S.Amdt. 3137

1. Inserts new text wherever appropriate

   Inserts

   Inserted: TITLE--IDENTITY THEFT AND TAX FRAUD PREVENTION

   Inserted: Subtitle A--Protecting Victims of Tax-related Identity Theft SEC. _01. EXPEDITED REFUNDS FOR IDENTITY THEFT VICTIMS.

   Inserted: Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall establish a plan of action to reduce the administrative time required to process and resolve cases of identity theft in connection with tax returns, including the issuance of refunds to legitimate taxpayers, to no more than 90 days, on average.

   Inserted: SEC. _02. SINGLE POINT OF CONTACT FOR IDENTITY THEFT VICTIMS.

   Inserted: Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall establish new procedures to ensure that any taxpayer whose return has been delayed or otherwise adversely affected due to identity theft has a single point of contact at the Internal Revenue Service throughout the processing of his or her case. The single point of contact shall track the case of the taxpayer from start to finish and coordinate with other specialized units to resolve case issues as quickly as possible.

   Inserted: SEC. _03. ENHANCEMENTS TO IRS PIN PROGRAM.

   Inserted: (a) In General.--The Secretary of the Treasury, or the Secretary's delegate, shall issue a personal identification number to any individual requesting protection from identity theft-related tax fraud after the individual's true identity has been established and verified.

   Inserted: (b) Report.--Not later than 360 days after the date of enactment of this Act, the Secretary of the Treasury shall submit to Congress a report analyzing the effectiveness of the program described in subsection (a) in reducing tax fraud.

   Inserted: SEC. _04. ELECTRONIC FILING OPT OUT.

   Inserted: Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall implement 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 a person purporting to be such a person.

   Inserted: SEC. _05. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY THEFT.

   Inserted: (a) In General.--Chapter 77 is amended by adding at the end the following new section:

   Show 177 more inserted paragraphsShow less

   Inserted: "SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

   Inserted: "If the Secretary determines that there was an unauthorized use of the identity of any taxpayer, the Secretary shall--

   Inserted: "(1) as soon as practicable and without jeopardizing an investigation relating to tax administration, notify the taxpayer, and

   Inserted: "(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.".

   Inserted: (b) Clerical Amendment.--The table of sections for chapter 77 is amended by adding at the end the following new item:

   Inserted: "Sec. 7529. Notification of suspected identity theft.".

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

   Inserted: Subtitle B--Shutting Down Abusive Identity Theft and Tax Fraud Schemes SEC. _11. RESTRICTIONS ON ABILITY TO USE PREPAID CARDS FOR TAX FRAUD.

   Inserted: (a) Accounts With Elevated Risk of Identity Theft.--

   Inserted: (1) In general.--Not later than 360 days after the date of the enactment of this Act, the Federal primary financial regulatory agencies, in consultation with the Secretary of the Treasury, shall jointly prescribe regulations requiring newly issued deposit or transaction account numbers, as the case may be, to be distinguishable between verified accounts and at-risk accounts.

   Inserted: (2) Definitions.--As used in this section--

   Inserted: (A) the term "at-risk account" means any deposit account or transaction account, including accounts associated with a prepaid access arrangement, that is not a verified account;

   Inserted: (B) the term "primary financial regulatory agency" has the same meaning as in section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301(12)); and

   Inserted: (C) the term "verified account" means any deposit account or transaction account in which the identity of the account holder and any prepaid access customer associated with the account is verified by--

   Inserted: (i) customer identification procedures that comply with section 5318(l) of title 31, United States Code; and

   Inserted: (ii) direct review of an original, unexpired government-issued form of identification bearing a photograph or similar safeguard, such as a driver's license or passport.

   Inserted: (b) GAO Audit of Debit Card Issuers To Ensure Compliance With Customer Identification Requirements.--

   Inserted: (1) Review and evaluation.--The Comptroller General of the United States shall review and evaluate the effectiveness of the current Customer Identification Program rules implementing the customer identification program requirements under section 5318(l) of title 31, United States Code, as such rules apply to the prepaid card industry.

