[Congressional Record Volume 156, Number 53 (Thursday, April 15, 2010)]
[Senate]
[Pages S2381-S2387]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Schumer, Mr. Kerry, Mr. 
        Menendez, Mr. Akaka, Mr. Brown of Ohio, Mr. Dodd, Mr. Durbin, 
        Mr. Lieberman, Mr. Merkley, Mr. Pryor, and Mr. Udall of New 
        Mexico):
  S. 3215. A bill to amend the Internal Revenue Code of 1986 to provide 
taxpayer protection and assistance, and for other purposes; to the 
Committee on Finance.
  Mr. BINGAMAN. Mr. President, on this annual Tax Day, I rise to 
introduce the Taxpayer Protection and Assistance Act of 2007, a robust 
package of reforms aimed at protecting the rights of all American 
taxpayers. I am pleased that my colleagues on the Finance Committee, 
Senators Schumer, Kerry, and Menendez, as well as Senators Akaka, Brown 
of Ohio, Dodd, Durbin, Lieberman, Merkley, Pryor, and Udall of New 
Mexico, are joining me in introducing this bill.
  This act consists of numerous well-vetted provisions, which will 
ensure our nation's taxpayers are better able to prepare and file their 
tax returns each year in a fashion that is fair, reasonable, and 
affordable.
  First, the act clarifies taxpayers' rights and responsibilities by 
requiring Treasury to publish an easy-to-understand Taxpayer Bill of 
Rights, enumerating taxpayers' rights and obligation, and corresponding 
Internal Revenue Code citations. As the National Taxpayer Advocate has 
explained: ``The [Internal Revenue] Code contains no comprehensive 
Taxpayer Bill of Rights that explicitly and transparently sets out 
taxpayer rights and obligations. Taxpayers do have rights, but they are 
scattered throughout the [Internal Revenue] Code and the Internal 
Revenue Manual and are neither easily accessible nor written in plain 
language that most taxpayers can understand.'' The act would rectify 
these shortcomings, without conferring any rights or obligations not 
already provided for under law.
  Second, the act supports programs that assist low-income taxpayers. 
It authorizes a $35 million grant program for Volunteer Income Tax 
Assistance, VITA, programs. VITA programs across the country offer free 
tax assistance to low- to moderate-income individuals who cannot afford 
professional assistance. More than 75,000 VITA volunteers prepare basic 
tax returns for these taxpayers; typically VITA programs focus on at 
least one specific underserved group with special needs--such as 
persons with disabilities, non-English speaking persons, Native 
Americans, rural taxpayers, and the elderly. During the 2009 filing 
season, VITA programs prepared more than 1.2 million tax returns and 
brought back over $1.6 billion in tax refunds to working families.
  I have seen firsthand the impact that free tax-preparation clinics 
can have on taxpayers and their communities. In fact, New Mexico is 
fortunate to have one of the nation's leading programs. Tax Help New 
Mexico began 35 years ago at Central New Mexico Community College, CNM, 
as a practical means of giving accounting students work experience in 
tax preparation while serving a community need. But while 70 percent of 
New Mexicans are eligible for Tax Help New Mexico's services, only 6.5 
percent are able to take advantage. To enable community VITA programs 
like Tax Help New Mexico to reach more underserved low-income 
taxpayers, the act authorizes a $35 million IRS grant program.
  Likewise, the act would strengthen Low-Income Taxpayer Clinics. These 
clinics, typically operated by community organizations and law schools, 
provide representation to low-income taxpayers in disputes with the 
IRS. The act authorizes the Treasury Secretary to refer taxpayers to 
these clinics. It also increases to $20 million annually the 
authorization for LITC grant programs. This will provide a substantial 
boost to clinics that serve this vital function, such as that which the 
University of New Mexico Law School operates for taxpayers in my state.
  Third, the act enhances the regulation of paid tax-return preparers. 
Nearly all professions--from beauticians to mortuaries to opticians--
are regulated at the state level. But with only a handful of 
exceptions, states do not regulate tax return preparers. Nor does the 
federal government currently regulate unenrolled tax return preparers, 
i.e., return preparers who are not CPAs, attorneys, enrolled agents, or 
enrolled actuaries--all already regulated under IRS Circular 230. A 
significant percentage of unenrolled preparers are well-trained and 
maintain high ethical standards. But untrained and unscrupulous tax 
return preparers can inflict serious harm on taxpayers and 
significantly undermine tax compliance.
  For years, taxpayers, tax professionals, and the National Taxpayer 
Advocate have been calling for federal regulation of unenrolled 
preparers. In early 2010, the IRS began taking steps to exercise 
oversight over these unenrolled preparers. I applaud the IRS's 
initiative. But it is still unclear that the IRS's program will be 
sufficiently comprehensive. Moreover, many see a benefit in clarifying 
the scope of the IRS's regulatory authority.
  The act responds to these concerns by codifying a regulatory system 
for unenrolled preparers. In order for a tax preparer to become 
registered and authorized by Treasury, the act requires preparers to 
pass a basic background check and an examination of competency and 
ethics standards. To remain in good standing, preparers will be 
required to satisfy continuing education requirements or be reexamined 
every three years on changes in tax law and common preparation 
mistakes. The act requires Treasury to maintain and publish for 
taxpayers a comprehensive list of all authorized tax return preparers, 
including Circular 230 preparers.
  Fourth, the act creates an oversight system for tax refund delivery 
products. Refund Anticipation Loans, RALs, are high-cost bank loans 
secured by a taxpayer's expected refund--loans that typically last 7 to 
14 days, until the actual IRS refund arrives and is used to repay the 
loan. RALs are often aggressively marketed by paid income-tax 
preparers, which advertise ``Instant Refunds'' or ``Quick Cash,'' 
sometimes disguising that they are selling advance loans on anticipated 
tax refunds. According to the National Consumer Law Center: ``Tax 
preparers and their bank partners made approximately 8.7 million RALs 
during the 2007 tax-filing season. . . .'' In my state of New Mexico, 
25 percent of taxpayers eligible for the Earned Income Tax Credit 
received a RAL in 2005.
  RALs might offer quick cash, but they are not a good deal for 
taxpayers. As the National Consumer Law Center exposed in a 2009 
report, the typical RAL of about $3,000 carries an annual percentage 
rate, APR, from 77 percent to 140 percent. We know that our vulnerable 
communities are particularly susceptible to RALs. In fact, a recent 
study by the First Nations Development Institute and Center for 
Responsible Lending found that RALs drained over $9.1 million from 
Native American communities in 2005.
  I am very troubled by the prevalence of RALs. And to begin addressing 
problems associated with them, the act requires Treasury to establish a 
registration program for those involved in the process of facilitating 
a tax refund delivery product, RDP, including RALs. Additionally, 
RDP facilitators will be required to disclose in writing and in an 
easily understandable format the taxpayer's options for receiving tax 
refunds, listed from least expensive to most expensive, the RDP's loan 
terms and fee schedule, and any other costs that the taxpayer may incur 
in filing a tax return. Moreover, the Act would prohibit Treasury from 
issuing a Refund Indicator, a score on which RDP facilitators rely 
before issuing a RDP, unless Treasury first determines that the 
taxpayer's refund would not be prevented by debts the taxpayer owes on 
student loans, child support, or by other provisions in the Tax Code. 
This additional screen will minimize the likelihood that a taxpayer 
will be issued a loan based on a refund claim that will not ultimately 
materialize

[[Page S2382]]

and which the taxpayer would nonetheless be required to repay.

