[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 542 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 542

   To amend the Internal Revenue Code of 1986 to provide additional 
                 safeguards to protect taxpayer rights.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 10 (legislative day, March 3), 1993

    Mr. Pryor (for himself, Mr. Grassley, Mr. Reid, Mr. Baucus, Mr. 
     Packwood, Mr. Boren, Mr. Danforth, Mr. Riegle, Mr. Hatch, Mr. 
   Rockefeller, Mr. Wallop, Mr. Daschle, Mr. Breaux, Mr. Conrad, Mr. 
    Bryan, Mr. Bumpers, Mr. Campbell, Mr. Cochran, Mr. D'Amato, Mr. 
DeConcini, Mr. Domenici, Mr. Exon, Mr. Glenn, Mr. Helms, Mr. Hollings, 
 Mr. Johnston, Mr. Lott, Ms. Mikulski, Mr. Murkowski, Mr. Nickles, Mr. 
Pressler, Mr. Sarbanes, Mr. Sasser, Mr. Shelby, Mr. Simon, Mr. Wofford, 
and Mr. Cohen) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to provide additional 
                 safeguards to protect taxpayer rights.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Taxpayer Bill of 
Rights 2''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

                       TITLE I--TAXPAYER ADVOCATE

Sec. 101. Establishment of position of Taxpayer Advocate within 
                            Internal Revenue Service.
Sec. 102. Expansion of authority to issue taxpayer assistance orders.
      TITLE II--MODIFICATIONS TO INSTALLMENT AGREEMENT PROVISIONS

Sec. 201. Taxpayer's right to installment agreement.
Sec. 202. Notification of reasons for termination or denial of 
                            installment agreements.
Sec. 203. Administrative review of denial of request for, or 
                            termination of, installment agreement.
                          TITLE III--INTEREST

Sec. 301. Expansion of authority to abate interest.
Sec. 302. Extension of interest-free period for payment of tax after 
                            notice and demand.
                        TITLE IV--JOINT RETURNS

Sec. 401. Disclosure of collection activities.
Sec. 402. Joint return may be made after separate returns without full 
                            payment of tax.
                     TITLE V--COLLECTION ACTIVITIES

Sec. 501. Modifications to lien and levy provisions.
Sec. 502. Offers-in-compromise.
Sec. 503. Notification of examination.
Sec. 504. Increase in limit on recovery of civil damages for 
                            unauthorized collection actions.
Sec. 505. Safeguards relating to designated summons.
                     TITLE VI--INFORMATION RETURNS

Sec. 601. Phone number of person providing payee statements required to 
                            be shown on such statement.
Sec. 602. Civil damages for fraudulent filing of information returns.
Sec. 603. Requirement to verify accuracy of information returns.
TITLE VII--MODIFICATIONS TO PENALTY FOR FAILURE TO COLLECT AND PAY OVER 
                                  TAX

Sec. 701. Preliminary notice requirement.
Sec. 702. No penalty if prompt notification of the Secretary.
Sec. 703. Disclosure of certain information where more than 1 person 
                            subject to penalty.
Sec. 704. Penalties under section 6672.
             TITLE VIII--AWARDING OF COSTS AND CERTAIN FEES

Sec. 801. Motion for disclosure of information.
Sec. 802. Increased limit on attorney fees.
Sec. 803. Failure to agree to extension not taken into account.
Sec. 804. Effective date.
                       TITLE IX--OTHER PROVISIONS

Sec. 901. Required content of certain notices.
Sec. 902. Treatment of substitute returns under section 6651.
Sec. 903. Relief from retroactive application of Treasury Department 
                            regulations.
Sec. 904. Required notice of certain payments.
Sec. 905. Unauthorized enticement of information disclosure.
                  TITLE X--FORM MODIFICATIONS; STUDIES

Sec. 1000. Definitions.
                     Subtitle A--Form Modifications

Sec. 1001. Explanation of certain provisions.
Sec. 1002. Improved procedures for notifying service of change of 
                            address or name.
Sec. 1003. Rights and responsibilities of divorced individuals.
                          Subtitle B--Studies

Sec. 1011. Pilot program for appeal of enforcement actions.
Sec. 1012. Study on taxpayers with special needs.
Sec. 1013. Reports on taxpayer-rights education program.
Sec. 1014. Biennial reports on misconduct by Internal Revenue Service 
                            employees.
Sec. 1015. Study of notices of deficiency.
Sec. 1016. Notice and form accuracy study.
Sec. 1017. Internal Revenue Service employees' suggestions study.

                       TITLE I--TAXPAYER ADVOCATE

SEC. 101. ESTABLISHMENT OF POSITION OF TAXPAYER ADVOCATE WITHIN 
              INTERNAL REVENUE SERVICE.

