[Congressional Record Volume 160, Number 56 (Monday, April 7, 2014)]
[Senate]
[Pages S2196-S2197]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. CORNYN:
S. 2215. A bill to protect taxpayers from improper audits by the
Internal Revenue Service; to the Committee on Finance.
Mr. CORNYN. 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. 2215
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the
``Eliminating Improper and Abusive IRS Audits Act of 2014''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Civil damages allowed for reckless or intentional disregard of
internal revenue laws.
Sec. 3. Modifications relating to certain offenses by officers and
employees in connection with revenue laws.
Sec. 4. Modifications relating to civil damages for unauthorized
inspection or disclosure of returns and return
information.
Sec. 5. Extension of time for contesting IRS levy.
Sec. 6. Increase in monetary penalties for certain unauthorized
disclosures of information.
Sec. 7. Ban on raising new issues on appeal.
Sec. 8. Limitation on enforcement of liens against principal
residences.
Sec. 9. Additional provisions relating to mandatory termination for
misconduct.
Sec. 10. Extension of declaratory judgment procedures to social welfare
organizations.
Sec. 11. Review by the Treasury Inspector General for Tax
Administration.
SEC. 2. CIVIL DAMAGES ALLOWED FOR RECKLESS OR INTENTIONAL
DISREGARD OF INTERNAL REVENUE LAWS.
(a) Increase in Amount of Damages.--Section 7433(b) of the
Internal Revenue Code of 1986 is amended by striking
``$1,000,000 ($100,000, in the case of negligence)'' and
inserting ``$3,000,000 ($300,000, in the case of
negligence)''.
(b) Extension of Time To Bring Action.--Section 7433(d)(3)
of the Internal Revenue Code of 1986 is amended by striking
``2 years'' and inserting ``5 years''.
(c) Effective Date.--The amendments made by this section
shall apply to actions of employees of the Internal Revenue
Service after the date of the enactment of this Act.
SEC. 3. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY
OFFICERS AND EMPLOYEES IN CONNECTION WITH
REVENUE LAWS.
(a) Increase in Penalty.--Section 7214 of the Internal
Revenue Code of 1986 is amended--
[[Page S2197]]
(1) by striking ``$10,000'' in subsection (a) and inserting
``$25,000'', and
(2) by striking ``$5,000'' in subsection (b) and inserting
``$10,000''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 4. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR
UNAUTHORIZED INSPECTION OR DISCLOSURE OF
RETURNS AND RETURN INFORMATION.
(a) Increase in Amount of Damages.--Subparagraph (A) of
section 7431(c)(1) of the Internal Revenue Code of 1986 is
amended by striking ``$1,000'' and inserting ``$10,000''.
(b) Effective Date.--The amendment made by this section
shall apply to inspections and disclosure occurring on and
after the date of the enactment of this Act.
SEC. 5. EXTENSION OF TIME FOR CONTESTING IRS LEVY.
(a) Extension of Time for Return of Property Subject to
Levy.--Subsection (b) of section 6343 of the Internal Revenue
Code of 1986 is amended by striking ``9 months'' and
inserting ``3 years''.
(b) Period of Limitation on Suits.--Subsection (c) of
section 6532 of the Internal Revenue Code of 1986 is
amended--
(1) in paragraph (1) by striking ``9 months'' and inserting
``3 years'', and
(2) in paragraph (2) by striking ``9-month'' and inserting
``3-year''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) levies made after the date of the enactment of this
Act, and
(2) levies made on or before such date if the 9-month
period has not expired under section 6343(b) of the Internal
Revenue Code of 1986 (without regard to this section) as of
such date.
SEC. 6. INCREASE IN MONETARY PENALTIES FOR CERTAIN
UNAUTHORIZED DISCLOSURES OF INFORMATION.
(a) In General.--Paragraphs (1), (2), (3), and (4) of
section 7213(a) of the Internal Revenue Code of 1986 are each
amended by striking ``$5,000'' and inserting ``$10,000''.
(b) Effective Date.--The amendments made by this section
shall apply to disclosures made after the date of the
enactment of this Act.
SEC. 7. BAN ON RAISING NEW ISSUES ON APPEAL.
(a) In General.--Chapter 77 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
section:
``SEC. 7529. PROHIBITION ON INTERNAL REVENUE SERVICE RAISING
NEW ISSUES IN AN INTERNAL APPEAL.
``(a) In General.--In reviewing an appeal of any
determination initially made by the Internal Revenue Service,
the Internal Revenue Service Office of Appeals may not
consider or decide any issue that is not within the scope of
the initial determination.
``(b) Certain Issues Deemed Outside of Scope of
Determination.--For purposes of subsection (a), the following
matters shall be considered to be not within the scope of a
determination:
``(1) Any issue that was not raised in a notice of
deficiency or an examiner's report which is the subject of
the appeal.
``(2) Any deficiency in tax which was not included in the
initial determination.
``(3) Any theory or justification for a tax deficiency
which was not considered in the initial determination.
``(c) No Inference With Respect to Issues Raised by
Taxpayers.--Nothing in this section shall be construed to
provide any limitation in addition to any limitations in
effect on the date of the enactment of this section on the
right of a taxpayer to raise an issue, theory, or
justification on an appeal from a determination initially
made by the Internal Revenue Service that was not within the
scope of the initial determination.''.
