[Congressional Record Volume 144, Number 34 (Tuesday, March 24, 1998)]
[Senate]
[Pages S2496-S2498]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        THE EDUCATION SAVINGS ACT FOR PUBLIC AND PRIVATE SCHOOLS

                                 ______
                                 

                      FAIRCLOTH AMENDMENT NO. 2105

  (Ordered to lie on the table.)
  Mr. FAIRCLOTH submitted an amendment intended to be proposed by him 
to amendment No. 2029 submitted by Mr. Kerrey to the bill (H.R. 2646) 
to amend the Internal Revenue Code of 1986 to allow tax-free 
expenditures from education individual retirement accounts for 
elementary and secondary school expenses, to increase the maximum 
annual amount of contributions to such accounts, and for other 
purposes; as follows:

       Beginning with page 5, line 8, and ending with page 30, 
     line 13, strike all, and insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Internal 
     Revenue Service Private Citizen Oversight Board Act of 
     1998''.
       (c) Table of Contents.--

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Internal Revenue Service Oversight Board.
Sec. 3. Commissioner of Internal Revenue; other officials.
Sec. 4. Other personnel.
Sec. 5. Prohibition on executive branch influence over taxpayer audits 
              and other investigations.

     SEC. 2. INTERNAL REVENUE SERVICE OVERSIGHT BOARD.

       (a) In General.--Section 7802 (relating to the Commissioner 
     of Internal Revenue) is amended to read as follows:

     ``SEC. 7802. INTERNAL REVENUE SERVICE OVERSIGHT BOARD.

       ``(a) Establishment.--There is established within the 
     Department of the Treasury the Internal Revenue Service 
     Oversight Board (hereafter in this subchapter referred to as 
     the `Oversight Board').
       ``(b) Membership.--
       ``(1) Composition.--The Oversight Board shall be composed 
     of 9 members who are not Federal officers or employees and 
     who are appointed by the President, by and with the advice 
     and consent of the Senate.
       ``(2) Qualifications and terms.--
       ``(A) Qualifications.--Members of the Oversight Board shall 
     be appointed solely on the basis of their professional 
     experience and expertise in 1 or more of the following areas:
       ``(i) Management of large service organizations.
       ``(ii) Customer service.
       ``(iii) Federal tax laws, including tax administration and 
     compliance.
       ``(iv) Information technology.
       ``(v) Organization development.
       ``(vi) The needs and concerns of taxpayers.
       ``(vii) Management or ownership of a small business.

     In the aggregate, the members of the Oversight Board should 
     collectively bring to bear expertise in all of the areas 
     described in the preceding sentence.
       ``(B) Terms.--Each member shall be appointed for a term of 
     5 years, except that of the members first appointed under 
     paragraph (1)--
       ``(i) 1 member shall be appointed for a term of 1 year,
       ``(ii) 1 member shall be appointed for a term of 2 years,
       ``(iii) 2 members shall be appointed for a term of 3 years, 
     and
       ``(iv) 2 members shall be appointed for a term of 4 years.

