[Congressional Record Volume 164, Number 201 (Thursday, December 20, 2018)]
[House]
[Pages H10402-H10414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAXPAYER FIRST ACT OF 2018
Mr. RICE of South Carolina. Mr. Speaker, I move to suspend the rules
and pass the bill (H.R. 7227) to amend the Internal Revenue Code of
1986 to modernize and improve the Internal Revenue Service, and for
other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 7227
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer
First Act of 2018''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; etc.
TITLE I--PUTTING TAXPAYERS FIRST
Subtitle A--Independent Appeals Process
Sec. 1001. Establishment of Internal Revenue Service Independent Office
of Appeals.
Subtitle B--Improved Service
Sec. 1101. Comprehensive customer service strategy.
Sec. 1102. IRS Free File Program.
Sec. 1103. Low-income exception for payments otherwise required in
connection with a submission of an offer-in-compromise.
Subtitle C--Sensible Enforcement
Sec. 1201. Internal Revenue Service seizure requirements with respect
to structuring transactions.
Sec. 1202. Exclusion of interest received in action to recover property
seized by the Internal Revenue Service based on
structuring transaction.
Sec. 1203. Clarification of equitable relief from joint liability.
Sec. 1204. Modification of procedures for issuance of third-party
summons.
Sec. 1205. Private debt collection and special compliance personnel
program.
Sec. 1206. Reform of notice of contact of third parties.
Sec. 1207. Modification of authority to issue designated summons.
Sec. 1208. Limitation on access of non-Internal Revenue Service
employees to returns and return information.
Subtitle D--Organizational Modernization
Sec. 1301. Office of the National Taxpayer Advocate.
Sec. 1302. Modernization of Internal Revenue Service organizational
structure.
Subtitle E--Other Provisions
Sec. 1401. Return preparation programs for applicable taxpayers.
Sec. 1402. Provision of information regarding low-income taxpayer
clinics.
Sec. 1403. Notice from IRS regarding closure of taxpayer assistance
centers.
Sec. 1404. Rules for seizure and sale of perishable goods restricted to
only perishable goods.
Sec. 1405. Whistleblower reforms.
Sec. 1406. Customer service information.
Sec. 1407. Misdirected tax refund deposits.
TITLE II--21ST CENTURY IRS
Subtitle A--Cybersecurity and Identity Protection
Sec. 2001. Public-private partnership to address identity theft refund
fraud.
Sec. 2002. Recommendations of Electronic Tax Administration Advisory
Committee regarding identity theft refund fraud.
Sec. 2003. Information sharing and analysis center.
Sec. 2004. Compliance by contractors with confidentiality safeguards.
Sec. 2005. Report on electronic payments.
Sec. 2006. Identity protection personal identification numbers.
[[Page H10403]]
Sec. 2007. Single point of contact for tax-related identity theft
victims.
Sec. 2008. Notification of suspected identity theft.
Sec. 2009. Guidelines for stolen identity refund fraud cases.
Sec. 2010. Increased penalty for improper disclosure or use of
information by preparers of returns.
Subtitle B--Development of Information Technology
Sec. 2101. Management of Internal Revenue Service information
technology.
Sec. 2102. Internet platform for Form 1099 filings.
Sec. 2103. Streamlined critical pay authority for information
technology positions.
Subtitle C--Modernization of Consent-Based Income Verification System
Sec. 2201. Disclosure of taxpayer information for third-party income
verification.
Sec. 2202. Limit redisclosures and uses of consent-based disclosures of
tax return information.
Subtitle D--Expanded Use of Electronic Systems
Sec. 2301. Electronic filing of returns.
Sec. 2302. Uniform standards for the use of electronic signatures for
disclosure authorizations to, and other authorizations
of, practitioners.
Sec. 2303. Payment of taxes by debit and credit cards.
Sec. 2304. Requirement that electronically prepared paper returns
include scannable code.
Sec. 2305. Authentication of users of electronic services accounts.
Subtitle E--Other Provisions
Sec. 2401. Repeal of provision regarding certain tax compliance
procedures and reports.
Sec. 2402. Comprehensive training strategy.
TITLE III--MISCELLANEOUS PROVISIONS
Subtitle A--Reform of Laws Governing Internal Revenue Service Employees
Sec. 3001. Electronic record retention.
Sec. 3002. Prohibition on rehiring any employee of the Internal Revenue
Service who was involuntarily separated from service for
misconduct.
Sec. 3003. Notification of unauthorized inspection or disclosure of
returns and return information.
Subtitle B--Provisions Relating to Exempt Organizations
Sec. 3101. Mandatory e-filing by exempt organizations.
Sec. 3102. Notice required before revocation of tax exempt status for
failure to file return.
Subtitle C--Tax Court
Sec. 3301. Disqualification of judge or magistrate judge of the Tax
Court.
Sec. 3302. Opinions and judgments.
Sec. 3303. Title of special trial judge changed to magistrate judge of
the Tax Court.
Sec. 3304. Repeal of deadwood related to Board of Tax Appeals.
TITLE I--PUTTING TAXPAYERS FIRST
Subtitle A--Independent Appeals Process
SEC. 1001. ESTABLISHMENT OF INTERNAL REVENUE SERVICE
INDEPENDENT OFFICE OF APPEALS.
(a) In General.--Section 7803 is amended by adding at the
end the following new subsection:
``(e) Independent Office of Appeals.--
``(1) Establishment.--There is established in the Internal
Revenue Service an office to be known as the `Internal
Revenue Service Independent Office of Appeals'.
``(2) Chief of appeals.--
``(A) In general.--The Internal Revenue Service Independent
Office of Appeals shall be under the supervision and
direction of an official to be known as the `Chief of
Appeals'. The Chief of Appeals shall report directly to the
Commissioner of the Internal Revenue Service and shall be
entitled to compensation at the same rate as the highest rate
of basic pay established for the Senior Executive Service
under section 5382 of title 5, United States Code.
``(B) Appointment.--The Chief of Appeals shall be appointed
by the Commissioner of the Internal Revenue Service without
regard to the provisions of title 5, United States Code,
relating to appointments in the competitive service or the
Senior Executive Service.
``(C) Qualifications.--An individual appointed under
subparagraph (B) shall have experience and expertise in--
``(i) administration of, and compliance with, Federal tax
laws,
``(ii) a broad range of compliance cases, and
``(iii) management of large service organizations.
``(3) Purposes and duties of office.--It shall be the
function of the Internal Revenue Service Independent Office
of Appeals to resolve Federal tax controversies without
litigation on a basis which--
``(A) is fair and impartial to both the Government and the
taxpayer,
``(B) promotes a consistent application and interpretation
of, and voluntary compliance with, the Federal tax laws, and
``(C) enhances public confidence in the integrity and
efficiency of the Internal Revenue Service.
``(4) Right of appeal.--The resolution process described in
paragraph (3) shall be generally available to all taxpayers.
``(5) Limitation on designation of cases as not eligible
for referral to independent office of appeals.--
``(A) In general.--If any taxpayer which is in receipt of a
notice of deficiency authorized under section 6212 requests
referral to the Internal Revenue Service Independent Office
of Appeals and such request is denied, the Commissioner of
the Internal Revenue Service shall provide such taxpayer a
written notice which--
``(i) provides a detailed description of the facts
involved, the basis for the decision to deny the request, and
a detailed explanation of how the basis of such decision
applies to such facts, and
``(ii) describes the procedures prescribed under
subparagraph (C) for protesting the decision to deny the
request.
``(B) Report to congress.--The Commissioner of the Internal
Revenue Service shall submit a written report to Congress on
an annual basis which includes the number of requests
described in subparagraph (A) which were denied and the
reasons (described by category) that such requests were
denied.
``(C) Procedures for protesting denial of request.--The
Commissioner of the Internal Revenue Service shall prescribe
procedures for protesting to the Commissioner of the Internal
Revenue Service a denial of a request described in
subparagraph (A).
``(D) Not applicable to frivolous positions.--This
paragraph shall not apply to a request for referral to the
Internal Revenue Service Independent Office of Appeals which
is denied on the basis that the issue involved is a frivolous
position (within the meaning of section 6702(c)).
``(6) Staff.--
``(A) In general.--All personnel in the Internal Revenue
Service Independent Office of Appeals shall report to the
Chief of Appeals.
``(B) Access to staff of office of the chief counsel.--The
Chief of Appeals shall have authority to obtain legal
assistance and advice from the staff of the Office of the
Chief Counsel. The Chief Counsel shall ensure that such
assistance and advice is provided by staff of the Office of
the Chief Counsel who were not involved in the case with
respect to which such assistance and advice is sought and who
are not involved in preparing such case for litigation.
``(7) Access to case files.--
``(A) In general.--In any case in which a conference with
the Internal Revenue Service Independent Office of Appeals
has been scheduled upon request of a specified taxpayer, the
Chief of Appeals shall ensure that such taxpayer is provided
access to the nonprivileged portions of the case file on
record regarding the disputed issues (other than documents
provided by the taxpayer to the Internal Revenue Service) not
later than 10 days before the date of such conference.
``(B) Taxpayer election to expedite conference.--If the
taxpayer so elects, subparagraph (A) shall be applied by
substituting `the date of such conference' for `10 days
before the date of such conference'.
``(C) Specified taxpayer.--For purposes of this paragraph--
``(i) In general.--The term `specified taxpayer' means--
``(I) in the case of any taxpayer who is a natural person,
a taxpayer whose adjusted gross income does not exceed
$400,000 for the taxable year to which the dispute relates,
and
``(II) in the case of any other taxpayer, a taxpayer whose
gross receipts do not exceed $5,000,000 for the taxable year
to which the dispute relates.
``(ii) Aggregation rule.--Rules similar to the rules of
section 448(c)(2) shall apply for purposes of clause
(i)(II).''.
(b) Conforming Amendments.--
(1) The following provisions are each amended by striking
``Internal Revenue Service Office of Appeals'' and inserting
``Internal Revenue Service Independent Office of Appeals'':
(A) Section 6015(c)(4)(B)(ii)(I).
(B) Section 6320(b)(1).
(C) Subsections (b)(1) and (d)(3) of section 6330.
(D) Section 6603(d)(3)(B).
(E) Section 6621(c)(2)(A)(i).
(F) Section 7122(e)(2).
(G) Subsections (a), (b)(1), (b)(2), and (c)(1) of section
7123.
(H) Subsections (c)(7)(B)(i), and (g)(2)(A) of section
7430.
(I) Section 7522(b)(3).
(J) Section 7612(c)(2)(A).
(2) Section 7430(c)(2) is amended by striking ``Internal
Revenue Service Office of Appeals'' each place it appears and
inserting ``Internal Revenue Service Independent Office of
Appeals''.
(3) The heading of section 6330(d)(3) is amended by
inserting ``Independent'' after ``IRS''.
(c) Other References.--Any reference in any provision of
law, or regulation or other guidance, to the Internal Revenue
Service Office of Appeals shall be treated as a reference to
the Internal Revenue Service Independent Office of Appeals.
(d) Savings Provisions.--Rules similar to the rules of
paragraphs (2) through (6) of section 1001(b) of the Internal
Revenue Service Restructuring and Reform Act of 1998 shall
apply for purposes of this section (and the amendments made
by this section).
(e) Effective Date.--
[[Page H10404]]
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Access to case files.--Section 7803(e)(7) of the
Internal Revenue Code of 1986, as added by subsection (a),
shall apply to conferences occurring after the date which is
1 year after the date of the enactment of this Act.
Subtitle B--Improved Service
SEC. 1101. COMPREHENSIVE CUSTOMER SERVICE STRATEGY.
(a) In General.--Not later than the date which is 1 year
after the date of the enactment of this Act, the Secretary of
the Treasury shall submit to Congress a written comprehensive
customer service strategy for the Internal Revenue Service.