  Fifth, the act requires additional protections before the IRS files a 
federal tax lien. The IRS has a number of enforcement tools at its 
disposal to ensure tax compliance, but use of these tools must be 
balanced with the need to ensure taxpayers do not suffer unnecessary 
long-term harm as a result. One such tool is the filing of a Notice of 
Federal Tax Lien, NFTL, when a taxpayer owes back taxes. But as the 
National Taxpayer Advocate explains in her 2009 Report to Congress: 
``[The filing of a tax lien can significantly harm the taxpayer's 
credit and affect his or her ability to obtain financing, find or 
retain a job, secure affordable housing or insurance, and ultimately 
pay the outstanding tax debt. For these reasons, the National Taxpayer 
Advocate believes that the IRS should not automatically file NFTLs but 
instead should carefully consider and balance these competing interests 
when determining whether a lien filing is appropriate.'' In my state 
alone, the IRS filed nearly 5,000 liens against taxpayers last year. 
The act would require the IRS to make individualized determinations 
before filing an NFTL, and in doing so to consider several enumerated 
factors, including the amount due, the taxpayer's compliance history, 
and any extenuating circumstances.
  Sixth, the act establishes a demonstration program to provide 
accounts to those who currently lack bank accounts. IRS data show that 
of the 60 million Federal tax refunds that were issued via paper checks 
in 2005, almost half went to households earning $30,000 or less. These 
households are most likely to lack access to reasonably-priced 
financial services--and thus most likely to pay a disproportionate 
amount of their income to conduct routine financial transactions. Yet 
the issuance of a refund check presents an important opportunity to 
bring these low-income taxpayers into the financial mainstream. The act 
authorizes Treasury to award eligible entities demonstration project 
grants so that they can establish accounts for individuals who 
currently lack bank accounts. The act also requires a study on the 
feasibility of delivering tax refunds on debit, prepaid, and other 
electronic cards.
  Finally, the act requires the IRS to study processing information 
returns and the effectiveness of collection alternatives. Currently, 
the IRS processes income tax returns before it processes most 
information returns, such as W-2s and 1099s. From the taxpayer's 
perspective, this leads to millions of cases where taxpayers may 
inadvertently make overclaims that the IRS does not identify until 
months later, exposing the taxpayer not only to additional tax 
liability, but to penalties and interest. This sequence also provides 
opportunities for fraud and requires the IRS to devote resources that 
should have not been paid and that it often cannot recover. The act 
also directs Treasury to conduct a study to identify and recommend 
legislative and administrative changes that would enable the IRS to 
receive and process information reporting documents before it processes 
tax returns. This should bring us closer to the goal of voluntary pre-
populated returns, which I understand are already available in most 
OECD countries.
  I have long maintained that our tax system depends on taxpayers being 
able to receive the best advice and assistance possible. We have a 
responsibility to our nation's taxpayers to make sure that they do 
receive such advice and assistance. This bill goes a long way toward 
that goal.
  I would be remiss if I did not acknowledge that this bill is the 
product of considerable collaboration. It draws on many recommendations 
of our National Taxpayer Advocate, Nina Olson. It also builds on input 
we have received from national and local taxpayer advocacy 
organizations, among them the Center for Economic Progress, Tax Help 
New Mexico, and the Maryland CASH Campaign. I am grateful for these 
stakeholders' participation.
  These are long overdue reforms; I hope that the Senate will consider 
them in this session.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3215

       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 Act of 2010''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; etc.

                TITLE I--TAXPAYER RIGHTS AND OBLIGATIONS

Sec. 101. Statement of taxpayer rights and obligations.

                  TITLE II--PREPARATION OF TAX RETURNS

Sec. 201. Programs for the benefit of low-income taxpayers.
Sec. 202. Regulation of Federal income tax return preparers.
Sec. 203. Refund delivery products.
Sec. 204. Preparer penalties with respect to preparation of returns and 
              other submissions.
Sec. 205. Clarification of enrolled agent credentials.

                 TITLE III--IMPROVING TAXPAYER SERVICES

Sec. 301. Individualized lien determination required before filing 
              notice of lien.
Sec. 302. Ban on audit insurance.
Sec. 303. Public awareness.
Sec. 304. Clarification of taxpayer assistance order authority.
Sec. 305. Taxpayer advocate directives.
Sec. 306. Improved services for taxpayers.
Sec. 307. Taxpayer access to financial institutions.
Sec. 308. Additional studies.

                TITLE I--TAXPAYER RIGHTS AND OBLIGATIONS

     SEC. 101. STATEMENT OF TAXPAYER RIGHTS AND OBLIGATIONS.

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

     ``SEC. 7529. STATEMENT OF TAXPAYER RIGHTS AND OBLIGATIONS.

       ``(a) In General.--The Secretary, in consultation with the 
     National Taxpayer Advocate, shall publish a summary statement 
     of rights and obligations arising under this title. Such 
     statement shall provide citations to the main provisions of 
     this title which provide for the right or obligation (as the 
     case may be). This statement of rights and obligations does 
     not create or confer any rights or obligations not otherwise 
     provided for under this title.
       ``(b) Statement of Rights and Obligations.--The statement 
     of rights and obligations is as follows:
       ``(1) Taxpayer rights.--
       ``(A) Right to be informed (including adequate legal and 
     procedural guidance and information about taxpayer rights).
       ``(B) Right to be assisted.
       ``(C) Right to be heard.
       ``(D) Right to pay no more than the correct amount of tax.
       ``(E) Right of appeal (administrative and judicial).
       ``(F) Right to certainty (including guidance, periods of 
     limitation, no second exam, and closing agreements).
       ``(G) Right to privacy (including due process 
     considerations, least intrusive enforcement action, and 
     search and seizure protections).
       ``(H) Right to confidentiality.
       ``(I) Right to appoint a representative in matters before 
     the Internal Revenue Service.
       ``(J) Right to fair and just tax system (offer in 
     compromise, abatement, assistance from the Office of the 
     Taxpayer Advocate under section 7803(c), apology, and other 
     compensation payments).
       ``(2) Taxpayer obligations.--
       ``(A) Obligation to be honest.
       ``(B) Obligation to be cooperative.
       ``(C) Obligation to provide accurate information and 
     documents on time.
       ``(D) Obligation to keep records.
       ``(E) Obligation to pay taxes on time.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     77 is amended by adding at the end the following new item:

``Sec. 7529. Statement of taxpayer rights and obligations.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect 180 days after the date of the enactment of 
     this Act.

