[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3151 Engrossed in House (EH)]

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116th CONGRESS
  1st Session
                                H. R. 3151

_______________________________________________________________________

                                 AN ACT


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

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

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Taxpayer First 
Act''.
    (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--PUTTING TAXPAYERS FIRST

                Subtitle A--Independent Appeals Process

Sec. 1001. Establishment of Internal Revenue Service Independent Office 
                            of Appeals.
                      Subtitle B--Improved Service

Sec. 1101. Comprehensive customer service strategy.
Sec. 1102. Low-income exception for payments otherwise required in 
                            connection with a submission of an offer-
                            in-compromise.
                    Subtitle C--Sensible Enforcement

Sec. 1201. Internal Revenue Service seizure requirements with respect 
                            to structuring transactions.
Sec. 1202. Exclusion of interest received in action to recover property 
                            seized by the Internal Revenue Service 
                            based on structuring transaction.
Sec. 1203. Clarification of equitable relief from joint liability.
Sec. 1204. Modification of procedures for issuance of third-party 
                            summons.
Sec. 1205. Private debt collection and special compliance personnel 
                            program.
Sec. 1206. Reform of notice of contact of third parties.
Sec. 1207. Modification of authority to issue designated summons.
Sec. 1208. Limitation on access of non-Internal Revenue Service 
                            employees to returns and return 
                            information.
                Subtitle D--Organizational Modernization

Sec. 1301. Office of the National Taxpayer Advocate.
Sec. 1302. Modernization of Internal Revenue Service organizational 
                            structure.
                      Subtitle E--Other Provisions

Sec. 1401. Return preparation programs for applicable taxpayers.
Sec. 1402. Provision of information regarding low-income taxpayer 
                            clinics.
Sec. 1403. Notice from IRS regarding closure of taxpayer assistance 
                            centers.
Sec. 1404. Rules for seizure and sale of perishable goods restricted to 
                            only perishable goods.
Sec. 1405. Whistleblower reforms.
Sec. 1406. Customer service information.
Sec. 1407. Misdirected tax refund deposits.
                       TITLE II--21ST CENTURY IRS

           Subtitle A--Cybersecurity and Identity Protection

Sec. 2001. Public-private partnership to address identity theft refund 
                            fraud.
Sec. 2002. Recommendations of Electronic Tax Administration Advisory 
                            Committee regarding identity theft refund 
                            fraud.
Sec. 2003. Information sharing and analysis center.
Sec. 2004. Compliance by contractors with confidentiality safeguards.
Sec. 2005. Identity protection personal identification numbers.
Sec. 2006. Single point of contact for tax-related identity theft 
                            victims.
Sec. 2007. Notification of suspected identity theft.
Sec. 2008. Guidelines for stolen identity refund fraud cases.
Sec. 2009. Increased penalty for improper disclosure or use of 
                            information by preparers of returns.
           Subtitle B--Development of Information Technology

Sec. 2101. Management of Internal Revenue Service information 
                            technology.
Sec. 2102. Internet platform for Form 1099 filings.
Sec. 2103. Streamlined critical pay authority for information 
                            technology positions.
 Subtitle C--Modernization of Consent-Based Income Verification System

Sec. 2201. Disclosure of taxpayer information for third-party income 
                            verification.
Sec. 2202. Limit redisclosures and uses of consent-based disclosures of 
                            tax return information.
             Subtitle D--Expanded Use of Electronic Systems

Sec. 2301. Electronic filing of returns.
Sec. 2302. Uniform standards for the use of electronic signatures for 
                            disclosure authorizations to, and other 
                            authorizations of, practitioners.
Sec. 2303. Payment of taxes by debit and credit cards.
Sec. 2304. Authentication of users of electronic services accounts.
                      Subtitle E--Other Provisions

Sec. 2401. Repeal of provision regarding certain tax compliance 
                            procedures and reports.
Sec. 2402. Comprehensive training strategy.
                  TITLE III--MISCELLANEOUS PROVISIONS

Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

Sec. 3001. Prohibition on rehiring any employee of the Internal Revenue 
                            Service who was involuntarily separated 
                            from service for misconduct.
Sec. 3002. Notification of unauthorized inspection or disclosure of 
                            returns and return information.
        Subtitle B--Provisions Relating to Exempt Organizations

Sec. 3101. Mandatory e-filing by exempt organizations.
Sec. 3102. Notice required before revocation of tax-exempt status for 
                            failure to file return.
                     Subtitle C--Revenue Provision

Sec. 3201. Increase in penalty for failure to file.
                      TITLE IV--BUDGETARY EFFECTS

Sec. 4001. Determination of budgetary effects.

                    TITLE I--PUTTING TAXPAYERS FIRST

                Subtitle A--Independent Appeals Process

SEC. 1001. ESTABLISHMENT OF INTERNAL REVENUE SERVICE INDEPENDENT OFFICE 
              OF APPEALS.

    (a) In General.--Section 7803 is amended by adding at the end the 
following new subsection:
    ``(e) Independent Office of Appeals.--
            ``(1) Establishment.--There is established in the Internal 
        Revenue Service an office to be known as the `Internal Revenue 
        Service Independent Office of Appeals'.
            ``(2) Chief of appeals.--
                    ``(A) In general.--The Internal Revenue Service 
                Independent Office of Appeals shall be under the 
                supervision and direction of an official to be known as 
                the `Chief of Appeals'. The Chief of Appeals shall 
                report directly to the Commissioner of Internal Revenue 
                and shall be entitled to compensation at the same rate 
                as the highest rate of basic pay established for the 
                Senior Executive Service under section 5382 of title 5, 
                United States Code.
                    ``(B) Appointment.--The Chief of Appeals shall be 
                appointed by the Commissioner of Internal Revenue 
                without regard to the provisions of title 5, United 
                States Code, relating to appointments in the 
                competitive service or the Senior Executive Service.
                    ``(C) Qualifications.--An individual appointed 
                under subparagraph (B) shall have experience and 
                expertise in--
                            ``(i) administration of, and compliance 
                        with, Federal tax laws,
                            ``(ii) a broad range of compliance cases, 
                        and
                            ``(iii) management of large service 
                        organizations.
            ``(3) Purposes and duties of office.--It shall be the 
        function of the Internal Revenue Service Independent Office of 
        Appeals to resolve Federal tax controversies without litigation 
        on a basis which--
                    ``(A) is fair and impartial to both the Government 
                and the taxpayer,
                    ``(B) promotes a consistent application and 
                interpretation of, and voluntary compliance with, the 
                Federal tax laws, and
                    ``(C) enhances public confidence in the integrity 
                and efficiency of the Internal Revenue Service.
            ``(4) Right of appeal.--The resolution process described in 
        paragraph (3) shall be generally available to all taxpayers.
            ``(5) Limitation on designation of cases as not eligible 
        for referral to independent office of appeals.--
                    ``(A) In general.--If any taxpayer which is in 
                receipt of a notice of deficiency authorized under 
                section 6212 requests referral to the Internal Revenue 
                Service Independent Office of Appeals and such request 
                is denied, the Commissioner of Internal Revenue shall 
                provide such taxpayer a written notice which--
                            ``(i) provides a detailed description of 
                        the facts involved, the basis for the decision 
                        to deny the request, and a detailed explanation 
                        of how the basis of such decision applies to 
                        such facts, and
                            ``(ii) describes the procedures prescribed 
                        under subparagraph (C) for protesting the 
                        decision to deny the request.
                    ``(B) Report to congress.--The Commissioner of 
                Internal Revenue shall submit a written report to 
                Congress on an annual basis which includes the number 
                of requests described in subparagraph (A) which were 
                denied and the reasons (described by category) that 
                such requests were denied.
                    ``(C) Procedures for protesting denial of 
                request.--The Commissioner of Internal Revenue shall 
                prescribe procedures for protesting to the Commissioner 
                of Internal Revenue a denial of a request described in 
                subparagraph (A).
                    ``(D) Not applicable to frivolous positions.--This 
                paragraph shall not apply to a request for referral to 
                the Internal Revenue Service Independent Office of 
                Appeals which is denied on the basis that the issue 
                involved is a frivolous position (within the meaning of 
                section 6702(c)).
            ``(6) Staff.--
                    ``(A) In general.--All personnel in the Internal 
                Revenue Service Independent Office of Appeals shall 
                report to the Chief of Appeals.
                    ``(B) Access to staff of office of the chief 
                counsel.--The Chief of Appeals shall have authority to 
                obtain legal assistance and advice from the staff of 
                the Office of the Chief Counsel. The Chief Counsel 
                shall ensure, to the extent practicable, that such 
                assistance and advice is provided by staff of the 
                Office of the Chief Counsel who were not involved in 
                the case with respect to which such assistance and 
                advice is sought and who are not involved in preparing 
                such case for litigation.
            ``(7) Access to case files.--
                    ``(A) In general.--In any case in which a 
                conference with the Internal Revenue Service 
                Independent Office of Appeals has been scheduled upon 
                request of a specified taxpayer, the Chief of Appeals 
                shall ensure that such taxpayer is provided access to 
                the nonprivileged portions of the case file on record 
                regarding the disputed issues (other than documents 
                provided by the taxpayer to the Internal Revenue 
                Service) not later than 10 days before the date of such 
                conference.
                    ``(B) Taxpayer election to expedite conference.--If 
                the taxpayer so elects, subparagraph (A) shall be 
                applied by substituting `the date of such conference' 
                for `10 days before the date of such conference'.
                    ``(C) Specified taxpayer.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `specified 
                        taxpayer' means--
                                    ``(I) in the case of any taxpayer 
                                who is a natural person, a taxpayer 
                                whose adjusted gross income does not 
                                exceed $400,000 for the taxable year to 
                                which the dispute relates, and
                                    ``(II) in the case of any other 
                                taxpayer, a taxpayer whose gross 
                                receipts do not exceed $5 million for 
                                the taxable year to which the dispute 
                                relates.
                            ``(ii) Aggregation rule.--Rules similar to 
                        the rules of section 448(c)(2) shall apply for 
                        purposes of clause (i)(II).''.
    (b) Conforming Amendments.--
            (1) The following provisions are each amended by striking 
        ``Internal Revenue Service Office of Appeals'' and inserting 
        ``Internal Revenue Service Independent Office of Appeals'':
                    (A) Section 6015(c)(4)(B)(ii)(I).
                    (B) Section 6320(b)(1).
                    (C) Subsections (b)(1) and (d)(3) of section 6330.
                    (D) Section 6603(d)(3)(B).
                    (E) Section 6621(c)(2)(A)(i).
                    (F) Section 7122(e)(2).
                    (G) Subsections (a), (b)(1), (b)(2), and (c)(1) of 
                section 7123.
                    (H) Subsections (c)(7)(B)(i) and (g)(2)(A) of 
                section 7430.
                    (I) Section 7522(b)(3).
                    (J) Section 7612(c)(2)(A).
            (2) Section 7430(c)(2) is amended by striking ``Internal 
        Revenue Service Office of Appeals'' each place it appears and 
        inserting ``Internal Revenue Service Independent Office of 
        Appeals''.
            (3) The heading of section 6330(d)(3) is amended by 
        inserting ``independent'' after ``irs''.
    (c) Other References.--Any reference in any provision of law, or 
regulation or other guidance, to the Internal Revenue Service Office of 
Appeals shall be treated as a reference to the Internal Revenue Service 
Independent Office of Appeals.
    (d) Savings Provisions.--Rules similar to the rules of paragraphs 
(2) through (6) of section 1001(b) of the Internal Revenue Service 
Restructuring and Reform Act of 1998 shall apply for purposes of this 
section (and the amendments made by this section).
    (e) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on the date of the enactment of this Act.
            (2) Access to case files.--Section 7803(e)(7) of the 
        Internal Revenue Code of 1986, as added by subsection (a), 
        shall apply to conferences occurring after the date which is 1 
        year after the date of the enactment of this Act.

