1.
(a)This Act may be cited
as the Taxpayer Advocacy and
Government Accountability Promotion Act of 2011
or the
TAX GAP Act of
2011
.
(b)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)The table of contents for this Act is as follows:
Sec. 1. Short title,
etc.
TITLE I—Taxpayer simplification, protection, and
fairness
Sec. 101. Taxpayer assistance and tax simplification
report.
Sec. 102. Elimination of taxpayer obligation to pay credit and
debit card processing fees for certain tax payments.
Sec. 103. Make offer-in-compromise application rules less
onerous for taxpayers.
Sec. 104. Elimination of special rules modifying amount of
estimated tax payments by corporation.
Sec. 105. Repeal of special estimated tax payment provision for
certain insurance companies.
Sec. 106. Repeal of designation of nonqualified preferred
stock.
Sec. 107. De minimis apology payments pilot
program.
TITLE II—Clarification of tax forms and filing
requirements
Sec. 201. Clarification of information on Schedule
C.
Sec. 202. Increased electronic filing of returns.
Sec. 203. Clarification of electronic filing requirements for
paid preparers.
Sec. 204. Requirement that electronically prepared paper
returns include 2D barcode.
Sec. 205. Authorization to require certain employee benefit
plan information returns and reports to be filed electronically.
TITLE III—Enhanced information reporting
Sec. 301. Automatic reporting on certain government payments
for property and services.
Sec. 302. Additional information on returns relating to
mortgage interest.
Sec. 303. Improved information reporting on unreported and
underreported financial accounts.
TITLE IV—Payments to certain contractors
Sec. 401. Requirements for withholding with respect to payments
to contractors.
Sec. 402. Continuous levy on payments to Medicaid providers and
suppliers.
Sec. 403. Levy authority for payments to Medicare providers
with delinquent tax debt.
Sec. 404. 100 percent levy for payments to Federal vendors
relating to property.
TITLE V—Improved tax administration and coordination
Sec. 501. Requirement for prisons located in U.S. to provide
information for tax administration.
Sec. 502. Facilitation of tax compliance with Indian tribal
governments.
Sec. 503. Improvement in access to information in the National
Directory of New Hires for tax administration purposes.
Sec. 504. Clarification of taxpayer privacy by improvement of
investigative disclosure statute.
Sec. 505. Authorization for Financial Management Service
retention of transaction fees from levied amounts.
TITLE VI—Clarification of penalties and liabilities
Sec. 601. Clarification of penalty for failure to comply with
electronic filing requirements.
Sec. 602. Increase in penalty on paid preparers who fail to
comply with earned income tax credit due diligence requirements.
Sec. 603. Increase in penalties for repeated and willful
failure to file tax return.
Sec. 604. Clarification of employee leasing companies liability
for clients' Federal employment taxes.
Sec. 605. Extension of statute of limitations where State or
local adjustment affects Federal tax liability.
Sec. 606. Elimination of restriction on offsetting refunds from
former residents.
TITLE VII—Understanding the tax gap
Sec. 701. Tax gap strategy and reports.
Sec. 702. Studies on the impact of tax gap
legislation.
Sec. 703. Reports on worker misclassification.
<enum>I</enum><header>Taxpayer
simplification, protection, and fairness</header>
<section id="id0C56B4E882D447158D4EBF390843C04A"><enum>101.</enum><header>Taxpayer
assistance and tax simplification report</header>
<subsection id="idED68085EA6964E5BB5C6ED50FB872B44"><enum>(a)</enum><header>In
general</header><text>Not later than 2 years after the date of the enactment of
this Act, the Secretary of the Treasury, in consultation with the Commissioner
of the Internal Revenue Service, shall submit to Congress a report on taxpayer
assistance and tax simplification.</text>
</subsection><subsection id="idCE58FF97BED34C6EAF3AECC1814D9BA9"><enum>(b)</enum><header>Matters
included</header><text>The report required under subsection (a) shall be based
on examinations of tax policy and of tax compliance enforcement and shall
include the following:</text>
<paragraph id="ID546c5bb5ac474cf586f9aea64fc87bbf"><enum>(1)</enum><text>An assessment of
the current and proposed efforts of the Internal Revenue Service with respect
to the simplification of tax forms, publications, and filing requirements for
individual taxpayers and for sole proprietor taxpayers, including additional,
plain-language guidance for taxpayers. Such assessment shall include specific
recommendations on—</text>
<subparagraph id="idE9670E02377D4AEAADBF854AA43B779D"><enum>(A)</enum><text>how these or
additional efforts may be improved or expanded upon, including through paid
preparers and tax preparation software, and</text>
</subparagraph><subparagraph id="idB99501C230C04E5882A0011126395778"><enum>(B)</enum><text>requiring or
encouraging the Internal Revenue Service, to the maximum extent possible, to
test its forms and publications on actual taxpayers prior to
publication.</text>
</subparagraph></paragraph><paragraph id="IDf37315bc30834726b04ed431d2ea9cf6"><enum>(2)</enum><text>An assessment of
the current efforts of the Internal Revenue Service—</text>
<subparagraph id="id21763638A6D840F580DFB87058EF4DF6"><enum>(A)</enum><text>to reduce the
time between receipt of an electronically filed tax return and the issuance of
a refund, and</text>
</subparagraph><subparagraph id="idA5BC8054A15C41379755C1EF5CBD53CA"><enum>(B)</enum><text>to reduce the
time between receipt of a manually filed tax return and the issuance of a
refund.</text>
</subparagraph></paragraph><paragraph id="ID0a7abf54dda14c8fa8786c67f66a6b91"><enum>(3)</enum><text>An assessment of
the efforts of the Internal Revenue Service to induce voluntary compliance by
individual taxpayers and sole proprietor taxpayers, with a particular focus on
current efforts to reduce administrative and compliance burdens. Such
assessment shall include specific recommendations on how voluntary compliance
may be improved or expanded upon, particularly in an environment where most
taxpayers use paid preparers or tax preparation software.</text>
</paragraph><paragraph id="IDa1df6f6cb8cd412ba8813fc65c7e4a63"><enum>(4)</enum><text>An assessment of
the current efforts of the Internal Revenue Service to improve taxpayer
service, including through outreach programs, taxpayer education, preparer
education, tax software industry coordination, and expanded availability of
online, Internet-based tax information and filing services offered by the
Internal Revenue Service. Such assessment shall include specific
recommendations on how these or additional efforts may be improved or expanded
upon.</text>
</paragraph><paragraph id="ID9c186e8641df4520ac76b2c17a7ca3b3"><enum>(5)</enum><text>An assessment of
the efficacy of previous Internal Revenue Service efforts with respect to
settlement initiatives, including the effect of such initiatives on improving
compliance and reducing current and future revenues lost due to tax evasion.
Such assessment shall include specific recommendations on how, or whether,
these or additional efforts may be improved or expanded upon.</text>
</paragraph><paragraph id="ID89ead9fbf9974d1091208e4718bbdc07"><enum>(6)</enum><text>An assessment of
the personnel, infrastructure, information technology, and capabilities of the
Internal Revenue Service with respect to ensuring and promoting taxpayer
service, encouraging voluntary compliance, enforcing involuntary
compliance.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idBECB96103CFA43F288800DA11414D775"><enum>(c)</enum><header>Use of
data</header><text>The report under subsection (a) shall, wherever possible, be
based on empirical data, agency-conducted tests, and quantitative
evidence.</text>
</subsection></section><section id="id49EBBD85F5394E04B32A29032DCCF429"><enum>102.</enum><header>Elimination of
taxpayer obligation to pay credit and debit card processing fees for certain
tax payments</header>
<subsection id="id025DC80590A342CDB5FB1CA7521D7C9A"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 6311(d) is amended to read as
follows:</text>
<quoted-block act-name="" id="id0354094BBBFC45BA8CF47C7E0C797009" style="OLC">
<paragraph id="id21FA490797144DDBB2653ADDFE163063"><enum>(2)</enum><header>Authority to
enter into contracts</header><text>Notwithstanding section 3718(f) of title 31,
United States Code—</text>
<subparagraph id="id546A8AAB389B43A6B89DB634252D63A1"><enum>(A)</enum><header>In
general</header><text>The Secretary is authorized to enter into contracts to
obtain services related to receiving payment by other means where cost
beneficial to the Government. Except as provided in subparagraph (B), the
Secretary may not pay any fee or provide any other consideration under any such
contract for the use of credit, debit, or charge cards for the payment of taxes
imposed by subtitle A.</text>
</subparagraph><subparagraph id="id2057232CAEE040EBBE35CFC3BA2FCCA3"><enum>(B)</enum><header>Services
provided by financial agents of the Government</header><text>The Secretary is
authorized to utilize services provided by a financial agent of the Government
to receive payment of delinquent tax liability made by credit, debit, or charge
card, and to pay such financial agent any contracted fees or other
consideration for the acceptance and processing of card transactions in
connection with such
services.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idD8AF1C97EA4F44E1902A8D2DB324F41D"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to payments
made after the date of the enactment of this Act.</text>
</subsection></section><section id="id08F8FE45F7154E37A0C5B9E797404034"><enum>103.</enum><header>Make
offer-in-compromise application rules less onerous for taxpayers</header>
<subsection id="id306EA887F6834557814CCB9165AD6612"><enum>(a)</enum><header>In
general</header><text>Section 7122 is amended by striking subsection (c) and by
redesignating subsections (d), (e), (f), and (g) as subsections (c), (d), (e),
and (f), respectively.</text>
</subsection><subsection id="id056346E2369C478DBB64CB7FB501FCD8"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="id551B3B86A68849DA9467D6E11C83E1AE"><enum>(1)</enum><text>Paragraph (3) of
section 7122(c), as redesignated by subsection (a), is amended by striking
subparagraph (C), by striking <quote>, and</quote> at the end of subparagraph
(B) and inserting a period, and by adding <quote>and</quote> at the end of
subparagraph (A).</text>
</paragraph><paragraph id="id4404310C9FC64A2C91F3A4D54050B29B"><enum>(2)</enum><text>Subsection (f) of
section 6159 is amended by striking <quote>section 7122(e)</quote> and
inserting <quote>section 7122(d)</quote>.</text>
</paragraph></subsection><subsection id="idE1D51015919645368BE3131B3C39DFB1"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
offers-in-compromise submitted after the date of the enactment of this
Act.</text>
</subsection></section><section id="id344DE22D922F4AD285BDA14C6CC51AA7"><enum>104.</enum><header>Elimination of
special rules modifying amount of estimated tax payments by
corporation</header><text display-inline="no-display-inline">The Corporate
Estimated Tax Shift Act of 2009 (and any modification of such section contained
in any other provision of law) and section 561 of the Hiring Incentives to
Restore Employment Act (and any modification of such section contained in any
other provision of law) shall not apply with respect to any installment of
corporate estimated tax for any taxable year beginning after December 31,
2013.</text>
</section><section id="id660BD6811038410C836A25D6180C174F"><enum>105.</enum><header>Repeal of
special estimated tax payment provision for certain insurance
companies</header>
<subsection id="id8EEA36A2FD7C4D72B305BEB3E8B031FD"><enum>(a)</enum><header>In
