Section 1 Short title
This Act may be cited as the “IRS Data Verification Modernization Act of 2016”.
IRS Data Verification Modernization Act of 2016
A BILL
To amend the Internal Revenue Code of 1986 to require website-based, real-time responses to requests to verify taxpayer income for legitimate business purposes.
Sec. 2 Disclosure of taxpayer information for third-party income verification
by striking “The Secretary may” and inserting the following:
“(1) In general—The Secretary shall”
by adding at the end the following new paragraph:
“(2) Disclosure for income verification—With respect to any program established by the Secretary to disclose returns and return information to an entity engaged in the process of confirming the income of a taxpayer for a legitimate business purpose, or a designee of any such entity, the Secretary shall ensure the following:
“(A) The disclosure process is conducted entirely through fully automated and electronic means accessible through the Internet.
“(B) The disclosure process is able to be completed in as close to real-time as is practicable.
“(3) Security requirements for recipients—The recipients authorized to receive returns or return information on behalf of taxpayers shall maintain adequate security to protect the information being disclosed.”
Efficient use of agency resources— In establishing the program to electronically automate income verification disclosures under section 6103(c)(2) of the Internal Revenue Code of 1986, as added by this section, the Secretary shall, to the extent practicable, make use of resources in operation or in development at the Internal Revenue Service, including databases, application programming interfaces, and other computerized systems, programs, and resources.
Report— Not later than 6 months after the date of the enactment of this Act, the Secretary of the Treasury shall submit a written report to Congress on any progress made on the implementation of section 6103(c)(2) of the Internal Revenue Code of 1986, as added by this section.
Effective date— The amendments made by this section shall apply with respect to disclosures made after the date that is one year after the date of the enactment of this Act.