[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3215 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3215

    To amend the Internal Revenue Code of 1986 to provide taxpayer 
           protection and assistance, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 15, 2010

 Mr. Bingaman (for himself, Mr. Schumer, Mr. Kerry, Mr. Menendez, Mr. 
  Akaka, Mr. Brown of Ohio, Mr. Dodd, Mr. Durbin, Mr. Lieberman, Mr. 
    Merkley, Mr. Pryor, and Mr. Udall of New Mexico) 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 taxpayer 
           protection and assistance, 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; ETC.

    (a) Short Title.--This Act may be cited as the ``Taxpayer Bill of 
Rights Act of 2010''.
    (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:

Sec. 1. Short title; etc.
                TITLE I--TAXPAYER RIGHTS AND OBLIGATIONS

Sec. 101. Statement of taxpayer rights and obligations.
                  TITLE II--PREPARATION OF TAX RETURNS

Sec. 201. Programs for the benefit of low-income taxpayers.
Sec. 202. Regulation of Federal income tax return preparers.
Sec. 203. Refund delivery products.
Sec. 204. Preparer penalties with respect to preparation of returns and 
                            other submissions.
Sec. 205. Clarification of enrolled agent credentials.
                 TITLE III--IMPROVING TAXPAYER SERVICES

Sec. 301. Individualized lien determination required before filing 
                            notice of lien.
Sec. 302. Ban on audit insurance.
Sec. 303. Public awareness.
Sec. 304. Clarification of taxpayer assistance order authority.
Sec. 305. Taxpayer advocate directives.
Sec. 306. Improved services for taxpayers.
Sec. 307. Taxpayer access to financial institutions.
Sec. 308. Additional studies.

                TITLE I--TAXPAYER RIGHTS AND OBLIGATIONS

SEC. 101. STATEMENT OF TAXPAYER RIGHTS AND OBLIGATIONS.

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

``SEC. 7529. STATEMENT OF TAXPAYER RIGHTS AND OBLIGATIONS.

    ``(a) In General.--The Secretary, in consultation with the National 
Taxpayer Advocate, shall publish a summary statement of rights and 
obligations arising under this title. Such statement shall provide 
citations to the main provisions of this title which provide for the 
right or obligation (as the case may be). This statement of rights and 
obligations does not create or confer any rights or obligations not 
otherwise provided for under this title.
    ``(b) Statement of Rights and Obligations.--The statement of rights 
and obligations is as follows:
            ``(1) Taxpayer rights.--
                    ``(A) Right to be informed (including adequate 
                legal and procedural guidance and information about 
                taxpayer rights).
                    ``(B) Right to be assisted.
                    ``(C) Right to be heard.
                    ``(D) Right to pay no more than the correct amount 
                of tax.
                    ``(E) Right of appeal (administrative and 
                judicial).
                    ``(F) Right to certainty (including guidance, 
                periods of limitation, no second exam, and closing 
                agreements).
                    ``(G) Right to privacy (including due process 
                considerations, least intrusive enforcement action, and 
                search and seizure protections).
                    ``(H) Right to confidentiality.
                    ``(I) Right to appoint a representative in matters 
                before the Internal Revenue Service.
                    ``(J) Right to fair and just tax system (offer in 
                compromise, abatement, assistance from the Office of 
                the Taxpayer Advocate under section 7803(c), apology, 
                and other compensation payments).
            ``(2) Taxpayer obligations.--
                    ``(A) Obligation to be honest.
                    ``(B) Obligation to be cooperative.
                    ``(C) Obligation to provide accurate information 
                and documents on time.
                    ``(D) Obligation to keep records.
                    ``(E) Obligation to pay taxes on time.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

``Sec. 7529. Statement of taxpayer rights and obligations.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 180 days after the date of the enactment of this Act.

                  TITLE II--PREPARATION OF TAX RETURNS

SEC. 201. PROGRAMS FOR THE BENEFIT OF LOW-INCOME TAXPAYERS.

    (a) Volunteer Income Tax Assistance Plus.--Chapter 77 (relating to 
miscellaneous provisions) is amended by inserting after section 7526 
the following new section:

``SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PLUS.