general</header><text>Section 847 is repealed, effective for taxable years
beginning after December 31, 2012.</text>
</subsection><subsection id="id4D2C41DBBCE94AEA8CD69F1FE2A68D2C"><enum>(b)</enum><header>Transition
rules</header>
<paragraph id="idBD90A736CB674AB1A1588E79AE71C53F"><enum>(1)</enum><header>Existing
special loss discount accounts</header>
<subparagraph id="id2A0BC9F39CFB448CA43E16ECC5F6F617"><enum>(A)</enum><header>In
general</header><text>In the case of a company that has a special loss discount
account (within the meaning of section 847(a)(3) of the Internal Revenue Code
of 1986, as in effect on the date of the enactment of this Act) on December 31,
2012, the entire amount of such account shall be subtracted from such account
and, unless the company makes the election under subparagraph (B), shall be
included in gross income for such company's first taxable year beginning after
such date.</text>
</subparagraph><subparagraph id="id1F442C8C5243490ABF50449C04E5056D"><enum>(B)</enum><header>Election to
include amounts ratably over 4 years</header><text>If a company makes the
election under this subparagraph, in such time and manner as the Secretary may
prescribe, the amount of such company's special loss discount account which is
subtracted from such account by reason of subparagraph (A) shall be included in
gross income ratably over the 4-taxable-year period beginning with such
company's first taxable year beginning after December 31, 2012.</text>
</subparagraph></paragraph><paragraph id="id45254C91F9B14CFA83F551DE02276C3C"><enum>(2)</enum><header>Accumulated
special estimated tax payments</header>
<subparagraph id="id35D51B1DB18E40389ACAE4314F25CE54"><enum>(A)</enum><header>In
general</header><text>Unless the company makes the election under paragraph
(1)(B), the amount of any special estimated tax payments made by such company
under section 847 of the Internal Revenue Code of 1986 in taxable years
beginning before December 31, 2012, which have not previously been applied to
reduce tax liability shall be applied to reduce any additional tax liability
resulting from the application of paragraph (1)(A) for the company's first
taxable year beginning after December 31, 2012.</text>
</subparagraph><subparagraph id="id3C8DB156DC714802B735E39ACC672BD2"><enum>(B)</enum><header>Companies
electing 4-year income inclusion</header><text>In the case of a company that
makes the election under paragraph (1)(B), the amount of any special estimated
tax payments made by such company under section 847 of such Code in taxable
years beginning before December 31, 2012, which have not previously been
applied to reduce tax liability shall be applied on a year-by-year basis to
reduce any additional tax liability resulting from the application of paragraph
(1)(B) for the taxable years in the 4-taxable-year period under such
paragraph.</text>
</subparagraph><subparagraph id="id846FED0CF4564C20BAECBF45DAB98C66"><enum>(C)</enum><header>Excess special
estimated tax payments</header><text>If the amount of special estimated tax
payments to which subparagraph (A) or (B) applies exceeds—</text>
<clause id="idC54B9AE4A59E4E0A80FEFFDF94CE4AE0"><enum>(i)</enum><text>the
additional tax liability resulting from the application of paragraph (1)(A) for
the company's first taxable year beginning after December 31, 2012, or</text>
</clause><clause id="id7D8B836975E845AB86F3D018B6A97F00"><enum>(ii)</enum><text>the total
additional tax liability resulting from the application of paragraph (1)(B) for
the company's first 4 taxable years beginning after such date,</text>
</clause><continuation-text continuation-text-level="subparagraph">whichever
is applicable, such excess amount shall be treated as a payment of the
company's estimated tax under section 6655 of such Code, beginning with the
first quarter of the first taxable year beginning after such date or, in the
case of an election under paragraph (1)(B), the first quarter of the 4th
taxable year beginning after such date.</continuation-text></subparagraph></paragraph></subsection></section><section id="idE3FCEB58212E43A48BFE45CD0A8472F8"><enum>106.</enum><header>Repeal of
designation of nonqualified preferred stock</header>
<subsection id="id70FC2BB1BBD746FBA3CC5AF12F30E183"><enum>(a)</enum><header>In
general</header><text>Section 351 is amended by striking subsection (g) and by
redesignating subsection (h) as subsection (g).</text>
</subsection><subsection id="id9765167A307D471BB224087DA55184A4"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="idC4CD2FCEDED740F8BD64DBFEBADA8334"><enum>(1)</enum><text>Section
45D(b)(6)(A) is amended by striking <quote>(other than nonqualified preferred
stock as defined in section 351(g)(2))</quote>.</text>
</paragraph><paragraph id="id0276713026024ECD915EEC3CA155EBCF"><enum>(2)</enum><text>Section 354(a)(2)
is amended—</text>
<subparagraph id="id36CD572BE1794F7798EBFC46FDD908DD"><enum>(A)</enum><text>by striking
<quote>(including nonqualified preferred stock, as defined in section
351(g)(2))</quote> in subparagraph (B), and</text>
</subparagraph><subparagraph id="id95649756C55140E690493777D4E1FA48"><enum>(B)</enum><text>by striking
subparagraph (C).</text>
</subparagraph></paragraph><paragraph id="id0381E2F022A14376A8007FD7727DEF6C"><enum>(3)</enum><text>Section 354(a)(3)
is amended by striking <quote>nonqualified preferred stock and</quote>.</text>
</paragraph><paragraph id="id56594F3809734EF0BE00CB5010420F5A"><enum>(4)</enum><text>Section 355(a)(3)
is amended—</text>
<subparagraph id="id2FDB975207BB4DC09928D72DBC216A48"><enum>(A)</enum><text>by striking
<quote>(including nonqualified preferred stock, as defined in section
351(g)(2))</quote> in subparagraph (C), and</text>
</subparagraph><subparagraph id="id8F1CF7B2C0AD4C01B66A376E0539529E"><enum>(B)</enum><text>by striking
subparagraph (D).</text>
</subparagraph></paragraph><paragraph id="id0FA2F43F67C1408683549FA105C21C61"><enum>(5)</enum><text>Section 355(a)(4)
is amended by striking <quote>nonqualified preferred stock and</quote>.</text>
</paragraph><paragraph id="id0EFE5F5D9631470FA02F228275C769BB"><enum>(6)</enum><text>Section 356 is
amended by striking subsection (e) and by redesignating subsections (f) and (g)
as subsections (e) and (f), respectively.</text>
</paragraph><paragraph id="idD40E7905162F4BCEABA5AB48D747F738"><enum>(7)</enum><text>Section 1036 is
amended by striking subsection (b) and by redesignating subsection (c) as
subsection (b).</text>
</paragraph></subsection><subsection id="idA08804916C4F4965A90BFD5BE872E713"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
transactions after December 31, 2012.</text>
</subsection></section><section id="idFCCDA30184794FCBBE3897CE506197FD"><enum>107.</enum><header>De minimis
apology payments pilot program</header>
<subsection id="idE3E1CD5CF0AB4EABAC8702A3082C0BC3"><enum>(a)</enum><header>In
general</header><text>Section 7811(b) is amended by striking <quote>or</quote>
at the end of paragraph (1), by striking the period and inserting <quote>,
or</quote> at the end of paragraph (2)(D), and adding at the end the following
new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id25AB2B352C564A429BF424BEB6952783" style="OLC">
<paragraph id="idECE80997F3784C90BE0FC6DA621540F3"><enum>(3)</enum><text>to make an
apology payment under subsection (h) in the case of any order issued during
2012 or 2013, upon the determination that such order—</text>
<subparagraph id="idC54476789EDB45D588B80479F0E3B597"><enum>(A)</enum><text>has been
accepted, or</text>
</subparagraph><subparagraph id="id8D185EC7B8734F4E9D8E096DB862676F"><enum>(B)</enum><text>if challenged,
has been administratively
sustained.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id37C9FF54F5DD4CE690229A1CAF533ED8"><enum>(b)</enum><header>Apology
payment</header><text>Section 7811 is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idFA46302656484FE988B2E54070D812B6" style="OLC">
<subsection id="idFEE09767FAA54E3E8F06C28A47B576BF"><enum>(h)</enum><header>Apology payment
program</header>
<paragraph id="idE4386DF200764F458970FD3E635F2318"><enum>(1)</enum><header>In
general</header><text>A taxpayer assistance order may require the Secretary to
provide an apology payment on behalf of the Internal Revenue Service to the
taxpayer under this subsection in any case in which the National Taxpayer
Advocate determines that any action or inaction by the Internal Revenue Service
has caused excess expense or undue burden on a taxpayer.</text>
</paragraph><paragraph id="id9FC306101E8A4CBDA47E384FA353E071"><enum>(2)</enum><header>Taxpayer
limitations</header><text>In the case of any apology payment required under
this subsection to any taxpayer with respect to any taxable year—</text>
<subparagraph id="idBCB0E47EB5804130A3ED1021FDC478D4"><enum>(A)</enum><text>such payment
shall not be less than $100, and</text>
</subparagraph><subparagraph id="idCC7CEB8CE97B4409B1BA6BC0189E4E98"><enum>(B)</enum><text>such payment
shall not exceed $1,000.</text>
</subparagraph></paragraph><paragraph id="id3A2DF06F5219474789617E6BBDCE9EB5"><enum>(3)</enum><header>Aggregate
yearly limitation</header><text>The amount of apology payments which the
National Taxpayer Advocate may require to be paid for any fiscal year shall not
exceed
$250,000.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idF8AD227EFACF4187B4977DFED3990A82"><enum>(c)</enum><header>Reports</header><text>Clause
(ii) of section 7803(c)(2)(B) is amended by striking <quote>and</quote> at the
end of subclause (X), by redesignating subclause (XI) as subclause (XII), and
by inserting after subclause (X) the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="id6B663D3D99614F25839F686790BD89BB" style="OLC">
<subclause id="id5C7D7FE879964A3CAFCDA43012CBB509"><enum>(XI)</enum><text>contain a
summary of all Taxpayer Assistance Orders which require an apology payment
under section 7811(h),
and</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id6F156D1E0F0F45BA994CB542B3987532"><enum>(d)</enum><header>Exclusion of
apology payments from gross income</header>
<paragraph id="idB298CE28131942508869D315CB679BBB"><enum>(1)</enum><header>In
general</header><text>Part III of subchapter B of chapter 1 is amended by
inserting before section 140 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="idC4A66FB0EDE44B5DB9F384404FB47133" style="OLC">
<section id="idB9F17D271AFB42988BE3D3FB7A0831E4"><enum>139F.</enum><header>Internal
Revenue Service apology payments</header><text display-inline="no-display-inline">Gross income shall not include any apology
payment received by a taxpayer as a result of a Taxpayer Assistance Order
described in section
7811(h).</text>
</section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id54F93CAE90804BA1AB97AC13B0E9B1AC"><enum>(2)</enum><header>Clerical
amendment</header><text>The table of sections for part III of subchapter B of
chapter 1 is amended by inserting before the item relating to section 140 the
following new item:</text>
<quoted-block id="id01779b5c-9f75-4b00-a27b-b073adc5812f" style="OLC">
<toc>
<toc-entry idref="idB9F17D271AFB42988BE3D3FB7A0831E4" level="section">Sec. 139F. Internal Revenue Service apology
payments.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id5153ECC468D44B4693301B44BD0C0CAE"><enum>(e)</enum><header>Effective
dates</header>
<paragraph id="id24E7627797214DAC8D641988400C7F06"><enum>(1)</enum><header>In
general</header><text>The amendments made by subsections (a) and (b) shall
apply to orders issued after December 31, 2011.</text>
</paragraph><paragraph id="id7A697027AF274613AC05F365111BD506"><enum>(2)</enum><header>Reports</header><text>The
amendments made by subsection (c) shall apply to reports required to be
submitted after December 31, 2011.</text>
</paragraph><paragraph id="id82E2637B2DD84E658253DF81A579A932"><enum>(3)</enum><header>Exclusion</header><text>The
amendments made by subsection (d) shall apply to taxable years beginning after
December 31, 2011.</text>
