[House Report 114-70]
[From the U.S. Government Publishing Office]


114th Congress    }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                      {       114-70

======================================================================



 
                  TAXPAYER BILL OF RIGHTS ACT OF 2015

                                _______
                                

 April 13, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 1058]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1058) to amend the Internal Revenue Code of 1986 to 
clarify that a duty of the Commissioner of Internal Revenue is 
to ensure that Internal Revenue Service employees are familiar 
with and act in accord with certain taxpayer rights, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................2
        A. Purpose and Summary...................................     2
        B. Background and Need for Legislation...................     3
        C. Legislative History...................................     3
II. EXPLANATION OF THE BILL...........................................4
        A. Duty to Ensure that IRS Employees are Familiar With 
            and Act in Accordance With Certain Taxpayer Rights 
            (sec. 2 of bill and sec. 7803 of the Code)...........     4
III.VOTES OF THE COMMITTEE............................................5

IV. BUDGET EFFECTS OF THE BILL........................................5
        A. Committee Estimate of Budgetary Effects...............     5
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures Budget Authority........................     5
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     6
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........6
        A. Committee Oversight Findings and Recommendations......     6
        B. Statement of General Performance Goals and Objectives.     7
        C. Information Relating to Unfunded Mandates.............     7
        D. Applicability of House Rule XXI 5(b)..................     7
        E. Tax Complexity Analysis...............................     7
        F. Congressional Earmarks, Limited Tax Benefits, and 
            Limited Tariff Benefits..............................     7
        G. Duplication of Federal Programs.......................     8
        H. Disclosure of Directed Rule Makings...................     8
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............8
        A. Text of Existing Law Amended or Repealed by the Bill, 
            as Reported..........................................     8
        B. Changes in Existing Law Proposed by the Bill, as 
            Reported.............................................    15

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Taxpayer Bill of Rights Act of 2015''.

SEC. 2. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FAMILIAR WITH AND ACT IN 
                    ACCORD WITH CERTAIN TAXPAYER RIGHTS.

  (a) In General.--Section 7803(a) of the Internal Revenue Code of 1986 
is amended by redesignating paragraph (3) as paragraph (4) and by 
inserting after paragraph (2) the following new paragraph:
          ``(3) Execution of duties in accord with taxpayer rights.--In 
        discharging his duties, the Commissioner shall ensure that 
        employees of the Internal Revenue Service are familiar with and 
        act in accord with taxpayer rights as afforded by other 
        provisions of this title, including--
                  ``(A) the right to be informed,
                  ``(B) the right to quality service,
                  ``(C) the right to pay no more than the correct 
                amount of tax,
                  ``(D) the right to challenge the position of the 
                Internal Revenue Service and be heard,
                  ``(E) the right to appeal a decision of the Internal 
                Revenue Service in an independent forum,
                  ``(F) the right to finality,
                  ``(G) the right to privacy,
                  ``(H) the right to confidentiality,
                  ``(I) the right to retain representation, and
                  ``(J) the right to a fair and just tax system.''.
  (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 1058, reported by the Committee on Ways and Means, 
requires that Internal Revenue Service (``IRS'') employees be 
familiar with and act in accordance with the Taxpayer Bill of 
Rights, which include:
     the right to be informed,
     the right to quality service,
     the right to pay no more than the correct amount 
of tax,
     the right to challenge the position of the IRS and 
be heard
     the right to appeal a decision of the IRS in an 
independent forum,
     the right to finality,
     the right to privacy,
     the right to confidentiality,
     the right to retain representation, and
     the right to a fair and just tax system.
    The bill makes it the affirmative duty of the IRS 
Commissioner to promote and protect these rights.

                 B. Background and Need for Legislation

    Through its oversight, the Committee has found examples in 
which IRS employees have failed to respect taxpayer rights, 
including mishandling of sensitive taxpayer information, 
seizing taxpayer assets without due process, and targeting 
groups for adverse treatment based on name and policy position, 
among others. Overall, the IRS has demonstrated a pattern of 
failing to act consistently in the best interest of the 
taxpayer. H.R. 1058 would ensure that the IRS acts in 
accordance with taxpayer rights.

                         C. Legislative History


Background

    H.R. 1058 was introduced on February 25, 2015, and was 
referred to the Committee on Ways and Means. Nearly identical 
legislation, H.R. 2768, passed the House of Representatives in 
the 113th Congress under suspension of the rules by voice vote 
on July 31, 2013.

Committee action

    The Committee on Ways and Means marked up H.R. 1058, the 
``Taxpayer Bill of Rights Act of 2015,'' on March 25, 2015, and 
ordered the bill, as amended, favorably reported (with a quorum 
being present).

Committee hearings

    The need for permanent rules at the IRS regarding enhanced 
protection for taxpayers was discussed at Committee hearings in 
the 112th, 113th, and 114th Congresses:
     Oversight Subcommittee Hearing on the IRS 
Operations and the 2012 Tax Return Filing Season (March 22, 
2012).
     Full Committee Hearing on IRS Targeting 
Conservative Groups (May 17, 2013).
     Full Committee Hearing Organizations Targeted by 
Internal Revenue Service for Their Personal Beliefs (June 4, 
2013).
     Full Committee Hearing on the Status of Internal 
Revenue Service's Review of Taxpayer Targeting Practices (June 
27, 2013).
     Oversight Subcommittee Hearing on the IRS Exempt 
Organizations Division Post-U.S. Treasury Inspector General for 
Tax Administration Audit Report (September 18, 2013).
     Oversight Subcommittee Hearing with IRS 
Commissioner Koskinen (February 5, 2014).
     Oversight Subcommittee Hearing on the IRS 
Operations and the 2014 Tax Return Filing Season (May 7, 2014).
     Full Committee Hearing with IRS Commissioner 
Koskinen (June 20, 2014).
     Oversight Subcommittee Hearing on Protecting Small 
Businesses from IRS Abuse (February 11, 2015).

