[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1555 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1555

 To amend the Internal Revenue Code of 1986 to restructure and reform 
         the Internal Revenue Service, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 13, 1997

 Mr. Faircloth 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 restructure and reform 
         the Internal Revenue Service, and for other purposes.

    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 ``Internal Revenue 
Service Oversight, Restructuring and Tax Code Elimination Act of 
1997''.
    (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.--

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Internal Revenue Service Oversight Board.
Sec. 3. Commissioner of Internal Revenue; other officials.
Sec. 4. Other personnel.
Sec. 5. Prohibition on executive branch influence over taxpayer audits 
                            and other investigations.
Sec. 6. Termination of Internal Revenue Code of 1986 and Internal 
                            Revenue Service.
Sec. 7. Structure of new Federal tax system.

SEC. 2. INTERNAL REVENUE SERVICE OVERSIGHT BOARD.

    (a) In General.--Section 7802 (relating to the Commissioner of 
Internal Revenue) is amended to read as follows:

``SEC. 7802. INTERNAL REVENUE SERVICE OVERSIGHT BOARD.

    ``(a) Establishment.--There is established within the Department of 
the Treasury the Internal Revenue Service Oversight Board (hereafter in 
this subchapter referred to as the `Oversight Board').
    ``(b) Membership.--
            ``(1) Composition.--The Oversight Board shall be composed 
        of 9 members who are not Federal officers or employees and who 
        are appointed by the President, by and with the advice and 
        consent of the Senate.
            ``(2) Qualifications and terms.--
                    ``(A) Qualifications.--Members of the Oversight 
                Board shall be appointed solely on the basis of their 
                professional experience and expertise in 1 or more of 
                the following areas:
                            ``(i) Management of large service 
                        organizations.
                            ``(ii) Customer service.
                            ``(iii) Federal tax laws, including tax 
                        administration and compliance.
                            ``(iv) Information technology.
                            ``(v) Organization development.
                            ``(vi) The needs and concerns of taxpayers.
                            ``(vii) Management or ownership of a small 
                        business.
                In the aggregate, the members of the Oversight Board 
                should collectively bring to bear expertise in all of 
                the areas described in the preceding sentence.
                    ``(B) Terms.--Each member shall be appointed for a 
                term of 5 years, except that of the members first 
                appointed under paragraph (1)--
                            ``(i) 1 member shall be appointed for a 
                        term of 1 year,
                            ``(ii) 1 member shall be appointed for a 
                        term of 2 years,
                            ``(iii) 2 members shall be appointed for a 
                        term of 3 years, and
                            ``(iv) 2 members shall be appointed for a 
                        term of 4 years.
                Such terms shall begin on the date of appointment.
                    ``(C) Reappointment.--An individual may be 
                appointed to no more than two 5-year terms on the 
                Oversight Board.
                    ``(D) Vacancy.--Any vacancy on the Oversight Board 
                shall be filled in the same manner as the original 
                appointment. Any member appointed to fill a vacancy 
                occurring before the expiration of the term for which 
                the member's predecessor was appointed shall be 
                appointed for the remainder of that term.
                    ``(E) Special government employees.--During the 
                entire period that an individual is a member of the 
                Oversight Board, such individual shall be treated as--
                            ``(i) serving as a special government 
                        employee (as defined in section 202 of 
title 18, United States Code) and as described in section 207(c)(2) of 
such title 18, and
                            ``(ii) serving as an officer or employee 
                        referred to in section 101(f) of the Ethics in 
                        Government Act of 1978 for purposes of title I 
                        of such Act.
            ``(3) Quorum.--6 members of the Oversight Board shall 
        constitute a quorum. A majority of members present and voting 
        shall be required for the Oversight Board to take action.
            ``(4) Removal.--Any member of the Oversight Board may be 
        removed at the will of the President.
            ``(5) Claims.--
                    ``(A) In general.--Members of the Oversight Board 
                shall have no personal liability under Federal law with 
                respect to any claim arising out of or resulting from 
                an act or omission by such member within the scope of 
                service as a member. The preceding sentence shall not 
                be construed to limit personal liability for criminal 
                acts or omissions, willful or malicious conduct, acts 
                or omissions for private gain, or any other act or 
                omission outside the scope of the service of such 
                member on the Oversight Board.
                    ``(B) Effect on other law.--This paragraph shall 
                not be construed--
                            ``(i) to affect any other immunities and 
                        protections that may be available to such 
                        member under applicable law with respect to 
                        such transactions,
                            ``(ii) to affect any other right or remedy 
                        against the United States under applicable law, 
                        or
                            ``(iii) to limit or alter in any way the 
                        immunities that are available under applicable 