    (a) General Rule.--Section 7802 (relating to Commissioner of 
Internal Revenue; Assistant Commissioner (Employee Plans and Exempt 
Organizations)) is amended by adding at the end thereof the following 
new subsection:
    ``(d) Office of Taxpayer Advocate.--
            ``(1) In general.--There is established in the Internal 
        Revenue Service an office to be known as the `Office of the 
        Taxpayer Advocate'. Such office, including all problem 
        resolution officers, shall be under the supervision and 
        direction of an official to be known as the `Taxpayer Advocate' 
        who shall report directly to the Commissioner of Internal 
        Revenue. The Taxpayer Advocate shall be entitled to 
        compensation at the same rate as the Chief Counsel for the 
        Internal Revenue Service.
            ``(2) Functions of office.--
                    ``(A) In general.--It shall be the function of the 
                Office of Taxpayer Advocate to--
                            ``(i) assist taxpayers in resolving 
                        problems with the Internal Revenue Service,
                            ``(ii) identify areas in which taxpayers 
                        have problems in dealings with the Internal 
                        Revenue Service,
                            ``(iii) to the extent possible, propose 
                        changes in the administrative practices of the 
                        Internal Revenue Service to mitigate problems 
                        identified under clause (ii), and
                            ``(iv) identify potential legislative 
                        changes which may be appropriate to mitigate 
                        such problems.
                    ``(B) Annual reports.--
                            ``(i) Objectives.--Not later than October 
                        31 of each calendar year after 1993, the 
                        Taxpayer Advocate shall report to the Committee 
                        on Ways and Means of the House of 
                        Representatives and the Committee on Finance of 
                        the Senate on the objectives of the Taxpayer 
                        Advocate for the following calendar year. Any 
                        such report shall contain full and substantive 
                        analysis, in addition to statistical 
                        information.
                            ``(ii) Activities.--Not later than June 30 
                        of each calendar year after 1993, the Taxpayer 
                        Advocate shall report to the Committee on Ways 
                        and Means of the House of Representatives and 
                        the Committee on Finance of the Senate on the 
                        activities of the Taxpayer Advocate during the 
                        fiscal year ending during such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information, and shall--
                                    ``(I) identify the initiatives the 
                                Taxpayer Advocate has taken on 
                                improving taxpayer services and 
                                Internal Revenue Service 
                                responsiveness,
                                    ``(II) contain recommendations 
                                received from individuals with the 
                                authority to issue taxpayer assistance 
                                orders under section 7811,
                                    ``(III) contain a summary of at 
                                least 20 of the most serious problems 
                                encountered by taxpayers, including a 
                                description of the nature of such 
                                problems,
                                    ``(IV) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action has 
                                been taken and the result of such 
                                action,
                                    ``(V) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action 
                                remains to be completed and the period 
                                during which each item has remained on 
                                such inventory,
                                    ``(VI) contain an inventory of the 
                                items described in subclauses (II) and 
                                (III) for which no action has been 
                                taken, the period during which each 
                                item has remained on such inventory, 
                                the reasons for the inaction, and 
                                identify any Internal Revenue Service 
                                official who is responsible for such 
                                inaction,
                                    ``(VII) identify any Taxpayer 
                                Assistance Order which was not honored 
                                by the Internal Revenue Service in a 
                                timely manner, as specified under 
                                section 7811(b),
                                    ``(VIII) contain recommendations 
                                for such administrative and legislative 
                                action as may be appropriate to resolve 
                                problems encountered by taxpayers, and
                                    ``(IX) include such other 
                                information as the Taxpayer Advocate 
                                may deem advisable.
                            ``(iii) Report to be submitted directly.--
                        Each report required under this subparagraph 
                        shall be provided directly to the Committees 
                        referred to in clauses (i) and (ii) without any 
                        prior review or comment from the Commissioner 
                        of the Internal Revenue Service, the Secretary 
                        of the Treasury, any other officer or employee 
                        of the Department of the Treasury, or the 
                        Office of Management and Budget.
            ``(3) Responsibilities of commissioner of internal revenue 
        service.--The Commissioner of Internal Revenue shall establish 
        procedures requiring a formal response to all recommendations 
        submitted to the Commissioner by the Taxpayer Advocate.''.
    (b) Conforming Amendments.--
            (1) Section 7811 (relating to taxpayer assistance orders) 
        is amended--
                    (A) by striking ``the Office of Ombudsman'' in 
                subsection (a) and inserting ``the Office of the 
                Taxpayer Advocate'', and
                    (B) by striking ``Ombudsman'' each place it appears 
                (including in the headings of subsections (e) and (f)) 
                and inserting ``Taxpayer Advocate''.
            (2) The heading for section 7802 is amended to read as 
        follows:

``SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; ASSISTANT COMMISSIONERS; 
              TAXPAYER ADVOCATE.''

            (3) The table of sections for subchapter A of chapter 80 of 
        subtitle F is amended by striking the item relating to section 
        7802 and inserting the following new item:

                              ``Sec. 7802. Commissioner of Internal 
                                        Revenue; Assistant 
                                        Commissioners; Taxpayer 
                                        Advocate.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 102. EXPANSION OF AUTHORITY TO ISSUE TAXPAYER ASSISTANCE ORDERS.

    (a) Terms of Orders.--Subsection (b) of section 7811 (relating to 
terms of taxpayer assistance orders) is amended--
            (1) by inserting ``within a specified time period'' after 
        ``the Secretary'', and
            (2) by inserting ``take any action as permitted by law,'' 
        after ``cease any action,''.
    (b) Limitation on Authority To Modify or Rescind.--Section 7811(c) 
(relating to authority to modify or rescind) is amended to read as 
follows:
    ``(c) Authority To Modify or Rescind.--Any Taxpayer Assistance 
Order issued by the Taxpayer Advocate under this section may be 
modified or rescinded only by the Taxpayer Advocate, the Commissioner, 
or any superior of either.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

      TITLE II--MODIFICATIONS TO INSTALLMENT AGREEMENT PROVISIONS

SEC. 201. TAXPAYER'S RIGHT TO INSTALLMENT AGREEMENT.

    (a) In General.--Subsection (a) of section 6159 (relating to 
agreements for payment of tax liability in installments) is amended to 
read as follows:
    ``(a) In General.--
            ``(1) Authorization of agreements.--The Secretary is 
        authorized to enter into written agreements with any taxpayer 
        under which such taxpayer is allowed to satisfy liability for 
        payment of any tax in installment payments if the Secretary 
        determines that such agreement will facilitate collection of 
        such liability.
            ``(2) Agreement as a matter of right.--In the case of any 
        taxpayer other than a corporation, the Secretary shall enter 
        into such an agreement if--
                    ``(A) the taxpayer requests such an agreement,
                    ``(B) the tax liability is attributable to the tax 
                imposed under chapter 1 and is less than $10,000, and
                    ``(C) the taxpayer has paid any tax liability for 
                the 3 preceding taxable years at the time such 
                liability was due.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 202. NOTIFICATION OF REASONS FOR TERMINATION OR DENIAL OF 
              INSTALLMENT AGREEMENTS.