     Such terms shall begin on the date of appointment.
       ``(C) Reappointment.--An individual may be appointed to no 
     more than two 5-year terms on the Oversight Board.
       ``(D) Vacancy.--Any vacancy on the Oversight Board shall be 
     filled in the same manner as the original appointment. Any 
     member appointed to fill a vacancy occurring before the 
     expiration of the term for which the member's predecessor was 
     appointed shall be appointed for the remainder of that term.
       ``(E) Special government employees.--During the entire 
     period that an individual is a member of the Oversight Board, 
     such individual shall be treated as--
       ``(i) serving as a special government employee (as defined 
     in section 202 of title 18, United States Code) and as 
     described in section 207(c)(2) of such title, 18, and
       ``(ii) serving as an officer or employee referred to in 
     section 101(f) of the Ethics in Government Act of 1978 for 
     purposes of title I of such Act.
       ``(3) Quorum.--6 members of the Oversight Board shall 
     constitute a quorum. A majority of members present and voting 
     shall be required for the Oversight Board to take action.
       ``(4) Removal.--Any member of the Oversight Board may be 
     removed at the will of the President.
       ``(5) Claims.--
       ``(A) In general.--Members of the Oversight Board shall 
     have no personal liability under Federal law with respect to 
     any claim arising out of or resulting from an act or omission 
     by such member within the scope of service as a member. The 
     preceding sentence shall not be construed to limit personal 
     liability for criminal acts or omissions, willful or 
     malicious conduct, acts or omissions for private gain, or any 
     other act or omission outside the scope of the service of 
     such member on the Oversight Board.''
       ``(B) Effect on other law.--This paragraph shall not be 
     construed--
       ``(i) to affect any other immunities and protections that 
     may be available to such member under applicable law with 
     respect to such transactions,
       ``(ii) to affect any other right or remedy against the 
     United States under applicable law, or
       ``(iii) to limit or alter in any way the immunities that 
     are available under applicable law for Federal officers and 
     employees.
       ``(c) General Responsibilities.--
       ``(1) In general.--The Oversight Board shall oversee the 
     Internal Revenue Service in its administration, management, 
     conduct, direction, and supervision of the execution and 
     application of the internal revenue laws or related statues 
     and tax conventions to which the United States is a party.
       ``(2) Requirement for disclosure of return information to 
     oversight board members.--Notwithstanding any other provision 
     of law, any return, return information, or taxpayer return 
     information (as defined in section 6103(b)) shall, without 
     written request, be open to inspection by or disclosure to 
     the members and staff of the Internal Revenue Service 
     Oversight Board.
       ``(d) Specific Responsibilities.--The Oversight Board shall 
     have the following specific responsibilities:
       ``(1) Strategic plans.--To review and approve strategic 
     plans of the Internal Revenue Service, including the 
     establishment of--
       ``(A) mission and objectives, and standards of performance 
     relative to either, and

[[Page S2497]]

       ``(B) annual and long-range strategic plans.
       ``(2) Operational plans.--To review the operational 
     functions of the Internal Revenue Service, including--
       ``(A) plans for modernization of the tax system, including 
     the procurement of information technology intended to process 
     tax returns,
       ``(B) plans for outsourcing or managed competition, and
       ``(C) plans for training and education.
       ``(3) Management.--To--
       ``(A) recommend to the President candidates for appointment 
     as the Commissioner of Internal Revenue and recommend to the 
     President the removal of the Commissioner,
       ``(B) review the Commissioner's selection, evaluation, and 
     compensation of senior managers,
       ``(C) review and approve the Commissioner's plans for any 
     major reorganization of the Internal Revenue Service, and
       ``(D) review, and make recommendations to the Commissioner 
     concerning, the auditing procedures and collection activities 
     of the Internal Revenue Service.
       ``(4) Budget.--To--
       ``(A) review and approve the budget request of the Internal 
     Revenue Service prepared by the Commissioner,
       ``(B) submit such budget request to the Secretary of the 
     Treasury, and
       ``(C) ensure that the budget request supports the annual 
     and long-range strategic plans.