                      Subtitle B--Improved Service

SEC. 1101. COMPREHENSIVE CUSTOMER SERVICE STRATEGY.

    (a) In General.--Not later than the date which is 1 year after the 
date of the enactment of this Act, the Secretary of the Treasury (or 
the Secretary's delegate) shall submit to Congress a written 
comprehensive customer service strategy for the Internal Revenue 
Service. Such strategy shall include--
            (1) a plan to provide assistance to taxpayers that is 
        secure, designed to meet reasonable taxpayer expectations, and 
        adopts appropriate best practices of customer service provided 
        in the private sector, including online services, telephone 
        call back services, and training of employees providing 
        customer services;
            (2) a thorough assessment of the services that the Internal 
        Revenue Service can co-locate with other Federal services or 
        offer as self-service options;
            (3) proposals to improve Internal Revenue Service customer 
        service in the short term (the current and following fiscal 
        year), medium term (approximately 3 to 5 fiscal years), and 
        long term (approximately 10 fiscal years);
            (4) a plan to update guidance and training materials for 
        customer service employees of the Internal Revenue Service, 
        including the Internal Revenue Manual, to reflect such 
        strategy; and
            (5) identified metrics and benchmarks for quantitatively 
        measuring the progress of the Internal Revenue Service in 
        implementing such strategy.
    (b) Updated Guidance and Training Materials.--Not later than 2 
years after the date of the enactment of this Act, the Secretary of the 
Treasury (or the Secretary's delegate) shall make available the updated 
guidance and training materials described in subsection (a)(4) 
(including the Internal Revenue Manual). Such updated guidance and 
training materials (including the Internal Revenue Manual) shall be 
written in a manner so as to be easily understood by customer service 
employees of the Internal Revenue Service and shall provide clear 
instructions.

SEC. 1102. LOW-INCOME EXCEPTION FOR PAYMENTS OTHERWISE REQUIRED IN 
              CONNECTION WITH A SUBMISSION OF AN OFFER-IN-COMPROMISE.

    (a) In General.--Section 7122(c) is amended by adding at the end 
the following new paragraph:
            ``(3) Exception for low-income taxpayers.--Paragraph (1), 
        and any user fee otherwise required in connection with the 
        submission of an offer-in-compromise, shall not apply to any 
        offer-in-compromise with respect to a taxpayer who is an 
        individual with adjusted gross income, as determined for the 
        most recent taxable year for which such information is 
        available, which does not exceed 250 percent of the applicable 
        poverty level (as determined by the Secretary).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to offers-in-compromise submitted after the date of the enactment of 
this Act.

                    Subtitle C--Sensible Enforcement

SEC. 1201. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH RESPECT 
              TO STRUCTURING TRANSACTIONS.

    Section 5317(c)(2) of title 31, United States Code, is amended--
            (1) by striking ``Any property'' and inserting the 
        following:
                    ``(A) In general.--Any property''; and
            (2) by adding at the end the following:
                    ``(B) Internal revenue service seizure requirements 
                with respect to structuring transactions.--
                            ``(i) Property derived from an illegal 
                        source.--Property may only be seized by the 
                        Internal Revenue Service pursuant to 
                        subparagraph (A) by reason of a claimed 
                        violation of section 5324 if the property to be 
                        seized was derived from an illegal source or 
                        the funds were structured for the purpose of 
                        concealing the violation of a criminal law or 
                        regulation other than section 5324.
                            ``(ii) Notice.--Not later than 30 days 
                        after property is seized by the Internal 
                        Revenue Service pursuant to subparagraph (A), 
                        the Internal Revenue Service shall--
                                    ``(I) make a good faith effort to 
                                find all persons with an ownership 
                                interest in such property; and
                                    ``(II) provide each such person so 
                                found with a notice of the seizure and 
                                of the person's rights under clause 
                                (iv).
                            ``(iii) Extension of notice under certain 
                        circumstances.--The Internal Revenue Service 
                        may apply to a court of competent jurisdiction 
                        for one 30-day extension of the notice 
                        requirement under clause (ii) if the Internal 
                        Revenue Service can establish probable cause of 
                        an imminent threat to national security or 
                        personal safety necessitating such extension.
                            ``(iv) Post-seizure hearing.--If a person 
                        with an ownership interest in property seized 
                        pursuant to subparagraph (A) by the Internal 
                        Revenue Service requests a hearing by a court 
                        of competent jurisdiction within 30 days after 
                        the date on which notice is provided under 
                        subclause (ii), such property shall be returned 
                        unless the court holds an adversarial hearing 
                        and finds within 30 days of such request (or 
                        such longer period as the court may provide, 
                        but only on request of an interested party) 
                        that there is probable cause to believe that 
                        there is a violation of section 5324 involving 
                        such property and probable cause to believe 
                        that the property to be seized was derived from 
                        an illegal source or the funds were structured 
                        for the purpose of concealing the violation of 
                        a criminal law or regulation other than section 
                        5324.''.

SEC. 1202. EXCLUSION OF INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY 
              SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON 
              STRUCTURING TRANSACTION.

    (a) In General.--Part III of subchapter B of chapter 1 is amended 
by inserting before section 140 the following new section:

``SEC. 139H. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY 
              THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING 
              TRANSACTION.

    ``Gross income shall not include any interest received from the 
Federal Government in connection with an action to recover property 
seized by the Internal Revenue Service pursuant to section 5317(c)(2) 
of title 31, United States Code, by reason of a claimed violation of 
section 5324 of such title.''.
    (b) Clerical Amendment.--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:

``Sec. 139H. Interest received in action to recover property seized by 
                            the Internal Revenue Service based on 
                            structuring transaction.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest received on or after the date of the enactment of 
this Act.

SEC. 1203. CLARIFICATION OF EQUITABLE RELIEF FROM JOINT LIABILITY.

    (a) In General.--Section 6015 is amended--
            (1) in subsection (e), by adding at the end the following 
        new paragraph:
            ``(7) Standard and scope of review.--Any review of a 
        determination made under this section shall be reviewed de novo 
        by the Tax Court and shall be based upon--
                    ``(A) the administrative record established at the 
                time of the determination, and
                    ``(B) any additional newly discovered or previously 
                unavailable evidence.''; and
            (2) by amending subsection (f) to read as follows:
    ``(f) Equitable Relief.--
            ``(1) In general.--Under procedures prescribed by the 
        Secretary, if--
                    ``(A) taking into account all the facts and 
                circumstances, it is inequitable to hold the individual 
                liable for any unpaid tax or any deficiency (or any 
                portion of either), and
                    ``(B) relief is not available to such individual 
                under subsection (b) or (c),
        the Secretary may relieve such individual of such liability.
            ``(2) Limitation.--A request for equitable relief under 
        this subsection may be made with respect to any portion of any 
        liability that--
                    ``(A) has not been paid, provided that such request 
                is made before the expiration of the applicable period 
                of limitation under section 6502, or
                    ``(B) has been paid, provided that such request is 
                made during the period in which the individual could 
                submit a timely claim for refund or credit of such 
                payment.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to petitions or requests filed or pending on or after the date of 
the enactment of this Act.

SEC. 1204. MODIFICATION OF PROCEDURES FOR ISSUANCE OF THIRD-PARTY 
              SUMMONS.

    (a) In General.--Section 7609(f) is amended by adding at the end 
the following flush sentence:
``The Secretary shall not issue any summons described in the preceding 
sentence unless the information sought to be obtained is narrowly 
tailored to information that pertains to the failure (or potential 
failure) of the person or group or class of persons referred to in 
paragraph (2) to comply with one or more provisions of the internal 
revenue law which have been identified for purposes of such 
paragraph.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to summonses served after the date that is 45 days after the date 
of the enactment of this Act.

SEC. 1205. PRIVATE DEBT COLLECTION AND SPECIAL COMPLIANCE PERSONNEL 
              PROGRAM.

    (a) Certain Tax Receivables Not Eligible for Collection Under Tax 
Collection Contracts.--Section 6306(d)(3) is amended by striking ``or'' 
at the end of subparagraph (C) and by inserting after subparagraph (D) 
the following new subparagraphs:
                    ``(E) a taxpayer substantially all of whose income 
                consists of disability insurance benefits under section 
                223 of the Social Security Act or supplemental security 
                income benefits under title XVI of the Social Security 
                Act (including supplemental security income benefits of 
                the type described in section 1616 of such Act or 
                section 212 of Public Law 93-66), or
                    ``(F) a taxpayer who is an individual with adjusted 
                gross income, as determined for the most recent taxable 
                year for which such information is available, which 
                does not exceed 200 percent of the applicable poverty 
                level (as determined by the Secretary),''.
    (b) Determination of Inactive Tax Receivables Eligible for 
Collection Under Tax Collection Contracts.--Section 6306(c)(2)(A)(ii) 
is amended by striking ``more than \1/3\ of the period of the 
applicable statute of limitation has lapsed'' and inserting ``more than 
2 years has passed since assessment''.
    (c) Maximum Length of Installment Agreements Offered Under Tax 
Collection Contracts.--Section 6306(b)(1)(B) is amended by striking ``5 
years'' and inserting ``7 years''.
    (d) Clarification That Special Compliance Personnel Program Account 
May Be Used for Program Costs.--
            (1) In general.--Section 6307(b) is amended--
                    (A) in paragraph (2), by striking all that follows 
                ``under such program'' and inserting a period, and
                    (B) in paragraph (3), by striking all that follows 
                ``out of such account'' and inserting ``for other than 
                program costs.''.
            (2) Communications, software, and technology costs treated 
        as program costs.--Section 6307(d)(2)(B) is amended by striking 
        ``telecommunications'' and inserting ``communications, 
        software, technology''.
            (3) Conforming amendment.--Section 6307(d)(2) is amended by 
        striking ``and'' at the end of subparagraph (A), by striking 
        the period at the end of subparagraph (B) and inserting ``, 
        and'', and by inserting after subparagraph (B) the following 
        new subparagraph:
                    ``(C) reimbursement of the Internal Revenue Service 
                or other government agencies for the cost of 
                administering the qualified tax collection program 
                under section 6306.''.
    (e) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        tax receivables identified by the Secretary (or the Secretary's 
        delegate) after December 31, 2020.
            (2) Maximum length of installment agreements.--The 
        amendment made by subsection (c) shall apply to contracts 
        entered into after the date of the enactment of this Act.
            (3) Use of special compliance personnel program account.--
        The amendment made by subsection (d) shall apply to amounts 
        expended from the special compliance personnel program account 
        after the date of the enactment of this Act.