Such strategy shall include--
(1) a plan to provide assistance to taxpayers that is
secure, designed to meet reasonable taxpayer expectations,
and adopts appropriate best practices of customer service
provided in the private sector, including online services,
telephone call back services, and training of employees
providing customer services;
(2) a thorough assessment of the services that the Internal
Revenue Service can co-locate with other Federal services or
offer as self-service options;
(3) proposals to improve Internal Revenue Service customer
service in the short term (the current and following fiscal
year), medium term (approximately 3 to 5 fiscal years), and
long term (approximately 10 fiscal years);
(4) a plan to update guidance and training materials for
customer service employees of the Internal Revenue Service,
including the Internal Revenue Manual, to reflect such
strategy; and
(5) identified metrics and benchmarks for quantitatively
measuring the progress of the Internal Revenue Service in
implementing such strategy.
(b) Updated Guidance and Training Materials.--Not later
than 2 years after the date of the enactment of this Act, the
Secretary of the Treasury (or the Secretary's delegate) shall
make available the updated guidance and training materials
described in subsection (a)(4) (including the Internal
Revenue Manual). Such updated guidance and training materials
(including the Internal Revenue Manual) shall be written in a
manner so as to be easily understood by customer service
employees of the Internal Revenue Service and shall provide
clear instructions.
SEC. 1102. IRS FREE FILE PROGRAM.
(a) In General.--
(1) The Secretary of the Treasury, or the Secretary's
delegate, shall continue to operate the IRS Free File Program
as established by the Internal Revenue Service and published
in the Federal Register on November 4, 2002 (67 Fed. Reg.
67247), including any subsequent agreements and governing
rules established pursuant thereto.
(2) The IRS Free File Program shall continue to provide
free commercial-type online individual income tax preparation
and electronic filing services to the lowest 70 percent of
taxpayers by adjusted gross income. The number of taxpayers
eligible to receive such services each year shall be
calculated by the Internal Revenue Service annually based on
prior year aggregate taxpayer adjusted gross income data.
(3) In addition to the services described in paragraph (2),
and in the same manner, the IRS Free File Program shall
continue to make available to all taxpayers (without regard
to income) a basic, online electronic fillable forms utility.
(4) The IRS Free File Program shall continue to work
cooperatively with the private sector to provide the free
individual income tax preparation and the electronic filing
services described in paragraphs (2) and (3).
(5) The IRS Free File Program shall work cooperatively with
State government agencies to enhance and expand the use of
the program to provide needed benefits to the taxpayer while
reducing the cost of processing returns.
(b) Innovations.--The Secretary of the Treasury, or the
Secretary's delegate, shall work with the private sector
through the IRS Free File Program to identify and implement,
consistent with applicable law, innovative new program
features to improve and simplify the taxpayer's experience
with completing and filing individual income tax returns
through voluntary compliance.
SEC. 1103. LOW-INCOME EXCEPTION FOR PAYMENTS OTHERWISE
REQUIRED IN CONNECTION WITH A SUBMISSION OF AN
OFFER-IN-COMPROMISE.
(a) In General.--Section 7122(c) is amended by adding at
the end the following new paragraph:
``(3) Exception for low-income taxpayers.--Paragraph (1),
and any user fee otherwise required in connection with the
submission of an offer-in-compromise, shall not apply to any
offer-in-compromise with respect to a taxpayer who is an
individual with adjusted gross income, as determined for the
most recent taxable year for which such information is
available, which does not exceed 250 percent of the
applicable poverty level (as determined by the Secretary).''.
(b) Effective Date.--The amendment made by this section
shall apply to offers-in-compromise submitted after the date
of the enactment of this Act.
Subtitle C--Sensible Enforcement
SEC. 1201. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH
RESPECT TO STRUCTURING TRANSACTIONS.
Section 5317(c)(2) of title 31, United States Code, is
amended--
(1) by striking ``Any property'' and inserting the
following:
``(A) In general.--Any property''; and
(2) by adding at the end the following:
``(B) Internal revenue service seizure requirements with
respect to structuring transactions.--
``(i) Property derived from an illegal source.--Property
may only be seized by the Internal Revenue Service pursuant
to subparagraph (A) by reason of a claimed violation of
section 5324 if the property to be seized was derived from an
illegal source or the funds were structured for the purpose
of concealing the violation of a criminal law or regulation
other than section 5324.
``(ii) Notice.--Not later than 30 days after property is
seized by the Internal Revenue Service pursuant to
subparagraph (A), the Internal Revenue Service shall--
``(I) make a good faith effort to find all persons with an
ownership interest in such property; and
``(II) provide each such person so found with a notice of
the seizure and of the person's rights under clause (iv).
``(iii) Extension of notice under certain circumstances.--
The Internal Revenue Service may apply to a court of
competent jurisdiction for one 30-day extension of the notice
requirement under clause (ii) if the Internal Revenue Service
can establish probable cause of an imminent threat to
national security or personal safety necessitating such
extension.
``(iv) Post-seizure hearing.--If a person with an ownership
interest in property seized pursuant to subparagraph (A) by
the Internal Revenue Service requests a hearing by a court of
competent jurisdiction within 30 days after the date on which
notice is provided under subclause (ii), such property shall
be returned unless the court holds an adversarial hearing and
finds within 30 days of such request (or such longer period
as the court may provide, but only on request of an
interested party) that there is probable cause to believe
that there is a violation of section 5324 involving such
property and probable cause to believe that the property to
be seized was derived from an illegal source or the funds
were structured for the purpose of concealing the violation
of a criminal law or regulation other than section 5324.''.
SEC. 1202. EXCLUSION OF INTEREST RECEIVED IN ACTION TO
RECOVER PROPERTY SEIZED BY THE INTERNAL REVENUE
SERVICE BASED ON STRUCTURING TRANSACTION.
(a) In General.--Part III of subchapter B of chapter 1 is
amended by inserting before section 140 the following new
section:
``SEC. 139H. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY
SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON
STRUCTURING TRANSACTION.
``Gross income shall not include any interest received from
the Federal Government in connection with an action to
recover property seized by the Internal Revenue Service
pursuant to section 5317(c)(2) of title 31, United States
Code, by reason of a claimed violation of section 5324 of
such title.''.
(b) Clerical Amendment.--The table of sections for part III
of subchapter B of chapter 1 is amended by inserting before
the item relating to section 140 the following new item:
``Sec. 139H. Interest received in action to recover property seized by
the Internal Revenue Service based on structuring
transaction.''.
(c) Effective Date.--The amendments made by this section
shall apply to interest received on or after the date of the
enactment of this Act.
SEC. 1203. CLARIFICATION OF EQUITABLE RELIEF FROM JOINT
LIABILITY.
(a) In General.--Section 6015 is amended--
(1) in subsection (e), by adding at the end the following
new paragraph:
``(7) Standard and scope of review.--Any review of a
determination made under this section shall be reviewed de
novo by the Tax Court and shall be based upon--
``(A) the administrative record established at the time of
the determination, and
``(B) any additional newly discovered or previously
unavailable evidence.''; and
(2) by amending subsection (f) to read as follows:
``(f) Equitable Relief.--
``(1) In general.--Under procedures prescribed by the
Secretary, if--
``(A) taking into account all the facts and circumstances,
it is inequitable to hold the individual liable for any
unpaid tax or any deficiency (or any portion of either), and
``(B) relief is not available to such individual under
subsection (b) or (c),
the Secretary may relieve such individual of such liability.
``(2) Limitation.--A request for equitable relief under
this subsection may be made with respect to any portion of
any liability that--
``(A) has not been paid, provided that such request is made
before the expiration of the applicable period of limitation
under section 6502, or
``(B) has been paid, provided that such request is made
during the period in which the individual could submit a
timely claim for refund or credit of such payment.''.
(b) Effective Date.--The amendments made by this section
shall apply to petitions
[[Page H10405]]
or requests filed or pending on or after the date of the
enactment of this Act.
SEC. 1204. MODIFICATION OF PROCEDURES FOR ISSUANCE OF THIRD-
PARTY SUMMONS.
(a) In General.--Section 7609(f) is amended by adding at
the end the following flush sentence:
``The Secretary shall not issue any summons described in the
preceding sentence unless the information sought to be
obtained is narrowly tailored to information that pertains to
the failure (or potential failure) of the person or group or
class of persons referred to in paragraph (2) to comply with
one or more provisions of the internal revenue law which have
been identified for purposes of such paragraph.''.
(b) Effective Date.--The amendments made by this section
shall apply to summonses served after the date of the
enactment of this Act.
SEC. 1205. PRIVATE DEBT COLLECTION AND SPECIAL COMPLIANCE
PERSONNEL PROGRAM.
(a) Certain Tax Receivables Not Eligible for Collection
Under Tax Collection Contracts.--Section 6306(d)(3) is
amended by striking ``or'' at the end of subparagraph (C) and
by inserting after subparagraph (D) the following new
subparagraphs:
``(E) a taxpayer substantially all of whose income consists
of disability insurance benefits under section 223 of the
Social Security Act or supplemental security income benefits
under title XVI of the Social Security Act (including
supplemental security income benefits of the type described
in section 1616 of such Act or section 212 of Public Law 93-
66), or
``(F) a taxpayer who is an individual with adjusted gross
income, as determined for the most recent taxable year for
which such information is available, which does not exceed
200 percent of the applicable poverty level (as determined by
the Secretary).''.
(b) Determination of Inactive Tax Receivables Eligible for
Collection Under Tax Collection Contracts.--Section
6306(c)(2)(A)(ii) is amended by striking ``more than \1/3\ of
the period of the applicable statute of limitation has
lapsed'' and inserting ``more than 2 years has passed since
assessment''.
(c) Maximum Length of Installment Agreements Offered Under
Tax Collection Contracts.--Section 6306(b)(1)(B) is amended
by striking ``5 years'' and inserting ``7 years''.
(d) Clarification That Special Compliance Personnel Program
Account May Be Used for Program Costs.--
(1) In general.--Section 6307(b) is amended--
(A) in paragraph (2), by striking all that follows ``under
such program'' and inserting a period; and
(B) in paragraph (3), by striking all that follows ``out of
such account'' and inserting ``for other than program
costs''.
(2) Communications, software, and technology costs treated
as program costs.--Section 6307(d)(2)(B) is amended by
striking ``telecommunications'' and inserting
``communications, software, technology''.
(3) Conforming amendment.--Section 6307(d)(2) is amended by
striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``,
and'', and by inserting after subparagraph (B) the following
new subparagraph:
``(C) reimbursement of the Internal Revenue Service or
other government agencies for the cost of administering the
qualified tax collection program under section 6306.''.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to tax receivables identified by the Secretary (or the
Secretary's delegate) after December 31, 2019.
(2) Maximum length of installment agreements.--The
amendment made by subsection (c) shall apply to contracts
entered into after the date of the enactment of this Act.
(3) Use of special compliance personnel program account.--
The amendment made by subsection (d) shall apply to amounts
expended from the special compliance personnel program
account after the date of the enactment of this Act.
SEC. 1206. REFORM OF NOTICE OF CONTACT OF THIRD PARTIES.
(a) In General.--Section 7602(c)(1) is amended to read as
follows:
``(1) General notice.--An officer or employee of the
Internal Revenue Service may not contact any person other
than the taxpayer with respect to the determination or
collection of the tax liability of such taxpayer unless such
contact occurs during a period (not greater than 1 year)
which is specified in a notice which--
``(A) informs the taxpayer that contacts with persons other
than the taxpayer are intended to be made during such period,
and
``(B) except as otherwise provided by the Secretary, is
provided to the taxpayer not later than 45 days before the
beginning of such period.
Nothing in the preceding sentence shall prevent the issuance
of notices to the same taxpayer with respect to the same tax
liability with periods specified therein that, in the
aggregate, exceed 1 year. A notice shall not be issued under
this paragraph unless there is an intent at the time such
notice is issued to contact persons other than the taxpayer
during the period specified in such notice. The preceding
sentence shall not prevent the issuance of a notice if the
requirement of such sentence is met on the basis of the
assumption that the information sought to be obtained by such
contact will not be obtained by other means before such
contact.''.