     The Secretary shall submit the budget request referred to in 
     paragraph (4)(B) for any fiscal year to the President who 
     shall submit such request, without revision, to Congress 
     together with the President's annual budget request for the 
     Internal Revenue Service for such fiscal year.
       ``(e) Oversight Board Personnel Matters.--
       ``(1) Compensation of members.--
       ``(A) In general.--Each member of the Oversight Board shall 
     be compensated at a rate not to exceed $30,000 per year.
       ``(B) Chairperson.--In lieu of the amount specified in 
     subparagraph (A), the Chairperson of the Oversight Board 
     shall be compensated at a rate not to exceed $50,000.
       ``(2) Travel expenses.--The members of the Oversight Board 
     shall be allowed travel expenses, including per diem in lieu 
     of subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business for purposes of attending meetings of the Oversight 
     Board.
       ``(3) Staff.--At the request of the Chairperson of the 
     Oversight Board, the Commissioner shall detail to the 
     Oversight Board such personnel as may be necessary to enable 
     the Oversight Board to perform its duties. Such detail shall 
     be without interruption or loss of civil service status or 
     privilege. The Chairperson of the Oversight Board may 
     recommend to the Commissioner specific staff of the 
     Internal Revenue Service for detail to the Oversight 
     Board, and may recommend to the Commissioner specific 
     individuals not employed by the Internal Revenue Service 
     to be hired by the Internal Revenue Service for the 
     purpose of being detailed to the Oversight Board.
       ``(4) Procurement of temporary and intermittent services.--
     The Chairperson of the Oversight Board may procure temporary 
     and intermittent services under section 3109(b) of title 5, 
     United States Code.
       ``(f) Administrative Matters.--
       ``(1) Chair.--The members of the Oversight Board shall 
     elect for a 2-year term a chairperson from among the members.
       ``(2) Committees.--The Oversight Board may establish such 
     committees as the Oversight Board determines appropriate.
       ``(3) Meetings.--The Oversight Board shall meet at least 
     once each month and at such other times as the Oversight 
     Board determines appropriate.
       ``(4) Reports.--The Oversight Board shall each year report 
     to the President and the Congress with respect to the conduct 
     of its responsibilities under this title.''.
       (b) Conforming Amendments.--
       (1) Section 4946(c) (relating to definitions and special 
     rules for chapter 42) is amended--
       (A) by striking ``or'' at the end of paragraph (5),
       (B) by striking the period at the end of paragraph (6) and 
     inserting ``, or'', and
       (C) by adding at the end the following new paragraph:
       ``(7) a member of the Internal Revenue Service Oversight 
     Board.''.
       (2) The table of sections for subchapter A of chapter 80 is 
     amended by striking the item relating to section 7802 and 
     inserting the following new item:

``Sec. 7802. Internal Revenue Service Oversight Board.''.

       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on the date of the enactment of this Act.
       (2) Nominations to internal revenue service oversight 
     board.--The President shall submit nominations under section 
     7802 of the Internal Revenue Code of 1986, as added by this 
     section, to the Senate not later than 6 months after the date 
     of the enactment of this Act.

     SEC. 3. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.

       (a) In General.--Section 7803 (relating to other personnel) 
     is amended to read as follows:

     ``SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER 
                   OFFICIALS.

       ``(a) Commissioner of Internal Revenue.--
       ``(1) Appointment.--
       ``(A) In general.--There shall be in the Department of the 
     Treasury a Commissioner of Internal Revenue who shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate, to a 5-year term. The appointment 
     shall be made without regard to political affiliation or 
     activity.
       ``(B) Vacancy.--Any individual appointed to fill a vacancy 
     in the position of Commissioner occurring before the 
     expiration of the term for which such individual's 
     predecessor was appointed shall be appointed only for the 
     remainder of that term.
       ``(C) Removal.--The Commissioner may be removed at the will 
     of the President.
       ``(2) Duties.--The Commissioner shall have such duties and 
     powers as the Secretary may prescribe, including the power 
     to--
       ``(A) administer, manage, conduct, direct, and supervise 
     the execution and application of the internal revenue laws or 
     related statutes and ax conventions to which the United 
     States is a party; and
       ``(B) recommend to the President a candidate for 
     appointment as Chief Counsel for the Internal Revenue Service 
     when a vacancy occurs, and recommend to the President the 
     removal of such Chief Counsel.

