IRS Data Verification Modernization Act of 2016

This bill specifies requirements for Internal Revenue Service (IRS) programs to disclose returns and return information to confirm a taxpayer's income for a legitimate business purpose.

The IRS must ensure that the disclosure process is: (1) conducted entirely through fully automated and electronic means accessible through the Internet, and (2) able to be completed in as close to real-time as is practicable. In establishing the program, the IRS must, to the extent practicable, use resources in operation or in development at the IRS.

Recipients authorized to receive returns or return information on behalf of taxpayers must maintain adequate security to protect the information being disclosed.