    (a) Terminations.--Subsection (b) of section 6159 (relating to 
extent to which agreements remain in effect) is amended by adding at 
the end thereof the following new paragraph:
            ``(5) Notice requirements.--The Secretary may not take any 
        action under paragraph (2), (3), or (4) unless--
                    ``(A) a notice of such action is provided to the 
                taxpayer not later than the day 30 days before the date 
                of such action, and
                    ``(B) such notice includes an explanation why the 
                Secretary intends to take such action.
        The preceding sentence shall not apply in any case in which the 
        Secretary believes that collection of any tax to which an 
        agreement under this section relates is in jeopardy.''.
    (b) Denials.--Section 6159 (relating to agreements for payment of 
tax liability in installments) is amended by adding at the end thereof 
the following new subsection:
    ``(c) Notice Requirements for Denials.--The Secretary may not deny 
any request for an installment agreement under this section unless--
            ``(1) a notice of the proposed denial is provided to the 
        taxpayer not later than the day 30 days before the date of such 
        denial, and
            ``(2) such notice includes an explanation why the Secretary 
        intends to deny such request.
The preceding sentence shall not apply in any case in which the 
Secretary believes that collection of any tax to which a request for an 
agreement under this section relates is in jeopardy.''.
    (c) Conforming Amendment.--Paragraph (3) of section 6159(b) is 
amended to read as follows:
            ``(3) Subsequent change in financial conditions.--If the 
        Secretary makes a determination that the financial condition of 
        a taxpayer with whom the Secretary has entered into an 
        agreement under subsection (a) has significantly changed, the 
        Secretary may alter, modify, or terminate such agreement.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date 6 months after the date of the enactment of this 
Act.

SEC. 203. ADMINISTRATIVE REVIEW OF DENIAL OF REQUEST FOR, OR 
              TERMINATION OF, INSTALLMENT AGREEMENT.

    (a) General Rule.--Section 6159 (relating to agreements for payment 
of tax liability in installments), as amended by section 202(b), is 
amended by adding at the end thereof the following new subsection:
    ``(d) Administrative Review.--The Secretary shall establish 
procedures for an independent administrative review of denials of 
requests for, or terminations of, installment agreements under this 
section.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1994.

                          TITLE III--INTEREST

SEC. 301. EXPANSION OF AUTHORITY TO ABATE INTEREST.

    (a) General Rule.--Paragraph (1) of section 6404(e) (relating to 
abatement of interest in certain cases) is amended--
            (1) by inserting ``unreasonable'' before ``error'' each 
        place it appears in subparagraphs (A) and (B), and
            (2) by striking ``in performing a ministerial act'' each 
        place it appears.
    (b) Clerical Amendment.--The subsection heading for subsection (e) 
of section 6404 is amended by striking ``Assessments'' and inserting 
``Abatement''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest accruing with respect to deficiencies or payments for 
taxable years beginning after the date of the enactment of this Act.

SEC. 302. EXTENSION OF INTEREST-FREE PERIOD FOR PAYMENT OF TAX AFTER 
              NOTICE AND DEMAND.

    (a) General Rule.--Paragraph (3) of section 6601(e) (relating to 
payments made within 10 days after notice and demand) is amended to 
read as follows:
            ``(3) Payments made within specified period after notice 
        and demand.--If notice and demand is made for payment of any 
        amount and if such amount is paid within 21 days (10 days if 
        the amount for which such notice and demand is made equals or 
        exceeds $100,000) after the date of such notice and demand, 
        interest under this section on the amount so paid shall not be 
        imposed for the period after the date of such notice and 
        demand.''.
    (b) Conforming Amendment.--Paragraph (3) of section 6651(a) 
(relating to addition to tax for failure to file tax return or pay tax) 
is amended by striking ``10 days'' and inserting ``21 days (10 days if 
the amount for which such notice and demand is made equals or exceed 
$100,000)''.
    (c) Effective Date.--The amendments made by this section shall 
apply in the case of any notice and demand given after December 31, 
1993.

                        TITLE IV--JOINT RETURNS

SEC. 401. DISCLOSURE OF COLLECTION ACTIVITIES.

    (a) General Rule.--Subsection (e) of section 6103 (relating to 
disclosure to persons having material interest) is amended by adding at 
the end thereof the following new paragraph:
            ``(8) Disclosure of collection activities with respect to 
        joint return.--If any deficiency of tax with respect to a joint 
        return is assessed and the individuals filing such return are 
        no longer married or no longer reside in the same household, 
        upon request in writing of either of such individuals, the 
        Secretary may disclose in writing to the individual making the 
        request whether the Secretary has attempted to collect such 
        deficiency from such other individual, the general nature of 
        such collection activities, and the amount collected.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 402. JOINT RETURN MAY BE MADE AFTER SEPARATE RETURNS WITHOUT FULL 
              PAYMENT OF TAX.

    (a) General Rule.--Paragraph (2) of section 6013(b) (relating to 
limitations on filing of joint return after filing separate returns) is 
amended by striking subparagraph (A) and redesignating the following 
subparagraphs accordingly.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                     TITLE V--COLLECTION ACTIVITIES

SEC. 501. MODIFICATIONS TO LIEN AND LEVY PROVISIONS.