    ``(a) In General.--The Secretary may, subject to the availability 
of appropriated funds, make grants to provide matching funds for the 
development, expansion, or continuation of qualified return preparation 
programs.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified return preparation program.--
                    ``(A) In general.--The term `qualified return 
                preparation program' means a program--
                            ``(i) which does not charge taxpayers for 
                        its return preparation services,
                            ``(ii) which operates programs which assist 
                        low-income taxpayers, including those programs 
                        that serve taxpayers for whom English is a 
                        second language, in preparing and filing their 
                        Federal income tax returns, including schedules 
                        reporting sole proprietorship or farm income, 
                        and
                            ``(iii) in which all of the volunteers who 
                        assist in the preparation of Federal income tax 
                        returns meet the training requirements 
                        prescribed by the Secretary.
                    ``(B) Assistance to low-income taxpayers.--For 
                purposes of subparagraph (A), a program is treated as 
                assisting low-income taxpayers if at least 90 percent 
                of the taxpayers assisted by the program have incomes 
                which do not exceed 250 percent of the poverty level, 
                as determined in accordance with criteria established 
                by the Director of the Office of Management and Budget.
            ``(2) Program.--The term `program' includes--
                    ``(A) a program at an institution of higher 
                education which--
                            ``(i) is described in section 102 (other 
                        than subsection (a)(1)(C) thereof) of the 
                        Higher Education Act of 1965 (20 U.S.C. 1088), 
                        as in effect on the date of the enactment of 
                        this section, and which has not been 
                        disqualified from participating in a program 
                        under title IV of such Act, and
                            ``(ii) satisfies the requirements of 
                        paragraph (1) through student assistance of 
                        taxpayers in return preparation and filing,
                    ``(B) an organization described in section 501(c) 
                and exempt from tax under section 501(a) which 
                satisfies the requirements of paragraph (1),
                    ``(C) a regional, State or local coalition (with 
                one lead organization, which meets the eligibility 
                requirements, acting as the applicant organization),
                    ``(D) a county or municipal government agency,
                    ``(E) an Indian tribe, as defined in section 4(12) 
                of the Native American Housing Assistance and Self-
                Determination Act of 1996 (25 U.S.C. 4103(12)), and 
                includes any tribally designated housing entity (as 
                defined in section 4(21) of such Act (25 U.S.C. 
                4103(21)), tribal subsidiary, subdivision, or other 
                wholly owned tribal entity,
                    ``(F) a section 501(c)(5) organization,
                    ``(G) a State government agency if no other 
                eligible organization is available to assist the 
                targeted population or community,
                    ``(H) a Cooperative Extension Service office if no 
                other eligible organization is available to assist the 
                targeted population or community, and
                    ``(I) a nonprofit Community Development Financial 
                Institution (CDFI) and federally- and State-chartered 
                credit union that qualifies for a tax exemption under 
                sections 501(c)(1) and 501(c)(14), respectively.
    ``(c) Special Rules and Limitations.--
            ``(1) Aggregate limitation.--Unless otherwise provided by 
        specific appropriation, the Secretary shall not allocate more 
        than $35,000,000 per year (exclusive of costs of administering 
        the program) to grants under this section.
            ``(2) Use of grants for overhead expenses prohibited.--No 
        grant made under this section may be used for overhead expenses 
        that are not directly related to any program or that are 
        incurred by any institution sponsoring such program.
            ``(3) Other applicable rules.--Rules similar to the rules 
        under paragraphs (2) through (6) of section 7526(c) shall apply 
        with respect to the awarding of grants to qualified return 
        preparation programs.
            ``(4) Promotion of programs.--The Secretary is authorized 
        to promote the benefits of and encourage the use of qualified 
        VITA Plus through the use of mass communications, referrals, 
        and other means.''.
    (b) Low-Income Taxpayer Clinics.--
            (1) Increase in authorized grants.--Paragraph (1) of 
        section 7526(c) (relating to aggregate limitation) is amended 
        by striking ``$6,000,000'' and inserting ``$20,000,000''.
            (2) Use of grants for overhead expenses prohibited.--
                    (A) In general.--Section 7526(c) (relating to 
                special rules and limitations) is amended by adding at 
                the end the following new paragraph:
            ``(6) Use of grants for overhead expenses prohibited.--No 
        grant made under this section may be used for the overhead 
        expenses that are not directly related to the clinic or that 
        are of any institution sponsoring such clinic.''.
                    (B) Conforming amendments.--Section 7526(c)(5) is 
                amended--
                            (i) by inserting ``qualified'' before 
                        ``low-income'', and
                            (ii) by striking the last sentence.
            (3) Promotion of clinics.--Subsection (c) of section 7526 
        (relating to special rules and limitations), as amended by 
        paragraph (2), is amended by adding at the end the following 
        new paragraph:
            ``(7) Promotion of clinics.--The Secretary is authorized to 
        promote the benefits of and encourage the use of qualified low-
        income taxpayer clinics through the use of mass communications, 
        referrals, and other means.''.
            (4) IRS referrals to clinics.--Subsection (c) of section 
        7526 (relating to special rules and limitations), as amended by 
        the preceding provisions of this subsection, is amended by 
        adding at the end the following new paragraph:
            ``(8) IRS referrals.--The Secretary may refer taxpayers to 
        qualified low-income taxpayer clinics receiving funding under 
        this section.''.
            (5) Notice of availability of clinics in notice of 
        deficiency.--Subsection (a) of section 6212 (relating to 
        general rule for notice of deficiency) is amended by inserting 
        ``, as well as notice regarding the availability of low-income 
        taxpayer clinics and information about how to contact them'' 
        before the period at the end.
            (6) Notice of availability of clinics in notice of hearing 
        upon filing of notice of lien.--Subsection (a) of section 6320 
        (relating to requirement of notice) is amended by adding at the 
        end the following new sentence: ``Such notice shall include a 
        notice to the taxpayer of the availability of low-income 
        taxpayer clinics and information about how to contact them.''.
            (7) Notice of availability of clinics in notice and 
        opportunity of hearing before levy.--Paragraph (3) of section 
        6330(a) is amended by adding at the end the following flush 
        sentence:
        ``Such notice shall include a notice to the taxpayer of the 
        availability of low-income taxpayer clinics and information 
        about how to contact them.''.
    (c) Clerical Amendment.--The table of sections for chapter 77 is 
amended by inserting after the item relating to section 7526 the 
following new item:

``Sec. 7526A. Volunteer income tax assistance plus.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 202. REGULATION OF FEDERAL INCOME TAX RETURN PREPARERS.