                      II. EXPLANATION OF THE BILL


   A. Duty To Ensure that IRS Employees Are Familiar With and Act in 
 Accordance With Certain Taxpayer Rights (sec. 2 of bill and sec. 7803 
                              of the Code)


                              PRESENT LAW

    The Code\1\ provides that the Commissioner has such duties 
and powers as prescribed by the Secretary. Unless otherwise 
specified by the Secretary, such duties and powers include the 
power to administer, manage, conduct, direct, and supervise the 
execution and application of the internal revenue laws or 
related statutes and tax conventions to which the United States 
is a party, and to recommend to the President a candidate for 
Chief Counsel (and recommend the removal of the Chief Counsel). 
If the Secretary determines not to delegate such specified 
duties to the Commissioner, such determination will not take 
effect until 30 days after the Secretary notifies the House 
Committees on Ways and Means, Oversight and Government Reform, 
and Appropriations, and the Senate Committees on Finance, 
Homeland Security and Governmental Affairs, and Appropriations. 
The Commissioner is to consult with the Oversight Board on all 
matters within the Board's authority (other than the 
recommendation of candidates for Commissioner and the 
recommendation to remove the Commissioner).
---------------------------------------------------------------------------
    \1\Sec. 7803(a).
---------------------------------------------------------------------------
    Unless otherwise specified by the Secretary, the 
Commissioner is authorized to employ such persons as the 
Commissioner deems proper for the administration and 
enforcement of the internal revenue laws and is required to 
issue all necessary directions, instructions, orders, and rules 
applicable to such persons. Unless otherwise provided by the 
Secretary, the Commissioner will determine and designate the 
posts of duty.

                           REASONS FOR CHANGE

    The Committee has found examples of IRS employees showing 
disregard for the rights and protections afforded taxpayers 
under the Code, and that such disregard may be a result of lack 
of emphasis on the importance of such rights. Any public 
perception that such disregard is common and not taken 
seriously by upper management at the IRS undermines trust in 
the integrity of the IRS. The Committee believes that the 
public trust that the top management of the IRS is committed to 
ensuring such rights is imperative to good tax administration. 
Although the IRS has recently published a Taxpayer Bill of 
Rights, such publication does not itself carry force of law or 
impose any obligations on the management or employees of the 
IRS. Accordingly, codifying the requirement that the 
Commissioner assume responsibility to implement the bill of 
rights is warranted to ensure public trust.

                        EXPLANATION OF PROVISION

    The provision adds to the Commissioner's duties the 
requirement to ensure that employees of the IRS are familiar 
with and act in accordance with taxpayer rights as afforded by 
other provisions of the Internal Revenue Code. These rights are 
enumerated as follows: (A) the right to be informed, (B) the 
right to quality service, (C) the right to pay no more than the 
correct amount of tax, (D) the right to challenge the position 
of the Internal Revenue Service and be heard, (E) the right to 
appeal a decision of the Internal Revenue Service in an 
independent forum, (F) the right to finality, (G) the right to 
privacy, (H) the right to confidentiality, (I) the right to 
retain representation, and (J) the right to a fair and just tax 
system.

                             EFFECTIVE DATE

    The provision is effective on the date of enactment.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 1058, the ``Taxpayer Bill of Rights Act 
of 2015,'' on March 25, 2015.
    The Chairman's amendment in the nature of a substitute was 
adopted by a voice vote (with a quorum being present).
    The bill, H.R. 1058, as amended, was ordered favorably 
reported to the House of Representatives by a voice vote (with 
a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 1058, as 
reported.
    The bill, as reported, is estimated to have no effect on 
Federal budget receipts for fiscal years 2015-2025.
    Pursuant to clause 8 of rule XIII of the Rules of the House 
of Representatives, the following statement is made by the 
Joint Committee on Taxation with respect to the provisions of 
the bill amending the Internal Revenue Code of 1986: the gross 
budgetary effect (before incorporating macroeconomic effects) 
in any fiscal year is less than 0.25 percent of the current 
projected gross domestic product of the United States for that 
fiscal year; therefore, the bill is not ``major legislation'' 
for purposes of requiring that the estimate include the 
budgetary effects of changes in economic output, employment, 
capital stock and other macroeconomic variables.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee further states that there are no new or increased tax 
expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 6, 2015.
Hon. Paul Ryan,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1058, the Taxpayer 
Bill of Rights Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 1058--Taxpayer Bill of Rights Act of 2015

    H.R. 1058 would amend federal law to require the 
Commissioner of the Internal Revenue Service (IRS) to ensure 
that IRS employees are familiar with and act in accordance with 
certain taxpayer rights. CBO estimates that implementing H.R. 
1058 would not have a significant cost over the next five 
years. CBO and the staff of the Joint Committee on Taxation 
(JCT) estimate that enacting the bill would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    According to the IRS, H.R. 1058 would codify the agency's 
current policies and practices. As recommended by the National 
Taxpayer Advocate (an independent organization within the IRS 
that advocates for taxpayers), the IRS has adopted several 
guidelines known as the Taxpayer Bill of Rights, which are 
identical to the provisions of H.R. 1058.
    CBO and JCT have determined that H.R. 1058 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would not affect the budgets 
of state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Theresa Gullo, Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee advises that it was as a result of the 
Committee's review of the provisions of H.R. 1058 that the 
Committee concluded that it is appropriate to report the bill, 
as amended, favorably to the House of Representatives with the 
recommendation that the bill do pass.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4). The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                D. Applicability of House Rule XXI 5(b)

    Rule XXI 5(b) of the Rules of the House of Representatives 
provides, in part, that ``A bill or joint resolution, 
amendment, or conference report carrying a Federal income tax 
rate increase may not be considered as passed or agreed to 
unless so determined by a vote of not less than three-fifths of 
the Members voting, a quorum being present.'' The Committee has 
carefully reviewed the bill, and states that the bill does not 
involve any Federal income tax rate increases within the 
meaning of the rule.