                  TITLE II--PREPARATION OF TAX RETURNS

     SEC. 201. PROGRAMS FOR THE BENEFIT OF LOW-INCOME TAXPAYERS.

       (a) Volunteer Income Tax Assistance Plus.--Chapter 77 
     (relating to miscellaneous provisions) is amended by 
     inserting after section 7526 the following new section:

     ``SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PLUS.

       ``(a) In General.--The Secretary may, subject to the 
     availability of appropriated funds, make grants to provide 
     matching funds for the development, expansion, or

[[Page S2383]]

     continuation of qualified return preparation programs.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified return preparation program.--
       ``(A) In general.--The term `qualified return preparation 
     program' means a program--
       ``(i) which does not charge taxpayers for its return 
     preparation services,
       ``(ii) which operates programs which assist low-income 
     taxpayers, including those programs that serve taxpayers for 
     whom English is a second language, in preparing and filing 
     their Federal income tax returns, including schedules 
     reporting sole proprietorship or farm income, and
       ``(iii) in which all of the volunteers who assist in the 
     preparation of Federal income tax returns meet the training 
     requirements prescribed by the Secretary.
       ``(B) Assistance to low-income taxpayers.--For purposes of 
     subparagraph (A), a program is treated as assisting low-
     income taxpayers if at least 90 percent of the taxpayers 
     assisted by the program have incomes which do not exceed 250 
     percent of the poverty level, as determined in accordance 
     with criteria established by the Director of the Office of 
     Management and Budget.
       ``(2) Program.--The term `program' includes--
       ``(A) a program at an institution of higher education 
     which--
       ``(i) is described in section 102 (other than subsection 
     (a)(1)(C) thereof) of the Higher Education Act of 1965 (20 
     U.S.C. 1088), as in effect on the date of the enactment of 
     this section, and which has not been disqualified from 
     participating in a program under title IV of such Act, and
       ``(ii) satisfies the requirements of paragraph (1) through 
     student assistance of taxpayers in return preparation and 
     filing,
       ``(B) an organization described in section 501(c) and 
     exempt from tax under section 501(a) which satisfies the 
     requirements of paragraph (1);
       ``(C) a regional, State or local coalition (with one lead 
     organization, which meets the eligibility requirements, 
     acting as the applicant organization);
       ``(D) a county or municipal government agency;
       ``(E) an Indian tribe, as defined in section 4(12) of the 
     Native American Housing Assistance and Self-Determination Act 
     of 1996 (25 U.S.C. 4103(12), and includes any tribally 
     designated housing entity (as defined in section 4(21) of 
     such Act (25 U.S.C. 4103(21)), tribal subsidiary, 
     subdivision, or other wholly owned tribal entity;
       ``(F) a section 501(c)(5) organization;
       ``(G) a State government agency if no other eligible 
     organization is available to assist the targeted population 
     or community;
       ``(H) a Cooperative Extension Service office if no other 
     eligible organization is available to assist the targeted 
     population or community; and
       ``(I) a nonprofit Community Development Financial 
     Institution (CDFI) and federally- and State-charted credit 
     union that qualifies for a tax exemption under sections 
     501(c)(1) and 501(c)(14), respectively.
       ``(c) Special Rules and Limitations.--
       ``(1) Aggregate limitation.--Unless otherwise provided by 
     specific appropriation, the Secretary shall not allocate more 
     than $35,000,000 per year (exclusive of costs of 
     administering the program) to grants under this section.
       ``(2) Use of grants for overhead expenses prohibited.--No 
     grant made under this section may be used for overhead 
     expenses that are not directly related to any program or that 
     are incurred by any institution sponsoring such program.
       ``(3) Other applicable rules.--Rules similar to the rules 
     under paragraphs (2) through (6) of section 7526(c) shall 
     apply with respect to the awarding of grants to qualified 
     return preparation programs.
       ``(4) Promotion of programs.--The Secretary is authorized 
     to promote the benefits of and encourage the use of qualified 
     VITA Plus through the use of mass communications, referrals, 
     and other means.''.
       (b) Low-Income Taxpayer Clinics.--
       (1) Increase in authorized grants.--Paragraph (1) of 
     section 7526(c) (relating to aggregate limitation) is amended 
     by striking ``$6,000,000'' and inserting ``$20,000,000''.
       (2) Use of grants for overhead expenses prohibited.--
       (A) In general.--Section 7526(c) (relating to special rules 
     and limitations) is amended by adding at the end the 
     following new paragraph:
       ``(6) Use of grants for overhead expenses prohibited.--No 
     grant made under this section may be used for the overhead 
     expenses that are not directly related to the clinic or that 
     are of any institution sponsoring such clinic.''.
       (B) Conforming amendments.--Section 7526(c)(5) is amended--
       (i) by inserting ``qualified'' before ``low-income'', and
       (ii) by striking the last sentence.
       (3) Promotion of clinics.--Subsection (c) of section 7526 
     (relating to special rules and limitations), as amended by 
     paragraph (2), is amended by adding at the end the following 
     new paragraph:
       ``(7) Promotion of clinics.--The Secretary is authorized to 
     promote the benefits of and encourage the use of qualified 
     low-income taxpayer clinics through the use of mass 
     communications, referrals, and other means.''.
       (4) IRS referrals to clinics.--Subsection (c) of section 
     7526 (relating to special rules and limitations), as amended 
     by the preceding provisions of this subsection, is amended by 
     adding at the end the following new paragraph:
       ``(8) IRS referrals.--The Secretary may refer taxpayers to 
     qualified low-income taxpayer clinics receiving funding under 
     this section.''.
       (5) Notice of availability of clinics in notice of 
     deficiency.--Subsection (a) of section 6212 (relating to 
     general rule for notice of deficiency) is amended by 
     inserting ``, as well as notice regarding the availability of 
     low-income taxpayer clinics and information about how to 
     contact them'' before the period at the end.
       (6) Notice of availability of clinics in notice of hearing 
     upon filing of notice of lien.--Subsection (a) of section 
     6320 (relating to requirement of notice) is amended by adding 
     at the end the following new sentence: ``Such notice shall 
     include a notice to the taxpayer of the availability of low-
     income taxpayer clinics and information about how to contact 
     them.''.
       (7) Notice of availability of clinics in notice and 
     opportunity of hearing before levy.--Paragraph (3) of section 
     6330(a) is amended by adding at the end the following flush 
     sentence:
     ``Such notice shall include a notice to the taxpayer of the 
     availability of low-income taxpayer clinics and information 
     about how to contact them.''.
       (c) Clerical Amendment.--The table of sections for chapter 
     77 is amended by inserting after the item relating to section 
     7526 the following new item:

``Sec. 7526A. Volunteer income tax assistance plus.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 202. REGULATION OF FEDERAL INCOME TAX RETURN PREPARERS.