</paragraph></subsection><subsection id="idD2D505B888914FF4B7723E70D7A36CE6"><enum>(f)</enum><header>Study and
report on apology payments program</header><text>Not later than December 31,
2013, the Secretary of the Treasury shall submit to Congress a report on the
apology payments program under the amendments made by this section. Such report
shall contain—</text>
<paragraph id="ID574f936614ec43bfb0a3be9843e3f103"><enum>(1)</enum><text>an evaluation
of—</text>
<subparagraph id="id42119D3A6AFF4A7F89BB092AA68D9024"><enum>(A)</enum><text>the merits and
effects of such program on—</text>
<clause id="idC646EAF36CCE423D9D0360E68A707141"><enum>(i)</enum><text>taxpayers who
received payments under section 7811(h), and</text>
</clause><clause id="idAC4129502BB545ABAF93F7CF2FB86804"><enum>(ii)</enum><text>the Internal
Revenue Service, and</text>
</clause></subparagraph><subparagraph id="id2BFFA96D98A845FBA0C3EB186A96BF53"><enum>(B)</enum><text>the impact of the
program on all taxpayers and the public, and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idA6A54507231E4BE89A2C36F663EC2285"><enum>(2)</enum><text>recommendations
whether the program should be extended, and, if so, whether and how it should
be improved.</text>
</paragraph></subsection></section><enum>II</enum><header>Clarification of
tax forms and filing requirements</header>
<section id="id069B924D643B494BB1459787D5DED46C"><enum>201.</enum><header>Clarification
of information on Schedule C</header>
<subsection id="ID34da396aecae4b5f9e57d498f51ec391"><enum>(a)</enum><header>Revision of
Schedule C</header><text>Not later than December 31, 2012, the Secretary of the
Treasury shall revise Schedule C to Form 1040 (hereafter in this section
referred to as <quote>Schedule C</quote>) to require that taxpayers engaged in
a trade or business provide the information required under this
subsection.</text>
<paragraph id="id4F698CAA5493420EB73C2FDB16753E10"><enum>(1)</enum><header>Additional
gross receipts information</header><text>With respect to the gross receipts of
the taxpayer from any trade or business, Schedule C shall require the taxpayer
to provide the following:</text>
<subparagraph id="id5E4B6895D6244DE1A21A4381452DA61E"><enum>(A)</enum><text>The total of
amount of gross receipts or sales reported to the taxpayer through payee
statements (as defined in section 6724(d)(2) of the Internal Revenue Code of
1986) and the number of such payee statements received by the taxpayer.</text>
</subparagraph><subparagraph id="idFE760EE70954467D897BE7CB1493F4C1"><enum>(B)</enum><text>The total of
amount of gross receipts or sales not included under subparagraph (A).</text>
</subparagraph></paragraph><paragraph id="ID821d3de114f94b03ae16e0f23539031d"><enum>(2)</enum><header>Additional
expense information</header><text>With respect to payments made by the taxpayer
in connection with any trade or business, Schedule C shall require the taxpayer
to provide the following:</text>
<subparagraph id="id9D5CF69AAA9D45F1968E316C8F07F6C8"><enum>(A)</enum><text>The total of
amounts reported by the taxpayer through payee statements (as so
defined).</text>
</subparagraph><subparagraph id="id6BF4E6A130FD44BA8DBE5301A3AB52EC"><enum>(B)</enum><text>The number of
payee statements (as so defined) furnished by the taxpayer.</text>
</subparagraph><subparagraph id="idDEC9C670DCDD4C879EE213B9DCDC15A5"><enum>(C)</enum><text>Such other
information as required by the Secretary with respect to payments in connection
with—</text>
<clause id="idCC0ACCD119EC4D4DB79FB00CFEB21051"><enum>(i)</enum><text>goods, and</text>
</clause><clause id="id61067A09E73B4235A13E610FE97FE782"><enum>(ii)</enum><text>services.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID47cc5eac80d145399ba07b2c5015d5b9"><enum>(b)</enum><header>Report on
improving voluntary compliance by sole proprietors</header>
<paragraph id="id3157800413A14EF49C7B9FA89E67CA23"><enum>(1)</enum><header>In
general</header><text>Not later than 3 years after the date of the enactment of
this Act, the Secretary of the Treasury shall submit to Congress a report
setting forth recommendations on—</text>
<subparagraph id="idC1FB2AC3CDD1415AA810130C47FAB7D4"><enum>(A)</enum><text>whether the
Internal Revenue Service should provide additional assistance to first-time
Schedule C filers by means of regular communications, a small business hotline,
a published resource guide, or automatic or computer-generated
<quote>soft</quote> notices,</text>
</subparagraph><subparagraph id="id33DFB42C08284577AF6B137CC786582B"><enum>(B)</enum><text>ways in which the
Internal Revenue Service can work with small businesses, trade representatives,
tax preparation software firms, and paid preparer representatives to determine
whether and how specific changes to existing education and guidance would help
those filing the Schedule C,</text>
</subparagraph><subparagraph id="id7884B408E3C2499F9AFEF46CDFD93B00"><enum>(C)</enum><text>ways to clarify
the instructions for Schedule C to indicate that information returns may be
required to be filed by sole proprietors who deduct expenses for wages, fees,
and commissions,</text>
</subparagraph><subparagraph id="id742721D5E1284DFEBF316F53E6AB92A0"><enum>(D)</enum><text>suggested changes
to the Internal Revenue Service's electronic and computer-based system for
filing information returns to accommodate those filing information returns on
payments made to sole proprietors, including whether the Internal Revenue
Service should develop an Internet-based system for filing information
returns,</text>
</subparagraph><subparagraph id="idC71CF8D5A8FF4A138B647CADE62346F3"><enum>(E)</enum><text>identification
and analysis of the best practices that are utilized by States and by foreign
governments with respect to encouraging voluntary tax compliance by sole
proprietors, and ways these best practices may be adopted by the Internal
Revenue Service,</text>
</subparagraph><subparagraph id="idE0DE4B3A965E4AF0A2A6E7D7243FDEE6"><enum>(F)</enum><text>whether, in the
case of tax returns containing income from a trade or business, the inclusion
of a checkbox or other indicator indicating whether the taxpayer had a
1099–MISC filing requirement would affect voluntary compliance by taxpayers,
and</text>
</subparagraph><subparagraph id="id7F55B676543941038DC67868AB9C1B68"><enum>(G)</enum><text>such other
improvements with respect to improving voluntary compliance by sole proprietors
as the Secretary determines is appropriate.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idDE11F787ACF7467E879659CE823EC98D"><enum>(2)</enum><header>Use of
data</header><text>The recommendations submitted in the report under paragraph
(1) shall, wherever possible, be based on empirical data, agency-conducted
tests, and quantitative evidence.</text>
</paragraph></subsection></section><section id="id1D6C21D67EE945DFAB2BB66D99DA7062"><enum>202.</enum><header>Increased
electronic filing of returns</header>
<subsection id="idA6451F4237CF40FEAFEAA9125030360D"><enum>(a)</enum><header>Persons
required To file Schedule M–3</header><text>Paragraph (2) of section 6011(e) is
amended—</text>
<paragraph id="id50C88229DBD648DDBB507CBE83EEA24D"><enum>(1)</enum><text>by redesignating
subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively,</text>
</paragraph><paragraph id="id2B03A89511CA4CFCAE81D9746A327698"><enum>(2)</enum><text>by inserting
before subparagraph (B), as so redesignated, the following new
subparagraph:</text>
<quoted-block act-name="" id="idC3760A66B3F142078646EB645CC7AB95" style="OLC">
<subparagraph id="id992F66569FA342C8841B440CB37463EB"><enum>(A)</enum><text>shall require any
corporation or partnership that has assets in excess of $10,000,000 on the last
day of the taxable year to file returns on magnetic
media,</text>
</subparagraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph id="id31374096E34543D795EE501822A049F7"><enum>(3)</enum><text>by inserting
<quote>except as provided in subparagraph (A),</quote> before <quote>shall not
require</quote> in subparagraph (B), as so redesignated.</text>
</paragraph></subsection><subsection id="id713C559FEB8049F89717ACF7D29E831B"><enum>(b)</enum><header>Reduction of
threshold</header><text>Subparagraph (B) of section 6011(e)(2), as redesignated
by subsection (a), is amended by striking <quote>at least 250 returns</quote>
and inserting <quote>more than a de minimis number of returns (as determined by
the Secretary) </quote>.</text>
</subsection><subsection id="id4A26B7DE79F04CACAA38E92478D203BC"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years ending after December 31, 2012.</text>
</subsection></section><section id="ID38A17A53072A4DAFA1BCA0227B71E095"><enum>203.</enum><header>Clarification
of electronic filing requirements for paid preparers</header>
<subsection id="id31AA18FEA74B404CA13A38B06A284CEC"><enum>(a)</enum><header>Lower threshold
for paid preparers</header><text>Section 6011(e)(3)(B) is amended by striking
<quote>10</quote> and inserting <quote>5</quote>.</text>
</subsection><subsection commented="no" id="id961986607687434C861394139FFEDD59"><enum>(b)</enum><header>Threshold based
on returns prepared</header><text>Paragraph (3) of section 6011(e) is
amended—</text>
<paragraph id="idB864A9DCC0F84080BEEC1E86E0C2BA9E"><enum>(1)</enum><text>by striking
<quote>filed</quote> in subparagraph (A)(i) and inserting
<quote>prepared</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0AC0296ED63E4714869B5EDEC5744F22"><enum>(2)</enum><text>by striking
<quote>file</quote> in subparagraph (B) and inserting
<quote>prepare</quote>.</text>
</paragraph></subsection><subsection id="id92394EDBDB1B4126B17402E1320ECBE3"><enum>(c)</enum><header>Penalty</header><text>Section
6695 is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id65C955939A0F447A9527B98795F96606" style="OLC">
<subsection id="ID294ba297d48e454d8d9118baa7ce0aee"><enum>(h)</enum><header>Failure To file
return on magnetic media</header><text>Any person who is a tax return preparer
with respect to any individual income tax return and who must file such return
on magnetic media pursuant to the requirement of section 6011(e)(3) and fails
to comply with the requirements of section 6011(e)(3) shall pay a penalty of
$50 for such failure unless it is shown that such failure is due to reasonable
cause and not due to willful neglect. The maximum penalty imposed under this
subsection on any person with respect to individual income tax returns filed
during any calendar year shall not exceed
$25,000.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id2C9245DE123E4693AABFE8B8F0567658"><enum>(d)</enum><header>Technical
amendment</header><text>Section 6011(e)(3)(A) is amended by striking
<quote>than</quote> and inserting <quote>that</quote>.</text>
</subsection><subsection id="idB34C125C036B4EC4B12F030195592BD8"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to returns
filed for taxable years beginning after December 31, 2011.</text>
</subsection></section><section id="idAA365A8915E24CBC894CB27FD97F1F0B"><enum>204.</enum><header>Requirement
that electronically prepared paper returns include 2D barcode</header>
<subsection id="id57CEC8DE7BE34C518688F2C067ABC6AA"><enum>(a)</enum><header>In
general</header><text>Subsection (e) of section 6011 is amended by adding at
the end the following new paragraph:</text>
<quoted-block act-name="" id="idDF1A2F3B7E25469ABBD4EA99782DC63B" style="OLC">
<paragraph id="id1A1D450CE4A84635BCB0324D724B4E80"><enum>(5)</enum><header>Special rule
for returns prepared electronically and submitted on paper</header><text>The
Secretary shall require that any return of tax which is prepared
electronically, but is printed and filed on paper, bear a matrix code or 2D
barcode which can, when scanned, convert such return to electronic
format.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id5C9424753A644B9CA219EB55F71419CC"><enum>(b)</enum><header>Conforming