                       E. Tax Complexity Analysis

    The following statement is made pursuant to clause 3(h)(1) 
of rule XIII of the Rules of the House of Representatives. 
Section 4022(b) of the Internal Revenue Service Restructuring 
and Reform Act of 1998 requires the staff of the Joint 
Committee on Taxation (in consultation with the Internal 
Revenue Service and the Treasury Department) to provide a tax 
complexity analysis. The complexity analysis is required for 
all legislation reported by the Senate Committee on Finance, 
the House Committee on Ways and Means, or any committee of 
conference if the legislation includes a provision that 
directly or indirectly amends the Internal Revenue Code and has 
widespread applicability to individuals or small businesses.
    Pursuant to clause 3(h)(1) of rule XIII of the Rules of the 
House of Representatives, the staff of the Joint Committee on 
Taxation has determined that a complexity analysis is not 
required under section 4022(b) of the IRS Reform Act because 
the bill contains no provisions that amend the Internal Revenue 
Code and that have ``widespread applicability'' to individuals 
or small businesses, within the meaning of the rule.

  F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   G. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program, 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139, or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169).

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

             VI. CHANGES IN EXISTING LAW MADE BY THE BILL, 
                              AS REPORTED


       A. Text of Existing Law Amended or Repealed by the Bill, 
                              as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