    (a) Withdrawal of Certain Notices.--Section 6323 (relating to 
validity and priority against certain persons) is amended by adding at 
the end thereof the following new subsection:
    ``(j) Withdrawal of Notice in Certain Circumstances.--
            ``(1) In general.--The Secretary may withdraw a notice of a 
        lien filed under this section and this chapter shall be applied 
        as if the withdrawn notice had not been filed, if the Secretary 
        determines that--
                    ``(A) the filing of such notice was premature or 
                otherwise not in accordance with administrative 
                procedures of the Secretary,
                    ``(B) the taxpayer has entered into an agreement 
                under section 6159 to satisfy the tax liability for 
                which the lien was imposed by means of installment 
                payments, unless such agreement provides otherwise,
                    ``(C) the withdrawal of such notice will facilitate 
                the collection of the tax liability, or
                    ``(D) with the consent of the taxpayer or the 
                Taxpayer Advocate, the withdrawal of such notice would 
                be in the best interests of the taxpayer (as determined 
                by the Taxpayer Advocate) and the United States.
        Any such withdrawal shall be made by filing notice thereof at 
        the same office as the withdrawn notice. A copy of such notice 
        of withdrawal shall be provided to the taxpayer.
            ``(2) Notice to credit agencies, etc.--Upon written request 
        by the taxpayer with respect to whom a notice of a lien was 
        withdrawn under paragraph (1), the Secretary shall promptly 
        make reasonable efforts to notify credit reporting agencies, 
        and any financial institution or creditor whose name and 
        address is specified in such request, of the withdrawal of such 
        notice. Any such request shall be in such form as the Secretary 
        may prescribe.''.
    (b) Return of Levied Property in Certain Cases.--Section 6343 
(relating to authority to release levy and return property) is amended 
by adding at the end thereof the following new subsection:
    ``(d) Return of Property in Certain Cases.--If--
            ``(1) any property has been levied upon, and
            ``(2) the Secretary determines that--
                    ``(A) the levy on such property was premature or 
                otherwise not in accordance with administrative 
                procedures of the Secretary,
                    ``(B) the taxpayer has entered into an agreement 
                under section 6159 to satisfy the tax liability for 
                which the levy was imposed by means of installment 
                payments, unless such agreement provides otherwise,
                    ``(C) the return of such property will facilitate 
                the collection of the tax liability, or
                    ``(D) with the consent of the taxpayer or the 
                Taxpayer Advocate, the return of such property would be 
                in the best interests of the taxpayer (as determined by 
                the Taxpayer Advocate) and the United States,
the provisions of subsection (b) shall apply in the same manner as if 
such property had been wrongly levied upon, except that no interest 
shall be allowed under subsection (c).''.
    (c) Modifications in Certain Levy Exemption Amounts.--
            (1) Fuel, etc.--Paragraph (2) of section 6334(a) (relating 
        to fuel, provisions, furniture, and personal effects exempt 
        from levy) is amended--
                    (A) by striking ``If the taxpayer is the head of a 
                family, so'' and inserting ``So'', and
                    (B) by striking ``$1,650 ($1,550 in the case of 
                levies issued during 1989)'' and inserting ``$1,700''.
            (2) Books, etc.--Paragraph (3) of section 6334(a) (relating 
        to books and tools of a trade, business, or profession exempt 
        from levy) is amended by striking ``$1,100 ($1,050 in the case 
        of levies issued during 1989)'' and inserting ``$1,200''.
            (3) Health care premiums.--TO BE DISCUSSED.
            (4) Indexed for inflation.--Section 6334 (relating to 
        property exempt from levy) is amended by adding at the end 
        thereof the following new subsection:
    ``(f) Inflation Adjustments.--
            ``(1) In general.--In the case of any calendar year 
        beginning after 1993, each dollar amount referred to in 
        paragraphs (2) and (3) of subsection (a) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year, by 
                substituting `calendar year 1992' for `calendar year 
                1989' in subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount after being increased 
        under paragraph (1) is not a multiple of $10, such dollar 
        amount shall be rounded to the nearest multiple of $10 (or, if 
        such dollar amount is a multiple of $5, such dollar amount 
        shall be increased to the next higher multiple of $10).''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on the date 
        of the enactment of this Act.
            (2) Exempt amounts.--The amendments made by subsection (c) 
        shall take effect with respect to levies issued after December 
        31, 1993.

SEC. 502. OFFERS-IN-COMPROMISE.

    (a) General Rule.--Subsection (a) of section 7122 (relating to 
compromises) is amended by adding at the end thereof the following new 
sentence: ``The Secretary may make such a compromise in any case where 
the Secretary determines that such compromise would be in the best 
interests of the United States.''.
    (b) Review Requirements.--Subsection (b) of section 7122 (relating 
to records) is amended by striking ``$500.'' and inserting ``$50,000. 
However, such compromise shall be subject to continuing quality review 
by the Secretary.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 503. NOTIFICATION OF EXAMINATION.

    (a) In General.--Section 7605 (relating to restrictions on 
examination of taxpayer) is amended by redesignating subsection (c) as 
subsection (d) and by inserting after subsection (b) the following new 
subsection:
    ``(c) Notification Requirement.--No examination described in 
subsection (a) shall be made unless the Secretary notifies the taxpayer 
in writing by mail to an address determined under section 6212(b) that 
the taxpayer is under examination and provides the taxpayer with an 
explanation of the process as described in section 7521(b)(1). The 
preceding sentence shall not apply in the case of any examination if 
the Secretary determines that--
            ``(1) such examination is in connection with a criminal 
        investigation or is with respect to a tax the collection of 
        which is in jeopardy, or
            ``(2) the application of the preceding sentence would be 
        inconsistent with national security needs or would interfere 
        with the effective conduct of a confidential law enforcement or 
        foreign counterintelligence activity.''.
    (b) Conforming Amendment.--Paragraph (1) of section 7521(b) 
(relating to safeguards) is amended by striking ``or at''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 504. INCREASE IN LIMIT ON RECOVERY OF CIVIL DAMAGES FOR 
              UNAUTHORIZED COLLECTION ACTIONS.

    (a) General Rule.--Subsection (b) of section 7433 (relating to 
damages) is amended by striking ``$100,000'' and inserting 
``$1,000,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to actions by officers or employees of the Internal Revenue 
Service after the date of the enactment of this Act.

SEC. 505. SAFEGUARDS RELATING TO DESIGNATED SUMMONS.

    (a) Standard of Review.--Subparagraph (A) of section 6503(k)(2) 
(defining designated summons) is amended by redesignating clauses (i) 
and (ii) as clauses (ii) and (iii), respectively, and by inserting 
before clause (ii) (as so redesignated) the following new clause:
                            ``(i) the issuance of such summons is 
                        preceded by a review of such issuance by the 
                        regional counsel of the Office of Chief Counsel 
                        for the region in which the examination of the 
                        corporation is being conducted,''.
    (b) Notice Requirements for Issuance.--Section 6503(k) is amended 
by adding at the end thereof the following new paragraph:
            ``(4) Notice requirements.--With respect to any summons 
        referred to in paragraph (1)(A) issued to any person other than 
        the corporation, the Secretary shall promptly notify the 
        corporation, in writing, that such summons has been issued with 
        respect to such corporation's return of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to summons issued after the date of the enactment of this Act.

                     TITLE VI--INFORMATION RETURNS

SEC. 601. PHONE NUMBER OF PERSON PROVIDING PAYEE STATEMENTS REQUIRED TO 
              BE SHOWN ON SUCH STATEMENT.