    (a) In General.--Section 330(a)(1) of title 31, United States Code, 
is amended by inserting ``(including tax return preparers of Federal 
tax returns, documents, and other submissions)'' after 
``representatives''.
    (b) Promulgation of Regulations.--The Secretary of the Treasury 
shall prescribe regulations under section 330 of title 31, United 
States Code, to regulate any tax return preparers not otherwise 
regulated by the Secretary.
    (c) Requirements.--Such regulations shall provide guidance on the 
following:
            (1) Examination.--
                    (A) In general.--In promulgating the regulations 
                under paragraph (1), the Secretary shall approve and 
                oversee eligibility examinations.
                    (B) Two examinations.--One such examination shall 
                be designed to test technical knowledge and competency 
                to prepare individual returns, and the other 
                examination shall be designed to test technical 
                knowledge and competency to prepare business income tax 
                returns.
                    (C) EITC.--The examination relating to individual 
                returns shall test knowledge and competency regarding 
                properly claiming the earned income tax credit under 
                section 32 of the Internal Revenue Code of 1986.
                    (D) Ethics.--Both examinations under subparagraph 
                (B) shall test knowledge regarding such ethical 
                standards for the preparation of such returns as 
                determined appropriate by the Secretary.
                    (E) Grandfather.--The Secretary is authorized to 
                accept an individual as meeting the eligibility 
                examination requirement of this section if, in lieu of 
                the eligibility examination under this section, the 
                individual passed a State licensing or State 
                registration program eligibility examination that the 
                Secretary determines is comparable to either of the 
                eligibility examinations described in subparagraph (B) 
                if such exam is administered within 5 years after the 
                date of the issuance of the regulations under this 
                section.
            (2) Suitability standards.--The Secretary shall provide 
        suitability standards for practicing as a tax return preparer, 
        including tax compliance with the requirements of the Internal 
        Revenue Code of 1986.
            (3) Continuing eligibility.--
                    (A) In general.--The regulations under paragraph 
                (1) shall require a renewal of eligibility every 3 
                years and shall set forth the manner in which a tax 
                return preparer must renew such eligibility.
                    (B) Continuing professional education 
                requirements.--As part of the renewal of eligibility, 
                such regulations shall require that each such tax 
                return preparer show evidence of completion of such 
                continuing education or testing requirements as 
                specified by the Secretary.
                    (C) Nonmonetary sanctions.--
                            (i) The regulations under this section 
                        shall provide for the denial, suspension or 
                        termination of such eligibility in the event of 
                        any failure to comply with the requirements 
                        promulgated hereunder.
                            (ii) Under such regulations, the Secretary 
                        shall establish procedures for the appeal of 
                        any determination under this paragraph.
    (d) Penalty for Unauthorized Preparation of Returns.--
            (1) In general.--In promulgating the regulations pursuant 
        to subsection (b), the Secretary shall impose a penalty of 
        $1,000 for each Federal tax return, document, or other 
        submission prepared by a tax return preparer who is not in 
        compliance with the regulations promulgated under this section 
        or who is suspended or disbarred from practice before the 
        Department of the Treasury under such regulations. Such penalty 
        shall be in addition to any other penalty which may be imposed.
            (2) Exception.--No penalty may be imposed under paragraph 
        (1) with respect to any failure if it is shown that such 
        failure is due to reasonable cause.
    (e) Definitions.--For purposes of this section--
            (1) Tax return preparer.--The term ``tax return preparer'' 
        has the meaning given by section 7701(a)(36) of the Internal 
        Revenue Code of 1986, and includes any person requiring the 
        purchase of services, a financial product or goods in lieu of 
        or in addition to direct monetary payment.
            (2) Secretary.--The terms ``Secretary of the Treasury'' and 
        ``Secretary'' mean the Secretary of the Treasury or the 
        delegate of the Secretary.
    (f) Public Awareness Campaign.--The Secretary shall conduct a 
public information and consumer education campaign, utilizing paid 
advertising--
            (1) to encourage taxpayers to use for Federal tax matters 
        only professionals who establish their competency under the 
        regulations promulgated under section 330 of title 31, United 
        States Code, and
            (2) to inform the public of the requirements that any 
        compensated preparer of tax returns, documents, and submissions 
        subject to the requirements under the regulations promulgated 
        under such section must sign the return, document, or 
        submission prepared for a fee and display notice of such 
        preparer's compliance under such regulations.
    (g) Effective Dates.--
            (1) In general.--The amendment made by this section shall 
        take effect on the date of the enactment of the Act.
            (2) Regulations.--The regulations required by section 
        330(d) of title 31, United States Code, shall be prescribed not 
        later than 2 years after the date of the enactment of this Act.
            (3) Full implementation.--The Secretary, taking into 
        consideration the complexity and magnitude of the requirements 
        set forth under this Act, may delay full implementation of the 
        regulations promulgated herein not later than the fifth filing 
        season after the enactment of this Act.

SEC. 203. REFUND DELIVERY PRODUCTS.

    (a) In General.--Chapter 77 (relating to miscellaneous provisions), 
as amended by section 101, is amended by adding at the end the 
following new section:

``SEC. 7530. REFUND DELIVERY PRODUCTS.