SEC. 1206. REFORM OF NOTICE OF CONTACT OF THIRD PARTIES.

    (a) In General.--Section 7602(c)(1) is amended to read as follows:
            ``(1) General notice.--An officer or employee of the 
        Internal Revenue Service may not contact any person other than 
        the taxpayer with respect to the determination or collection of 
        the tax liability of such taxpayer unless such contact occurs 
        during a period (not greater than 1 year) which is specified in 
        a notice which--
                    ``(A) informs the taxpayer that contacts with 
                persons other than the taxpayer are intended to be made 
                during such period, and
                    ``(B) except as otherwise provided by the 
                Secretary, is provided to the taxpayer not later than 
                45 days before the beginning of such period.
        Nothing in the preceding sentence shall prevent the issuance of 
        notices to the same taxpayer with respect to the same tax 
        liability with periods specified therein that, in the 
        aggregate, exceed 1 year. A notice shall not be issued under 
        this paragraph unless there is an intent at the time such 
        notice is issued to contact persons other than the taxpayer 
        during the period specified in such notice. The preceding 
        sentence shall not prevent the issuance of a notice if the 
        requirement of such sentence is met on the basis of the 
        assumption that the information sought to be obtained by such 
        contact will not be obtained by other means before such 
        contact.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to notices provided, and contacts of persons made, after the date which 
is 45 days after the date of the enactment of this Act.

SEC. 1207. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED SUMMONS.

    (a) In General.--Paragraph (1) of section 6503(j) is amended by 
striking ``coordinated examination program'' and inserting 
``coordinated industry case program''.
    (b) Requirements for Summons.--Clause (i) of section 6503(j)(2)(A) 
is amended to read as follows:
                            ``(i) the issuance of such summons is 
                        preceded by a review and written approval of 
                        such issuance by the Commissioner of the 
                        relevant operating division of the Internal 
                        Revenue Service and the Chief Counsel which--
                                    ``(I) states facts clearly 
                                establishing that the Secretary has 
                                made reasonable requests for the 
                                information that is the subject of the 
                                summons, and
                                    ``(II) is attached to such 
                                summons,''.
    (c) Establishment That Reasonable Requests for Information Were 
Made.--Subsection (j) of section 6503 is amended by adding at the end 
the following new paragraph:
            ``(4) Establishment that reasonable requests for 
        information were made.--In any court proceeding described in 
        paragraph (3), the Secretary shall establish that reasonable 
        requests were made for the information that is the subject of 
        the summons.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to summonses issued after the date which is 45 days after the 
date of the enactment of this Act.

SEC. 1208. LIMITATION ON ACCESS OF NON-INTERNAL REVENUE SERVICE 
              EMPLOYEES TO RETURNS AND RETURN INFORMATION.

    (a) In General.--Section 7602 is amended by adding at the end the 
following new subsection:
    ``(f) Limitation on Access of Persons Other Than Internal Revenue 
Service Officers and Employees.--The Secretary shall not, under the 
authority of section 6103(n), provide any books, papers, records, or 
other data obtained pursuant to this section to any person authorized 
under section 6103(n), except when such person requires such 
information for the sole purpose of providing expert evaluation and 
assistance to the Internal Revenue Service. No person other than an 
officer or employee of the Internal Revenue Service or the Office of 
Chief Counsel may, on behalf of the Secretary, question a witness under 
oath whose testimony was obtained pursuant to this section.''.
    (b) Effective Date.--The amendment made by this section--
            (1) shall take effect on the date of the enactment of this 
        Act; and
            (2) shall not fail to apply to a contract in effect under 
        section 6103(n) of the Internal Revenue Code of 1986 merely 
        because such contract was in effect before the date of the 
        enactment of this Act.

                Subtitle D--Organizational Modernization

SEC. 1301. OFFICE OF THE NATIONAL TAXPAYER ADVOCATE.

    (a) Taxpayer Advocate Directives.--
            (1) In general.--Section 7803(c) is amended by adding at 
        the end the following new paragraph:
            ``(5) Taxpayer advocate directives.--In the case of any 
        Taxpayer Advocate Directive issued by the National Taxpayer 
        Advocate pursuant to a delegation of authority from the 
        Commissioner of Internal Revenue--
                    ``(A) the Commissioner or a Deputy Commissioner 
                shall modify, rescind, or ensure compliance with such 
                directive not later than 90 days after the issuance of 
                such directive, and
                    ``(B) in the case of any directive which is 
                modified or rescinded by a Deputy Commissioner, the 
                National Taxpayer Advocate may (not later than 90 days 
                after such modification or rescission) appeal to the 
                Commissioner, and the Commissioner shall (not later 
                than 90 days after such appeal is made) ensure 
                compliance with such directive as issued by the 
                National Taxpayer Advocate or provide the National 
                Taxpayer Advocate with the reasons for any modification 
                or rescission made or upheld by the Commissioner 
                pursuant to such appeal.''.
            (2) Report to certain committees of congress regarding 
        directives.--Section 7803(c)(2)(B)(ii) is amended by 
        redesignating subclauses (VIII) through (XI) as subclauses (IX) 
        through (XII), respectively, and by inserting after subclause 
        (VII) the following new subclause:
                                    ``(VIII) identify any Taxpayer 
                                Advocate Directive which was not 
                                honored by the Internal Revenue Service 
                                in a timely manner, as specified under 
                                paragraph (5);''.
    (b) National Taxpayer Advocate Annual Reports to Congress.--
            (1) Inclusion of most serious taxpayer problems.--Section 
        7803(c)(2)(B)(ii)(III) is amended by striking ``at least 20 of 
        the'' and inserting ``the 10''.
            (2) Coordination with treasury inspector general for tax 
        administration.--Section 7803(c)(2) is amended by adding at the 
        end the following new subparagraph:
                    ``(E) Coordination with treasury inspector general 
                for tax administration.--Before beginning any research 
                or study, the National Taxpayer Advocate shall 
                coordinate with the Treasury Inspector General for Tax 
                Administration to ensure that the National Taxpayer 
                Advocate does not duplicate any action that the 
                Treasury Inspector General for Tax Administration has 
                already undertaken or has a plan to undertake.''.
            (3) Statistical support.--
                    (A) In general.--Section 6108 is amended by adding 
                at the end the following new subsection:
    ``(d) Statistical Support for National Taxpayer Advocate.--Upon 
request of the National Taxpayer Advocate, the Secretary shall, to the 
extent practicable, provide the National Taxpayer Advocate with 
statistical support in connection with the preparation by the National 
Taxpayer Advocate of the annual report described in section 
7803(c)(2)(B)(ii). Such statistical support shall include statistical 
studies, compilations, and the review of information provided by the 
National Taxpayer Advocate for statistical validity and sound 
statistical methodology.''.
                    (B) Disclosure of review.--Section 
                7803(c)(2)(B)(ii), as amended by subsection (a), is 
                amended by striking ``and'' at the end of subclause 
                (XI), by redesignating subclause (XII) as subclause 
                (XIII), and by inserting after subclause (XI) the 
                following new subclause:
                                    ``(XII) with respect to any 
                                statistical information included in 
                                such report, include a statement of 
                                whether such statistical information 
                                was reviewed or provided by the 
                                Secretary under section 6108(d) and, if 
                                so, whether the Secretary determined 
                                such information to be statistically 
                                valid and based on sound statistical 
                                methodology; and''.
                    (C) Conforming amendment.--Section 
                7803(c)(2)(B)(iii) is amended by adding at the end the 
                following: ``The preceding sentence shall not apply 
                with respect to statistical information provided to the 
                Secretary for review, or received from the Secretary, 
                under section 6108(d).''.
    (c) Salary of National Taxpayer Advocate.--Section 7803(c)(1)(B)(i) 
is amended by striking ``, or, if the Secretary of the Treasury so 
determines, at a rate fixed under section 9503 of such title''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on the date of the enactment of this Act.
            (2) Salary of national taxpayer advocate.--The amendment 
        made by subsection (c) shall apply to compensation paid to 
        individuals appointed as the National Taxpayer Advocate after 
        March 31, 2019.

SEC. 1302. MODERNIZATION OF INTERNAL REVENUE SERVICE ORGANIZATIONAL 
              STRUCTURE.

    (a) In General.--Not later than September 30, 2020, the Secretary 
of the Treasury (or the Secretary's delegate) shall submit to Congress 
a comprehensive written plan to redesign the organization of the 
Internal Revenue Service. Such plan shall--
            (1) ensure the successful implementation of the priorities 
        specified by Congress in this Act;
            (2) prioritize taxpayer services to ensure that all 
        taxpayers easily and readily receive the assistance that they 
        need;
            (3) streamline the structure of the agency including 
        minimizing the duplication of services and responsibilities 
        within the agency;
            (4) best position the Internal Revenue Service to combat 
        cybersecurity and other threats to the Internal Revenue 
        Service; and
            (5) address whether the Criminal Investigation Division of 
        the Internal Revenue Service should report directly to the 
        Commissioner of Internal Revenue.
    (b) Repeal of Restriction on Organizational Structure of Internal 
Revenue Service.--Paragraph (3) of section 1001(a) of the Internal 
Revenue Service Restructuring and Reform Act of 1998 shall cease to 
apply beginning 1 year after the date on which the plan described in 
subsection (a) is submitted to Congress.

                      Subtitle E--Other Provisions

SEC. 1401. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.

    (a) In General.--Chapter 77 is amended by inserting after section 
7526 the following new section:

``SEC. 7526A. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.