amendment</header><text>Paragraph (1) of section 6011(e) is amended by striking
<quote>paragraph (3)</quote> and inserting <quote>paragraphs (3) and
(5)</quote>.</text>
</subsection><subsection id="id6BBAFAF83D8147F1B6B36F5C6AAC1E4C"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to returns
of tax the due date for which (including extensions) is after December 31,
2012.</text>
</subsection></section><section id="idA48D7AB1102F4E398B4992D051A12A7D"><enum>205.</enum><header>Authorization
to require certain employee benefit plan information returns and reports to be
filed electronically</header>
<subsection id="idC94E43C195EB45F99FAD11BBCD4F9F20"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 6011(e), as amended by this Act,
is amended by adding at the end the following new sentence: <quote>Subparagraph
(B) shall not apply in the case of a return or report required by section 6057,
6058, or 6059.</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idD4702F1F8D854086AEE39FADEF20EB48"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to plan years
beginning after December 31, 2012.</text>
</subsection></section><enum>III</enum><header>Enhanced
information reporting</header>
<section id="id9CC1D9D608E04D9B8C59682CDFBBF405"><enum>301.</enum><header>Automatic
reporting on certain government payments for property and services</header>
<subsection id="idD4B0B401EF9B422A84EAEFE2CB711367"><enum>(a)</enum><header>In
general</header><text>Section 6041, as amended by the Comprehensive 1099
Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011,
is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id878046CCDA634FF1AD67F063440C4409" style="OLC">
<subsection id="id239744D93FD44FD88498BC72DCFB8573"><enum>(h)</enum><header>Applications to
governmental units</header><text>For purposes of this section—</text>
<paragraph id="IDcc16097ec62043b48ebbf2923ed5863c"><enum>(1)</enum><header>Treated as
persons</header><text>The term <term>person</term> includes any governmental
unit (and any agency or instrumentality thereof).</text>
</paragraph><paragraph id="ID4b2627800bdc45afb7d25849d0ac5767"><enum>(2)</enum><header>Special
rules</header><text>In the case of any payment by a governmental entity or any
agency or instrumentality thereof—</text>
<subparagraph id="IDca50f956bf9348bfb08fee884ad5e8ad"><enum>(A)</enum><text>subsection (a)
shall be applied without regard to the trade or business requirement contained
therein, and</text>
</subparagraph><subparagraph id="IDfb8fbdcc72d648b0b50ab871b6aa2bd3"><enum>(B)</enum><text>any return under
this section shall be made by the officer or employee having control of the
payment or appropriately designated for the purpose of making such
return.</text>
</subparagraph></paragraph><paragraph id="IDb41695eb00b54fc8a222a9c54106915e"><enum>(3)</enum><header>Exceptions</header><text>This
subsection shall not apply to such payments as the Secretary may specify in
regulations prescribed after the date of the enactment of this subsection. Such
regulations may include—</text>
<subparagraph id="id5B07A2FB295D4B25B1C30536BB296153"><enum>(A)</enum><text>payments of
interest,</text>
</subparagraph><subparagraph id="id1879BFAD42A54195B041FD40EBD8F614"><enum>(B)</enum><text>payments for real
property,</text>
</subparagraph><subparagraph id="id73B585AC0173435ABD19C108C81151EB"><enum>(C)</enum><text>payments to
entities exempt from tax or foreign governments,</text>
</subparagraph><subparagraph id="id6AB58B0A79534B058116F0D4EEFD4765"><enum>(D)</enum><text>intergovernmental
payments,</text>
</subparagraph><subparagraph id="id3F238C1567E04BB7ADC8EBC66309C500"><enum>(E)</enum><text>payments made
pursuant to classified or confidential contracts, including contracts described
in section 6050M(e)(3) with respect to which the requirements of section
6050M(e)(2) are met, and</text>
</subparagraph><subparagraph id="id156407E4E6B84BCF83DD103031613A16"><enum>(F)</enum><text>any other payment
with respect to which reporting is required under another provision of this
title.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id8B229E6180664896AC770F43BE01E82B"><enum>(b)</enum><header>Conforming
amendments to returns by governments regarding payments of remuneration for
services and direct sales to corporations</header><text>Paragraph (3) of
section 6041A(d) is amended—</text>
<paragraph id="idAB63F2E3D774404091FB70CA1A9ABF9D"><enum>(1)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">by federal executive
agencies</header-in-text></quote> in the heading,</text>
</paragraph><paragraph id="id511255428C4A43E79601FD1110887011"><enum>(2)</enum><text>by striking
<quote>by any Federal executive agency (as defined in section 6050M(b))</quote>
in subparagraph (A) and inserting <quote>by any governmental entity or any
agency or instrumentality thereof</quote>, and</text>
</paragraph><paragraph id="id05011BE3F28241FF9878BB285DE9AA2B"><enum>(3)</enum><text>by inserting
<quote>classified or confidential contracts, including</quote> after
<quote>services under</quote> in subparagraph (B)(i).</text>
</paragraph></subsection><subsection id="idAB6DA58637D54A82973852E0E29247D6"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to payments
made after December 31, 2012.</text>
</subsection></section><section id="idCEF4B3DDD86E46A4A9628D2993553B8A"><enum>302.</enum><header>Additional
information on returns relating to mortgage interest</header>
<subsection id="id2F73E916D9534A40A3AE22A3CAC9921F"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 6050H(b) is amended by striking
<quote>and</quote> at the end of subparagraph (C), by redesignating
subparagraph (D) as subparagraph (G), and by inserting after subparagraph (C)
the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="idC3AA6E3183874948A0376F7126307E34" style="OLC">
<subparagraph id="id0EFE63AA51A546EBA0EC49F711997F8A"><enum>(D)</enum><text>the unpaid
balance with respect to such mortgage,</text>
</subparagraph><subparagraph id="id2310D18C883E47CDBE335BC62D0C2430"><enum>(E)</enum><text>the address of
the property securing such mortgage, and</text>
</subparagraph><subparagraph commented="no" id="id255DEC78DCDD460991EBB2EF1D871E47"><enum>(F)</enum><text>information with
respect to whether the mortgage is a refinancing that occurred in such calendar
year.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id2CE7F2906453424581612A69D5B40818"><enum>(b)</enum><header>Payee
statements</header><text>Subsection (d) of section 6050H is amended by striking
<quote>and</quote> at the end of paragraph (1), by striking the period at the
end of paragraph (2) and inserting <quote>, and</quote>, and by inserting after
paragraph (2) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id5EE330B39F6840679BB5B686FA642ECA" style="OLC">
<paragraph id="idAC4A78F388B84F67A8E68DEA9AF3D133"><enum>(3)</enum><text>the information
required to be included on the return under subparagraphs (D), (E), and (F) of
subsection
(b)(2).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id39267BC9F50748448E3EFEE166CE11F2"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to returns
and statements the due date for which (determined without regard for
extensions) is after December 31, 2012.</text>
</subsection></section><section commented="no" id="id076812691B484AE793B17169E5D0D8CD"><enum>303.</enum><header>Improved
information reporting on unreported and underreported financial
accounts</header>
<subsection commented="no" id="id242EBCA95ECC43B0A79A7CFFDF551DCF"><enum>(a)</enum><header>Elimination of
minimum interest requirement</header>
<paragraph commented="no" id="idDA244F0B986348DA8D1EA3891579B4F5"><enum>(1)</enum><header>In
general</header><text>Section 6049(a) is amended by striking <quote>aggregating
$10 or more</quote> each place it appears.</text>
</paragraph><paragraph commented="no" id="idE1BC439D92EE49E8A779FD309FA2E2AF"><enum>(2)</enum><header>Conforming
amendments</header><text>Subparagraph (C) of section 6049(d)(5) is
amended—</text>
<subparagraph commented="no" id="id0B0C8F67BDFA42769994B11A50BB68BE"><enum>(A)</enum><text>by striking
<quote>which involves the payment of $10 or more of interest</quote>,
and</text>
</subparagraph><subparagraph commented="no" id="id648CB58FAB2B415F97BE310F27075A00"><enum>(B)</enum><text>by striking
<quote><header-in-text level="subparagraph" style="OLC">in the case of
transactions involving $10 or more</header-in-text></quote> in the
heading.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD6D752C40E3B413EA76DB8EE86D64514"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
returns filed after December 31, 2012.</text>
</paragraph></subsection><subsection commented="no" id="id3805DC2F5C464F4B8063735D606CC75C"><enum>(b)</enum><header>Reporting of
non-Interest bearing deposits</header>
<paragraph commented="no" id="id4BFF58D2DCED43958BB0B70548C9E780"><enum>(1)</enum><header>In
general</header><text>Subpart B of part III of subchapter A of chapter 61 is
amended by inserting after section 6049 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id89B75DF7B68F40319DF7EE978FE0AB9B" style="OLC">
<section commented="no" id="id2AD6C109D23F4CF6A1020DE38F245962"><enum>6049A.</enum><header>Returns
regarding non-interest bearing deposits</header>
<subsection commented="no" id="idB35C614459EC40879A8538783D14B8CA"><enum>(a)</enum><header>Requirement of
reporting</header><text>Every person who holds a reportable deposit during any
calendar year shall make a return according to the forms or regulations
prescribed by the Secretary, setting forth the name and address of the person
for whom such deposit was held.</text>
</subsection><subsection commented="no" id="idD0BABC64C26E4C268F5A4C1E35BA5A83"><enum>(b)</enum><header>Reportable
deposit</header><text>For purposes of this section—</text>
<paragraph commented="no" id="idB7D6A91B6B9E47118ED32F9BAD2DF020"><enum>(1)</enum><header>In
general</header><text>The term <term>reportable deposit</term> means—</text>
<subparagraph commented="no" id="idAA8455C42A9A470881A25724857E3FA9"><enum>(A)</enum><text>any amount on
deposit with—</text>
<clause commented="no" id="id18644AF0770B44B497728CE86E57851C"><enum>(i)</enum><text>a person carrying
on the banking business,</text>
</clause><clause commented="no" id="idB5ABD0414A2F42A99AC703EFD0961949"><enum>(ii)</enum><text>a mutual savings
bank, a savings and loan association, a building and loan association, a
cooperative bank, a homestead association, a credit union, an industrial loan
association or bank, or any similar organization,</text>
</clause><clause commented="no" id="id4B0D9425149E47C7BBF58397D0D615CB"><enum>(iii)</enum><text>a broker (as
defined in section 6045(c)), or</text>
</clause><clause commented="no" id="id53A2279DCE9944DE8759C3482140860F"><enum>(iv)</enum><text>any other person
provided in regulations prescribed by the Secretary, or</text>
</clause></subparagraph><subparagraph commented="no" id="id6EE00F4782B040E1A8B227F9E60D91B8"><enum>(B)</enum><text>to the extent
provided by the Secretary in regulations, any amount held by an insurance
company, an investment company (as defined in section 3 of the Investment
Company Act of 1940), or held in other pooled funds or trusts.</text>
</subparagraph></paragraph><paragraph commented="no" id="id2677734A84E042FF98624907C80D4B1C"><enum>(2)</enum><header>Exceptions</header><text>Such
term shall not include—</text>
<subparagraph commented="no" id="id3C4FAB50F9414C0FA5A1B1E493F68CD0"><enum>(A)</enum><text>any amount with
respect to which a report is made under section 6049,</text>
</subparagraph><subparagraph commented="no" id="id5B6295285C28491CAB914F67EE148267"><enum>(B)</enum><text>any amount on
deposit with or held by a natural person,</text>
</subparagraph><subparagraph commented="no" id="idC1E30921E58945699CB8D9B5442ADDCE"><enum>(C)</enum><text>except to the
extent provided in regulations, any amount—</text>
<clause commented="no" id="id6AD5496D295B49E29CE68365DBB2597A"><enum>(i)</enum><text>held with respect
