[Congressional Record Volume 146, Number 45 (Tuesday, April 11, 2000)]
[House]
[Pages H2057-H2069]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAXPAYER BILL OF RIGHTS 2000
Mr. ARCHER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4163) to amend the Internal Revenue Code of 1986 to provide
for increased fairness to taxpayers, as amended.
The Clerk read as follows:
H.R. 4163
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer
Bill of Rights 2000''.
(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.--
Sec. 1. Short title; etc.
TITLE I--PENALTIES AND INTEREST
Sec. 101. Failure to pay estimated tax penalty converted to interest
charge on accumulated unpaid balance.
Sec. 102. Exclusion from gross income for interest on overpayments of
income tax by individuals.
Sec. 103. Reductions of penalty for failure to pay tax.
Sec. 104. Abatement of interest.
Sec. 105. Deposits made to stop the running of interest on potential
underpayments.
Sec. 106. Expansion of interest netting for individuals.
TITLE II--CONFIDENTIALITY AND DISCLOSURE
Sec. 201. Disclosure and privacy rules relating to returns and return
information.
Sec. 202. Expansion of type of advice available for public inspection.
Sec. 203. Collection activities with respect to joint return
disclosable to either spouse based on oral request.
Sec. 204. Taxpayer representatives not subject to examination on sole
basis of representation of taxpayers.
Sec. 205. Disclosure in judicial or administrative tax proceedings of
return and return information of persons who are not
party to such proceedings.
Sec. 206. Prohibition of disclosure of taxpayer identification
information with respect to disclosure of accepted
offers-in-compromise.
Sec. 207. Compliance by State contractors with confidentiality
safeguards.
Sec. 208. Higher standards for requests for and consents to disclosure.
Sec. 209. Notice to taxpayer concerning administrative determination of
browsing; annual report.
Sec. 210. Disclosure of taxpayer identity for tax refund purposes.
TITLE III--OTHER REQUIREMENTS
Sec. 301. Clarification of definition of church tax inquiry.
Sec. 302. Expansion of declaratory judgment remedy to tax-exempt
organizations.
Sec. 303. Employee misconduct report to include summary of complaints
by category.
Sec. 304. Increase in threshold for Joint Committee reports on refunds
and credits.
Sec. 305. Annual report on awards of costs and certain fees in
administrative and court proceedings.
Sec. 306. Annual report on abatement of penalties.
Sec. 307. Better means of communicating with taxpayers.
Sec. 308. Explanation of statute of limitations and consequences of
failure to file.
TITLE I--PENALTIES AND INTEREST
SEC. 101. FAILURE TO PAY ESTIMATED TAX PENALTY CONVERTED TO
INTEREST CHARGE ON ACCUMULATED UNPAID BALANCE.
(a) Penalty Moved to Interest Chapter of Code.--The
Internal Revenue Code of 1986 is amended by redesignating
section 6654 as section 6641 and by moving section 6641 (as
so redesignated) from part I of subchapter A of chapter 68 to
the end of subchapter E of chapter 67 (as added by subsection
(e)(1) of this section).
(b) Penalty Converted to Interest Charge.--The heading and
subsections (a) and (b) of section 6641 (as so redesignated)
are amended to read as follows:
``SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY
ESTIMATED INCOME TAX.
``(a) In General.--Interest shall be paid on any
underpayment of estimated tax by an individual for a taxable
year for each day of such underpayment. The amount of such
interest for
[[Page H2058]]
any day shall be the product of the underpayment rate
established under subsection (b)(2) multiplied by the amount
of the underpayment.
``(b) Amount of Underpayment; Interest Rate.--For purposes
of subsection (a)--
``(1) Amount.--The amount of the underpayment on any day
shall be the excess of--
``(A) the sum of the required installments for the taxable
year the due dates for which are on or before such day, over
``(B) the sum of the amounts (if any) of estimated tax
payments made on or before such day on such required
installments.
``(2) Determination of interest rate.--
``(A) In general.--The underpayment rate with respect to
any day in an installment underpayment period shall be the
underpayment rate established under section 6621 for the
first day of the calendar quarter in which such installment
underpayment period begins.
``(B) Installment underpayment period.--For purposes of
subparagraph (A), the term `installment underpayment period'
means the period beginning on the day after the due date for
a required installment and ending on the due date for the
subsequent required installment (or in the case of the 4th
required installment, the 15th day of the 4th month
following the close of a taxable year).
``(C) Daily rate.--The rate determined under subparagraph
(A) shall be applied on a daily basis and shall be based on
the assumption of 365 days in a calendar year.
``(3) Termination of estimated tax interest.--No day after
the end of the installment underpayment period for the 4th
required installment specified in paragraph (2)(B) for a
taxable year shall be treated as a day of underpayment with
respect to such taxable year.''.
(c) Increase in Safe Harbor Where Tax is Small.--
(1) In general.--Clause (i) of section 6641(d)(1)(B) (as so
redesignated) is amended to read as follows:
``(i) the lesser of--
``(I) 90 percent of the tax shown on the return for the
taxable year (or, if no return is filed, 90 percent of the
tax for such year), or
``(II) the tax shown on the return for the taxable year
(or, if no return is filed, the tax for such year) reduced
(but not below zero) by $2,000, or''.
(2) Conforming amendment.--Subsection (e) of section 6641
(as so redesignated) is amended by striking paragraph (1) and
redesignating paragraphs (2) and (3) as paragraphs (1) and
(2), respectively.
(d) Conforming Amendments.--
(1) Paragraphs (1) and (2) of subsection (e) (as
redesignated by subsection (c)(2)) and subsection (h) of
section 6641 (as so designated) are each amended by striking
``addition to tax'' each place it occurs and inserting
``interest''.
(2) Section 167(g)(5)(D) is amended by striking ``6654''
and inserting ``6641''.
(3) Section 460(b)(1) is amended by striking ``6654'' and
inserting ``6641''.
(4) Section 3510(b) is amended--
(A) by striking ``section 6654'' in paragraph (1) and
inserting ``section 6641'',
(B) by amending paragraph (2)(B) to read as follows:
``(B) no interest would be required to be paid (but for
this section) under 6641 for such taxable year by reason of
the $2,000 amount specified in section
6641(d)(1)(B)(i)(II).'',
(C) by striking ``section 6654(d)(2)'' in paragraph (3) and
inserting ``section 6641(d)(2)'', and
(D) by striking paragraph (4).
(5) Section 6201(b)(1) is amended by striking ``6654'' and
inserting ``6641''.
(6) Section 6601(h) is amended by striking ``6654'' and
inserting ``6641''.
(7) Section 6621(b)(2)(B) is amended by striking ``addition
to tax under section 6654'' and inserting ``interest required
to be paid under section 6641''.
(8) Section 6622(b) is amended--
(A) by striking ``Penalty for'' in the heading, and
(B) by striking ``addition to tax under section 6654 or
6655'' and inserting ``interest required to be paid under
section 6641 or addition to tax under section 6655''.
(9) Section 6658(a) is amended--
(A) by striking ``6654, or 6655'' and inserting ``or 6655,
and no interest shall be required to be paid under section
6641,'', and
(B) by inserting ``or paying interest'' after ``the tax''
in paragraph (2)(B)(ii).
(10) Section 6665(b) is amended--
(A) in the matter preceding paragraph (1) by striking ``,
6654,'', and
(B) in paragraph (2) by striking ``6654 or''.
(11) Section 7203 is amended by striking ``section 6654 or
6655'' and inserting ``section 6655 or interest required to
be paid under section 6641''.
(e) Clerical Amendments.--
(1) Chapter 67 is amended by inserting after subchapter D
the following:
``Subchapter E--Interest on Failure by Individual to Pay Estimated
Income Tax
``Sec. 6641. Interest on failure by individual to pay estimated income
tax.''.
(2) The table of subchapters for chapter 67 is amended by
adding at the end the following new items:
``Subchapter D. Notice requirements.
``Subchapter E. Interest on failure by individual to pay estimated
income tax.''.
(3) The table of sections for part I of subchapter A of
chapter 68 is amended by striking the item relating to
section 6654.
(f) Effective Date.--The amendments made by this section
shall apply to installment payments for taxable years
beginning after December 31, 2000.
SEC. 102. EXCLUSION FROM GROSS INCOME FOR INTEREST ON
OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.
(a) In General.--Part III of subchapter B of chapter 1
(relating to items specifically excluded from gross income)
is amended by redesignating section 139 as section 139A and
by inserting after section 138 the following new section:
``SEC. 139. EXCLUSION FROM GROSS INCOME FOR INTEREST ON
OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS.
``(a) In General.--In the case of an individual, gross
income shall not include interest paid under section 6611 on
any overpayment of tax imposed by this subtitle.
``(b) Exception.--Subsection (a) shall not apply in the
case of a failure to claim items resulting in the overpayment
on the original return if the Secretary determines that the
principal purpose of such failure is to take advantage of
subsection (a).
``(c) Special Rule for Determining Modified Adjusted Gross
Income.--For purposes of this title, interest not included in
gross income under subsection (a) shall not be treated as
interest which is exempt from tax for purposes of sections
32(i)(2)(B) and 6012(d) or any computation in which interest
exempt from tax under this title is added to adjusted gross
income.''.
(b) Clerical Amendment.--The table of sections for part III
of subchapter B of chapter 1 is amended by striking the item
relating to section 139 and inserting the following new
items:
``Sec. 139. Exclusion from gross income for interest on overpayments of
income tax by individuals.
``Sec. 139A. Cross references to other Acts.''.
(c) Effective Date.--The amendments made by this section
shall apply to interest received in calendar years beginning
after the date of the enactment of this Act.
SEC. 103. REDUCTIONS OF PENALTY FOR FAILURE TO PAY TAX.
(a) Reductions of Penalty for Failure To Pay Tax.--
(1) Reduction of penalty by 50 percent.--
(A) In general.--Paragraphs (2) and (3) of section 6651(a)
are each amended by striking ``0.5'' each place it appears
and inserting ``0.25''.
(B) Conforming amendment.--Paragraph (1) of section 6651(d)
is amended by striking ``by substituting `1 percent' for `0.5
percent' '' and inserting ``by substituting `0.5 percent' for
`0.25 percent' ''.
(2) Reduction of penalty to zero during period of
installment agreement.--Subsection (h) of section 6651 is
amended by striking ``by substituting `0.25' for `0.5' '' and
inserting ``by substituting `zero' for `0.25' ''.
(3) Effective date.--The amendments made by this subsection
shall apply for purposes of determining additions to tax for
months beginning after December 31, 2000.
(b) Prohibition of Fee for Installment Agreements Using
Automated Withdrawals.--
(1) In general.--Section 6159 (relating to agreements for
payment of tax liability in installments) is amended by
redesignating subsection (e) as subsection (f) and by
inserting after subsection (d) the following new subsection:
``(e) Prohibition of Fee for Installment Agreements Using
Automated Withdrawals.--The Secretary may not charge a
taxpayer a fee for entering into an agreement with the
Secretary under this section only for so long as payments
under such agreement are made by means of electronic transfer
or by similar automated means.''.
(2) Effective date.--The amendments made by this subsection
shall apply to installment agreements entered into more than
30 days after the date of the enactment of this Act.
SEC. 104. ABATEMENT OF INTEREST.