       (a) In General.--Section 330(a)(1) of title 31, United 
     States Code, is amended by inserting ``(including tax return 
     preparers of Federal tax returns, documents, and other 
     submissions)'' after ``representatives''.
       (b) Promulgation of Regulations.--The Secretary of the 
     Treasury shall prescribe regulations under section 330 of 
     title 31, United States Code, to regulate any tax return 
     preparers not otherwise regulated by the Secretary.
       (c) Requirements.--Such regulations shall provide guidance 
     on the following:
       (1) Examination.--
       (A) In general.--In promulgating the regulations under 
     paragraph (1), the Secretary shall approve and oversee 
     eligibility examinations.
       (B) 2 examinations.--One such examination shall be designed 
     to test technical knowledge and competency to prepare 
     individual returns, and the other examination shall be 
     designed to test technical knowledge and competency to 
     prepare business income tax returns.
       (C) EITC.--The examination relating to individual returns 
     shall test knowledge and competency regarding properly 
     claiming the earned income tax credit under section 32 of the 
     Internal Revenue Code of 1986.
       (D) Ethics.--Both examinations under subparagraph (B) shall 
     test knowledge regarding such ethical standards for the 
     preparation of such returns as determined appropriate by the 
     Secretary.
       (E) Grandfather.--The Secretary is authorized to accept an 
     individual as meeting the eligibility examination requirement 
     of this section if, in lieu of the eligibility examination 
     under this section, the individual passed a State licensing 
     or State registration program eligibility examination that 
     the Secretary determines is comparable to either of the 
     eligibility examinations described in subparagraph (B) if 
     such exam is administered within 5 years after the date of 
     the issuance of the regulations under this section.
       (2) Suitability standards.--The Secretary shall provide 
     suitability standards for practicing as a tax return 
     preparer, including tax compliance with the requirements of 
     the Internal Revenue Code of 1986.
       (3) Continuing eligibility.--
       (A) In general.--The regulations under paragraph (1) shall 
     require a renewal of eligibility every 3 years and shall set 
     forth the manner in which a tax return preparer must renew 
     such eligibility.
       (B) Continuing professional education requirements.--As 
     part of the renewal of eligibility, such regulations shall 
     require that each such tax return preparer show evidence of 
     completion of such continuing education or testing 
     requirements as specified by the Secretary.
       (C) Nonmonetary sanctions.--
       (i) The regulations under this section shall provide for 
     the denial, suspension or termination of such eligibility in 
     the event of any failure to comply with the requirements 
     promulgated hereunder.
       (ii) Under such regulations, the Secretary shall establish 
     procedures for the appeal of any determination under this 
     paragraph.
       (d) Penalty for Unauthorized Preparation of Returns.--
       (1) In general.--In promulgating the regulations pursuant 
     to subsection (b), the Secretary shall impose a penalty of 
     $1,000 for each Federal tax return, document, or other 
     submission prepared by a tax return preparer

[[Page S2384]]

     who is not in compliance with the regulations promulgated 
     under this section or who is suspended or disbarred from 
     practice before the Department of the Treasury under such 
     regulations. Such penalty shall be in addition to any other 
     penalty which may be imposed.
       (2) Exception.--No penalty may be imposed under paragraph 
     (1) with respect to any failure if it is shown that such 
     failure is due to reasonable cause.
       (e) Definitions.--For purposes of this section--
       (1) Tax return preparer.--The term ``tax return preparer'' 
     has the meaning given by section 7701(a)(36) of the Internal 
     Revenue Code of 1986, and includes any person requiring the 
     purchase of services, a financial product or goods in lieu of 
     or in addition to direct monetary payment.
       (2) Secretary.--The terms ``Secretary of the Treasury'' and 
     ``Secretary'' mean the Secretary of the Treasury or the 
     delegate of the Secretary.
       (f) Public Awareness Campaign.--The Secretary shall conduct 
     a public information and consumer education campaign, 
     utilizing paid advertising--
       (1) to encourage taxpayers to use for Federal tax matters 
     only professionals who establish their competency under the 
     regulations promulgated under section 330 of title 31, United 
     States Code, and
       (2) to inform the public of the requirements that any 
     compensated preparer of tax returns, documents, and 
     submissions subject to the requirements under the regulations 
     promulgated under such section must sign the return, 
     document, or submission prepared for a fee and display notice 
     of such preparer's compliance under such regulations.
       (g) Effective Dates.--
       (1) In general.--The amendment made by this section shall 
     take effect on the date of the enactment of the Act.
       (2) Regulations.--The regulations required by section 
     330(d) of title 31, United States Code, shall be prescribed 
     not later than 2 years after the date of the enactment of 
     this Act.
       (3) Full implementation.--The Secretary, taking into 
     consideration the complexity and magnitude of the 
     requirements set forth under this Act, may delay full 
     implementation of the regulations promulgated herein not 
     later than the fifth filing season after the enactment of 
     this Act.

     SEC. 203. REFUND DELIVERY PRODUCTS.

       (a) In General.--Chapter 77 (relating to miscellaneous 
     provisions), as amended by section 101, is amended by adding 
     at the end the following new section:

     ``SEC. 7530. REFUND DELIVERY PRODUCTS.