    (a) General Rule.--The following provisions are each amended by 
striking ``name and address'' and inserting ``name, address, and phone 
number of the information contact'':
            (1) Section 6041(d)(1).
            (2) Section 6041A(e)(1).
            (3) Section 6042(c)(1).
            (4) Section 6044(e)(1).
            (5) Section 6045(b)(1).
            (6) Section 6049(c)(1)(A).
            (7) Section 6050B(b)(1).
            (8) Section 6050H(d)(1).
            (9) Section 6050I(e)(1).
            (10) Section 6050J(e).
            (11) Section 6050K(b)(1).
            (12) Section 6050N(b)(1).
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to statements required to be furnished after December 31, 1993 
(determined without regard to any extension).

SEC. 602. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION RETURNS.

    (a) General Rule.--Subchapter B of chapter 76 (relating to 
proceedings by taxpayers and third parties) is amended by redesignating 
section 7434 as section 7435 and by inserting after section 7433 the 
following new section:

``SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION 
              RETURNS.

    ``(a) In General.--If any person willfully files a false or 
fraudulent information return with respect to payments purported to be 
made to any other person, such other person may bring a civil action 
for damages against the person so filing such return.
    ``(b) Damages.--In any action brought under subsection (a), upon a 
finding of liability on the part of the defendant, the defendant shall 
be liable to the plaintiff in an amount equal to the greater of $5,000 
or the sum of--
            ``(1) any actual damages sustained by the plaintiff as a 
        proximate result of the filing of the false or fraudulent 
        information return (including any costs attributable to 
        resolving deficiencies asserted as a result of such filing), 
        and
            ``(2) the costs of the action.
    ``(c) Period for Bringing Action.--Notwithstanding any other 
provision of law, an action to enforce the liability created under this 
section may be brought without regard to the amount in controversy and 
may be brought only within the later of--
            ``(1) 4 years after the date of the filing of the false or 
        fraudulent information return, or
            ``(2) 1 year after the date such false or fraudulent 
        information return would have been discovered by exercise of 
        reasonable care.
    ``(d) Copy of Complaint Filed With IRS.--Any person bringing an 
action under subsection (a) shall provide a copy of the complaint to 
the Internal Revenue Service upon the filing of such complaint with the 
court.
    ``(e) Finding of Court To Include Correct Amount of Payment.--The 
judgment of the court in an action brought under subsection (a) shall 
include a finding of the correct amount which should have been reported 
in the information return.
    ``(f) Information Return.--For purposes of this section, the term 
`information return' means any statement described in section 
6724(d)(1)(A).''.
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 76 is amended by striking the item relating to section 7434 and 
inserting the following:

                              ``Sec. 7434. Civil damages for fraudulent 
                                        filing of information returns.
                              ``Sec. 7435. Cross references.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to false or fraudulent information returns filed after the date 
of the enactment of this Act.

SEC. 603. REQUIREMENT TO VERIFY ACCURACY OF INFORMATION RETURNS.

    (a) General Rule.--Section 6201 (relating to assessment authority) 
is amended by redesignating subsection (d) as subsection (e) and by 
inserting after subsection (c) the following new subsection:
    ``(d) Required Reasonable Verification of Information Returns.--In 
any court proceeding, if a taxpayer asserts a reasonable dispute with 
respect to any item of income reported on an information return filed 
with the Secretary under subpart B of part III of subchapter A of 
chapter 61 by a third party and the taxpayer has fully cooperated with 
the Secretary (including providing, within a reasonable period of time, 
access to and inspection of all witnesses, information, and documents 
within the control of the taxpayer as reasonably requested by the 
Secretary), the Secretary shall present reasonable and probative 
information concerning such deficiency in addition to such information 
return.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

TITLE VII--MODIFICATIONS TO PENALTY FOR FAILURE TO COLLECT AND PAY OVER 
                                  TAX

SEC. 701. PRELIMINARY NOTICE REQUIREMENT.

    (a) In General.--Section 6672 (relating to failure to collect and 
pay over tax, or attempt to evade or defeat tax) is amended by 
redesignating subsection (b) as subsection (c) and by inserting after 
subsection (a) the following new subsection:
    ``(b) Preliminary Notice Requirement.--
            ``(1) In general.--No penalty shall be imposed under 
        subsection (a) unless the Secretary notifies the taxpayer in 
        writing by mail to an address as determined under section 
        6212(b) that the taxpayer shall be subject to an assessment of 
        such penalty.
            ``(2) Timing of notice.--The mailing of the notice 
        described in paragraph (1) shall precede any notice and demand 
        of any penalty under subsection (a) by at least 60 days.
            ``(3) Statute of limitations.--If a notice described in 
        paragraph (1) with respect to any penalty is mailed before the 
        expiration of the period provided by section 6501 for the 
        assessment of such penalty (determined without regard to this 
        paragraph), the period provided by such section for the 
        assessment of such penalty shall not expire before the date 90 
        days after the date on which such notice was mailed.
            ``(4) Exception for jeopardy.--This subsection shall not 
        apply if the Secretary finds that the collection of the penalty 
        is in jeopardy.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to assessments made after June 30, 1994.

SEC. 702. NO PENALTY IF PROMPT NOTIFICATION OF THE SECRETARY.

    (a) In General.--Section 6672 (relating to failure to collect and 
pay over tax, or attempt to evade or defeat tax) is amended by adding 
at the end thereof the following new subsection:
    ``(d) Penalty Not Applicable Where Prompt Notification of 
Failure.--
            ``(1) In general.--A person shall not be liable for any 
        penalty under subsection (a) by reason of any failure referred 
        to in subsection (a) if--
                    ``(A) such person is not a significant owner, or 
                highly compensated employee, of the trade or business 
                with respect to which such failure occurred,
                    ``(B) such person notifies the Secretary (in such 
                manner as he may prescribe) that such failure has 
                occurred within 10 days after the date of such failure,
                    ``(C) such notification was before any notice by 
                the Secretary to any person with respect to such 
                failure, and
                    ``(D) such failure is not a part of a plan to 
                defraud the Federal Government.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Significant owner.--The term `significant 
                owner' means--
                            ``(i) any person holding an interest as a 
                        proprietor in a trade or business carried on as 
                        a proprietorship, and
                            ``(ii) in the case of a trade or business 
                        conducted by a corporation or partnership, any 
                        person who is a 5-percent owner (as defined in 
                        section 416(i)(1)) in such corporation or 
                        partnership, as the case may be.
                    ``(B) Highly compensated employee.--The term 
                `highly compensated employee' means any employee who 
                receives compensation from the employer at an annual 
                rate in excess of $75,000.
            ``(3) Special rules.--
                    ``(A) One-time relief.--This subsection shall apply 
                only once with respect to--
                            ``(i) any person, and
                            ``(ii) any trade or business with respect 
                        to which the failure described in subsection 
                        (a) occurred.
                    ``(B) Application of subsection.--This subsection 
                shall not apply if it results in no person being held 
                liable for the penalty described in subsection (a).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply in the case of failures after the date of the enactment of this 
Act.