    ``(a) Registration.--
            ``(1) In general.--The Secretary shall by regulation 
        require each refund delivery product facilitator to register 
        annually with the Secretary.
            ``(2) Registration requirements.--A registration shall 
        under paragraph (1) shall include--
                    ``(A) the name, address, and TIN of the refund 
                delivery product facilitator, and
                    ``(B) the fee schedule of the facilitator for the 
                year.
            ``(3) Display of registration certificate.--The certificate 
        of registration under paragraph (1) shall be displayed in the 
        facility of the refund delivery product facilitator in the 
        manner required by the Secretary.
    ``(b) Disclosure Requirements.--
            ``(1) In general.--Each refund delivery product facilitator 
        registered with the Secretary shall be subject to the 
        requirements of paragraphs (2) through (5).
            ``(2) Taxpayer education.--The requirements of this 
        paragraph are that the refund delivery product facilitator 
        makes available to consumers an informational pamphlet that--
                    ``(A) sets forth options available for receiving 
                tax refunds, presented from least expensive to most 
                expensive, and
                    ``(B) discusses short-term credit alternatives to 
                utilizing refund delivery products.
            ``(3) Nature of the transaction.--The requirements of this 
        paragraph are that, at the time of application for the refund 
        delivery product, the refund delivery product facilitator 
        specifically state in writing--
                    ``(A) in the case of a refund delivery product 
                which is a refund loan--
                            ``(i) that the applicant is applying for a 
                        loan based on the applicant's anticipated 
                        income tax refund,
                            ``(ii) the expected time within which the 
                        loan will be paid to the applicant if such loan 
                        is approved, and
                            ``(iii) that there is no guarantee that a 
                        refund will be paid in full or received within 
                        a specified time period, and that the applicant 
                        is responsible for the repayment of the loan 
                        even if the refund is not paid in full or has 
                        been delayed,
                    ``(B) the time within which income tax refunds are 
                typically paid based upon the different filing options 
                available to the applicant, and
                    ``(C) that the applicant may file an electronic 
                return without applying for a refund delivery product 
                and the fee for filing such an electronic return.
            ``(4) Fees, interest and amounts received.--The 
        requirements of this paragraph are that, at the time of 
        application for the refund delivery product, the refund 
        delivery product facilitator discloses to the applicant all 
        amounts to be received in connection with a refund delivery 
        product. Such disclosure shall include--
                    ``(A) a copy of the fee schedule of the refund 
                delivery product facilitator,
                    ``(B) in the case of a refund delivery product 
                which is a refund loan--
                            ``(i) the typical fees and interest rates 
                        (using annual percentage rates as defined by 
                        section 107 of the Truth in Lending Act (15 
                        U.S.C. 1606)) for several typical amounts of 
                        such loans and of other types of consumer 
                        credit, and
                            ``(ii) that the loan may have substantial 
                        fees and interest charges that may exceed those 
                        of other sources of credit, and the applicant 
                        should carefully consider--
                                    ``(I) whether such a loan is 
                                appropriate for the applicant, and
                                    ``(II) other sources of credit,
                    ``(C) typical fees and interest charges if a refund 
                is not paid or delayed,
                    ``(D) the amount of a fee (if any) that will be 
                charged if the refund delivery product is not approved, 
                and
                    ``(E) administrative costs and any other amounts.
            ``(5) Other information.--The requirements of this 
        paragraph are that the refund delivery product facilitator 
        discloses any other information required to be disclosed by the 
        Secretary.
            ``(6) Disclosure requirement.--A disclosure under any of 
        the preceding paragraphs of this subsection shall not be 
        treated as meeting the requirements of the respective paragraph 
        unless the disclosure is written in a manner calculated to be 
        understood by the average consumer of refund delivery products 
        and provides sufficient information (as determined in 
        accordance with regulations prescribed by the Secretary) to 
        allow the consumer to understand such options and credit 
        alternatives.
    ``(c) Penalty.--
            ``(1) In general.--There is hereby imposed a penalty on any 
        refund delivery product facilitator who fails to register with 
        the Secretary pursuant to subsection (a) or fails to meet a 
        disclosure requirement under subsection (b).
            ``(2) Amount of penalty.--The amount of the penalty imposed 
        by paragraph (1) shall be the greater of--
                    ``(A) $1,000, and
                    ``(B) three times the amount of the refund loan, if 
                applicable, and refund delivery product facilitator-
                determined fees charged with respect to each refund 
                delivery product provided by the refund delivery 
                product facilitator during the period in which the 
                failure described in paragraph (1) occurred.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the penalty imposed by 
        paragraph (1) to the extent that the payment of such penalty 
        would be excessive or otherwise inequitable relative to the 
        failure involved.
    ``(d) Conduct.--
            ``(1) Rules of conduct.--The Secretary shall prescribe 
        rules of conduct for refund delivery product facilitators which 
        are similar to the rules applicable to federally authorized tax 
        practitioners (as defined by section 7525(a)(3)(A)) under part 
        10 of title 31, Code of Federal Regulations.
            ``(2) Limitation on approval as refund delivery product 
        facilitator.--For such period as the Secretary (in his 
        discretion) determines reasonable, the Secretary may not 
        register any person as a refund delivery product facilitator 
        under subsection (a) who the Secretary determines has engaged 
        in any conduct that would warrant disciplinary action under the 
        rules of conduct prescribed under paragraph (1) or under part 
        10 of title 31, Code of Federal Regulations.
    ``(e) Other Limitations Relating to Refund Delivery Products.--In 
any case in which a taxpayer has consented to the release of the 
taxpayer's refund indicator to a refund delivery product facilitator, 
the Secretary may only provide information related to the refund 
indicator to a refund delivery product facilitator who is registered 
under subsection (a). For purposes of the preceding sentence, the term 
`refund indicator' means a notification provided through a tax return's 
acknowledgment file regarding whether a refund will be paid. The 
Secretary may issue a refund indicator only after the Secretary 
determines that the taxpayer's refund would not be prevented by any 
provision of this title, including any provision relating to refund 
offset to repay debts for delinquent Federal or State taxes, student 
loans, child support, or other Federal agency debt, whether the 
taxpayer is claiming ineligible children for purposes of certain tax 
benefits, and whether the refund will be held pending a fraud 
investigation.
    ``(f) Definitions.--For purposes of this section--
            ``(1) Refund delivery product facilitator.--
                    ``(A) In general.--The term `refund delivery 
                product facilitator' includes any electronic filing 
                service provider who--
                            ``(i) solicits for, processes, receives, or 
                        accepts delivery of an application for a refund 
                        delivery product, or
                            ``(ii) facilitates the making of a refund 
                        delivery product in any other manner.
                    ``(B) Electronic filing service provider.--The term 
                `electronic filing service provider' includes any 
                person who is an electronic return originator, 
                intermediate service provider, or transmitter.
                    ``(C) Electronic return originator.--The term 
                `electronic return originator' includes a person who 
                originates the electronic submission of income tax 
                returns for another person.
                    ``(D) Intermediate service provider.--The term 
                `intermediate service provider' includes a person who 
                assists with processing return information between an 
                electronic return originator (or the taxpayer in the 
                case of online filing) and a transmitter.
                    ``(E) Transmitter.--The term `transmitter' includes 
                a person who sends the electronic return data directly 
                to the Internal Revenue Service.
            ``(2) Refund delivery product.--The term `refund delivery 
        product' includes a refund loan and any other product sold to a 
        taxpayer for a fee or any other thing of value for the purpose 
        of receiving the taxpayer's anticipated federal tax refund.
            ``(3) Refund loan.--The term `refund loan' includes any 
        loan of money or any other thing of value to a taxpayer in 
        connection with the taxpayer's anticipated receipt of a Federal 
        tax refund. Such term includes a loan secured by the tax refund 
        or an arrangement to repay a loan from the tax refund.
    ``(g) Regulations.--
            ``(1) In general.--The Secretary may prescribe such 
        regulations as necessary to carry out this subchapter.
            ``(2) Burden of registration.--In promulgating such 
        regulations, the Secretary shall minimize the burden and cost 
        on the registrant.''.
    (b) Public Awareness Campaign.--The Secretary of the Treasury shall 
conduct a public information and consumer education campaign, utilizing 
paid advertising, to educate the public on making sound financial 
decisions with respect to refund delivery products (as defined by 
section 7530 of the Internal Revenue Code of 1986), including--
            (1) the need to compare the rates and fees of refund loans 
        with the rates and fees of conventional loans,
            (2) the need to compare the amount of money received under 
        a refund delivery product after taking into consideration such 
        costs and fees with the total amount of the refund, and
            (3) where and how taxpayers may lodge complaints concerning 
        refund delivery product facilitators.
    (c) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