to a person described in section 6049(b)(4),</text>
</clause><clause commented="no" id="idEE9060E367724F35926C1A11D77419F8"><enum>(ii)</enum><text>with respect to
which section 6049(b)(5) would apply if a payment were made with respect to
such amount, or</text>
</clause><clause commented="no" id="id5B20431C949F46B19ED5E6124B6728B2"><enum>(iii)</enum><text>on deposit with
or held by a person described in section 6049(b)(2)(C), or</text>
</clause></subparagraph><subparagraph commented="no" id="idCBF0A118FF914D138DC88AA6097026E0"><enum>(D)</enum><text>any amount for
which the Secretary determines there is already sufficient reporting.</text>
</subparagraph></paragraph></subsection><subsection id="ID15880f51595a4cfe9b9c89da4756eabd"><enum>(c)</enum><header>Statements To
be furnished to persons with respect to whom information is required</header>
<paragraph id="ID11bf2f7f0d584c138d224edcbaa9c5a2"><enum>(1)</enum><header>In
general</header><text>Every person required to make a return under subsection
(a) shall furnish to each person whose name is required to be set forth in such
return a written statement showing—</text>
<subparagraph id="IDf197ee0faa244e34af861ab69bc4a471"><enum>(A)</enum><text>the name,
address, and phone number of the information contact of the person required to
make such return, and</text>
</subparagraph><subparagraph id="IDc39d3c56124d4fa8a45c15da36b25f78"><enum>(B)</enum><text>the reportable
account with respect to which such return was made.</text>
</subparagraph></paragraph><paragraph id="IDe2f26795be47414d8d88155316eac939"><enum>(2)</enum><header>Time and form
of statement</header><text>The written statement under paragraph (1)—</text>
<subparagraph id="ID34d880c423324f0f90fced96d76e3cb2"><enum>(A)</enum><text>shall be
furnished at a time and in a manner similar to the time and manner that
statements are required to be filed under section 6049(c)(2), and</text>
</subparagraph><subparagraph id="ID83c12dde1b324028900e3677a77494f1"><enum>(B)</enum><text>shall be in such
form as the Secretary may prescribe by regulations.</text>
</subparagraph></paragraph></subsection><subsection id="id6FD726213AF44964ABB39D9CC403E4D9"><enum>(d)</enum><header>Person</header><text>For
purposes of this section, the term <term>person</term>, when referring to the
person for whom a deposit is held, includes any governmental unit and any
agency or instrumentality thereof and any international organization and any
agency or instrumentality
thereof.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDc83b34b2cfba4ceb982716836032f25b"><enum>(2)</enum><header>Assessable
penalties</header>
<subparagraph id="IDf38740ecf2e249f7b0cf573f252b8078"><enum>(A)</enum><header>Failure to file
return</header><text>Subparagraph (B) of section 6724(d)(1) is amended by
striking <quote>or</quote> at the end of clause (xxii), by striking
<quote>and</quote> at the end of clause (xxiv) and inserting <quote>or</quote>,
and by inserting after clause (xxiv) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id142633D1599A41DAB8222F3A54D07001" style="OLC">
<clause id="IDf6d1826b11f14eccbd5f428d4dfe8488"><enum>(xxvi)</enum><text>section 6049A
(relating to returns regarding non-interest bearing deposits),
and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="IDca3e92ddfb7c459296ab7840aca5f310"><enum>(B)</enum><header>Failure to file
payee statement</header><text>Paragraph (2) of section 6724(d) is amended by
striking <quote>or</quote> at the end of subparagraph (GG), by striking the
period at the end of subparagraph (HH) and inserting <quote>, or</quote> and by
inserting after subparagraph (HH) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idB424700DB4984649B2B81CD9DF32EBFA" style="OLC">
<subparagraph id="ID39e4c4badc094d6ca602bfbd0762b5d7"><enum>(II)</enum><text>section 6049A(c)
(relating to returns regarding non-interest bearing
deposits).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" id="id7D5D637B9A5B4314882B347026F98D28"><enum>(3)</enum><header>Clerical
amendment</header><text>The table of section for subpart B of part III of
subchapter A of chapter 61 is amended by inserting after the item relating to
section 6049 the following new item:</text>
<quoted-block id="idec980d19-7250-420a-a7fe-8e527b8d237f" style="OLC">
<toc>
<toc-entry idref="id2AD6C109D23F4CF6A1020DE38F245962" level="section">Sec. 6049A. Returns regarding non-interest bearing
deposits.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id4020725C2F3E4E44AC3BCAC5076A8AC9"><enum>(4)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
returns filed after December 31, 2012.</text>
</paragraph></subsection></section><enum>IV</enum><header>Payments to
certain contractors</header>
<section id="id51240D76531B46DCA0E371B1C53CF1D6"><enum>401.</enum><header>Requirements
for withholding with respect to payments to contractors</header>
<subsection id="idC5A3C00212B040D49D6F86C995E1033D"><enum>(a)</enum><header>In
general</header>
<paragraph id="idACE21996CF6542458FC4500439173891"><enum>(1)</enum><header>Requirement</header><text>Paragraph
(1) of section 3406(a) is amended by striking <quote>or</quote> at the end of
subparagraph (C), by inserting <quote>or</quote> at the end of subparagraph
(D), and by inserting after subparagraph (D) the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id2F6C15A9153A4F788315E04665D5DC5A" style="OLC">
<subparagraph id="idF4A9EF32A5724C62B1FB234271648AF5"><enum>(E)</enum><text>the Secretary has
not provided verification to the payor that the TIN furnished by the payee is
correct,</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idD2BF47EE8CE8433CA576DF3040A9BA46"><enum>(2)</enum><header>Application
only to certain transactions</header><text>Subsection (a) of section 3406 is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id80C33818AF404853A165F2CB699374A6" style="OLC">
<paragraph id="id64212C279BB642F588D628B779B2871B"><enum>(3)</enum><header>Subparagraph
<enum-in-header>(E)</enum-in-header> of paragraph
<enum-in-header>(1)</enum-in-header> applies only to certain other reportable
payments</header><text>Subparagraph (E) of paragraph (1) shall only apply to
other reportable payments described in subparagraph (B) of subsection
(b)(3).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id672A4C239E964AB7BF431A452F937BAA"><enum>(3)</enum><header>Period of
withholding</header>
<subparagraph id="idB7A10D30A0FD47F49C8036E11AC318FA"><enum>(A)</enum><header>In
general</header><text>Section 3406(e) is amended by redesignating paragraph (5)
as paragraph (6) and by inserting after paragraph (4) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id66DE959F27B442849FD1E25B4DF6ED71" style="OLC">
<paragraph id="idDDB3F83B42554EA887622D55D5AD436C"><enum>(5)</enum><header>No matching
TIN</header><text>In any case in which the Secretary has not provided
verification to the payor that the TIN furnished by the payee is correct
pursuant to subsection (a)(1)(E), subsection (a) shall apply to such payment
and any subsequent such payment made by the payor after the date such TIN was
submitted to the Secretary for verification until the payee furnishes another
TIN in the manner required and such TIN is verified by the Secretary as
correct.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="idAA5C176ADBC648A2B4E3C13E56F8618C"><enum>(B)</enum><header>Conforming
amendment</header><text>Paragraph (2) of section 3406(e) is amended by
inserting <quote>pursuant to subsection (a)(1)(B),</quote> after <quote>is
incorrect</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="idE98C40EBD4BD47C59D2BA8F8CDDBFD89"><enum>(b)</enum><header>Voluntary
withholding</header><text>Section 3402(p) is amended by redesignating paragraph
(3) as paragraph (4) and by inserting after paragraph (2) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idC55A5818F1EC4C1DA4DDCE9ED314800C" style="OLC">
<paragraph id="idC9BE0D0085D7431BA7BC8A3EF361CBCA"><enum>(3)</enum><header>Certain
payments to contractors</header>
<subparagraph id="id08D8CFF48F9840D5AB1018B110C92E43"><enum>(A)</enum><header>In
general</header><text>If, at the time of any specified payment to any person, a
request by such person is in effect that such payment be subject to withholding
under this chapter, the person making such payment shall deduct and withhold
from such payment an amount equal to the rate in effect under such
request.</text>
</subparagraph><subparagraph id="idC9FE9C1366DE4F55ADBD12F65374B59C"><enum>(B)</enum><header>Specified
payment</header><text>For purposes of this paragraph, the term <term>specified
payment</term> means any payment described in subparagraph (A) or (B) of
section 3406(b)(3).</text>
</subparagraph><subparagraph id="idF3145A65D6B442D897986AF7A9B557F5"><enum>(C)</enum><header>Request</header><text>A
request to subject a specified payment to withholding shall be made at such
time and in such manner as the Secretary may by regulations prescribe, and
shall specify a uniform percentage of withholding which is equal to any rate at
which tax is imposed under subsection (a), (b), (c), or (d) of section 1, as
appropriate,</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id8C9971721AE94950ADDC75CEB0F4621D"><enum>(c)</enum><header>Effective
date</header>
<paragraph id="id1B27740C24074BF3B0D6EEA26A8C3A40"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to payments made after December 31, 2012.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idE3B835AFF18A40DFAFCBC8E0C9F91978"><enum>(2)</enum><header>Certification</header><text>The
amendments made by subsection (a) shall not take effect before the date on
which the Secretary of the Treasury has certified that there is a system in
place to provide notifications in an accurate and timely manner regarding the
verification of taxpayer identification numbers submitted pursuant to section
3406(a)(1)(E) of the Internal Revenue Code of 1986 (as added by subsection
(a)).</text>
</paragraph></subsection></section><section id="id82A75A0B825E458B80B30093DA02FFE6" section-type="subsequent-section"><enum>402.</enum><header>Continuous levy on
payments to Medicaid providers and suppliers</header>
<subsection id="id28D7788156F7441089067C55707C350F"><enum>(a)</enum><header>In
general</header><text>Section 6331(h)(2) is amended by striking
<quote>and</quote> at the end of subparagraph (B), by striking the period at
the end of subparagraph (C) and inserting <quote>, and</quote>, and by adding
at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id71F6C7EE1BC44232A6EAC7A41E809C5C" style="OLC">
<subparagraph id="id249ED9890CB4488EB629A4490E31B64A"><enum>(D)</enum><text>any payment to
any Medicaid provider or supplier under a State plan under title XIX of the
Social Security
Act.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id2A0ADE02E6E64B9092126EC7E7BD5CAC"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to levies
issued after December 31, 2012.</text>
</subsection></section><section id="idDDCB7B6F69934B54BD06B87C9D14C6B8"><enum>403.</enum><header>Levy authority
for payments to Medicare providers with delinquent tax debt</header>
<subsection id="id98C7C75FEAE34F77B515D6F5C4F8C52B"><enum>(a)</enum><header>In
general</header><text>Section 6331(h)(2), as amended by this Act, is amended by
striking <quote>and</quote> at the end of subparagraph (C), by striking the
period at the end of subparagraph (D) and inserting <quote>, and</quote>, and
by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idDBE00633F6A241D8876D3BF126E482B3" style="OLC">
<subparagraph id="id6E56B1DA85B84C09A7BAA4E6DC5F4BEB"><enum>(E)</enum><text>any payment to
any Medicare provider or supplier under title XVIII of the Social Security
Act.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id895C3B701CAA48E2B39F853280F3AEB4"><enum>(b)</enum><header>100 percent
levy</header><text>Section 6331(h)(3) is amended by inserting <quote>or to a
provider or supplier described in paragraph (2)(E)</quote> after
<quote>Government</quote>.</text>
