Confidentiality of returns and return information under Internal Revenue Code of 1986

(a) In general Section 6103 of the Internal Revenue Code of 1986 is amended by redesignating subsection (q) as subsection (r) and by inserting after subsection (p) the following new subsection: (q) Prohibition on disclosure to certain employees Notwithstanding any other provision of this section, no return or return information shall be disclosed by means of access to any public money receipt or payment system of the Department of the Treasury (including any payment system of the Bureau of the Fiscal Service (or any successor thereof)) to any individual described in subparagraph (B) or (C) of section 2(a)(1) of the Protecting Americans’ Privacy Act of 2025.. (b) Civil damages for unauthorized inspection or disclosure (1) In general Subsection (a) of section 7431 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (3) Inspection or disclosure by certain employees If any individual described in subparagraph (B) or (C) of section 2(a)(1) of the Protecting Americans’ Privacy Act of 2025 knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of section 6103(q), such taxpayer may bring a civil action for damages against such person in a district court of the United States. In any action brought under this paragraph, subsection (c)(1)(A) shall be applied by substituting $250,000 for $1,000.. (2) Conforming amendment Paragraph (1) of section 7431(a) of such Code is amended by striking If any in paragraph (1) and inserting Except as provided in paragraph (3), if any. (c) No inference Nothing in the amendments made by this section shall be construed as creating any inference as to whether any disclosure or inspection prior to the enactment of this Act was lawful or permitted by section 6103 of the Internal Revenue Code of 1986.