   Text of Existing Law Amended or Repealed by the Bill, as Reported

  In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *



Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


CHAPTER 80--GENERAL RULES

           *       *       *       *       *       *       *


Subchapter A--Application of Internal Revenue Laws

           *       *       *       *       *       *       *


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

  (a) Commissioner of Internal Revenue.--
          (1) Appointment.--
                  (A) In general.--There shall be in the 
                Department of the Treasury a Commissioner of 
                Internal Revenue who shall be appointed by the 
                President, by and with the advice and consent 
                of the Senate. Such appointment shall be made 
                from individuals who, among other 
                qualifications, have a demonstrated ability in 
                management.
                  (B) Term.--The term of the Commissioner of 
                Internal Revenue shall be a 5-year term, 
                beginning with a term to commence on November 
                13, 1997. Each subsequent term shall begin on 
                the day after the date on which the previous 
                term expires.
                  (C) Vacancy.--Any individual appointed as 
                Commissioner of Internal Revenue during a term 
                as defined in subparagraph (B) shall be 
                appointed for the remainder of that term.
                  (D) Removal.--The Commissioner may be removed 
                at the will of the President.
                  (E) Reappointment.--The Commissioner may be 
                appointed to serve more than one term.
          (2) Duties.--The Commissioner shall have such duties 
        and powers as the Secretary may prescribe, including 
        the power to--
                  (A) administer, manage, conduct, direct, and 
                supervise the execution and application of the 
                internal revenue laws or related statutes and 
                tax conventions to which the United States is a 
                party; and
                  (B) recommend to the President a candidate 
                for appointment as Chief Counsel for the 
                Internal Revenue Service when a vacancy occurs, 
                and recommend to the President the removal of 
                such Chief Counsel.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A) or (B), such 
        determination may not take effect until 30 days after 
        the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Consultation with Board.--The Commissioner shall 
        consult with the Oversight Board on all matters set 
        forth in paragraphs (2) and (3) (other than paragraph 
        (3)(A)) of section 7802(d).
  (b) Chief Counsel for the Internal Revenue Service.--
          (1) Appointment.--There shall be in the Department of 
        the Treasury a Chief Counsel for the Internal Revenue 
        Service who shall be appointed by the President, by and 
        with the consent of the Senate.
          (2) Duties.--The Chief Counsel shall be the chief law 
        officer for the Internal Revenue Service and shall 
        perform such duties as may be prescribed by the 
        Secretary, including the duty--
                  (A) to be legal advisor to the Commissioner 
                and the Commissioner's officers and employees;
                  (B) to furnish legal opinions for the 
                preparation and review of rulings and memoranda 
                of technical advice;
                  (C) to prepare, review, and assist in the 
                preparation of proposed legislation, treaties, 
                regulations, and Executive orders relating to 
                laws which affect the Internal Revenue Service;
                  (D) to represent the Commissioner in cases 
                before the Tax Court; and
                  (E) to determine which civil actions should 
                be litigated under the laws relating to the 
                Internal Revenue Service and prepare 
                recommendations for the Department of Justice 
                regarding the commencement of such actions.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A), (B), (C), (D), or (E), 
        such determination may not take effect until 30 days 
        after the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Persons to whom Chief Counsel reports.--The Chief 
        Counsel shall report directly to the Commissioner of 
        Internal Revenue, except that--
                  (A) the Chief Counsel shall report to both 
                the Commissioner and the General Counsel for 
                the Department of the Treasury with respect 
                to--
                          (i) legal advice or interpretation of 
                        the tax law not relating solely to tax 
                        policy;
                          (ii) tax litigation; and (B) the 
                        Chief Counsel shall report to the 
                        General Counsel with respect to legal 
                        advice or interpretation of the tax law 
                        relating solely to tax policy.
        If there is any disagreement between the Commissioner 
        and the General Counsel with respect to any matter 
        jointly referred to them under subparagraph (A), such 
        matter shall be submitted to the Secretary or Deputy 
        Secretary for resolution.
          (4) Chief Counsel personnel.--All personnel in the 
        Office of Chief Counsel shall report to the Chief 
        Counsel.
  (c) Office of the Taxpayer Advocate.--
          (1) Establishment.--
                  (A) In general.--There is established in the 
                Internal Revenue Service an office to be known 
                as the ``Office of the Taxpayer Advocate''.
                  (B) National Taxpayer Advocate.--
                          (i) In general.--The Office of the 
                        Taxpayer Advocate shall be under the 
                        supervision and direction of an 
                        official to be known as the ``National 
                        Taxpayer Advocate''. The National 
                        Taxpayer Advocate shall report directly 
                        to the Commissioner of Internal Revenue 
                        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, or, if the 
                        Secretary of the Treasury so 
                        determines, at a rate fixed under 
                        section 9503 of such title.
                          (ii) Appointment.--The National 
                        Taxpayer Advocate shall be appointed by 
                        the Secretary of the Treasury after 
                        consultation with the Commissioner of 
                        Internal Revenue and the Oversight 
                        Board and without regard to the 
                        provisions of title 5, United States 
                        Code, relating to appointments in the 
                        competitive service or the Senior 
                        Executive Service.
                          (iii) Qualifications.--An individual 
                        appointed under clause (ii) shall 
                        have--
                                  (I) a background in customer 
                                service as well as tax law; and
                                  (II) experience in 
                                representing individual 
                                taxpayers.
                          (iv) Restriction on employment.--An 
                        individual may be appointed as the 
                        National Taxpayer Advocate only if such 
                        individual was not an officer or 
                        employee of the Internal Revenue 
                        Service during the 2-year period ending 
                        with such appointment and such 
                        individual agrees not to accept any 
                        employment with the Internal Revenue 
                        Service for at least 5 years after 
                        ceasing to be the National Taxpayer 
                        Advocate. Service as an officer or 
                        employee of the Office of the Taxpayer 
                        Advocate shall not be taken into 
                        account in applying this clause.
          (2) Functions of office.--
                  (A) In general.--It shall be the function of 
                the Office of the Taxpayer Advocate to--
                          (i) assist taxpayers in resolving 
                        problems with the Internal Revenue 
                        Service;
                          (ii) identify areas in which 
                        taxpayers have problems in dealings 
                        with the Internal Revenue Service;
                          (iii) to the extent possible, propose 
                        changes in the administrative practices 
                        of the Internal Revenue Service to 
                        mitigate problems identified under 
                        clause (ii); and
                          (iv) identify potential legislative 
                        changes which may be appropriate to 
                        mitigate such problems.
                  (B) Annual reports.--
                          (i) Objectives.--Not later than June 
                        30 of each calendar year, the National 
                        Taxpayer Advocate shall report to the 
                        Committee on Ways and Means of the 
                        House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the objectives of the Office of the 
                        Taxpayer Advocate for the fiscal year 
                        beginning in such calendar year. Any 
                        such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information.
                          (ii) Activities.--Not later than 
                        December 31 of each calendar year, the 
                        National Taxpayer Advocate shall report 
                        to the Committee on Ways and Means of 
                        the House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the activities of the Office of the 
                        Taxpayer Advocate during the fiscal 
                        year ending during such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information, and shall--
                                  (I) identify the initiatives 
                                the Office of the Taxpayer 
                                Advocate has taken on improving 
                                taxpayer services and Internal 
                                Revenue Service responsiveness;
                                  (II) contain recommendations 
                                received from individuals with 
                                the authority to issue Taxpayer 
                                Assistance Orders under section 
                                7811;
                                  (III) contain a summary of at 
                                least 20 of the most serious 
                                problems encountered by 
                                taxpayers, including a 
                                description of the nature of 
                                such problems;
                                  (IV) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action has been taken 
                                and the result of such action;
                                  (V) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action remains to be 
                                completed and the period during 
                                which each item has remained on 
                                such inventory;
                                  (VI) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which no action has been 
                                taken, the period during which 
                                each item has remained on such 
                                inventory, the reasons for the 
                                inaction, and identify any 
                                Internal Revenue Service 
                                official who is responsible for 
                                such inaction;
                                  (VII) identify any Taxpayer 
                                Assistance Order which was not 
                                honored by the Internal Revenue 
