AMENDMENT 628

Amendment: Section 2H3.1 is amended in the title by striking "or" and inserting a semicolon; and by inserting "; Disclosure of Tax Return Information" after "Eavesdropping".

Section 2H3.1 is amended by striking subsection (a) as follows:

"(a) Base Offense Level: 9",

and inserting the following:

"(a) Base Offense Level (Apply the greater):

(1) 9; or

(2) 6, if the defendant was convicted of 26 U.S.C. § 7213A or 26 U.S.C. § 7216.".

Section 2H3.1(b)(1) is amended by striking "conduct" and inserting "offense".

Section 2H3.1(c)(1) is amended by striking "conduct" and inserting "offense"; and by striking "that offense" and inserting "that other offense".

The Commentary to §2H3.1 captioned "Statutory Provisions" is amended by inserting "26 U.S.C. §§ 7213(a)(1)-(3), (a)(5), (d), 7213A, 7216;" after "2511;".

The Commentary to §2H3.1 captioned "Application Note" is amended by striking "Note" and inserting "Notes"; by redesignating Note 1 as Note 2; and by inserting before Note 2, as redesignated by this amendment, the following:

"1. Definitions.—For purposes of this guideline, ‘tax return’ and ‘tax return information’ have the meaning given the terms ‘return’ and ‘return information’ in 26 U.S.C. § 6103(b)(1) and (2), respectively.".

The Commentary to §2H3.1 captioned "Application Notes" as re-captioned by this amendment, is amended in Note 2, as redesignated by this amendment, by inserting "Satellite Cable Transmissions.—" before "If the".

The Commentary to §2H3.1 captioned "Background" is amended by adding at the end the following additional paragraph:

" This section also refers to conduct relating to the disclosure and inspection of tax returns and tax return information, which is proscribed by 26 U.S.C. §§ 7213(a)(1)-(3), (5), (d), 7213A, and 7216. These statutes provide for a maximum term of imprisonment of five years for most types of disclosure of tax return information, but provide a maximum term of imprisonment of one year for violations of 26 U.S.C. §§ 7213A and 7216.".

Appendix A (Statutory Index) is amended by inserting after the line referenced to 26 U.S.C. § 7212(b) the following new lines:

and by inserting after the line referenced to 26 U.S.C. § 7215 the following new line:

"26 U.S.C. § 7216                                  2H3.1".

Reason for Amendment: This amendment responds to the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105–206 ("the Act"). The Act created new tax offenses pertaining to the unlawful disclosure of tax-related information contained on computer software and to unlawful requests for tax audits. In addition, the Taxpayer Browsing Protection Act of 1997, Public Law 105–35, created another tax offense pertaining to the unlawful inspection of tax information.

Specifically, Public Law 105–35 expanded 26 U.S.C. § 7213 to prohibit federal and state employees and certain other persons from disclosing tax-related computer software. Public Law 105–35 also created an offense at 26 U.S.C. § 7213A making it unlawful for federal and state employees and certain other persons to inspect tax return information in any way other than that authorized under the Internal Revenue Code.

This is a two-part amendment. First, this amendment updates Appendix A (Statutory Index) by referring most of these offenses to §2H3.1 (Interception of Communications and Eavesdropping). Prior to this amendment, no guideline provision or statutory reference was expressly promulgated to address tax offenses that implicated privacy interests. Under subsection (a) of §1B1.2 (Applicable Guidelines) and under §2X5.1 (Other Offenses), courts are required to use the most analogous offense guideline from Chapter Two (Offense Conduct) in each pending case brought under a statute having no reference in the guidelines’ statutory index.

In general, the guideline most analogous for these offenses is §2H3.1. Section 2H3.1 concerns offenses against privacy and, in large measure, these tax-related offenses are devoted to protecting taxpayer privacy interests. Section 2H3.1 also contains a cross reference to "another offense" if a greater offense level will result.

Second, this amendment adds a three-level decrease in the base offense level under §2H3.1 for the least serious types of offense behavior, in which there was no intent to harm or obtain pecuniary gain. The base offense level for §2H3.1 is level 9 with a range of 4 to 10 months (in criminal history Category I). The Commission determined that a base offense level of level 9 is too severe for the misdemeanor offenses contained in 26 U.S.C. §§ 7213A (Unauthorized Inspection) and 7216 (Unauthorized Disclosure), and the three-level decrease addresses this concern.

Effective Date: The effective date of this amendment is November 1, 2001.