       ``(a) Registration.--
       ``(1) In general.--The Secretary shall by regulation 
     require each refund delivery product facilitator to register 
     annually with the Secretary.
       ``(2) Registration requirements.--A registration shall 
     under paragraph (1) shall include--
       ``(A) the name, address, and TIN of the refund delivery 
     product facilitator, and
       ``(B) the fee schedule of the facilitator for the year.
       ``(3) Display of registration certificate.--The certificate 
     of registration under paragraph (1) shall be displayed in the 
     facility of the refund delivery product facilitator in the 
     manner required by the Secretary.
       ``(b) Disclosure Requirements.--
       ``(1) In general.--Each refund delivery product facilitator 
     registered with the Secretary shall be subject to the 
     requirements of paragraphs (2) through (5).
       ``(2) Taxpayer education.--The requirements of this 
     paragraph are that the refund delivery product facilitator 
     makes available to consumers an informational pamphlet that--
       ``(A) sets forth options available for receiving tax 
     refunds, presented from least expensive to most expensive, 
     and
       ``(B) discusses short-term credit alternatives to utilizing 
     refund delivery products.
       ``(3) Nature of the transaction.--The requirements of this 
     paragraph are that, at the time of application for the refund 
     delivery product, the refund delivery product facilitator 
     specifically state in writing--
       ``(A) in the case of a refund delivery product which is a 
     refund loan--
       ``(i) that the applicant is applying for a loan based on 
     the applicant's anticipated income tax refund,
       ``(ii) the expected time within which the loan will be paid 
     to the applicant if such loan is approved, and
       ``(iii) that there is no guarantee that a refund will be 
     paid in full or received within a specified time period, and 
     that the applicant is responsible for the repayment of the 
     loan even if the refund is not paid in full or has been 
     delayed,
       ``(B) the time within which income tax refunds are 
     typically paid based upon the different filing options 
     available to the applicant, and
       ``(C) that the applicant may file an electronic return 
     without applying for a refund delivery product and the fee 
     for filing such an electronic return.
       ``(4) Fees, interest and amounts received.--The 
     requirements of this paragraph are that, at the time of 
     application for the refund delivery product, the refund 
     delivery product facilitator discloses to the applicant all 
     amounts to be received in connection with a refund delivery 
     product. Such disclosure shall include--
       ``(A) a copy of the fee schedule of the refund delivery 
     product facilitator,
       ``(B) in the case of a refund delivery product which is a 
     refund loan--
       ``(i) the typical fees and interest rates (using annual 
     percentage rates as defined by section 107 of the Truth in 
     Lending Act (15 U.S.C. 1606)) for several typical amounts of 
     such loans and of other types of consumer credit, and
       ``(ii) that the loan may have substantial fees and interest 
     charges that may exceed those of other sources of credit, and 
     the applicant should carefully consider--

       ``(I) whether such a loan is appropriate for the applicant, 
     and
       ``(II) other sources of credit,

       ``(C) typical fees and interest charges if a refund is not 
     paid or delayed,
       ``(D) the amount of a fee (if any) that will be charged if 
     the refund delivery product is not approved, and
       ``(E) administrative costs and any other amounts.
       ``(5) Other information.--The requirements of this 
     paragraph are that the refund delivery product facilitator 
     discloses any other information required to be disclosed by 
     the Secretary.
       ``(6) Disclosure requirement.--A disclosure under any of 
     the preceding paragraphs of this subsection shall not be 
     treated as meeting the requirements of the respective 
     paragraph unless the disclosure is written in a manner 
     calculated to be understood by the average consumer of refund 
     delivery products and provides sufficient information (as 
     determined in accordance with regulations prescribed by the 
     Secretary) to allow the consumer to understand such options 
     and credit alternatives.
       ``(c) Penalty.--
       ``(1) In general.--There is hereby imposed a penalty on any 
     refund delivery product facilitator who fails to register 
     with the Secretary pursuant to subsection (a) or fails to 
     meet a disclosure requirement under subsection (b).
       ``(2) Amount of penalty.--The amount of the penalty imposed 
     by paragraph (1) shall be the greater of--
       ``(A) $1,000, and
       ``(B) three times the amount of the refund loan, if 
     applicable, and refund delivery product facilitator-
     determined fees charged with respect to each refund delivery 
     product provided by the refund delivery product facilitator 
     during the period in which the failure described in paragraph 
     (1) occurred.
       ``(3) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the penalty imposed by 
     paragraph (1) to the extent that the payment of such penalty 
     would be excessive or otherwise inequitable relative to the 
     failure involved.
       ``(d) Conduct.--
       ``(1) Rules of conduct.--The Secretary shall prescribed 
     rules of conduct for refund delivery product facilitators 
     which are similar to the rules applicable to federally 
     authorized tax practitioners (as defined by section 
     7525(a)(3)(A)) under part 10 of title 31, Code of Federal 
     Regulations.
       ``(2) Limitation on approval as refund delivery product 
     facilitator.--For such period as the Secretary (in his 
     discretion) determines reasonable, the Secretary may not 
     register any person as a refund delivery product facilitator 
     under subsection (a) who the Secretary determines has engaged 
     in any conduct that would warrant disciplinary action under 
     the rules of conduct prescribed under paragraph (1) or under 
     part 10 of title 31, Code of Federal Regulations.
       ``(e) Other Limitations Relating to Refund Delivery 
     Products.--In any case in which a taxpayer has consented to 
     the release of the taxpayer's refund indicator to a refund 
     delivery product facilitator, the Secretary may only provide 
     information related to the refund indicator to a refund 
     delivery product facilitator who is registered under 
     subsection (a). For purposes of the preceding sentence, the 
     term `refund indicator' means a notification provided through 
     a tax return's acknowledgment file regarding whether a refund 
     will be paid. The Secretary may issue a refund indicator only 
     after the Secretary determines that the taxpayer's refund 
     would not be prevented by any provision of this title, 
     including any provision relating to refund offset to repay 
     debts for delinquent Federal or State taxes, student loans, 
     child support, or other Federal agency debt, whether the 
     taxpayer is claiming ineligible children for purposes of 
     certain tax benefits, and whether the refund will be held 
     pending a fraud investigation.
       ``(f) Definitions.--For purposes of this section--
       ``(1) Refund delivery product facilitator.--
       ``(A) In general.--The term `refund delivery product 
     facilitator' includes any electronic filing service provider 
     who--
       ``(i) solicits for, processes, receives, or accepts 
     delivery of an application for a refund delivery product, or
       ``(ii) facilitates the making of a refund delivery product 
     in any other manner.
       ``(B) Electronic filing service provider.--The term 
     `electronic filing service provider' includes any person who 
     is an electronic return originator, intermediate service 
     provider, or transmitter.
       ``(C) Electronic return originator.--The term `electronic 
     return originator' includes a person who originates the 
     electronic submission of income tax returns for another 
     person.