                                Service in a timely manner, as 
                                specified under section 
                                7811(b);
                                  (VIII) contain 
                                recommendations for such 
                                administrative and legislative 
                                action as may be appropriate to 
                                resolve problems encountered by 
                                taxpayers;
                                  (IX) identify areas of the 
                                tax law that impose significant 
                                compliance burdens on taxpayers 
                                or the Internal Revenue 
                                Service, including specific 
                                recommendations for remedying 
                                these problems;
                                  (X) identify the 10 most 
                                litigated issues for each 
                                category of taxpayers, 
                                including recommendations for 
                                mitigating such disputes; and
                                  (XI) include such other 
                                information as the National 
                                Taxpayer Advocate may deem 
                                advisable.
                          (iii) Report to be submitted 
                        directly.--Each report required under 
                        this subparagraph shall be provided 
                        directly to the committees described in 
                        clause (i) without any prior review or 
                        comment from the Commissioner, the 
                        Secretary of the Treasury, the 
                        Oversight Board, any other officer or 
                        employee of the Department of the 
                        Treasury, or the Office of Management 
                        and Budget.
                          (iv) Coordination with report of 
                        Treasury Inspector General for Tax 
                        Administration.--To the extent that 
                        information required to be reported 
                        under clause (ii) is also required to 
                        be reported under paragraph (1) or (2) 
                        of subsection (d) by the Treasury 
                        Inspector General for Tax 
                        Administration, the National Taxpayer 
                        Advocate shall not contain such 
                        information in the report submitted 
                        under such clause.
                  (C) Other responsibilities.--The National 
                Taxpayer Advocate shall--
                          (i) monitor the coverage and 
                        geographic allocation of local offices 
                        of taxpayer advocates;
                          (ii) develop guidance to be 
                        distributed to all Internal Revenue 
                        Service officers and employees 
                        outlining the criteria for referral of 
                        taxpayer inquiries to local offices of 
                        taxpayer advocates;
                          (iii) ensure that the local telephone 
                        number for each local office of the 
                        taxpayer advocate is published and 
                        available to taxpayers served by the 
                        office; and
                          (iv) in conjunction with the 
                        Commissioner, develop career paths for 
                        local taxpayer advocates choosing to 
                        make a career in the Office of the 
                        Taxpayer Advocate.
                  (D) Personnel actions.--
                          (i) In general.--The National 
                        Taxpayer Advocate shall have the 
                        responsibility and authority to--
                                  (I) appoint local taxpayer 
                                advocates and make available at 
                                least 1 such advocate for each 
                                State; and
                                  (II) evaluate and take 
                                personnel actions (including 
                                dismissal) with respect to any 
                                employee of any local office of 
                                a taxpayer advocate described 
                                in subclause (I).
                          (ii) Consultation.--The National 
                        Taxpayer Advocate may consult with the 
                        appropriate supervisory personnel of 
                        the Internal Revenue Service in 
                        carrying out the National Taxpayer 
                        Advocate's responsibilities under this 
                        subparagraph.
          (3) Responsibilities of Commissioner.--The 
        Commissioner shall establish procedures requiring a 
        formal response to all recommendations submitted to the 
        Commissioner by the National Taxpayer Advocate within 3 
        months after submission to the Commissioner.
          (4) Operation of local offices.--
                  (A) In general.--Each local taxpayer 
                advocate--
                          (i) shall report to the National 
                        Taxpayer Advocate or delegate thereof;
                          (ii) may consult with the appropriate 
                        supervisory personnel of the Internal 
                        Revenue Service regarding the daily 
                        operation of the local office of the 
                        taxpayer advocate;
                          (iii) shall, at the initial meeting 
                        with any taxpayer seeking the 
                        assistance of a local office of the 
                        taxpayer advocate, notify such taxpayer 
                        that the taxpayer advocate offices 
                        operate independently of any other 
                        Internal Revenue Service office and 
                        report directly to Congress through the 
                        National Taxpayer Advocate; and
                          (iv) may, at the taxpayer advocate's 
                        discretion, not disclose to the 
                        Internal Revenue Service contact with, 
                        or information provided by, such 
                        taxpayer.
                  (B) Maintenance of independent 
                communications.--Each local office of the 
                taxpayer advocate shall maintain a separate 
                phone, facsimile, and other electronic 
                communication access, and a separate post 
                office address.
  (d) Additional Duties of the Treasury Inspector General for 
Tax Administration.--
          (1) Annual reporting.--The Treasury Inspector General 
        for Tax Administration shall include in one of the 
        semiannual reports under section 5 of the Inspector 
        General Act of 1978--
                  (A) an evaluation of the compliance of the 
                Internal Revenue Service with--
                          (i) restrictions under section 1204 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        the use of enforcement statistics to 
                        evaluate Internal Revenue Service 
                        employees;
                          (ii) restrictions under section 7521 
                        on directly contacting taxpayers who 
                        have indicated that they prefer their 
                        representatives be contacted;
                          (iii) required procedures under 
                        section 6320 upon the filing of a 
                        notice of a lien;
                          (iv) required procedures under 
                        subchapter D of chapter 64 for seizure 
                        of property for collection of taxes, 
                        including required procedures under 
                        section 6330 regarding levies; and
                          (v) restrictions under section 3707 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        designation of taxpayers;
                  (B) a review and a certification of whether 
                or not the Secretary is complying with the 
                requirements of section 6103(e)(8) to disclose 
                information to an individual filing a joint 
                return on collection activity involving the 
                other individual filing the return;
                  (C) information regarding extensions of the 
                statute of limitations for assessment and 
                collection of tax under section 6501 and the 
                provision of notice to taxpayers regarding 
                requests for such extension;
                  (D) an evaluation of the adequacy and 
                security of the technology of the Internal 
                Revenue Service;
                  (E) any termination or mitigation under 
                section 1203 of the Internal Revenue Service 
                Restructuring and Reform Act of 1998;
                  (F) information regarding improper denial of 
                requests for information from the Internal 
                Revenue Service identified under paragraph 
                (3)(A); and
                  (G) information regarding any administrative 
                or civil actions with respect to violations of 
                the fair debt collection provisions of section 
                6304, including--
                          (i) a summary of such actions 
                        initiated since the date of the last 
                        report; and
                          (ii) a summary of any judgments or 
                        awards granted as a result of such 
                        actions.
          (2) Semiannual reports.--
                  (A) In general.--The Treasury Inspector 
                General for Tax Administration shall include in 
                each semiannual report under section 5 of the 
                Inspector General Act of 1978--
                          (i) the number of taxpayer complaints 
                        during the reporting period;
                          (ii) the number of employee 
                        misconduct and taxpayer abuse 
                        allegations received by the Internal 
                        Revenue Service or the Inspector 
                        General during the period from 
                        taxpayers, Internal Revenue Service 
                        employees, and other sources;
                          (iii) a summary of the status of such 
                        complaints and allegations; and
                          (iv) a summary of the disposition of 
                        such complaints and allegations, 
                        including the outcome of any Department 
                        of Justice action and any monies paid 
                        as a settlement of such complaints and 
                        allegations.
                  (B) Clauses (iii) and (iv) of subparagraph 
                (A) shall only apply to complaints and 
                allegations of serious employee misconduct.
          (3) Other responsibilities.--The Treasury Inspector 
        General for Tax Administration shall--
                  (A) conduct periodic audits of a 
                statistically valid sample of the total number 
                of determinations made by the Internal Revenue 
                Service to deny written requests to disclose 
                information to taxpayers on the basis of 
                section 6103 of this title or section 552(b)(7) 
                of title 5, United States Code;
                  (B) establish and maintain a toll-free 
                telephone number for taxpayers to use to 
                confidentially register complaints of 
                misconduct by Internal Revenue Service 
                employees and incorporate the telephone number 
                in the statement required by section 6227 of 
                the Omnibus Taxpayer Bill of Rights (Internal 
                Revenue Service Publication No. 1); and
                  (C) not later than December 31, 2010, submit 
                a written report to Congress on the 
                implementation of section 6103(k)(10).