    ``(a) Establishment of Volunteer Income Tax Assistance Matching 
Grant Program.--The Secretary shall establish a Community Volunteer 
Income Tax Assistance Matching Grant Program under which the Secretary 
may, subject to the availability of appropriated funds, make grants to 
provide matching funds for the development, expansion, or continuation 
of qualified return preparation programs assisting applicable taxpayers 
and members of underserved populations.
    ``(b) Use of Funds.--
            ``(1) In general.--Qualified return preparation programs 
        may use grants received under this section for--
                    ``(A) ordinary and necessary costs associated with 
                program operation in accordance with cost principles 
                under the applicable Office of Management and Budget 
                circular, including--
                            ``(i) wages or salaries of persons 
                        coordinating the activities of the program,
                            ``(ii) developing training materials, 
                        conducting training, and performing quality 
                        reviews of the returns prepared under the 
                        program,
                            ``(iii) equipment purchases, and
                            ``(iv) vehicle-related expenses associated 
                        with remote or rural tax preparation services,
                    ``(B) outreach and educational activities described 
                in subsection (c)(2)(B), and
                    ``(C) services related to financial education and 
                capability, asset development, and the establishment of 
                savings accounts in connection with tax return 
                preparation.
            ``(2) Requirement of matching funds.--A qualified return 
        preparation program must provide matching funds on a dollar-
        for-dollar basis for all grants provided under this section. 
        Matching funds may include--
                    ``(A) the salary (including fringe benefits) of 
                individuals performing services for the program,
                    ``(B) the cost of equipment used in the program, 
                and
                    ``(C) other ordinary and necessary costs associated 
                with the program.
        Indirect expenses, including general overhead of any entity 
        administering the program, shall not be counted as matching 
        funds.
    ``(c) Application.--
            ``(1) In general.--Each applicant for a grant under this 
        section shall submit an application to the Secretary at such 
        time, in such manner, and containing such information as the 
        Secretary may reasonably require.
            ``(2) Priority.--In awarding grants under this section, the 
        Secretary shall give priority to applications which 
        demonstrate--
                    ``(A) assistance to applicable taxpayers, with 
                emphasis on outreach to, and services for, such 
                taxpayers,
                    ``(B) taxpayer outreach and educational activities 
                relating to eligibility and availability of income 
                supports available through this title, including the 
                earned income tax credit, and
                    ``(C) specific outreach and focus on one or more 
                underserved populations.
            ``(3) Amounts taken into account.--In determining matching 
        grants under this section, the Secretary shall only take into 
        account amounts provided by the qualified return preparation 
        program for expenses described in subsection (b).
    ``(d) Program Adherence.--
            ``(1) In general.--The Secretary shall establish procedures 
        for, and shall conduct not less frequently than once every 5 
        calendar years during which a qualified return preparation 
        program is operating under a grant under this section, periodic 
        site visits--
                    ``(A) to ensure the program is carrying out the 
                purposes of this section, and
                    ``(B) to determine whether the program meets such 
                program adherence standards as the Secretary shall by 
                regulation or other guidance prescribe.
            ``(2) Additional requirements for grant recipients not 
        meeting program adherence standards.--In the case of any 
        qualified return preparation program which--
                    ``(A) is awarded a grant under this section, and
                    ``(B) is subsequently determined--
                            ``(i) not to meet the program adherence 
                        standards described in paragraph (1)(B), or
                            ``(ii) not to be otherwise carrying out the 
                        purposes of this section,
        such program shall not be eligible for any additional grants 
        under this section unless such program provides sufficient 
        documentation of corrective measures established to address any 
        such deficiencies determined.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Qualified return preparation program.--The term 
        `qualified return preparation program' means any program--
                    ``(A) which provides assistance to individuals, not 
                less than 90 percent of whom are applicable taxpayers, 
                in preparing and filing Federal income tax returns,
                    ``(B) which is administered by a qualified entity,
                    ``(C) in which all volunteers who assist in the 
                preparation of Federal income tax returns meet the 
                training requirements prescribed by the Secretary, and
                    ``(D) which uses a quality review process which 
                reviews 100 percent of all returns.
            ``(2) Qualified entity.--
                    ``(A) In general.--The term `qualified entity' 
                means any entity which--
                            ``(i) is an eligible organization,
                            ``(ii) is in compliance with Federal tax 
                        filing and payment requirements,
                            ``(iii) is not debarred or suspended from 
                        Federal contracts, grants, or cooperative 
                        agreements, and
                            ``(iv) agrees to provide documentation to 
                        substantiate any matching funds provided 
                        pursuant to the grant program under this 
                        section.
                    ``(B) Eligible organization.--The term `eligible 
                organization' means--
                            ``(i) an institution of higher education 
                        which is described in section 102 (other than 
                        subsection (a)(1)(C) thereof) of the Higher 
                        Education Act of 1965 (20 U.S.C. 1002), as in 
                        effect on the date of the enactment of this 
                        section, and which has not been disqualified 
                        from participating in a program under title IV 
                        of such Act,
                            ``(ii) an organization described in section 
                        501(c) and exempt from tax under section 
                        501(a),
                            ``(iii) a local government agency, 
                        including--
                                    ``(I) a county or municipal 
                                government agency, and
                                    ``(II) an Indian tribe, as defined 
                                in section 4(13) of the Native American 
                                Housing Assistance and Self-
                                Determination Act of 1996 (25 U.S.C. 
                                4103(13)), including any tribally 
                                designated housing entity (as defined 
                                in section 4(22) of such Act (25 U.S.C. 
                                4103(22))), tribal subsidiary, 
                                subdivision, or other wholly owned 
                                tribal entity,
                            ``(iv) a local, State, regional, or 
                        national coalition (with one lead organization 
                        which meets the eligibility requirements of 
                        clause (i), (ii), or (iii) acting as the 
                        applicant organization), or
                            ``(v) in the case of applicable taxpayers 
                        and members of underserved populations with 
                        respect to which no organizations described in 
                        the preceding clauses are available--
                                    ``(I) a State government agency, or
                                    ``(II) an office providing 
                                Cooperative Extension services (as 
                                established at the land-grant colleges 
                                and universities under the Smith-Lever 
                                Act of May 8, 1914).
            ``(3) Applicable taxpayers.--The term `applicable taxpayer' 
        means a taxpayer whose income for the taxable year does not 
        exceed an amount equal to the completed phaseout amount under 
        section 32(b) for a married couple filing a joint return with 
        three or more qualifying children, as determined in a revenue 
        procedure or other published guidance.
            ``(4) Underserved population.--The term `underserved 
        population' includes populations of persons with disabilities, 
        persons with limited English proficiency, Native Americans, 
        individuals living in rural areas, members of the Armed Forces 
        and their spouses, and the elderly.
    ``(f) Special Rules and Limitations.--
            ``(1) Duration of grants.--Upon application of a qualified 
        return preparation program, the Secretary is authorized to 
        award a multi-year grant not to exceed 3 years.
            ``(2) Aggregate limitation.--Unless otherwise provided by 
        specific appropriation, the Secretary shall not allocate more 
        than $30 million per fiscal year (exclusive of costs of 
        administering the program) to grants under this section.
    ``(g) Promotion of Programs.--
            ``(1) In general.--The Secretary shall promote tax 
        preparation through qualified return preparation programs 
        through the use of mass communications and other means.
            ``(2) Provision of information regarding qualified return 
        preparation programs.--The Secretary may provide taxpayers 
        information regarding qualified return preparation programs 
        receiving grants under this section.
            ``(3) Referrals to low-income taxpayer clinics.--Qualified 
        return preparation programs receiving a grant under this 
        section are encouraged, in appropriate cases, to--
                    ``(A) advise taxpayers of the availability of, and 
                eligibility requirements for receiving, advice and 
                assistance from qualified low-income taxpayer clinics 
                receiving funding under section 7526, and
                    ``(B) provide information regarding the location 
                of, and contact information for, such clinics.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by inserting after the item relating to section 7526 the 
following new item:

``Sec. 7526A. Return preparation programs for applicable taxpayers.''.

SEC. 1402. PROVISION OF INFORMATION REGARDING LOW-INCOME TAXPAYER 
              CLINICS.

    (a) In General.--Section 7526(c) is amended by adding at the end 
the following new paragraph:
            ``(6) Provision of information regarding qualified low-
        income taxpayer clinics.--Notwithstanding any other provision 
        of law, officers and employees of the Department of the 
        Treasury may--
                    ``(A) advise taxpayers of the availability of, and 
                eligibility requirements for receiving, advice and 
                assistance from one or more specific qualified low-
                income taxpayer clinics receiving funding under this 
                section, and
                    ``(B) provide information regarding the location 
                of, and contact information for, such clinics.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 1403. NOTICE FROM IRS REGARDING CLOSURE OF TAXPAYER ASSISTANCE 
              CENTERS.

    Not later than 90 days before the date that a proposed closure of a 
Taxpayer Assistance Center would take effect, the Secretary of the 
Treasury (or the Secretary's delegate) shall--
            (1) make publicly available (including by non-electronic 
        means) a notice which--
                    (A) identifies the Taxpayer Assistance Center 
                proposed for closure and the date of such proposed 
                closure; and
                    (B) identifies the relevant alternative sources of 
                taxpayer assistance which may be utilized by taxpayers 
                affected by such proposed closure; and
            (2) submit to Congress a written report that includes--
                    (A) the information included in the notice 
                described in paragraph (1);
                    (B) the reasons for such proposed closure; and
                    (C) such other information as the Secretary may 
                determine appropriate.

SEC. 1404. RULES FOR SEIZURE AND SALE OF PERISHABLE GOODS RESTRICTED TO 
              ONLY PERISHABLE GOODS.

    (a) In General.--Section 6336 is amended by striking ``or become 
greatly reduced in price or value by keeping, or that such property 
cannot be kept without great expense''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property seized after the date of the enactment of this Act.

SEC. 1405. WHISTLEBLOWER REFORMS.

