[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1677 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 1677

    To amend the Internal Revenue Code of 1986 to enhance taxpayer 
                       protections and outreach.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 26, 2007

   Mr. Rangel (for himself and Mr. Lewis of Georgia) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to enhance taxpayer 
                       protections and outreach.

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

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Taxpayer 
Protection Act of 2007''.
    (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 for this Act is as 
follows:

Sec. 1. Short title; etc.
Sec. 2. Family business tax simplification.
Sec. 3. Taxpayer notification of suspected identity theft.
Sec. 4. Extension of time for return of property for wrongful levy.
Sec. 5. Individuals held harmless on wrongful levy, etc., on individual 
                            retirement plan.
Sec. 6. Clarification of IRS unclaimed refund authority.
Sec. 7. Prohibition on IRS debt indicators for predatory refund 
                            anticipation loans.
Sec. 8. Prohibition on misuse of Department of the Treasury names and 
                            symbols.
Sec. 9. EITC outreach.

SEC. 2. FAMILY BUSINESS TAX SIMPLIFICATION.

    (a) In General.--Section 761 (defining terms for purposes of 
partnerships) is amended by redesignating subsection (f) as subsection 
(g) and by inserting after subsection (e) the following new subsection:
    ``(f) Qualified Joint Venture.--
            ``(1) In general.--In the case of a qualified joint venture 
        conducted by a husband and wife who file a joint return for the 
        taxable year, for purposes of this title--
                    ``(A) such joint venture shall not be treated as a 
                partnership,
                    ``(B) all items of income, gain, loss, deduction, 
                and credit shall be divided between the spouses in 
                accordance with their respective interests in the 
                venture, and
                    ``(C) each spouse shall take into account such 
                spouse's respective share of such items as if they were 
                attributable to a trade or business conducted by such 
                spouse as a sole proprietor.
            ``(2) Qualified joint venture.--For purposes of paragraph 
        (1), the term `qualified joint venture' means any joint venture 
        involving the conduct of a trade or business if--
                    ``(A) the only members of such joint venture are a 
                husband and wife,
                    ``(B) both spouses materially participate (within 
                the meaning of section 469(h) without regard to 
                paragraph (5) thereof) in such trade or business, and
                    ``(C) both spouses elect the application of this 
                subsection.''.
    (b) Net Earnings From Self-Employment.--
            (1) Subsection (a) of section 1402 (defining net earnings 
        from self-employment) is amended by striking ``, and'' at the 
        end of paragraph (15) and inserting a semicolon, by striking 
        the period at the end of paragraph (16) and inserting ``; 
        and'', and by inserting after paragraph (16) the following new 
        paragraph:
            ``(17) notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified joint venture shall be taken into account as provided 
        in section 761(f) in determining net earnings from self-
        employment of such spouse.''.
            (2) Subsection (a) of section 211 of the Social Security 
        Act (defining net earnings from self-employment) is amended by 
        striking ``and'' at the end of paragraph (14), by striking the 
        period at the end of paragraph (15) and inserting ``; and'', 
        and by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) Notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified joint venture shall be taken into account as provided 
        in section 761(f) of the Internal Revenue Code of 1986 in 
        determining net earnings from self-employment of such 
        spouse.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.

SEC. 3. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY THEFT.

    (a) In General.--Chapter 77 (relating to miscellaneous provisions) 
is amended by adding at the end the following new section:

``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

    ``If, in the course of an investigation under section 7206 
(relating to fraud and false statements) or 7207 (relating to 
fraudulent returns, statements, or other documents), the Secretary 
determines that there may have been an unauthorized use of the identity 
of the taxpayer or dependents, the Secretary shall--
            ``(1) as soon as practicable and without jeopardizing such 
        investigation, notify the taxpayer of such determination, and
            ``(2) if any person is criminally charged by indictment or 
        information under either of such sections, notify such taxpayer 
        as soon as practicable of such charge.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

``Sec. 7529. Notification of suspected identity theft.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to determinations made after the date of the enactment of this 
Act.

SEC. 4. EXTENSION OF TIME FOR RETURN OF PROPERTY FOR WRONGFUL LEVY.

    (a) Extension of Time for Return of Property Subject to Levy.--
Subsection (b) of section 6343 (relating to return of property) is 
amended by striking ``9 months'' and inserting ``2 years''.
    (b) Period of Limitation on Suits.--Subsection (c) of section 6532 
(relating to suits by persons other than taxpayers) is amended--
            (1) in paragraph (1) by striking ``9 months'' and inserting 
        ``2 years'', and
            (2) in paragraph (2) by striking ``9-month'' and inserting 
        ``2-year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to--
            (1) levies made after the date of the enactment of this 
        Act, and
            (2) levies made on or before such date if the 9-month 
        period has not expired under section 6343(b) of the Internal 
        Revenue Code of 1986 (without regard to this section) as of 
        such date.

SEC. 5. INDIVIDUALS HELD HARMLESS ON WRONGFUL LEVY, ETC., ON INDIVIDUAL 
              RETIREMENT PLAN.