SEC. 703. DISCLOSURE OF CERTAIN INFORMATION WHERE MORE THAN 1 PERSON 
              SUBJECT TO PENALTY.

    (a) In General.--Subsection (e) of section 6103 (relating to 
disclosure to persons having material interest), as amended by section 
401(a), is amended by adding at the end thereof the following new 
paragraph:
            ``(9) Disclosure of certain information where more than 1 
        person subject to penalty under section 6672.--If the Secretary 
        determines that a person is liable for a penalty under section 
        6672(a) with respect to any failure, upon request in writing of 
        such person, the Secretary shall disclose in writing to such 
        person--
                    ``(A) the name of any other person whom the 
                Secretary has determined to be liable for such penalty 
                with respect to such failure, and
                    ``(B) whether the Secretary has attempted to 
                collect such penalty from such other person, the 
                general nature of such collection activities, and the 
                amount collected.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 704. PENALTIES UNDER SECTION 6672.

    (a) Public Information Requirements.--The Secretary of the Treasury 
or the Secretary's delegate (hereafter in this section referred to as 
the ``Secretary'') shall take such actions as may be appropriate to 
ensure that employees are aware of their responsibilities under the 
Federal tax depository system, the circumstances under which employees 
may be liable for the penalty imposed by section 6672 of the Internal 
Revenue Code of 1986, and the responsibility to promptly report to the 
Internal Revenue Service any failure referred to in subsection (a) of 
such section 6672. Such actions shall include--
            (1) printing of a warning on deposit coupon booklets and 
        the appropriate tax returns that certain employees may be 
        liable for the penalty imposed by such section 6672, and
            (2) the development of a special information packet.
    (b) Board Members of Tax-Exempt Organizations.--
            (1) Voluntary board members.--
                    (A) In general.--The penalty under section 6672 of 
                the Internal Revenue Code of 1986 shall not be imposed 
                on unpaid, volunteer members of any board of trustees 
                or directors of an organization referred to in section 
                501 of such Code to the extent such members are solely 
                serving in an honorary capacity, do not participate in 
                the day-to-day or financial operations of the 
                organization, and do not have actual knowledge of the 
                failure on which such penalty is imposed.
                    (B) Application of paragraph.--This paragraph shall 
                not apply if it results in no person being held liable 
                for the penalty described in section 6672(a) of the 
                Internal Revenue Code of 1986.
            (2) Development of explanatory materials.--The Secretary 
        shall develop materials explaining the circumstances under 
        which board members of tax-exempt organizations (including 
        voluntary and honorary members) may be subject to penalty under 
        section 6672 of such Code. Such materials shall be made 
        available to tax-exempt organizations.
            (3) IRS instructions.--The Secretary shall clarify the 
        instructions to Internal Revenue Service employees on the 
        application of the penalty under section 6672 of such Code with 
        regard to voluntary members of boards of trustees or directors 
        of tax- exempt organizations.
    (c) Prompt Notification.--To the maximum extent practicable, the 
Secretary shall notify all persons who have failed to make timely and 
complete deposit of any taxes described in section 6672 of the Internal 
Revenue Code of 1986 of such failure within 30 days after the return 
was filed reflecting such failure or after the date on which the 
Secretary is first aware of such failure. If the person failing to make 
the deposit is not an individual, the Secretary shall notify the entity 
subject to such deposit requirement and that entity shall notify, 
within 15 days of the notification by the Secretary, all officers, 
general partners, trustees, or other managers of the failure.

             TITLE VIII--AWARDING OF COSTS AND CERTAIN FEES

SEC. 801. MOTION FOR DISCLOSURE OF INFORMATION.

    Paragraph (4) of section 7430(c) (defining prevailing party) is 
amended by adding at the end thereof the following new subparagraph:
                    ``(C) Motion for disclosure of information.--Once a 
                taxpayer substantially prevails as described in 
                subparagraph (A)(ii), the taxpayer may file a motion 
                for an order requiring the disclosure (within a 
                reasonable period of time specified by the court) of 
                all information and copies of relevant records in the 
                possession of the Internal Revenue Service with respect 
                to such taxpayer's case and the substantial 
                justification for the position taken by the Internal 
                Revenue Service.''.

SEC. 802. INCREASED LIMIT ON ATTORNEY FEES.

    Paragraph (1) of section 7430(c) (defining reasonable litigation 
costs) is amended--
            (1) by striking ``$75'' in clause (iii) of subparagraph (B) 
        and inserting ``$110'',
            (2) by striking ``an increase in the cost of living or'' in 
        clause (iii) of subparagraph (B), and
            (3) by adding after clause (iii) the following:
        ``In the case of any calendar year beginning after 1992, the 
        dollar amount referred to in clause (iii) shall be increased by 
        an amount equal to such dollar amount multiplied by the cost-
        of-living adjustment determined under section 1(f)(3) for such 
        calendar year, by substituting `calendar year 1991' for 
        `calendar year 1989' in subparagraph (B) thereof. If any dollar 
        amount after being increased under the preceding sentence is 
        not a multiple of $10, such dollar amount shall be rounded to 
        the nearest multiple of $10 (or, if such dollar amount is a 
        multiple of $5, such dollar amount shall be increased to the 
        next higher multiple of $10).''.

SEC. 803. FAILURE TO AGREE TO EXTENSION NOT TAKEN INTO ACCOUNT.

    Paragraph (1) of section 7430(b) (relating to requirement that 
administrative remedies be exhausted) is amended by adding at the end 
thereof the following new sentence: ``Any failure to agree to an 
extension of the time for the assessment of any tax shall not be taken 
into account for purposes of determining whether the prevailing party 
meets the requirements of the preceding sentence.''

SEC. 804. EFFECTIVE DATE.

