[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1578 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1578

To amend the Internal Revenue Code of 1986 to enhance taxpayer rights, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 16, 2015

Mr. Grassley (for himself and Mr. Thune) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to enhance taxpayer rights, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Taxpayer Bill of 
Rights Enhancement Act of 2015''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
     TITLE I--TAXPAYER BILL OF RIGHTS AND INTERNAL REVENUE SERVICE 
                             ACCOUNTABILITY

Sec. 101. Duty to ensure that IRS employees are familiar with and act 
                            in accord with certain taxpayer rights.
Sec. 102. Revisions relating to termination of employment of IRS 
                            employees for misconduct.
Sec. 103. Codification of rules for retention of Internal Revenue 
                            Service emails.
                     TITLE II--THE RIGHT TO PRIVACY

Sec. 201. Criminal penalty for unauthorized disclosure or inspection.
Sec. 202. Civil damages for unauthorized disclosure or inspection.
Sec. 203. IRS employees prohibited from using personal email accounts 
                            for official business.
Sec. 204. Compliance by contractors with confidentiality safeguards.
TITLE III--THE RIGHT TO APPEAL IN AN INDEPENDENT FORUM AND TO CHALLENGE 
           THE INTERNAL REVENUE SERVICE POSITION AND BE HEARD

Sec. 301. Increase in limitations on civil damages for certain 
                            unauthorized collection actions.
Sec. 302. Extension of time limit for contesting IRS levy.
Sec. 303. Expansion of declaratory judgment remedy to tax-exempt 
                            organizations.
           TITLE IV--THE RIGHT TO A FAIR AND JUST TAX SYSTEM

Sec. 401. Waiver of user fee for installment agreements using automated 
                            withdrawals.
Sec. 402. Individuals held harmless on improper levy on individual 
                            retirement plan.
Sec. 403. Office of Chief Counsel review of offers-in-compromise.
Sec. 404. Authority of the National Taxpayer Advocate to comment on 
                            Treasury regulations.
Sec. 405. Individual estimated tax.
Sec. 406. Corporate estimated tax.
Sec. 407. Increase in large corporation threshold for estimated tax 
                            payments.
Sec. 408. Expansion of interest netting.
Sec. 409. Clarification of application of Federal tax deposit penalty.
                   TITLE V--THE RIGHT TO BE INFORMED

Sec. 501. Collection activities with respect to joint return 
                            disclosable to either spouse based on oral 
                            request.
Sec. 502. Disclosure of taxpayer identity for tax refund purposes.
Sec. 503. Release of information regarding the status of certain 
                            investigations.
Sec. 504. Mandatory electronic filing for annual returns of exempt 
                            organizations.
                 TITLE VI--THE RIGHT TO QUALIFY SERVICE

Sec. 601. Free electronic filing.
Sec. 602. Access to appeals.

     TITLE I--TAXPAYER BILL OF RIGHTS AND INTERNAL REVENUE SERVICE 
                             ACCOUNTABILITY

SEC. 101. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FAMILIAR WITH AND ACT 
              IN ACCORD WITH CERTAIN TAXPAYER RIGHTS.

    (a) In General.--Section 7803(a) of the Internal Revenue Code of 
1986 is amended by redesignating paragraph (3) as paragraph (4) and by 
inserting after paragraph (2) the following new paragraph:
            ``(3) Execution of duties in accord with taxpayer rights.--
        In discharging his duties, the Commissioner shall ensure that 
        employees of the Internal Revenue Service are familiar with and 
        act in accord with taxpayer rights as afforded by other 
        provisions of this title, including--
                    ``(A) the right to be informed,
                    ``(B) the right to quality service,
                    ``(C) the right to pay no more than the correct 
                amount of tax,
                    ``(D) the right to challenge the position of the 
                Internal Revenue Service and be heard,
                    ``(E) the right to appeal a decision of the 
                Internal Revenue Service in an independent forum,
                    ``(F) the right to finality,
                    ``(G) the right to privacy,
                    ``(H) the right to confidentiality,
                    ``(I) the right to retain representation, and
                    ``(J) the right to a fair and just tax system.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 102. REVISIONS RELATING TO TERMINATION OF EMPLOYMENT OF IRS 
              EMPLOYEES FOR MISCONDUCT.