                        law for Federal officers and employees.
    ``(c) General Responsibilities.--
            ``(1) In general.--The Oversight Board shall oversee the 
        Internal Revenue Service in its administration, management, 
        conduct, direction, and supervision of the execution and 
        application of the internal revenue laws or related statutes 
        and tax conventions to which the United States is a party.
            ``(2) Restriction on disclosure of return information to 
        oversight board members.--No return, return information, or 
        taxpayer return information (as defined in section 6103(b)) may 
        be disclosed to any member of the Oversight Board. Any request 
        for information not permitted to be disclosed under the 
        preceding sentence, and any contact relating to a specific 
        taxpayer, made by a member of the Oversight Board so described 
        to an officer or employee of the Internal Revenue Service shall 
        be reported by such officer or employee to the Secretary and 
        the Joint Committee on Taxation.
    ``(d) Specific Responsibilities.--The Oversight Board shall have 
the following specific responsibilities:
            ``(1) Strategic plans.--To review and approve strategic 
        plans of the Internal Revenue Service, including the 
        establishment of--
                    ``(A) mission and objectives, and standards of 
                performance relative to either, and
                    ``(B) annual and long-range strategic plans.
            ``(2) Operational plans.--To review the operational 
        functions of the Internal Revenue Service, including--
                    ``(A) plans for modernization of the tax system, 
                including the procurement of information technology 
                intended to process tax returns,
                    ``(B) plans for outsourcing or managed competition, 
                and
                    ``(C) plans for training and education.
            ``(3) Management.--To--
                    ``(A) recommend to the President candidates for 
                appointment as the Commissioner of Internal Revenue and 
                recommend to the President the removal of the 
                Commissioner,
                    ``(B) review the Commissioner's selection, 
                evaluation, and compensation of senior managers,
                    ``(C) review and approve the Commissioner's plans 
                for any major reorganization of the Internal Revenue 
                Service, and
                    ``(D) review, and make recommendations to the 
                Commissioner concerning, the auditing procedures and 
                collection activities of the Internal Revenue Service.
            ``(4) Budget.--To--
                    ``(A) review and approve the budget request of the 
                Internal Revenue Service prepared by the Commissioner,
                    ``(B) submit such budget request to the Secretary 
                of the Treasury, and
                    ``(C) ensure that the budget request supports the 
                annual and long-range strategic plans.
The Secretary shall submit the budget request referred to in paragraph 
(4)(B) for any fiscal year to the President who shall submit such 
request, without revision, to Congress together with the President's 
annual budget request for the Internal Revenue Service for such fiscal 
year.
    ``(e) Oversight Board Personnel Matters.--
            ``(1) Compensation of members.--
                    ``(A) In general.--Each member of the Oversight 
                Board shall be compensated at a rate not to exceed 
                $30,000 per year.
                    ``(B) Chairperson.--In lieu of the amount specified 
                in subparagraph (A), the Chairperson of the Oversight 
                Board shall be compensated at a rate not to exceed 
                $50,000.
            ``(2) Travel expenses.--The members of the Oversight Board 
        shall be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        for purposes of attending meetings of the Oversight Board.
            ``(3) Staff.--At the request of the Chairperson of the 
        Oversight Board, the Commissioner shall detail to the Oversight 
        Board such personnel as may be necessary to enable the 
        Oversight Board to perform its duties. Such detail shall be 
        without interruption or loss of civil service status or 
        privilege. The Chairperson of the Oversight Board may recommend 
        to the Commissioner specific staff of the Internal Revenue 
        Service for detail to the Oversight Board, and may recommend to 
        the Commissioner specific individuals not employed by the 
        Internal Revenue Service to be hired by the Internal Revenue 
        Service for the purpose of being detailed to the Oversight 
        Board.
            ``(4) Procurement of temporary and intermittent services.--
        The Chairperson of the Oversight Board may procure temporary 
        and intermittent services under section 3109(b) of title 5, 
        United States Code.
    ``(f) Administrative Matters.--
            ``(1) Chair.--The members of the Oversight Board shall 
        elect for a 2-year term a chairperson from among the members.
            ``(2) Committees.--The Oversight Board may establish such 
        committees as the Oversight Board determines appropriate.
            ``(3) Meetings.--The Oversight Board shall meet at least 
        once each month and at such other times as the Oversight Board 
        determines appropriate.
            ``(4) Reports.--The Oversight Board shall each year report 
        to the President and the Congress with respect to the conduct 
        of its responsibilities under this title.''.
    (b) Conforming Amendments.--
            (1) Section 4946(c) (relating to definitions and special 
        rules for chapter 42) is amended--
                    (A) by striking ``or'' at the end of paragraph (5),
                    (B) by striking the period at the end of paragraph 
                (6) and inserting ``, or'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(7) a member of the Internal Revenue Service Oversight 
        Board.''.
            (2) The table of sections for subchapter A of chapter 80 is 
        amended by striking the item relating to section 7802 and 
        inserting the following new item:

                              ``Sec. 7802. Internal Revenue Service 
                                        Oversight Board.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act.
            (2) Nominations to internal revenue service oversight 
        board.--The President shall submit nominations under section 
        7802 of the Internal Revenue Code of 1986, as added by this 
        section, to the Senate not later than 6 months after the date 
        of the enactment of this Act.

SEC. 3. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.

    (a) In General.--Section 7803 (relating to other personnel) is 
amended to read as follows:

``SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.

    ``(a) Commissioner of Internal Revenue.--
            ``(1) Appointment.--
                    ``(A) In general.--There shall be in the Department 
                of the Treasury a Commissioner of Internal Revenue who 
                shall be appointed by the President, by and with the 
                advice and consent of the Senate, to a 5-year term. The 
                appointment shall be made without regard to political 
                affiliation or activity.
                    ``(B) Vacancy.--Any individual appointed to fill a 
                vacancy in the position of Commissioner occurring 
                before the expiration of the term for which such 
                individual's predecessor was appointed shall be 
                appointed only for the remainder of that term.
                    ``(C) Removal.--The Commissioner may be removed at 
                the will of the President.
            ``(2) Duties.--The Commissioner shall have such duties and 
        powers as the Secretary may prescribe, including the power to--
                    ``(A) administer, manage, conduct, direct, and 
                supervise the execution and application of the internal 
                revenue laws or related statutes and ax conventions to 
                which the United States is a party; and
                    ``(B) recommend to the President a candidate for 
                appointment as Chief Counsel for the Internal Revenue 
                Service when a vacancy occurs, and recommend to the 
                President the removal of such Chief Counsel.
        If the Secretary determines not to delegate a power specified 
        in subparagraph (A) or (B), such determination may not take 
        effect until 30 days after the Secretary notifies the 
        Committees on Ways and Means, Government Reform and Oversight, 
        and Appropriations of the House of Representatives, the 
        Committees on Finance, Government Operations, and 
        Appropriations of the Senate, and the Joint Committee on 
        Taxation.
            ``(3) Consultation with oversight board.--The Commissioner 
        shall consult with the Oversight Board on all matters set forth 
        in paragraphs (2) and (3) (other than paragraph (3)(A)) of 
        section 7802(d).
    ``(b) Assistant Commissioner for Employee Plans and Exempt 
Organizations.--There is established within the Internal Revenue 
Service an office to be known as the `Office of Employee Plans and 
Exempt Organizations' to be under the supervision and direction of an 
Assistant Commissioner of Internal Revenue. As head of the Office, the 
Assistant Commissioner shall be responsible for carrying out such 
functions as the Secretary may prescribe with respect to organizations 
exempt from tax under section 501(a) and with respect to plans to which 
part I of subchapter D of chapter 1 applies (and with respect to 
organizations designed to be exempt under such section and plans 
designed to be plans to which such part applies) and other nonqualified 
deferred compensation arrangements. The Assistant Commissioner shall 
report annually to the Commissioner with respect to the Assistant 
Commissioner's responsibilities under this section.
    ``(c) Office of Taxpayer Advocate.--
            ``(1) In general.--
                    ``(A) Establishment.--There is established in the 
                Internal Revenue Service an office to be known as the 
                `Office of the Taxpayer Advocate'. Such office shall be 
                under the supervision and direction of an official to 
                be known as the `Taxpayer Advocate' who shall be 
                appointed with the approval of the Oversight Board by 
                the Commissioner of Internal Revenue and shall report 
                directly to the Commissioner. The Taxpayer Advocate 
                shall be entitled to compensation at the same rate as 