(b) Effective Date.--The amendment made by this section
shall apply to notices provided, and contacts of persons
made, after the date which is 45 days after the date of the
enactment of this Act.
SEC. 1207. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED
SUMMONS.
(a) In General.--Paragraph (1) of section 6503(j) is
amended by striking ``coordinated examination program'' and
inserting ``coordinated industry case program''.
(b) Requirements for Summons.--Clause (i) of section
6503(j)(2)(A) is amended to read as follows:
``(i) the issuance of such summons is preceded by a review
and written approval of such issuance by the Commissioner of
the relevant operating division of the Internal Revenue
Service and the Chief Counsel which--
``(I) states facts clearly establishing that the Secretary
has made reasonable requests for the information that is the
subject of the summons, and
``(II) is attached to such summons,''.
(c) Establishment That Reasonable Requests for Information
Were Made.--Subsection (j) of section 6503 is amended by
adding at the end the following new paragraph:
``(4) Establishment that reasonable requests for
information were made.--In any court proceeding described in
paragraph (3), the Secretary shall establish that reasonable
requests were made for the information that is the subject of
the summons.''.
(d) Effective Date.--The amendments made by this section
shall apply to summonses issued after the date of the
enactment of this Act.
SEC. 1208. LIMITATION ON ACCESS OF NON-INTERNAL REVENUE
SERVICE EMPLOYEES TO RETURNS AND RETURN
INFORMATION.
(a) In General.--Section 7602 is amended by adding at the
end the following new subsection:
``(f) Limitation on Access of Persons Other Than Internal
Revenue Service Officers and Employees.--The Secretary shall
not, under the authority of section 6103(n), provide any
books, papers, records, or other data obtained pursuant to
this section to any person authorized under section 6103(n),
except when such person requires such information for the
sole purpose of providing expert evaluation and assistance to
the Internal Revenue Service. No person other than an officer
or employee of the Internal Revenue Service or the Office of
Chief Counsel may, on behalf of the Secretary, question a
witness under oath whose testimony was obtained pursuant to
this section.''.
(b) Effective Date.--The amendment made by this section--
(1) shall take effect on the date of the enactment of this
Act; and
(2) shall not fail to apply to a contract in effect under
section 6103(n) of the Internal Revenue Code of 1986 merely
because such contract was in effect before the date of the
enactment of this Act.
Subtitle D--Organizational Modernization
SEC. 1301. OFFICE OF THE NATIONAL TAXPAYER ADVOCATE.
(a) Taxpayer Advocate Directives.--
(1) In general.--Section 7803(c) is amended by adding at
the end the following new paragraph:
``(5) Taxpayer advocate directives.--In the case of any
Taxpayer Advocate Directive issued by the National Taxpayer
Advocate pursuant to a delegation of authority from the
Commissioner of the Internal Revenue Service--
``(A) the Commissioner or a Deputy Commissioner shall
modify, rescind, or ensure compliance with such directive not
later than 90 days after the issuance of such directive, and
``(B) in the case of any directive which is modified or
rescinded by a Deputy Commissioner, the National Taxpayer
Advocate may (not later than 90 days after such modification
or rescission) appeal to the Commissioner and the
Commissioner shall (not later than 90 days after such appeal
is made) ensure compliance with such directive as issued by
the National Taxpayer Advocate or provide the National
Taxpayer Advocate with a detailed description of the reasons
for any modification or rescission made or upheld by the
Commissioner pursuant to such appeal.''.
(2) Report to certain committees of congress regarding
directives.--Section 7803(c)(2)(B)(ii) is amended by
redesignating subclauses (VIII) through (XI) as subclauses
(IX) through (XII), respectively, and by inserting after
subclause (VII) the following new subclause:
``(VIII) identify any Taxpayer Advocate Directive which was
not honored by the Internal Revenue Service in a timely
manner, as specified under paragraph (5),''.
(b) National Taxpayer Advocate Annual Reports to
Congress.--
(1) Inclusion of most serious taxpayer problems.--Section
7803(c)(2)(B)(ii)(III) is amended by striking ``at least 20
of the'' and inserting ``the 10''.
(2) Coordination with treasury inspector general for tax
administration.--Section 7803(c)(2) is amended by adding at
the end the following new subparagraph:
[[Page H10406]]
``(E) Coordination with treasury inspector general for tax
administration.--Before beginning any research or study, the
National Taxpayer Advocate shall coordinate with the Treasury
Inspector General for Tax Administration to ensure that the
National Taxpayer Advocate does not duplicate any action that
the Treasury Inspector General for Tax Administration has
already undertaken or has a plan to undertake.''.
(3) Statistical support.--
(A) In general.--Section 6108 is amended by adding at the
end the following new subsection:
``(d) Statistical Support for National Taxpayer Advocate.--
The Secretary shall, upon request of the National Taxpayer
Advocate, provide the National Taxpayer Advocate with
statistical support in connection with the preparation by the
National Taxpayer Advocate of the annual report described in
section 7803(c)(2)(B)(ii). Such statistical support shall
include statistical studies, compilations, and the review of
information provided by the National Taxpayer Advocate for
statistical validity and sound statistical methodology.''.
(B) Disclosure of review.--Section 7803(c)(2)(B)(ii), as
amended by subsection (a), is amended by redesignating
subclause (XII) as subclause (XIII) and by inserting after
subclause (XI) the following new subclause:
``(XII) with respect to any statistical information
included in such report, include a statement of whether such
statistical information was reviewed or provided by the
Secretary under section 6108(d) and, if so, whether the
Secretary determined such information to be statistically
valid and based on sound statistical methodology.''.
(C) Conforming amendment.--Section 7803(c)(2)(B)(iii) is
amended by adding at the end the following: ``The preceding
sentence shall not apply with respect to statistical
information provided to the Secretary for review, or received
from the Secretary, under section 6108(d).''.
(c) Salary of National Taxpayer Advocate.--Section
7803(c)(1)(B)(i) is amended by striking ``, or, if the
Secretary of the Treasury so determines, at a rate fixed
under section 9503 of such title''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Salary of national taxpayer advocate.--The amendment
made by subsection (c) shall apply to compensation paid to
individuals appointed as the National Taxpayer Advocate after
the date of the enactment of this Act.
SEC. 1302. MODERNIZATION OF INTERNAL REVENUE SERVICE
ORGANIZATIONAL STRUCTURE.
(a) In General.--Not later than September 30, 2020, the
Commissioner of the Internal Revenue Service shall submit to
Congress a comprehensive written plan to redesign the
organization of the Internal Revenue Service. Such plan
shall--
(1) ensure the successful implementation of the priorities
specified by Congress in this Act;
(2) prioritize taxpayer services to ensure that all
taxpayers easily and readily receive the assistance that they
need;
(3) streamline the structure of the agency including
minimizing the duplication of services and responsibilities
within the agency;
(4) best position the Internal Revenue Service to combat
cybersecurity and other threats to the Internal Revenue
Service; and
(5) address whether the Criminal Investigation Division of
the Internal Revenue Service should report directly to the
Commissioner.
(b) Repeal of Restriction on Organizational Structure of
Internal Revenue Service.--Paragraph (3) of section 1001(a)
of the Internal Revenue Service Restructuring and Reform Act
of 1998 shall cease to apply beginning 1 year after the date
on which the Commissioner of the Internal Revenue Service
submits to Congress the plan described in subsection (a).
Subtitle E--Other Provisions
SEC. 1401. RETURN PREPARATION PROGRAMS FOR APPLICABLE
TAXPAYERS.
(a) In General.--Chapter 77 is amended by inserting after
section 7526 the following new section:
``SEC. 7526A. RETURN PREPARATION PROGRAMS FOR APPLICABLE
TAXPAYERS.
``(a) Establishment of Volunteer Income Tax Assistance
Matching Grant Program.--The Secretary shall establish a
Community Volunteer Income Tax Assistance Matching Grant
Program under which the Secretary may, subject to the
availability of appropriated funds, make grants to provide
matching funds for the development, expansion, or
continuation of qualified return preparation programs
assisting applicable taxpayers and members of underserved
populations.
``(b) Use of Funds.--
``(1) In general.--Qualified return preparation programs
may use grants received under this section for--
``(A) ordinary and necessary costs associated with program
operation in accordance with cost principles under the
applicable Office of Management and Budget circular,
including--
``(i) wages or salaries of persons coordinating the
activities of the program,
``(ii) developing training materials, conducting training,
and performing quality reviews of the returns prepared under
the program,
``(iii) equipment purchases, and
``(iv) vehicle-related expenses associated with remote or
rural tax preparation services,
``(B) outreach and educational activities described in
subsection (c)(2)(B), and
``(C) services related to financial education and
capability, asset development, and the establishment of
savings accounts in connection with tax return preparation.
``(2) Requirement of matching funds.--A qualified return
preparation program must provide matching funds on a dollar-
for-dollar basis for all grants provided under this section.
Matching funds may include--
``(A) the salary (including fringe benefits) of individuals
performing services for the program,
``(B) the cost of equipment used in the program, and
``(C) other ordinary and necessary costs associated with
the program.
Indirect expenses, including general overhead of any entity
administering the program, shall not be counted as matching
funds.
``(c) Application.--
``(1) In general.--Each applicant for a grant under this
section shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may reasonably require.
``(2) Priority.--In awarding grants under this section, the
Secretary shall give priority to applications which
demonstrate--
``(A) assistance to applicable taxpayers, with emphasis on
outreach to, and services for, such taxpayers,
``(B) taxpayer outreach and educational activities relating
to eligibility and availability of income supports available
through this title, including the earned income tax credit,
and
``(C) specific outreach and focus on one or more
underserved populations.
``(3) Amounts taken into account.--In determining matching
grants under this section, the Secretary shall only take into
account amounts provided by the qualified return preparation
program for expenses described in subsection (b).
``(d) Program Adherence.--
``(1) In general.--The Secretary shall establish procedures
for, and shall conduct not less frequently than once every 5
calendar years during which a qualified return preparation
program is operating under a grant under this section,
periodic site visits--
``(A) to ensure the program is carrying out the purposes of
this section, and
``(B) to determine whether the program meets such program
adherence standards as the Secretary shall by regulation or
other guidance prescribe.
``(2) Additional requirements for grant recipients not
meeting program adherence standards.--In the case of any
qualified return preparation program which--
``(A) is awarded a grant under this section, and
``(B) is subsequently determined--
``(i) not to meet the program adherence standards described
in paragraph (1)(B), or
``(ii) not to be otherwise carrying out the purposes of
this section,
such program shall not be eligible for any additional grants
under this section unless such program provides sufficient
documentation of corrective measures established to address
any such deficiencies determined.
``(e) Definitions.--For purposes of this section--
``(1) Qualified return preparation program.--The term
`qualified return preparation program' means any program--
``(A) which provides assistance to individuals, not less
than 90 percent of whom are applicable taxpayers, in
preparing and filing Federal income tax returns,
``(B) which is administered by a qualified entity,
``(C) in which all volunteers who assist in the preparation
of Federal income tax returns meet the training requirements
prescribed by the Secretary, and
``(D) which uses a quality review process which reviews 100
percent of all returns.
``(2) Qualified entity.--
``(A) In general.--The term `qualified entity' means any
entity which--
``(i) is an eligible organization,
``(ii) is in compliance with Federal tax filing and payment
requirements,
``(iii) is not debarred or suspended from Federal
contracts, grants, or cooperative agreements, and
``(iv) agrees to provide documentation to substantiate any
matching funds provided pursuant to the grant program under
this section.
