Federal agencies will face new mandatory checklist requirements before they can certify and send out any government payment — verifying that funds are available, the payee is alive and correctly identified, and the bank account is open and belongs to the right person. The “Do Not Pay” system (renamed from “Initiative” to “System”) is significantly expanded: Treasury gains direct access to IRS tax return data (including adjusted gross income, bank routing numbers, and filing status), Social Security Administration name/SSN records, and the National Directory of New Hires (an HHS database of employer-reported wage and employment data originally built for child-support enforcement). State and local governments that administer federally funded programs will also be required to screen recipients through Do Not Pay before making payments. Any organization receiving a federal award of $50,000 or more for the first time from a given program must file a one-time report within 180 days on how it used the funds, or risk having future payments frozen until it complies. Treasury’s computerized comparisons of federal databases under Do Not Pay are explicitly declared to not be “matching programs” under the Privacy Act of 1974 — removing a layer of procedural oversight that normally applies when agencies cross-reference personal records. Unauthorized disclosure of information accessed through the system carries criminal penalties of up to 5 years in prison and $5,000 in fines.
Civil Liberties
- Privacy Act matching-program rules — Treasury’s Do Not Pay cross-database comparisons are excluded from their coverage
- IRS tax return access — AGI, bank routing numbers, filing status, and Schedule C data shared with Do Not Pay system
- National Directory of New Hires access — employer-reported wage and employment records now available to Treasury and its contractors
- SSA name/SSN confirmation — Social Security records opened to Treasury and state agencies administering federally funded programs
Transparency & Accountability
- Annual report to Congress — Secretary of Treasury must report on Do Not Pay effectiveness, error rates, and agency compliance
- Fraud-risk indicators — agencies must design and apply objective anomaly signals to their improper-payment risk assessments
- First-use post-award reporting — new grantees receiving $50,000+ must file a one-time fund-use report or face payment freeze
- Pre-certification checklist — certifying officers must affirmatively verify payee identity, account validity, and program compliance before any voucher is approved
- Privacy Act notice process bypassed — Secretary may add data assets to Do Not Pay with only 30-day public comment, not full matching-agreement review
Congressional Summary
Pre-Payment Fraud Prevention and Treasury Data Access ActThis bill expands efforts to identify, prevent, and recover improper payments of federal funds (e.g., overpayments, underpayments, payments to ineligible recipients).Specifically, the Department of the Treasury must establish certain requirements that agencies must meet before directing Treasury to make a payment of federal funds. These pre-payment requirements must include verification of payee information, payment details, and fund availability. Further, agencies must, to the extent practicable, verify the accuracy of payee bank account information before directing Treasury to make a payment.The bill also expands the Do Not Pay system, which provides agencies with access to centralized data for the purpose of verifying payee eligibility, and provides statutory authority for Treasury’s role as administrator of the system. The bill requires specified data assets to be added to the system and authorizes Treasury to (1) designate additional data assets for inclusion, and (2) access certain taxpayer and Social Security information for the system. The bill specifies that information obtained through the system may only be used to prevent and recover improper payments and establishes penalties for the unlawful disclosure of such information.The bill explicitly requires executive agencies and state and local governments administering federally funded programs to screen payees against all appropriate Do Not Pay data assets and risk tools before making an award or directing a payment.Finally, the bill establishes post-award reporting requirements for certain first-time fund recipients under federal programs for awards of $50,000 or more.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-04-23
- Date Added
- 2026-06-05
- Source
- Congress.gov →
Like reading a bill in plain English?
We're building an app that does this for every bill in Congress and lets you tell your reps how you want them to vote. We're a small team getting ready to launch, and we're trying to show investors that real people want this. Be one of them. Help us get it built. Leave your email and we'll tell you the moment the app is ready.