                the highest level official reporting directly to the 
                Commissioner of Internal Revenue.
                    ``(B) Restriction on subsequent employment.--An 
                individual who is an officer or employee of the 
                Internal Revenue Service may be appointed as Taxpayer 
                Advocate only if such individual agrees not to accept 
                any employment with the Internal Revenue Service for at 
                least 5 years after ceasing to be the Taxpayer 
                Advocate.
            ``(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 June 30 
                        of each calendar year, the Taxpayer Advocate 
                        shall report to the Committee on Ways and Means 
                        of the House of Representatives, the Committee 
                        on Finance of the Senate, and the Subcommittees 
                        on Treasury, Postal Service, and General 
                        Government of the Committees on Appropriation 
                        of the House of Representatives and the Senate 
                        on the objectives of the Taxpayer Advocate for 
                        the fiscal year beginning in such calendar 
                        year. Any such report shall contain full and 
substantive analysis, in addition to statistical information.
                            ``(ii) Activities.--Not later than December 
                        31 of each calendar year, the Taxpayer Advocate 
                        shall report to the Committee on Ways and Means 
                        of the House of Representatives, the Committee 
                        on Finance of the Senate, and the Subcommittees 
                        on Treasury, Postal Service, and General 
                        Government of the Committees on Appropriation 
                        of the House of Representatives and 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 (I), 
                                (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,
                                    ``(IX) identify areas of the tax 
                                law that impose significant compliance 
                                burdens on taxpayers or the Internal 
                                Revenue Service, including specific 
                                recommendations for remedying these 
                                problems,
                                    ``(X) in conjunction with the 
                                National Director of Appeals, identify 
                                the 10 most litigated issues for each 
                                category of taxpayers, including 
                                recommendations for mitigating such 
                                disputes, and
                                    ``(XI) include such other 
                                information as the Taxpayer Advocate 
                                may deem advisable.
                            ``(iii) Submission of report.--Each report 
                        required under this subparagraph shall be 
                        provided to the committees described in clauses 
                        (i) and (ii) with prior review and comment from 
                        the Oversight Board, but without any prior 
                        review or comment from the Secretary of the 
                        Treasury, any other officer or employee of the 
                        Department of the Treasury, or the Office of 
                        Management and Budget.
                    ``(C) Other responsibilities.--The Taxpayer 
                Advocate shall--
                            ``(i) monitor the coverage and geographic 
                        allocation of problem resolution officers, and
                            ``(ii) develop guidance to be distributed 
                        to all Internal Revenue Service officers and 
                        employees outlining the criteria for referral 
                        of taxpayer inquiries to problem resolution 
                        officers.
            ``(3) Responsibilities of commissioner.--The Commissioner 
        shall establish procedures requiring a formal response to all 
        recommendations submitted to the Commissioner by the Taxpayer 
        Advocate within 3 months after submission to the 
        Commissioner.''.
    (b) Conforming Amendments.--
            (1) The table of sections for subchapter A of chapter 80 is 
        amended by striking the item relating to section 7803 and 
        inserting the following new item:

