A bill to amend the Internal Revenue Code of 1986 to increase criminal and civil penalties for unauthorized disclosure of taxpayer information, and for other purposes.

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4752 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
  2d Session
                                S. 4752

  To amend the Internal Revenue Code of 1986 to increase criminal and 
 civil penalties for unauthorized disclosure of taxpayer information, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2026

Mr. Daines (for himself and Ms. Cortez Masto) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To amend the Internal Revenue Code of 1986 to increase criminal and 
 civil penalties for unauthorized disclosure of taxpayer information, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATIONS TO PENALTIES FOR UNAUTHORIZED DISCLOSURES OF 
              TAXPAYER INFORMATION.

    (a) Criminal Penalties.--
            (1) In general.--Paragraphs (1), (2), (3), (4), and (5) of 
        section 7213(a) of the Internal Revenue Code of 1986 are each 
        amended by striking ``$5,000, or imprisonment of not more than 
        5 years'' each place it appears and inserting ``$250,000, or 
        imprisonment of not more than 7 years''.
            (2) Failure of contractors to maintain safeguards.--
                    (A) In general.--Part I of subchapter A of chapter 
                75 of subtitle F of the Internal Revenue Code of 1986 
                is amended by inserting after section 7213A the 
                following new section:

``SEC. 7213B. FAILURE OF IRS CONTRACTORS TO MAINTAIN SAFEGUARDS.

    ``(a) In General.--In the case of a contractor of the Internal 
Revenue Service that willfully fails to implement or enforce any 
applicable requirement under section 6103 (or regulations prescribed 
thereunder) to protect the confidentiality of returns or return 
information, if such failure results in the unauthorized disclosure of 
returns or return information, such contractor shall be guilty of a 
felony and, upon conviction thereof, shall be fined the greater of--
            ``(1) $500,000, or
            ``(2) an amount equal to 25 percent of the total amount 
        obligated under all contracts with the Internal Revenue Service 
        during the first fiscal year in which such contractor was 
        provided access to any returns or return information related to 
        the unauthorized disclosure.
    ``(b) Definitions.--For purposes of this section, the term 
`contractor of the Internal Revenue Service' means any person described 
in section 6103(n) (including any officer or employee of such person) 
in connection with a written contract with the Internal Revenue 
Service.''.
                    (B) Clerical amendment.--The table of sections for 
                part I of subchapter A of chapter 75 of subtitle F of 
                the Internal Revenue Code of 1986 is amended by 
                inserting after the item relating to section 7213A the 
                following new item:

``Sec. 7213B. Failure of IRS contractors to maintain safeguards.''.
                    (C) Conforming amendments.--
                            (i) Section 6103(e)(11) of such Code is 
                        amended by inserting ``7213B,'' after 
                        ``7213A,''.
                            (ii) Section 6105(d) of such Code is 
                        amended by inserting ``7213B,'' after 
                        ``7213A,''.
                            (iii) Section 7431(e) of such Code is 
                        amended by striking the first sentence and 
                        inserting the following: ``If any person is 
                        criminal charged by indictment or information 
                        with--
            ``(1) inspection or disclosure of a taxpayer's return or 
        return information in violation of--
                    ``(A) paragraph (1) or (2) of section 7213(a),
                    ``(B) section 7213A(a), or
                    ``(C) subparagraph (B) of section 1030(a)(2) of 
                title 18, United States Code, or
            ``(2) failure to protect the confidentiality of returns or 
        return information which results in the unauthorized disclosure 
        of the taxpayer's return or return information in violation of 
        section 7213B(a),
the Secretary shall notify such taxpayer as soon as practicable of such 
inspection or disclosure.''.
                            (iv) Section 7513(c) of such Code is 
                        amended by striking ``section 7213'' and 
                        inserting ``sections 7213 and 7213B''.
    (b) Civil Damages.--Section 7431(c)(1)(A) of the Internal Revenue 
Code of 1986 is amended by striking ``$1,000'' and inserting 
``$5,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures or inspections made after the date of the 
enactment of this Act.
                                 <all>