</subsection><subsection id="idC0CB086E5BF14ECBA45B61FB0BEAC7A5"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to payments
after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="H3BFC40FD871A4BF48EFD6CE4E82DCE17" section-type="subsequent-section"><enum>404.</enum><header display-inline="yes-display-inline">100 percent levy for payments to Federal
vendors relating to property</header>
<subsection commented="no" display-inline="no-display-inline" id="H36DA5479FF754A0A870AEFB456C1454B"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/6331">Section 6331(h)(3)</external-xref> is amended by
striking <quote>goods or services</quote> and inserting <quote>property, goods,
or services</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA4ED4C7095674E34A46F22B030F4C81C"><enum>(b)</enum><header display-inline="yes-display-inline">Effective
date</header><text display-inline="yes-display-inline">The amendment made by
this section shall apply to levies issued after the date of the enactment of
this Act.</text>
</subsection></section><enum>V</enum><header>Improved tax
administration and coordination</header>
<section id="id70EEDE3B0DC842E4A7DE78D07398E308"><enum>501.</enum><header>Requirement
for prisons located in U.S. to provide information for tax
administration</header>
<subsection id="idB07650C10279404DA64477E861D057DD"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subchapter B of
chapter 61 is amended by redesignating section 6116 as section 6117 and by
inserting after section 6115 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id1616B6AC81B8494AAA14D3F57F9C31EC" style="OLC">
<section id="idB8AF27BDE92C4A638B46F4FF8F2329A5"><enum>6116.</enum><header>Requirement
for prisons located in United States to provide information for tax
administration</header>
<subsection id="id440750C8C1AA40DF977E4A85DA634DF3"><enum>(a)</enum><header>In
general</header><text>Not later than September 15, 2011, and annually
thereafter, the head of the Federal Bureau of Prisons and the head of any State
agency charged with the responsibility for administration of prisons shall
provide to the Secretary in electronic format a list with the information
described in subsection (b) of all the inmates incarcerated within the prison
system for any part of the prior 2 calendar years or the current calendar year
through August 31.</text>
</subsection><subsection id="idF0C06C7C0AB940AEB6F06B82A44D7EEF"><enum>(b)</enum><header>Information</header><text>The
information with respect to each inmate is—</text>
<paragraph id="id286F313C2D964E0BA7F25A3F9FABC6B0"><enum>(1)</enum><text>first, middle,
and last name,</text>
</paragraph><paragraph id="id7EAEBE0638774F63A4B6CBA538573439"><enum>(2)</enum><text>date of
birth,</text>
</paragraph><paragraph id="id15C988F99B504FE5B441887A1D94F92E"><enum>(3)</enum><text>institution of
current incarceration or, for released inmates, most recent
incarceration,</text>
</paragraph><paragraph id="idBF5C033355F047C0831829CC7271CB04"><enum>(4)</enum><text>prison assigned
inmate number,</text>
</paragraph><paragraph id="id83A9FBAAAA2C43DDA811E825EF2A9A07"><enum>(5)</enum><text>the date of
incarceration,</text>
</paragraph><paragraph id="idB604904BBF67431EA90C50B25CA72A55"><enum>(6)</enum><text>the date of
release or anticipated date of release,</text>
</paragraph><paragraph id="id95A5FC0442D34734BE0AA5207B3D1840"><enum>(7)</enum><text>the date of work
release,</text>
</paragraph><paragraph id="id1927A71A855140E0BE5B60C153532116"><enum>(8)</enum><text>taxpayer
identification number and whether the prison has verified such number,</text>
</paragraph><paragraph id="idAD175D1118AB4A8BA14D0B48FF92D2BE"><enum>(9)</enum><text>last known
address, and</text>
</paragraph><paragraph id="id71466AF0EA5041E492FE11066327867D"><enum>(10)</enum><text>any additional
information as the Secretary may provide.</text>
</paragraph></subsection><subsection id="idFE1FEDC796504D6D93C86738373DCC28"><enum>(c)</enum><header>Format</header><text>The
Secretary shall determine the electronic format of the information described in
subsection
(b).</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idD20CC32AECD74DFB85E8A179C0952F50"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for such subchapter is amended by
striking the item relating to section 6116 and by adding at the end the
following new items:</text>
<quoted-block display-inline="no-display-inline" id="id56980EDDC2FF437CA0F1F62A749DC4DE" style="OLC">
<toc>
<toc-entry idref="idB8AF27BDE92C4A638B46F4FF8F2329A5" level="section">Sec. 6116. Requirement for prisons located in United States to
provide information for tax administration.</toc-entry>
<toc-entry bold="off" level="section">Sec. 6117. Cross
reference.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="idBC35E2F030324F39AA630A0F512C54DB"><enum>502.</enum><header>Facilitation
of tax compliance with Indian tribal governments</header>
<subsection id="id414A5536C9BE4AA2B579D09A39B714C3"><enum>(a)</enum><header>In
general</header><text>Paragraph (5) of section 6103(b) is amended—</text>
<paragraph id="idA760E3770DE04E1CB4CE4CC68873C358"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of clause (ii)(III),</text>
</paragraph><paragraph id="id1F77758232AE437AB009B15151A833E9"><enum>(2)</enum><text>by striking the
period at the end of clause (iii)(II) and inserting <quote>, and</quote>,
and</text>
</paragraph><paragraph id="id180FD7EC7A324F32BABF4AB03E73410A"><enum>(3)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block act-name="" id="id97FB439E0EC8467095B481B8A819F819" style="OLC">
<clause id="id90186FB7F1A344B0BCCF20FD4B6D36E4"><enum>(iv)</enum><text>for purposes of
subsections (d)(1) and (p), any Indian tribal government which imposes a tax on
any income, wages, or other activity or transaction which is also taxed under
any chapter of this title described in such
subsection.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idC236E50269E04D8F8939293C37363000"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
disclosures made after the date of the enactment of this Act.</text>
</subsection></section><section id="id9E2A6E05E4D74A68B245DEF2B615A842"><enum>503.</enum><header>Improvement in
access to information in the National Directory of New Hires for tax
administration purposes</header>
<subsection commented="no" display-inline="no-display-inline" id="idBB99F90E9867480A9F429E9122B13D00"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Paragraph (3) of section 453(i) of the
<act-name parsable-cite="SSA">Social Security Act</act-name> (42 U.S.C. 653(i))
is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id98A51F652B8848E0802329065A0DFEB4" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id3D2822A463634119AAAF701B13E0D9D0"><enum>(3)</enum><header display-inline="yes-display-inline">Administration of Federal tax
laws</header><text display-inline="yes-display-inline">The Secretary of the
Treasury shall have access to the information in the National Directory of New
Hires for purposes of administering the Internal Revenue Code of
1986.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idDCDAF1E343994AD59A6611099E21AFB7"><enum>(b)</enum><header display-inline="yes-display-inline">Effective
date</header><text display-inline="yes-display-inline">The amendment made by
this section shall take effect on the date of the enactment of this Act.</text>
</subsection></section><section id="id6FE1E990D33F47168B3EB765E697BD1D"><enum>504.</enum><header>Clarification
of taxpayer privacy by improvement of investigative disclosure statute</header>
<subsection id="idB4D82F63FF8A4FF38BED6DAB94FAF2D8"><enum>(a)</enum><header>In
general</header><text>Paragraph (6) of section 6103(k) is amended—</text>
<paragraph id="idAC663FE0DDC14068804E02634EAC196A"><enum>(1)</enum><text>by inserting
<quote>(A) <header-in-text level="subparagraph" style="OLC">In
general</header-in-text>.—</quote> before <quote>An internal revenue
officer</quote>, and</text>
</paragraph><paragraph id="idC16C24698C04470DA7EC43426509B194"><enum>(2)</enum><text>by adding at the
end the following new subparagraph:</text>
<quoted-block act-name="" id="idE615CD46A1204C7C8A2EF02BAFAE8CFC" style="OLC">
<subparagraph id="id1C4CFFBEF4944FF3B0819C3A243BC4CA" indent="up1"><enum>(B)</enum><header>Identity
disclosure</header><text>Nothing in this section shall be construed to prohibit
agents of the Department of the Treasury from identifying themselves, their
organizational affiliation, the identity of the subject of an investigation,
and the nature of such investigation when contacting third parties either in
writing or
otherwise.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id1EBF2A2CB3BA483FBAFD2BFA0C4E10CB"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
disclosures after the date of the enactment of this Act.</text>
</subsection></section><section id="ID7527D98F227F4000854F1F50EA51B7A5"><enum>505.</enum><header>Authorization
for Financial Management Service retention of transaction fees from levied
amounts</header><text display-inline="no-display-inline">Notwithstanding any
other provision of law, the Financial Management Service may charge the
Internal Revenue Service, and the Internal Revenue Service may pay the
Financial Management Service, a fee sufficient to cover the full cost of
implementing a continuous levy program under subsection (h) of section 6331 of
the Internal Revenue Code of 1986. Any such fee shall be based on actual levies
made and shall be collected by the Financial Management Service by the
retention of a portion of amounts collected by levy pursuant to that
subsection. Amounts received by the Financial Management Service as fees under
that subsection shall be deposited into the account of the Department of the
Treasury under section 3711(g)(7) of title 31, United States Code, and shall be
collected and accounted for in accordance with the provisions of that
section.</text>
</section><enum>VI</enum><header>Clarification of
penalties and liabilities</header>
<section id="id5EDBD9DF4C4D4853B314A166AD710A0F"><enum>601.</enum><header>Clarification
of penalty for failure to comply with electronic filing requirements</header>
<subsection commented="no" display-inline="no-display-inline" id="idA1F08B37EAAE42D797B4313B6F54E255"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Part I of subchapter B of chapter 68 is
amended by inserting after section 6720C the following new section:</text>
<quoted-block display-inline="no-display-inline" id="idDA75553BABBF49D6A4EABB9A9987DEBB" style="OLC">
<section commented="no" display-inline="no-display-inline" id="id26BE6D15BAAA45EBAF29C918A5CCC0D0" section-type="subsequent-section"><enum>6720D.</enum><header display-inline="yes-display-inline">Failure to file certain returns
electronically</header>
<subsection commented="no" display-inline="no-display-inline" id="id4D56D89587854ECB952A1393D4E6521F"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Any person who fails to file a return
described in section 6651 or 6652(c)(1) in electronic form as required under
section 6011(e) shall pay a penalty equal to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idE1A57FFCD5C5486D804AD6A8BC19B92C"><enum>(1)</enum><text>$5,000, in the
case of an organization required to file the return described in section
6033(a)(1), and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD6030943A51844839FB6FF3CFC6C8D73"><enum>(2)</enum><text display-inline="yes-display-inline">$25,000, in any other case.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD310D37C93B14C798371CF37D5A62745"><enum>(b)</enum><header>No penalty for
additional failures</header><text>No person shall pay more than one penalty
under this section in a taxable year.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idF56A942C48244C18A41810EBB5279410"><enum>(c)</enum><header>Exception where
no return filed</header><text display-inline="yes-display-inline">If a penalty