    (a) Termination for Taking Official Actions for Political 
Purposes.--Paragraph (10) of section 1203(b) of the Internal Revenue 
Service Restructuring and Reform Act of 1998 is amended to read as 
follows:
            ``(10) performing, delaying, or failing to perform (or 
        threatening to perform, delay, or fail to perform) any official 
        action (including any audit) with respect to a taxpayer for 
        purpose of extracting personal gain or benefit or for a 
        political purpose.''.
    (b) Notification of Decision Not To Terminate Employment.--Section 
1203(c) of the Internal Revenue Service Restructuring and Reform Act of 
1998 is amended by adding at the end the following new paragraph:
            ``(4) Notification.--In any case in which the Commissioner 
        exercises the authority under paragraph (1), the Commissioner 
        shall submit to the chairman and ranking member of the 
        Committee on Finance of the Senate and the chairman and ranking 
        member of the Committee on Ways and Means of the House of 
        Representatives of the reasons for taking a personnel action 
        other than termination.''.

SEC. 103. CODIFICATION OF RULES FOR RETENTION OF INTERNAL REVENUE 
              SERVICE EMAILS.

    (a) Retention of Records.--Email records of the Internal Revenue 
Service shall be retained in an appropriate electronic system that 
supports records management and litigation requirements, including the 
capability to identify, retrieve, and retain the records, in accordance 
with this subsection:
            (1) Prior to the date on which the Treasury Inspector 
        General for Tax Administration makes the certification under 
        subsection (c)(1), the Commissioner of Internal Revenue and the 
        Chief Counsel for the Internal Revenue Service shall retain all 
        email records.
            (2) Not later than December 31, 2016, the Commissioner of 
        Internal Revenue and the Chief Counsel for the Internal Revenue 
        Service shall maintain email records of all principal officers 
        and specified employees of the Internal Revenue Service for a 
        period of 15 years beginning on the date such record was 
        generated.
    (b) Transmission of Records to the National Archives.--Not later 
than the last day of the 15-year period described in subsection (a)(2), 
the Commissioner of Internal Revenue and the Chief Counsel for the 
Internal Revenue Service shall transfer the email records of principal 
officers of the Internal Revenue Service to the Archivist of the United 
States.
    (c) Compliance.--
            (1) Certification.--On the date that the Treasury Inspector 
        General for Tax Administration determines that the Internal 
        Revenue Service has a program in place that complies with the 
        requirements of subsections (a)(2) and (b), the Treasury 
        Inspector General for Tax Administration shall certify to the 
        Committee on Finance of the Senate and the Committee on Ways 
        and Means of the House of Representatives that the Internal 
        Revenue Service is in compliance with such requirements.
            (2) Reports.--
                    (A) Interim report.--Not later than March 1, 2016, 
                the Treasury Inspector General for Tax Administration 
                shall submit a report to the Committee on Finance of 
                the Senate and the Committee on Ways and Means of the 
                House of Representatives on the steps being taken by 
                the Commissioner of Internal Revenue and the Chief 
                Counsel for the Internal Revenue Service to comply with 
                the requirements of subsections (a)(2) and (b).
                    (B) Final report.--Not later than March 1, 2017, 
                the Treasury Inspector General for Tax Administration 
                shall submit a report to the Committee on Finance of 
                the Senate and the Committee on Ways and Means of the 
                House of Representatives describing whether the 
                Internal Revenue Service is in compliance with the 
                requirements of subsections (a)(2) and (b).
    (d) Definitions.--
            (1) Principal officers.--For purposes of this section, the 
        term ``principal officer'' means, with respect to the Internal 
        Revenue Service--
                    (A) any employee whose position is listed under the 
                Internal Revenue Service in the most recent version of 
                the United States Government Manual published by the 
                Office of the Federal Register,
                    (B) any employee who is a senior staff member 
                reporting directly to the Commissioner of Internal 
                Revenue, and
                    (C) any--
                            (i) associate counsel, deputy counsel, or 
                        division head in the Office of the Chief 
                        Counsel for the Internal Revenue Service, and
                            (ii) any employee who is a senior staff 
                        member,
                who reports directly to such Chief Counsel.
            (2) Specified employees.--The term ``specified employee'' 
        means, with respect to the Internal Revenue Service, any 
        employee who--
                    (A) holds a Senior Executive Service position (as 
                defined in section 3132 of title 5, United States Code) 
                in the Internal Revenue Service or the Office of Chief 
                Counsel for the Internal Revenue Service), and
                    (B) is not a principal officer of the Internal 
                Revenue Service.