   Inserted: (2) Required considerations.--The review and evaluation required under paragraph (1) shall--

   Inserted: (A) consider whether weaknesses in current customer identification programs are contributing to identity theft and financial loss, particularly with respect to tax fraud; and

   Inserted: (B) review whether--

   Inserted: (i) current risk-based standards for customer identification are the best means to prevent criminal use of prepaid cards and provide sufficient guidance and certainty to the sellers and providers of prepaid access;

   Inserted: (ii) current exclusions from customer identification requirements, such as exclusions for government benefit programs, are appropriate; and

   Inserted: (iii) Federal regulatory agencies exercise adequate oversight and supervision of customer identification practices of the prepaid card industry.

   Inserted: (3) Report to congress.--Not later than 360 days after the date of the enactment this Act, the Comptroller General of the United States shall submit to Congress a report--

   Inserted: (A) on the findings of the review and evaluation required under paragraph (1); and

   Inserted: (B) containing any recommendations or proposals for legislative or administrative action to improve the customer identification practices of the prepaid card industry.

   Inserted: SEC. _12. LIMITATION ON MULTIPLE TAX REFUNDS TO THE SAME ACCOUNT.

   Inserted: (a) In General.--Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall issue regulations that restrict the delivery or deposit of multiple tax refunds from the same tax year to the same individual account or mailing address.

   Inserted: (b) Exception.--The regulation promulgated under subsection (a) shall provide that the restrictions shall not apply in cases and situations where the Secretary determines there is not a likelihood of tax fraud.

   Inserted: Subtitle C--Adding Critical New Protections to Safeguard Social Security Numbers SEC. _21. PROHIBITING THE DISPLAY OF SOCIAL SECURITY ACCOUNT NUMBERS ON NEWLY ISSUED MEDICARE IDENTIFICATION CARDS AND COMMUNICATIONS PROVIDED TO MEDICARE BENEFICIARIES.

   Inserted: (a) In General.--Not later than 2 years after the date of the 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.

   Inserted: (b) Newly Issued Medicare Cards and Communications Provided to Beneficiaries.--

   Inserted: (1) Newly issued cards.--

   Inserted: (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).

   Inserted: (B) Requirements.--

   Inserted: (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.

   Inserted: (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.

   Inserted: (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.

   Inserted: (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.

   Inserted: (c) Medicare Beneficiary Defined.--In this section, the term "Medicare beneficiary" means an individual entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.) or enrolled for benefits under part B of such title (42 U.S.C. 1395j et seq.).

   Inserted: (d) Conforming Amendments.--

   Inserted: (1) Reference in the social security act.--Section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 405(c)(2)(C)) is amended--

   Inserted: (A) by moving clause (x), as added by section 1414(a)(2) of the Patient Protection and Affordable Care Act (Public Law 111-148), 6 ems to the left;

   Inserted: (B) by redesignating clause (x), as added by section 2(a)(1) of the Social Security Number Protection Act of 2010 (42 U.S.C. 1305 note), as clause (xii); and

   Inserted: (C) by adding after clause (xii), as redesignated by subparagraph (B), the following new clause:

   Inserted: "(xiii) Subject to the EXPIRE Act of 2014, social security account numbers shall not be displayed on Medicare identification cards or on communications provided to Medicare beneficiaries.".

   Inserted: (2) Access to information.--Section 205(r) of the Social Security Act (42 U.S.C. 405(r)) is amended by adding at the end the following new paragraph:

   Inserted: "(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--

   Inserted: "(A) the requirements of subparagraphs (A) and (B) of paragraph (3) are met; and

   Inserted: "(B) such agreement includes appropriate provisions to protect the confidentiality of information provided by the Commissioner under such agreement.".

   Inserted: (e) Pilot Program.--

   Inserted: (1) Establishment.--The Secretary shall establish a pilot program utilizing smart card technology to evaluate--

   Inserted: (A) the applicability of smart card technology to the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), including the applicability of such technology to Medicare beneficiaries or Medicare providers; and

   Inserted: (B) whether such cards would be effective in preventing fraud under the Medicare program.

