P.L. 116–25, Approved July 1, 2019 (133 Stat. 981)

SECTION. 1. SHORT TITLE.

This Act may be cited as the “Taxpayer First Act”.

SEC. 1205.^[485] PRIVATE DEBT COLLECTION AND SPECIAL COMPLIANCE PERSONNEL PROGRAM.

(a)  Certain Tax Receivables Not Eligible for Collection Under Tax Collection Contracts.—Section 6306(d)(3)^[486] is amended by striking “or” at the end of subparagraph (C) and by inserting after subparagraph (D) the following new subparagraphs:

“(E)  a taxpayer substantially all of whose income consists of disability insurance benefits under section 223 of the Social Security Act or supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93–66), or

SEC. 2005. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBERS.

(a)  In General.—Subject to subsection (b), the Secretary of the Treasury or the Secretary’s delegate (hereafter referred to in this section as the “Secretary”) shall establish a program to issue, upon the request of any individual, a number which may be used in connection with such individual’s social security number (or other identifying information with respect to such individual as determined by the Secretary) to assist the Secretary in verifying such individual’s identity.

(b) Requirements.—

(1)  Annual expansion.—For each calendar year beginning after the date of the enactment of this Act, the Secretary shall provide numbers through the program described in subsection (a) to individuals residing in such States as the Secretary deems appropriate, provided that the total number of States served by such program during such year is greater than the total number of States served by such program during the preceding year.

(2)  Nationwide availability.—Not later than 5 years after the date of the enactment of this Act,^[487] the Secretary shall ensure that the program described in subsection (a) is made available to any individual residing in the United States.

SEC. 2007. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

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

“SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.—

“(a)  In General.—If the Secretary determines that there has been or may have been an unauthorized use of the identity of any individual, the Secretary shall, without jeopardizing an investigation relating to tax administration—

“(1)  as soon as practicable—

“(A)  notify the individual of such determination,

“(B)  provide instructions on how to file a report with law enforcement regarding the unauthorized use,

“(C)  identify any steps to be taken by the individual to permit law enforcement to access personal information of the individual during the investigation,

“(D)  provide information regarding actions the individual may take in order to protect the individual from harm relating to the unauthorized use, and

“(E)  offer identity protection measures to the individual, such as the use of an identity protection personal identification number, and

“(2)  at the time the information described in paragraph (1) is provided (or, if not available at such time, as soon as practicable thereafter), issue additional notifications to such individual (or such individual’s designee) regarding—

“(A)  whether an investigation has been initiated in regards to such unauthorized use,

“(B)  whether the investigation substantiated an unauthorized use of the identity of the individual, and

“(C)  whether—

“(i)  any action has been taken against a person relating to such unauthorized use, or

“(ii)  any referral has been made for criminal prosecution of such person and, to the extent such information is available, whether such person has been criminally charged by indictment or information.

“(b) Employment-Related Identity Theft.—

“(1)  In general.—For purposes of this section, the unauthorized use of the identity of an individual includes the unauthorized use of the identity of the individual to obtain employment.

“(2)  Determination of employment-related identity theft.—For purposes of this section, in making a determination as to whether there has been or may have been an unauthorized use of the identity of an individual to obtain employment, the Secretary shall review any information—

“(A)  obtained from a statement described in section 6051 or an information return relating to compensation for services rendered other than as an employee, or

“(B)  provided to the Internal Revenue Service by the Social Security Administration regarding any statement described in section 6051,

which indicates that the social security account number provided on such statement or information return does not correspond with the name provided on such statement or information return or the name on the tax return reporting the income which is included on such statement or information return.”.

(b) Additional Measures.—

(1)  Examination of both paper and electronic statements and returns.—The Secretary of the Treasury (or the Secretary’s delegate) shall examine the statements, information returns, and tax returns described in section 7529(b)(2) of the Internal Revenue Code of 1986 (as added by subsection (a)) for any evidence of employment-related identity theft, regardless of whether such statements or returns are submitted electronically or on paper.

(2)  Improvement of effective return processing program with social security admnistration.—Section 232 of the Social Security Act (42 U.S.C. 432) is amended*  *  *^[488]

(3)  Underreporting of income.—The Secretary of the Treasury (or the Secretary’s delegate) shall establish procedures to ensure that income reported in connection with the unauthorized use of a taxpayer’s identity is not taken into account in determining any penalty for underreporting of income by the victim of identity theft.

(d)  Effective Date.—The amendments made by this section shall apply to determinations made after the date that is 6 months after the date of the enactment of this Act.

SEC. 2301. ELECTRONIC FILING OF RETURNS.

(a)  In General.—Section 6011(e)(2)(A) is amended by striking “250” and inserting “the applicable number of”.

(b)  Applicable Number.—Section 6011(e) is amended by striking paragraph (5) and inserting the following new paragraphs:

“(5) Applicable number.—

“(A)  In general.—For purposes of paragraph (2)(A), the applicable number shall be—

“(i)  except as provided in subparagraph (B), in the case of calendar years before 2021, 250,

“(ii)  in the case of calendar year 2021, 100, and

“(iii)  in the case of calendar years after 2021, 10.

“(B)  Special rule for partnerships for 2018, 2019, 2020, and 2021.—In the case of a partnership, for any calendar year before 2022, the applicable number shall be—

“(i)  in the case of calendar year 2018, 200,

“(ii)  in the case of calendar year 2019, 150,

“(iii)  in the case of calendar year 2020, 100, and

“(iv)  in the case of calendar year 2021, 50.

“(6)  Partnerships required to file on magnetic media.—Notwithstanding paragraph (2)(A), the Secretary shall require partnerships having more than 100 partners to file returns on magnetic media.”.

(c)  Returns Filed by a Tax Return Preparer.—Section 6011(e)(3) is amended by adding at the end the following new subparagraph:

“(D)  Exception for certain preparers located in areas without internet access.—The Secretary may waive the requirement of subparagraph (A) if the Secretary determines, on the basis of an application by the tax return preparer, that the preparer cannot meet such requirement by reason of being located in a geographic area which does not have access to internet service (other than dialup or satellite service).”.

(d)  Conforming Amendment.—Section 6724(c) is amended by striking “250 information returns (more than 100 information returns in the case of a partnership having more than 100 partners)” and inserting “the applicable number (determined under section 6011(e)(5) with respect to the calendar year to which such returns relate) of information returns”.

(e)  Effective Date.—The amendments made by this section shall take effect on the date of the enactment of this Act.^[489]