``(B) Eligible organization.--The term `eligible
organization' means--
``(i) an institution of higher education which is described
in section 102 (other than subsection (a)(1)(C) thereof) of
the Higher Education Act of 1965 (20 U.S.C. 1002), as in
effect on the date of the enactment of this section, and
which has not been disqualified from participating in a
program under title IV of such Act,
``(ii) an organization described in section 501(c) and
exempt from tax under section 501(a),
``(iii) a local government agency, including--
``(I) a county or municipal government agency, and
[[Page H10407]]
``(II) an Indian tribe, as defined in section 4(13) of the
Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4103(13)), including any tribally
designated housing entity (as defined in section 4(22) of
such Act (25 U.S.C. 4103(22))), tribal subsidiary,
subdivision, or other wholly owned tribal entity,
``(iv) a local, State, regional, or national coalition
(with one lead organization which meets the eligibility
requirements of clause (i), (ii), or (iii) acting as the
applicant organization), or
``(v) in the case of applicable taxpayers and members of
underserved populations with respect to which no
organizations described in the preceding clauses are
available--
``(I) a State government agency, or
``(II) an office providing Cooperative Extension services
(as established at the land-grant colleges and universities
under the Smith-Lever Act of May 8, 1914).
``(3) Applicable taxpayers.--The term `applicable taxpayer'
means a taxpayer whose income for the taxable year does not
exceed an amount equal to the completed phaseout amount under
section 32(b) for a married couple filing a joint return with
three or more qualifying children, as determined in a revenue
procedure or other published guidance.
``(4) Underserved population.--The term `underserved
population' includes populations of persons with
disabilities, persons with limited English proficiency,
Native Americans, individuals living in rural areas, members
of the Armed Forces and their spouses, and the elderly.
``(f) Special Rules and Limitations.--
``(1) Duration of grants.--Upon application of a qualified
return preparation program, the Secretary is authorized to
award a multi-year grant not to exceed 3 years.
``(2) Aggregate limitation.--Unless otherwise provided by
specific appropriation, the Secretary shall not allocate more
than $30,000,000 per fiscal year (exclusive of costs of
administering the program) to grants under this section.
``(g) Promotion of Programs.--
``(1) In general.--The Secretary shall promote tax
preparation through qualified return preparation programs
through the use of mass communications and other means.
``(2) Provision of information regarding qualified return
preparation programs.--The Secretary may provide taxpayers
information regarding qualified return preparation programs
receiving grants under this section.
``(3) VITA grantee referral.--Qualified return preparation
programs receiving a grant under this section are encouraged,
in appropriate cases, to--
``(A) advise taxpayers of the availability of, and
eligibility requirements for receiving, advice and assistance
from qualified low-income taxpayer clinics receiving funding
under section 7526, and
``(B) provide information regarding the location of, and
contact information for, such clinics.''.
(b) Clerical Amendment.--The table of sections for chapter
77 is amended by inserting after the item relating to section
7526 the following new item:
``Sec. 7526A. Return preparation programs for applicable taxpayers.''.
SEC. 1402. PROVISION OF INFORMATION REGARDING LOW-INCOME
TAXPAYER CLINICS.
(a) In General.--Section 7526(c) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(6) Provision of information regarding qualified low-
income taxpayer clinics.--Notwithstanding any other provision
of law, officers and employees of the Department of the
Treasury may--
``(A) advise taxpayers of the availability of, and
eligibility requirements for receiving, advice and assistance
from one or more specific qualified low-income taxpayer
clinics receiving funding under this section, and
``(B) provide information regarding the location of, and
contact information for, such clinics.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.
SEC. 1403. NOTICE FROM IRS REGARDING CLOSURE OF TAXPAYER
ASSISTANCE CENTERS.
Not later than 90 days before the date that a proposed
closure of a Taxpayer Assistance Center would take effect,
the Secretary of the Treasury (or the Secretary's delegate)
shall--
(1) make publicly available (including by non-electronic
means) a notice which--
(A) identifies the Taxpayer Assistance Center proposed for
closure and the date of such proposed closure; and
(B) identifies the relevant alternative sources of taxpayer
assistance which may be utilized by taxpayers affected by
such proposed closure; and
(2) submit to Congress a written report that includes--
(A) the information included in the notice described in
paragraph (1);
(B) the reasons for such proposed closure; and
(C) such other information as the Secretary may determine
appropriate.
SEC. 1404. RULES FOR SEIZURE AND SALE OF PERISHABLE GOODS
RESTRICTED TO ONLY PERISHABLE GOODS.
(a) In General.--Section 6336 of the Internal Revenue Code
of 1986 is amended by striking ``or become greatly reduced in
price or value by keeping, or that such property cannot be
kept without great expense''.
(b) Effective Date.--The amendment made by this section
shall apply to property seized after the date of the
enactment of this Act.
SEC. 1405. WHISTLEBLOWER REFORMS.
(a) Modifications to Disclosure Rules for Whistleblowers.--
(1) In general.--Section 6103(k) is amended by adding at
the end the following new paragraph:
``(13) Disclosure to whistleblowers.--
``(A) In general.--The Secretary may disclose, to any
individual providing information relating to any purpose
described in paragraph (1) or (2) of section 7623(a), return
information related to the investigation of any taxpayer with
respect to whom the individual has provided such information,
but only to the extent that such disclosure is necessary in
obtaining information, which is not otherwise reasonably
available, with respect to the correct determination of tax
liability for tax, or the amount to be collected with respect
to the enforcement of any other provision of this title.
``(B) Updates on whistleblower investigations.--The
Secretary shall disclose to an individual providing
information relating to any purpose described in paragraph
(1) or (2) of section 7623(a) the following:
``(i) Not later than 60 days after a case for which the
individual has provided information has been referred for an
audit or examination, a notice with respect to such referral.
``(ii) Not later than 60 days after a taxpayer with respect
to whom the individual has provided information has made a
payment of tax with respect to tax liability to which such
information relates, a notice with respect to such payment.
``(iii) Subject to such requirements and conditions as are
prescribed by the Secretary, upon a written request by such
individual--
``(I) information on the status and stage of any
investigation or action related to such information, and
``(II) in the case of a determination of the amount of any
award under section 7623(b), the reasons for such
determination.
Clause (iii) shall not apply to any information if the
Secretary determines that disclosure of such information
would seriously impair Federal tax administration.
Information described in clauses (i), (ii), and (iii) may be
disclosed to a designee of the individual providing such
information in accordance with guidance provided by the
Secretary.''.
(2) Conforming amendments.--
(A) Confidentiality of information.--Section 6103(a)(3) is
amended by striking ``subsection (k)(10)'' and inserting
``paragraph (10) or (13) of subsection (k)''.
(B) Penalty for unauthorized disclosure.--Section
7213(a)(2) is amended by striking ``(k)(10)'' and inserting
``(k)(10) or (13)''.
(C) Coordination with authority to disclose for
investigative purposes.--Section 6103(k)(6) is amended by
adding at the end the following new sentence: ``This
paragraph shall not apply to any disclosure to an individual
providing information relating to any purpose described in
paragraph (1) or (2) of section 7623(a) which is made under
paragraph (13)(A).''.
(b) Protection Against Retaliation.--Section 7623 is
amended by adding at the end the following new subsection:
``(d) Civil Action To Protect Against Retaliation Cases.--
``(1) Anti-retaliation whistleblower protection for
employees.--No employer, or any officer, employee,
contractor, subcontractor, or agent of such employer, may
discharge, demote, suspend, threaten, harass, or in any other
manner discriminate against an employee in the terms and
conditions of employment (including through an act in the
ordinary course of such employee's duties) in reprisal for
any lawful act done by the employee--
``(A) to provide information, cause information to be
provided, or otherwise assist in an investigation regarding
underpayment of tax or any conduct which the employee
reasonably believes constitutes a violation of the internal
revenue laws or any provision of Federal law relating to tax
fraud, when the information or assistance is provided to the
Internal Revenue Service, the Secretary of Treasury, the
Treasury Inspector General for Tax Administration, the
Comptroller General of the United States, the Department of
Justice, the United States Congress, a person with
supervisory authority over the employee, or any other person
working for the employer who has the authority to
investigate, discover, or terminate misconduct, or
``(B) to testify, participate in, or otherwise assist in
any administrative or judicial action taken by the Internal
Revenue Service relating to an alleged underpayment of tax or
any violation of the internal revenue laws or any provision
of Federal law relating to tax fraud.
``(2) Enforcement action.--
``(A) In general.--A person who alleges discharge or other
reprisal by any person in violation of paragraph (1) may seek
relief under paragraph (3) by--
``(i) filing a complaint with the Secretary of Labor, or
``(ii) if the Secretary of Labor has not issued a final
decision within 180 days of the filing of the complaint and
there is no showing that such delay is due to the bad faith
of
[[Page H10408]]
the claimant, bringing an action at law or equity for de novo
review in the appropriate district court of the United
States, which shall have jurisdiction over such an action
without regard to the amount in controversy.
``(B) Procedure.--
``(i) In general.--An action under subparagraph (A)(i)
shall be governed under the rules and procedures set forth in
section 42121(b) of title 49, United States Code.
``(ii) Exception.--Notification made under section
42121(b)(1) of title 49, United States Code, shall be made to
the person named in the complaint and to the employer.
``(iii) Burdens of proof.--An action brought under
subparagraph (A)(ii) shall be governed by the legal burdens
of proof set forth in section 42121(b) of title 49, United
States Code, except that in applying such section--
``(I) `behavior described in paragraph (1)' shall be
substituted for `behavior described in paragraphs (1) through
(4) of subsection (a)' each place it appears in paragraph
(2)(B) thereof, and
``(II) `a violation of paragraph (1)' shall be substituted
for `a violation of subsection (a)' each place it appears.
``(iv) Statute of limitations.--A complaint under
subparagraph (A)(i) shall be filed not later than 180 days
after the date on which the violation occurs.
``(v) Jury trial.--A party to an action brought under
subparagraph (A)(ii) shall be entitled to trial by jury.
``(3) Remedies.--
``(A) In general.--An employee prevailing in any action
under paragraph (2)(A) shall be entitled to all relief
necessary to make the employee whole.
``(B) Compensatory damages.--Relief for any action under
subparagraph (A) shall include--
``(i) reinstatement with the same seniority status that the
employee would have had, but for the reprisal,
``(ii) the sum of 200 percent of the amount of back pay and
100 percent of all lost benefits, with interest, and
``(iii) compensation for any special damages sustained as a
result of the reprisal, including litigation costs, expert
witness fees, and reasonable attorney fees.
``(4) Rights retained by employee.--Nothing in this section
shall be deemed to diminish the rights, privileges, or
remedies of any employee under any Federal or State law, or
under any collective bargaining agreement.
``(5) Nonenforceability of certain provisions waiving
rights and remedies or requiring arbitration of disputes.--
``(A) Waiver of rights and remedies.--The rights and
remedies provided for in this subsection may not be waived by
any agreement, policy form, or condition of employment,
including by a predispute arbitration agreement.
``(B) Predispute arbitration agreements.--No predispute
arbitration agreement shall be valid or enforceable, if the
agreement requires arbitration of a dispute arising under
this subsection.''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall apply to disclosures made after the date of the
enactment of this Act.
(2) Civil protection.--The amendment made by subsection (b)
shall take effect on the date of the enactment of this Act.
SEC. 1406. CUSTOMER SERVICE INFORMATION.
The Secretary of the Treasury (or the Secretary's delegate)
shall provide helpful information to taxpayers placed on hold
during a telephone call to any Internal Revenue Service help
line, including the following:
(1) Information about common tax scams.
(2) Information on where and how to report tax scams.
(3) Additional advice on how taxpayers can protect
themselves from identity theft and tax scams.
SEC. 1407. MISDIRECTED TAX REFUND DEPOSITS.