    (a) Modifications to Disclosure Rules for Whistleblowers.--
            (1) In general.--Section 6103(k) is amended by adding at 
        the end the following new paragraph:
            ``(13) Disclosure to whistleblowers.--
                    ``(A) In general.--The Secretary may disclose, to 
                any individual providing information relating to any 
                purpose described in paragraph (1) or (2) of section 
                7623(a), return information related to the 
                investigation of any taxpayer with respect to whom the 
                individual has provided such information, but only to 
                the extent that such disclosure is necessary in 
                obtaining information, which is not otherwise 
                reasonably available, with respect to the correct 
                determination of tax liability for tax, or the amount 
                to be collected with respect to the enforcement of any 
                other provision of this title.
                    ``(B) Updates on whistleblower investigations.--The 
                Secretary shall disclose to an individual providing 
                information relating to any purpose described in 
                paragraph (1) or (2) of section 7623(a) the following:
                            ``(i) Not later than 60 days after a case 
                        for which the individual has provided 
                        information has been referred for an audit or 
                        examination, a notice with respect to such 
                        referral.
                            ``(ii) Not later than 60 days after a 
                        taxpayer with respect to whom the individual 
                        has provided information has made a payment of 
                        tax with respect to tax liability to which such 
                        information relates, a notice with respect to 
                        such payment.
                            ``(iii) Subject to such requirements and 
                        conditions as are prescribed by the Secretary, 
                        upon a written request by such individual--
                                    ``(I) information on the status and 
                                stage of any investigation or action 
                                related to such information, and
                                    ``(II) in the case of a 
                                determination of the amount of any 
                                award under section 7623(b), the 
                                reasons for such determination.
                Clause (iii) shall not apply to any information if the 
                Secretary determines that disclosure of such 
                information would seriously impair Federal tax 
                administration. Information described in clauses (i), 
                (ii), and (iii) may be disclosed to a designee of the 
                individual providing such information in accordance 
                with guidance provided by the Secretary.''.
            (2) Conforming amendments.--
                    (A) Confidentiality of information.--Section 
                6103(a)(3) is amended by striking ``subsection 
                (k)(10)'' and inserting ``paragraph (10) or (13) of 
                subsection (k)''.
                    (B) Penalty for unauthorized disclosure.--Section 
                7213(a)(2) is amended by striking ``(k)(10)'' and 
                inserting ``(k)(10) or (13)''.
                    (C) Coordination with authority to disclose for 
                investigative purposes.--Section 6103(k)(6) is amended 
                by adding at the end the following new sentence: ``This 
                paragraph shall not apply to any disclosure to an 
                individual providing information relating to any 
                purpose described in paragraph (1) or (2) of section 
                7623(a) which is made under paragraph (13)(A).''.
    (b) Protection Against Retaliation.--Section 7623 is amended by 
adding at the end the following new subsection:
    ``(d) Civil Action To Protect Against Retaliation Cases.--
            ``(1) Anti-retaliation whistleblower protection for 
        employees.--No employer, or any officer, employee, contractor, 
        subcontractor, or agent of such employer, may discharge, 
        demote, suspend, threaten, harass, or in any other manner 
        discriminate against an employee in the terms and conditions of 
        employment (including through an act in the ordinary course of 
        such employee's duties) in reprisal for any lawful act done by 
        the employee--
                    ``(A) to provide information, cause information to 
                be provided, or otherwise assist in an investigation 
                regarding underpayment of tax or any conduct which the 
                employee reasonably believes constitutes a violation of 
                the internal revenue laws or any provision of Federal 
                law relating to tax fraud, when the information or 
                assistance is provided to the Internal Revenue Service, 
                the Secretary of the Treasury, the Treasury Inspector 
                General for Tax Administration, the Comptroller General 
                of the United States, the Department of Justice, the 
                United States Congress, a person with supervisory 
                authority over the employee, or any other person 
                working for the employer who has the authority to 
                investigate, discover, or terminate misconduct, or
                    ``(B) to testify, participate in, or otherwise 
                assist in any administrative or judicial action taken 
                by the Internal Revenue Service relating to an alleged 
                underpayment of tax or any violation of the internal 
                revenue laws or any provision of Federal law relating 
                to tax fraud.
            ``(2) Enforcement action.--
                    ``(A) In general.--A person who alleges discharge 
                or other reprisal by any person in violation of 
                paragraph (1) may seek relief under paragraph (3) by--
                            ``(i) filing a complaint with the Secretary 
                        of Labor, or
                            ``(ii) if the Secretary of Labor has not 
                        issued a final decision within 180 days of the 
                        filing of the complaint and there is no showing 
                        that such delay is due to the bad faith of the 
                        claimant, bringing an action at law or equity 
                        for de novo review in the appropriate district 
                        court of the United States, which shall have 
                        jurisdiction over such an action without regard 
                        to the amount in controversy.
                    ``(B) Procedure.--
                            ``(i) In general.--An action under 
                        subparagraph (A)(i) shall be governed under the 
                        rules and procedures set forth in section 
                        42121(b) of title 49, United States Code.
                            ``(ii) Exception.--Notification made under 
                        section 42121(b)(1) of title 49, United States 
                        Code, shall be made to the person named in the 
                        complaint and to the employer.
                            ``(iii) Burdens of proof.--An action 
                        brought under subparagraph (A)(ii) shall be 
                        governed by the legal burdens of proof set 
                        forth in section 42121(b) of title 49, United 
                        States Code, except that in applying such 
                        section--
                                    ``(I) `behavior described in 
                                paragraph (1)' shall be substituted for 
                                `behavior described in paragraphs (1) 
                                through (4) of subsection (a)' each 
                                place it appears in paragraph (2)(B) 
                                thereof, and
                                    ``(II) `a violation of paragraph 
                                (1)' shall be substituted for `a 
                                violation of subsection (a)' each place 
                                it appears.
                            ``(iv) Statute of limitations.--A complaint 
                        under subparagraph (A)(i) shall be filed not 
                        later than 180 days after the date on which the 
                        violation occurs.
                            ``(v) Jury trial.--A party to an action 
                        brought under subparagraph (A)(ii) shall be 
                        entitled to trial by jury.
            ``(3) Remedies.--
                    ``(A) In general.--An employee prevailing in any 
                action under paragraph (2)(A) shall be entitled to all 
                relief necessary to make the employee whole.
                    ``(B) Compensatory damages.--Relief for any action 
                under subparagraph (A) shall include--
                            ``(i) reinstatement with the same seniority 
                        status that the employee would have had, but 
                        for the reprisal,
                            ``(ii) the sum of 200 percent of the amount 
                        of back pay and 100 percent of all lost 
                        benefits, with interest, and
                            ``(iii) compensation for any special 
                        damages sustained as a result of the reprisal, 
                        including litigation costs, expert witness 
                        fees, and reasonable attorney fees.
            ``(4) Rights retained by employee.--Nothing in this section 
        shall be deemed to diminish the rights, privileges, or remedies 
        of any employee under any Federal or State law, or under any 
        collective bargaining agreement.
            ``(5) Nonenforceability of certain provisions waiving 
        rights and remedies or requiring arbitration of disputes.--
                    ``(A) Waiver of rights and remedies.--The rights 
                and remedies provided for in this subsection may not be 
                waived by any agreement, policy form, or condition of 
                employment, including by a predispute arbitration 
                agreement.
                    ``(B) Predispute arbitration agreements.--No 
                predispute arbitration agreement shall be valid or 
                enforceable, if the agreement requires arbitration of a 
                dispute arising under this subsection.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to disclosures made after the date of the enactment 
        of this Act.
            (2) Civil protection.--The amendment made by subsection (b) 
        shall take effect on the date of the enactment of this Act.

SEC. 1406. CUSTOMER SERVICE INFORMATION.

    The Secretary of the Treasury (or the Secretary's delegate) shall 
provide helpful information to taxpayers placed on hold during a 
telephone call to any Internal Revenue Service help line, including the 
following:
            (1) Information about common tax scams.
            (2) Information on where and how to report tax scams.
            (3) Additional advice on how taxpayers can protect 
        themselves from identity theft and tax scams.

SEC. 1407. MISDIRECTED TAX REFUND DEPOSITS.

    Section 6402 is amended by adding at the end the following new 
subsection:
    ``(n) Misdirected Direct Deposit Refund.--Not later than the date 
which is 6 months after the date of the enactment of the Taxpayer First 
Act, the Secretary shall prescribe regulations to establish procedures 
to allow for--
            ``(1) taxpayers to report instances in which a refund made 
        by the Secretary by electronic funds transfer was not 
        transferred to the account of the taxpayer;
            ``(2) coordination with financial institutions for the 
        purpose of--
                    ``(A) identifying the accounts to which transfers 
                described in paragraph (1) were made; and
                    ``(B) recovery of the amounts so transferred; and
            ``(3) the refund to be delivered to the correct account of 
        the taxpayer.''.

                       TITLE II--21ST CENTURY IRS

           Subtitle A--Cybersecurity and Identity Protection

SEC. 2001. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY THEFT REFUND 
              FRAUD.

    The Secretary of the Treasury (or the Secretary's delegate) shall 
work collaboratively with the public and private sectors to protect 
taxpayers from identity theft refund fraud.

SEC. 2002. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION ADVISORY 
              COMMITTEE REGARDING IDENTITY THEFT REFUND FRAUD.

    The Secretary of the Treasury shall ensure that the advisory group 
convened by the Secretary pursuant to section 2001(b)(2) of the 
Internal Revenue Service Restructuring and Reform Act of 1998 (commonly 
known as the Electronic Tax Administration Advisory Committee) studies 
(including by providing organized public forums) and makes 
recommendations to the Secretary regarding methods to prevent identity 
theft and refund fraud.