``Sec. 7530. Refund delivery products.''.
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of the Act.
            (2) Regulations.--The regulations required by section 
        7530(g) of the Internal Revenue Code of 1986 shall be 
        prescribed not later than 2 years after the date of the 
        enactment of this Act.
            (3) Full implementation.--The Secretary of the Treasury, 
        taking into consideration the complexity and magnitude of the 
        requirements set forth under this Act, may delay full 
        implementation of the regulations promulgated under such 
        section not later than 5 years after the enactment of this Act.

SEC. 204. PREPARER PENALTIES WITH RESPECT TO PREPARATION OF RETURNS AND 
              OTHER SUBMISSIONS.

    (a) Inclusion of Other Submissions in Penalty Provisions.--
            (1) Understatement of taxpayer's liability.--
                    (A) In general.--Section 6694 (relating to 
                understatement of taxpayer's liability by tax return 
                preparer) is amended by striking ``return or claim of 
                refund'' each place it appears and inserting ``return, 
                claim of refund, or other submission''.
                    (B) Conforming amendments.--Section 6694, as 
                amended by paragraph (1), is amended by striking 
                ``return or claim'' each place it appears and inserting 
                ``return, claim, or other submission''.
            (2) Other assessable penalties.--
                    (A) In general.--Section 6695 (relating to other 
                assessable penalties with respect to the preparation of 
                tax returns for other persons) is amended by striking 
                ``return or claim of refund'' each place it appears and 
                inserting ``return, claim of refund, or other 
                submission''.
                    (B) Conforming amendments.--Section 6695, as 
                amended by paragraph (1), is amended by striking 
                ``return or claim'' each place it appears and inserting 
                ``return, claim, or other submission''.
    (b) Increase in Certain Other Assessable Penalty Amounts.--
            (1) In general.--Subsections (a), (b), and (c) of section 
        6695 (relating to other assessable penalties with respect to 
        the preparation of income tax returns for other persons) are 
        each amended by striking ``$50'' and inserting ``$1,000''.
            (2) Removal of annual limitation.--Subsections (a), (b), 
        and (c) of section 6695 are each amended by striking the last 
        sentence thereof.
    (c) Review by the Treasury Inspector General for Tax 
Administration.--Subparagraph (A) of section 7803(d)(2) is amended by 
striking ``and'' at the end of clause (iii), by striking the period at 
the end of clause (iv) and inserting ``, and'', and by adding at the 
end the following new clause:
                            ``(v) a summary of the penalties assessed 
                        and collected during the reporting period under 
                        sections 6694 and 6695 and under the 
                        regulations promulgated under section 330 of 
                        title 31, United States Code, and a review of 
                        the procedures by which violations are 
                        identified and penalties are assessed under 
                        those sections,''.
    (d) Additional Certification on Documents Other Than Returns.--
            (1) Identifying number required for all submissions to the 
        irs by tax return preparers.--The first sentence of paragraph 
        (4) of section 6109(a) is amended by striking ``return or claim 
        for refund'' and inserting ``return, claim for refund, or other 
        document''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to documents filed after the date of the enactment 
        of this Act.
    (e) Coordination With Section 6060(a).--The Secretary of the 
Treasury shall coordinate the requirements under the regulations 
promulgated under section 330 of title 31, United States Code, with the 
return requirements of section 6060 of the Internal Revenue Code of 
1986.
    (f) Effective Date.--The regulations required by this section shall 
be prescribed not later than one year after the date of the enactment 
of this Act.