Section 6402 is amended by adding at the end the following
new subsection:
``(n) Misdirected Direct Deposit Refund.--Not later than
the date which is 6 months after the date of the enactment of
the Taxpayer First Act of 2018, the Secretary shall prescribe
regulations to establish procedures to allow for--
``(1) taxpayers to report instances in which a refund made
by the Secretary by electronic funds transfer was erroneously
delivered to an account at a financial institution for which
the taxpayer is not the owner;
``(2) coordination with financial institutions for the
purpose of--
``(A) identifying erroneous payments described in paragraph
(1); and
``(B) recovery of the erroneously transferred amounts; and
``(3) the refund to be delivered to the correct account of
the taxpayer.''.
TITLE II--21ST CENTURY IRS
Subtitle A--Cybersecurity and Identity Protection
SEC. 2001. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY
THEFT REFUND FRAUD.
The Secretary of the Treasury (or the Secretary's delegate)
shall work collaboratively with the public and private
sectors to protect taxpayers from identity theft refund
fraud.
SEC. 2002. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION
ADVISORY COMMITTEE REGARDING IDENTITY THEFT
REFUND FRAUD.
The Secretary of the Treasury shall ensure that the
advisory group convened by the Secretary pursuant to section
2001(b)(2) of the Internal Revenue Service Restructuring and
Reform Act of 1998 (commonly known as the Electronic Tax
Administration Advisory Committee) studies (including by
providing organized public forums) and makes recommendations
to the Secretary regarding methods to prevent identity theft
and refund fraud.
SEC. 2003. INFORMATION SHARING AND ANALYSIS CENTER.
(a) In General.--The Secretary of the Treasury (or the
Secretary's delegate) may participate in an information
sharing and analysis center to centralize, standardize, and
enhance data compilation and analysis to facilitate sharing
actionable data and information with respect to identity
theft tax refund fraud.
(b) Development of Performance Metrics.--The Secretary of
the Treasury (or the Secretary's delegate) shall develop
metrics for measuring the success of such center in detecting
and preventing identity theft tax refund fraud.
(c) Disclosure.--
(1) In general.--Section 6103(k), as amended by this Act,
is amended by adding at the end the following new paragraph:
``(14) Disclosure of return information for purposes of
cybersecurity and the prevention of identity theft tax refund
fraud.--
``(A) In general.--Under such procedures and subject to
such conditions as the Secretary may prescribe, the Secretary
may disclose specified return information to specified ISAC
participants to the extent that the Secretary determines such
disclosure is in furtherance of effective Federal tax
administration relating to the detection or prevention of
identity theft tax refund fraud, validation of taxpayer
identity, authentication of taxpayer returns, or detection or
prevention of cybersecurity threats.
``(B) Specified isac participants.--For purposes of this
paragraph--
``(i) In general.--The term `specified ISAC participant'
means--
``(I) any person designated by the Secretary as having
primary responsibility for a function performed with respect
to the information sharing and analysis center described in
section 2003(a) of the Taxpayer First Act of 2018, and
``(II) any person subject to the requirements of section
7216 and which is a participant in such information sharing
and analysis center.
``(ii) Information sharing agreement.--Such term shall not
include any person unless such person has entered into a
written agreement with the Secretary setting forth the terms
and conditions for the disclosure of information to such
person under this paragraph, including requirements regarding
the protection and safeguarding of such information by such
person.
``(C) Specified return information.--For purposes of this
paragraph, the term `specified return information' means--
``(i) in the case of a return which is in connection with a
case of potential identity theft refund fraud--
``(I) in the case of such return filed electronically, the
internet protocol address, device identification, email
domain name, speed of completion, method of authentication,
refund method, and such other return information related to
the electronic filing characteristics of such return as the
Secretary may identify for purposes of this subclause, and
``(II) in the case of such return prepared by a tax return
preparer, identifying information with respect to such tax
return preparer, including the preparer taxpayer
identification number and electronic filer identification
number of such preparer,
``(ii) in the case of a return which is in connection with
a case of a identity theft refund fraud which has been
confirmed by the Secretary (pursuant to such procedures as
the Secretary may provide), the information referred to in
subclauses (I) and (II) of clause (i), the name and taxpayer
identification number of the taxpayer as it appears on the
return, and any bank account and routing information provided
for making a refund in connection with such return, and
``(iii) in the case of any cybersecurity threat to the
Internal Revenue Service, information similar to the
information described in subclauses (I) and (II) of clause
(i) with respect to such threat.
``(D) Restriction on use of disclosed information.--
``(i) Designated third parties.--Any return information
received by a person described in subparagraph (B)(i)(I)
shall be used only for the purposes of and to the extent
necessary in--
``(I) performing the function such person is designated to
perform under such subparagraph,
``(II) facilitating disclosures authorized under
subparagraph (A) to persons described in subparagraph
(B)(i)(II), and
``(III) facilitating disclosures authorized under
subsection (d) to participants in such information sharing
and analysis center.
``(ii) Return preparers.--Any return information received
by a person described in subparagraph (B)(i)(II) shall be
treated for purposes of section 7216 as information furnished
to such person for, or in connection with, the preparation of
a return of the tax imposed under chapter 1.
``(E) Data protection and safeguards.--Return information
disclosed under this
[[Page H10409]]
paragraph shall be subject to such protections and safeguards
as the Secretary may require in regulations or other guidance
or in the written agreement referred to in subparagraph
(B)(ii). Such written agreement shall include a requirement
that any unauthorized access to information disclosed under
this paragraph, and any breach of any system in which such
information is held, be reported to the Treasury Inspector
General for Tax Administration.''.
(2) Application of civil and criminal penalties.--
(A) Section 6103(a)(3), as amended by this Act, is amended
by striking ``or (13)'' and inserting ``(13), or (14)''.
(B) Section 7213(a)(2), as amended by this Act, is amended
by striking ``or (13)'' and inserting ``(13), or (14)''.
SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY
SAFEGUARDS.
(a) In General.--Section 6103(p) is amended by adding at
the end the following new paragraph:
``(9) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no
return or return information shall be disclosed to any
contractor or other agent of a Federal, State, or local
agency unless such agency, to the satisfaction of the
Secretary--
``(A) has requirements in effect which require each such
contractor or other agent which would have access to returns
or return information to provide safeguards (within the
meaning of paragraph (4)) to protect the confidentiality of
such returns or return information,
``(B) agrees to conduct an on-site review every 3 years (or
a mid-point review in the case of contracts or agreements of
less than 3 years in duration) of each contractor or other
agent to determine compliance with such requirements,
``(C) submits the findings of the most recent review
conducted under subparagraph (B) to the Secretary as part of
the report required by paragraph (4)(E), and
``(D) certifies to the Secretary for the most recent annual
period that such contractor or other agent is in compliance
with all such requirements.
The certification required by subparagraph (D) shall include
the name and address of each contractor or other agent, a
description of the contract or agreement with such contractor
or other agent, and the duration of such contract or
agreement. The requirements of this paragraph shall not apply
to disclosures pursuant to subsection (n) for purposes of
Federal tax administration.''.
(b) Conforming Amendment.--Section 6103(p)(8)(B) is amended
by inserting ``or paragraph (9)'' after ``subparagraph (A)''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures made after December 31, 2022.
SEC. 2005. REPORT ON ELECTRONIC PAYMENTS.
Not later than 2 years after the date of the enactment of
this Act, the Secretary of the Treasury (or the Secretary's
delegate), in coordination with the Bureau of Fiscal Service
and the Internal Revenue Service, and in consultation with
private sector financial institutions, shall submit a written
report to Congress describing how the government can utilize
new payment platforms to increase the number of tax refunds
paid by electronic funds transfer. Such report shall weigh
the interests of reducing identity theft tax refund fraud,
reducing the Federal Government's costs in delivering tax
refunds, the costs and any associated fees charged to
taxpayers (including monthly and point-of-service fees) to
access their tax refunds, the impact on individuals who do
not have access to financial accounts or institutions, and
ensuring payments are made to accounts at a financial
institution that complies with section 21 of the Federal
Deposit Insurance Act, chapter 2 of title I of Public Law 91-
508, and subchapter II of chapter 53 of title 31, United
States Code (commonly referred to collectively as the ``Bank
Secrecy Act'') and the USA PATRIOT Act. Such report shall
include any legislative recommendations necessary to
accomplish these goals.
SEC. 2006. IDENTITY PROTECTION PERSONAL IDENTIFICATION
NUMBERS.
(a) In General.--Subject to subsection (b), the Secretary
of the Treasury or the Secretary's delegate (hereafter
referred to in this section as the ``Secretary'') shall
establish a program to issue, upon the request of any
individual, a number which may be used in connection with
such individual's social security number (or other
identifying information with respect to such individual as
determined by the Secretary) to assist the Secretary in
verifying such individual's identity.
(b) Requirements.--
(1) Annual expansion.--For each calendar year beginning
after the date of the enactment of this Act, the Secretary
shall provide numbers through the program described in
subsection (a) to individuals residing in such States as the
Secretary deems appropriate, provided that the total number
of States served by such program during such year is greater
than the total number of States served by such program during
the preceding year.
(2) Nationwide availability.--Not later than 5 years after
the date of the enactment of this Act, the Secretary shall
ensure that the program described in subsection (a) is made
available to any individual residing in the United States.
SEC. 2007. SINGLE POINT OF CONTACT FOR TAX-RELATED IDENTITY
THEFT VICTIMS.
(a) In General.--The Secretary of the Treasury (or the
Secretary's delegate) shall establish and implement
procedures to ensure that any taxpayer whose return has been
delayed or otherwise adversely affected due to tax-related
identity theft has a single point of contact at the Internal
Revenue Service throughout the processing of the taxpayer's
case. The single point of contact shall track the taxpayer's
case to completion and coordinate with other Internal Revenue
Service employees to resolve case issues as quickly as
possible.
(b) Single Point of Contact.--
(1) In general.--For purposes of subsection (a), the single
point of contact shall consist of a team or subset of
specially trained employees who--
(A) have the ability to work across functions to resolve
the issues involved in the taxpayer's case; and
(B) shall be accountable for handling the case until its
resolution.
(2) Team or subset.--The employees included within the team
or subset described in paragraph (1) may change as required
to meet the needs of the Internal Revenue Service, provided
that procedures have been established to--
(A) ensure continuity of records and case history; and
(B) notify the taxpayer when appropriate.
SEC. 2008. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
(a) In General.--Chapter 77 is amended by adding at the end
the following new section:
``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
``(a) In General.--If the Secretary determines that there
has been or may have been an unauthorized use of the identity
of any individual, the Secretary shall, without jeopardizing
an investigation relating to tax administration--
``(1) as soon as practicable, notify the individual of such
determination and provide--
``(A) instructions on how to file a report with law
enforcement regarding the unauthorized use of the identity of
the individual,
``(B) the identification of any forms necessary for the
individual to complete and submit to law enforcement to
permit access to personal information of the individual
during the investigation,
``(C) information regarding actions the individual may take
in order to protect the individual from harm relating to such
unauthorized use, and
``(D) an offer of identity protection measures to be
provided to the individual by the Internal Revenue Service,
such as the use of an identity protection personal
identification number, and
``(2) at the time the information described in paragraph
(1) is provided (or, if not available at such time, as soon
as practicable thereafter), issue additional notifications to
such individual (or such individual's designee) regarding--
``(A) whether an investigation has been initiated in
regards to such unauthorized use,
``(B) whether the investigation substantiated an
unauthorized use of the identity of the individual, and
``(C) whether--
``(i) any action has been taken against a person relating
to such unauthorized use, or
``(ii) any referral has been made for criminal prosecution
of such person and, to the extent such information is
available, whether such person has been criminally charged by
indictment or information.
``(b) Employment-Related Identity Theft.--
``(1) In general.--For purposes of this section, the
unauthorized use of the identity of an individual includes
the unauthorized use of the identity of the individual to
obtain employment.
