Authorizes appropriations to establish an office in the Internal Revenue Service (IRS) to focus on violations of tax law by individuals under investigation for criminal commercial sex activity.
Amends the Internal Revenue Code to: (1) revise requirements for making awards to individuals who disclose tax law violations to the IRS (whistleblowers); and (2) increase criminal monetary and other penalties for attempts to evade or defeat tax, willful failure to file a tax return, supply information, or pay tax, aggravated failure to file tax returns, fraud and false statements, and underpayment or overpayment of tax due to fraud.
Establishes in the IRS a Whitleblower Office to analyze whistleblower information and manage the whistleblower awards program.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6107 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6107
To authorize appropriations for the purpose of establishing an office
within the Internal Revenue Service to focus on violations of the
internal revenue laws by persons who are under investigation for
conduct relating to commercial sex acts, to establish a Whistleblower
Office within the Internal Revenue Service, and to increase the
criminal monetary penalty limitations for the underpayment or
overpayment of tax due to fraud.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 19, 2006
Mrs. Maloney (for herself, Ms. Woolsey, and Mr. Nadler) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To authorize appropriations for the purpose of establishing an office
within the Internal Revenue Service to focus on violations of the
internal revenue laws by persons who are under investigation for
conduct relating to commercial sex acts, to establish a Whistleblower
Office within the Internal Revenue Service, and to increase the
criminal monetary penalty limitations for the underpayment or
overpayment of tax due to fraud.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. AUTHORIZATION OF APPROPRIATIONS FOR TAX LAW ENFORCEMENT
RELATING TO HUMAN SEX TRAFFICKING.
(a) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated
$2,000,000 for fiscal year 2007 for the purpose of establishing
an office within the Internal Revenue Service to focus on
violations of the internal revenue laws by persons who are
under investigation by any office of Federal, State, or local
law enforcement for knowingly recruiting, enticing, harboring,
transporting, or providing by any means a person, knowing
that--
(A) force, fraud, or coercion will be used to cause
the person to engage in a commercial sex act, or
(B) the person has not attained the age of 18 years
and will be caused to engage in a commercial sex act.
(2) Definitions.--For purposes of paragraph (1), the terms
``commercial sex act'' and ``coercion'' shall have the meaning
given such terms by section 1591(c) of title 18, United States
Code.
(3) Availability.--Any amounts appropriated pursuant to the
authority of paragraph (1) shall remain available for fiscal
year 2008.
(b) Additional Funding for Operations of Office.--Unless
specifically appropriated otherwise, there is authorized to be
appropriated and is appropriated to the office established under
subsection (a)(1) for fiscal years 2007 and 2008 for the administration
of such office an amount equal to the amount of any tax under chapter 1
of the Internal Revenue Code of 1986 (including any interest) collected
during such fiscal years as the result of the actions of such office,
plus any civil or criminal monetary penalties imposed under such Code
relating to such tax and so collected.
(c) Report.--Not later than 1 year after the date of the enactment
of this Act, the Secretary of the Treasury shall report to the
Committee of Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on the enforcement activities of the
office established under subsection (a)(1) and shall include any
recommendations for statutory changes to assist in future prosecutions
under this section.
(d) Applicability of Whistleblower Awards to Victims of Human Sex
Trafficking.--For purposes of making an award under paragraph (1) or
(2) of section 7623(b) of the Internal Revenue Code of 1986 with
respect to information provided by any person caused to engage in a
commercial sex act (within the meaning of section 1591(c)(1) of title
18, United States Code), the determination whether such person is
described in such paragraph shall be made without regard to paragraph
(3) of such section 7623(b).
SEC. 2. WHISTLEBLOWER REFORMS.
(a) In General.--Section 7623 (relating to expenses of detection of
underpayments and fraud, etc.) is amended--
(1) by striking ``The Secretary'' and inserting ``(a) In
General.--The Secretary'',
(2) by striking ``and'' at the end of paragraph (1) and
inserting ``or'',
(3) by striking ``(other than interest)'', and
(4) by adding at the end the following new subsections:
``(b) Awards to Whistleblowers.--
``(1) In general.--If the Secretary proceeds with any
administrative or judicial action described in paragraph (5)
based on information brought to the Secretary's attention by an
individual, the Secretary shall, as determined by the
Whistleblower Office and subject to paragraph (2), pay such
individual as an award at least 15 percent but not more than 30
percent of the collected proceeds (including penalties,
interest, additions to tax, and additional amounts) resulting
from the action (including any related actions) or from any
settlement in response to such action. The Whistleblower Office
shall determine the amount of such award on the basis of the
extent to which the individual substantially contributed to
such action.