           *       *       *       *       *       *       *


      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

       Changes in Existing Law Proposed by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, and existing law in 
which no change is proposed is shown in roman):

INTERNAL REVENUE CODE OF 1986

           *       *       *       *       *       *       *



Subtitle F--Procedure and Administration

           *       *       *       *       *       *       *


CHAPTER 80--GENERAL RULES

           *       *       *       *       *       *       *


Subchapter A--Application of Internal Revenue Laws

           *       *       *       *       *       *       *


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

  (a) Commissioner of Internal Revenue.--
          (1) Appointment.--
                  (A) In general.--There shall be in the 
                Department of the Treasury a Commissioner of 
                Internal Revenue who shall be appointed by the 
                President, by and with the advice and consent 
                of the Senate. Such appointment shall be made 
                from individuals who, among other 
                qualifications, have a demonstrated ability in 
                management.
                  (B) Term.--The term of the Commissioner of 
                Internal Revenue shall be a 5-year term, 
                beginning with a term to commence on November 
                13, 1997. Each subsequent term shall begin on 
                the day after the date on which the previous 
                term expires.
                  (C) Vacancy.--Any individual appointed as 
                Commissioner of Internal Revenue during a term 
                as defined in subparagraph (B) shall be 
                appointed for the remainder of that term.
                  (D) Removal.--The Commissioner may be removed 
                at the will of the President.
                  (E) Reappointment.--The Commissioner may be 
                appointed to serve more than one term.
          (2) Duties.--The Commissioner shall have such duties 
        and powers as the Secretary may prescribe, including 
        the power to--
                  (A) administer, manage, conduct, direct, and 
                supervise the execution and application of the 
                internal revenue laws or related statutes and 
                tax conventions to which the United States is a 
                party; and
                  (B) recommend to the President a candidate 
                for appointment as Chief Counsel for the 
                Internal Revenue Service when a vacancy occurs, 
                and recommend to the President the removal of 
                such Chief Counsel.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A) or (B), such 
        determination may not take effect until 30 days after 
        the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Execution of duties in accord with taxpayer 
        rights.--In discharging his duties, the Commissioner 
        shall ensure that employees of the Internal Revenue 
        Service are familiar with and act in accord with 
        taxpayer rights as afforded by other provisions of this 
        title, including--
                  (A) the right to be informed,
                  (B) the right to quality service,
                  (C) the right to pay no more than the correct 
                amount of tax,
                  (D) the right to challenge the position of 
                the Internal Revenue Service and be heard,
                  (E) the right to appeal a decision of the 
                Internal Revenue Service in an independent 
                forum,
                  (F) the right to finality,
                  (G) the right to privacy,
                  (H) the right to confidentiality,
                  (I) the right to retain representation, and
                  (J) the right to a fair and just tax system.
          [(3)] (4) Consultation with Board.--The Commissioner 
        shall consult with the Oversight Board on all matters 
        set forth in paragraphs (2) and (3) (other than 
        paragraph (3)(A)) of section 7802(d).
  (b) Chief Counsel for the Internal Revenue Service.--
          (1) Appointment.--There shall be in the Department of 
        the Treasury a Chief Counsel for the Internal Revenue 
        Service who shall be appointed by the President, by and 
        with the consent of the Senate.
          (2) Duties.--The Chief Counsel shall be the chief law 
        officer for the Internal Revenue Service and shall 
        perform such duties as may be prescribed by the 
        Secretary, including the duty--
                  (A) to be legal advisor to the Commissioner 
                and the Commissioner's officers and employees;
                  (B) to furnish legal opinions for the 
                preparation and review of rulings and memoranda 
                of technical advice;
                  (C) to prepare, review, and assist in the 
                preparation of proposed legislation, treaties, 
                regulations, and Executive orders relating to 
                laws which affect the Internal Revenue Service;
                  (D) to represent the Commissioner in cases 
                before the Tax Court; and
                  (E) to determine which civil actions should 
                be litigated under the laws relating to the 
                Internal Revenue Service and prepare 
                recommendations for the Department of Justice 
                regarding the commencement of such actions.
        If the Secretary determines not to delegate a power 
        specified in subparagraph (A), (B), (C), (D), or (E), 
        such determination may not take effect until 30 days 
        after the Secretary notifies the Committees on Ways and 
        Means, Government Reform and Oversight, and 
        Appropriations of the House of Representatives and the 
        Committees on Finance, Governmental Affairs, and 
        Appropriations of the Senate.
          (3) Persons to whom Chief Counsel reports.--The Chief 
        Counsel shall report directly to the Commissioner of 
        Internal Revenue, except that--
                  (A) the Chief Counsel shall report to both 
                the Commissioner and the General Counsel for 
                the Department of the Treasury with respect 
                to--
                          (i) legal advice or interpretation of 
                        the tax law not relating solely to tax 
                        policy;
                          (ii) tax litigation; and (B) the 
                        Chief Counsel shall report to the 
                        General Counsel with respect to legal 
                        advice or interpretation of the tax law 
                        relating solely to tax policy.
        If there is any disagreement between the Commissioner 
        and the General Counsel with respect to any matter 
        jointly referred to them under subparagraph (A), such 
        matter shall be submitted to the Secretary or Deputy 
        Secretary for resolution.
          (4) Chief Counsel personnel.--All personnel in the 
        Office of Chief Counsel shall report to the Chief 
        Counsel.
  (c) Office of the Taxpayer Advocate.--
          (1) Establishment.--
                  (A) In general.--There is established in the 
                Internal Revenue Service an office to be known 
                as the ``Office of the Taxpayer Advocate''.
                  (B) National Taxpayer Advocate.--
                          (i) In general.--The Office of the 
                        Taxpayer Advocate shall be under the 
                        supervision and direction of an 
                        official to be known as the ``National 
                        Taxpayer Advocate''. The National 
                        Taxpayer Advocate shall report directly 
                        to the Commissioner of Internal Revenue 
                        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, or, if the 
                        Secretary of the Treasury so 
                        determines, at a rate fixed under 
                        section 9503 of such title.
                          (ii) Appointment.--The National 
                        Taxpayer Advocate shall be appointed by 
                        the Secretary of the Treasury after 
                        consultation with the Commissioner of 
                        Internal Revenue and the Oversight 
                        Board and without regard to the 
                        provisions of title 5, United States 
                        Code, relating to appointments in the 
                        competitive service or the Senior 
                        Executive Service.
                          (iii) Qualifications.--An individual 
                        appointed under clause (ii) shall 
                        have--
                                  (I) a background in customer 
                                service as well as tax law; and
                                  (II) experience in 