   Inserted: (2) Implementation.--

   Inserted: (A) Initial implementation.--The Secretary shall implement the pilot program under this subsection not later than 1 year after the date of enactment of this Act.

   Inserted: (B) Scope and duration.--The Secretary shall conduct the pilot program--

   Inserted: (i) in not less than 2 States; and

   Inserted: (ii) for a period of not less than 180 days or more than 2 years.

   Inserted: (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:

   Inserted: (A) A summary of the pilot program and findings, including--

   Inserted: (i) the costs or savings to the Medicare program as a result of the implementation of the pilot program;

   Inserted: (ii) whether the use of smart card technology resulted in improvements in the quality of care provided to Medicare beneficiaries under the pilot program; and

   Inserted: (iii) whether such technology was useful in preventing or detecting fraud, waste, and abuse in the Medicare program.

   Inserted: (B) Recommendations regarding whether the use of smart card technology should be expanded under the Medicare program.

   Inserted: (4) Definitions.--In this subsection:

   Inserted: (A) Medicare provider.--The term "Medicare provider" includes a provider of services (as defined in section 1861(u) of the Social Security Act (42 U.S.C. 1395x(u))) and a supplier (as defined in section 1861(d) of such Act (42 U.S.C. 1395x(d))).

   Inserted: (B) Secretary.--The term "Secretary" means the Secretary of Health and Human Services.

   Inserted: (C) Smart card.--The term "smart card" means identification used by a Medicare beneficiary or a Medicare provider that includes anti-fraud attributes. Such a card--

   Inserted: (i) may rely on existing commercial data transfer networks or on a network of proprietary card readers or databases; and

   Inserted: (ii) may include--

   Inserted: (I) cards using technology adapted from the financial services industry;

   Inserted: (II) cards containing individual biometric identification, provided that such identification is encrypted and not contained in any central database;

   Inserted: (III) cards adapting technology and processes utilized in the TRICARE program under chapter 55 of title 10, United States Code, or by the Veterans' Administration; or

   Inserted: (IV) such other technology as the Secretary determines appropriate.

   Inserted: SEC. _22. PROHIBITION OF THE DISPLAY, SALE, OR PURCHASE OF SOCIAL SECURITY NUMBERS.

   Inserted: (a) Prohibition.--

   Inserted: (1) In general.--Chapter 47 of title 18, United States Code, is amended by inserting after section 1028A the following:

   Inserted: "Sec. 1028B. Prohibition of the display, sale, or purchase of Social Security numbers

   Inserted: "(a) Definitions.--In this section:

   Inserted: "(1) Display.--The term 'display' means to intentionally communicate or otherwise make available (on the Internet or in any other manner) to the general public an individual's Social Security number.

   Inserted: "(2) Person.--The term 'person' means any individual, partnership, corporation, trust, estate, cooperative, association, or any other entity.

   Inserted: "(3) Purchase.--The term 'purchase' means providing directly or indirectly, anything of value in exchange for a Social Security number.

   Inserted: "(4) Sale.--The term 'sale' means obtaining, directly or indirectly, anything of value in exchange for a Social Security number.

   Inserted: "(5) State.--The term 'State' means any State of the United States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, the United States Virgin Islands, Guam, American Samoa, and any territory or possession of the United States.

   Inserted: "(b) Limitation on Display.--No person may display any individual's Social Security number to the general public without the affirmatively expressed consent of the individual.

   Inserted: "(c) Limitation on Sale or Purchase.--Except as otherwise provided in this section, no person may sell or purchase any individual's Social Security number without the affirmatively expressed consent of the individual.