SEC. 205. CLARIFICATION OF ENROLLED AGENT CREDENTIALS.

    Section 330 of title 31, United States Code, as amended by section 
202, is amended--
            (1) by redesignating subsection (e) as subsection (f), and
            (2) by inserting after subsection (d) the following new 
        subsection:
    ``(e) Any enrolled agents properly licensed to practice as required 
under rules promulgated under subsection (a) shall be allowed to use 
the credentials or designation as `enrolled agent', `EA', or `E.A.'.''.

                 TITLE III--IMPROVING TAXPAYER SERVICES

SEC. 301. INDIVIDUALIZED LIEN DETERMINATION REQUIRED BEFORE FILING 
              NOTICE OF LIEN.

    (a) In General.--Section 6323 is amended by adding at the end the 
following new subsection:
    ``(k) Lien Determination Before Filing.--
            ``(1) In general.--The Secretary shall not file a notice of 
        lien before making an individualized lien determination.
            ``(2) Lien determination.--In making an individualized lien 
        determination with respect to a taxpayer, the Secretary shall 
        consider factors, including--
                    ``(A) the amount due,
                    ``(B) the lien filing fee,
                    ``(C) the value of the taxpayer's equity in the 
                property or right to property,
                    ``(D) the taxpayer's tax compliance history,
                    ``(E) extenuating circumstances, if any, that 
                explain the delinquency, and
                    ``(F) the effect of the filing on the taxpayer's 
                ability to obtain financing, generate future income, 
                and pay current and future tax liabilities.
            ``(3) Supervisory review.--In any case in which--
                    ``(A) collecting a liability through a lien imposed 
                under section 6321 would create an economic hardship 
                (within the meaning of section 6343(a)(1)(D)), or
                    ``(B) the taxpayer does not have significant equity 
                in property or right to property,
        the Secretary shall not file a notice of lien unless the 
        supervisor of the employee making the lien determination 
        referenced in paragraph (2) also determines that the filing is 
        necessary.
            ``(4) Withdrawal of lien.--A lien filed in violation of 
        this subsection shall be withdrawn under subsection (j).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to liens filed after the date of the enactment of 
this Act.

SEC. 302. BAN ON AUDIT INSURANCE.

    Section 330 of title 31, United States Code, as amended by sections 
202 and 205, is amended by adding at the end the following new 
subsection:
    ``(g) Ban on Audit Insurance.--No person admitted to practice 
before the Department of the Treasury may directly or indirectly offer 
or provide insurance or other form of indemnification or reimbursement 
to cover a taxpayer's assessment of federal tax, penalties, or 
interest.''.

SEC. 303. PUBLIC AWARENESS.

    (a) In General.--Section 6103(k) (relating to disclosure of certain 
returns and return information for tax administration purposes) is 
amended by adding at the end the following new paragraph:
            ``(10) Disclosure of recognized, certified, or registered 
        persons; revocation of registration.--The Secretary shall 
        furnish to the public--
                    ``(A) the identity of any person who--
                            ``(i) is an enrolled agent or is an 
                        attorney or certified public accountant who 
                        either has a power of attorney on file with the 
                        Internal Revenue Service or notifies the 
                        Internal Revenue Service of their status as a 
                        preparer of Federal tax returns,
                            ``(ii) is certified under section 330(d) of 
                        title 31, United States Code, as a tax return 
                        preparer, or
                            ``(iii) is registered as a refund delivery 
                        product facilitator pursuant to section 7530, 
                        and
                    ``(B) information as to whether or not any person 
                who is otherwise suspended or disbarred is no longer so 
                recognized, certified, or registered (as the case may 
                be).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect not later than two years after the date of enactment of 
this Act.

SEC. 304. CLARIFICATION OF TAXPAYER ASSISTANCE ORDER AUTHORITY.

    (a) In General.--Paragraph (2) of section 7811(b) is amended--
            (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively, and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) chapter 74 (relating to closing agreements 
                and compromises),''.
    (b) Effective Date.--The amendments made by this section shall 
apply to orders issued after the date of the enactment of this Act.

SEC. 305. TAXPAYER ADVOCATE DIRECTIVES.

    (a) In General.--Subchapter A of chapter 80 is amended by inserting 
after section 7811 the following new section:

``SEC. 7811A. TAXPAYER ADVOCATE DIRECTIVES.