``(2) Award in case of less substantial contribution.--
``(A) In general.--If the Whistleblower Office
determines that the action described in paragraph (1)
is based principally on disclosures of specific
allegations (other than information provided by the
individual described in paragraph (1)) resulting from a
judicial or administrative hearing, from a governmental
report, hearing, audit, or investigation, or from the
news media, the Whistleblower Office may award such
sums as it considers appropriate, but in no case more
than 10 percent of the collected proceeds (including
penalties, interest, additions to tax, and additional
amounts) resulting from the action (including any
related actions) or from any settlement in response to
such action, taking into account the significance of
the individual's information and the role of such
individual and any legal representative of such
individual in contributing to such action.
``(B) Nonapplication of paragraph where individual
is original source of information.--Subparagraph (A)
shall not apply if the information resulting in the
initiation of the action described in paragraph (1) was
originally provided by the individual described in
paragraph (1).
``(3) Reduction in or denial of award.--If the
Whistleblower Office determines that the claim for an award
under paragraph (1) or (2) is brought by an individual who
planned and initiated the actions that led to the underpayment
of tax or actions described in subsection (a)(2), then the
Whistleblower Office may appropriately reduce such award. If
such individual is convicted of criminal conduct arising from
the role described in the preceding sentence, the Whistleblower
Office shall deny any award.
``(4) Appeal of award determination.--Any determination
regarding an award under paragraph (1), (2), or (3) may, within
30 days of such determination, be appealed to the Tax Court
(and the Tax Court shall have jurisdiction with respect to such
matter).
``(5) Application of this subsection.--This subsection
shall apply with respect to any action--
``(A) against any taxpayer, but in the case of any
individual, only if such individual's gross income
exceeds $200,000 for any taxable year subject to such
action, and
``(B) if the tax, penalties, interest, additions to
tax, and additional amounts in dispute exceed $20,000.
``(6) Additional rules.--
``(A) No contract necessary.--No contract with the
Internal Revenue Service is necessary for any
individual to receive an award under this subsection.
``(B) Representation.--Any individual described in
paragraph (1) or (2) may be represented by counsel.
``(C) Submission of information.--No award may be
made under this subsection based on information
submitted to the Secretary unless such information is
submitted under penalty of perjury.
``(c) Whistleblower Office.--
``(1) In general.--There is established in the Internal
Revenue Service an office to be known as the `Whistleblower
Office' which--
``(A) shall at all times operate at the direction
of the Commissioner and coordinate and consult with
other divisions in the Internal Revenue Service as
directed by the Commissioner,
``(B) shall analyze information received from any
individual described in subsection (b) and either
investigate the matter itself or assign it to the
appropriate Internal Revenue Service office,
``(C) shall monitor any action taken with respect
to such matter,
``(D) shall inform such individual that it has
accepted the individual's information for further
review,
``(E) may require such individual and any legal
representative of such individual to not disclose any
information so provided,
``(F) in its sole discretion may ask for additional
assistance from such individual or any legal
representative of such individual, and
``(G) shall determine the amount to be awarded to
such individual under subsection (b).
``(2) Request for assistance.--
``(A) In general.--Any assistance requested under
paragraph (1)(F) shall be under the direction and
control of the Whistleblower Office or the office
assigned to investigate the matter under paragraph
(1)(A). No individual or legal representative whose
assistance is so requested may by reason of such
request represent himself or herself as an employee of
the Federal Government.
``(B) Funding of assistance.--From the amounts
available for expenditure under subsection (b), the
Whistleblower Office may, with the agreement of the
individual described in subsection (b), reimburse the
costs incurred by any legal representative of such
individual in providing assistance described in
subparagraph (A).
``(d) Report by Secretary.--The Secretary shall each year conduct a
study and report to Congress on the use of this section, including--
``(1) an analysis of the use of this section during the
preceding year and the results of such use, and
``(2) any legislative or administrative recommendations
regarding the provisions of this section and its
application.''.