``(2) Determination of employment-related identity theft.--
For purposes of this section, in making a determination as to
whether there has been or may have been an unauthorized use
of the identity of an individual to obtain employment, the
Secretary shall review any information--
``(A) obtained from a statement described in section 6051
or an information return relating to compensation for
services rendered other than as an employee, or
``(B) provided to the Internal Revenue Service by the
Social Security Administration regarding any statement
described in section 6051,
which indicates that the social security account number
provided on such statement or information return does not
correspond with the name provided on such statement or
information return or the name on the tax return reporting
the income which is included on such statement or information
return.''.
(b) Additional Measures.--
(1) Examination of both paper and electronic statements and
returns.--The Secretary of the Treasury (or the Secretary's
delegate) shall examine the statements, information returns,
and tax returns described in section 7529(b)(2) of the
Internal Revenue Code of 1986 (as added by subsection (a))
for any evidence of employment-related identity theft,
regardless of whether such statements or returns are
submitted electronically or on paper.
(2) Improvement of effective return processing program with
social security administration.--Section 232 of the Social
Security Act (42 U.S.C. 432) is amended by inserting after
the third sentence the following: ``For purposes of carrying
out the return processing program described in the
[[Page H10410]]
preceding sentence, the Commissioner of Social Security shall
request, not less than annually, such information described
in section 7529(b)(2) of the Internal Revenue Code of 1986 as
may be necessary to ensure the accuracy of the records
maintained by the Commissioner of Social Security related to
the amounts of wages paid to, and the amounts of self-
employment income derived by, individuals.''.
(3) Underreporting of income.--The Secretary (or the
Secretary's delegate) shall establish procedures to ensure
that income reported in connection with the unauthorized use
of a taxpayer's identity is not taken into account in
determining any penalty for underreporting of income by the
victim of identity theft.
(c) Clerical Amendment.--The table of sections for chapter
77 is amended by adding at the end the following new item:
``Sec. 7529. Notification of suspected identity theft.''.
(d) Effective Date.--The amendments made by this section
shall apply to determinations made after the date that is 6
months after the date of the enactment of this Act.
SEC. 2009. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.
(a) In General.--Not later than 1 year after the date of
the enactment of this Act, the Secretary (or the Secretary's
delegate), in consultation with the National Taxpayer
Advocate, shall develop and implement publicly available
guidelines for management of cases involving stolen identity
refund fraud in a manner that reduces the administrative
burden on taxpayers who are victims of such fraud.
(b) Standards and Procedures To Be Considered.--The
guidelines described in subsection (a) may include--
(1) standards for--
(A) the average length of time in which a case involving
stolen identity refund fraud should be resolved;
(B) the maximum length of time, on average, a taxpayer who
is a victim of stolen identity refund fraud and is entitled
to a tax refund which has been stolen should have to wait to
receive such refund; and
(C) the maximum number of offices and employees within the
Internal Revenue Service with whom a taxpayer who is a victim
of stolen identity refund fraud should be required to
interact in order to resolve a case;
(2) standards for opening, assigning, reassigning, or
closing a case involving stolen identity refund fraud; and
(3) procedures for implementing and accomplishing the
standards described in paragraphs (1) and (2), and measures
for evaluating such procedures and determining whether such
standards have been successfully implemented.
SEC. 2010. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE
OF INFORMATION BY PREPARERS OF RETURNS.
(a) In General.--Section 6713 is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Enhanced Penalty for Improper Use or Disclosure
Relating to Identity Theft.--
``(1) In general.--In the case of a disclosure or use
described in subsection (a) that is made in connection with a
crime relating to the misappropriation of another person's
taxpayer identity (as defined in section 6103(b)(6)), whether
or not such crime involves any tax filing, subsection (a)
shall be applied--
``(A) by substituting `$1,000' for `$250', and
``(B) by substituting `$50,000' for `$10,000'.
``(2) Separate application of total penalty limitation.--
The limitation on the total amount of the penalty under
subsection (a) shall be applied separately with respect to
disclosures or uses to which this subsection applies and to
which it does not apply.''.
(b) Criminal Penalty.--Section 7216(a) is amended by
striking ``$1,000'' and inserting ``$1,000 ($100,000 in the
case of a disclosure or use to which section 6713(b)
applies)''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures or uses on or after the date of
the enactment of this Act.
Subtitle B--Development of Information Technology
SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION
TECHNOLOGY.
(a) Duties and Responsibilities of Internal Revenue Service
Chief Information Officer.--Section 7803, as amended by
section 1001, is amended by adding at the end the following
new subsection:
``(f) Internal Revenue Service Chief Information Officer.--
``(1) In general.--There shall be in the Internal Revenue
Service an Internal Revenue Service Chief Information Officer
(hereafter referred to in this subsection as the `IRS CIO')
who shall be appointed by the Commissioner of the Internal
Revenue Service.
``(2) Centralized responsibility for internal revenue
service information technology.--The Commissioner of the
Internal Revenue Service (and the Secretary) shall act
through the IRS CIO with respect to all development,
implementation, and maintenance of information technology for
the Internal Revenue Service. Any reference in this
subsection to the IRS CIO which directs the IRS CIO to take
any action, or to assume any responsibility, shall be treated
as a reference to the Commissioner of the Internal Revenue
Service acting through the IRS CIO.
``(3) General duties and responsibilities.--The IRS CIO
shall--
``(A) be responsible for the development, implementation,
and maintenance of information technology for the Internal
Revenue Service,
``(B) ensure that the information technology of the
Internal Revenue Service is secure and integrated,
``(C) maintain operational control of all information
technology for the Internal Revenue Service,
``(D) be the principal advocate for the information
technology needs of the Internal Revenue Service, and
``(E) consult with the Chief Procurement Officer of the
Internal Revenue Service to ensure that the information
technology acquired for the Internal Revenue Service is
consistent with--
``(i) the goals and requirements specified in subparagraphs
(A) through (D), and
``(ii) the strategic plan developed under paragraph (4).
``(4) Strategic plan.--
``(A) In general.--The IRS CIO shall develop and implement
a multiyear strategic plan for the information technology
needs of the Internal Revenue Service. Such plan shall--
``(i) include performance measurements of such technology
and of the implementation of such plan,
``(ii) include a plan for an integrated enterprise
architecture of the information technology of the Internal
Revenue Service,
``(iii) include and take into account the resources needed
to accomplish such plan,
``(iv) take into account planned major acquisitions of
information technology by the Internal Revenue Service,
including Customer Account Data Engine 2 and the Enterprise
Case Management System, and
``(v) align with the needs and strategic plan of the
Internal Revenue Service.
``(B) Plan updates.--The IRS CIO shall, not less frequently
than annually, review and update the strategic plan under
subparagraph (A) (including the plan for an integrated
enterprise architecture described in subparagraph (A)(ii)) to
take into account the development of new information
technology and the needs of the Internal Revenue Service.
``(5) Scope of authority.--
``(A) Information technology.--For purposes of this
subsection, the term `information technology' has the meaning
given such term by section 11101 of title 40, United States
Code.
``(B) Internal revenue service.--Any reference in this
subsection to the Internal Revenue Service includes a
reference to all components of the Internal Revenue Service,
including--
``(i) the Office of the Taxpayer Advocate,
``(ii) the Criminal Investigation Division of the Internal
Revenue Service, and
``(iii) except as otherwise provided by the Secretary with
respect to information technology related to matters
described in subsection (b)(3)(B), the Office of the Chief
Counsel.''.
(b) Independent Verification and Validation of the Customer
Account Data Engine 2 and Enterprise Case Management
System.--
(1) In general.--The Commissioner of the Internal Revenue
Service shall enter into a contract with an independent
reviewer to verify and validate the implementation plans
(including the performance milestones and cost estimates
included in such plans) developed for the Customer Account
Data Engine 2 and the Enterprise Case Management System.
(2) Deadline for completion.--Such contract shall require
that such verification and validation be completed not later
than the date which is 1 year after the date of the enactment
of this Act.
(3) Application to phases of cade 2.--
(A) In general.--Paragraphs (1) and (2) shall not apply to
phase 1 of the Customer Account Data Engine 2 and shall apply
separately to each other phase.
(B) Deadline for completing plans.--Not later than 1 year
after the date of the enactment of this Act, the Commissioner
of the Internal Revenue Service shall complete the
development of plans for all phases of the Customer Account
Data Engine 2.
(C) Deadline for completion of verification and validation
of plans.--In the case of any phase after phase 2 of the
Customer Account Data Engine 2, paragraph (2) shall be
applied by substituting ``the date on which the plan for such
phase was completed'' for ``the date of the enactment of this
Act''.
(c) Coordination of IRS CIO and Chief Procurement Officer
of the Internal Revenue Service.--
(1) In general.--The Chief Procurement Officer of the
Internal Revenue Service shall--
(A) identify all significant IRS information technology
acquisitions and provide written notification to the Internal
Revenue Service Chief Information Officer (hereafter referred
to in this subsection as the ``IRS CIO'') of each such
acquisition in advance of such acquisition, and
(B) regularly consult with the IRS CIO regarding
acquisitions of information technology for the Internal
Revenue Service, including meeting with the IRS CIO regarding
such acquisitions upon request.
[[Page H10411]]
(2) Significant irs information technology acquisitions.--
For purposes of this subsection, the term ``significant IRS
information technology acquisitions'' means--
(A) any acquisition of information technology for the
Internal Revenue Service in excess of $1,000,000; and
(B) such other acquisitions of information technology for
the Internal Revenue Service (or categories of such
acquisitions) as the IRS CIO, in consultation with the Chief
Procurement Officer of the Internal Revenue Service, may
identify.
(3) Scope.--Terms used in this subsection which are also
used in section 7803(f) of the Internal Revenue Code of 1986
(as amended by subsection (a)) shall have the same meaning as
when used in such section.
SEC. 2102. INTERNET PLATFORM FOR FORM 1099 FILINGS.
(a) In General.--Not later than January 1, 2023, the
Secretary of the Treasury or the Secretary's delegate
(hereafter referred to in this section as the ``Secretary'')
shall make available an Internet website or other electronic
media, with a user interface and functionality similar to the
Business Services Online Suite of Services provided by the
Social Security Administration, that will provide access to
resources and guidance provided by the Internal Revenue
Service and will allow persons to--
(1) prepare and file Forms 1099;
(2) prepare Forms 1099 for distribution to recipients other
than the Internal Revenue Service; and
(3) maintain a record of completed and submitted Forms
1099.
(b) Electronic Services Treated as Supplemental;
Application of Security Standards.--The Secretary shall
ensure that the services described in subsection (a)--
(1) are a supplement to, and not a replacement for, other
services provided by the Internal Revenue Service to
taxpayers; and
(2) comply with applicable security standards and
guidelines.
SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION
TECHNOLOGY POSITIONS.
(a) In General.--Subchapter A of chapter 80 is amended by
adding at the end the following new section:
``SEC. 7812. STREAMLINED CRITICAL PAY AUTHORITY FOR
INFORMATION TECHNOLOGY POSITIONS.
``In the case of any position which is critical to the
functionality of the information technology operations of the
Internal Revenue Service--
``(1) section 9503 of title 5, United States Code, shall be
applied--
``(A) by substituting `during the period beginning on the
date of the enactment of section 7812 of the Internal Revenue
Code of 1986, and ending on September 30, 2023' for `Before
September 30, 2013 in subsection (a)',
``(B) without regard to subparagraph (B) of subsection
(a)(1), and
``(C) by substituting `the date of the enactment of the
Taxpayer First Act of 2018' for `June 1, 1998' in subsection
(a)(6),
``(2) section 9504 of such title 5 shall be applied by
substituting `During the period beginning on the date of the
enactment of section 7812 of the Internal Revenue Code of
1986, and ending on September 30, 2023' for `Before September
30, 2013' each place it appears in subsections (a) and (b),
and
``(3) section 9505 of such title shall be applied--
``(A) by substituting `During the period beginning on the
date of the enactment of section 7812 of the Internal Revenue
Code of 1986, and ending on September 30, 2023' for `Before
September 30, 2013' in subsection (a), and
``(B) by substituting `the information technology
operations' for `significant functions' in subsection (a).''.