   Inserted: "(d) Prerequisites for Consent.--In order for consent to exist under subsection (b) or (c), the person displaying or seeking to display, selling or attempting to sell, or purchasing or attempting to purchase, an individual's Social Security number shall--

   Inserted: "(1) inform the individual of the general purpose for which the number will be used, the types of persons to whom the number may be available, and the scope of transactions permitted by the consent; and

   Inserted: "(2) obtain the affirmatively expressed consent (electronically or in writing) of the individual.

   Inserted: "(e) Exceptions.--Nothing in this section shall be construed to prohibit or limit the display, sale, or purchase of a Social Security number--

   Inserted: "(1) required, authorized, or excepted under any Federal law;

   Inserted: "(2) for a public health purpose, including the protection of the health or safety of an individual in an emergency situation;

   Inserted: "(3) for a national security purpose;

   Inserted: "(4) for a law enforcement purpose, including the investigation of fraud and the enforcement of a child support obligation;

   Inserted: "(5) if the display, sale, or purchase of the number is for a use occurring as a result of an interaction between businesses, governments, or business and government (regardless of which entity initiates the interaction), including, but not limited to--

   Inserted: "(A) the prevention of fraud (including fraud in protecting an employee's right to employment benefits);

   Inserted: "(B) the facilitation of credit checks or the facilitation of background checks of employees, prospective employees, or volunteers;

   Inserted: "(C) the retrieval of other information from other businesses, commercial enterprises, government entities, or private nonprofit organizations; or

   Inserted: "(D) when the transmission of the number is incidental to, and in the course of, the sale, lease, franchising, or merger of all, or a portion of, a business;

   Inserted: "(6) if the transfer of such a number is part of a data matching program involving a Federal, State, or local agency; or

   Inserted: "(7) if such number is required to be submitted as part of the process for applying for any type of Federal, State, or local government benefit or program;

   Inserted: except that, nothing in this subsection shall be construed as permitting a professional or commercial user to display or sell a Social Security number to the general public.

   Inserted: "(f) Limitation.--Nothing in this section shall prohibit or limit the display, sale, or purchase of Social Security numbers as permitted under title V of the Gramm-Leach-Bliley Act, or for the purpose of affiliate sharing as permitted under the Fair Credit Reporting Act, except that no entity regulated under such Acts may make Social Security numbers available to the general public, as may be determined by the appropriate regulators under such Acts. For purposes of this subsection, the general public shall not include affiliates or unaffiliated third-party business entities as may be defined by the appropriate regulators.".

   Inserted: (2) Conforming amendment.--The chapter analysis for chapter 47 of title 18, United States Code, is amended by inserting after the item relating to section 1028 the following:

   Inserted: "1028B. Prohibition of the display, sale, or purchase of Social Security numbers.".

   Inserted: (b) Study; Report.--

   Inserted: (1) In general.--The Attorney General shall conduct a study and prepare a report on all of the uses of Social Security numbers permitted, required, authorized, or excepted under any Federal law. The report shall include a detailed description of the uses allowed as of the date of enactment of this Act, the impact of such uses on privacy and data security, and shall evaluate whether such uses should be continued or discontinued by appropriate legislative action.

   Inserted: (2) Report.--Not later than 1 year after the date of enactment of this Act, the Attorney General shall report to Congress findings under this subsection. The report shall include such recommendations for legislation based on criteria the Attorney General determines to be appropriate.

   Inserted: (c) Effective Date.--The amendments made by this section shall take effect on the date that is 30 days after the date on which the final regulations promulgated under section 1028B of title 18, United States Code, are published in the Federal Register.

   Inserted: SEC. _23. CRIMINAL PENALTIES FOR THE MISUSE OF A SOCIAL SECURITY NUMBER.

   Inserted: (a) Prohibition of Wrongful Use as Personal Identification Number.--No person may obtain any individual's Social Security number for purposes of locating or identifying an individual with the intent to physically injure, harm, or use the identity of the individual for any illegal purpose.