[[Page S2385]]

       ``(D) Intermediate service provider.--The term 
     `intermediate service provider' includes a person who assists 
     with processing return information between an electronic 
     return originator (or the taxpayer in the case of online 
     filing) and a transmitter.
       ``(E) Transmitter.--The term `transmitter' includes a 
     person who sends the electronic return data directly to the 
     Internal Revenue Service.
       ``(2) Refund delivery product.--The term `refund delivery 
     product' includes a refund loan and any other product sold to 
     a taxpayer for a fee or any other thing of value for the 
     purpose of receiving the taxpayer's anticipated federal tax 
     refund.
       ``(3) Refund loan.--The term `refund loan' includes any 
     loan of money or any other thing of value to a taxpayer in 
     connection with the taxpayer's anticipated receipt of a 
     Federal tax refund. Such term includes a loan secured by the 
     tax refund or an arrangement to repay a loan from the tax 
     refund.
       ``(g) Regulations.--
       ``(1) In general.--The Secretary may prescribe such 
     regulations as necessary to carry out this subchapter.
       ``(2) Burden of registration.--In promulgating such 
     regulations, the Secretary shall minimize the burden and cost 
     on the registrant.''.
       (b) Public Awareness Campaign.--The Secretary of the 
     Treasury shall conduct a public information and consumer 
     education campaign, utilizing paid advertising, to educate 
     the public on making sound financial decisions with respect 
     to refund delivery products (as defined by section 7530 of 
     the Internal Revenue Code of 1986), including--
       (1) the need to compare the rates and fees of refund loans 
     with the rates and fees of conventional loans,
       (2) the need to compare the amount of money received under 
     a refund delivery product after taking into consideration 
     such costs and fees with the total amount of the refund, and
       (3) where and how taxpayers may lodge complaints concerning 
     refund delivery product facilitators.
       (c) Clerical Amendment.--The table of sections for chapter 
     77 is amended by adding at the end the following new item:

``Sec. 7530. Refund delivery products.''.

       (d) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     take effect on the date of the enactment of the Act.
       (2) Regulations.--The regulations required by section 
     7530(g) of the Internal Revenue Code of 1986 shall be 
     prescribed not later than 2 years after the date of the 
     enactment of this Act.
       (3) Full implementation.--The Secretary of the Treasury, 
     taking into consideration the complexity and magnitude of the 
     requirements set forth under this Act, may delay full 
     implementation of the regulations promulgated under such 
     section not later than 5 years after the enactment of this 
     Act.

     SEC. 204. PREPARER PENALTIES WITH RESPECT TO PREPARATION OF 
                   RETURNS AND OTHER SUBMISSIONS.

       (a) Inclusion of Other Submissions in Penalty Provisions.--
       (1) Understatement of taxpayer's liability.--
       (A) In general.--Section 6694 (relating to understatement 
     of taxpayer's liability by tax return preparer) is amended by 
     striking ``return or claim of refund'' each place it appears 
     and inserting ``return, claim of refund, or other 
     submission''.
       (B) Conforming amendments.--Section 6694, as amended by 
     paragraph (1), is amended by striking ``return or claim'' 
     each place it appears and inserting ``return, claim, or other 
     submission''.
       (2) Other assessable penalties.--
       (A) In general.--Section 6695 (relating to other assessable 
     penalties with respect to the preparation of tax returns for 
     other persons) is amended by striking ``return or claim of 
     refund'' each place it appears and inserting ``return, claim 
     of refund, or other submission''.
       (B) Conforming amendments.--Section 6695, as amended by 
     paragraph (1), is amended by striking ``return or claim'' 
     each place it appears and inserting ``return, claim, or other 
     submission''.
       (b) Increase in Certain Other Assessable Penalty Amounts.--
       (1) In general.--Subsections (a), (b), and (c) of section 
     6695 (relating to other assessable penalties with respect to 
     the preparation of income tax returns for other persons) are 
     each amended by striking ``$50'' and inserting ``$1,000''.
       (2) Removal of annual limitation.--Subsections (a), (b), 
     and (c) of section 6695 are each amended by striking the last 
     sentence thereof.
       (c) Review by the Treasury Inspector General for Tax 
     Administration.--Subparagraph (A) of section 7803(d)(2) is 
     amended by striking ``and'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(v) a summary of the penalties assessed and collected 
     during the reporting period under sections 6694 and 6695 and 
     under the regulations promulgated under section 330 of title 
     31, United States Code, and a review of the procedures by 
     which violations are identified and penalties are assessed 
     under those sections,''.
       (d) Additional Certification on Documents Other Than 
     Returns.--
       (1) Identifying number required for all submissions to the 
     irs by tax return preparers.--The first sentence of paragraph 
     (4) of section 6109(a) is amended by striking ``return or 
     claim for refund'' and inserting ``return, claim for refund, 
     or other document''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to documents filed after the date of the 
     enactment of this Act.
       (e) Coordination With Section 6060(a).--The Secretary of 
     the Treasury shall coordinate the requirements under the 
     regulations promulgated under section 330 of title 31, United 
     States Code, with the return requirements of section 6060 of 
     the Internal Revenue Code of 1986.
       (f) Effective Date.--The regulations required by this 
     section shall be prescribed not later than one year after the 
     date of the enactment of this Act.

     SEC. 205. CLARIFICATION OF ENROLLED AGENT CREDENTIALS.

       Section 330 of title 31, United States Code, as amended by 
     section 202, is amended--
       (1) by redesignating subsection (e) as subsection (f), and
       (2) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Any enrolled agents properly licensed to practice as 
     required under rules promulgated under subsection (a) shall 
     be allowed to use the credentials or designation as `enrolled 
     agent', `EA', or `E.A.'.''.

                 TITLE III--IMPROVING TAXPAYER SERVICES

     SEC. 301. INDIVIDUALIZED LIEN DETERMINATION REQUIRED BEFORE 
                   FILING NOTICE OF LIEN.

       (a) In General.--Section 6323 is amended by adding at the 
     end the following new subsection:
       ``(k) Lien Determination Before Filing.--
       ``(1) In general.--The Secretary shall not file a notice of 
     lien before making an individualized lien determination.
       ``(2) Lien determination.--In making an individualized lien 
     determination with respect to a taxpayer, the Secretary shall 
     consider factors, including--
       ``(A) the amount due,
       ``(B) the lien filing fee,
       ``(C) the value of the taxpayer's equity in the property or 
     right to property,
       ``(D) the taxpayer's tax compliance history,
       ``(E) extenuating circumstances, if any, that explain the 
     delinquency, and
       ``(F) the effect of the filing on the taxpayer's ability to 
     obtain financing, generate future income, and pay current and 
     future tax liabilities.
       ``(3) Supervisory review.--In any case in which--
       ``(A) collecting a liability through a lien imposed under 
     section 6321 would create an economic hardship (within the 
     meaning of section 6343(a)(1)(D)), or
       ``(B) the taxpayer does not have significant equity in 
     property or right to property,

     the Secretary shall not file a notice of lien unless the 
     supervisor of the employee making the lien determination 
     referenced in paragraph (2) also determines that the filing 
     is necessary.
       ``(4) Withdrawal of lien.--A lien filed in violation of 
     this subsection shall be withdrawn under subsection (j).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to liens filed after the date of the 
     enactment of this Act.