     If the Secretary determines not to delegate a power specified 
     in subparagraph (A) or (B), such determination may not take 
     effect until 30 days after the Secretary notifies the 
     Committees on Ways and Means, Government Reform and 
     Oversight, and Appropriations of the House of 
     Representatives, the Committees on Finance, Government 
     Operations, and Appropriations of the Senate, and the Joint 
     Committee on Taxation.
       ``(3) Consultation with oversight board.--The Commissioner 
     shall consult with the Oversight Board on all matters set 
     forth in paragraphs (2) and (3) (other than paragraph (3)(A) 
     of section 7802(d).
       ``(b) Assistant Commissioner for Employee Plans and Exempt 
     Organizations.--There is established within the Internal 
     Revenue Service an office to be known as the ``Office of 
     Employee Plans and Exempt Organizations' to be under the 
     supervision and direction of an Assistant Commissioner of 
     Internal Revenue. As head of the Office, the Assistant 
     Commissioner shall be responsible for carrying out such 
     functions as the Secretary may prescribe with respect to 
     organizations exempt from tax under section 501(a) and with 
     respect to plans to which part I of subchapter D of chapter 1 
     applies (and with respect to organizations designed to be 
     exempt under such section and plans designed to be plans to 
     which such part applies) and other nonqualified deferred 
     compensation arrangements. The Assistant Commissioner shall 
     report annually to the Commissioner with respect to the 
     Assistant Commissioner's responsibilities under this section.
       ``(c) Office of Taxpayer Advocate.--
       ``(1) In general.--
       ``(A) Establishment.--There is established in the Internal 
     Revenue Service an office to be known as the ``Office of the 
     Taxpayer Advocate'. Such office shall be under the 
     supervision and direction of an official to be known as the 
     ``Taxpayer Advocate' who shall be appointed with the approval 
     of the Oversight Board by the Commissioner of Internal 
     Revenue and shall report directly to the Commissioner. The 
     Taxpayer Advocate shall be entitled to compensation at the 
     same rate as the highest level official reporting directly to 
     the Commissioner of Internal Revenue.
       ``(B) Restriction on subsequent employment.--An individual 
     who is an officer or employee of the Internal Revenue Service 
     may be appointed as Taxpayer Advocate only if such individual 
     agrees not to accept any employment with the Internal Revenue 
     Service for at least 5 years after ceasing to be the Taxpayer 
     Advocate.
       ``(2) Functions of office.--
       ``(A) In general.--It shall be the function of the Office 
     of Taxpayer Advocate to--
       ``(i) assist taxpayers in resolving problems with the 
     Internal Revenue Service,
       ``(ii) identify areas in which taxpayers have problems in 
     dealings with the Internal Revenue Service,
       ``(iii) to the extent possible, propose changes in the 
     administrative practices of the Internal Revenue Service to 
     mitigate problems identified under clause (ii), and
       ``(iv) identify potential legislative changes which may be 
     appropriate to mitigate such problems.
       ``(B) Annual reports.--
       ``(i) Objectives.--Not later than June 30 of each calendar 
     year, the Taxpayer Advocate shall report to the Committee on 
     Ways and Means of the House of Representatives, the Committee 
     on Finance of the Senate, and the Subcommittees on Treasury, 
     Postal Service, and General Government of the Committees on 
     Appropriation of the House of Representatives and the Senate 
     on the objectives of the Taxpayer Advocate for the fiscal 
     year beginning in such calendar year. Any such report shall 
     contain full and substantive analysis, in addition to 
     statistical information.
       ``(ii) Activities.--Not later than December 31 of each 
     calendar year, the Taxpayer Advocate shall report to the 
     Committee on Ways and Means of the House of Representatives, 
     the Committee on Finance of the Senate, and the Subcommittees 
     on Treasury, Postal Service, and General Government of the

[[Page S2498]]