is imposed under section 6651(a)(1) or 6652(c)(1) with respect any failure, the
penalty under subsection (a) shall not apply.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id129080B1B679438C8BE79CD5C7ADA1D8"><enum>(d)</enum><header>Deficiency
procedures not To apply</header><text display-inline="yes-display-inline">Subchapter B of chapter 63 shall not apply
in respect of the assessment or collection of any penalty imposed by this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id44E3A2AA98BC4EC7B6CE3D1039A009B4"><enum>(b)</enum><header display-inline="yes-display-inline">Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for part I of
subchapter B of chapter 68 is amended by inserting after the item relating to
section 6720C the following new item:</text>
<quoted-block display-inline="no-display-inline" id="idA3623CA97C104BE1A196C4DEB646C0D0" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 6720D. Failure to file
certain returns
electronically.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id365C5ADC0C6F4FEFA33608BDCD8BD08E"><enum>(c)</enum><header display-inline="yes-display-inline">Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to returns required to be filed on or after January 1,
2013.</text>
</subsection></section><section id="id0BE34D1D06E04666B5F0EBAB95AC0ADF"><enum>602.</enum><header>Increase in
penalty on paid preparers who fail to comply with earned income tax credit due
diligence requirements</header>
<subsection id="id1B677516115646A6856AEAD25F87A885"><enum>(a)</enum><header>In
general</header><text>Section 6695(g) is amended by striking
<quote>$100</quote> and inserting <quote>$500</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idEA68105267C948E587387DE62F25BF5D"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendment made by
this section shall apply to returns required to be filed after December 31,
2012.</text>
</subsection></section><section id="idA8206A6610894549AA04EC97986980F6"><enum>603.</enum><header>Increase in
penalties for repeated and willful failure to file tax return</header>
<subsection commented="no" display-inline="no-display-inline" id="idE2B4AA7D5CEC427891E9B40555774C3B"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Section 7203 is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id2A9917291335403E8CCE724819904203"><enum>(1)</enum><text display-inline="yes-display-inline">in the first sentence, by striking
<quote>Any person</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id5098554B2D0445A39310930FBEBCE144" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="idD14DABE2D9A84C66A9925586D6993B3D"><enum>(a)</enum><header display-inline="yes-display-inline">In General</header><text display-inline="yes-display-inline">Any
person</text>
</subsection><after-quoted-block>,
</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0E5B77C5A4934CBF91841C1A0EA0D86B"><enum>(2)</enum><text display-inline="yes-display-inline">in the third sentence, by striking
<quote>section</quote> and inserting <quote>subsection</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id1377E95754894DB5B4AAA1111D9ABF1C"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id164949E85A804C74A73996A92CCCC6FA" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id11B3E723B10A485EAD2D7444F14B3B44"><enum>(b)</enum><header display-inline="yes-display-inline">Aggravated Failure To File</header>
<paragraph commented="no" display-inline="no-display-inline" id="id78915C9888244ACB9EA745D613E6A44A"><enum>(1)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">In the case of any failure described in
paragraph (2), the first sentence of subsection (a) shall be applied by
substituting—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id037281CB78C94DBC985F5BA90C6667C0"><enum>(A)</enum><text display-inline="yes-display-inline"><quote>felony</quote> for
<quote>misdemeanor</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idBD568C61CF4C46839C71F8F5135B8742"><enum>(B)</enum><text display-inline="yes-display-inline"><quote>$250,000 ($500,000</quote> for
<quote>$25,000 ($100,000</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6A20C9E162B749B4A8B2E9AB9FBD89C4"><enum>(C)</enum><text display-inline="yes-display-inline"><quote>5 years</quote> for <quote>1
year</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id7F2AF4B97ED14E25BBA46055A57A8C6A"><enum>(2)</enum><header display-inline="yes-display-inline">Failure described</header><text display-inline="yes-display-inline">A failure described in this paragraph
is—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id59B9E563663844B780C33BC374654ADA"><enum>(A)</enum><text display-inline="yes-display-inline">a failure to make a return described in
subsection (a) for any 3 taxable years occurring during any period of 5
consecutive taxable years if the aggregate tax liability for such period is not
less than $50,000, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id95E539F8F04946F99E7786B0DF2E3F82"><enum>(B)</enum><text display-inline="yes-display-inline">a failure to make a return by any person
who has income attributable to conduct punishable as a felony under State or
Federal law, where such income gives rise to a requirement to make a
return.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idEFF6A405E3374DC58698927DFFE2FF86"><enum>(b)</enum><header display-inline="yes-display-inline">Penalty may be applied in addition to other
penalties</header><text display-inline="yes-display-inline">Section 7204 is
amended by striking <quote>the penalty provided in section 6674</quote> and
inserting <quote>the penalties provided in sections 6674 and
7203(b)</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id9EB4B78F71E740C7B2ABF7C176D39C95"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to returns required to be filed after December 31,
2012.</text>
</subsection></section><section id="id45FEA5ABC5D449B9AB60E5783144A0A4"><enum>604.</enum><header>Clarification
of employee leasing companies liability for clients' Federal employment
taxes</header><text display-inline="no-display-inline">With respect to
employment tax returns required to be filed with respect to wages paid on or
after January 1, 2013, the Secretary of the Treasury shall issue regulations
establishing—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idA02FB3CC203B4958B75660D86FC0BFBB"><enum>(1)</enum><text display-inline="yes-display-inline">standards for holding employee leasing
companies jointly and severally liable with their clients for Federal
employment taxes under chapters 21, 22, 23, and 24 of the Internal Revenue Code
of 1986, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id94D58616622A4933963448A902535FE2"><enum>(2)</enum><text display-inline="yes-display-inline">standards for holding such companies solely
liable for such taxes.</text>
</paragraph></section><section id="idAEC0C8838CEE42948FB84A79A721A00D"><enum>605.</enum><header>Extension of
statute of limitations where State or local adjustment affects Federal tax
liability</header>
<subsection id="id89F9299A3D9740D2A7D9A7A48C684671"><enum>(a)</enum><header>In
general</header><text>Subsection (c) of section 6501 is amended by adding at
the end the following new paragraph:</text>
<quoted-block act-name="" id="idDFFA0BC51F7E4E4197BDBDD034B1B23C" style="OLC">
<paragraph id="idEC710F6CDFE141088EFE53B6430BED31"><enum>(11)</enum><header>State and
local tax adjustments affecting Federal tax liability</header><text>If any
return, amended return, or other adjustment with respect to State or local
taxes results in an increase of Federal tax liability for a taxable year (as
reported by the taxpayer in an amended Federal return or as determined by the
Secretary on the basis of information sharing with State or local revenue
authorities), the period for the assessment of such increase shall not expire
until the later of—</text>
<subparagraph id="idA3B07078AA3F47099A6AEADDB6A76CA7"><enum>(A)</enum><text>1 year after the
date the taxpayer first files an amended Federal return reflecting such
increase, or</text>
</subparagraph><subparagraph id="id02BB2004FBEA49E98C1FC6CFA9AA9F2B"><enum>(B)</enum><text>2 years after the
date the Secretary first receives information relating to such increase from
State or local revenue authorities.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Any
further amended returns or information sharing with respect to such increase
shall not further extend the period specified in the preceding
sentence.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id132F8EFCE87D48ADAE215C9463A0811D"><enum>(b)</enum><header>Credits and
refunds</header>
<paragraph id="id40AA401F76DD403B910671B628FFF938"><enum>(1)</enum><header>In
general</header><text>Subsection (b) of section 6511 is amended by adding at
the end the following new paragraph:</text>
<quoted-block act-name="" id="id90FDA1263DF844149BBF7C750EDB16A2" style="OLC">
<paragraph id="id6859CC90EB8A4651A52C0FF3D2D42619"><enum>(3)</enum><header>State and local
tax adjustments affecting Federal tax liability</header><text>If any return,
amended return, or other adjustment with respect to State or local taxes
results in an increase of Federal tax liability for a taxable year (as reported
by the taxpayer in an amended Federal return or as determined by the Secretary
on the basis of information sharing with State or local revenue authorities),
the period during which the taxpayer may claim a credit or refund offsetting
such increase shall not expire until the later of—</text>
<subparagraph id="id8DF22A53C1B74865AAF98E3E00DA8CB9"><enum>(A)</enum><text>1 year after the
date the taxpayer first files an amended Federal return reflecting such
increase and stipulating that such amendment relates to an adjustment with
respect to State or local tax, or</text>
</subparagraph><subparagraph id="id15163A47B4E04281A5F86C1D6DFB64A4"><enum>(B)</enum><text>2 years after the
date the Secretary first receives information relating to such increase from
State or local revenue authorities.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Any
further amended returns or information sharing with respect to such increase
shall not further extend the period specified in the preceding
sentence.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idF3313D2EEAA944AEACE0F588FF17BBC8"><enum>(2)</enum><header>Conforming
amendment</header><text>Paragraph (1) of section 6511(b) is amended by striking
<quote>No credit</quote> and inserting <quote>Except as provided in paragraph
(3), no credit</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idBFBA83E887AB4C2A86CACB085379B7E9"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to returns
the due date for which is after December 31, 2012.</text>
</subsection></section><section id="ID5B4247CE6CE34FFEA5DBA5AA05E55D40"><enum>606.</enum><header>Elimination of
restriction on offsetting refunds from former residents</header>
<subsection id="id5E872AD13A8C4A93AFD1CAD274722BD3"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 6402(e)
(relating to collection of past-due, legally enforceable State income tax
obligations) is amended by striking paragraph (2) and by redesignating
paragraphs (3), (4), (5), (6), and (7) as paragraphs (2), (3), (4), (5), and
(6), respectively.</text>
</subsection><subsection id="id38545D51F99E4B59A3EA88DB9CB36F0D"><enum>(b)</enum><header>Elimination of
10-Year restriction</header><text display-inline="yes-display-inline">Subparagraph (B) of section 6402(e)(5) is
amended—</text>
<paragraph id="id7F2FD53AB1E44D68908BC33AA89AA23F"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>, and which has not been
delinquent for more than 10 years</quote>, and</text>
</paragraph><paragraph id="id3F78FCB62A1142DDBEDEC2F4BC50A4FE"><enum>(2)</enum><text>by inserting
<quote>and</quote> after <quote>not collected,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idE677F5E59FCE4CAA8B962DCF2621934C"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to refunds