                     TITLE II--THE RIGHT TO PRIVACY

SEC. 201. CRIMINAL PENALTY FOR UNAUTHORIZED DISCLOSURE OR INSPECTION.

    (a) Unauthorized Disclosure.--Section 7213 is amended by striking 
``$5,000'' each place it appears in subsections (a) and (d) and 
inserting ``$20,000''.
    (b) Unauthorized Inspection.--Section 7213A(b)(1) is amended by 
striking ``$1,000'' and inserting ``$5,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to violations occurring after the date of the enactment of this 
Act.

SEC. 202. CIVIL DAMAGES FOR UNAUTHORIZED DISCLOSURE OR INSPECTION.

    (a) Notice to Taxpayer.--Subsection (e) of section 7431 is amended 
by adding at the end the following new sentences: ``The Secretary shall 
also notify such taxpayer if the Internal Revenue Service or, upon 
notice to the Secretary by a Federal or State agency, if such Federal 
or State agency, proposes an administrative determination as to 
disciplinary or adverse action against an employee arising from the 
employee's unauthorized inspection or disclosure of the taxpayer's 
return or return information. The notice described in this subsection 
shall include the date of the inspection or disclosure and the rights 
of the taxpayer under such administrative determination.''.
    (b) Payment Authority Clarified.--
            (1) In general.--Section 7431 is amended by adding at the 
        end the following new subsection:
    ``(i) Payment Authority.--Claims pursuant to subsection (a)(1) 
shall be payable out of funds appropriated under section 1304 of title 
31, United States Code.''.
            (2) Annual reports of payments.--The Secretary of the 
        Treasury shall annually report to the Committee on Finance of 
        the Senate and the Committee on Ways and Means of the House of 
        Representatives regarding payments made from the United States 
        Judgment Fund under section 7431(i) of the Internal Revenue 
        Code of 1986.
    (c) Burden of Proof for Good Faith Exception Rests With Person 
Making Inspection or Disclosure.--Section 7431(b) is amended by adding 
at the end the following new flush sentence:
``In any proceeding involving the issue of the existence of good faith, 
the burden of proof with respect to such issue shall be on the person 
who made the inspection or disclosure.''.
    (d) Reports.--Subsection (p) of section 6103 is amended by adding 
at the end the following new paragraph:
            ``(9) Report on willful unauthorized disclosure and 
        inspection.--As part of the report required by paragraph (3)(C) 
        for each calendar year, the Secretary shall furnish information 
        regarding the willful unauthorized disclosure and inspection of 
        returns and return information, including the number, status, 
        and results of--
                    ``(A) administrative investigations,
                    ``(B) civil lawsuits brought under section 7431 
                (including the amounts for which such lawsuits were 
                settled and the amounts of damages awarded), and
                    ``(C) criminal prosecutions.''.
    (e) Increase in Amount of Damages Per Violation.--
            (1) In general.--Subparagraph (A) of section 7431(c)(1) is 
        amended to read as follows:
                    ``(A) the sum of--
                            ``(i) $5,000 for each act of unauthorized 
                        inspection of a return or return information 
                        with respect to which such defendant is found 
                        liable, and
                            ``(ii) $10,000 for each act of unauthorized 
                        disclosure of a return or return information 
                        with respect to which such defendant is found 
                        liable, or''.
            (2) Punitive damages.--
                    (A) In general.--Section 7431(c) is amended by 
                redesignating paragraphs (2) and (3) as paragraphs (3) 
                and (4), respectively, and by inserting after paragraph 
                (1) the following new paragraph:
            ``(2) in the case of willful inspection or disclosure or an 
        inspection or disclosure which is the result of gross 
        negligence, punitive damages, plus''.
                    (B) Conforming amendment.--Subparagraph (B) of 
                section 7431(c) is amended to read as follows:
                    ``(B) the actual damages sustained by the plaintiff 
                as a result of such unauthorized inspection or 
                disclosure, plus''.
    (f) Effective Dates.--
            (1) Notice.--The amendment made by subsection (a) shall 
        apply to determinations made after the date which is 180 days 
        after the date of the enactment of this Act.
            (2) Payment authority.--The amendment made by subsection 
        (b)(1) shall take effect on the date which is 180 days after 
        the date of the enactment of this Act.
            (3) Burden of proof.--The amendments made by subsection (c) 
        shall apply to inspections and disclosures occurring on and 
        after the date which is 180 days after the date of the 
        enactment of this Act.
            (4) Reports.--Subsection (b)(2) and the amendment made by 
        subsection (d) shall apply to calendar years ending after the 
        date which is 180 days after the date of the enactment of this 
        Act.
            (5) Increase in damages.--The amendment made by subsection 
        (e) shall apply to proceedings commenced after the date of the 
        enactment of this Act.