SEC. 2003. INFORMATION SHARING AND ANALYSIS CENTER.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) may participate in an information sharing and analysis center 
to centralize, standardize, and enhance data compilation and analysis 
to facilitate sharing actionable data and information with respect to 
identity theft tax refund fraud.
    (b) Development of Performance Metrics.--The Secretary of the 
Treasury (or the Secretary's delegate) shall develop metrics for 
measuring the success of such center in detecting and preventing 
identity theft tax refund fraud.
    (c) Disclosure.--
            (1) In general.--Section 6103(k), as amended by this Act, 
        is amended by adding at the end the following new paragraph:
            ``(14) Disclosure of return information for purposes of 
        cybersecurity and the prevention of identity theft tax refund 
        fraud.--
                    ``(A) In general.--Under such procedures and 
                subject to such conditions as the Secretary may 
                prescribe, the Secretary may disclose specified return 
                information to specified ISAC participants to the 
                extent that the Secretary determines such disclosure is 
                in furtherance of effective Federal tax administration 
                relating to the detection or prevention of identity 
                theft tax refund fraud, validation of taxpayer 
                identity, authentication of taxpayer returns, or 
                detection or prevention of cybersecurity threats.
                    ``(B) Specified isac participants.--For purposes of 
                this paragraph--
                            ``(i) In general.--The term `specified ISAC 
                        participant' means--
                                    ``(I) any person designated by the 
                                Secretary as having primary 
                                responsibility for a function performed 
                                with respect to the information sharing 
                                and analysis center described in 
                                section 2003(a) of the Taxpayer First 
                                Act, and
                                    ``(II) any person subject to the 
                                requirements of section 7216 and which 
                                is a participant in such information 
                                sharing and analysis center.
                            ``(ii) Information sharing agreement.--Such 
                        term shall not include any person unless such 
                        person has entered into a written agreement 
                        with the Secretary setting forth the terms and 
                        conditions for the disclosure of information to 
                        such person under this paragraph, including 
                        requirements regarding the protection and 
                        safeguarding of such information by such 
                        person.
                    ``(C) Specified return information.--For purposes 
                of this paragraph, the term `specified return 
                information' means--
                            ``(i) in the case of a return which is in 
                        connection with a case of potential identity 
                        theft refund fraud--
                                    ``(I) in the case of such return 
                                filed electronically, the internet 
                                protocol address, device 
                                identification, email domain name, 
                                speed of completion, method of 
                                authentication, refund method, and such 
                                other return information related to the 
                                electronic filing characteristics of 
                                such return as the Secretary may 
                                identify for purposes of this 
                                subclause, and
                                    ``(II) in the case of such return 
                                prepared by a tax return preparer, 
                                identifying information with respect to 
                                such tax return preparer, including the 
                                preparer taxpayer identification number 
                                and electronic filer identification 
                                number of such preparer,
                            ``(ii) in the case of a return which is in 
                        connection with a case of a identity theft 
                        refund fraud which has been confirmed by the 
                        Secretary (pursuant to such procedures as the 
                        Secretary may provide), the information 
                        referred to in subclauses (I) and (II) of 
                        clause (i), the name and taxpayer 
                        identification number of the taxpayer as it 
                        appears on the return, and any bank account and 
                        routing information provided for making a 
                        refund in connection with such return, and
                            ``(iii) in the case of any cybersecurity 
                        threat to the Internal Revenue Service, 
                        information similar to the information 
                        described in subclauses (I) and (II) of clause 
                        (i) with respect to such threat.
                    ``(D) Restriction on use of disclosed 
                information.--
                            ``(i) Designated third parties.--Any return 
                        information received by a person described in 
                        subparagraph (B)(i)(I) shall be used only for 
                        the purposes of and to the extent necessary 
                        in--
                                    ``(I) performing the function such 
                                person is designated to perform under 
                                such subparagraph,
                                    ``(II) facilitating disclosures 
                                authorized under subparagraph (A) to 
                                persons described in subparagraph 
                                (B)(i)(II), and
                                    ``(III) facilitating disclosures 
                                authorized under subsection (d) to 
                                participants in such information 
                                sharing and analysis center.
                            ``(ii) Return preparers.--Any return 
                        information received by a person described in 
                        subparagraph (B)(i)(II) shall be treated for 
                        purposes of section 7216 as information 
                        furnished to such person for, or in connection 
                        with, the preparation of a return of the tax 
                        imposed under chapter 1.
                    ``(E) Data protection and safeguards.--Return 
                information disclosed under this paragraph shall be 
                subject to such protections and safeguards as the 
                Secretary may require in regulations or other guidance 
                or in the written agreement referred to in subparagraph 
                (B)(ii). Such written agreement shall include a 
                requirement that any unauthorized access to information 
                disclosed under this paragraph, and any breach of any 
                system in which such information is held, be reported 
                to the Treasury Inspector General for Tax 
                Administration.''.
            (2) Application of civil and criminal penalties.--
                    (A) Section 6103(a)(3), as amended by this Act, is 
                amended by striking ``or (13)'' and inserting ``, (13), 
                or (14)''.
                    (B) Section 7213(a)(2), as amended by this Act, is 
                amended by striking ``or (13)'' and inserting ``, (13), 
                or (14)''.

SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.

    (a) In General.--Section 6103(p) is amended by adding at the end 
the following new paragraph:
            ``(9) 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 or 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.--Section 6103(p)(8)(B) is amended by 
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after December 31, 2022.

SEC. 2005. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBERS.

    (a) In General.--Subject to subsection (b), the Secretary of the 
Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall establish a program to issue, upon 
the request of any individual, a number which may be used in connection 
with such individual's social security number (or other identifying 
information with respect to such individual as determined by the 
Secretary) to assist the Secretary in verifying such individual's 
identity.
    (b) Requirements.--
            (1) Annual expansion.--For each calendar year beginning 
        after the date of the enactment of this Act, the Secretary 
        shall provide numbers through the program described in 
        subsection (a) to individuals residing in such States as the 
        Secretary deems appropriate, provided that the total number of 
        States served by such program during such year is greater than 
        the total number of States served by such program during the 
        preceding year.
            (2) Nationwide availability.--Not later than 5 years after 
        the date of the enactment of this Act, the Secretary shall 
        ensure that the program described in subsection (a) is made 
        available to any individual residing in the United States.

SEC. 2006. SINGLE POINT OF CONTACT FOR TAX-RELATED IDENTITY THEFT 
              VICTIMS.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall establish and implement procedures to ensure that any 
taxpayer whose return has been delayed or otherwise adversely affected 
due to tax-related identity theft has a single point of contact at the 
Internal Revenue Service throughout the processing of the taxpayer's 
case. The single point of contact shall track the taxpayer's case to 
completion and coordinate with other Internal Revenue Service employees 
to resolve case issues as quickly as possible.
    (b) Single Point of Contact.--
            (1) In general.--For purposes of subsection (a), the single 
        point of contact shall consist of a team or subset of specially 
        trained employees who--
                    (A) have the ability to work across functions to 
                resolve the issues involved in the taxpayer's case; and
                    (B) shall be accountable for handling the case 
                until its resolution.
            (2) Team or subset.--The employees included within the team 
        or subset described in paragraph (1) may change as required to 
        meet the needs of the Internal Revenue Service, provided that 
        procedures have been established to--
                    (A) ensure continuity of records and case history; 
                and
                    (B) notify the taxpayer when appropriate.

SEC. 2007. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

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

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

    ``(a) In General.--If the Secretary determines that there has been 
or may have been an unauthorized use of the identity of any individual, 
the Secretary shall, without jeopardizing an investigation relating to 
tax administration--
            ``(1) as soon as practicable--
                    ``(A) notify the individual of such determination,
                    ``(B) provide instructions on how to file a report 
                with law enforcement regarding the unauthorized use,
                    ``(C) identify any steps to be taken by the 
                individual to permit law enforcement to access personal 
                information of the individual during the investigation,
                    ``(D) provide information regarding actions the 
                individual may take in order to protect the individual 
                from harm relating to the unauthorized use, and
                    ``(E) offer identity protection measures to the 
                individual, such as the use of an identity protection 
                personal identification number, and
            ``(2) at the time the information described in paragraph 
        (1) is provided (or, if not available at such time, as soon as 
        practicable thereafter), issue additional notifications to such 
        individual (or such individual's designee) regarding--
                    ``(A) whether an investigation has been initiated 
                in regards to such unauthorized use,
                    ``(B) whether the investigation substantiated an 
                unauthorized use of the identity of the individual, and
                    ``(C) whether--
                            ``(i) any action has been taken against a 
                        person relating to such unauthorized use, or
                            ``(ii) any referral has been made for 
                        criminal prosecution of such person and, to the 
                        extent such information is available, whether 
                        such person has been criminally charged by 
                        indictment or information.
    ``(b) Employment-Related Identity Theft.--
            ``(1) In general.--For purposes of this section, the 
        unauthorized use of the identity of an individual includes the 
        unauthorized use of the identity of the individual to obtain 
        employment.
            ``(2) Determination of employment-related identity theft.--
        For purposes of this section, in making a determination as to 
        whether there has been or may have been an unauthorized use of 
        the identity of an individual to obtain employment, the 
        Secretary shall review any information--
                    ``(A) obtained from a statement described in 
                section 6051 or an information return relating to 
                compensation for services rendered other than as an 
                employee, or
                    ``(B) provided to the Internal Revenue Service by 
                the Social Security Administration regarding any 
                statement described in section 6051,
        which indicates that the social security account number 
        provided on such statement or information return does not 
        correspond with the name provided on such statement or 
        information return or the name on the tax return reporting the 
        income which is included on such statement or information 
        return.''.
    (b) Additional Measures.--
            (1) Examination of both paper and electronic statements and 
        returns.--The Secretary of the Treasury (or the Secretary's 
        delegate) shall examine the statements, information returns, 
        and tax returns described in section 7529(b)(2) of the Internal 
        Revenue Code of 1986 (as added by subsection (a)) for any 
        evidence of employment-related identity theft, regardless of 
        whether such statements or returns are submitted electronically 
        or on paper.
            (2) Improvement of effective return processing program with 
        social security administration.--Section 232 of the Social 
        Security Act (42 U.S.C. 432) is amended by inserting after the 
        third sentence the following: ``For purposes of carrying out 
        the return processing program described in the preceding 
        sentence, the Commissioner of Social Security shall request, 
        not less than annually, such information described in section 
        7529(b)(2) of the Internal Revenue Code of 1986 as may be 
        necessary to ensure the accuracy of the records maintained by 
        the Commissioner of Social Security related to the amounts of 
        wages paid to, and the amounts of self-employment income 
        derived by, individuals.''.
            (3) Underreporting of income.--The Secretary of the 
        Treasury (or the Secretary's delegate) shall establish 
        procedures to ensure that income reported in connection with 
        the unauthorized use of a taxpayer's identity is not taken into 
        account in determining any penalty for underreporting of income 
        by the victim of identity theft.
    (c) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

``Sec. 7529. Notification of suspected identity theft.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to determinations made after the date that is 6 months after the 
date of the enactment of this Act.

SEC. 2008. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate), in consultation with the National Taxpayer 
Advocate, shall develop and implement publicly available guidelines for 
management of cases involving stolen identity refund fraud in a manner 
that reduces the administrative burden on taxpayers who are victims of 
such fraud.
    (b) Standards and Procedures To Be Considered.--The guidelines 
described in subsection (a) may include--
            (1) standards for--
                    (A) the average length of time in which a case 
                involving stolen identity refund fraud should be 
                resolved;
                    (B) the maximum length of time, on average, a 
                taxpayer who is a victim of stolen identity refund 
                fraud and is entitled to a tax refund which has been 
                stolen should have to wait to receive such refund; and
                    (C) the maximum number of offices and employees 
                within the Internal Revenue Service with whom a 
                taxpayer who is a victim of stolen identity refund 
                fraud should be required to interact in order to 
                resolve a case;
            (2) standards for opening, assigning, reassigning, or 
        closing a case involving stolen identity refund fraud; and
            (3) procedures for implementing and accomplishing the 
        standards described in paragraphs (1) and (2), and measures for 
        evaluating such procedures and determining whether such 
        standards have been successfully implemented.

SEC. 2009. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF 
              INFORMATION BY PREPARERS OF RETURNS.