     SEC. 302. BAN ON AUDIT INSURANCE.

       Section 330 of title 31, United States Code, as amended by 
     sections 202 and 205, is amended by adding at the end the 
     following new subsection:
       ``(g) Ban on Audit Insurance.--No person admitted to 
     practice before the Department of the Treasury may directly 
     or indirectly offer or provide insurance or other form of 
     indemnification or reimbursement to cover a taxpayers' 
     assessment of federal tax, penalties, or interest.''.

     SEC. 303. PUBLIC AWARENESS.

       (a) In General.--Section 6103(k) (relating to disclosure of 
     certain returns and return information for tax administration 
     purposes) is amended by adding at the end the following new 
     paragraph:
       ``(10) Disclosure of recognized, certified, or registered 
     persons; revocation of registration.--The Secretary shall 
     furnish to the public--
       ``(A) the identity of any person who--
       ``(i) is an enrolled agent or is an attorney or certified 
     public accountant who either has a power of attorney on file 
     with the Internal Revenue Service or notifies the Internal 
     Revenue Service of their status as a preparer of Federal tax 
     returns,
       ``(ii) is certified under section 330(d) of title 31, 
     United States Code, as a tax return preparer, or
       ``(iii) is registered as a refund delivery product 
     facilitator pursuant to section 7530, and
       ``(B) information as to whether or not any person who is 
     otherwise suspended or disbarred is no longer so recognized, 
     certified, or registered (as the case may be).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect not later than two years after the date of 
     enactment of this Act.

     SEC. 304. CLARIFICATION OF TAXPAYER ASSISTANCE ORDER 
                   AUTHORITY.

       (a) In General.--Paragraph (2) of section 7811(b) is 
     amended--
       (1) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively, and
       (2) by inserting after subparagraph (B) the following new 
     subparagraph:

[[Page S2386]]

       ``(C) chapter 74 (relating to closing agreements and 
     compromises),''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to orders issued after the date of the enactment 
     of this Act.

     SEC. 305. TAXPAYER ADVOCATE DIRECTIVES.

       (a) In General.--Subchapter A of chapter 80 is amended by 
     inserting after section 7811 the following new section:

     ``SEC. 7811A. TAXPAYER ADVOCATE DIRECTIVES.

       ``(a) Authority to Issue.--The National Taxpayer Advocate 
     may issue a Taxpayer Advocate Directive to mandate 
     administrative or procedural changes to improve the operation 
     of a functional process or to grant relief to groups of 
     taxpayers (or all taxpayers) if its implementation will 
     protect the rights of taxpayers, prevent undue burden, ensure 
     equitable treatment, or provide an essential service to 
     taxpayers. A Taxpayer Advocate Directive may only be issued 
     by the National Taxpayer Advocate. The terms of a Taxpayer 
     Advocate Directive may require the Commissioner to implement 
     it within a specified period of time.
       ``(b) Authority to Modify or Rescind.--Any Taxpayer 
     Advocate Directive may be modified or rescinded--
       ``(1) only by the National Taxpayer Advocate, the 
     Commissioner of Internal Revenue, or the Deputy Commissioner 
     of Internal Revenue, and
       ``(2) only if a written explanation of the reasons for the 
     modification or rescission is provided to the National 
     Taxpayer Advocate.''.
       (b) Annual Report.--
       (1) In general.--Clause (ii) of section 7803(c)(2)(B) is 
     amended by redesignating subclauses (III) through (XI) as 
     subclauses (IV) through (XII), respectively, and by inserting 
     after subclause (II) the following new subclause:

       ``(III) contain Taxpayer Advocate Directives issued under 
     section 7811A;''.

       (2) Conforming amendments.--Clause (ii) of section 
     7803(c)(2)(B), as amended by paragraph (1), is amended--
       (A) by striking ``subclauses (I), (II), and (III)'' in 
     subclauses (V), (VI), and (VII) thereof and inserting 
     ``subclauses (I), (II), (III), and (IV)'', and
       (B) in subclause (VIII)--
       (i) by inserting ``or Taxpayer Advocate Directive'' after 
     ``Taxpayer Assistance Order'', and
       (ii) by inserting ``or 7811A(a)'' after ``section 
     7811(b)''.
       (c) Clerical Amendment.--The table of sections for 
     subchapter A of chapter 80 is amended by inserting after the 
     item relating to section 7811 the following new item:

``Sec. 7811A. Taxpayer advocate directives.''.

     SEC. 306. IMPROVED SERVICES FOR TAXPAYERS.

       (a) In General.--It is the sense of Congress that the 
     Internal Revenue Service should within 2 years--
       (1) reduce the time between receipt of an electronically 
     filed return and issuance of a refund,
       (2) expand assistance to low-income taxpayers,
       (3) allocate resources to assist low-income taxpayers in 
     establishing accounts at financial institutions that receive 
     direct deposits from the United States Treasury,
       (4) deliver tax refunds on debit cards, prepaid cards, and 
     other electronic means to assist individuals that do not have 
     access to financial accounts or institutions,
       (5) establish a pilot program for satellite walk-in centers 
     to be located in rural underserved communities without easy 
     access to Internal Revenue Service Taxpayer Assistance 
     Centers by using office facilities currently occupied by the 
     Federal government, including United States Postal Service 
     and Social Security Administration facilities; such satellite 
     walk-in centers should have the capability to provide video-
     conferencing services and scanning or other digitizing 
     functions to deliver, in an interactive manner, all service 
     and compliance functions currently available in Internal 
     Revenue Service Taxpayer Assistance Centers, and
       (6) establish a pilot program for mobile tax return 
     preparation offices.
       (b) Location of Service.--
       (1) In general.--The mobile tax return filing offices 
     should be located in communities that the Secretary 
     determines have a high incidence of taxpayers claiming the 
     earned income tax credit, particularly in locations with few 
     community volunteer tax preparation clinics.
       (2) Indian reservation.--At least one mobile tax return 
     filing office should be on or near an Indian reservation (as 
     defined in section 168(j)(6) of the Internal Revenue Code of 
     1986).

     SEC. 307. TAXPAYER ACCESS TO FINANCIAL INSTITUTIONS.

