This bill modifies requirements for the preparation of tax returns and Internal Revenue Service (IRS) procedures for the collection of taxes.

The bill amends the Internal Revenue Code to:

• apply tax preparer penalties for the understatement of a taxpayer's liability and other violations to other submissions to the IRS, in addition to tax returns or refund claims;
• increase tax preparer penalties for gross misconduct and other violations;
• require identifying numbers to be included for all submissions to the IRS by tax return preparers (limited to tax returns or refund claims under current law);
• limit the disclosure of taxpayer information to the express purpose for which the taxpayer granted consent;
• provide for de novo review by the Tax Court of IRS innocent spouse relief determinations;
• specify that the determination of whether or not a debt has been discharged may not be based solely on a nonpayment period; and
• restrict the authority of the IRS to use a levy after the collection period has expired.

The bill amends the Fair Credit Reporting Act to reduce from seven years to two years the period that a tax lien may appear on a taxpayer's credit report.