    (a) In General.--Section 6713 is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Enhanced Penalty for Improper Use or Disclosure Relating to 
Identity Theft.--
            ``(1) In general.--In the case of a disclosure or use 
        described in subsection (a) that is made in connection with a 
        crime relating to the misappropriation of another person's 
        taxpayer identity (as defined in section 6103(b)(6)), whether 
        or not such crime involves any tax filing, subsection (a) shall 
        be applied--
                    ``(A) by substituting `$1,000' for `$250', and
                    ``(B) by substituting `$50,000' for `$10,000'.
            ``(2) Separate application of total penalty limitation.--
        The limitation on the total amount of the penalty under 
        subsection (a) shall be applied separately with respect to 
        disclosures or uses to which this subsection applies and to 
        which it does not apply.''.
    (b) Criminal Penalty.--Section 7216(a) is amended by striking 
``$1,000'' and inserting ``$1,000 ($100,000 in the case of a disclosure 
or use to which section 6713(b) applies)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures or uses on or after the date of the enactment of 
this Act.

           Subtitle B--Development of Information Technology

SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION 
              TECHNOLOGY.

    (a) Duties and Responsibilities of Internal Revenue Service Chief 
Information Officer.--Section 7803, as amended by section 1001, is 
amended by adding at the end the following new subsection:
    ``(f) Internal Revenue Service Chief Information Officer.--
            ``(1) In general.--There shall be in the Internal Revenue 
        Service an Internal Revenue Service Chief Information Officer 
        (hereafter referred to in this subsection as the `IRS CIO') who 
        shall be appointed by the Commissioner of Internal Revenue.
            ``(2) Centralized responsibility for internal revenue 
        service information technology.--The Commissioner of Internal 
        Revenue (and the Secretary) shall act through the IRS CIO with 
        respect to all development, implementation, and maintenance of 
        information technology for the Internal Revenue Service. Any 
        reference in this subsection to the IRS CIO which directs the 
        IRS CIO to take any action, or to assume any responsibility, 
        shall be treated as a reference to the Commissioner of Internal 
        Revenue acting through the IRS CIO.
            ``(3) General duties and responsibilities.--The IRS CIO 
        shall--
                    ``(A) be responsible for the development, 
                implementation, and maintenance of information 
                technology for the Internal Revenue Service,
                    ``(B) ensure that the information technology of the 
                Internal Revenue Service is secure and integrated,
                    ``(C) maintain operational control of all 
                information technology for the Internal Revenue 
                Service,
                    ``(D) be the principal advocate for the information 
                technology needs of the Internal Revenue Service, and
                    ``(E) consult with the Chief Procurement Officer of 
                the Internal Revenue Service to ensure that the 
                information technology acquired for the Internal 
                Revenue Service is consistent with--
                            ``(i) the goals and requirements specified 
                        in subparagraphs (A) through (D), and
                            ``(ii) the strategic plan developed under 
                        paragraph (4).
            ``(4) Strategic plan.--
                    ``(A) In general.--The IRS CIO shall develop and 
                implement a multiyear strategic plan for the 
                information technology needs of the Internal Revenue 
                Service. Such plan shall--
                            ``(i) include performance measurements of 
                        such technology and of the implementation of 
                        such plan,
                            ``(ii) include a plan for an integrated 
                        enterprise architecture of the information 
                        technology of the Internal Revenue Service,
                            ``(iii) include and take into account the 
                        resources needed to accomplish such plan,
                            ``(iv) take into account planned major 
                        acquisitions of information technology by the 
                        Internal Revenue Service, and
                            ``(v) align with the needs and strategic 
                        plan of the Internal Revenue Service.
                    ``(B) Plan updates.--The IRS CIO shall, not less 
                frequently than annually, review and update the 
                strategic plan under subparagraph (A) (including the 
                plan for an integrated enterprise architecture 
                described in subparagraph (A)(ii)) to take into account 
                the development of new information technology and the 
                needs of the Internal Revenue Service.
            ``(5) Scope of authority.--
                    ``(A) Information technology.--For purposes of this 
                subsection, the term `information technology' has the 
                meaning given such term by section 11101 of title 40, 
                United States Code.
                    ``(B) Internal revenue service.--Any reference in 
                this subsection to the Internal Revenue Service 
                includes a reference to all components of the Internal 
                Revenue Service, including--
                            ``(i) the Office of the Taxpayer Advocate,
                            ``(ii) the Criminal Investigation Division 
                        of the Internal Revenue Service, and
                            ``(iii) except as otherwise provided by the 
                        Secretary with respect to information 
                        technology related to matters described in 
                        subsection (b)(3)(B), the Office of the Chief 
                        Counsel.''.
    (b) Independent Verification and Validation of the Customer Account 
Data Engine 2 and Enterprise Case Management System.--
            (1) In general.--The Commissioner of Internal Revenue shall 
        enter into a contract with an independent reviewer to verify 
        and validate the implementation plans (including the 
        performance milestones and cost estimates included in such 
        plans) developed for the Customer Account Data Engine 2 and the 
        Enterprise Case Management System.
            (2) Deadline for completion.--Such contract shall require 
        that such verification and validation be completed not later 
        than the date which is 1 year after the date of the enactment 
        of this Act.
            (3) Application to phases of cade 2.--
                    (A) In general.--Paragraphs (1) and (2) shall not 
                apply to phase 1 of the Customer Account Data Engine 2 
                and shall apply separately to each other phase.
                    (B) Deadline for completing plans.--Not later than 
                1 year after the date of the enactment of this Act, the 
                Commissioner of Internal Revenue shall complete the 
                development of plans for all phases of the Customer 
                Account Data Engine 2.
                    (C) Deadline for completion of verification and 
                validation of plans.--In the case of any phase after 
                phase 2 of the Customer Account Data Engine 2, 
                paragraph (2) shall be applied by substituting ``the 
                date on which the plan for such phase was completed'' 
                for ``the date of the enactment of this Act''.
    (c) Coordination of IRS CIO and Chief Procurement Officer of the 
Internal Revenue Service.--
            (1) In general.--The Chief Procurement Officer of the 
        Internal Revenue Service shall--
                    (A) identify all significant IRS information 
                technology acquisitions and provide written 
                notification to the Internal Revenue Service Chief 
                Information Officer (hereafter referred to in this 
                subsection as the ``IRS CIO'') of each such acquisition 
                in advance of such acquisition, and
                    (B) regularly consult with the IRS CIO regarding 
                acquisitions of information technology for the Internal 
                Revenue Service, including meeting with the IRS CIO 
                regarding such acquisitions upon request.
            (2) Significant irs information technology acquisitions.--
        For purposes of this subsection, the term ``significant IRS 
        information technology acquisitions'' means--
                    (A) any acquisition of information technology for 
                the Internal Revenue Service in excess of $1 million; 
                and
                    (B) such other acquisitions of information 
                technology for the Internal Revenue Service (or 
                categories of such acquisitions) as the IRS CIO, in 
                consultation with the Chief Procurement Officer of the 
                Internal Revenue Service, may identify.
            (3) Scope.--Terms used in this subsection which are also 
        used in section 7803(f) of the Internal Revenue Code of 1986 
        (as added by subsection (a)) shall have the same meaning as 
        when used in such section.

SEC. 2102. INTERNET PLATFORM FOR FORM 1099 FILINGS.

    (a) In General.--Not later than January 1, 2023, the Secretary of 
the Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall make available an internet website 
or other electronic media, with a user interface and functionality 
similar to the Business Services Online Suite of Services provided by 
the Social Security Administration, that provides access to resources 
and guidance provided by the Internal Revenue Service and allows 
persons to--
            (1) prepare and file Forms 1099;
            (2) prepare Forms 1099 for distribution to recipients other 
        than the Internal Revenue Service; and
            (3) maintain a record of completed, filed, and distributed 
        Forms 1099.
    (b) Electronic Services Treated as Supplemental; Application of 
Security Standards.--The Secretary shall ensure that the services 
described in subsection (a)--
            (1) are a supplement to, and not a replacement for, other 
        services provided by the Internal Revenue Service to taxpayers; 
        and
            (2) comply with applicable security standards and 
        guidelines.

SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION 
              TECHNOLOGY POSITIONS.

    (a) In General.--Subchapter A of chapter 80 is amended by adding at 
the end the following new section:

``SEC. 7812. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION 
              TECHNOLOGY POSITIONS.

    ``In the case of any position which is critical to the 
functionality of the information technology operations of the Internal 
Revenue Service--
            ``(1) section 9503 of title 5, United States Code, shall be 
        applied--
                    ``(A) by substituting `during the period beginning 
                on the date of the enactment of section 7812 of the 
                Internal Revenue Code of 1986, and ending on September 
                30, 2025' for `Before September 30, 2013 in subsection 
                (a)',
                    ``(B) without regard to subparagraph (B) of 
                subsection (a)(1), and
                    ``(C) by substituting `the date of the enactment of 
                the Taxpayer First Act' for `June 1, 1998' in 
                subsection (a)(6),
            ``(2) section 9504 of such title 5 shall be applied by 
        substituting `During the period beginning on the date of the 
        enactment of section 7812 of the Internal Revenue Code of 1986, 
        and ending on September 30, 2025' for `Before September 30, 
        2013' each place it appears in subsections (a) and (b), and
            ``(3) section 9505 of such title shall be applied--
                    ``(A) by substituting `During the period beginning 
                on the date of the enactment of section 7812 of the 
                Internal Revenue Code of 1986, and ending on September 
                30, 2025' for `Before September 30, 2013' in subsection 
                (a), and
                    ``(B) by substituting `the information technology 
                operations' for `significant functions' in subsection 
                (a).''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 80 is amended by adding at the end the following new item:

``Sec. 7812. Streamlined critical pay authority for information 
                            technology positions.''.

 Subtitle C--Modernization of Consent-Based Income Verification System

SEC. 2201. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY INCOME 
              VERIFICATION.

    (a) In General.--Not later than 1 year after the close of the 2-
year period described in subsection (d)(1), the Secretary of the 
Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall implement a program to ensure that 
any qualified disclosure--
            (1) is fully automated and accomplished through the 
        internet; and
            (2) is accomplished in as close to real-time as is 
        practicable.
    (b) Qualified Disclosure.--For purposes of this section, the term 
``qualified disclosure'' means a disclosure under section 6103(c) of 
the Internal Revenue Code of 1986 of returns or return information by 
the Secretary to a person seeking to verify the income or 
creditworthiness of a taxpayer who is a borrower in the process of a 
loan application.
    (c) Application of Security Standards.--The Secretary shall ensure 
that the program described in subsection (a) complies with applicable 
security standards and guidelines.
    (d) User Fee.--
            (1) In general.--During the 2-year period beginning on the 
        first day of the sixth calendar month beginning after the date 
        of the enactment of this Act, the Secretary shall assess and 
        collect a fee for qualified disclosures (in addition to any 
        other fee assessed and collected for such disclosures) at such 
        rates as the Secretary determines are sufficient to cover the 
        costs related to implementing the program described in 
        subsection (a), including the costs of any necessary 
        infrastructure or technology.
            (2) Deposit of collections.--Amounts received from fees 
        assessed and collected under paragraph (1) shall be deposited 
        in, and credited to, an account solely for the purpose of 
        carrying out the activities described in subsection (a). Such 
        amounts shall be available to carry out such activities without 
        need of further appropriation and without fiscal year 
        limitation.

SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF 
              TAX RETURN INFORMATION.

    (a) In General.--Section 6103(c) is amended by adding at the end 
the following: ``Persons designated by the taxpayer under this 
subsection to receive return information shall not use the information 
for any purpose other than the express purpose for which consent was 
granted and shall not disclose return information to any other person 
without the express permission of, or request by, the taxpayer.''.
    (b) Application of Penalties.--Section 6103(a)(3) is amended by 
inserting ``subsection (c),'' after ``return information under''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date which is 180 days after the 
date of the enactment of this Act.

             Subtitle D--Expanded Use of Electronic Systems

SEC. 2301. ELECTRONIC FILING OF RETURNS.

    (a) In General.--Section 6011(e)(2)(A) is amended by striking 
``250'' and inserting ``the applicable number of''.
    (b) Applicable Number.--Section 6011(e) is amended by striking 
paragraph (5) and inserting the following new paragraphs:
            ``(5) Applicable number.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(A), the applicable number shall be--
                            ``(i) except as provided in subparagraph 
                        (B), in the case of calendar years before 2021, 
                        250,
                            ``(ii) in the case of calendar year 2021, 
                        100, and
                            ``(iii) in the case of calendar years after 
                        2021, 10.
                    ``(B) Special rule for partnerships for 2018, 2019, 
                2020, and 2021.--In the case of a partnership, for any 
                calendar year before 2022, the applicable number shall 
                be--
                            ``(i) in the case of calendar year 2018, 
                        200,
                            ``(ii) in the case of calendar year 2019, 
                        150,
                            ``(iii) in the case of calendar year 2020, 
                        100, and
                            ``(iv) in the case of calendar year 2021, 
                        50.
            ``(6) Partnerships required to file on magnetic media.--
        Notwithstanding paragraph (2)(A), the Secretary shall require 
        partnerships having more than 100 partners to file returns on 
        magnetic media.''.
    (c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Exception for certain preparers located in 
                areas without internet access.--The Secretary may waive 
                the requirement of subparagraph (A) if the Secretary 
                determines, on the basis of an application by the tax 
                return preparer, that the preparer cannot meet such 
                requirement by reason of being located in a geographic 
                area which does not have access to internet service 
                (other than dial-up or satellite service).''.
    (d) Conforming Amendment.--Section 6724(c) is amended by striking 
``250 information returns (more than 100 information returns in the 
case of a partnership having more than 100 partners)'' and inserting 
``the applicable number (determined under section 6011(e)(5) with 
respect to the calendar year to which such returns relate) of 
information returns''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES FOR 
              DISCLOSURE AUTHORIZATIONS TO, AND OTHER AUTHORIZATIONS 
              OF, PRACTITIONERS.

    Section 6061(b)(3) is amended to read as follows:
            ``(3) Published guidance.--
                    ``(A) In general.--The Secretary shall publish 
                guidance as appropriate to define and implement any 
                waiver of the signature requirements or any method 
                adopted under paragraph (1).
                    ``(B) Electronic signatures for disclosure 
                authorizations to, and other authorizations of, 
                practitioners.--Not later than 6 months after the date 
                of the enactment of this subparagraph, the Secretary 
                shall publish guidance to establish uniform standards 
                and procedures for the acceptance of taxpayers' 
                signatures appearing in electronic form with respect to 
                any request for disclosure of a taxpayer's return or 
                return information under section 6103(c) to a 
                practitioner or any power of attorney granted by a 
                taxpayer to a practitioner.
                    ``(C) Practitioner.--For purposes of subparagraph 
                (B), the term `practitioner' means any individual in 
                good standing who is regulated under section 330 of 
                title 31, United States Code.''.

SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.

    Section 6311(d)(2) is amended by adding at the end the following: 
``The preceding sentence shall not apply to the extent that the 
Secretary ensures that any such fee or other consideration is fully 
recouped by the Secretary in the form of fees paid to the Secretary by 
persons paying taxes imposed under subtitle A with credit, debit, or 
charge cards pursuant to such contract. Notwithstanding the preceding 
sentence, the Secretary shall seek to minimize the amount of any fee or 
other consideration that the Secretary pays under any such contract.''.

SEC. 2304. AUTHENTICATION OF USERS OF ELECTRONIC SERVICES ACCOUNTS.

    Beginning 180 days after the date of the enactment of this Act, the 
Secretary of the Treasury (or the Secretary's delegate) shall verify 
the identity of any individual opening an e-Services account with the 
Internal Revenue Service before such individual is able to use the e-
Services tools.

                      Subtitle E--Other Provisions

SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN TAX COMPLIANCE 
              PROCEDURES AND REPORTS.

    Section 2004 of the Internal Revenue Service Restructuring and 
Reform Act of 1998 (26 U.S.C. 6012 note) is repealed.

SEC. 2402. COMPREHENSIVE TRAINING STRATEGY.

    Not later than 1 year after the date of the enactment of this Act, 
the Commissioner of Internal Revenue shall submit to Congress a written 
report providing a comprehensive training strategy for employees of the 
Internal Revenue Service, including--
            (1) a plan to streamline current training processes, 
        including an assessment of the utility of further consolidating 
        internal training programs, technology, and funding;
            (2) a plan to develop annual training regarding taxpayer 
        rights, including the role of the Office of the Taxpayer 
        Advocate, for employees that interface with taxpayers and the 
        direct managers of such employees;
            (3) a plan to improve technology-based training;
            (4) proposals to--
                    (A) focus employee training on early, fair, and 
                efficient resolution of taxpayer disputes for employees 
                that interface with taxpayers and the direct managers 
                of such employees; and
                    (B) ensure consistency of skill development and 
                employee evaluation throughout the Internal Revenue 
                Service; and
            (5) a thorough assessment of the funding necessary to 
        implement such strategy.

                  TITLE III--MISCELLANEOUS PROVISIONS

Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

SEC. 3001. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE INTERNAL REVENUE 
              SERVICE WHO WAS INVOLUNTARILY SEPARATED FROM SERVICE FOR 
              MISCONDUCT.

    (a) In General.--Section 7804 is amended by adding at the end the 
following new subsection:
    ``(d) Prohibition on Rehiring Employees Involuntarily Separated.--
The Commissioner may not hire any individual previously employed by the 
Commissioner who was removed for misconduct under this subchapter or 
chapter 43 or chapter 75 of title 5, United States Code, or whose 
employment was terminated under section 1203 of the Internal Revenue 
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to the hiring of employees after the date of the 
enactment of this Act.

SEC. 3002. NOTIFICATION OF UNAUTHORIZED INSPECTION OR DISCLOSURE OF 
              RETURNS AND RETURN INFORMATION.

    (a) In General.--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 a Federal 
or State agency (upon notice to the Secretary by 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 unauthorized inspection or disclosure and the 
rights of the taxpayer under such administrative determination.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to determinations proposed after the date which is 180 days after the 
date of the enactment of this Act.

        Subtitle B--Provisions Relating to Exempt Organizations

SEC. 3101. MANDATORY E-FILING BY 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) Other Reports and Returns.--
            (1) Political organizations.--Section 527(j)(7) is amended 
        by striking ``if the organization has'' and all that follows 
        through ``such calendar year''.
            (2) Unrelated business income tax returns.--Section 6011 is 
        amended by redesignating subsection (h) as subsection (i) and 
        by inserting after subsection (g) the following new subsection:
    ``(h) Mandatory e-Filing of Unrelated Business Income Tax Return.--
Any organization required to file an annual return under this section 
which relates to any tax imposed by section 511 shall file such return 
in electronic form.''.
    (c) Inspection of Electronically Filed Annual Returns.--Section 
6104(b) 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 as soon as practicable 
in a machine readable format.''.
    (d) 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 of the Treasury or the 
                        Secretary's delegate (hereafter referred to in 
                        this paragraph as the ``Secretary'') determines 
                        the application of the amendments made by this 
                        section would cause undue burden without a 
                        delay, the Secretary may delay the application 
                        of such amendments, but such delay shall not 
                        apply to any taxable year beginning on or after 
                        the date that is 2 years after 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 
                such delay shall not apply to any taxable year 
                beginning on or after the date that is 2 years after 
                the enactment of this Act.

SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX-EXEMPT STATUS FOR 
              FAILURE TO FILE RETURN.

    (a) In General.--Section 6033(j)(1) is amended by striking ``If an 
organization'' and inserting the following:
                    ``(A) Notice.--If an organization described in 
                subsection (a)(1) or (i) fails to file the annual 
                return or notice required under either subsection for 2 
                consecutive years, the Secretary shall notify the 
                organization--
                            ``(i) that the Internal Revenue Service has 
                        no record of such a return or notice from such 
                        organization for 2 consecutive years, and
                            ``(ii) about the revocation that will occur 
                        under subparagraph (B) if the organization 
                        fails to file such a return or notice by the 
                        due date for the next such return or notice 
                        required to be filed.
                The notification under the preceding sentence shall 
                include information about how to comply with the filing 
                requirements under subsections (a)(1) and (i).
                    ``(B) Revocation.--If an organization''.
    (b) Effective Date.--The amendment made by this section shall apply 
to failures to file returns or notices for 2 consecutive years if the 
return or notice for the second year is required to be filed after 
December 31, 2019.

                     Subtitle C--Revenue Provision

SEC. 3201. INCREASE IN PENALTY FOR FAILURE TO FILE.

    (a) In General.--The second sentence of subsection (a) of section 
6651 is amended by striking ``$205'' and inserting ``$330''.
    (b) Inflation Adjustment.--Section 6651(j)(1) is amended--
            (1) by striking ``2014'' and inserting ``2020'',
            (2) by striking ``$205'' and inserting ``$330'', and
            (3) by striking ``2013'' and inserting ``2019''.
    (c) Effective Date.--The amendments made by this section shall 
apply to returns required to be filed after December 31, 2019.

                      TITLE IV--BUDGETARY EFFECTS

SEC. 4001. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the House Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

            Passed the House of Representatives June 10, 2019.

            Attest:

                                                                 Clerk.
116th CONGRESS

  1st Session

                               H. R. 3151

_______________________________________________________________________

                                 AN ACT

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