(b) Clerical Amendment.--The table of sections for
subchapter A of chapter 80 is amended by adding at the end
the following new item:
``Sec. 7812. Streamlined critical pay authority for information
technology positions.''.
Subtitle C--Modernization of Consent-Based Income Verification System
SEC. 2201. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY
INCOME VERIFICATION.
(a) In General.--Not later than 1 year after the close of
the 2-year period described in subsection (d)(1), the
Secretary of the Treasury or the Secretary's delegate
(hereafter referred to in this section as the ``Secretary'')
shall implement a program to ensure that any qualified
disclosure--
(1) is fully automated and accomplished through the
Internet; and
(2) is accomplished in as close to real-time as is
practicable.
(b) Qualified Disclosure.--For purposes of this section,
the term ``qualified disclosure'' means a disclosure under
section 6103(c) of the Internal Revenue Code of 1986 of
returns or return information by the Secretary to a person
seeking to verify the income or creditworthiness of a
taxpayer who is a borrower in the process of a loan
application.
(c) Application of Security Standards.--The Secretary shall
ensure that the program described in subsection (a) complies
with applicable security standards and guidelines.
(d) User Fee.--
(1) In general.--During the 2-year period beginning on the
first day of the 6th calendar month beginning after the date
of the enactment of this Act, the Secretary shall assess and
collect a fee for qualified disclosures (in addition to any
other fee assessed and collected for such disclosures) at
such rates as the Secretary determines are sufficient to
cover the costs related to implementing the program described
in subsection (a), including the costs of any necessary
infrastructure or technology.
(2) Deposit of collections.--Amounts received from fees
assessed and collected under paragraph (1) shall be deposited
in, and credited to, an account solely for the purpose of
carrying out the activities described in subsection (a). Such
amounts shall be available to carry out such activities
without need of further appropriation and without fiscal year
limitation.
SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED
DISCLOSURES OF TAX RETURN INFORMATION.
(a) In General.--Section 6103(c) is amended by adding at
the end the following: ``Persons designated by the taxpayer
under this subsection to receive return information shall not
use the information for any purpose other than the express
purpose for which consent was granted and shall not disclose
return information to any other person without the express
permission of, or request by, the taxpayer.''.
(b) Application of Penalties.--Section 6103(a)(3) is
amended by inserting ``subsection (c),'' after ``return
information under''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures made after the date of the
enactment of this Act.
Subtitle D--Expanded Use of Electronic Systems
SEC. 2301. ELECTRONIC FILING OF RETURNS.
(a) In General.--Section 6011(e)(2)(A) is amended by
striking ``250'' and inserting ``the applicable number of''.
(b) Applicable Number.--Section 6011(e) is amended by
striking paragraph (5) and inserting the following new
paragraphs:
``(5) Applicable number.--
``(A) In general.--For purposes of paragraph (2)(A), the
applicable number shall be--
``(i) except as provided in subparagraph (B), in the case
of calendar years before 2020, 250,
``(ii) in the case of calendar year 2020, 100, and
``(iii) in the case of calendar years after 2020, 10.
``(B) Special rule for partnerships for 2018 and 2019.--In
the case of a partnership, for any calendar year before 2020,
the applicable number shall be--
``(i) in the case of calendar year 2018, 200, and
``(ii) in the case of calendar year 2019, 150.
``(6) Partnerships required to file on magnetic media.--
Notwithstanding paragraph (2)(A), the Secretary shall require
partnerships having more than 100 partners to file returns on
magnetic media.''.
(c) Returns Filed by a Tax Return Preparer.--Section
6011(e)(3) is amended by adding at the end the following new
subparagraph:
``(D) Exception for certain preparers located in areas
without internet access.--The Secretary may waive the
requirement of subparagraph (A) if the Secretary determines,
on the basis of an application by the tax return preparer,
that the preparer cannot meet such requirement by reason of
being located in a geographic area which does not have access
to internet service (other than dial-up or satellite
service).''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC
SIGNATURES FOR DISCLOSURE AUTHORIZATIONS TO,
AND OTHER AUTHORIZATIONS OF, PRACTITIONERS.
Section 6061(b)(3) is amended to read as follows:
``(3) Published guidance.--
``(A) In general.--The Secretary shall publish guidance as
appropriate to define and implement any waiver of the
signature requirements or any method adopted under paragraph
(1).
``(B) Electronic signatures for disclosure authorizations
to, and other authorizations of, practitioners.--Not later
than 6 months after the date of the enactment of this
subparagraph, the Secretary shall publish guidance to
establish uniform standards and procedures for the acceptance
of taxpayers' signatures appearing in electronic form with
respect to any request for disclosure of a taxpayer's return
or return information under section 6103(c) to a practitioner
or any power of attorney granted by a taxpayer to a
practitioner.
``(C) Practitioner.--For purposes of subparagraph (B), the
term `practitioner' means any individual in good standing who
is regulated under section 330 of title 31, United States
Code.''.
SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.
Section 6311(d)(2) is amended by adding at the end the
following: ``The preceding sentence shall not apply to the
extent that the Secretary ensures that any such fee or other
consideration is fully recouped by the Secretary in the form
of fees paid to the Secretary by persons paying taxes imposed
under subtitle A with credit, debit, or charge cards pursuant
to such contract. Notwithstanding the preceding sentence, the
Secretary shall seek to minimize the amount of any fee or
other consideration that the Secretary pays under any such
contract.''.
[[Page H10412]]
SEC. 2304. REQUIREMENT THAT ELECTRONICALLY PREPARED PAPER
RETURNS INCLUDE SCANNABLE CODE.
(a) In General.--Subsection (e) of section 6011, as amended
by this Act, is amended by adding at the end the following
new paragraph:
``(7) Special rule for returns prepared electronically and
submitted on paper.--The Secretary shall require that any
return of tax which is prepared electronically, but is
printed and filed on paper, bear a code which can, when
scanned, convert such return to electronic format.''.
(b) Conforming Amendment.--Paragraph (1) of section 6011(e)
is amended by striking ``paragraph (3)'' and inserting
``paragraphs (3) and (7)''.
(c) Effective Date.--The amendments made by this section
shall apply to returns of tax the due date for which
(determined without regard to extensions) is after December
31, 2020.
SEC. 2305. AUTHENTICATION OF USERS OF ELECTRONIC SERVICES
ACCOUNTS.
Beginning 180 days after the date of the enactment of this
Act, the Secretary of the Treasury (or the Secretary's
delegate) shall verify the identity of any individual opening
an e-Services account with the Internal Revenue Service
before such individual is able to use the e-Services tools.
Subtitle E--Other Provisions
SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN TAX
COMPLIANCE PROCEDURES AND REPORTS.
Section 2004 of the Internal Revenue Service Restructuring
and Reform Act of 1998 (26 U.S.C. 6012 note) is repealed.
SEC. 2402. COMPREHENSIVE TRAINING STRATEGY.
Not later than 1 year after the date of the enactment of
this Act, the Commissioner of Internal Revenue shall submit
to Congress a written report providing a comprehensive
training strategy for employees of the Internal Revenue
Service, including--
(1) a plan to streamline current training processes,
including an assessment of the utility of further
consolidating internal training programs, technology, and
funding;
(2) a plan to develop annual training regarding taxpayer
rights, including the role of the Office of the Taxpayer
Advocate, for employees that interface with taxpayers and
their managers;
(3) a plan to improve technology-based training;
(4) proposals to--
(A) focus employee training on early, fair, and efficient
resolution of taxpayer disputes for employees that interface
with taxpayers and their managers; and
(B) ensure consistency of skill development and employee
evaluation throughout the Internal Revenue Service; and
(5) a thorough assessment of the funding necessary to
implement such strategy.
TITLE III--MISCELLANEOUS PROVISIONS
Subtitle A--Reform of Laws Governing Internal Revenue Service Employees
SEC. 3001. ELECTRONIC RECORD RETENTION.
(a) Retention of Records.--
(1) In general.--Email records of the Internal Revenue
Service shall be retained in an appropriate electronic system
that supports records management and litigation requirements,
including the capability to identify, retrieve, and retain
the records, in accordance with the requirements described in
paragraph (2).
(2) Requirements.--
(A) Prior to certification.--The Commissioner of Internal
Revenue and the Chief Counsel for the Internal Revenue
Service shall retain all email records generated on or after
the date of the enactment of this Act and before the date on
which the Treasury Inspector General for Tax Administration
makes the certification under subsection (c)(1).
(B) Principal officers and specified employees.--Not later
than December 31, 2019, the Commissioner of Internal Revenue
and the Chief Counsel for the Internal Revenue Service shall
maintain email records of all principal officers and
specified employees of the Internal Revenue Service for a
period of not less than 15 years beginning on the date such
record was generated.
(b) Transmission of Records to the National Archives.--Not
later than 15 years after the date on which an email record
of a principal officer or specified employee of the Internal
Revenue Service is generated, the Commissioner of Internal
Revenue and the Chief Counsel for the Internal Revenue
Service shall transfer such email record to the Archivist of
the United States.
(c) Compliance.--
(1) Certification.--On the date that the Treasury Inspector
General for Tax Administration determines that the Internal
Revenue Service has a program in place that complies with the
requirements of subsections (a)(2)(B) and (b), the Treasury
Inspector General for Tax Administration shall certify to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate that the Internal
Revenue Service is in compliance with such requirements.
(2) Reports.--
(A) Interim report.--Not later than December 31, 2019, the
Treasury Inspector General for Tax Administration shall
submit a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate on the steps being taken by the Commissioner of
Internal Revenue and the Chief Counsel for the Internal
Revenue Service to comply with the requirements of
subsections (a)(2)(B) and (b).
(B) Final report.--Not later than April 1, 2020, the
Treasury Inspector General for Tax Administration shall
submit a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate describing whether the Internal Revenue Service is in
compliance with the requirements of subsections (a)(2)(B) and
(b).
(d) Definitions.--For purposes of this section--
(1) Principal officer.--The term ``principal officer''
means, with respect to the Internal Revenue Service--
(A) any employee whose position is listed under the
Internal Revenue Service in the most recent version of the
United States Government Manual published by the Office of
the Federal Register;
(B) any employee who is a senior staff member reporting
directly to the Commissioner of Internal Revenue or the Chief
Counsel for the Internal Revenue Service; and
(C) any associate counsel, deputy counsel, or division head
in the Office of the Chief Counsel for the Internal Revenue
Service.
(2) Specified employee.--The term ``specified employee''
means, with respect to the Internal Revenue Service, any
employee who--
(A) holds a Senior Executive Service position (as defined
in section 3132 of title 5, United States Code) in the
Internal Revenue Service or the Office of Chief Counsel for
the Internal Revenue Service; and
(B) is not a principal officer of the Internal Revenue
Service.
SEC. 3002. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE
INTERNAL REVENUE SERVICE WHO WAS INVOLUNTARILY
SEPARATED FROM SERVICE FOR MISCONDUCT.
(a) In General.--Section 7804 is amended by adding at the
end the following new subsection:
``(d) Prohibition on Rehiring Employees Involuntarily
Separated.--The Commissioner may not hire any individual
previously employed by the Commissioner who was removed for
misconduct under this subchapter or chapter 43 or chapter 75
of title 5, United States Code, or whose employment was
terminated under section 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998 (26 U.S.C. 7804
note).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to the hiring of employees after the
date of the enactment of this Act.
SEC. 3003. NOTIFICATION OF UNAUTHORIZED INSPECTION OR
DISCLOSURE OF RETURNS AND RETURN INFORMATION.
(a) In General.--Subsection (e) of section 7431 is amended
by adding at the end the following new sentences: ``The
Secretary shall also notify such taxpayer if the Internal
Revenue Service or a Federal or State agency (upon notice to
the Secretary by such Federal or State agency) proposes an
administrative determination as to disciplinary or adverse
action against an employee arising from the employee's
unauthorized inspection or disclosure of the taxpayer's
return or return information. The notice described in this
subsection shall include the date of the unauthorized
inspection or disclosure and the rights of the taxpayer under
such administrative determination.''.
