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.
- Bill Number
- S. 4752
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-06-11: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-30T21:58:33Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to strengthen penalties for unauthorized disclosure of taxpayer information and to establish new requirements for contractors handling such data.
Key Provisions
- Criminal penalties: Increases the maximum fine from $5,000 to $250,000 and the maximum prison term from 5 years to 7 years under section 7213(a) for unauthorized disclosures.
- New contractor provision: Creates section 7213B, making it a felony for IRS contractors to willfully fail to protect taxpayer data if that failure leads to unauthorized disclosure. Penalties include the greater of $500,000 or 25 percent of the total contract value obligated in the first fiscal year of access.
- Civil damages: Raises the minimum civil penalty under section 7431(c)(1)(A) from $1,000 to $5,000 per unauthorized disclosure.
- Conforming changes: Updates notification rules for affected taxpayers and cross-references in related sections.
- Effective date: Applies to disclosures or inspections occurring after the date of enactment.
Significant Changes to Existing Law The bill raises both criminal and civil penalties for violations involving taxpayer returns or return information. It introduces a dedicated felony provision for IRS contractors, previously absent from the Code, and ties contractor penalties to contract value. It also expands taxpayer notification requirements when criminal charges are filed.
Potential Impacts
- Government agencies: Increases compliance obligations and potential liability for the IRS and its contractors.
- Citizens: Provides stronger financial remedies and deterrence against privacy breaches involving personal tax data.
- International relations: No direct effects identified in the bill text.
Main Stakeholders Affected
- IRS contractors and their employees.
- Taxpayers whose information may be disclosed.
- The Internal Revenue Service and its oversight bodies.
- The Department of Justice (for enforcement of new criminal provisions).
Notable Legal, Constitutional, or Political Implications The legislation reinforces statutory protections for taxpayer privacy under section 6103 by escalating penalties, which may influence future enforcement practices and contractor agreements. It does not alter constitutional standards but strengthens civil and criminal remedies for violations of existing disclosure rules.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Sen. Cortez Masto, Catherine [D-NV]
Recent Actions
- 2026-06-11: Read twice and referred to the Committee on Finance.
- 2026-06-11: Introduced in Senate
Bill Versions
- To amend the Internal Revenue Code of 1986 to increase criminal and civil penalties for unauthorized disclosure of taxpayer information, and for other purposes. — issued 2026-06-11 — PDF (4 pages)