                              ``Sec. 7803. Commissioner of Internal 
                                        Revenue; other officials.''.
            (2) Subsection (b) of section 5109 of title 5, United 
        States Code, is amended by striking ``7802(b)'' and inserting 
        ``7803(b)''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act.
            (2) Current officers.--
                    (A) In the case of an individual serving as 
                Commissioner of Internal Revenue on the date of the 
                enactment of this Act who was appointed to such 
                position before such date, the 5-year term required by 
                section 7803(a)(1) of the Internal Revenue Code of 
                1986, as added by this section, shall begin as of the 
                date of such appointment.
                    (B) Section 7803(c)(1)(B) of such Code, as added by 
                this section, shall not apply to the individual serving 
                as Taxpayer Advocate on the date of the enactment of 
                this Act.

SEC. 4. OTHER PERSONNEL.

    (a) In General.--Section 7804 (relating to the effect of 
reorganization plans) is amended to read as follows:

``SEC. 7804. OTHER PERSONNEL.

    ``(a) Appointment and Supervision.--Unless otherwise prescribed by 
the Secretary, the Commissioner of Internal Revenue is authorized to 
employ such number of persons as the Commissioner deems proper for the 
administration and enforcement of the internal revenue laws, and the 
Commissioner shall issue all necessary directions, instructions, 
orders, and rules applicable to such persons.
    ``(b) Posts of Duty of Employees in Field Service or Traveling.--
Unless otherwise prescribed by the Secretary--
            ``(1) Designation of post of duty.--The Commissioner shall 
        determine and designate the posts of duty of all such persons 
        engaged in field work or traveling on official business outside 
        of the District of Columbia.
            ``(2) Detail of personnel from field service.--The 
        Commissioner may order any such person engaged in field work to 
        duty in the District of Columbia, for such periods as the 
        Commissioner may prescribe, and to any designated post of duty 
        outside the District of Columbia upon the completion of such 
        duty.
    ``(c) Delinquent Internal Revenue Officers and Employees.--If any 
officer or employee of the Treasury Department acting in connection 
with the internal revenue laws fails to account for and pay over any 
amount of money or property collected or received by him in connection 
with the internal revenue laws, the Secretary shall issue notice and 
demand to such officer or employee for payment of the amount which he 
failed to account for and pay over, and, upon failure to pay the amount 
demanded within the time specified in such notice, the amount so 
demanded shall be deemed imposed upon such officer or employee and 
assessed upon the date of such notice and demand, and the provisions of 
chapter 64 and all other provisions of law relating to the collection 
of assessed taxes shall be applicable in respect of such amount.''.
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 6344 is amended by striking 
        ``section 7803(d)'' and inserting ``section 7804(c)''.
            (2) The table of sections for subchapter A of chapter 80 is 
        amended by striking the item relating to section 7804 and 
        inserting the following new item:

                              ``Sec. 7804. Other personnel.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 5. PROHIBITION ON EXECUTIVE BRANCH INFLUENCE OVER TAXPAYER AUDITS 
              AND OTHER INVESTIGATIONS.