(a) Abatement of Interest if Gross Injustice Would
Otherwise Result.--Section 6404 is amended by redesignating
subsection (i) as subsection (j) and by inserting after
subsection (h) the following new subsection:
``(i) Abatement of Interest if Gross Injustice Would
Otherwise Result.--The Secretary may abate the assessment of
all or any part of interest on any amount of tax imposed by
this title for any period if the Secretary determines that--
``(1) a gross injustice would otherwise result if interest
were to be charged, and
``(2) no significant aspect of the events giving rise to
the accrual of the interest can be attributed to the taxpayer
involved.''.
(b) Abatement of Interest for Periods Attributable to Any
Unreasonable IRS Error or Delay.--Subparagraphs (A) and (B)
of section 6404(e)(1) are each amended by striking ``in
performing a ministerial or managerial act''.
(c) Abatement of Interest With Respect to Erroneous Refund
Check Without Regard to Size of Refund.--Paragraph (2) of
section 6404(e) is amended by striking ``unless--'' and all
that follows and inserting ``unless the taxpayer (or a
related party) has in any way caused such erroneous
refund.''
(d) Abatement of Interest to Extent Interest is
Attributable to Taxpayer Reliance on Written Statements of
the IRS.--Subsection (f) of section 6404 is amended--
(1) in the subsection heading, by striking ``Penalty or
Addition'' and inserting ``Interest, Penalty, or Addition'',
and
(2) in paragraph (1) and in subparagraph (B) of paragraph
(2), by striking ``penalty or addition'' and inserting
``interest, penalty, or addition''.
(e) Effective Date.--The amendments made by this section
shall apply with respect to interest accruing on or after the
date of the enactment of this Act.
[[Page H2059]]
SEC. 105. DEPOSITS MADE TO STOP THE RUNNING OF INTEREST ON
POTENTIAL UNDERPAYMENTS.
(a) In General.--Subchapter B of chapter 67 (relating to
interest on overpayments) is amended by redesignating section
6612 as section 6613 and by inserting after section 6611 the
following new section:
``SEC. 6612. DEPOSITS MADE TO STOP THE RUNNING OF INTEREST ON
POTENTIAL UNDERPAYMENTS, ETC.
``(a) Authority To Make Deposits Other Than As Payment of
Tax.--Any taxpayer may make a cash bond deposit with the
Secretary to offset any potential underpayment of tax imposed
by this title for any taxable period. Such a deposit shall be
made in such manner as the Secretary shall prescribe.
``(b) Deposits Used To Pay Underpayment Also Offset Running
of Interest on Underpayment.--Any cash bond deposit used to
pay tax under this title shall offset interest under
subchapter A during the period of such deposit on such tax
under such procedures as the Secretary shall prescribe.
``(c) Taxpayer May Request Return of Cash Bond Deposit.--
``(1) In general.--On written request of a taxpayer who
made a cash bond deposit, the Secretary shall return to the
taxpayer any amount of such deposit specified by the
taxpayer.
``(2) No interest.--In the case of a deposit which is so
returned--
``(A) the amount returned shall not offset interest under
subchapter A for any period, and
``(B) except as provided in subsection (d), no interest
shall be allowed on such amount.
``(3) Exceptions.--Paragraph (1) shall not apply to any
amount if--
``(A) such amount has been treated by the Secretary as a
payment of tax after a final determination of the disputed
items to which such amount relates,
``(B) such amount has been designated by the taxpayer as
being a payment of tax,
``(C) the Secretary determines that assessment or
collection of tax is in jeopardy, or
``(D) the amount is applied in accordance with section
6402.
Subparagraph (D) shall not apply to a payment to a taxpayer
if the taxpayer is entitled to be paid interest under
subsection (d) on such payment.
``(d) Interest on Amounts Returned in Certain
Circumstances.--
``(1) In general.--Interest shall be allowed and paid on
the amount of any cash bond deposit for a taxable period
which is returned to the taxpayer only if the deposit is
attributable to a dispute reserve account for such period.
``(2) Attribution to dispute reserve account.--For purposes
of paragraph (1), an amount is attributable to a dispute
reserve account for any taxable period only to the extent
that the aggregate of the cash bond deposits for such period
(reduced by the amount of such deposits which has been
previously returned to the taxpayer or treated as a payment
of tax) does not exceed the deposit limit for such period.
``(3) Deposit limit.--For purposes of paragraph (2)--
``(A) In general.--The deposit limit for any taxable period
is the amount specified by the taxpayer at the time of the
deposit as the taxpayer's reasonable estimate of the
potential underpayment for such period with respect to
disputable items identified (at such time) by the taxpayer
with respect to such deposit.
``(B) Safe harbor based on 30-day letter.--In the case of a
taxpayer who is issued a 30-day letter for any taxable
period, the deposit limit for such period shall not be less
than the amount of the proposed deficiency specified in such
letter.
``(4) Definitions.--For purposes of paragraph (3)--
``(A) Disputable item.--The term `disputable item' means
any item if the taxpayer--
``(i) has a reasonable basis for its treatment of such
item, and
``(ii) reasonably believes that the Secretary also has a
reasonable basis for disallowing the taxpayer's treatment of
such item.
``(B) 30-day letter.--The term `30-day letter' means the
first letter of proposed deficiency which allows the taxpayer
an opportunity for administrative review in the Internal
Revenue Service Office of Appeals.
``(5) Rate and period of interest.--
``(A) Rate.--The rate of interest allowable under this
subsection shall be the Federal short-term rate determined
under section 6621(b), compounded daily.
``(B) Period.--Interest under this subsection on any
payment to a taxpayer shall be payable from the date of the
deposit to which such payment is attributable to a date (to
be determined by the Secretary) preceding the date of the
check making such payment by not more than 30 days. For
purposes of the preceding sentence, cash bond deposits for
any taxable period shall be treated as used and returned on a
last-in first-out basis.
``(e) Cash Bond Deposit.--For purposes of this section--
``(1) In general.--The term `cash bond deposit' means any
payment which is designated by the taxpayer as being a cash
bond deposit for a specified taxable period.
``(2) Amounts designated or used as payment of tax.--A cash
bond deposit shall cease to be treated as such for purposes
of this section beginning on the date that the taxpayer
designates such deposit as a payment of tax for purposes of
this title, or, if earlier, on the date such deposit is so
used.
``(f) Change in Period for Which Deposit Made.--Subject to
the requirements of subsection (d), a taxpayer may change the
taxable period to which a cash bond deposit relates.''
(b) Clerical Amendment.--The table of sections for
subchapter B of chapter 67 is amended by striking the last
item and inserting the following new items:
``Sec. 6612. Deposits made to stop the running of interest on potential
underpayments, etc.
``Sec. 6613. Cross references.''
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to interest for periods after the date of the enactment
of this Act.
(2) Specification of disputed items.--In the case of
amounts held by the Secretary of the Treasury on the date of
the enactment of this Act as a deposit in the nature of a
cash bond pursuant to Revenue Procedure 84-58, the date that
the taxpayer makes the identification under subsection
(d)(3)(A) of section 6612 of the Internal Revenue Code of
1986, as added by this section, shall be treated as the date
such amounts were deposited for purposes of such section
6612.
SEC. 106. EXPANSION OF INTEREST NETTING FOR INDIVIDUALS.
(a) In General.--Subsection (d) of section 6621 (relating
to elimination of interest on overlapping periods of tax
overpayments and underpayments) is amended by adding at the
end the following: ``Solely for purposes of the preceding
sentence, section 6611(e) shall not apply in the case of an
individual.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to interest accrued after December 31, 2000.
TITLE II--CONFIDENTIALITY AND DISCLOSURE
SEC. 201. DISCLOSURE AND PRIVACY RULES RELATING TO RETURNS
AND RETURN INFORMATION.
(a) In General.--Subsection (a) of section 6103 (relating
to general rule for confidentiality and disclosure of returns
and return information) is amended by striking ``title--''
and inserting ``title and notwithstanding any other provision
of law--''.
(b) Procedural and Jurisdictional Rules.--Subsection (p) of
section 6103 (relating to procedure and recordkeeping) is
amended by adding at the end the following new paragraph:
``(9) Procedural rules applicable to certain disclosures.--
``(A) In general.--The Secretary shall prescribe
regulations for purposes of providing for disclosures of
return and return information under subsections (c), (e), and
(k) (1) and (2). Such regulations shall include a schedule of
fees, and waivers and reductions of such fees, applicable to
the processing of requests for such disclosures.
``(B) Determinations of whether to comply with disclosure
requests.--
``(i) Initial requests.--In response to a request that
reasonably describes the return or return information sought
and is made in accordance with the published rules, the
Secretary shall--
``(I) determine within 20 days after the receipt of any
request for disclosure of return or return information under
subsections (c), (e), and (k) (1) and (2) whether to comply
with such request, and
``(II) immediately notify the person making such request of
such determination and the reasons therefor, and of the right
of such person to appeal to the Commissioner any adverse
determination.
``(ii) Appeal.--The Commissioner shall--
``(I) make a determination with respect to any appeal of
any adverse determination under clause (i)(I) within 20 days
after the receipt of such appeal, and
``(II) if on appeal the denial of the request for
disclosure of such return or return information is in whole
or in part upheld, the Commissioner shall notify the person
making such request of the provisions for judicial review of
that determination under subparagraph (D).
``(iii) Extension of periods for unusual circumstances.--
``(I) In general.--The time limits prescribed in clause (i)
and clause (ii) (as the case may be) may be extended for not
more than 10 days in unusual circumstances by providing to
the person making such request for disclosure written notice
which sets forth the unusual circumstances for such extension
and the date on which a determination is expected to be
dispatched. No such notice shall specify a date that would
result in an extension for more than 10 working days, except
as provided in subclause (II).
``(II) Modification of request or time period.--If, with
respect to a request for which the time limits are extended
under subclause (I), the Secretary determines that the
request cannot be processed within the time limit so
specified, the Secretary shall notify the person making the
request and shall provide the person an opportunity to limit
the scope of the request so that it may be processed within
that time limit or an opportunity to arrange with the agency
an alternative time frame for processing the request or a
modified request. Refusal by the person to reasonably modify
the request or arrange such an alternative time frame shall
be considered as a factor in determining whether exceptional
circumstances exist for purposes of subparagraph (C).
``(iv) Unusual circumstances defined.--For purposes of
clause (iii), the term `unusual circumstances' means, but
only to the extent reasonably necessary to the proper
processing of the particular requests--
``(I) the need to search for and collect the requested
records from field facilities or other establishments that
are separate from the office processing the request,
``(II) the need to search for, collect, and appropriately
examine a voluminous amount of separate and distinct records
which are demanded in a single request, or
[[Page H2060]]
``(III) the need for consultation, which shall be conducted
with all practicable speed, with another agency having a
substantial interest in the determination of the request or
among two or more components of the agency having substantial
subject-matter interest therein.
``(v) 20-day period excludes certain days.--The 20-day
periods referred to in clauses (i) and (ii) shall not include
Saturdays, Sundays, and legal public holidays.
``(C) Failure to meet time limits.--
``(i) In general.--Any person making a request for the
disclosure of return or return information which is subject
to this paragraph shall be deemed to have exhausted his
administrative remedies with respect to such request if the
Secretary fails to comply with the applicable time limit
provisions of this paragraph. If the Secretary can show
exceptional circumstances exist and that the agency is
exercising due diligence in responding to the request, the
court may retain jurisdiction and allow the agency additional
time to complete its review of the records. Upon any
determination by the Secretary to comply with a request for
records, the records shall be made promptly available to such
person making such request. Any notification of denial of any
request for records under this subsection shall set forth the
names and titles or positions of each person responsible for
the denial of such request.