(b) Clerical Amendment.--The table of sections for chapter
77 of such Code is amended by adding at the end the following
new item:
``Sec. 7529. Prohibition on Internal Revenue Service raising new issues
in an internal appeal.''.
(c) Effective Date.--The amendments made by this section
shall apply to matters filed or pending with the Internal
Revenue Service Office of Appeals on or after the date of the
enactment of this Act.
SEC. 8. LIMITATION ON ENFORCEMENT OF LIENS AGAINST PRINCIPAL
RESIDENCES.
(a) In General.--Section 7403(a) of the Internal Revenue
Code of 1986 is amended--
(1) by striking ``In any case'' and inserting the
following:
``(1) In general.--In any case'', and
(2) by adding at the end the following new paragraph:
``(2) Limitation with respect to principal residence.--
``(A) In general.--Paragraph (1) shall not apply to any
property used as the principal residence of the taxpayer
(within the meaning of section 121) unless the Secretary of
the Treasury makes a written determination that--
``(i) all other property of the taxpayer, if sold, is
insufficient to pay the tax or discharge the liability, and
``(ii) such action will not create an economic hardship for
the taxpayer.
``(B) Delegation.--For purposes of this paragraph, the
Secretary of the Treasury may not delegate any
responsibilities under subparagraph (A) to any person other
than--
``(i) the Commissioner of Internal Revenue, or
``(ii) a district director or assistant district director
of the Internal Revenue Service.''.
(b) Effective Date.--The amendments made by this section
shall apply to actions filed after the date of the enactment
of this Act.
SEC. 9. ADDITIONAL PROVISIONS RELATING TO MANDATORY
TERMINATION FOR MISCONDUCT.
(a) Termination of Unemployment for Inappropriate Review of
Tax-exempt Status.--Section 1203(b) of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804
note) is amended by striking ``and'' at the end of paragraph
(9), by striking the period at the end of paragraph (10) and
inserting ``; and'', and by adding at the end the following
new paragraph:
``(11) in the case of any review of an application for tax-
exempt status by an organization described in section 501(c)
of the Internal Revenue Code of 1986, developing or using any
methodology that applies disproportionate scrutiny to any
applicant based on the ideology expressed in the name or
purpose of the organization.''.
(b) Mandatory Unpaid Administrative Leave for Misconduct.--
Paragraph (1) of Section 1203(c) of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804
note) is amended by adding at the end the following new
sentence: ``Notwithstanding the preceding sentence, if the
Commissioner of Internal Revenue takes a personnel action
other than termination for an act or omission described in
subsection (b), the Commissioner shall place the employee on
unpaid administrative leave for a period of not less than 30
days.''.
(c) Limitation on Alternative Punishment.--Paragraph (1) of
section 1203(c) of the Internal Revenue Service Restructuring
and Reform Act of 1998 (26 U.S.C. 7804 note) is amended by
striking ``The Commissioner'' and inserting ``Except in the
case of an act or omission described in subsection (b)(3)(A),
the Commissioner''.
SEC. 10. EXTENSION OF DECLARATORY JUDGMENT PROCEDURES TO
SOCIAL WELFARE ORGANIZATIONS.
(a) In General.--Section 7428(a)(1) of the Internal Revenue
Code of 1986 is amended by striking ``or'' at the end of
subparagraph (C) and by adding at the end the following new
subparagraph:
``(E) with respect to the initial classification or
continuing classification of an organization described in
section 501(c)(4) which is exempt from tax under section
501(a), or''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to pleading filed after the date of
the enactment of this Act.
SEC. 11. REVIEW BY THE TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION.
(a) Review.--Subsection (k)(1) of section 8D of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) by redesignating subparagraph (D) as subparagraph (E);
(3) by inserting after subparagraph (C) the following new
subparagraph:
``(D) shall--
``(i) review any criteria employed by the Internal Revenue
Service to select tax returns (including applications for
recognition of tax-exempt status) for examination or audit,
assessment or collection of deficiencies, criminal
investigation or referral, refunds for amounts paid, or any
heightened scrutiny or review in order to determine whether
the criteria discriminates against taxpayers on the basis of
race, religion, or political ideology; and
``(ii) consult with the Internal Revenue Service on
recommended amendments to such criteria in order to eliminate
any discrimination identified pursuant to the review
described in clause (i); and''; and
(4) in subparagraph (E), as so redesignated, by striking
``and (C)'' and inserting ``(C), and (D)''.
(b) Semiannual Report.--Subsection (g) of such section is
amended by adding at the end the following new paragraph:
``(3) Any semiannual report made by the Treasury Inspector
General for Tax Administration that is required pursuant to
section 5(a) shall include--
``(A) a statement affirming that the Treasury Inspector
General for Tax Administration has reviewed the criteria
described in subsection (k)(1)(D) and consulted with the
Internal Revenue Service regarding such criteria; and
``(B) a description and explanation of any such criteria
that was identified as discriminatory by the Treasury
Inspector General for Tax Administration.''.
____________________