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.

This bill increases the penalties for unauthorized disclosure of taxpayer information to strengthen protections for individuals whose tax data is compromised. It raises maximum criminal fines for such violations from $5,000 to $250,000 and extends potential prison sentences from five to seven years. The legislation also introduces a new felony charge specifically for IRS contractors who willfully fail to maintain security safeguards, imposing fines of up to $500,000 or 25 percent of their total contract value with the IRS. Additionally, civil damages for unauthorized disclosures are increased from $1,000 to $5,000, and the bill requires the IRS to notify taxpayers promptly when they are criminally charged for leaking their tax return information.