H.R. 8292 — Taxpayer Data Protection Act
Disclaimer:The content provided in this post, including but not limited to bills and legislative documents, is sourced from various governmental and public domain sources. I do not claim ownership of any of the content uploaded. All rights and credits belong to the respective owners and creators. This material is made available for informational and educational purposes only.
Background:
26 U.S.C. S 7213 of the Internal Revenue Code outlines the penalties for the unauthorized disclosure of any tax return information of an individual as defined in 26 U.S.C. § 6103. Current law states that any violation shall be a felony punishable by a fine in any amount not to exceed $5,000, or imprisonment of not more than 5 years, or both. This bill increases the maximum penalty to a fine of up to $250,000, or imprisonment of not more than 10 years, or both. It also clarifies that any violation which affects more than one taxpayer shall be treated as a separate, distinct violation.
Issue:
Starting in 2019, an Internal Revenue Service (IRS) contractor stole taxpayer data and leaked it to the New York Times and ProPublica. Those organizations then published a significant amount of confidential tax information targeting numerous American taxpayers using information that the IRS is tasked with keeping confidential and secure.
- Starting in September 2020, the Committee questioned federal investigators and sought answers about who illegally stole and leaked confidential American taxpayer information and how the IRS allowed it to happen. Committee efforts continued after ProPublica began publishing articles in June 2021 with private taxpayer information.
- In September 2023, the U.S. Department of Justice (DOJ) announced it was charging IRS contractor Charles Littlejohn—who stole tax return information for thousands of individuals—with one count of disclosing tax return information without authorization.
- Committee Republicans sent a letter to the Judge who oversaw Mr. Littlejohn’s case expressing disappointment that DOJ plead Mr. Littlejohn to a single count when the facts clearly warranted additional charges. The letter, however, also encouraged the Judge to sentence Mr. Littlejohn to the maximum of 5 years imprisonment despite the anticipated sentencing range of 8 to 14 months.
- The Judge ultimately agreed and sentenced Mr. Littlejohn to 5 years in prison and a $5,000 fine.
Increasing Penalties for The Unauthorized Disclosure of Taxpayer Information
- The Taxpayer Data Protection Act amends paragraphs (1), (2), (3), (4), and (5) of 26 U.S.C. § 7213(a) to increase the penalties for unauthorized disclosure of taxpayer information.
- It increases the maximum fine and imprisonment period for an unauthorized disclosure of 26 U.S.C. § 6103 information from “$5,000, or imprisonment of not more than 5 years” to “$250,000, or imprisonment of not more than 10 years.” This fine amount is consistent with 18 U.S.C. § 3571.
- The bill also adds language to ensure every impacted taxpayer counts as a distinct instance of a disclosure.
- Imposing a more serious maximum sentence will help deter the unauthorized disclosure of taxpayer information in the future.
Original Text
The original Article featuring all those details is given below:
Amendments
Here it features the recent amendments to the Act:
Chairman Smith Opening Statement – Markup of the Taxpayer Data Protection Act
“The bill before us today, sponsored by every Republican member on this Committee, helps ensure bad actors are prevented from stealing and disclosing taxpayer information.”
As prepared for delivery.
“Americans file their tax returns every year with the expectation that their data and personal tax information are protected and secure from unlawful disclosure. Unfortunately, the recent criminal actions of an IRS leaker make clear that Congress must act to ensure these crimes are fully prosecuted and that would-be bad actors are deterred in the future.
“Between 2017 and 2021, Charles Littlejohn worked as a contractor for the IRS through the firm of Booz Allen. Half of Mr. Littlejohn’s taxpayer-funded career was spent stealing taxpayer information – in particular information belonging to President Trump, as well as that of other political targets.
“Mr. Littlejohn then leaked the confidential tax return information to the New York Times and ProPublica so they could publish articles about President Trump and notable figures such as Jeff Bezos, Elon Musk, and Warren Buffet along with many others.
“Mr. Littlejohn took active steps to avoid detection by the IRS, including uploading the information to a private website, and storing the information on multiple personal storage devices.
“Once he became the subject of an investigation into the leaks, he deleted and destroyed evidence linking him to these crimes.
“Once caught, Mr. Littlejohn admitted that he was ‘aware of the potential consequences’ and, in fact, he made his decision ‘with full knowledge that [he] would end up in a courtroom.’
“The current law failed to protect taxpayers because it failed to deter Mr. Littlejohn.
“In September of last year, the Department of Justice made the bizarre decision to charge Mr. Littlejohn with just a single count of unauthorized disclosure of private tax information. He stole the tax return information of thousands of individuals, submitted that information to two separate news organizations, and obstructed the DOJ’s investigation.
“After Republicans on this Committee sent a letter to the judge overseeing this case about the DOJ’s lackluster charge and urged her to give him the maximum sentence available, Mr. Littlejohn did in fact receive the maximum under the circumstances: 5 years in prison and a $5,000 fine. During the sentencing, the judge called his crimes ‘an attack on our constitutional democracy.’
“The bill before us today, sponsored by every Republican member on this Committee, helps ensure bad actors are prevented from stealing and disclosing taxpayer information.
“The Taxpayer Data Protection Act increases the maximum penalty for the unauthorized disclosure of returns and return information to include a fine of up to $250,000, or imprisonment of 10 years, or both. It also ensures that each taxpayer impacted by a disclosure will count as a separate and distinct violation of the law.
“It is up to us as members of the chief tax-writing committee in Congress to protect the public trust and to secure private taxpayer information.
“I urge all my colleagues to support this legislation and send a clear message that Congress will not tolerate criminal leaks of taxpayer information.”
Source: ways and means
Disclaimer:The content provided in this post, including but not limited to bills and legislative documents, is sourced from various governmental and public domain sources. I do not claim ownership of any of the content uploaded. All rights and credits belong to the respective owners and creators. This material is made available for informational and educational purposes only.