``(ii) Exceptional circumstances defined.--For purposes of
clause (i), the term `exceptional circumstances' does not
include a delay that results from a predictable workload of
the Secretary relating to requests subject to this paragraph,
unless the Secretary demonstrates reasonable progress in
reducing its backlog of pending requests.
``(iii) Refusal to modify request or time frame.--Refusal
by a person to reasonably modify the scope of a request or
arrange an alternative time frame for processing a request
(or a modified request) under subparagraph (B)(ii) after
being given an opportunity to do so by the agency to whom the
person made the request shall be considered as a factor in
determining whether exceptional circumstances exist for
purposes of this subparagraph.
``(D) Judicial proceedings.--
``(i) Jurisdiction of the district courts.--
``(I) In general.--On complaint, the district courts of the
United States in the district in which the complainant
resides, or has his principal place of business, or in which
his return or return information is situated, or in the
District of Columbia, shall have jurisdiction to enjoin the
Secretary from withholding return or return information which
is subject to disclosure under subsection (c), (e), or (k)
(1) or (2), and to order the production of any return or
return information improperly withheld from the complainant.
``(II) Expedited processing.--No district court of the
United States shall have jurisdiction to review a denial by
the Secretary of expedited processing of a request for return
or return information after the Secretary has provided a
complete response to the request.
``(ii) Procedural matters.--In a case arising under clause
(i), the court shall determine the matter de novo (on the
record before the Secretary at the time of the determination
in the case of a request for expedited processing), and may
examine the contents of such return or return information in
camera to determine whether such return or return information
or any part thereof shall be withheld under any of the
provisions of this title, and the burden shall be on the
Secretary to sustain its action. In addition to any other
matters to which a court accords substantial weight, a court
shall accord substantial weight to an affidavit of the
Secretary concerning the Secretary's determination as to
technical feasibility relating to, and reproducibility of,
such return and return information.
``(E) Deadline for Secretary to answer complaint.--
Notwithstanding any other provision of law, the Secretary
shall serve an answer or otherwise plead to any complaint
made under this paragraph within 30 days after service upon
the Secretary of the pleading in which such complaint is
made, unless the court otherwise directs for good cause
shown.''.
(c) Attorney Fees.--Subsection (a) of section 7430
(relating to general rule for awarding of costs and certain
fees) is amended by inserting after ``title,'' the following:
``and in any court proceeding in connection with the
disclosure of return and return information under section
6103(p)(9),''.
(d) Effective Date.--The amendments made by this section
shall apply to requests made after the date of the enactment
of this Act.
SEC. 202. EXPANSION OF TYPE OF ADVICE AVAILABLE FOR PUBLIC
INSPECTION.
(a) In General.--Subparagraph (A) of section 6110(i)(1) is
amended--
(1) by striking ``national office component of the Office
of Chief Counsel'' and inserting ``component of the Office of
Chief Counsel or of the Service'', and
(2) in clause (i) by striking ``field or service center
employees of the Service or regional or district'' and
inserting ``employees of the Service or''.
(b) Conforming Amendments.--
(1) Section 6110(i)(2) is amended by inserting ``or the
Service'' after ``Office of Chief Counsel''.
(2) The following provisions of section 6110 are amended by
striking ``Chief Counsel advice'' each place it appears and
inserting ``official advice'':
(A) Paragraph (1) of subsection (b).
(B) Subparagraph (A) of subsection (i)(1).
(C) Paragraphs (3) and (4) of subsection (i).
(3) Subparagraph (A) of section 6110(g)(5) is amended by
inserting ``official advice and'' before ``technical
advice''.
(4) The heading for subsection (i) of section 6110 is
amended by striking ``Chief Counsel'' and inserting
``Official''.
(5) The heading for paragraph (1) of section 6110(i) is
amended by striking ``Chief counsel'' and inserting
``Official''.
(6) The headings for paragraphs (2) and (3) of section
6110(i), and for subparagraphs (A) and (B) of paragraph (4)
of such section, are each amended by striking ``chief
counsel'' and inserting ``official''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to any official advice issued more than 90 days after
the date of the enactment of this Act.
(2) Documents treated as official advice.--If the Secretary
of the Treasury by regulation provides pursuant to section
6110(i)(2) of the Internal Revenue Code of 1986, that any
additional advice or instruction issued by the Office of
Chief Counsel shall be treated as official advice, such
additional advice or instruction shall be made available for
public inspection pursuant to section 6110 of such Code, as
amended by this section, only in accordance with the
effective date set forth in such regulation.
(3) Official advice to be available electronically.--The
Internal Revenue Service shall make any official advice
issued more than 90 days after the date of the enactment of
this Act and made available for public inspection pursuant to
section 6110 of the Internal Revenue Code of 1986, as amended
by this section, also available by computer
telecommunications within 1 year after issuance.
SEC. 203. COLLECTION ACTIVITIES WITH RESPECT TO JOINT RETURN
DISCLOSABLE TO EITHER SPOUSE BASED ON ORAL
REQUEST.
(a) In General.--Paragraph (8) of section 6103(e) (relating
to disclosure of collection activities with respect to joint
return) is amended by striking ``in writing'' the first place
it appears.
(b) Effective Date.--The amendment made by this section
shall apply to requests made after the date of the enactment
of this Act.
SEC. 204. TAXPAYER REPRESENTATIVES NOT SUBJECT TO EXAMINATION
ON SOLE BASIS OF REPRESENTATION OF TAXPAYERS.
(a) In General.--Subsection (h) of section 6103 (relating
to disclosure to certain Federal officers and employees for
purposes of tax administration, etc.) is amended by adding at
the end the following new paragraph:
``(7) Taxpayer representatives.--Notwithstanding paragraph
(1), the return of the representative of a taxpayer whose
return is being examined by an officer or employee of the
Department of the Treasury shall not be open to inspection by
such officer or employee on the sole basis of the
representative's relationship to the taxpayer unless a
supervisor of such officer or employee has approved the
inspection of the return of such representative on a basis
other than by reason of such relationship.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.
SEC. 205. DISCLOSURE IN JUDICIAL OR ADMINISTRATIVE TAX
PROCEEDINGS OF RETURN AND RETURN INFORMATION OF
PERSONS WHO ARE NOT PARTY TO SUCH PROCEEDINGS.
(a) In General.--Paragraph (4) of section 6103(h) (relating
to disclosure to certain Federal officers and employees for
purposes of tax administration, etc.) is amended by adding
at the end the following new subparagraph:
``(B) Disclosure in judicial or administrative tax
proceedings of return and return information of persons not
party to such proceedings.--
``(i) Notice.--Return or return information of any person
who is not a party to a judicial or administrative proceeding
described in paragraph (4) shall not be disclosed under
clause (ii) or (iii) of subparagraph (A) until after the
Secretary makes a reasonable effort to give notice to such
person and an opportunity for such person to request the
deletion of matter from such return or return information,
including any of the items referred to in paragraphs (1)
through (7) of section 6110(c). Such notice shall include a
statement of the issue or issues the resolution of which is
the reason such return or return information is sought. In
the case of S corporations, partnerships, estates, and
trusts, such notice shall be made at the entity level.
``(ii) Disclosure limited to pertinent portion.--The only
portion of a return or return information described in clause
(i) which may be disclosed under subparagraph (A) is that
portion of such return or return information that directly
relates to the resolution of an issue in such proceeding.
``(iii) Exceptions.--Clause (i) shall not apply to--
``(I) any ex parte proceeding for obtaining a search
warrant, order for entry on premises or safe deposit boxes,
or similar ex parte proceeding,
``(II) disclosure of third party return information by
indictment or criminal information, or
``(III) if the Secretary determines that the application of
such clause would seriously impair a criminal tax
investigation.''.
(b) Conforming Amendments.--Paragraph (4) of section
6103(h) is amended by--
(1) by striking ``proceedings.--A return'' and inserting
``proceedings.--
``(A) In general.--Except as provided in subparagraph (B),
a return'',
(2) by redesignating subparagraphs (A), (B), (C), and (D)
clauses (i), (ii), (iii), and (iv), respectively, and
(3) in the matter following clause (iv) (as so
redesignated), by striking ``subparagraph (A), (B), or (C)''
and inserting ``clause (i), (ii) or (iii)'' and by moving
such matter two ems to the right.
(c) Effective Date.--The amendments made by this section
shall apply to proceedings commenced after the date of the
enactment of this Act.
[[Page H2061]]
SEC. 206. PROHIBITION OF DISCLOSURE OF TAXPAYER
IDENTIFICATION INFORMATION
WITH RESPECT TO DISCLOSURE OF ACCEPTED
OFFERS-IN-COMPROMISE.
(a) In General.--Paragraph (1) of section 6103(k) (relating
to disclosure of certain returns and return information for
tax administrative purposes) is amended by inserting ``(other
than address and TIN)'' after ``Return information''.
(b) Effective Date.--The amendment made by this section
shall apply to disclosures made after the date of the
enactment of this Act.
SEC. 207. COMPLIANCE BY STATE CONTRACTORS WITH
CONFIDENTIALITY SAFEGUARDS.
(a) In General.--Paragraph (8) of section 6103(p) (relating
to State law requirements) is amended by redesignating
subparagraph (B) as subparagraph (C) and by inserting after
subparagraph (A) the following new subparagraph:
``(B) Disclosure to contractors.--Notwithstanding any other
provision of this section, no return or return information
shall be disclosed by any officer or employee of any State to
any contractor of the State unless such State--
``(i) has requirements in effect which require each
contractor of the State 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,
``(ii) agrees to conduct an annual, on-site review (mid-
point review in the case of contracts of less than 1 year in
duration) of each contractor to determine compliance with
such requirements,
``(iii) submits the findings of the most recent review
conducted under clause (ii) to the Secretary as part of the
report required by paragraph (4)(E), and
``(iv) certifies to the Secretary for the most recent
annual period that all contractors are in compliance with all
such requirements.
The certification required by clause (iv) shall include the
name and address of each contractor, a description of the
contract of the contractor with the State, and the duration
of such contract.''.
(b) Conforming Amendment.--Subparagraph (C) of section
6103(p)(8), as amended by subsection (a), is amended by
striking ``subparagraph (A)'' and inserting ``subparagraphs
(A) and (B)''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to disclosures made after December 31, 2001.
(2) The first certification under section 6103(p)(8)(B)(iv)
of the Internal Revenue Code of 1986, as added by subsection
(a), shall be made with respect to calendar year 2002.
SEC. 208. HIGHER STANDARDS FOR REQUESTS FOR AND CONSENTS TO
DISCLOSURE.
(a) In General.--Subsection (c) of section 6103 (relating
to disclosure of returns and return information to designee
of taxpayer) is amended by adding at the end the following
new paragraphs:
``(2) Requirements for valid requests and consents.--A
request for or consent to disclosure under paragraph (1)
shall only be valid for purposes of this section or sections
7213, 7213A, or 7431 if--
``(A) at the time of execution, such request or consent
designates a recipient of such disclosure and is dated, and
``(B) at the time such request or consent is submitted to
the Secretary, the submitter of such request or consent
certifies, under penalty of perjury, that such request or
consent complied with subparagraph (A).
