Identity Theft and Tax Fraud Prevention Act of 2017 This bill amends the Internal Revenue Code to establish requirements and authorities for the Internal Revenue Service (IRS) related to: (1) preventing identify theft and tax refund fraud, and (2) the electronic filing of tax returns. The IRS must: develop and implement guidelines for stolen identity refund fraud cases, provide specified notifications to suspected victims of identity theft, establish a local law enforcement liaison for tax-related identity theft and other tax fraud matters, use information from the Do Not Pay Initiative to help prevent identity theft refund fraud, establish a program to issue identity protection personal identification numbers to any individual after the individual's identity has been verified, establish an Internet platform for Form 1099 filings, require electronically prepared paper returns to include a scannable code to convert the form to an electronic format, and verify the identity of individuals opening e-Services accounts. The bill also: increases penalties associated with identify theft, permits the IRS to transfer appropriations between accounts to combat tax fraud, reinstates streamlined critical pay authority for certain IRS information technology positions, amends the Social Security Act to permit the IRS to access the National Directory of New Hires for tax administration purposes, permits the IRS to establish minimum standards for professional tax preparers, and expands the authority of the IRS to require certain taxpayers to file electronic returns. The IRS and the Department of the Treasury must submit to Congress specified reports regarding identify theft and tax refund fraud.