    ``(a) Authority To Issue.--The National Taxpayer Advocate may issue 
a Taxpayer Advocate Directive to mandate administrative or procedural 
changes to improve the operation of a functional process or to grant 
relief to groups of taxpayers (or all taxpayers) if its implementation 
will protect the rights of taxpayers, prevent undue burden, ensure 
equitable treatment, or provide an essential service to taxpayers. A 
Taxpayer Advocate Directive may only be issued by the National Taxpayer 
Advocate. The terms of a Taxpayer Advocate Directive may require the 
Commissioner to implement it within a specified period of time.
    ``(b) Authority To Modify or Rescind.--Any Taxpayer Advocate 
Directive may be modified or rescinded--
            ``(1) only by the National Taxpayer Advocate, the 
        Commissioner of Internal Revenue, or the Deputy Commissioner of 
        Internal Revenue, and
            ``(2) only if a written explanation of the reasons for the 
        modification or rescission is provided to the National Taxpayer 
        Advocate.''.
    (b) Annual Report.--
            (1) In general.--Clause (ii) of section 7803(c)(2)(B) is 
        amended by redesignating subclauses (III) through (XI) as 
        subclauses (IV) through (XII), respectively, and by inserting 
        after subclause (II) the following new subclause:
                                    ``(III) contain Taxpayer Advocate 
                                Directives issued under section 
                                7811A;''.
            (2) Conforming amendments.--Clause (ii) of section 
        7803(c)(2)(B), as amended by paragraph (1), is amended--
                    (A) by striking ``subclauses (I), (II), and (III)'' 
                in subclauses (V), (VI), and (VII) thereof and 
                inserting ``subclauses (I), (II), (III), and (IV)'', 
                and
                    (B) in subclause (VIII)--
                            (i) by inserting ``or Taxpayer Advocate 
                        Directive'' after ``Taxpayer Assistance 
                        Order'', and
                            (ii) by inserting ``or 7811A(a)'' after 
                        ``section 7811(b)''.
    (c) Clerical Amendment.--The table of sections for subchapter A of 
chapter 80 is amended by inserting after the item relating to section 
7811 the following new item:

``Sec. 7811A. Taxpayer advocate directives.''.

SEC. 306. IMPROVED SERVICES FOR TAXPAYERS.

    (a) In General.--It is the sense of Congress that the Internal 
Revenue Service should within 2 years--
            (1) reduce the time between receipt of an electronically 
        filed return and issuance of a refund,
            (2) expand assistance to low-income taxpayers,
            (3) allocate resources to assist low-income taxpayers in 
        establishing accounts at financial institutions that receive 
        direct deposits from the United States Treasury,
            (4) deliver tax refunds on debit cards, prepaid cards, and 
        other electronic means to assist individuals that do not have 
        access to financial accounts or institutions,
            (5) establish a pilot program for satellite walk-in centers 
        to be located in rural underserved communities without easy 
        access to Internal Revenue Service Taxpayer Assistance Centers 
        by using office facilities currently occupied by the Federal 
        Government, including United States Postal Service and Social 
        Security Administration facilities; such satellite walk-in 
        centers should have the capability to provide video-
        conferencing services and scanning or other digitizing 
        functions to deliver, in an interactive manner, all service and 
        compliance functions currently available in Internal Revenue 
        Service Taxpayer Assistance Centers, and
            (6) establish a pilot program for mobile tax return 
        preparation offices.
    (b) Location of Service.--
            (1) In general.--The mobile tax return filing offices 
        should be located in communities that the Secretary determines 
        have a high incidence of taxpayers claiming the earned income 
        tax credit, particularly in locations with few community 
        volunteer tax preparation clinics.
            (2) Indian reservation.--At least one mobile tax return 
        filing office should be on or near an Indian reservation (as 
        defined in section 168(j)(6) of the Internal Revenue Code of 
        1986).

SEC. 307. TAXPAYER ACCESS TO FINANCIAL INSTITUTIONS.