``(3) Restrictions on persons obtaining information.--Any
person shall, as a condition for receiving return or return
information under paragraph (1)--
``(A) ensure that such return and return information is
kept confidential,
``(B) use such return and return information only for the
purpose for which it was requested, and
``(C) not disclose such return and return information
except to accomplish the purpose for which it was requested,
unless a separate consent from the taxpayer is obtained.
``(4) Requirements for form prescribed by secretary.--For
purposes of this subsection, the Secretary shall prescribe a
form for requests and consents which shall--
``(A) contain a warning, prominently displayed, informing
the taxpayer that the form should not be signed unless it is
completed,
``(B) state that if the taxpayer believes there is an
attempt to coerce him to sign an incomplete or blank form,
the taxpayer should report the matter to the Treasury
Inspector General for Tax Administration, and
``(C) contain the address and telephone number of the
Treasury Inspector General for Tax Administration.''.
(b) Report.--Not later than 18 months after the date of the
enactment of this Act, the Treasury Inspector General for Tax
Administration shall submit a report to the Congress on
compliance with the designation and certification
requirements applicable to requests for or consent to
disclosure of returns and return information under section
6103(c) of the Internal Revenue Code of 1986, as amended by
subsection (a). Such report shall--
(1) evaluate (on the basis of random sampling) whether--
(A) the amendments made by subsection (a) are achieving the
purposes of this section,
(B) requesters and submitters for such disclosure are
continuing to evade the purposes of this section and, if so,
how, and
(C) the sanctions for violations of such requirements are
adequate, and
(2) include such recommendations that the Treasury
Inspector General for Tax Administration considers necessary
or appropriate to better achieve the purposes of this
section.
(c) Conforming Amendment.--Section 6103(c) is amended by
striking ``Taxpayer.--The Secretary'' and inserting
``Taxpayer.--
``(1) In General.--The Secretary''.
(d) Effective Date.--The amendments made by this section
shall apply to requests and consents made after 3 months
after the date of the enactment of this Act.
SEC. 209. NOTICE TO TAXPAYER CONCERNING ADMINISTRATIVE
DETERMINATION OF BROWSING;
ANNUAL REPORT.
(a) Notice to Taxpayer.--Subsection (e) of section 7431
(relating to notification of unlawful inspection and
disclosure) is amended by adding at the end the following:
``The Secretary shall also notify such taxpayer if the
Treasury Inspector General for Tax Administration determines
that such taxpayer's return or return information was
inspected or disclosed in violation of any of the provisions
specified in paragraph (1), (2), or (3).''.
(b) Reports.--Subsection (p) of section 6103 (relating to
procedure and recordkeeping), as amended by section 201(b),
is further amended by adding at the end the following new
paragraph:
``(10) Report on unauthorized disclosure and inspection.--
As part of the report required by paragraph (3)(C) for each
calendar year, the Secretary shall furnish information
regarding the unauthorized disclosure and inspection of
returns and return information, including the number, status,
and results of--
``(A) administrative investigations,
``(B) civil lawsuits brought under section 7431 (including
the amounts for which such lawsuits were settled and the
amounts of damages awarded), and
``(C) criminal prosecutions.''.
(c) Effective Date.--
(1) Notice.--The amendment made by subsection (a) shall
apply to determinations made after the date of the enactment
of this Act.
(2) Reports.--The amendment made by subsection (b) shall
apply to calendar years ending after the date of the
enactment of this Act.
SEC. 210. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX REFUND
PURPOSES.
Paragraph (1) of section 6103(m) (relating to disclosure of
taxpayer identity information for tax refunds) is amended by
inserting ``, and through any other means of mass
communication,'' after ``media''.
TITLE III--OTHER REQUIREMENTS
SEC. 301. CLARIFICATION OF DEFINITION OF CHURCH TAX INQUIRY.
Subsection (i) of section 7611 (relating to section not to
apply to criminal investigations, etc.) is amended by
striking ``or'' at the end of paragraph (4), by striking the
period at the end of paragraph (5) and inserting ``, or'',
and by inserting after paragraph (5) the following:
``(6) information provided by the Secretary related to the
standards for exemption from tax under this title and the
requirements under this title relating to unrelated business
taxable income.''.
SEC. 302. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-
EXEMPT ORGANIZATIONS.
(a) In General.--Paragraph (1) of section 7428(a) (relating
to creation of remedy) is amended--
(1) in subparagraph (B) by inserting after ``509(a))'' the
following: ``or as a private operating foundation (as defined
in section 4942(j)(3))'', and
(2) by amending subparagraph (C) to read as follows:
``(C) with respect to the initial qualification or
continuing qualification of an organization as an
organization described in section 501(c) (other than
paragraph (3)) which is exempt from tax under section 501(a),
or''.
(b) Court Jurisdiction.--Subsection (a) of section 7428 is
amended in the material following paragraph (2) by striking
``United States Tax Court, the United States Claims Court, or
the district court of the United States for the District of
Columbia'' and inserting the following: ``United States Tax
Court (in the case of any such determination or failure) or
the United States Claims Court or the district court of the
United States for the District of Columbia (in the case of a
determination or failure with respect to an issue referred to
in subparagraph (A) or (B) of paragraph (1)),''.
(c) Failure of Service To Act on Determinations Treated as
Exhaustion of Remedies.--The second sentence of paragraph (2)
of section 7428(b) (relating to exhaustion of administrative
remedies) is amended to read as follows: ``An organization
requesting the determination of an issue referred to in
subsection (a)(1) shall be deemed to have exhausted its
administrative remedies with respect to--
``(A) a failure by the Secretary to make a determination
with respect to such issue at the expiration of 270 days
after the date on which the request for such determination
was made if the organization has taken, in a timely manner,
all reasonable steps to secure such determination, and
``(B) a failure by any office of the Service (other than
the office which is responsible for initial determinations
with respect to such issue (hereinafter in this subparagraph
referred to as the `initial office'), to make a determination
with respect to such issue at the expiration of 180 days
after the date on which any request for such determination
was made by the initial office if the organization has
taken, in a timely manner, all reasonable steps to secure
such determination.''.
(d) Effective Dates.--
(1) Declaratory judgment.--The amendments made by
subsections (a) and (b) shall apply to pleadings filed with
respect to determinations (or requests for determinations)
made after the date of the enactment of this Act.
[[Page H2062]]
(2) Failure of service to act.--The amendments made by
subsection (c) shall apply to applications received in the
national office of the Internal Revenue Service after the
date of the enactment of this Act.
SEC. 303. EMPLOYEE MISCONDUCT REPORT TO INCLUDE SUMMARY OF
COMPLAINTS BY CATEGORY.
(a) In General.--Clause (ii) of section 7803(d)(2)(A) is
amended by inserting before the semicolon at the end the
following: ``, including a summary (by category) of the 10
most common complaints made and the number of such common
complaints''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to reporting periods ending after
the date of the enactment of this Act.
SEC. 304. INCREASE IN THRESHOLD FOR JOINT COMMITTEE REPORTS
ON REFUNDS AND CREDITS.
(a) General Rule.--Subsections (a) and (b) of section 6405
are each amended by striking ``$1,000,000'' and inserting
``$2,000,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act,
except that such amendment shall not apply with respect to
any refund or credit with respect to a report that has been
made before such date of the enactment under section 6405 of
the Internal Revenue Code of 1986.
SEC. 305. ANNUAL REPORT ON AWARDS OF COSTS AND CERTAIN FEES
IN ADMINISTRATIVE AND COURT PROCEEDINGS.
Not later than 3 months after the close of each Federal
fiscal year after fiscal year 1999, the Treasury Inspector
General for Tax Administration shall submit a report to
Congress which specifies for such year--
(1) the number of payments made by the United States
pursuant to section 7430 of the Internal Revenue Code of 1986
(relating to awarding of costs and certain fees),
(2) the amount of each such payment,
(3) an analysis of any administrative issue giving rise to
such payments, and
(4) changes (if any) which will be implemented as a result
of such analysis and other changes (if any) recommended by
the Treasury Inspector General for Tax Administration as a
result of such analysis.
SEC. 306. ANNUAL REPORT ON ABATEMENT OF PENALTIES.
Not later than 6 months after the close of each Federal
fiscal year after fiscal year 1999, the Treasury Inspector
General for Tax Administration shall submit a report to
Congress on abatements of penalties under the Internal
Revenue Code of 1986 during such year, including information
on the reasons and criteria for such abatements.
SEC. 307. BETTER MEANS OF COMMUNICATING WITH TAXPAYERS.
Not later than 18 months after the date of the enactment of
this Act, the Treasury Inspector General for Tax
Administration shall submit a report to Congress evaluating
whether technological advances, such as e-mail and facsimile
transmission, permit the use of alternative means for the
Internal Revenue Service to communicate with taxpayers.
SEC. 308. EXPLANATION OF STATUTE OF LIMITATIONS AND
CONSEQUENCES OF FAILURE TO FILE.
The Secretary of the Treasury or the Secretary's delegate
shall, as soon as practicable but not later than 180 days
after the date of the enactment of this Act, revise the
statement required by section 6227 of the Omnibus Taxpayer
Bill of Rights (Internal Revenue Service Publication No. 1),
and any instructions booklet accompanying a general income
tax return form for taxable years beginning in 2000 and later
(including forms 1040, 1040A, 1040EZ, and any similar or
successor forms relating thereto), to provide for an
explanation of--
(1) the limitations imposed by section 6511 of the Internal
Revenue Code of 1986 on credits and refunds, and
(2) the consequences under such section 6511 of the failure
to file a return of tax.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Archer) and the gentleman from Pennsylvania (Mr. Coyne) will
each control 20 minutes.
The Chair recognizes the gentleman from Texas (Mr. Archer).
{time} 1430
General Leave
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their
remarks, and include extraneous material, on H.R. 4163.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, while some might find it surprising, I still do my own
taxes. Often people ask me why, and the answer is easy. I think that as
chairman of the Committee on Ways and Means I should understand fully
all of the difficulties, all of the headaches, all of the confusion,
that Americans face in dealing with our complicated tax system.
Over the past 5 years, we have cut taxes and we have tried to
simplify the code. Clearly, one of the greatest simplifications is the
elimination of taxes on home sales. Now one does not have to bring a
shoe box full of receipts to their tax preparer when they sell their
home. Yet the Tax Code is still too complicated and confusing, and we
eventually need to get the IRS out of the lives of individual
Americans.
In the meantime, we should be sure that the current system treats
taxpayers fairly while protecting their rights and privacy. That is why
we are here today, to begin work on a new taxpayer bill of rights.
This Taxpayer Bill of Rights 2000 builds on the IRS Reform Act which
we passed in 1998, which by the way was the first reform of the IRS
since 1952. Our new plan will help taxpayers even further to protect
taxpayer privacy, level the playing field between taxpayers and the
IRS, and take at least some small steps to help simplify the process of
paying taxes.
While taxpayer rights are important, we also believe taxes should be
lower. Federal taxes, as a percentage of GDP, are the highest since
World War II. So we want to fix the marriage tax penalty, help families
save for education, and bury the death tax.
We also passed incentives for health research, long-term care,
adoption, small businesses and many, many other worthwhile activities;
but we are not through yet.
