A bill to amend the Internal Revenue Code of 1986 to provide for the reimbursement to State and local law enforcement agencies of costs incurred in investigations which substantially contribute to the recovery of Federal taxes.

Amends the Internal Revenue Code to require the Internal Revenue Service (IRS) to reimburse costs of pertinent investigations of State and local law enforcement agencies that provide information which substantially contributes to the recovery of Federal taxes. Includes as reimbursable costs: (1) reasonable expenses; (2) per diem expenses; and (3) salaries and overtime compensation. Limits the amount of such reimbursement to ten percent of the sum ultimately recovered.

Directs the IRS to maintain records of information provided by State and local law enforcement agencies and to notify them when their information results in a tax recovery.

Directs that ten percent of any amount recovered as the result of information offered by such governmental units be deposited in a separate account, to be used for payments to the eligible law enforcement agencies, with any surplus to be withdrawn and deposited in the Treasury as internal revenue collections.