payable for taxable years ending after the date of the enactment of this
Act.</text>
</subsection></section><enum>VII</enum><header>Understanding
the tax gap</header>
<section id="idCAB7B0183EDC41BEB6BB155D210DD443"><enum>701.</enum><header>Tax gap
strategy and reports</header>
<subsection id="IDe7e519a889db4c80bdcaaf3bd5fdfa65"><enum>(a)</enum><header>Comprehensive
strategy for reducing the tax gap</header>
<paragraph id="idC6E940593349418AA74BC22F9B40FB51"><enum>(1)</enum><header>In
general</header><text>The Secretary of the Treasury shall submit to Congress
comprehensive and detailed reports on a strategy for reducing the tax gap. Such
reports shall include—</text>
<subparagraph id="idFB9AB7BD82B94E79B30077199989787A"><enum>(A)</enum><text>a detailed
assessment of the major sources and causes of the tax gap, and</text>
</subparagraph><subparagraph id="id7917967E16A24B019E13A79371E8F3FA"><enum>(B)</enum><text>a goal for
reducing the tax gap and components of the tax gap.</text>
</subparagraph></paragraph><paragraph id="id35B750C8166640598328FC8E66A730D0"><enum>(2)</enum><header>Time for
submitting reports</header>
<subparagraph id="id6EA24F5CBBFE4D48AECAC77F05B258C5"><enum>(A)</enum><header>Initial
report</header><text>The first report required under paragraph (1) shall be
submitted not later than December 31, 2012.</text>
</subparagraph><subparagraph id="id5BA0291516C6463FBBD28B7C16B1F107"><enum>(B)</enum><header>Subsequent
reports</header><text>The Secretary of the Treasury shall submit additional
reports under paragraph (1) not later than 5 years after the date on which the
most recent preceding report was submitted under paragraph (1).</text>
</subparagraph></paragraph><paragraph id="idFE8A187EA2ED488A98B4726C99C25031"><enum>(3)</enum><header>Use of
data</header><text>Any report submitted under this subsection shall, wherever
possible, be based on empirical data, agency-conducted tests, and quantitative
evidence.</text>
</paragraph></subsection><subsection id="IDd5a170f5d9794b9ba4b9b99b92fcac2c"><enum>(b)</enum><header>Annual tax gap
report</header>
<paragraph id="id01BDB16D56FA499182FE86E1AA16A0BA"><enum>(1)</enum><header>In
general</header><text>Not later than December 31 of each year beginning after
2012, the Secretary of the Treasury shall submit to Congress a report on the
most recent estimates of the tax gap.</text>
</paragraph><paragraph id="idBA2736AAC41F4865A60EF9A239941999"><enum>(2)</enum><header>Matters
included</header><text>The report submitted under paragraph (1) shall
include—</text>
<subparagraph id="id3CA4CA3C364848488E280E1042ADE08F"><enum>(A)</enum><text>an update on any
studies and pilot projects of the Internal Revenue Service associated with
specific areas of the tax gap,</text>
</subparagraph><subparagraph id="id4F5316D9845E4FF3AA61A6C3B66925EF"><enum>(B)</enum><text>an assessment of
how the Internal Revenue Service has aligned its enforcement and compliance
efforts with the goals and recommendations set forth in the most recent report
submitted under subsection (a),</text>
</subparagraph><subparagraph id="id08D193E640584D8D9955E968C7580C8B"><enum>(C)</enum><text>a detailed
assessment of how effectively the Internal Revenue Service is making full use
of the collected information to determine the causes of, and potential
solutions for, the tax gap,</text>
</subparagraph><subparagraph id="idE6EEE05225C240CDAE5E04E188DE4A5C"><enum>(D)</enum><text>a detailed
assessment of the benefits gained from the tax gap estimation and analysis
efforts, including service and enforcement improvements, regulatory changes,
and statutory changes resulting from those efforts, and</text>
</subparagraph><subparagraph id="idB673EB97DEC84A33A818C712721DFD33"><enum>(E)</enum><text>an update and
detailed assessment of enforcement initiatives of the Internal Revenue Service,
including information sharing between the Internal Revenue Service and State
revenue agencies.</text>
</subparagraph></paragraph></subsection><subsection id="id5DA529A16A024D79833714D7E36FCE5C"><enum>(c)</enum><header>Tax
gap</header><text>For purposes of this section, the term <term>tax gap</term>
means, with respect to any tax year, the difference between—</text>
<paragraph id="id5593BD1E09F94A4094215A2EA7C5AA7F"><enum>(1)</enum><text>the amount of
taxes owed by taxpayers under the Internal Revenue Code of 1986 for such tax
year, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idEBE4EBFDDC2948CF8DA3D2ED5EB01A51"><enum>(2)</enum><text>the amount of
revenue paid voluntarily and timely by taxpayers under such Code for such tax
year.</text>
</paragraph></subsection></section><section id="id7C61B14B3318408B902AFFBF5E1D0CC2"><enum>702.</enum><header>Studies on the
impact of tax gap legislation</header>
<subsection id="ID1caf4e230a824c8a89f5cd8383aee5c9"><enum>(a)</enum><header>Study of return
on investment</header>
<paragraph id="id048254830AC046E481AF4D2A7F7BAFDA"><enum>(1)</enum><header>Matters
studied</header>
<subparagraph id="id199EE8B106624F6A92E820E0981B8C7F"><enum>(A)</enum><header>In
general</header><text>The Secretary of the Treasury shall conduct a study
on—</text>
<clause id="idAD066A865FE04296ACDAE31B2D1C0557"><enum>(i)</enum><text>the
revenue increases, and</text>
</clause><clause id="id2ACBB57AFC6C4F499DE361EABDD42BB8"><enum>(ii)</enum><text>the
costs,</text>
</clause><continuation-text continuation-text-level="subparagraph">with
respect to tax gap legislation.</continuation-text></subparagraph><subparagraph id="idA524B6D5CF744868B16AF799F8CCF803"><enum>(B)</enum><header>Tax gap
legislation</header><text>For purposes of this section, the term <term>tax gap
legislation</term> means the provisions of, and amendments made by—</text>
<clause id="idCD76C6C7CEBC4722B647D01F523E025A"><enum>(i)</enum><text>this Act,</text>
</clause><clause id="id07C58E3445234E67A47D49935B917FF7"><enum>(ii)</enum><text>section 403 of
the Energy Improvement and Extension Act of 2008 (relating to broker reporting
of customer's basis in securities transactions),</text>
</clause><clause id="id86A869CE65F2447BA5C7F348F71B5FDF"><enum>(iii)</enum><text>section 3091 of
the Housing Assistance Tax Act of 2008 (relating to returns relating to
payments made in settlement of payment card and third party network
transactions), and</text>
</clause><clause id="idCD451DBAC744400CB7C5C1370F674AAE"><enum>(iv)</enum><text>such other Acts,
as determined appropriate by the Secretary of the Treasury.</text>
</clause></subparagraph></paragraph><paragraph id="id7B0A4A584C46406E99E80628D8F0DD65"><enum>(2)</enum><header>Revenue
increases</header><text>The revenue increases considered in the study conducted
under paragraph (1) shall include—</text>
<subparagraph id="id02E427D0A086437B96639AC0F4CD7E3E"><enum>(A)</enum><text>revenue collected
from enforcement efforts,</text>
</subparagraph><subparagraph id="id77E0B30658384D8182360C815D0FAF77"><enum>(B)</enum><text>revenue increases
from voluntary compliance by taxpayers in response to tax gap legislation
(including cases in which the Internal Revenue Service has not yet effectively
or fully implemented a data matching system), and</text>
</subparagraph><subparagraph id="id727BCABFD0D547E0AAFD5FE1F7FE4F57"><enum>(C)</enum><text>any other
revenue, administrative, or other cost savings to the Government and to
taxpayers.</text>
</subparagraph></paragraph><paragraph id="idA6D490C193B447CAA678244CF97177B7"><enum>(3)</enum><header>Costs</header><text>The
costs considered in this study conducted under paragraph (1) shall
include—</text>
<subparagraph id="id32F5E10C25CF4043BE22B799F56F668A"><enum>(A)</enum><text>administrative
and other costs of the Internal Revenue Service,</text>
</subparagraph><subparagraph id="idC44289D6C4464A34BD7F1F97EB9D644F"><enum>(B)</enum><text>compliance costs
to taxpayers, and</text>
</subparagraph><subparagraph id="id9BCDBAAF2A9B4A5BB3E8D9DB148134CB"><enum>(C)</enum><text>compliance costs
to any affected third parties, such as persons required to file information
returns.</text>
</subparagraph></paragraph></subsection><subsection id="id24CD3816D9D543A6A156CFD4F21CAC97"><enum>(b)</enum><header>Reports</header>
<paragraph id="id2A5755FF9BB9407C905CD44C8DCD8F8F"><enum>(1)</enum><header>Initial
report</header>
<subparagraph id="idE4F34F478C5A4CA1BF3979A221C21666"><enum>(A)</enum><header>In
general</header><text>Not later than 4 years after the date of the enactment of
this Act, the Secretary of the Treasury shall submit to Congress a report on
the matters studied under subsection (a).</text>
</subparagraph><subparagraph id="id9F5F5145CB77462088FF8E23E8119AEB"><enum>(B)</enum><header>Assessment with
respect to data limitations</header><text>The report under subparagraph (A)
shall include—</text>
<clause id="id703B87B570FC4B9D94AB8D0ACE0C8418"><enum>(i)</enum><text>an
assessment of the limitations of the Internal Revenue Service with respect to
the collection of data used to assess the matters studied under subsection (a),
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idF075B452338E495D9BF0A74B3422D338"><enum>(ii)</enum><text>recommendations
regarding steps to overcome any such limitations.</text>
</clause></subparagraph></paragraph><paragraph id="IDf3488af6532f4b9a86561d5cb1838a29"><enum>(2)</enum><header>Follow-up
report</header>
<subparagraph id="id7DF3146B46674A88A6771645DE9C23C7"><enum>(A)</enum><header>In
general</header><text>Not later than 3 years after the date on which the report
under paragraph (1) is submitted, the Secretary of the Treasury shall submit to
Congress a follow-up report on the matters studied under subsection (a).</text>
</subparagraph><subparagraph id="idC68F6EAD020F4992AA7A5632EDFD2392"><enum>(B)</enum><header>Assessment with
respect to implementation of recommendations</header><text>The report under
subparagraph (A) shall include an assessment on the implementation of the
recommendations included in the report submitted under paragraph (1).</text>
</subparagraph></paragraph></subsection></section><section id="HDDFF70C560AD47C8B454946344AEA2D6"><enum>703.</enum><header>Reports on
worker misclassification</header>
<subsection id="idB696C5642C0844BF9F4C4CB94F642611"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary of the
Treasury shall submit to Congress the following reports on worker
misclassification:</text>
<paragraph id="H749AA8CB670E4FA0BEA7616D18AF9E3D"><enum>(1)</enum><text>A
report each fiscal year on worker classification which shall include the total
number of examinations of employers initiated because of suspected worker
classification issues, the total number of examinations that included
determinations on worker classification issues, the amount of additional tax
liabilities associated with worker classification enforcement actions, the
number of workers reclassified as a result of these actions, the number of
requests for Determination of Worker Status (Form SS–8), and technical guidance
on how to understand the data provided in the report.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HAB05E9B486884F9987C253AE3A5BA9FB"><enum>(2)</enum><text>A report each
fiscal year in which new statistically valid data is compiled and interpreted
on worker classification, prepared on the basis of information gathered during
an Employment Tax Study conducted by the National Research Program (NRP) of the
Internal Revenue Service. Such report shall provide statistical estimates of
the number of employers misclassifying workers, the number of workers
misclassified, the industries involved, data interpretations and conclusions,
and a description of the impact of improper worker classification on the
employment tax gap.</text>
</paragraph></subsection><subsection id="idE348ED9DB64846AD86F8BD169D50E632"><enum>(b)</enum><header>Time for
submitting reports</header><text>The first reports required under subsection
(a) shall be submitted not later than 3 years after the date of the enactment
of this Act.</text>
</subsection></section>