       (a) Establishment of Program.--The Secretary of the 
     Treasury may award demonstration project grants (including 
     multiyear awards) to eligible entities to provide accounts to 
     individuals who currently do not have an account with a 
     financial institution. The account would be held in a 
     federally insured depository institution.
       (b) Priority.--Priority shall be given to demonstration 
     project proposals that provide accounts at low or no cost 
     and--
       (1) that utilize new technologies such as the prepaid 
     product to expand access to financial services, in particular 
     for persons without bank accounts, with low access to 
     financial services, or low utilization of mainstream 
     financial services,
       (2) that promote the development of new financial products 
     and services that are adequate to improve access to wealth 
     building financial services, which help integrate more 
     Americans into the financial mainstream,
       (3) that promote education for these persons and depository 
     institutions concerning the availability and use of financial 
     services for and by such persons, and
       (4) that include other such activities and projects as the 
     Secretary may determine are consistent with the purpose of 
     this section.
       (c) Eligible Entities.--
       (1) In general.--An entity is eligible to receive a grant 
     under this section if such an entity is--
       (A) an organization described in section 501(c)(3) of the 
     Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code,
       (B) a federally insured depository institution,
       (C) an agency of a State or local government,
       (D) a community development financial institution,
       (E) an Indian tribal organization,
       (F) an Alaska Native Corporation,
       (G) a Native Hawaiian organization,
       (H) an organization described in 501(c)(5), and exempt from 
     tax under section 501(a), of such Code,
       (I) a nonbank financial service provider, or
       (J) a partnership comprised of 1 or more of the entities 
     described in the preceding subparagraphs.
       (2) Definitions.--For purposes of this section--
       (A) Federally insured depository institution.--The term 
     ``federally insured depository institution'' means any 
     insured depository institution (as defined in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813)) and any 
     insured credit union (as defined in section 101 of the 
     Federal Credit Union Act (12 U.S.C. 1752)).
       (B) Community development financial institution.--The term 
     ``community development financial institution'' means any 
     organization that has been certified as such pursuant to 
     section 1805.201 of title 12, Code of Federal Regulations.
       (C) Alaska native corporation.--The term ``Alaska Native 
     Corporation'' has the same meaning as the term ``Native 
     Corporation'' under section 3(m) of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1602(m)).
       (D) Native hawaiian organization.--The term ``Native 
     Hawaiian organization'' means any organization that--
       (i) serves and represents the interests of Native 
     Hawaiians, and
       (ii) has as a primary and stated purpose the provision of 
     services to Native Hawaiians.
       (E) Labor organization.--The term ``labor organization'' 
     means an organization--
       (i) in which employees participate,
       (ii) which exists for the purpose, in whole or in part, of 
     dealing with employers concerning grievances, labor disputes, 
     wages, rates of pay, hours of employment, or conditions of 
     work, and
       (iii) which is described in section 501(c)(5) of the 
     Internal Revenue Code of 1986.
       (F) Nonbank financial service provider.--The term ``nonbank 
     financial service provider'' mean an entity that engages in 
     financial services activities, as authorized under the 
     Federal Reserve Board, 12 Code of Federal Regulations Part 
     225, Regulation Y.
       (d) Application.--An eligible entity shall submit an 
     application to the Secretary of the Treasury in such form and 
     containing such information as the Secretary may require.
       (e) Evaluation and Report.--For each fiscal year in which a 
     grant is awarded under this section, the Secretary of the 
     Treasury shall submit a report to Congress containing a 
     description of the activities funded, amounts distributed, 
     and measurable results, as appropriate and available.
       (f) Power and Authority of the Secretary.--
       (1) Assistance.--Subject to appropriations, the Secretary 
     of the Treasury may provide financial and technical 
     assistance to awardees for expanding the distribution of 
     financial services, including through financial services 
     electronic networks.
       (2) Research and development.--The Secretary of the 
     Treasury may conduct or support such research and development 
     as the Secretary considers appropriate in order to further 
     the purpose of this section, including the collection of 
     information about access to financial services.
       (3) Regulations.--The Secretary of the Treasury is 
     authorized to promulgate regulations to implement and 
     administer the program under this section.
       (g) Study on Delivery of Tax Refunds.--
       (1) In general.--The Secretary of the Treasury, in 
     consultation with the National Taxpayer Advocate, shall 
     conduct a study on the feasibility of delivering tax refunds 
     on debit cards, prepaid cards, and other electronic means to 
     assist individuals that do not have access to financial 
     accounts or institutions.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress containing the results of the 
     study conducted under paragraph (1).

     SEC. 308. ADDITIONAL STUDIES.

       (a) Study on Accelerated Processing of Information 
     Returns.--
       (1) Findings.--Congress finds the following:

[[Page S2387]]

       (A) Under current procedures, the Internal Revenue Service 
     processes income tax returns before it processes most 
     information returns, including Forms W-2, which report wages 
     and tax withholding, and Forms 1099, which report interest, 
     dividends, and other payments.
       (B) The sequence described in subparagraph (A) makes little 
     logical sense.
       (C) From a taxpayer perspective, the sequence leads to 
     millions of cases where taxpayers inadvertently make 
     overclaims that the Internal Revenue Service does not 
     identify until months later, exposing the taxpayer not only 
     to a tax liability but to penalties and interest charges as 
     well.
       (D) From the Federal Government's perspective, this 
     sequence creates opportunities for fraud and requires the 
     Internal Revenue Service to devote resources to recovering 
     refunds that should not have been paid and that it often 
     cannot recover.
       (2) Study.--The Secretary of the Treasury, in consultation 
     with the National Taxpayer Advocate, shall conduct a study to 
     identify and recommend legislative and administrative changes 
     that would enable the Internal Revenue Service to receive and 
     process information reporting documents before it processes 
     tax returns. In conducting the study, the Secretary shall 
     consider, among other factors, the issues identified in the 
     National Taxpayer Advocate's 2009 Annual Report to Congress.
       (3) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress describing the results of the 
     study conducted under paragraph (2).
       (b) Study on the Effectiveness of Collection 
     Alternatives.--
       (1) In general.--The Secretary of the Treasury, in 
     consultation with the National Taxpayer Advocate, shall 
     conduct a study to assess the effectiveness of collection 
     alternatives, especially offers in compromise, on long-term 
     tax compliance. Such a study shall analyze a group of 
     taxpayers who applied for offers in compromise 5 or more 
     years ago and compare the amount of revenue collected from 
     the taxpayers whose offers were accepted with the amount of 
     revenue collected from the taxpayers whose offers were 
     rejected, and compare, among the taxpayers whose offers were 
     rejected, the amount they offered with the amounts collected.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress containing the results of the 
     study conducted under paragraph (1).
                                 ______