Today I am pleased that my Democratic colleagues have joined with us
to make this a bipartisan taxpayer bill of rights, and I commend the
gentleman from New York (Mr. Houghton) of the Subcommittee on
Oversight, the gentleman from Ohio (Mr. Portman) and the gentleman from
Arizona (Mr. Hayworth) for putting this package together on our side,
as well as the gentleman from New York (Mr. Rangel), the gentleman from
Pennsylvania (Mr. Coyne) and others for joining with us on the other
side.
As the old saying goes, there is nothing certain but death and taxes.
We cannot do anything about death but we can and should make taxes as
fair and easy as possible, and I urge my colleagues to join together
and pass this important taxpayer friendly legislation.
Mr. Speaker, I ask unanimous consent to now yield the balance of my
time to the gentleman from New York (Mr. Houghton), the chairman of the
Subcommittee on Oversight, and that he be permitted to yield blocks of
time.
The SPEAKER pro tempore (Mr. Ose). Is there objection to the request
of the gentleman from Texas?
There was no objection.
Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I support H.R. 4163, the measure that is before us
today. I would like to commend the chairman of the Subcommittee on
Oversight, the gentleman from New York (Mr. Houghton), for developing
this bipartisan measure that we will be voting on very shortly.
As the ranking member of the subcommittee, I can say that the review
of pro-taxpayer proposals by the Joint Committee on Taxation, the
Internal Revenue Service's taxpayer advocate, and Treasury proposals
was well worth our while.
The bill before us today will help taxpayers nationwide. The bill
changes two current failure to pay tax penalty provisions for
individual taxpayers. The bill allows the IRS to abate interest in
cases that the IRS taxpayer advocate advised us that the IRS made a
mistake. Too many taxpayers believe that they paid their taxes only to
find out that the IRS calculated the final balance due incorrectly.
Taxpayers deserve relief from interest charges in these particular
situations.
The bill also addresses situations where the IRS has caused an
unreasonable delay or where abatement would prevent gross injustice.
This legislation also allows the Congress to obtain more and better
information about the IRS to ensure more effective agency and
congressional oversight. This bill will make the IRS more accountable
by requiring the Treasury Inspector General for Tax Administration to
report to the Congress on the reasons for penalty abatements and awards
of attorneys' fees.
The Taxpayer Bill of Rights of 2000 will give us better insight into
how the IRS is working 2 years after we passed the IRS Reform and
Restructuring Act
[[Page H2063]]
of 1998. The American people expect that we will continue to work to
enhance the fairness of the Tax Code. They also expect to make it
easier for people to file and pay their taxes on an annual basis.
At this time I would like to recognize the hard working men and women
of the Internal Revenue Service and commend them for the work that they
do sometimes under very, very difficult circumstances.
The Taxpayer Bill of Rights of 2000 is a direct response to the
enactment of IRS reforms in 1998. It represents timely follow-up of our
oversight responsibilities. Unlike the proposals before the Committee
on Ways and Means this week, the taxpayer bill of rights is a serious
proposal that will be signed into law.
I urge my colleagues to support this bill and continue our efforts to
make our tax system more equitable.
Mr. Speaker, I reserve the balance of my time.
Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would, first of all, like to thank the gentleman from
Pennsylvania (Mr. Coyne). It has been wonderful to work with the
gentleman from Pennsylvania (Mr. Coyne) and also the Members of the
Democratic group.
As Peter Druker has always said that all great ideas ultimately
degenerate into work, and as a result I would like to thank Mac
McKenney on our side, Hugh Hatcher, and Beth Vance. They have done a
wonderful job, but particularly the gentleman from Pennsylvania (Mr.
Coyne). It has been wonderful to work with him.
Also I would like to thank my associates, the gentleman from Ohio
(Mr. Portman) and the gentleman from Arizona (Mr. Hayworth) who will be
speaking and also the gentleman from New York (Mr. Rangel) who is the
full committee ranking Democrat.
Now I am not going to review the bill's 25 provisions. That would
take too long. Instead, let me give some examples of what this bill
would do.
I would like to describe some of the stories we have heard at the
Subcommittee on Oversight, and I want to explain what some of these
provisions mean to real taxpayers. The National Taxpayer Advocate told
us that the IRS erroneously refunded $59,000 to a particular taxpayer.
This is the story. The taxpayer sent the check back to the IRS. The IRS
sent the check back to the taxpayer. The taxpayer then returned the
check a second time and then the IRS manually refunded the money. The
taxpayer deposited the money in the bank until the problem could be
solved. When the matter was resolved and the taxpayer returned the
money, the IRS required the taxpayer to pay interest.
What kind of sense does that make? And so on and so forth.
Under current law, really the problem is the IRS has no authority.
There is no law to help it, to abate interest in such a case. So the
problem is not the men and women who work very hard, as the gentleman
from Pennsylvania (Mr. Coyne) referred to earlier, for the IRS. The
problem is the law. The bill requires instant abatement in taxes like
this one.
The National Association of Enrolled Agents told us about a taxpayer,
here is another story, who went to work for low wages in 1989. The
company failed to withhold taxes during the year and at the end of the
year the taxpayer was given a form 1099 miscellaneous and he could not
pay his taxes. He now owes $17,000; $1,600 in penalties and $9,000 in
interest, if one can believe it.
So under this bill, our bill, the failure to pay penalty will be
repealed for taxpayers who enter into the installing agreement with the
IRS and interest can be waived if a gross injustice would result.
Unfortunately, of course, this bill comes too late for our particular
taxpayer who I mentioned earlier, but it will help others, we hope, who
find themselves in a similar situation.
The Taxpayer Advocate also told us of another taxpayer who discovered
that his partners were defrauding the government. The taxpayer helped
the IRS in securing a conviction. In 1990, the taxpayer asked the IRS
how much he owed in taxes. The IRS said the information was not yet
available and told the taxpayer to wait for a bill. So in 1997, 7 years
later, the taxpayer received that bill. It was for $113,000. The
taxpayer paid the $113,000 in 1998, but the taxpayer received another
bill for $115,000 in interest.
See, it does not make any sense at all. Once again, the problem is
not the Internal Revenue Service. The problem is the law and that is
what we are intending to change. Our bill will allow the taxpayers who
find themselves in such a predicament to stop the running of interest
by making a deposit in a dispute reserve account. Amounts deposited in
escrow could be withdrawn with interest or used to satisfy an
underpayment of tax. Any taxpayer in the dispute with the IRS could
choose to put the money in the dispute reserve account to stop the
running of interest; very important.
So, Mr. Speaker, the Taxpayer Bill of Rights 2000 will do several
things. It will reform the penalties and interests. It will strengthen
the taxpayer privacy, very important condition. It will reduce the
compliance burden and, lastly, level the field between the IRS and
taxpayers. It will literally help millions of taxpayers. That is our
hope.
Now this is an important first step, and it is a first step. There
are needed reforms, but we also need to simplify the Tax Code. Many of
these provisions would be unnecessary if the Tax Code was less
confusing. So I look forward to working with my colleagues on tax
simplification, and I am pleased to join my colleagues from the
Committee on Ways and Means, Republicans and Democrats, in bringing
this needed bill before the House, and I urge my colleagues to support
its adoption.
Mr. Speaker, I reserve the balance of my time.
Mr. COYNE. Mr. Speaker, I yield 2 minutes to the gentleman from Texas
(Mr. Doggett), who has a very important proposal relative to a
financial disclosure amendment that he would like to discuss.
Mr. DOGGETT. Mr. Speaker, this is a good bill. I support it. I am a
cosponsor of it. I think we need more taxpayer rights, but this
afternoon's debate is a strange one. Last week at the scheduling
colloquy, the Republican leadership announced that we would have full
and open debate on the question of taxpayer rights so that any Member
could come forward with their ideas about how we might expand those
rights. Today we do not have that opportunity because Republicans
discovered one amendment that I have been offering, of which they were
very fearful. This amendment addresses the right of taxpayers to know,
specifically to know about taxpayer-subsidized, nonprofit political
bank accounts that can keep their contributors unknown to the public
and can spew out unlimited amounts of hate on the airwaves while they
take hidden money. This is the so-called section 527, the new Swiss
bank account for politicians this year.
The Republican leadership was so very scared that their members would
have to vote out here on the floor today against public disclosure that
they terminated the debate. They have now limited us to 20 minutes to a
side and prohibited any member from offering any amendment on any
subject. Regarding these 527 organizations, I stood with John McCain on
Friday, just outside this Capitol, and he said ``527 organizations are
the latest manifestation of corruption in American politics.''
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. The gentleman will suspend. Under c1. 1 of
Rule XVII, the gentleman may not quote senators.
Parliamentary Inquiry
Mr. DOGGETT. Mr. Speaker, I would make a parliamentary inquiry. The
gentleman may quote any American citizen. I did not refer to any
Senator. I referred to John McCain, a presidential candidate, and I
would ask at this point, Mr. Speaker, if in fact it is not appropriate
to quote other American citizens on the floor, particularly when they
speak out as eloquently as Mr. John McCain of Arizona did on this
question of corruption of American politics by 527 political
organizations.
The SPEAKER pro tempore. The Chair would advise the gentleman that
the weight of recent precedent and the purposes of the rule prohibit
references to speeches or statements of senators occurring outside the
Senate Chamber.
{time} 1445
Mr. DOGGETT. Mr. Speaker, just so that I am clear, then, and so that
I will be able to urge the same point in the future, any reference to a
member of the Senate, even though the title Senator is not mentioned,
and even though
[[Page H2064]]
the comments, instead of being on the floor of the Senate, were outside
of the Capitol building with Common Cause as they released their
``stealth-PAC'' report against these 527 organizations, I may not utter
the name John McCain or that of any other member of the Senate on the
floor, even though they speak in a private capacity.
The SPEAKER pro tempore (Mr. Ose). The Chair would advise the
gentleman from Texas that, for the purposes of comity on the floor of
the House, that the precedent states that the personal views of the
Senator not uttered in the Senate are not allowed to be quoted in the
House.
The weight of recent precedent and the purposes of the rule prohibit
references to speeches or statements of Senators occurring outside the
Senate Chamber, and the reference to Senator McCain, who is clearly a
member of the Senate, falls within that purview.
Mr. DOGGETT. So that the Chair is instructing me I may not mention
the name ``John McCain'' on the floor of the House, Mr. Speaker. Is
this not an exception? I could understand why some might not want it
mentioned.
The SPEAKER pro tempore. The Chair would advise the gentleman that,
to the extent the quotations of the Senator are occurring outside the
Senate Chamber, then it does not come under any of the exceptions to
clause 1 of rule XVII.
Mr. DOGGETT. Does a statement that John McCain as a citizen makes
outside the Capitol with Common Cause at a press conference to point
out the evils of these stealth PACs fall under one of these exceptions
or not?
The SPEAKER pro tempore. That does not come under the exception of
clause 1 of rule XVII.
Mr. DOGGETT. I am pleased to be informed, though I consider it a
strange ruling, Mr. Speaker.
A great American hero from Arizona has said that section 527
organizations are ``the latest manifestation of corruption in American
politics.'' Yet this House Republican leadership refuses to let this
House deal with this issue today because they are afraid to give
taxpayers the right to force groups like this ``Shape the Debate''
group, shown on this poster, to disclose who gave them their dirty
money. It could come from China or any foreign source. It could come
from a homegrown special-interest group.