SEC. 203. IRS EMPLOYEES PROHIBITED FROM USING PERSONAL EMAIL ACCOUNTS 
              FOR OFFICIAL BUSINESS.

    No officer or employee of the Internal Revenue Service may use a 
personal email account to conduct any official business of the 
Government.

SEC. 204. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.

    (a) In General.--Section 6103(p), as amended by this Act, is 
amended by adding at the end the following new paragraph:
            ``(10) Disclosure to contractors and other agents.--
        Notwithstanding any other provision of this section, no return 
        or return information shall be disclosed to any contractor or 
        other agent of a Federal, State, or local agency unless such 
        agency, to the satisfaction of the Secretary--
                    ``(A) has requirements in effect which require each 
                such contractor or other agent which would have access 
                to returns or return information to provide safeguards 
                (within the meaning of paragraph (4)) to protect the 
                confidentiality of such returns or return information,
                    ``(B) agrees to conduct an on-site review every 3 
                years (or a mid-point review in the case of contracts 
                or agreements of less than 3 years in duration) of each 
                contractor or other agent to determine compliance with 
                such requirements,
                    ``(C) submits the findings of the most recent 
                review conducted under subparagraph (B) to the 
                Secretary as part of the report required by paragraph 
                (4)(E), and
                    ``(D) certifies to the Secretary for the most 
                recent annual period that such contractor or other 
                agent is in compliance with all such requirements.
        The certification required by subparagraph (D) shall include 
        the name and address of each contractor and other agent, a 
        description of the contract or agreement with such contractor 
        or other agent, and the duration of such contract or agreement. 
        The requirements of this paragraph shall not apply to 
        disclosures pursuant to subsection (n) for purposes of Federal 
        tax administration.''.
    (b) Conforming Amendment.--Subparagraph (B) of section 6103(p)(8) 
is amended by inserting ``or paragraph (10)'' after ``subparagraph 
(A)''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to disclosures made after the date of the enactment of 
        this Act.
            (2) Certifications.--The first certification under section 
        6103(p)(10)(D) of the Internal Revenue Code of 1986, as added 
        by subsection (a), shall be made with respect to the portion of 
        calendar year 2015 following the date of the enactment of this 
        Act.

TITLE III--THE RIGHT TO APPEAL IN AN INDEPENDENT FORUM AND TO CHALLENGE 
           THE INTERNAL REVENUE SERVICE POSITION AND BE HEARD

SEC. 301. INCREASE IN LIMITATIONS ON CIVIL DAMAGES FOR CERTAIN 
              UNAUTHORIZED COLLECTION ACTIONS.

    (a) In General.--Section 7433(b) is amended by striking 
``$1,000,000 ($100,000'' and inserting ``$1,500,000 ($150,000''.
    (b) Punitive Damages in the Case of Reckless or Intentional 
Action.--Subsection (b) of section 7433 is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and by moving such 
        subparagraphs 2 ems to the right,
            (2) by striking ``In any action'' and inserting the 
        following:
            ``(1) In general.--In any action'', and
            (3) by adding at the end the following new paragraph:
            ``(2) Punitive damages for willful and reckless actions.--
        In any action brought under subsection (a) or petition filed 
        under subsection (e) in which the defendant is found to be 
        liable and to have acted recklessly or intentionally, the court 
        may award the plaintiff punitive damages.''.
    (c) Period for Bringing Action.--Paragraph (3) of section 7433(d) 
is amended by striking ``the date the right of action accrues'' and 
inserting ``the later of the date of on which administrative remedies 
available within the Internal Revenue Service have been exhausted or 
the date on which the taxpayer reasonably could have discovered that 
the actions of the officer or employee were done in disregard of a 
provision of this title or any regulation promulgated under this 
title''.
    (d) Effective Date.--The amendments made by this section shall 
apply in the case of proceedings commenced after the date of the 
enactment of this Act.

SEC. 302. EXTENSION OF TIME LIMIT FOR CONTESTING IRS LEVY.

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

SEC. 303. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-EXEMPT 
              ORGANIZATIONS.