    The amendments made by this title shall apply in the case of 
proceedings commenced after the date of the enactment of this Act.

                       TITLE IX--OTHER PROVISIONS

SEC. 901. REQUIRED CONTENT OF CERTAIN NOTICES.

    (a) General Rule.--Subsection (a) of section 7522 (relating to 
content of tax due, deficiency, and other notices) is amended by 
striking ``shall describe the basis for, and identify'' and inserting 
``shall set forth the adjustments which are the basis for, and shall 
identify''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to notices sent after the date 6 months after the date of the 
enactment of this Act.

SEC. 902. TREATMENT OF SUBSTITUTE RETURNS UNDER SECTION 6651.

    (a) General Rule.--Section 6651 (relating to failure to file tax 
return or to pay tax) is amended by adding at the end thereof the 
following new subsection:
    ``(h) Treatment of Returns Prepared by Secretary Under Section 
6020(b).--In the case of any return made by the Secretary under section 
6020(b)--
            ``(1) such return shall be disregarded for purposes of 
        determining the amount of the addition under paragraph (1) of 
        subsection (a), but
            ``(2) such return shall be treated as the return filed by 
        the taxpayer for purposes of determining the amount of the 
        addition under paragraphs (2) and (3) of subsection (a).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply in the case of any return the due date for which (determined 
without regard to extensions) is after the date of the enactment of 
this Act.

SEC. 903. RELIEF FROM RETROACTIVE APPLICATION OF TREASURY DEPARTMENT 
              REGULATIONS.

    (a) In General.--Subsection (b) of section 7805 (relating to rules 
and regulations) is amended to read as follows:
    ``(b) Retroactivity of Regulations.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, no temporary, proposed, or final regulation 
        relating to the internal revenue laws shall apply to any 
        taxable period ending before the earliest of the following 
        dates:
                    ``(A) The date on which such regulation is filed 
                with the Federal Register.
                    ``(B) In the case of any final regulation, the date 
                on which any proposed or temporary regulation to which 
                such final regulation relates was filed with the 
                Federal Register.
                    ``(C) The date on which any notice substantially 
                describing the expected contents of any temporary, 
                proposed, or final regulation is issued to the public.
            ``(2) Prevention of abuse.--The Secretary may provide that 
        any regulation may take effect or apply retroactively to 
        prevent abuse of a statute to which the regulation relates.
            ``(3) Correction of procedural defects.--The Secretary may 
        provide that any regulation may apply retroactively to correct 
        a procedural defect in the issuance of any prior regulation.
            ``(4) Internal regulations.--The limitations of paragraph 
        (1) shall not apply to any regulation relating to internal 
        Treasury Department policies, practices or procedures.
            ``(5) Congressional authorization.--The limitation of 
        paragraph (1) may be superseded by a legislative grant from 
        Congress authorizing the Secretary to prescribe the effective 
        date with respect to any regulation.
            ``(6) Election to apply retroactively.--The Secretary may 
        provide for any taxpayer to elect to apply any regulation 
        before the dates specified in paragraph (1).
            ``(7) Application to rulings.--The Secretary may prescribe 
        the extent, if any, to which any ruling (including any judicial 
        decision or any administrative determination other than by 
        regulation) relating to the internal revenue laws shall be 
        applied without retroactive effect.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by subsection (a) shall apply with respect to--
                    (A) any temporary or proposed regulation filed on 
                or after January 5, 1993, and
                    (B) any temporary or proposed regulation filed 
                before January 5, 1993, and filed as a final regulation 
                after such date.
            (2) Special rule.--Section 7805(b)(2) of the Internal 
        Revenue Code of 1986 (as added by subsection (a)) shall apply 
        only to statutes enacted on or after the date of the enactment 
        of this Act.

SEC. 904. REQUIRED NOTICE OF CERTAIN PAYMENTS.

    If any payment is received by the Secretary of the Treasury or the 
Secretary's delegate (hereafter in the section referred to as the 
``Secretary'') from any taxpayer and the Secretary cannot associate 
such payment with any outstanding tax liability of such taxpayer, the 
Secretary shall make reasonable efforts to notify the taxpayer of such 
inability within 60 days after the receipt of such payment.

SEC. 905. UNAUTHORIZED ENTICEMENT OF INFORMATION DISCLOSURE.

    (a) In General.--Subchapter B of chapter 76 (relating to 
proceedings by taxpayers and third parties) is amended by redesignating 
section 7434 as section 7435 and by inserting after section 7433 the 
following new section:

``SEC. 7434. CIVIL DAMAGES FOR UNAUTHORIZED ENTICEMENT OF INFORMATION 
              DISCLOSURE.

    ``(a) In General.--If any officer or employee of the United States 
intentionally compromises the determination or collection of any tax 
due from an attorney, certified public accountant, or enrolled agent 
representing a taxpayer in exchange for information conveyed by the 
taxpayer to the attorney, certified public accountant, or enrolled 
agent for purposes of obtaining advice concerning the taxpayer's tax 
liability, such taxpayer may bring a civil action for damages against 
the United States in a district court of the United States. Such civil 
action shall be the exclusive remedy for recovering damages resulting 
from such actions.
    ``(b) Damages.--In any action brought under subsection (a), upon a 
finding of liability on the part of the defendant, the defendant shall 
be liable to the plaintiff in an amount equal to the lesser of $500,000 
or the sum of--
            ``(1) actual, direct economic damages sustained by the 
        plaintiff as a proximate result of the information disclosure, 
        and
            ``(2) the costs of the action.
Damages shall not include the taxpayer's liability for any civil or 
criminal penalties, or other losses attributable to incarceration or 
the imposition of other criminal sanctions.
    ``(c) Payment Authority.--Claims pursuant to this section shall be 
payable out of funds appropriated under section 1304 of title 31, 
United States Code.
    ``(d) Period for Bringing Action.--Notwithstanding any other 
provision of law, an action to enforce liability created under this 
section may be brought without regard to the amount in controversy and 
may be brought only within 2 years after the date the actions creating 
such liability would have been discovered by exercise of reasonable 
care.
    ``(e) Mandatory Stay.--Upon a certification by the Commissioner or 
the Commissioner's delegate that there is an ongoing investigation or 
prosecution of the taxpayer, the district court before which an action 
under this section is pending, shall stay all proceedings with respect 
to such action pending the conclusion of the investigation or 
prosecution.
    ``(f) Crime-Fraud Exception.--Subsection (a) shall not apply to 
information conveyed to an attorney, certified public accountant, or 
enrolled agent for the purpose of perpetrating a fraud or crime.''.
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 76 is amended by striking the item relating to section 7434 and 
by adding at the end thereof the following new items:

                              ``Sec. 7434. Civil damages for 
                                        unauthorized enticement of 
                                        information disclosure.
                              ``Sec. 7435. Cross references.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to actions after the date of the enactment of this Act.