     Committees on Appropriation of the House of Representatives 
     and the Senate on the activities of the Taxpayer Advocate 
     during the fiscal year ending during such calendar year. Any 
     such report shall contain full and substantive analysis, in 
     addition to statistical information, and shall--
       ``(I) identify the initiatives the Taxpayer Advocate has 
     taken on improving taxpayer services and Internal Revenue 
     Service responsiveness,
       ``(II) contain recommendations received from individuals 
     with the authority to issue Taxpayer Assistance Orders under 
     section 7811,
       ``(III) contain a summary of at least 20 of the most 
     serious problems encountered by taxpayers, including a 
     description of the nature of such problems,
       ``(IV) contain an inventory of the items described in 
     subclauses (I), (II), and (III) for which action has been 
     taken and the result of such action,
       ``(V) contain an inventory of the items described in 
     subclauses (I), (II), and (III) for which action remains to 
     be completed and the period during which each item has 
     remained on such inventory,
       ``(VI) contain an inventory of the items described in 
     subclauses (I), (II), and (III) for which no action has been 
     taken, the period during which each item has remained on such 
     inventory, the reasons for the inaction, and identify any 
     Internal Revenue Service official who is responsible for such 
     inaction,
       ``(VII) identify any Taxpayer Assistance Order which was 
     not honored by the Internal Revenue Service in a timely 
     manner, as specified under section 7811(b),
       ``(VIII) contain recommendations for such administrative 
     and legislative action as may be appropriate to resolve 
     problems encountered by taxpayers,
       ``(IX) identify areas of the tax law that impose 
     significant compliance burdens on taxpayers or the Internal 
     Revenue Service, including specific recommendations for 
     remedying these problems,
       ``(X) in conjunction with the National Director of Appeals, 
     identify the 10 most litigated issues for each category of 
     taxpayers, including recommendations for mitigating such 
     disputes, and
       ``(XI) include such other information as the Taxpayer 
     Advocate may deem advisable.
       ``(iii) Submission of report.--Each report required under 
     this subparagraph shall be provided to the committees 
     described in clauses (i) and (ii) with prior review and 
     comment from the Oversight Board, but without any prior 
     review or comment from the Secretary of the Treasury, any 
     other officer or employee of the Department of the Treasury, 
     or the Office of Management and Budget.
       ``(C) Other responsibilities.--The Taxpayer Advocate 
     shall--
       ``(i) monitor the coverage and geographic allocation of 
     problem resolution officers, and
       ``(ii) develop guidance to be distributed to all Internal 
     Revenue Service officers and employees outlining the criteria 
     for referral of taxpayer inquiries to problem resolution 
     officers.
       ``(3) Responsibilities of commissioner.--The Commissioner 
     shall establish procedures requiring a formal response to all 
     recommendations submitted to the Commissioner by the Taxpayer 
     Advocate within 3 months after submission to the 
     Commissioner.''.
       (b) Conforming Amendments.--
       (1) The table of sections for subchapter A of chapter 80 is 
     amended by striking the item relating to section 7803 and 
     inserting the following new item:

``Sec. 7803. Commissioner of Internal Revenue; other officials.''.

       (2) Subsection (b) of section 5109 of title 5, United 
     States Code, is amended by striking ``7802(b)'' and inserting 
     ``7803(b)''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on the date of the enactment of this Act.
       (2) Current officers.--
       (A) In the case of an individual serving as Commissioner of 
     Internal Revenue on the date of the enactment of this Act who 
     was appointed to such position before such date, the 5-year 
     term required by section 7803(a)(1) of the Internal Revenue 
     Code of 1986, as added by this section, shall begin as of the 
     date of such appointment.
       (B) Section 7803(c)(1)(B) of such Code, as added by this 
     section, shall not apply to the individual serving as 
     Taxpayer Advocate on the date of the enactment of this Act.

     SEC. 4. OTHER PERSONNEL.

       (a) In General.--Section 7804 (relating to the effect of 
     reorganization plans) is amended to read as follows:

     SEC. 7804. OTHER PERSONNEL.