    (a) In General.--Paragraph (1) of section 7428(a) is amended--
            (1) in subparagraph (B) by inserting after ``509(a))'' the 
        following: ``or as a private operating foundation (as defined 
        in section 4942(j)(3))''; and
            (2) by amending subparagraph (C) to read as follows:
                    ``(C) with respect to the initial qualification or 
                continuing qualification of an organization as an 
                organization described in section 501(c) (other than 
                paragraph (3)) or 501(d) which is exempt from tax under 
                section 501(a), or''.
    (b) Court Jurisdiction.--Subsection (a) of section 7428 is amended 
in the material following paragraph (2) by striking ``United States Tax 
Court, the United States Claims Court, or the district court of the 
United States for the District of Columbia'' and inserting the 
following: ``United States Tax Court (in the case of any such 
determination or failure) or the Court of Federal Claims or the 
district court of the United States for the District of Columbia (in 
the case of a determination or failure with respect to an issue 
referred to in subparagraph (A), (B), or (D) of paragraph (1)),''.
    (c) Technical Amendment.--Section 7428, as amended by subsection 
(b), is amended by striking ``Claims Court'' each place it appears in 
subsection (a), (b)(2), and (c)(1)(C)(iii) and inserting ``Court of 
Federal Claims''.
    (d) Effective Date.--The amendments made by this section shall 
apply to pleadings filed after the date of the enactment of this Act.

           TITLE IV--THE RIGHT TO A FAIR AND JUST TAX SYSTEM

SEC. 401. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS USING AUTOMATED 
              WITHDRAWALS.

    (a) In General.--Section 6159 is amended by redesignating 
subsections (e) and (f) as subsections (f) and (g), respectively, and 
by inserting after subsection (d) the following new subsection:
    ``(e) Waiver of User Fees for Installment Agreements Using 
Automated Withdrawals.--In the case of a taxpayer who enters into an 
installment agreement in which automated installment payments are 
agreed to, the Secretary shall waive the fee (if any) for entering into 
the installment agreement.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to agreements entered into on or after the date which is 180 days 
after the date of the enactment of this Act.

SEC. 402. INDIVIDUALS HELD HARMLESS ON IMPROPER LEVY ON INDIVIDUAL 
              RETIREMENT PLAN.

    (a) In General.--Section 6343 is amended by adding at the end the 
following new subsection:
    ``(f) Individuals Held Harmless on Wrongful Levy, etc. on 
Individual Retirement Plan.--
            ``(1) In general.--If the Secretary determines that an 
        individual retirement plan has been levied upon in a case to 
        which subsection (b) or (d)(2)(A) applies and property or an 
        amount of money is returned to the individual who is the 
        beneficiary of such plan--
                    ``(A) the individual may contribute such property 
                or an amount equal to the sum of--
                            ``(i) the amount of money returned by the 
                        Secretary on account of such levy, and
                            ``(ii) interest paid under subsection (c) 
                        on such amount of money,
                into an individual retirement plan (other than an 
                endowment contract) to which a rollover contribution of 
                a distribution from the plan levied upon is permitted 
                if such contribution is made not later than the due 
                date (not including extensions) for filing the return 
                of tax for the taxable year in which such property or 
                amount of money is returned, and
                    ``(B) the Secretary shall, at the time such 
                property or amount of money is returned, notify such 
                individual that a contribution described in 
                subparagraph (A) may be made.
            ``(2) Treatment as rollover.--The distribution on account 
        of the levy and any contribution under paragraph (1) with 
        respect to such distribution shall be treated for purposes of 
        this title as if such distribution and contribution were part 
        of a rollover contribution described in section 
        408(d)(3)(A)(i); except that--
                    ``(A) the contribution shall be treated as having 
                been made to the individual retirement plan for the 
                taxable year in which the distribution on account of 
                the levy occurred, and the interest paid under 
                subsection (c) shall be treated as earnings within such 
                plan after the contribution and as not includible in 
                gross income, and
                    ``(B) such contribution shall not be taken into 
                account under section 408(d)(3)(B).
            ``(3) Refund, etc., of income tax on levy.--Except in the 
        case of a rollover contribution under this subsection from an 
        individual retirement plan that is not a Roth IRA to a Roth 
        IRA, if any amount is includible in gross income for a taxable 
        year by reason of a levy referred to in paragraph (1) and any 
        portion of such amount is treated as a rollover contribution 
        under paragraph (2), any tax imposed by chapter 1 on such 
        portion shall not be assessed, and if assessed shall be abated, 
        and if collected shall be credited or refunded as an 
        overpayment made on the due date for filing the return of tax 
        for such taxable year.
            ``(4) Interest.--Notwithstanding subsection (d), interest 
        shall be allowed under subsection (c) in a case in which the 
        Secretary makes a determination described in subsection 
        (d)(2)(A) with respect to a levy upon an individual retirement 
        plan.
            ``(5) Treatment of inherited accounts.--For purposes of 
        paragraph (1)(A), section 408(d)(3)(C) shall be disregarded in 
        determining whether an individual retirement plan is a plan to 
        which a rollover contribution of a distribution from the plan 
        levied upon is permitted.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid under subsections (b), (c), and (d)(2)(A) of section 
6343 of the Internal Revenue Code of 1986 after December 31, 2015.

