed or to be imposed for a violation 
        of this section; and
          (4) a term of imprisonment imposed on a person for a 
        violation of this section may, in the discretion of the 
        court, run concurrently, in whole or in part, only with 
        another term of imprisonment that is imposed by the 
        court at the same time on that person for an additional 
        violation of this section, provided that such 
        discretion shall be exercised in accordance with any 
        applicable guidelines and policy statements issued by 
        the Sentencing Commission pursuant to section 994 of 
        title 28.
  (c) Definition.--For purposes of this section, the term 
``felony violation enumerated in subsection (c)'' means any 
offense that is a felony violation of--
          (1) section 641 (relating to theft of public money, 
        property, or rewards ), section 656 (relating to theft, 
        embezzlement, or misapplication by bank officer or 
        employee), or section 664 (relating to theft from 
        employee benefit plans);
          (2) section 911 (relating to false personation of 
        citizenship);
          (3) section 922(a)(6) (relating to false statements 
        in connection with the acquisition of a firearm);
          (4) any provision contained in this chapter (relating 
        to fraud and false statements), other than this section 
        or section 1028(a)(7);
          (5) any provision contained in chapter 63 (relating 
        to mail, bank, and wire fraud);
          (6) any provision contained in chapter 69 (relating 
        to nationality and citizenship);
          (7) any provision contained in chapter 75 (relating 
        to passports and visas);
          (8) section 523 of the Gramm-Leach-Bliley Act (15 
        U.S.C. 6823) (relating to obtaining customer 
        information by false pretenses);
          (9) section 243 or 266 of the Immigration and 
        Nationality Act (8 U.S.C. 1253 and 1306) (relating to 
        willfully failing to leave the United States after 
        deportation and creating a counterfeit alien 
        registration card);
          (10) any provision contained in chapter 8 of title II 
        of the Immigration and Nationality Act (8 U.S.C. 1321 
        et seq.) (relating to various immigration offenses); 
        [or]
          (11) section 208, 811, 1107(b), 1128B(a), or 1632 of 
        the Social Security Act (42 U.S.C. 408, 1011, 1307(b), 
        1320a-7b(a), and 1383a) (relating to false statements 
        relating to programs under the Act)[.]; or
          (12) section 7206(b) of the Internal Revenue Code of 
        1986 (relating to use of false identity in connection 
        with tax fraud).

           *       *       *       *       *       *       *


                                  [all]