                  TITLE X--FORM MODIFICATIONS; STUDIES

SEC. 1000. DEFINITIONS.

    For purposes of this title:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or his delegate.
            (2) 1986 code.--The term ``1986 Code'' means the Internal 
        Revenue Code of 1986.
            (3) Tax-writing committees.--The term ``tax-writing 
        Committees'' means the Committee on Ways and Means of the House 
        of Representatives and the Committee on Finance of the Senate.

                     Subtitle A--Form Modifications

SEC. 1001. EXPLANATION OF CERTAIN PROVISIONS.

    (a) General Rule.--The Secretary shall take such actions as may be 
appropriate to ensure that taxpayers are aware of the provisions of the 
1986 Code permitting payment of tax in installments, extensions of time 
for payment of tax, and compromises of tax liability. Such actions 
shall include revising the instructions for filing income tax returns 
so that such instructions include an explanation of--
            (1) the procedures for requesting the benefits of such 
        provisions, and
            (2) the terms and conditions under which the benefits of 
        such provisions are available.
    (b) Collection Notices.--In any notice of an underpayment of tax or 
proposed underpayment of tax sent by the Secretary to any taxpayer, the 
Secretary shall include a notification of the availability of the 
provisions of sections 6159, 6161, and 7122 of the 1986 Code.

SEC. 1002. IMPROVED PROCEDURES FOR NOTIFYING SERVICE OF CHANGE OF 
              ADDRESS OR NAME.

    The Secretary shall provide improved procedures for taxpayers to 
notify the Secretary of changes in names and addresses. Not later than 
June 30, 1994, the Secretary shall institute procedures for timely 
updating all Internal Revenue Service records with change-of-address 
information provided to the Secretary by taxpayers.

SEC. 1003. RIGHTS AND RESPONSIBILITIES OF DIVORCED INDIVIDUALS.

    The Secretary shall include in the Internal Revenue Service 
publication entitled ``Your Rights As A Taxpayer'' a section on the 
rights and responsibilities of divorced individuals.

                          Subtitle B--Studies

SEC. 1011. PILOT PROGRAM FOR APPEAL OF ENFORCEMENT ACTIONS.

    (a) General Rule.--The Secretary shall establish a 1-year pilot 
program for appeals of enforcement actions (including lien, levy, and 
seizure actions) to the Appeals Division of the Internal Revenue 
Service--
            (1) where the deficiency was assessed without actual 
        knowledge of the taxpayer,
            (2) where the deficiency was assessed without an 
        opportunity for administrative appeal, and
            (3) in other appropriate circumstances.
    (b) Report.--Not later than June 30, 1994, the Secretary shall 
submit to the tax-writing Committees a report on the pilot program 
established under subsection (a), together with such recommendations as 
he may deem advisable.

SEC. 1012. STUDY ON TAXPAYERS WITH SPECIAL NEEDS.

    (a) General Rule.--The Secretary shall conduct a study on ways to 
assist the elderly, physically impaired, foreign-language speaking, and 
other taxpayers with special needs to comply with the internal revenue 
laws.
    (b) Report.--Not later than June 30, 1994, the Secretary shall 
submit to the tax-writing Committees a report on the study conducted 
under subsection (a), together with such recommendations as he may deem 
advisable.

SEC. 1013. REPORTS ON TAXPAYER-RIGHTS EDUCATION PROGRAM.

    Not later than April 1, 1994, the Secretary shall submit a report 
to the tax-writing Committees on the scope and content of the Internal 
Revenue Service's taxpayer-rights education program for its officers 
and employees. Not later than June 30, 1994, the Secretary shall submit 
a report to the tax-writing Committees on the effectiveness of the 
program referred to in the preceding sentence.

SEC. 1014. BIENNIAL REPORTS ON MISCONDUCT BY INTERNAL REVENUE SERVICE 
              EMPLOYEES.

    Not later than June 30, 1994 and during June of each second 
calendar year thereafter, the Secretary shall report to the tax-writing 
Committees on all cases involving complaints about misconduct of 
Internal Revenue Service employees and the disposition of such 
complaints.

SEC. 1015. STUDY OF NOTICES OF DEFICIENCY.

    (a) General Rule.--The Comptroller General shall conduct a study 
on--
            (1) the effectiveness of current Internal Revenue Service 
        efforts to notify taxpayers with regard to tax deficiencies 
        under section 6212 of the 1986 Code,
            (2) the number of registered or certified letters and other 
        notices returned to the Internal Revenue Service as 
        undeliverable,
            (3) any follow-up action taken by the Internal Revenue 
        Service to locate taxpayers who did not receive actual notice,
            (4) the effect that failures to receive notice of such 
        deficiencies have on taxpayers, and
            (5) recommendations to improve Internal Revenue Service 
        notification of taxpayers.
    (b) Report.--Not later than June 30, 1994, the Comptroller General 
shall submit to the tax-writing Committees a report on the study 
conducted under subsection (a), together with such recommendations as 
he may deem advisable.

SEC. 1016. NOTICE AND FORM ACCURACY STUDY.

    (a) General Rule.--The Comptroller General shall conduct annual 
studies of the accuracy of 25 of the most commonly used Internal 
Revenue Service forms, notices, and publications. In conducting any 
such study, the Comptroller General shall examine the suitability and 
usefulness of Internal Revenue Service telephone numbers on Internal 
Revenue Service notices and shall solicit and consider the comments of 
organizations representing taxpayers, employers, and tax professionals.
    (b) Reports.--The Comptroller General shall submit to the tax-
writing Committees a report on each study conducted under subsection 
(a), together with such recommendations as he may deem advisable. The 
first such report shall be submitted not later than June 30, 1994.

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