CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION.

SEC. 1026. CONFIDENTIALITY AND DISCLOSURE OF RETURNS AND RETURN INFORMATION. (a) In General.—Subsection (k) of section 6103 is amended by adding at the end the following new paragraph: “(8) Levies on certain government payments.— “(A) Disclosure of return information in levies on financial management service.—In serving a notice of levy, or release of such levy, with respect to any applicable government payment, the Secretary may disclose to officers and employees of the Financial Management Service— “(i) return information, including taxpayer identity information, “(ii) the amount of any unpaid Lability under this title (including penalties and interest), and “(iii) the type of tax and tax period to which such unpaid liability relates. “(B) Restriction on use of disclosed information.—Return information disclosed under subparagraph (A) may be used by officers and employees of the Financial Management Service only for the purpose of, and to the extent necessary in, transferring levied funds in satisfaction of the levy, maintaining appropriate agency records in regard to such levy or the release thereof, notifying the taxpayer and the agency certifying such payment that the levy has been honored, or in the defense of any litigation ensuing from the honor of such levy. “(C) Applicable government payment.—For purposes of this paragraph, the term ‘applicable government payment’ means— “(i) any Federal payment (other than a payment for which eligibility is based on the income or assets 111 STAT. 925(or both) of a payee) certified to the Financial Management Service for disbursement, and “(ii) any other payment which is certified to the Financial Management Service for disbursement and which the Secretary designates by published notice.”. (b) Conforming Amendments.— (1) Section 6103(p) is amended— (A) in paragraph (3)(A), by striking “(2), or (6)” and inserting “(2), (6), or (8)”, and (B) in paragraph (4), by inserting “(k)(8),” after “(j)(1) or (2),” each place it appears. (2) Section 552a(a)(8)(B) of title 5, United States Code, is amended by striking “or” at the end of clause (v), by adding “or” at the end of clause (vi), and by adding at the end the following new clause: “(vii) matches performed incident to a levy described in section 6103(k)(8) of the Internal Revenue Code of 1986;”. (c) Effective Date.—The amendments made by this section shall apply to levies issued after the date of the enactment of this Act.