(b) Assignment to Special Trial Judges.--
(1) In general.--Section 7443A(b) (relating to proceedings
which may be assigned to special trial judges) is amended by
striking ``and'' at the end of paragraph (4), by redesignating
paragraph (5) as paragraph (6), and by inserting after
paragraph (4) the following new paragraph:
``(5) any proceeding under section 7623(b)(4), and''.
(2) Conforming amendment.--Section 7443A(c) is amended by
striking ``or (4)'' and inserting ``(4), or (5)''.
(c) Deduction Allowed Whether or Not Taxpayer Itemizes.--Subsection
(a) of section 62 (relating to general rule defining adjusted gross
income) is amended by inserting after paragraph (20) the following new
paragraph:
``(21) Attorneys fees relating to awards to
whistleblowers.--Any deduction allowable under this chapter for
attorney fees and court costs paid by, or on behalf of, the
taxpayer in connection with any award under section 7623(b)
(relating to awards to whistleblowers). The preceding sentence
shall not apply to any deduction in excess of the amount
includible in the taxpayer's gross income for the taxable year
on account of such award.''.
(d) Effective Date.--The amendments made by this section shall
apply to information provided on or after the date of the enactment of
this Act.
SEC. 3. INCREASE IN CRIMINAL MONETARY PENALTY LIMITATION FOR THE
UNDERPAYMENT OR OVERPAYMENT OF TAX DUE TO FRAUD.
(a) In General.--
(1) Attempt to evade or defeat tax.--Section 7201 (relating
to attempt to evade or defeat tax) is amended--
(A) by striking ``$100,000 ($500,000'' and
inserting ``$500,000 ($1,000,000'', and
(B) by striking ``5 years'' and inserting ``10
years''.
(2) Willful failure to file return, supply information, or
pay tax.--
(A) In general.--Section 7203 (relating to willful
failure to file return, supply information, or pay tax)
is amended--
(i) in the first sentence--
(I) by striking ``Any person'' and
inserting the following:
``(a) In General.--Any person'', and
(II) by striking ``$25,000'' and
inserting ``$50,000'',
(ii) in the third sentence, by striking
``section'' and inserting ``subsection'', and
(iii) by adding at the end the following
new subsection:
``(b) Aggravated Failure to File.--
``(1) In general.--In the case of any failure described in
paragraph (2), the first sentence of subsection (a) shall be
applied by substituting--
``(A) `felony' for `misdemeanor',
``(B) `$500,000 ($1,000,000' for `$50,000
($100,000', and
``(C) `10 years' for `1 year'.
``(2) Failure described.--A failure described in this
paragraph is--
``(A) a failure to make a return described in
subsection (a) for a period of 3 or more consecutive
taxable years if the aggregate tax liability for such
period is not less than $100,000, or
``(B) a failure to make a return if the tax
liability giving rise to the requirement to make such
return is attributable to an activity which is a felony
under any State or Federal law.''.
(B) Penalty may be applied in addition to other
penalties.--Section 7204 (relating to fraudulent
statement or failure to make statement to employees) is
amended by striking ``the penalty provided in section
6674'' and inserting ``the penalties provided in
sections 6674 and 7203(b)''.
(3) Fraud and false statements.--Section 7206 (relating to
fraud and false statements) is amended--
(A) by striking ``$100,000 ($500,000'' and
inserting ``$500,000 ($1,000,000'', and
(B) by striking ``3 years'' and inserting ``5
years''.
(b) Increase in Monetary Limitation for Underpayment or Overpayment
of Tax Due to Fraud.--Section 7206 (relating to fraud and false
statements), as amended by subsection (a)(3), is amended--
(1) by striking ``Any person who--'' and inserting ``(a) In
General.--Any person who--'', and
(2) by adding at the end the following new subsection:
``(b) Increase in Monetary Limitation for Underpayment or
Overpayment of Tax Due to Fraud.--If any portion of any underpayment
(as defined in section 6664(a)) or overpayment (as defined in section
6401(a)) of tax required to be shown on a return is attributable to
fraudulent action described in subsection (a), the applicable dollar
amount under subsection (a) shall in no event be less than an amount
equal to such portion. A rule similar to the rule under section 6663(b)
shall apply for purposes of determining the portion so attributable.''.
(c) Effective Date.--The amendments made by this section shall
apply to actions, and failures to act, occurring after the date of the
enactment of this Act.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1766-1767)
Referred to the House Committee on Ways and Means.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line