                                representing individual 
                                taxpayers.
                          (iv) Restriction on employment.--An 
                        individual may be appointed as the 
                        National Taxpayer Advocate only if such 
                        individual was not an officer or 
                        employee of the Internal Revenue 
                        Service during the 2-year period ending 
                        with such appointment and such 
                        individual agrees not to accept any 
                        employment with the Internal Revenue 
                        Service for at least 5 years after 
                        ceasing to be the National Taxpayer 
                        Advocate. Service as an officer or 
                        employee of the Office of the Taxpayer 
                        Advocate shall not be taken into 
                        account in applying this clause.
          (2) Functions of office.--
                  (A) In general.--It shall be the function of 
                the Office of the Taxpayer Advocate to--
                          (i) assist taxpayers in resolving 
                        problems with the Internal Revenue 
                        Service;
                          (ii) identify areas in which 
                        taxpayers have problems in dealings 
                        with the Internal Revenue Service;
                          (iii) to the extent possible, propose 
                        changes in the administrative practices 
                        of the Internal Revenue Service to 
                        mitigate problems identified under 
                        clause (ii); and
                          (iv) identify potential legislative 
                        changes which may be appropriate to 
                        mitigate such problems.
                  (B) Annual reports.--
                          (i) Objectives.--Not later than June 
                        30 of each calendar year, the National 
                        Taxpayer Advocate shall report to the 
                        Committee on Ways and Means of the 
                        House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the objectives of the Office of the 
                        Taxpayer Advocate for the fiscal year 
                        beginning in such calendar year. Any 
                        such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information.
                          (ii) Activities.--Not later than 
                        December 31 of each calendar year, the 
                        National Taxpayer Advocate shall report 
                        to the Committee on Ways and Means of 
                        the House of Representatives and the 
                        Committee on Finance of the Senate on 
                        the activities of the Office of the 
                        Taxpayer Advocate during the fiscal 
                        year ending during such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information, and shall--
                                  (I) identify the initiatives 
                                the Office of the Taxpayer 
                                Advocate has taken on improving 
                                taxpayer services and Internal 
                                Revenue Service responsiveness;
                                  (II) contain recommendations 
                                received from individuals with 
                                the authority to issue Taxpayer 
                                Assistance Orders under section 
                                7811;
                                  (III) contain a summary of at 
                                least 20 of the most serious 
                                problems encountered by 
                                taxpayers, including a 
                                description of the nature of 
                                such problems;
                                  (IV) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action has been taken 
                                and the result of such action;
                                  (V) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which action remains to be 
                                completed and the period during 
                                which each item has remained on 
                                such inventory;
                                  (VI) contain an inventory of 
                                the items described in 
                                subclauses (I), (II), and (III) 
                                for which no action has been 
                                taken, the period during which 
                                each item has remained on such 
                                inventory, the reasons for the 
                                inaction, and identify any 
                                Internal Revenue Service 
                                official who is responsible for 
                                such inaction;
                                  (VII) identify any Taxpayer 
                                Assistance Order which was not 
                                honored by the Internal Revenue 
                                Service in a timely manner, as 
                                specified under section 
                                7811(b);
                                  (VIII) contain 
                                recommendations for such 
                                administrative and legislative 
                                action as may be appropriate to 
                                resolve problems encountered by 
                                taxpayers;
                                  (IX) identify areas of the 
                                tax law that impose significant 
                                compliance burdens on taxpayers 
                                or the Internal Revenue 
                                Service, including specific 
                                recommendations for remedying 
                                these problems;
                                  (X) identify the 10 most 
                                litigated issues for each 
                                category of taxpayers, 
                                including recommendations for 
                                mitigating such disputes; and
                                  (XI) include such other 
                                information as the National 
                                Taxpayer Advocate may deem 
                                advisable.
                          (iii) Report to be submitted 
                        directly.--Each report required under 
                        this subparagraph shall be provided 
                        directly to the committees described in 
                        clause (i) without any prior review or 
                        comment from the Commissioner, the 
                        Secretary of the Treasury, the 
                        Oversight Board, any other officer or 
                        employee of the Department of the 
                        Treasury, or the Office of Management 
                        and Budget.
                          (iv) Coordination with report of 
                        Treasury Inspector General for Tax 
                        Administration.--To the extent that 
                        information required to be reported 
                        under clause (ii) is also required to 
                        be reported under paragraph (1) or (2) 
                        of subsection (d) by the Treasury 
                        Inspector General for Tax 
                        Administration, the National Taxpayer 
                        Advocate shall not contain such 
                        information in the report submitted 
                        under such clause.
                  (C) Other responsibilities.--The National 
                Taxpayer Advocate shall--
                          (i) monitor the coverage and 
                        geographic allocation of local offices 
                        of taxpayer advocates;
                          (ii) develop guidance to be 
                        distributed to all Internal Revenue 
                        Service officers and employees 
                        outlining the criteria for referral of 
                        taxpayer inquiries to local offices of 
                        taxpayer advocates;
                          (iii) ensure that the local telephone 
                        number for each local office of the 
                        taxpayer advocate is published and 
                        available to taxpayers served by the 
                        office; and
                          (iv) in conjunction with the 
                        Commissioner, develop career paths for 
                        local taxpayer advocates choosing to 