    (a) In General.--Part I of subchapter A of chapter 75 (relating to 
crimes, other offenses, and forfeitures) is amended by adding after 
section 7216 the following new section:

``SEC. 7217. PROHIBITION ON EXECUTIVE BRANCH INFLUENCE OVER TAXPAYER 
              AUDITS AND OTHER INVESTIGATIONS.

    ``(a) Prohibition.--It shall be unlawful for any applicable person 
to request any officer or employee of the Internal Revenue Service to 
conduct or terminate an audit or other investigation of any particular 
taxpayer with respect to the tax liability of such taxpayer.
    ``(b) Reporting Requirement.--Any officer or employee of the 
Internal Revenue Service receiving any request prohibited by subsection 
(a) shall report the receipt of such request to the Chief Inspector of 
the Internal Revenue Service.
    ``(c) Exceptions.--Subsection (a) shall not apply to--
            ``(1) any request made to an applicable person by the 
        taxpayer or a representative of the taxpayer and forwarded by 
        such applicable person to the Internal Revenue Service,
            ``(2) any request by an applicable person for disclosure of 
        return or return information under section 6103 if such request 
        is made in accordance with the requirements of such section, or
            ``(3) any request by the Secretary of the Treasury as a 
        consequence of the implementation of a change in tax policy.
    ``(d) Penalty.--Any person who willfully violates subsection (a) or 
fails to report under subsection (b) shall be punished upon conviction 
by a fine in any amount not exceeding $5,000, or imprisonment of not 
more than 5 years, or both, together with the costs of prosecution.
    ``(e) Applicable Person.--For purposes of this section, the term 
`applicable person' means--
            ``(1) the President, the Vice President, any employee of 
        the executive office of the President, and any employee of the 
executive office of the Vice President, and
            ``(2) any individual (other than the Attorney General of 
        the United States) serving in a position specified in section 
        5312 of title 5, United States Code.''.
    (b) Clerical Amendment.--The table of sections for part I of 
subchapter A of chapter 75 is amended by adding after the item relating 
to section 7216 the following new item:

                              ``Sec. 7217. Prohibition on executive 
                                        branch influence over taxpayer 
                                        audits and other 
                                        investigations.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to requests made after the date of the enactment of this Act.

SEC. 6. TERMINATION OF INTERNAL REVENUE CODE OF 1986 AND INTERNAL 
              REVENUE SERVICE.

    (a) Tax Code.--No tax shall be imposed under the Internal Revenue 
Code of 1986--
            (1) for any taxable year beginning after December 31, 2000, 
        and
            (2) in the case of any tax not imposed on the basis of a 
        taxable year, on any taxable event or for any period after 
        December 31, 2000.
    (b) Internal Revenue Service.--The operations of the Internal 
Revenue Service are terminated and no appropriations are authorized for 
such operations in fiscal years beginning after September 30, 2001. The 
Secretary of the Treasury shall provide for the orderly termination of 
such operations.
    (c) Exceptions.--Subsection (a) shall not apply to taxes imposed 
by--
            (1) chapter 2 (relating to tax on self-employment income),
            (2) chapter 21 (relating to Federal Insurance Contributions 
        Act), and
            (3) chapter 22 (relating to Railroad Retirement Tax Act).

SEC. 7. STRUCTURE OF NEW FEDERAL TAX SYSTEM.

    The Congress hereby declares that any new Federal tax system should 
be a simple and fair system that--
            (1) applies a low rate to all Americans,
            (2) requires a supermajority of both Houses of Congress to 
        raise taxes,
            (3) provides tax relief for working Americans,
            (4) protects the rights of taxpayers and reduces tax 
        collection abuses,
            (5) eliminates the bias against savings and investment,
            (6) promotes economic growth and job creation,
            (7) does not penalize marriage or families, and
            (8) protects the integrity of Social Security and Medicare.
            (9) provides for a taxpayer-friendly collections process to 
        replace the Internal Revenue Service.
                                 <all>