SEC. 403. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-COMPROMISE.

    (a) In General.--Section 7122(b) is amended by striking ``Whenever 
a compromise'' and all that follows through ``his delegate'' and 
inserting ``If the Secretary determines that an opinion of the General 
Counsel for the Department of the Treasury, or the Counsel's delegate, 
is required with respect to a compromise, there shall be placed on file 
in the office of the Secretary such opinion''.
    (b) Conforming Amendments.--Section 7122(b) is amended by striking 
the second and third sentences.
    (c) Effective Date.--The amendments made by this section shall 
apply to offers-in-compromise submitted or pending on or after the date 
of the enactment of this Act.

SEC. 404. AUTHORITY OF THE NATIONAL TAXPAYER ADVOCATE TO COMMENT ON 
              TREASURY REGULATIONS.

    (a) In General.--Section 7805 is amended by adding at the end the 
following new subsection:
    ``(g) Review of Impact of Regulations on Taxpayer Rights.--
            ``(1) Submissions to national taxpayer advocate.--Prior to 
        publication of any proposed or temporary regulation by the 
        Secretary, the Secretary shall submit such regulation to the 
        National Taxpayer Advocate for comment on the impact of such 
        regulation on taxpayer rights or taxpayer burden. Not later 
        than the date 4 weeks after the date of such submission, the 
        National Taxpayer Advocate shall submit comments, if any, on 
        such regulation to the Secretary.
            ``(2) Consideration of comments.--In prescribing any final 
        regulation which supersedes a proposed or temporary regulation 
        with respect to which the National Taxpayer Advocate has 
        submitted comments--
                    ``(A) the Secretary shall consider the comments of 
                the National Taxpayer Advocate on such proposed or 
                temporary regulation, and
                    ``(B) the Secretary shall discuss its response to 
                such comments in the preamble of such final 
                regulation.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to regulations issued after the date of the enactment of 
this Act.

SEC. 405. INDIVIDUAL ESTIMATED TAX.

    (a) Increase in Exception for Individuals Owing Small Amount of 
Tax.--Section 6654(e)(1) is amended by striking ``$1,000'' and 
inserting ``$2,000''.
    (b) Computation of Addition to Tax.--Section 6654 is amended by 
striking subsections (a) and (b) and inserting the following:
    ``(a) Addition to the Tax.--
            ``(1) In general.--Except as otherwise provided in this 
        section, in the case of any underpayment of estimated tax by an 
        individual for a taxable year, there shall be added to the tax 
        under chapter 1, the tax under chapter 2, and the tax under 
        chapter 2A for such taxable year the sum of the amounts 
        determined under paragraph (2) for each day for which there is 
        an underpayment.
            ``(2) Amount of addition to tax.--The amount determined 
        under this paragraph for any day shall be the product of--
                    ``(A) the underpayment rate established under 
                subsection (b)(2) for such day, multiplied by
                    ``(B) the amount of the underpayment for such day.
    ``(b) Amount of Underpayment; Underpayment Rate.--For purposes of 
subsection (a)--
            ``(1) Amount.--The amount of underpayment on any day shall 
        be the excess (if any) of--
                    ``(A) the sum of the required installments for the 
                taxable year the due dates for which are on or before 
                such day, over
                    ``(B) the sum of the amounts of estimated tax 
                payments made for such taxable year on or before such 
                day.
            ``(2) Determination of underpayment rate.--
                    ``(A) In general.--The underpayment rate with 
                respect to any day in an installment underpayment 
                period shall be the underpayment rate established under 
                section 6621 for the first day of the calendar quarter 
                in which such installment underpayment period begins.
                    ``(B) Installment underpayment period.--For 
                purposes of subparagraph (A), the term `installment 
                underpayment period' means the period beginning on the 
                day after the due date for a required installment and 
                ending on the due date for the subsequent required 
                installment (or in the case of the 4th required 
                installment, the 15th day of the 4th month following 
                the close of a taxable year).
                    ``(C) Daily rate.--The rate determined under 
                subparagraph (A) shall be applied on a daily basis and 
                shall be based on the assumption of 365 days in a 
                calendar year.
            ``(3) Termination of estimated tax underpayment.--No day 
        after the end of the installment underpayment period for the 
        4th required installment specified in paragraph (2)(B) for a 
        taxable year shall be treated as a day of underpayment with 
        respect to such taxable year.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 406. CORPORATE ESTIMATED TAX.