       ``(a) Appointment and Supervision.--Unless otherwise 
     prescribed by the Secretary, the Commissioner of Internal 
     Revenue is authorized to employ such number of persons as the 
     Commissioner deems proper for the administration and 
     enforcement of the internal revenue laws, and the 
     Commissioner shall issue all necessary directions, 
     instructions, orders, and rules applicable to such persons.
       ``(b) Posts of Duty of Employees in Field Service or 
     Traveling.--Unless otherwise prescribed by the Secretary--
       ``(1) Designation of post of duty.--The Commissioner shall 
     determine and designate the posts of duty of all such persons 
     engaged in field work or traveling on official business 
     outside of the District of Columbia.
       ``(2) Detail of personnel from field service.--The 
     Commissioner may order any such person engaged in field work 
     to duty in the District of Columbia, for such periods as the 
     Commissioner may prescribe, and to any designated post of 
     duty outside the District of Columbia upon the completion of 
     such duty.
       ``(c) Delinquent Internal Revenue Officers and Employees.--
     If any officer or employee of the Treasury Department acting 
     in connection with the internal revenue laws fails to account 
     for and pay over any amount of money or property collected or 
     received by him in connection with the internal revenue laws, 
     the Secretary shall issue notice and demand to such officer 
     or employee for payment of the amount which he failed to 
     account for and pay over, and, upon failure to pay the amount 
     demanded within the time specified in such notice, the amount 
     so demanded shall be deemed imposed upon such officer or 
     employee and assessed upon the date of such notice and 
     demand, and the previsions of chapter 64 and all other 
     provisions of law relating to the collection of assessed 
     taxes shall be applicable in respect of such amount.''.
       (b) Conforming Amendments.--
       (1) Subsection (b) of section 6344 is amended by striking 
     ``section 7803(d)'' and inserting ``section 7804(c)''.
       (2) The table of sections for subchapter A of chapter 80 is 
     amended by striking the item relating to section 7804 and 
     inserting the following new item:

``Sec. 7804. Other personnel.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 5. PROHIBITION ON EXECUTIVE BRANCH INFLUENCE OVER 
                   TAXPAYER AUDITS AND OTHER INVESTIGATIONS.

       (a) In General.--Part I of subchapter A of chapter 75 
     (relating to crimes, other offenses, and forfeitures) is 
     amended by adding after section 7216 the following new 
     section:

     ``SEC. 7217. PROHIBITION ON EXECUTIVE BRANCH INFLUENCE OVER 
                   TAXPAYER AUDITS AND OTHER INVESTIGATIONS.

       ``(a) Prohibition.--It shall be unlawful for any applicable 
     person to request any officer or employee of the Internal 
     Revenue Service to conduct or terminate an audit or other 
     investigation of any particular taxpayer with respect to the 
     tax liability of such taxpayer.
       ``(b) Reporting Requirements.--Any officer or employee of 
     the Internal Revenue Service receiving any request prohibited 
     by subsection (a) shall report the receipt of such request to 
     the Chief Inspector of the Internal Revenue Service.
       ``(c) Exceptions.--Subsection (a) shall not apply to--
       ``(1) any request made to an applicable person by the 
     taxpayer or a representative of the taxpayer and forwarded by 
     such applicable person to the Internal Revenue Service,
       ``(2) any request by an applicable person for disclosure of 
     return or return information under section 6103 if such 
     request is made in accordance with the requirements of such 
     section, or
       ``(3) any request by the Secretary of the Treasury as a 
     consequence of the implementation of a change in tax policy.
       ``(d) Penalty.--Any person who willfully violates 
     subsection (a) or fails to report under subsection (b) shall 
     be punished upon conviction by a fine in any amount not 
     exceeding $5,000, or imprisonment of not more than 5 years, 
     or both, together with the costs of prosecution.
       ``(e) Applicable Person.--For purposes of this section, the 
     term `applicable person' means--
       ``(1) the President, the Vice President, any employee of 
     the executive office of the President, and any employee of 
     the executive office of the Vice President, and
       ``(2) any individual (other than the Attorney General of 
     the United States) serving in a position specified in section 
     5312 of title 5, United States Code.''.
       (b) Clerical Amendment.--The table of sections for part I 
     of subchapter A of chapter 75 is amended by adding after the 
     item relating to section 7216 the following new item:

``Sec. 7217. Prohibition on executive branch influence over taxpayer 
              audits and other investigations.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

                          ____________________