   Inserted: (b) Criminal Sanctions.--Section 208(a) of the Social Security Act (42 U.S.C. 408(a)) is amended--

   Inserted: (1) in paragraph (8), by inserting "or" after the semicolon; and

   Inserted: (2) by inserting after paragraph (8) the following:

   Inserted: "(9) except as provided in subsections (e) and (f) of section 1028B of title 18, United States Code, knowingly and willfully displays, sells, or purchases (as those terms are defined in section 1028B(a) of title 18, United States Code) any individual's Social Security account number without having met the prerequisites for consent under section 1028B(d) of title 18, United States Code; or

   Inserted: "(10) obtains any individual's Social Security number for the purpose of locating or identifying the individual with the intent to injure or to harm that individual, or to use the identity of that individual for an illegal purpose;".

   Inserted: SEC. _24. CIVIL ACTIONS AND CIVIL PENALTIES.

   Inserted: (a) Civil Action in State Courts.--

   Inserted: (1) In general.--Any individual aggrieved by an act of any person in violation of this Act or any amendments made by this Act may, if otherwise permitted by the laws or rules of the court of a State, bring in an appropriate court of that State--

   Inserted: (A) an action to enjoin such violation;

   Inserted: (B) an action to recover for actual monetary loss from such a violation, or to receive up to $500 in damages for each such violation, whichever is greater; or

   Inserted: (C) both such actions.

   Inserted: It shall be an affirmative defense in any action brought under this paragraph that the defendant has established and implemented, with due care, reasonable practices and procedures to effectively prevent violations of the regulations prescribed under this Act. If the court finds that the defendant willfully or knowingly violated the regulations prescribed under this subsection, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under subparagraph (B).

   Inserted: (2) Statute of limitations.--An action may be commenced under this subsection not later than the earlier of--

   Inserted: (A) 5 years after the date on which the alleged violation occurred; or

   Inserted: (B) 3 years after the date on which the alleged violation was or should have been reasonably discovered by the aggrieved individual.

   Inserted: (3) Nonexclusive remedy.--The remedy provided under this subsection shall be in addition to any other remedies available to the individual.

   Inserted: (b) Civil Penalties.--

   Inserted: (1) In general.--Any person who the Attorney General determines has violated any section of this Act or of any amendments made by this Act shall be subject, in addition to any other penalties that may be prescribed by law--

   Inserted: (A) to a civil penalty of not more than $5,000 for each such violation; and

   Inserted: (B) to a civil penalty of not more than $50,000, if the violations have occurred with such frequency as to constitute a general business practice.

   Inserted: (2) Determination of violations.--Any willful violation committed contemporaneously with respect to the Social Security numbers of 2 or more individuals by means of mail, telecommunication, or otherwise, shall be treated as a separate violation with respect to each such individual.

   Inserted: (3) Enforcement procedures.--The provisions of section 1128A of the Social Security Act (42 U.S.C. 1320a-7a), other than subsections (a), (b), (f), (h), (i), (j), (m), and (n) and the first sentence of subsection (c) of such section, and the provisions of subsections (d) and (e) of section 205 of such Act (42 U.S.C. 405) shall apply to a civil penalty action under this subsection in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a) of such Act (42 U.S.C. 1320a-7a(a)), except that, for purposes of this paragraph, any reference in section 1128A of such Act (42 U.S.C. 1320a-7a) to the Secretary shall be deemed to be a reference to the Attorney General.

   Inserted: Subtitle D--Strengthening Laws and Improving Enforcement Against Tax-related Identity Theft SEC. _31. CRIMINAL PENALTY FOR USING A FALSE IDENTITY IN CONNECTION WITH TAX FRAUD.

   Inserted: (a) In General.--Section 7206 is amended--

   Inserted: (1) by striking "Any person" and inserting the following:

   Inserted: "(a) In General.--Any person", and

   Inserted: (2) by adding at the end the following new subsection:

   Inserted: "(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.".

   Inserted: (b) 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:

   Inserted: "(12) section 7206(b) of the Internal Revenue Code of 1986 (relating to use of false identity in connection with tax fraud).".

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

   Inserted: SEC. _32. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS.