    (a) Increase in Small Tax Amount Exception.--Section 6655(f) is 
amended by striking ``$500'' and inserting ``$1,000''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2015.

SEC. 407. INCREASE IN LARGE CORPORATION THRESHOLD FOR ESTIMATED TAX 
              PAYMENTS.

    (a) In General.--Section 6655(g)(2) is amended--
            (1) by striking ``$1,000,000'' in subparagraph (A) and 
        inserting ``the applicable amount'',
            (2) by striking ``the $1,000,000 amount specified in 
        subparagraph (A)'' in subparagraph (B)(ii) and inserting ``the 
        applicable amount'',
            (3) by redesignating subparagraph (B) as subparagraph (C), 
        and
            (4) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) Applicable amount.--For purposes of this 
                paragraph, the applicable amount is $1,000,000 
                increased (but not above $1,500,000) by $50,000 for 
                each taxable year beginning after 2015.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2015.

SEC. 408. EXPANSION OF INTEREST NETTING.

    (a) In General.--Subsection (d) of section 6621 is amended by 
adding at the end the following new sentence: ``Solely for purposes of 
the preceding sentence, section 6611(e) shall not apply.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to interest accrued after December 31, 2015.

SEC. 409. CLARIFICATION OF APPLICATION OF FEDERAL TAX DEPOSIT PENALTY.

    Nothing in section 6656 of the Internal Revenue Code of 1986 shall 
be construed to permit the percentage specified in subsection 
(b)(1)(A)(iii) thereof to apply other than in a case where the failure 
is for more than 15 days.

                   TITLE V--THE RIGHT TO BE INFORMED

SEC. 501. COLLECTION ACTIVITIES WITH RESPECT TO JOINT RETURN 
              DISCLOSABLE TO EITHER SPOUSE BASED ON ORAL REQUEST.

    (a) In General.--Paragraph (8) of section 6103(e) is amended by 
striking ``in writing'' the first place it appears.
    (b) Effective Date.--The amendment made by this section shall apply 
to requests made after the date of the enactment of this Act.

SEC. 502. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX REFUND PURPOSES.

    Section 6103(m)(1) is amended by striking ``taxpayer identity 
information to the press and other media'' and by inserting ``a 
person's name and the city and State of the person's mailing address to 
the press, other media, and through any other means of mass 
communication,''.

SEC. 503. RELEASE OF INFORMATION REGARDING THE STATUS OF CERTAIN 
              INVESTIGATIONS.