    (a) Establishment of Program.--The Secretary of the Treasury may 
award demonstration project grants (including multiyear awards) to 
eligible entities to provide accounts to individuals who currently do 
not have an account with a financial institution. The account would be 
held in a federally insured depository institution.
    (b) Priority.--Priority shall be given to demonstration project 
proposals that provide accounts at low or no cost and--
            (1) that utilize new technologies such as the prepaid 
        product to expand access to financial services, in particular 
        for persons without bank accounts, with low access to financial 
        services, or low utilization of mainstream financial services,
            (2) that promote the development of new financial products 
        and services that are adequate to improve access to wealth 
        building financial services, which help integrate more 
        Americans into the financial mainstream,
            (3) that promote education for these persons and depository 
        institutions concerning the availability and use of financial 
        services for and by such persons, and
            (4) that include other such activities and projects as the 
        Secretary may determine are consistent with the purpose of this 
        section.
    (c) Eligible Entities.--
            (1) In general.--An entity is eligible to receive a grant 
        under this section if such an entity is--
                    (A) an organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986 and exempt from 
                tax under section 501(a) of such Code,
                    (B) a federally insured depository institution,
                    (C) an agency of a State or local government,
                    (D) a community development financial institution,
                    (E) an Indian tribal organization,
                    (F) an Alaska Native Corporation,
                    (G) a Native Hawaiian organization,
                    (H) an organization described in 501(c)(5), and 
                exempt from tax under section 501(a), of such Code,
                    (I) a nonbank financial service provider, or
                    (J) a partnership comprised of 1 or more of the 
                entities described in the preceding subparagraphs.
            (2) Definitions.--For purposes of this section--
                    (A) Federally insured depository institution.--The 
                term ``federally insured depository institution'' means 
                any insured depository institution (as defined in 
                section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813)) and any insured credit union (as defined 
                in section 101 of the Federal Credit Union Act (12 
                U.S.C. 1752)).
                    (B) Community development financial institution.--
                The term ``community development financial 
                institution'' means any organization that has been 
                certified as such pursuant to section 1805.201 of title 
                12, Code of Federal Regulations.
                    (C) Alaska native corporation.--The term ``Alaska 
                Native Corporation'' has the same meaning as the term 
                ``Native Corporation'' under section 3(m) of the Alaska 
                Native Claims Settlement Act (43 U.S.C. 1602(m)).
                    (D) Native hawaiian organization.--The term 
                ``Native Hawaiian organization'' means any organization 
                that--
                            (i) serves and represents the interests of 
                        Native Hawaiians, and
                            (ii) has as a primary and stated purpose 
                        the provision of services to Native Hawaiians.
                    (E) Labor organization.--The term ``labor 
                organization'' means an organization--
                            (i) in which employees participate,
                            (ii) which exists for the purpose, in whole 
                        or in part, of dealing with employers 
                        concerning grievances, labor disputes, wages, 
                        rates of pay, hours of employment, or 
                        conditions of work, and
                            (iii) which is described in section 
                        501(c)(5) of the Internal Revenue Code of 1986.
                    (F) Nonbank financial service provider.--The term 
                ``nonbank financial service provider'' mean an entity 
                that engages in financial services activities, as 
                authorized under the Federal Reserve Board, 12 Code of 
                Federal Regulations Part 225, Regulation Y.
    (d) Application.--An eligible entity shall submit an application to 
the Secretary of the Treasury in such form and containing such 
information as the Secretary may require.
    (e) Evaluation and Report.--For each fiscal year in which a grant 
is awarded under this section, the Secretary of the Treasury shall 
submit a report to Congress containing a description of the activities 
funded, amounts distributed, and measurable results, as appropriate and 
available.
    (f) Power and Authority of the Secretary.--
            (1) Assistance.--Subject to appropriations, the Secretary 
        of the Treasury may provide financial and technical assistance 
        to awardees for expanding the distribution of financial 
        services, including through financial services electronic 
        networks.
            (2) Research and development.--The Secretary of the 
        Treasury may conduct or support such research and development 
        as the Secretary considers appropriate in order to further the 
        purpose of this section, including the collection of 
        information about access to financial services.
            (3) Regulations.--The Secretary of the Treasury is 
        authorized to promulgate regulations to implement and 
        administer the program under this section.
    (g) Study on Delivery of Tax Refunds.--
            (1) In general.--The Secretary of the Treasury, in 
        consultation with the National Taxpayer Advocate, shall conduct 
        a study on the feasibility of delivering tax refunds on debit 
        cards, prepaid cards, and other electronic means to assist 
        individuals that do not have access to financial accounts or 
        institutions.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of the Treasury shall 
        submit a report to Congress containing the results of the study 
        conducted under paragraph (1).

SEC. 308. ADDITIONAL STUDIES.

    (a) Study on Accelerated Processing of Information Returns.--
            (1) Findings.--Congress finds the following:
                    (A) Under current procedures, the Internal Revenue 
                Service processes income tax returns before it 
                processes most information returns, including Forms W-
                2, which report wages and tax withholding, and Forms 
                1099, which report interest, dividends, and other 
                payments.
                    (B) The sequence described in subparagraph (A) 
                makes little logical sense.
                    (C) From a taxpayer perspective, the sequence leads 
                to millions of cases where taxpayers inadvertently make 
                overclaims that the Internal Revenue Service does not 
                identify until months later, exposing the taxpayer not 
                only to a tax liability but to penalties and interest 
                charges as well.
                    (D) From the Federal Government's perspective, this 
                sequence creates opportunities for fraud and requires 
                the Internal Revenue Service to devote resources to 
                recovering refunds that should not have been paid and 
                that it often cannot recover.
            (2) Study.--The Secretary of the Treasury, in consultation 
        with the National Taxpayer Advocate, shall conduct a study to 
        identify and recommend legislative and administrative changes 
        that would enable the Internal Revenue Service to receive and 
        process information reporting documents before it processes tax 
        returns. In conducting the study, the Secretary shall consider, 
        among other factors, the issues identified in the National 
        Taxpayer Advocate's 2009 Annual Report to Congress.
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of the Treasury shall 
        submit a report to Congress describing the results of the study 
        conducted under paragraph (2).
    (b) Study on the Effectiveness of Collection Alternatives.--
            (1) In general.--The Secretary of the Treasury, in 
        consultation with the National Taxpayer Advocate, shall conduct 
        a study to assess the effectiveness of collection alternatives, 
        especially offers in compromise, on long-term tax compliance. 
        Such a study shall analyze a group of taxpayers who applied for 
        offers in compromise 5 or more years ago and compare the amount 
        of revenue collected from the taxpayers whose offers were 
        accepted with the amount of revenue collected from the 
        taxpayers whose offers were rejected, and compare, among the 
        taxpayers whose offers were rejected, the amount they offered 
        with the amounts collected.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of the Treasury shall 
        submit a report to Congress containing the results of the study 
        conducted under paragraph (1).
                                 <all>