                        make a career in the Office of the 
                        Taxpayer Advocate.
                  (D) Personnel actions.--
                          (i) In general.--The National 
                        Taxpayer Advocate shall have the 
                        responsibility and authority to--
                                  (I) appoint local taxpayer 
                                advocates and make available at 
                                least 1 such advocate for each 
                                State; and
                                  (II) evaluate and take 
                                personnel actions (including 
                                dismissal) with respect to any 
                                employee of any local office of 
                                a taxpayer advocate described 
                                in subclause (I).
                          (ii) Consultation.--The National 
                        Taxpayer Advocate may consult with the 
                        appropriate supervisory personnel of 
                        the Internal Revenue Service in 
                        carrying out the National Taxpayer 
                        Advocate's responsibilities under this 
                        subparagraph.
          (3) Responsibilities of Commissioner.--The 
        Commissioner shall establish procedures requiring a 
        formal response to all recommendations submitted to the 
        Commissioner by the National Taxpayer Advocate within 3 
        months after submission to the Commissioner.
          (4) Operation of local offices.--
                  (A) In general.--Each local taxpayer 
                advocate--
                          (i) shall report to the National 
                        Taxpayer Advocate or delegate thereof;
                          (ii) may consult with the appropriate 
                        supervisory personnel of the Internal 
                        Revenue Service regarding the daily 
                        operation of the local office of the 
                        taxpayer advocate;
                          (iii) shall, at the initial meeting 
                        with any taxpayer seeking the 
                        assistance of a local office of the 
                        taxpayer advocate, notify such taxpayer 
                        that the taxpayer advocate offices 
                        operate independently of any other 
                        Internal Revenue Service office and 
                        report directly to Congress through the 
                        National Taxpayer Advocate; and
                          (iv) may, at the taxpayer advocate's 
                        discretion, not disclose to the 
                        Internal Revenue Service contact with, 
                        or information provided by, such 
                        taxpayer.
                  (B) Maintenance of independent 
                communications.--Each local office of the 
                taxpayer advocate shall maintain a separate 
                phone, facsimile, and other electronic 
                communication access, and a separate post 
                office address.
  (d) Additional Duties of the Treasury Inspector General for 
Tax Administration.--
          (1) Annual reporting.--The Treasury Inspector General 
        for Tax Administration shall include in one of the 
        semiannual reports under section 5 of the Inspector 
        General Act of 1978--
                  (A) an evaluation of the compliance of the 
                Internal Revenue Service with--
                          (i) restrictions under section 1204 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        the use of enforcement statistics to 
                        evaluate Internal Revenue Service 
                        employees;
                          (ii) restrictions under section 7521 
                        on directly contacting taxpayers who 
                        have indicated that they prefer their 
                        representatives be contacted;
                          (iii) required procedures under 
                        section 6320 upon the filing of a 
                        notice of a lien;
                          (iv) required procedures under 
                        subchapter D of chapter 64 for seizure 
                        of property for collection of taxes, 
                        including required procedures under 
                        section 6330 regarding levies; and
                          (v) restrictions under section 3707 
                        of the Internal Revenue Service 
                        Restructuring and Reform Act of 1998 on 
                        designation of taxpayers;
                  (B) a review and a certification of whether 
                or not the Secretary is complying with the 
                requirements of section 6103(e)(8) to disclose 
                information to an individual filing a joint 
                return on collection activity involving the 
                other individual filing the return;
                  (C) information regarding extensions of the 
                statute of limitations for assessment and 
                collection of tax under section 6501 and the 
                provision of notice to taxpayers regarding 
                requests for such extension;
                  (D) an evaluation of the adequacy and 
                security of the technology of the Internal 
                Revenue Service;
                  (E) any termination or mitigation under 
                section 1203 of the Internal Revenue Service 
                Restructuring and Reform Act of 1998;
                  (F) information regarding improper denial of 
                requests for information from the Internal 
                Revenue Service identified under paragraph 
                (3)(A); and
                  (G) information regarding any administrative 
                or civil actions with respect to violations of 
                the fair debt collection provisions of section 
                6304, including--
                          (i) a summary of such actions 
                        initiated since the date of the last 
                        report; and
                          (ii) a summary of any judgments or 
                        awards granted as a result of such 
                        actions.
          (2) Semiannual reports.--
                  (A) In general.--The Treasury Inspector 
                General for Tax Administration shall include in 
                each semiannual report under section 5 of the 
                Inspector General Act of 1978--
                          (i) the number of taxpayer complaints 
                        during the reporting period;
                          (ii) the number of employee 
                        misconduct and taxpayer abuse 
                        allegations received by the Internal 
                        Revenue Service or the Inspector 
                        General during the period from 
                        taxpayers, Internal Revenue Service 
                        employees, and other sources;
                          (iii) a summary of the status of such 
                        complaints and allegations; and
                          (iv) a summary of the disposition of 
                        such complaints and allegations, 
                        including the outcome of any Department 
                        of Justice action and any monies paid 
                        as a settlement of such complaints and 
                        allegations.
                  (B) Clauses (iii) and (iv) of subparagraph 
                (A) shall only apply to complaints and 
                allegations of serious employee misconduct.
          (3) Other responsibilities.--The Treasury Inspector 
        General for Tax Administration shall--
                  (A) conduct periodic audits of a 
                statistically valid sample of the total number 
                of determinations made by the Internal Revenue 
                Service to deny written requests to disclose 
                information to taxpayers on the basis of 
                section 6103 of this title or section 552(b)(7) 
                of title 5, United States Code;
                  (B) establish and maintain a toll-free 
                telephone number for taxpayers to use to 
                confidentially register complaints of 
                misconduct by Internal Revenue Service 
                employees and incorporate the telephone number 
                in the statement required by section 6227 of 
                the Omnibus Taxpayer Bill of Rights (Internal 
                Revenue Service Publication No. 1); and
                  (C) not later than December 31, 2010, submit 
                a written report to Congress on the 
                implementation of section 6103(k)(10).

           *       *       *       *       *       *       *


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