(b) Effective Date.--The amendment made by this section
shall apply to determinations proposed after the date which
is 180 days after the date of the enactment of this Act.
Subtitle B--Provisions Relating to Exempt Organizations
SEC. 3101. MANDATORY E-FILING BY EXEMPT ORGANIZATIONS.
(a) In General.--Section 6033 is amended by redesignating
subsection (n) as subsection (o) and by inserting after
subsection (m) the following new subsection:
``(n) Mandatory Electronic Filing.--Any organization
required to file a return under this section shall file such
return in electronic form.''.
(b) Conforming Amendment.--Paragraph (7) of section 527(j)
is amended by striking ``if the organization has'' and all
that follows through ``such calendar year''.
(c) Inspection of Electronically Filed Annual Returns.--
Subsection (b) of section 6104 is amended by adding at the
end the following: ``Any annual return required to be filed
electronically under section 6033(n) shall be made available
by the Secretary to the public as soon as practicable in a
machine readable format.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after the date of the enactment of this Act.
(2) Transitional relief.--
(A) Small organizations.--
(i) In general.--In the case of any small organizations, or
any other organizations for which the Secretary of the
Treasury or the Secretary's delegate (hereafter referred to
in this paragraph as the ``Secretary'') determines the
application of the amendments made by this section would
cause undue burden without a delay, the Secretary may delay
the application of such amendments, but such delay shall not
apply to any taxable
[[Page H10413]]
year beginning on or after the date 2 years after of the
enactment of this Act.
(ii) Small organization.--For purposes of clause (i), the
term ``small organization'' means any organization--
(I) the gross receipts of which for the taxable year are
less than $200,000; and
(II) the aggregate gross assets of which at the end of the
taxable year are less than $500,000.
(B) Organizations filing form 990-T.--In the case of any
organization described in section 511(a)(2) of the Internal
Revenue Code of 1986 which is subject to the tax imposed by
section 511(a)(1) of such Code on its unrelated business
taxable income, or any organization required to file a return
under section 6033 of such Code and include information under
subsection (e) thereof, the Secretary may delay the
application of the amendments made by this section, but such
delay shall not apply to any taxable year beginning on or
after the date 2 years after of the enactment of this Act.
SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX EXEMPT
STATUS FOR FAILURE TO FILE RETURN.
(a) In General.--Section 6033(j)(1) is amended by striking
``If an organization'' and inserting the following:
``(A) Notice.--
``(i) In general.--After an organization described in
subsection (a)(1) or (i) fails to file the annual return or
notice required under either subsection for 2 consecutive
years, the Secretary shall notify the organization--
``(I) that the Internal Revenue Service has no record of
such a return or notice from such organization for 2
consecutive years, and
``(II) about the revocation that will occur under
subparagraph (B) if the organization fails to file such a
return or notice by the due date for the next such return or
notice required to be filed.
The notification under the preceding sentence shall include
information about how to comply with the filing requirements
under subsection (a)(1) and (i).
``(B) Revocation.--If an organization''.
(b) Effective Date.--The amendment made by this section
shall apply to failures to file returns or notices for 2
consecutive years if the return or notice for the second year
is required to be filed after December 31, 2018.
Subtitle C--Tax Court
SEC. 3301. DISQUALIFICATION OF JUDGE OR MAGISTRATE JUDGE OF
THE TAX COURT.
(a) In General.--Part II of subchapter C of chapter 76 is
amended by adding at the end the following new section:
``SEC. 7467. DISQUALIFICATION OF JUDGE OR MAGISTRATE JUDGE OF
THE TAX COURT.
``Section 455 of title 28, United States Code, shall apply
to judges and magistrate judges of the Tax Court and to
proceedings of the Tax Court.''.
(b) Clerical Amendment.--The table of sections for such
part is amended by adding at the end the following new item:
``Sec. 7467. Disqualification of judge or magistrate judge of the Tax
Court.''.
SEC. 3302. OPINIONS AND JUDGMENTS.
(a) In General.--Section 7459 is amended by striking all
that precedes subsection (c) and inserting the following:
``SEC. 7459. OPINIONS AND JUDGMENTS.
``(a) Requirement.--An opinion upon any proceeding
instituted before the Tax Court and a judgment thereon shall
be made as quickly as practicable. The judgment shall be made
by a judge in accordance with the opinion of the Tax Court,
and such judgment so made shall, when entered, be the
judgment of the Tax Court.
``(b) Inclusion of Findings of Fact in Opinion.--It shall
be the duty of the Tax Court and of each division to include
in its opinion or memorandum opinion upon any proceeding, its
findings of fact. The Tax Court shall issue in writing all of
its findings of fact, opinions, and memorandum opinions.
Subject to such conditions as the Tax Court may by rule
provide, the requirements of this subsection and of section
7460 are met if findings of fact or opinion are stated orally
and recorded in the transcript of the proceedings.''.
(b) References.--Section 7459 is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) References.--Any reference in this title to a
decision or report of the Tax Court shall be treated as a
reference to a judgment or opinion of the Tax Court,
respectively.''.
(c) Conforming Amendment.--The item relating to section
7459 in the table of sections for part II of subchapter C of
chapter 76 is amended to read as follows:
``Sec. 7459. Opinions and judgments.''.
(d) Continuing Effect of Legal Documents.--All orders,
decisions, reports, rules, permits, agreements, grants,
contracts, certificates, licenses, registrations, privileges,
and other administrative actions, in connection with the Tax
Court, which are in effect at the time this section takes
effect, or were final before the effective date of this
section and are to become effective on or after the effective
date of this section, shall continue in effect according to
their terms until modified, terminated, superseded, set
aside, or revoked in accordance with law by the Tax Court.
SEC. 3303. TITLE OF SPECIAL TRIAL JUDGE CHANGED TO MAGISTRATE
JUDGE OF THE TAX COURT.
(a) In General.--Section 7443A is amended--
(1) by striking ``special trial judges'' in subsections (a)
and (e) and inserting ``magistrate judges of the Tax Court'';
(2) by striking ``special trial judges of the court'' in
subsection (b) and inserting ``magistrate judges of the Tax
Court''; and
(3) by striking ``special trial judge'' in subsections (c)
and (d) and inserting ``magistrate judge of the Tax Court''.
(b) Conforming Amendments.--
(1) The heading of section 7443A is amended by striking
``special trial judges'' and inserting ``magistrate judges of
the tax court''.
(2) The heading of section 7443A(b) is amended by striking
``Special Trial Judges'' and inserting ``Magistrate Judges of
the Tax Court''.
(3) The item relating to section 7443A in the table of
sections for part I of subchapter C of chapter 76 is amended
to read as follows:
``Sec. 7443A. Magistrate judges of the Tax Court.''.
(4) The heading of section 7448 is amended by striking
``special trial judges'' and inserting ``magistrate judges of
the tax court''.
(5) Section 7448 is amended--
(A) by striking ``special trial judge's'' each place it
appears in subsections (a)(6), (c)(1), (d), and (m)(1) and
inserting ``magistrate judge of the Tax Court's''; and
(B) by striking ``special trial judge'' each place it
appears other than in subsection (n) and inserting
``magistrate judge of the Tax Court''.
(6) Section 7448(n) is amended--
(A) by striking ``special trial judge which are allowable''
and inserting ``magistrate judge of the Tax Court which are
allowable''; and
(B) by striking ``special trial judge of the Tax Court''
both places it appears and inserting ``magistrate judge of
the Tax Court''.
(7) The heading of section 7448(b)(2) is amended by
striking ``Special trial judges'' and inserting ``Magistrate
judges of the tax court''.
(8) The item relating to section 7448 in the table of
sections for part I of subchapter C of chapter 76 is amended
to read as follows:
``Sec. 7448. Annuities to surviving spouses and dependent children of
judges and magistrate judges of the Tax Court.''.
(9) Section 7456(a) is amended--
(A) by striking ``special trial judge'' each place it
appears and inserting ``magistrate judge''; and
(B) by striking ``(or by the clerk'' and inserting ``of the
Tax Court (or by the clerk''.
(10) Section 7466(a) is amended by striking ``special trial
judge'' and inserting ``magistrate judge''.
(11) Section 7470A is amended by striking ``special trial
judges'' both places it appears in subsections (a) and (b)
and inserting ``magistrate judges''.
(12) Section 7471(a)(2)(A) is amended by striking ``special
trial judges'' and inserting ``magistrate judges''.
(13) Section 7471(c) is amended--
(A) by striking ``Special Trial Judges'' in the heading and
inserting ``Magistrate Judges of the Tax Court''; and
(B) by striking ``special trial judges'' and inserting
``magistrate judges''.
SEC. 3304. REPEAL OF DEADWOOD RELATED TO BOARD OF TAX
APPEALS.
(a) Section 7459, as amended by this Act, is amended by
striking subsection (f) and by redesignating subsections (g)
and (h) as subsections (f) and (g), respectively.
(b) Section 7447(a)(3) is amended to read as follows:
``(3) In any determination of length of service as judge or
as a judge of the Tax Court of the United States there shall
be included all periods (whether or not consecutive) during
which an individual served as judge.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
South Carolina (Mr. Rice) and the gentleman from Georgia (Mr. Lewis)
each will control 20 minutes.
The Chair recognizes the gentleman from South Carolina.
General Leave
Mr. RICE of South Carolina. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days in which to revise and extend
their remarks and include extraneous material on H.R. 7227, currently
under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from South Carolina?
There was no objection.
Mr. RICE of South Carolina. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, this is a bipartisan, commonsense measure that I am
proud to have worked on alongside Mr. Lewis and many members of the
Ways and Means Committee for the past 2 years.
Mr. Speaker, I urge all Members to support this legislation, and I
yield back the balance of my time.
Mr. LEWIS of Georgia. Mr. Speaker, I yield myself such time as I may
consume.
[[Page H10414]]
Mr. Speaker, I rise in strong support of H.R. 7227. I am proud of the
product and of the process.
I thank the gentleman from South Carolina for all of his help and all
of his great work.
Let me also thank Chairman Brady for his tireless work and commitment
to this bill. From start to finish, he worked with us to advance good,
responsible policy. This afternoon, I again thank him, the gentlewoman
from Kansas (Ms. Jenkins), and the gentleman from Florida (Mr.
Buchanan) for serving as partners in leading this effort.
I also thank our staff again for their good and great work. They
refused to give up; they refused to give in. They worked together on
behalf of the American taxpayers and of the American people, and they
did a great and superb job.
For over a year, the Ways and Means Oversight Subcommittee hosted
hearings and roundtables. We listened and asked questions. We asked
Democratic and Republican Members to share their concerns and ideas. We
reached out to taxpayers and advocates. We negotiated. We took our
time, and, Mr. Speaker, I believe that we did it and we did it right.
Together, we developed a bill that improves the independent appeals
process and taxpayer services. We worked together to ensure that
taxpayers--especially those who are low-income, disabled, and senior
citizens--receive fair, quality, and timely help and support.
For these reasons, I am especially proud of our work to prevent
private debt collectors from excessively targeting low-income
taxpayers. As a result, our bill will ease the burden on those who are
already struggling to keep a roof over their head and food on the
table.
From the beginning, we committed to bipartisanship, and we refused to
abandon our course.
I believe that this experience took our subcommittee and our
institution back to our roots. Mr. Speaker, at every crossroad, we
remembered the lessons from the past and chose to put the taxpayer
first.
The process was transparent and inclusive, and the product is strong
and timely.
For these reasons, Mr. Speaker, I urge all of my colleagues to
support the bill, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from South Carolina (Mr. Rice) that the House suspend the
rules and pass the bill, H.R. 7227, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. MASSIE. 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, further
proceedings on this motion will be postponed.
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