    (a) In General.--Subsection (e) of section 6103 is amended by 
adding at the end the following new paragraph:
            ``(11) Disclosure to certain relevant persons of 
        information regarding status of certain investigations.--
                    ``(A) Information upon request.--With respect to 
                any investigation conducted by the officers and 
                employees of the Treasury Inspector General for Tax 
                Administration which relates to possible violations of 
                the internal revenue laws or related statutes, the 
                Secretary and the Attorney General may, upon written 
                request by any relevant person, disclose to such person 
                (or such person's designee)--
                            ``(i) whether there is or has been such an 
                        investigation with respect to which such person 
                        is a relevant person, and
                            ``(ii) if there is or has been such an 
                        investigation--
                                    ``(I) whether such investigation is 
                                on-going or has been completed, and
                                    ``(II) if such investigation has 
                                been completed, the conclusions of such 
                                investigation, including whether there 
                                was a referral to administrative 
                                authorities or for criminal 
                                prosecution, and the contact 
                                information of the person handling the 
                                referred matter.
                    ``(B) Notification upon conclusion.--Not later than 
                30 days after the completion of any investigation--
                            ``(i) which is conducted by the officers 
                        and employees of the Treasury Inspector General 
                        for Tax Administration, and
                            ``(ii) the results of which indicate that--
                                    ``(I) there is substantial evidence 
                                that there has been a violation of the 
                                internal revenue laws or related 
                                statutes, and
                                    ``(II) such violation involves one 
                                or more relevant persons,
                the Secretary shall disclose to all such relevant 
                persons (or designees) the conclusions of the 
                investigation, including whether there was a referral 
                to administrative authorities or for criminal 
                prosecution, and the contact information of the person 
                handling the referred matter.
                    ``(C) Relevant person.--For purposes of this 
                paragraph, the term `relevant person' means, with 
                respect to any investigation--
                            ``(i) any complainant who provided 
                        information to the Treasury Inspector General 
                        for Tax Administration related to the 
                        investigation, and
                            ``(ii) any taxpayer who is directly 
                        connected with the matter being 
                        investigated.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 504. MANDATORY ELECTRONIC FILING FOR ANNUAL RETURNS OF EXEMPT 
              ORGANIZATIONS.

    (a) In General.--Section 6033 is amended by redesignating 
subsection (n) as subsection (o) and by inserting after subsection (m) 
the following new subsection:
    ``(n) Mandatory Electronic Filing.--Any organization required to 
file a return under this section shall file such return in electronic 
form.''.
    (b) Inspection of Electronically Filed Annual Returns.--Subsection 
(b) of section 6104 is amended by adding at the end the following: 
``Any annual return required to be filed electronically under section 
6033(n) shall be made available by the Secretary to the public in 
machine readable format as soon as practicable.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after the date of the enactment of this Act.
            (2) Transitional relief.--
                    (A) Small organizations.--
                            (i) In general.--In the case of any small 
                        organizations, or any other organizations for 
                        which the Secretary determines the application 
                        of the amendments made by subsection (a) would 
                        cause undue burden without a delay, the 
                        Secretary may delay the application of such 
                        amendments, but not later than taxable years 
                        beginning 2 years after the date of the 
                        enactment of this Act.
                            (ii) Small organization.--For purposes of 
                        clause (i), the term ``small organization'' 
                        means any organization--
                                    (I) the gross receipts of which for 
                                the taxable year are less than 
                                $200,000, and
                                    (II) the aggregate gross assets of 
                                which at the end of the taxable year 
                                are less than $500,000.
                    (B) Organizations filing form 990-T.--In the case 
                of any organization described in section 511(a)(2) of 
                the Internal Revenue Code of 1986 which is subject to 
                the tax imposed by section 511(a)(1) of such Code on 
                its unrelated business taxable income, or any 
                organization required to file a return under section 
                6033 of such Code and include information under 
                subsection (e) thereof, the Secretary may delay the 
                application of the amendments made by this section, but 
                not later than taxable years beginning 2 years after 
                the date of the enactment of this Act.

                 TITLE VI--THE RIGHT TO QUALIFY SERVICE

SEC. 601. FREE ELECTRONIC FILING.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall, in cooperation with the private sector technology 
industry, maintain a program that provides free individual income tax 
preparation and electronic filing services to low-income taxpayers and 
elderly taxpayers.
    (b) Requirements of Program.--The Secretary shall by regulation or 
other guidance prescribe with respect to the program--
            (1) the qualifications, selection process, and contract 
        term for businesses participating in the program,
            (2) a process for periodic review of businesses 
        participating in the program,
            (3) procedures for terminating business participation in 
        the program for failure to comply with any program 
        requirements, and
            (4) such other procedures as the Secretary determines are 
        necessary or appropriate to carry out the purposes of the 
        program.
    (c) Free File Program.--The Internal Revenue Service Free File 
program, as set forth in the notice published in the Federal Register 
on November 4, 2002 (67 Fed. Reg. 67247), shall be treated as meeting 
the requirements of subsection (a).

SEC. 602. ACCESS TO APPEALS.

    Subsection (b) of section 3465 of the Internal Revenue Service 
Restructuring and Reform Act of 1998 is amended by striking ``an 
appeals officer is regularly available within each State'' and 
inserting ``there is at least one appeals officer and one settlement 
officer located and permanently available in each State, the District 
of Columbia, and Puerto Rico''.
                                 <all>