   Inserted: (a) In General.--Section 6713(a) is amended--

   Inserted: (1) by striking "$250" and inserting "$1,000", and

   Inserted: (2) by striking "$10,000" and inserting "$50,000".

   Inserted: (b) Criminal Penalty.--Section 7216(a) is amended by striking "$1,000" and inserting "$100,000".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to disclosures or uses after the date of the enactment of this Act.

   Inserted: SEC. _33. AUTHORITY TO TRANSFER INTERNAL REVENUE SERVICE APPROPRIATIONS TO USE FOR TAX FRAUD ENFORCEMENT.

   Inserted: 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.

   Inserted: SEC. _34. LOCAL LAW ENFORCEMENT LIAISON.

   Inserted: (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.

   Inserted: (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 shall include--

   Inserted: (1) receiving information from State and local law enforcement authorities;

   Inserted: (2) responding to inquiries from State and local law enforcement authorities;

   Inserted: (3) administering authorized information-sharing initiatives with State or local law enforcement authorities and reviewing the performance of such initiatives;

   Inserted: (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

   Inserted: (5) any other duties as delegated by the Commissioner of Internal Revenue.

   Inserted: SEC. _35. EXTEND INTERNAL REVENUE SERVICE AUTHORITY TO REQUIRE TRUNCATED SOCIAL SECURITY NUMBERS ON FORM W-2.

   Inserted: (a) In General.--Paragraph (2) of section 6051(a) is amended by striking "his social security number" and inserting "an identifying number for the employee".

   Inserted: (b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. _36. CLARIFICATION WITH RESPECT TO REGULATION OF FEDERAL TAX RETURN PREPARERS.

   Inserted: (a) In General.--Subparagraph (D) of section 330(a)(2) of title 31, United States Code, is amended by inserting "and in preparing and filing their tax returns" before the period.

   Inserted: (b) Effective Date.--

   Inserted: (1) In general.--The amendment made by this section applies to regulations promulgated before, on, or after the date of the enactment of this Act.

   Inserted: (2) Effect on existing proceedings.--Nothing in this section shall be construed to create a negative inference with respect to the application of section 330 of title 31, United States Code, or the authority of the Secretary of the Treasury under such section, with respect to regulations promulgated before the date of the enactment of this Act.

   Inserted: SEC. _37. AUTHENTICATION OF USERS OF ELECTRONIC SERVICES ACCOUNTS.

   Inserted: (a) In General.--The Commissioner of Internal Revenue shall establish a program to verify the identity of any individual opening an e-Services account with the Internal Revenue Service before such individual is able to use the e-Services tools.

   Inserted: (b) Report.--The Commissioner of Internal Revenue shall report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives, not later than 1 year after the date of the enactment of this Act, on any further legislative recommendations to prevent fraud relating to the Internal Revenue Service e-Services tools, including an authorized e-file provider program.

   Inserted: Subtitle E--Accelerating Transition to a Real-time Tax System That Protects Taxpayers and Reduces Fraud SEC. _41. IMPROVEMENT IN ACCESS TO INFORMATION IN THE NATIONAL DIRECTORY OF NEW HIRES FOR TAX ADMINISTRATION PURPOSES.

   Inserted: (a) In General.--Paragraph (3) of section 453(i) of the Social Security Act (42 U.S.C. 653(i)) is amended to read as follows:

   Inserted: "(3) Administration of federal tax laws.--The Secretary of the Treasury shall have access to the information in the National Directory of New Hires for purposes of administering the Internal Revenue Code of 1986.".

   Inserted: (b) Effective Date.--The amendment made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. _42. PLAN OF ACTION FOR TRANSITIONING TO A REAL-TIME TAX SYSTEM.

   Inserted: Not later than 270 days after the date of enactment of this Act, the Secretary of the Treasury, or the Secretary's delegate, shall submit to Congress a report analyzing and outlining options and potential timelines for moving toward a tax system that reduces burdens on taxpayers and decreases tax fraud through real-time information matching.

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As printed