This is wrong. Taxpayers should have the right to know about all of
this. They are being denied that right to learn who is corrupting the
American political system through these 527 political organizations. I
do not believe it helps people of either party. I do think it cuts to
the heart of our American democracy.
Mr. HOUGHTON. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman
from Arizona (Mr. Hayworth).
Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from New York, the
subcommittee chairman, for yielding me the time.
I will admit the fact that the gentleman from Texas comes to the
floor, taking what is a positive piece of legislation, and tearing it
asunder, because if there is genuine concern on the part of those who
represent all 435 districts in this House about campaign finance
abuses, Mr. Speaker, the first place we should look is down at the
other end of Pennsylvania Avenue.
The gentleman from Texas (Mr. Doggett) just mentioned China. It is a
sad fact that the President of the United States, on numerous
occasions, sought the help of the Chinese Communists in his reelection
campaign. It is a sadder fact that the presumptive nominee of the
Democratic Party was active in soliciting funds from the Chinese
Government.
I would just ask Members of this body, if we want to have a real
political donnybrook and tug-of-war, we can do that. Never mind the
recent amnesia about the fact that every tax bill debate here comes
under a closed rule. So we debate the merits of the tax bill.
If my friends were interested in genuine reform, how curious it is
that no action was taken in the Committee on Government Reform, the
gentleman from Indiana (Mr. Burton) in the chair. How curious it is
that no one reached out to a Member of this body on the committee of
jurisdiction, allegedly. I received no communication from the gentleman
from Texas (Mr. Doggett) to take up this alleged reform. But how much
more important it would be to do the substantive work to help people.
Mr. DOGGETT. Mr. Speaker, will the gentleman yield?
Mr. HAYWORTH. No, I will not yield.
Mr. DOGGETT. Well, I can understand that.
Mr. HAYWORTH. Mr. Speaker, it is fascinating to me to watch how the
people's work is set aside. I understand the political principle at
work. Why go on the defensive? Always be on the offense. Always be
involved in misdirection. I guess if I had to defend the legacy of
shame that has been brought and heaped upon this country by those who
willingly, knowingly took campaign donations from the Communist
Chinese, then I guess I would scramble and profess shock and dismay
about the current campaign finance structure.
Mr. Chairman, I have said it before; I will say it again: for this
crowd to stand in this Chamber and lecture us and the American people
on campaign finance reform is akin to Bonnie and Clyde, at the height
of their crime spree, holding a press conference to call for tougher
penalties on bank robbery.
It is sad. It is despicable. The true search for truth would demand
that we look at those who would willingly solicit campaign donations
from foreign powers.
Mr. COYNE. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Massachusetts (Mr. Neal).
(Mr. NEAL of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. DOGGETT. Mr. Speaker, since the gentleman from Arizona (Mr.
Hayworth) would not yield, will the gentleman from Massachusetts yield
to me?
Mr. NEAL of Massachusetts. I yield to the gentleman from Texas.
Mr. DOGGETT. Mr. Speaker, the gentleman from Massachusetts is aware,
is he not, that during the Committee on Ways and Means last week,
before the Committee on Ways and Means convened, then again on Friday
after the Committee on Ways and Means, I invited the gentleman from
Arizona (Mr. Hayworth) and every Member of the Republican leadership
and Members of this House to join to make this a truly bipartisan
effort to clean up what one great Arizonan has said is ``a
manifestation of corruption in American politics''?
Mr. NEAL of Massachusetts. Mr. Speaker, as shocking as it is, I have
to agree with the gentleman from Texas (Mr. Doggett). He is right on
target.
Mr. Speaker, the gentleman from Arizona (Mr. Hayworth) who took to
the well here, he mentioned a couple of terms to describe the current
American campaign finance system. Those people sitting up there in the
Chamber, they know that the only word that he said that was accurate
was despicable.
Announcement By The Speaker Pro Tempore
The SPEAKER pro tempore. References to visitors in the gallery are
inappropriate according to the rules of the House.
Mr. NEAL of Massachusetts. Mr. Speaker, there are some visitors in
this Chamber as well as Members who would describe the current campaign
finance system as being despicable. I think that there is general
agreement across the Nation today that that is the case.
This legislation as proposed, does indeed make some modest
improvements in interest and penalty provisions of the Tax Code, and it
ought to be supported by the House. These improvements, however, are
overshadowed, unfortunately, by the Suspension Calendar that prevents
Democrats from offering a germane amendment. This amendment would have
been offered by the gentleman from Texas (Mr. Doggett). It would
require the public disclosure of contributions to and expenditures by
section 527 political committees.
These committees are increasingly being used to circumvent the
public's right to know who is trying to influence elections in this
Nation. They are like an underground economy and are increasingly being
formed because they exist in the shadows and get around normal election
rules that apply to everyone else.
All the gentleman from Texas (Mr. Doggett) wants to do is to apply
some antiseptic to these committees. He does not challenge their right
to exist.
[[Page H2065]]
He merely wants them to respect the public's right to know.
Disclosure, I thought, was the Republican mantra for campaign finance
reform. Now we find out that, for many, it is simply a position that
they take.
Mr. Speaker, too little public information exists on these
organizations. They seem to be growing dramatically to support the
election efforts of the other side. But they are also in support of
some Democrats. The truth is we do not really know, and that is why we
should move ahead with disclosure right now without delay.
We are going to overwhelmingly pass this modest bill and leave the
only significant reform behind. That is too bad, but given the fact
that the three days of hearings on tax reform and the other three tax
bills on the floor this week exist only for political purposes, I guess
at this moment it is the best that we can expect.
Mr. HOUGHTON. Mr. Speaker, I yield 5 minutes to the gentleman from
Ohio (Mr. Portman).
Mr. PORTMAN. Mr. Speaker, I thank the gentleman from New York
(Chairman Houghton) for yielding me this time and for his leadership on
this package.
I hate to disappoint the crowd who has gathered here, but I am going
to talk about taxpayer rights and not campaign finance reform. As
someone who has worked for the last 7 years on IRS reform with the
gentleman from Pennsylvania (Mr. Coyne) and with others, I think this
is something that we ought to focus on, which is expanding taxpayer
rights.
I think this campaign finance discussion, while interesting, is an
entirely different subject that ought not to be part of this bill. I
think it is incorrect to say that tax bills come up on this floor under
an open rule or anybody can offer an amendment. It has never happened
in the 7 years that I have served.
I think that the legislation that the gentleman from Texas (Mr.
Doggett) is talking about is not ready as compared to this legislation,
which is carefully considered, the result of numerous reports,
including from the Joint Committee on Taxation, including from the IRS,
the Taxpayer Advocate.
I think, in fact, that we ought to wait for the Treasury Department's
report on this very topic, which is, incidentally, already late,
overdue, under the law. It was supposed to already be here; it is not
here yet. I think at the very least my friends on the other side of the
aisle would want to wait until the Clinton administration Treasury
Department comes up with its recommendations on this topic.
Again, I hate to disappoint folks, but rather than killing these
important taxpayer rights provisions with a partisan poison pill on
527, a campaign finance issue, rather than focusing on that, I would
like to focus on what we are doing together on a bipartisan basis to
continue the effort to reform the IRS and make our tax system work
better.
Again, I want to thank the gentleman from New York (Chairman
Houghton) for his work in this regard; the gentleman from Arizona (Mr.
Hayworth), who was here earlier who worked on the taxpayer rights; the
gentleman from Pennsylvania (Mr. Coyne); and others who put together
this legislation that we are considering.
The gentleman from New York (Chairman Houghton) has touched on a lot
of the key provisions. Let me just talk about how this came about
because I think it is important for the House to understand where we
are and why we are here.
Two years ago, after 2 years of work, this Congress passed the
historic IRS Restructuring and Reform Act. It did a lot of things. But
it was based on a year-long, bipartisan national commission on
restructuring the IRS. It was the most dramatic overhall of the IRS
since 1952, long overdue.
Yes, among other things, we dramatically improved taxpayer rights. We
added over 50 new taxpayer rights. We affected over 70 taxpayer rights,
changing them to make the IRS work better for the taxpayer.
The long-term goal of these reforms is that, within a period of time,
we think 3 to 5 years, we will have an IRS that actually offers every
taxpayer the level of service, efficiency, and respect that they
deserve and that approaches the private sector customer service
standards. It is a daunting task.
But by our action today, if we can approve these taxpayer rights and
keep to this topic and move this forward, we will actually be
continuing our efforts, which are encouraging and bipartisan, to truly
have a new IRS and new taxpayer system.
One of the taxpayers rights that we changed, for instance, 2 years
ago was shifting the burden of proof. So now when one goes to tax
court, rather than having the burden of proof be on one as a taxpayer,
it is on the IRS, as it should be, as it is in the criminal justice
system, as it is in other forums.
We also do not allow the IRS to seize one's homes and properties
anymore unless they are subject to judicial reviews. We also allow
taxpayers to seek damages from the IRS for wrongful collection actions.
These are very significant reforms, again, that this Congress put
forward after a lot of work over a 2-year period as part of last
year's, or 2 years ago, through the Structuring and Reform Act.
Finally, it did two very important things with regard to taxpayer
rights for the future. It required that the Taxpayer Advocate issue a
report and made the Taxpayer Advocate independent enough to be able to
issue a bona fide report on problems taxpayers face, to encourage more
taxpayer rights.
What are we talking about today? We are talking about provisions that
come from that Taxpayer Advocate's report, which was reported on
earlier this year. Second, we required that the Joint Committee on
Taxation conduct studies on two issues: one is interest and penalties,
a very complex, difficult issue for the IRS and for many taxpayers.
{time} 1500
And, second, on taxpayer privacy, such as the disclosure of tax
return information.
Two good Joint Tax Committee reports underlie what we are doing
today. In fact, a number of our provisions come straight out of those
Joint Tax Committee reports that were mandated under the Restructuring
and Reform Act.
Again, these are common sense proposals that are the natural next
step in our ongoing effort to create a better tax system and to truly
reform the IRS. I hope we will keep our focus on that this afternoon.
The gentleman from New York (Mr. Houghton) again has talked about
some of these provisions, and I will just touch on a couple.
One, it does expand privacy with regard to taxpayers. Very important.
We provide more protection against computer hackers gaining access to
your and my taxpayer records. We require the IRS to notify taxpayers
immediately if taxpayer information has been obtained illegally.
We increase tax fairness in a number of ways, including improving
notification of undelivered refund checks.
For taxpayers who pay estimated taxes, we increase the estimated tax
threshold providing more of a buffer, doubling it from $1,000 to
$2,000.
We have very important provisions that enable taxpayers to stop the
escalation of interest charges that build up and up and up during
disputes with the IRS and taxpayers. We encourage taxpayers and, by the
way, we drafted this provision to get into installment agreements with
the IRS to resolve their issues.
These are important provisions. And, Mr. Speaker, I would just say
finally that this is a carefully considered, thoughtful package, and I
hope all my colleagues will support it.
Mr. COYNE. Mr. Speaker, I yield 2 minutes to the gentleman from
Georgia (Mr. Lewis).
Mr. LEWIS of Georgia. Mr. Speaker, I want to thank the gentleman from
Pennsylvania (Mr. Coyne) for yielding me this time. I rise today in
support of the amendment of the gentleman from Texas (Mr. Doggett) that
the Republicans voted down in committee and blocked from being offered
to the Taxpayers' Bill of Rights today.