    (a) In General.--Section 6343 (relating to authority to release 
levy and return property) is amended by adding at the end the following 
new subsection:
    ``(f) Individuals Held Harmless on Wrongful Levy, Etc. on 
Individual Retirement Plan.--
            ``(1) In general.--If the Secretary determines that an 
        individual retirement plan has been levied upon in a case to 
        which subsection (b) or (d)(2)(A) applies, an amount equal to 
        the sum of--
                    ``(A) the amount of money returned by the Secretary 
                on account of such levy, and
                    ``(B) interest paid under subsection (c) on such 
                amount of money,
        may be deposited into such individual retirement plan or any 
        other individual retirement plan (other than an endowment 
        contract) to which a rollover from the plan levied upon is 
        permitted.
            ``(2) Treatment as rollover.--If amounts are deposited into 
        an individual retirement plan under paragraph (1) not later 
        than the 60th day after the date on which the individual 
        receives the amounts under paragraph (1)--
                    ``(A) such deposit shall be treated as a rollover 
                described in section 408(d)(3)(A)(i),
                    ``(B) to the extent the deposit includes interest 
                paid under subsection (c), such interest shall not be 
                includible in gross income, and
                    ``(C) such deposit shall not be taken into account 
                under section 408(d)(3)(B).
        For purposes of subparagraph (B), an amount shall be treated as 
        interest only to the extent that the amount deposited exceeds 
        the amount of the levy.
            ``(3) Refund, etc., of income tax on levy.--If any amount 
        is includible in gross income for a taxable year by reason of a 
        levy referred to in paragraph (1) and any portion of such 
        amount is treated as a rollover under paragraph (2), any tax 
        imposed by chapter 1 on such portion shall not be assessed, and 
        if assessed shall be abated, and if collected shall be credited 
        or refunded as an overpayment made on the due date for filing 
        the return of tax for such taxable year.
            ``(4) Interest.--Notwithstanding subsection (d), interest 
        shall be allowed under subsection (c) in a case in which the 
        Secretary makes a determination described in subsection 
        (d)(2)(A) with respect to a levy upon an individual retirement 
        plan.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid under subsections (b), (c), and (d)(2)(A) of section 
6343 of the Internal Revenue Code of 1986 after the date of the 
enactment of this Act.

SEC. 6. CLARIFICATION OF IRS UNCLAIMED REFUND AUTHORITY.

    Section 6103(m)(1) (relating to tax refunds) is amended by 
inserting after ``media'' and ``, and through any other means of mass 
communication,''.

SEC. 7. PROHIBITION ON IRS DEBT INDICATORS FOR PREDATORY REFUND 
              ANTICIPATION LOANS.

    (a) In General.--Subsection (f) of section 6011 (relating to 
promotion of electronic filing) is amended by adding at the end the 
following new paragraph:
            ``(3) Prohibition on irs debt indicators for predatory 
        refund anticipation loans.--
                    ``(A) In general.--In carrying out any program 
                under this subsection, the Secretary shall not provide 
                a debt indicator to any person with respect to any 
                refund anticipation loan if the Secretary determines 
                that the business practices of such person involve 
                refund anticipations loans and related charges and fees 
                that are predatory.
                    ``(B) Refund anticipation loan.--For purposes of 
                this paragraph, the term `refund anticipation loan' 
                means a loan of money or of any other thing of value to 
                a taxpayer secured by the taxpayer's anticipated 
                receipt of a Federal tax refund.
                    ``(C) IRS debt indicator.--For purposes of this 
                paragraph, the term `debt indicator' means a 
                notification provided through a tax return's 
                acknowledgment file that a refund will be offset to 
                repay debts for delinquent Federal or State taxes, 
                student loans, child support, or other Federal agency 
                debt.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to returns filed after the date of the enactment of this 
Act.

SEC. 8. PROHIBITION ON MISUSE OF DEPARTMENT OF THE TREASURY NAMES AND 
              SYMBOLS.

    (a) In General.--Subsection (a) of section 333 of title 31, United 
States Code, is amended by inserting ``internet domain address,'' after 
``solicitation,'' both places it appears.
    (b) Penalty for Misuse by Electronic Means.--Subsections (c)(2) and 
(d)(1) of section 333 of such Code are each amended by inserting ``or 
any other mass communications by electronic means,'' after 
``telecast,''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to violations occurring after the date of the 
enactment of this Act.

SEC. 9. EITC OUTREACH.

    (a) In General.--Section 32 (relating to earned income) is amended 
by adding at the end the following new subsection:
    ``(n) Notification of Potential Eligibility for Credit and 
Refund.--
            ``(1) In general.--To the extent possible and on an annual 
        basis, the Secretary shall provide to each taxpayer who--
                    ``(A) for any preceding taxable year for which 
                credit or refund is not precluded by section 6511, and
                    ``(B) did not claim the credit under subsection (a) 
                but may be allowed such credit for any such taxable 
                year based on return or return information (as defined 
                in section 6103(b)) available to the Secretary,
        notice that such taxpayer may be eligible to claim such credit 
        and a refund for such taxable year.
            ``(2) Notice.--Notice provided under paragraph (1) shall be 
        in writing and sent to the last known address of the 
        taxpayer.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
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