,,ii  #aaith ,,congress  #b;d ,session  
,s4 #dgeb  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,june #aa1     
#bjbf,mr4 ,daines 7for himself and ,ms4 
,cortez ,masto7 introduced the following
 bill2 which was read twice and referred
 to the ,committee on ,finance  ,a      
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to increase criminal and
 civil penalties for unauthorized       
disclosure of taxpayer information1 and 
for other purposes4  #a4 ,modifications 
to penalties for unauthorized           
disclosures of taxpayer information  7a7
 ,criminal penalties  7#a7 ,in general  
,paragraphs 7#a71 7#b71 7#c71 7#d71 and 
7#e7 of section #gbac7;a7 of the        
,internal ,revenue ,code of #aihf are   
each amended by striking #e1jjj1 or     
imprisonment of not more than #e years  
each place it appears and inserting     
#bej1jjj1 or imprisonment of not more   
than #g years4  7#b7 ,failure of        
contractors to maintain safeguards  7,a7
 ,in general ,part ,i of subchapter ,a  

of chapter #ge of subtitle ,f of the    
,internal ,revenue ,code of #aihf is    
amended by inserting after section      
#gbac;,a the following new section3     
#gbac;,b4 ,failure of ,,irs contractors 
to maintain safeguards  7a7 ,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
 #fajc 7or regulations prescribed       
thereunder7 to protect the              
confidentiality of returns or return    
information1 if such failure results in 
the unauthorized disclosure of returns  
or return information1 such contractor  
shall be guilty of a felony and1 upon   
conviction thereof1 shall be fined the  
greater of-- 7#a7 #ejj1jjj1 or  7#b7 an 
amount equal to #be 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 disclosure4 
7b7 ,definitions ,for purposes of this  
section1 the term contractor of the     
,internal ,revenue ,service means any   
person described in section #fajc7n7    
7including any officer or employee of   
such person7 in connection with a       
written contract with the ,internal     
,revenue ,service4  4  7,b7 ,clerical   
amendment ,the table of sections for    
part ,i of subchapter ,a of chapter #ge 
of subtitle ,f of the ,internal ,revenue
 ,code of #aihf is amended by inserting 
after the item relating to section      
#gbac;,a the following new item3  ,sec4 
#gbac;,b4 ,failure of ,,irs contractors 
to maintain safeguards4  4  7,c7        
,conforming amendments  7i7 ,section    
#fajc7;e77#aa7 of such ,code is amended 
by inserting #gbac;,b1 after #gbac;,a14 
7ii7 ,section #faje7;d7 of such ,code is
 amended by inserting #gbac;,b1 after   
#gbac;,a14  7iii7 ,section #gdca7;e7 of 
such ,code is amended by striking the   
first sentence and inserting the        

following3 ,if any person is criminal   
charged by indictment or information    
with-- 7#a7 inspection or disclosure of 
a taxpayer's return or return           
information in violation of-- 7,a7      
paragraph 7#a7 or 7#b7 of section       
#gbac7;a71  7,b7 section #gbac;,a7a71 or
  7,c7 subparagraph 7,b7 of section     
#ajcj7;a77#b7 of title #ah1 ,united     
,states ,code1 or  7#b7 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 #gbac;,b7a71 the
 ,secretary shall notify such taxpayer  
as soon as practicable of such          
inspection or disclosure4 4  7iv7       
,section #geac7;c7 of such ,code is     
amended by striking section #gbac and   
inserting sections #gbac and #gbac;,b4  
7b7 ,civil damages ,section             
#gdca7;c77#a77;,a7 of the ,internal     
,revenue ,code of #aihf is amended by   
striking #a1jjj and inserting #e1jjj4   

7c7 ,effective date ,the amendments made
 by this section shall apply to         
disclosures or inspections made after   
the date of the enactment of this ,act4