Every person in America realizes the importance and the necessity of
fixing our system of financing elections. This amendment is an
important step toward campaign finance reform. It will close another
loophole in the financial disclosure laws. It would clean up the
[[Page H2066]]
mess created by section 527 political organizations.
These organizations can take unlimited money from almost any source,
even foreign money, and make expenditures without any disclosure to
anyone. It is a sham, it is a shame, and it is a disgrace.
The American people deserve better. Much better. The amendment
requires simple disclosure by these organizations. The American people
have a right to know. They have a right to know who is funding
political campaigns in our country. They have a right to know who is
behind the attack ads.
The American people have a right to a free and fair election process.
We need to end the pollution of the political process in our country.
There is already too much money in the political process. There is no
room for secrecy.
Mr. Speaker, I am very disappointed that the Doggett amendment will
not be included in this bill. We need to fix the mess and we need to
fix it now. I urge all of my colleagues to vote for the Doggett
amendment when it finally comes up for a vote on the House floor.
Mr. COYNE. Mr. Speaker, I yield 1 minute to the gentleman from
Washington (Mr. Baird).
Mr. BAIRD. Mr. Speaker, I rise today to express my frustration with
the fact that while this bill itself is worthy, an essential amendment
was denied a hearing today, the amendment by my friend, the gentleman
from Texas (Mr. Doggett).
For months, actually for years, we have heard the solution to
campaign finance reform is disclosure. Yet when the gentleman from
Texas (Mr. Doggett) introduces an amendment calling on disclosure of
527 funds, that amendment is denied consideration.
If we asked the American people a couple of questions, although I
think we know the answers, if we asked them, Do you think your
representatives should spend more time on the phone or more time with
constituents?, they would say more time with constituents. If we asked
them, Do you think there should be unlimited, untraceable, unreported
donations from whoever chooses?, the American people would say that is
wrong.
When we talk about a Taxpayers' Bill of Rights, my colleagues, it is
a right of the taxpayers to know where this money is coming from that
is influencing our political process, and this amendment should have
been ruled in order.
No organization which is granted section 527 status should be allowed
to hide their list of donors or be less than forthright when it comes
to telling citizens how they are spending their money. If these 527
organizations have the right and ability to influence campaigns, the
people have a right to know where the money comes from.
We need to address this issue and address it now.
Mr. Speaker, I rise today to express my frustration with the fact
that this important measure has been relegated to the suspension
calendar rather than being given a chance to have a full and open
debate.
I am dismayed that the House Leadership continues to oppose any and
all types of substantive campaign finance reform. They fought tooth and
nail to keep the bipartisan Shays-Meehan legislation from coming to the
House floor. They have resisted time and time again giving this debate
the attention it deserves, maintaining that the American people don't
care about this issue.
They are simply wrong. If we ask American voters a couple of
questions, we know the answers: Do you want your elected
representatives to spend more time on the phone begging for dollars or
more time with their constituents and studying issues? Do you want
unlimited amounts of external money from untraceable sources to
influence the outcome of your election or do you want the character,
knowledge and ability of the candidates in competition to influence the
outcome of the election? Do you want the legislative process to be
skewed by big dollars or to be determined by the merits of the policy
arguments?
So why did the Rules Committee make out of order a sound amendment
from my good friend from Texas, Lloyd Doggett, that would go a long way
to making ``527 Stealth PAC organizations'' more accountable to the
American people?
Absolutely no organization which is granted ``Section 527'' status
should be allowed to hide their list of donors, or be less than
forthright when it comes to telling citizens how it is spending their
money to influence the political process. If these ``Section 527''
organizations have the right and the ability to influence campaigns,
then the American people have a right to know where the money is coming
from and how that money is being spent.
I want to be clear--I do not oppose the provisions of this bill; I
don't have problems with the content of the bill. What I do have
problems with is the tactical maneuvers surrounding today's action.
What we're doing today is simply wrong and I urge the Members of this
body to give this measure a sufficient amount of time for floor debate.
Mr. COYNE. Mr. Speaker, I yield 1 minute to the gentlewoman from
California (Mrs. Capps).
Mrs. CAPPS. Mr. Speaker, I support this bill to give taxpayers more
rights when dealing with the IRS, but taxpayers should also be
protected from shady political organizations. This would be a better
bill if it included the Doggett amendment on so-called 527 groups.
These are tax-exempt political organizations trying to influence
elections. They spend millions of dollars on negative ads, direct mail
campaigns, and phone banks. Where do they get their money? From the
shadows.
527 groups do not have to disclose how much money they raise or where
their money comes from. Voters do not know then who is behind the 30-
second TV ads trashing their candidates. There is absolutely no
accountability, and the American taxpayer is footing the bill.
There is an old saying, Sunshine is the best disinfectant. The
Doggett amendment would bring a little sunshine into this shadowy
corner of politics.
As tax day approaches, Mr. Speaker, I urge the House leadership to
let us vote on the Doggett amendment so we can give the American
taxpayer and the American voter the break they deserve.
Mr. HOUGHTON. Mr. Speaker, I yield 2 minutes to the gentleman from
Colorado (Mr. McInnis).
Mr. McINNIS. Mr. Speaker, I am a little frustrated as well as the
other side in listening to some of my colleagues.
The gentleman, with his amendment, is simply trying to divert from
the fact that taxpayers have rights in this country. I think the
gentleman ought to focus his energy on helping the taxpayer out there.
Instead, what we saw in committee over there and what we are seeing
now, is that this gentleman is trying to focus attention away from the
taxpayers of this country who are demanding some attention from the
IRS, as far as the rights they should be entitled to, and he is trying
to move it into the trial lawyers' circle. He is trying to move it into
the circle of campaign reform.
How interesting all of a sudden that this gentleman steps forward and
starts talking about campaign reform. I urge the gentleman to step
forward and start talking about taxpayer rights. I urge the gentleman
to take a look at the taxpayers of this country and not to raise their
taxes, but to give these taxpayers fair notice. Put them on an even
playing field with the government.
What is happening here is simply a diversion, and that is all there
is to it. It is very easy to see what is occurring here, but it grabs
lots of attention. Let us get on the floor and let us draw away as much
as we can attention from the needs of the taxpayer and let us talk
about this theoretical campaign reform.
And by the way I would be very interested to see the gentleman's
entire package and see what it does with the trial attorneys'
association. I would be very interested to see the gentleman's package
and what it does with the labor unions. I would be very interested to
see the disclosures the gentleman himself has filed in regards to his
campaign expenditures.
That is not the issue we are here for today. The issue that we are
dealing with here today are taxpayers' rights. My colleagues, the
burden on the taxpayers is the heaviest it has been since World War II.
There are a lot of working men and women out there who deserve to have
rights when they deal with the government.
There are a lot of new people in this new generation, I had a small
class of them in my office the other day, young people who, for the
first time, have taken summer jobs, and they are asking me what do
these taxes go for.
I urge the gentleman to withdraw his amendment. Do not put this
amendment forward. Put the energy where it
[[Page H2067]]
needs to be, and that is with the taxpayers of this country.
Mr. COYNE. Mr. Speaker, may I inquire as to the time remaining on
each side?
The SPEAKER pro tempore (Mr. LaHood). The gentleman from Pennsylvania
(Mr. Coyne) has 8\1/2\ minutes remaining, and the gentleman from New
York (Mr. Houghton) has 2 minutes remaining.
Mr. COYNE. Mr. Speaker, I yield 1 minute to the gentleman from New
Jersey (Mr. Holt).
Mr. HOLT. Mr. Speaker, I thank the gentleman for yielding me this
time.
What we are talking about with the amendment here is getting at the
heart of our democracy, of our form of government. Of course we are
interested in taxpayer rights, and I support the underlying bill, but
the Doggett amendment should be in order.
We are talking about transparency. The 527 organizations seek to
influence elections under the cloak of secrecy. And I can tell my
colleagues, Mr. Speaker, that we have not seen the worst. The worst is
yet to come.
I hope that this House will see fit to adopt the Doggett amendment.
Mr. DOGGETT. Mr. Speaker, will the gentleman yield?
Mr. HOLT. I yield to the gentleman from Texas.
Mr. DOGGETT. The gentleman is aware that with this measure we are
asking the 527s to do the same thing that trial lawyers and labor
unions, myself, yourself, and every candidate already does. That is all
this bill does; is that correct?
Mr. HOLT. That is absolutely correct.
Mr. DOGGETT. So the last speaker was totally out of order in his
suggestion that we were avoiding taxpayer rights, because what we are
involved with is giving all American taxpayers a new right, the right
to know what these phony organizations do that taxpayers are forced to
subsidize--where they get their money, just as they already can learn
about the gentleman, myself, or any other candidate for federal office.
Mr. HOLT. The gentleman is correct.
Mr. COYNE. Mr. Speaker, I yield 2 minutes to the gentleman from
Washington (Mr. McDermott).
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, I watched the distinguished Member from
Colorado and I saw he was lathered up here, and I was really beginning
to be fearful for his mental health, watching him go on. He did not
seem to understand what political contributions have to do with the Tax
Code.
Now, I want to explain something to him. Most Members who get elected
have to raise a lot of money. A lot of money has to be raised, and they
get it from all these corporations who want something to happen in
these hallowed halls. They do not give that money for no reason at all.
If they cannot get it from the Member, then they cannot get their
message across. So they form up these 527 organizations. They have
unlimited amounts of money. They can take money from anywhere in the
world, and nobody will ever know where it came from.
So if the gentleman is worried about the taxpayers of this country
and he is not worried about what it is that changes the tax structure
and who gets the breaks around here, the gentleman ought to go down to
K Street and take a little look around. Those offices down there are
paid for by the same people who have the 527 organizations who want the
tax structure to work for them.
And if the gentleman is worried about taxpayers, he ought to worry
about what happens when these organizations can pour unlimited money
into the airwaves to assault the Congress with these ads, and the
public, about the way things are going.
Now, everybody says there is this terrible problem with all this
money in politics. And, as a matter of fact, I read here what Fred
Werthheimer, who used to be the head of Common Cause said. ``We have an
elected official with power and influence and the ability to do favors
for undisclosed donors.'' Undisclosed donors.
Everybody says they want an open book. Then they ought to vote for
the amendment of the gentleman from Texas (Mr. Doggett).
Mr. COYNE. Mr. Speaker, I yield 4 minutes to the gentleman from Texas
(Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, being, myself, a cosponsor of this Taxpayer Bill of
Rights, I like the bill we have, but I believe we could make it much
better with the amendment that I sought to offer. And so does the Joint
Committee on Taxation, which happens to be chaired by a Republican
Member, the chairman of the House Committee on Ways and Means. That
Joint Committee, this January, called for disclosure of these 527
organizations. And what has the House Committee on Ways and Means or
this House as a whole done about it until now? Absolutely nothing.
Until I offered this amendment in the committee, once again,
Republicans were going to sit on their hands to oppose reform.
I just want the American people to know that when they turn on their
television set and they begin seeing one attack ad after another,
probably from both sides, spewing out hate and misrepresenting someone,
that today it was the House Republican leadership that blessed that
kind of conduct, because they have denied us an opportunity to at least
learn, when the attack ads hit the airwaves, who the attackers are.
{time} 1515
As to the phoney claim made today that there is a need to find out
more about this or that other organization, all we are trying to do is
to apply the same standards to these 527 organizations that already
apply to every Member of Congress, Republican and Democrat, with
reference to their individual campaigns.
I think that the American taxpayers who are subsidizing these
organizations, American taxpayers who are filling out their own tax
forms right now, should know that these 527 organizations usually get
away tax free. They are subsidized by the hard-working men and women of
America. And one of these groups is called ``Shape the Debate.''
My colleagues can pull up that Web page right now, and they will see
an advertisement on it to promote more hate ads. It calls for the
giving of unlimited amounts of contributions. It says they can be from
any source. And I might note that that source, while it can be a
corporate treasury written right out of the corporate treasury, it
could also be China or Iraq or Cuba or any other country because it is
all hidden money.
Just focusing on this as one example, which any American can pull up
on the World Wide Web right now, you will find an effort to solicit
just that kind of money, unlimited amounts of money that can come
directly from a corporate treasury. And what do they go on to promise
those who give? Well, these contributions, they tell us, ``are not
reported to the Federal Election Commission or any State agency, and
they do not count against contribution limits.'' The whole idea is
nobody will know.
This Republican Party has become so wed to secret money funding.
Within the last week we have heard reports of a million-dollar
contribution, a million dollars of undisclosed money from one source we
have heard. They can spend it on a townhouse. They can spend it on a
truck. They can spend it on sky boxes. Or they can spend it on hate
ads. And that is what these 527 organizations do, they spew out hate.
And they want to be able to continue to operate under some pleasant-
sounding name like ``Americans for Better Government,'' when, in fact,
the money that they are using is from some special-interest group that
wants to control the agenda of Congress.
Let me give my colleagues another example of the kind of organization
that Republicans are protecting. Many of us have heard from our seniors
that they ought not to be having to pay twice as much as the most
favored customers of pharmaceutical companies on purchases of their
prescription drugs. And so now we have some group out there called
``Citizens for Better Medicare.'' It is a 527 organization just like
``Shape the Debate.''
``Citizens for Better Medicare'' can go around and attack all of us
who
[[Page H2068]]
want to end the price discrimination against our seniors on
prescription drugs and claim they are on the side of the seniors. And
who is funding that organization? Well, we will never know from the
IRS. We will never know from the disclosure reports like I and every
other Member of Congress must file. But what we have learned, in fact,
is it is the pharmaceutical companies themselves fighting to protect
the discrimination they want to continue against our seniors.
Mr. COYNE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, this is a very important and appropriate follow-up, the
legislation that we are discussing here today, of the oversight
subcommittee's work in the early 1990s under the leadership of
Congressman Jake Pickle. The work that the gentleman from New York (Mr.
Houghton) has done on this legislation and other members of the
subcommittee, I think, warrants us voting for this in overwhelming
proportions, and I hope that it passes. It is a good piece of
legislation.
Mr. Speaker, I yield back the balance of my time.
Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank the gentleman from Pennsylvania (Mr. Coyne) for
his comments.
I am really disappointed that this thing has gone down into sort of
the political pits where one party is accusing the other party. That
was not the essence of what we were trying to do. We were trying do
this on a bipartisan basis, the gentleman from Pennsylvania (Mr.
Coyne), myself, the gentleman from Texas (Mr. Archer), and the
gentleman from New York (Mr. Rangel). That was the essence of it.
Every member of the Committee on Ways and Means has a bill he or she
would like to add to this. But I have always felt, particularly now, we
owe it to the taxpayers of this country to approve the taxpayer rights
package and save any campaign finance debate for another forum.
I really feel this, and I feel it not only as a Republican but also
as a Member of this Chamber and really in a bipartisan mode. That is
the important thing that we do now.
Mr. PELOSI. Mr. Speaker, I support Representative Doggett's proposal
to require political organizations operating under Section 527 of the
Tax Code to file publicly-disclosed reports with the IRS that include
the names of contributors and expenditures. These Section 527 political
operations have gained too much political influence and can swing
elections without any public monitoring or oversight. I am disappointed
the House Republican leadership did not allow this amendment to be
offered today on the House floor.
Recently, the Republican led House Ways and Means Committee voted 21
to 15 on party lines to defeat Representative Lloyd Doggett's
initiative to close this existing loophole in U.S. campaign finance
disclosure laws that is enabling an expanding number of organizations
to channel tens of millions of dollars into political campaigns. While
Doggett's initiative would not impose any limits on use of funds, it
would require greater disclosure to illuminate the motivation and
sponsor of political attacks and help the implied targets of such
attacks identify their attackers.
At present, political organizations operating under Section 527 can
operate without disclosing who they are and collect unlimited
contributions without paying tax on the funds. As long as their
activities are focused on ``issues,'' as opposed to specific
candidates, they are exempt from the reporting requirements of federal
election laws. Representative Dogget's proposal mirrors the filing and
disclosure rules that Federal political parties and campaign committees
must follow under the Federal election laws administered by the Federal
Election Commission [FEC], and mirrors the existing Internal Revenue
Code penalties on tax-exempt organization that fail to file and fail to
publically disemminate reports.
We must reform our tax laws and political campaign laws to ensure
that money does not destroy our democracy. I support Representative
Doggett's proposal and am disappointed the House Republican leadership
prevented us from debating this issue of critical importance to our
democracy.
Mr. WATTS of Oklahoma. Mr. Speaker, during this dreaded week of
headaches and frustration for the American taxpayer who has just
finished or is still trying to file their income tax forms to the IRS,
I rise today in strong and enthusiastic support of H.R. 4163--The
Taxpayer Bill of Rights.
A common theme that we have pursued since attaining the majority in
Congress has been to make government smarter, simpler, and fairer in
its treatment of our citizens. We should never forget that we are here
to serve the people, and not the other way around.
In addition to our continuing efforts to explore ways to make the
income tax a fairer and more equitable system, this Republican-led
Congress has been working hard to make the Internal Revenue Service
more responsive to the American taxpayer. It is essential, Mr. Speaker,
that we continue to ensure that the IRS evolves into a responsive
service organization for the 21st century, providing better service to
the American taxpayer while ensuring that the IRS meets the highest
standards for professionalism, accountability, and efficiency. H.R.
4163 is one more step on the road to reform that began just a few years
ago when we enacted the IRS Reform and Restructuring Act in 1998.
Today's bill, the Taxpayer Bill of Rights, builds on this success by
further simplifying the income tax filing and IRS appeal process,
providing even more rights and protections to the American taxpayer,
all while holding the IRS accountable for its actions.
For example, the issue of privacy in this age of computerization and
inter-connectivity via the internet, is of increasing concern to many
Americans today. This bill places additional protections in place to
prevent unauthorized access to tax return information by non-IRS
organizations. In fact, even IRS employees would need a supervisor's
determination that sufficient grounds warrant inspection of a tax
return before they would be allowed authorization to review this
information.
An additional essential reform to restore fairness to the income tax
system is the provision to allow the IRS to eliminate interest on past-
due taxes for cases when the IRS makes a mistake or causes an
unreasonable delay, as well as cases in which the taxpayer relies on
erroneous written statements from the IRS. Mr. Speaker, it's past time
that we stop holding the American taxpayer hostage to IRS errors and
bureaucracy. This bill goes a long way to restoring common sense and
reasonableness to the operation of this agency.
Once again, this bill is just one more step in our hard-fought
efforts to try to bring common sense back to our government, and I
encourage my colleagues to join me in strong support of H.R. 4163, the
Taxpayer Bill of Rights.
Mr. EWING. Mr. Speaker, on April 15, the citizens of this country
will once again face the annual task of paying their taxes. For many
Americans preparing their tax return has become a daunting endeavor.
Under the current tax system there are more than 700 different tax
forms and over 17,000 pages of rules and regulations. The system has
become so complex that nearly 60% of all taxpayers seek assistance when
filing their returns, but the tax system has become so confusing that
even these professional tax preparers have trouble properly calculating
returns. In a survey conducted by Money magazine in 1997, 46
professional tax preparers were asked to calculate a hypothetical
family's tax return, they received 46 different answers.
The problem does not end there. According to a report by GAO during
the 1999 tax filing season the IRS committed 9.8 million errors. Who
winds up paying for these errors? Ordinary citizens, even when the IRS
is at fault. The IRS operates under a dual standard. It is quick to
penalize individuals for mistakes, even those to which it contributes,
but is very slow and unrewarding when it is at fault. The time has come
to level the playing field.
The IRS Restructuring and Reform Act of 1998 attempted to resolve
some of these problems by reforming the IRS and providing 74 new
taxpayer rights and protections. While the reforms and rights and
protections included in that bill have generally been successful they
were merely the first in a series of steps toward truly reforming the
IRS. The Taxpayer Bill of Rights of 2000 builds upon the success of
that bill and carries the attempt to reform the IRS another step
forward.
First and foremost the bill reforms penalties and interest. It
repeals the failure to pay penalty for taxpayers who enter into
installment agreements with the IRS, and allows for abatement of
interest if a gross injustice would otherwise result, in cases
attributable to any unreasonable IRS error or delay, or instances of
error where a taxpayer has relied on written advice from the IRS.
The bill also allows taxpayers to stop the running of interest by
voluntarily depositing amounts in a ``dispute reserve account,''
similar to an escrow account, that would stop the running of interest
on amounts in dispute and allow taxpayers to earn interest on that
amount if they prevail.
Additionally, it reduces the compliance burden by raising the
threshold at which taxpayers would be liable for interest for
underpaying estimated taxes from $1,000 to $2,000 and simplifies the
calculation of interest on underpayments by providing one interest rate
per underpayment period.
The second main feature of the Taxpayer Bill of Rights of 2000 is
that it strengthens taxpayer privacy. It accomplishes this by
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stengthening safeguards against unauthorized disclosure of federal
income tax return information by States and State contractors as well
as prohibiting anyone, banks and lenders for instance, from asking or
coercing a taxpayer to sign a consent to disclose their tax information
unless the form is dated and it is clear who will be receiving the
information.
The bill also contains a provision that tightens restrictions on
``browsing'' of taxpayer information by IRS employees. The IRS is
required to notify taxpayers after the Treasury Inspector General for
Tax Administration determines that a taxpayer's return or return
information has been disclosed or inspected without authorization.
Finally this bill levels the field between the IRS and the Taxpayer.
It accomplishes this first by excluding interest paid by the IRS from
the income of individual taxpayers. Under current law, taxpayers cannot
deduct interest that they pay to the IRS, but they have to pay taxes on
any interest payment they receive from the IRS.
Secondly, it provides access to the working law of the IRS. All
final, written legal interpretations issued to IRS employees that
affect a member of the public are made publicly available. If taxpayers
are expected to comply with an IRS interpretation of the law, the
interpretation should be available. Currently, taxpayers have no way of
determining whether the IRS applying the tax laws evenly across the
U.S. This will permit taxpayers to determine what is the appropriate
legal analysis applicable to their facts and circumstances.
As the complexity of the tax code increases, the need to pretect
taxpayers has also increased. We must be diligent and ensure Americans
receive the protection they deserve. This bill takes the steps
necessary to endure that taxpayers are treated fairly and the
information they disclose is protected. It extends the reforms began in
1998 by reigning in and finally putting the taxpayer on an equal
footing with the IRS.
Mr. HOUGHTON. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. LaHood). The question is on the motion
offered by the gentleman from New York (Mr. Houghton) that the House
suspend the rules and pass the bill, H.R. 4163, as amended.
The question was taken.
Mr. HOUGHTON. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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