[House Report 119-42]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-42
======================================================================
INTERNAL REVENUE SERVICE MATH AND TAXPAYER HELP ACT
_______
March 27, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Missouri, from the Committee on Ways and Means, submitted
the following
R E P O R T
[To accompany H.R. 998]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 998) to amend the Internal Revenue Code of 1986 to
require additional information on math and clerical error
notices, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND....................................... 3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 4
D. Designated Hearing.................................. 4
II. EXPLANATION OF THE BILL...................................... 4
III.VOTE OF THE COMMITTEE........................................ 8
IV. BUDGET EFFECTS OF THE BILL................................... 8
A. Committee Estimate of Budgetary Effects............. 8
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 9
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 9
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE... 9
A. Committee Oversight Findings and Recommendations.... 9
B. Statement of General Performance Goals and
Objectives......................................... 9
C. Applicability of House Rule XXI, Clause 5(b)........ 9
D. Information Relating to Unfunded Mandates........... 9
E. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 10
F. Duplication of Federal Programs..................... 10
G. Tax Complexity Analysis............................. 10
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED........ 10
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 ``Internal Revenue Service Math and
Taxpayer Help Act''.
SEC. 2. IMPROVEMENT OF NOTICES OF MATH OR CLERICAL ERROR.
(a) In General.--Section 6213(b)(1) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``errors.--If the taxpayer'' and inserting
``errors.--
``(A) In general.--If the taxpayer'',
(2) by striking ``Each notice'' in the second sentence and
inserting ``Subject to subparagraph (B), each notice'', and
(3) by adding at the end the following new subparagraph:
``(B) Specificity of math or clerical error notice.--
``(i) In general.--The notice provided under
subparagraph (A) shall--
``(I) be sent to the taxpayer's last
known address,
``(II) describe the mathematical or
clerical error in comprehensive, plain
language, including--
``(aa) the type of error,
``(bb) the section of this
title to which the error
relates,
``(cc) a description of the
nature of the error, and
``(dd) the specific line of
the return on which the error
was made,
``(III) an itemized computation of
any direct or incidental adjustments to
be made to the return in correction of
the error, including any adjustment to
the amount of--
``(aa) adjusted gross income,
``(bb) taxable income,
``(cc) itemized or standard
deductions,
``(dd) nonrefundable credits,
``(ee) credits under section
24, 25A, 32, 35, or 36B,
credits claimed with respect to
undistributed long-term capital
gains on Form 2439, credits for
Federal taxes paid on fuels
claimed on Form 4136, and any
other refundable credits,
``(ff) income tax,
``(gg) other taxes,
``(hh) total tax,
``(ii) Federal income tax
withheld or excess tax withheld
under section 3101 or 3201(a),
``(jj) estimated tax
payments, including amount
applied from prior year's
return,
``(kk) refund or amount owed,
``(ll) net operating loss
carryforwards, or
``(mm) credit carryforwards,
``(IV) include the telephone number
for the automated phone transcript
service, and
``(V) display the date by which the
taxpayer may request to abate any
assessment specified in such notice
pursuant to paragraph (2)(A), in bold,
font size 14, and immediately next to
the taxpayer's address on page 1 of the
notice.
``(ii) No lists of potential errors.--A
notice which provides multiple potential or
alternative errors which may be applicable to
the return shall not be sufficiently specific
for purposes of clause (i)(II); however, if
multiple specific errors apply to the return
all such errors should be listed.''.
(b) Notice of Abatement.--Paragraph (2) of section 6213(b) is amended
by adding at the end the following new subparagraph:
``(C) Notice.--Upon determination of an abatement
pursuant to subparagraph (A), the Secretary shall send
notice to the taxpayer of such abatement which--
``(i) is sent to the taxpayer's last known
address,
``(ii) describes the abatement in
comprehensive, plain language, and
``(iii) provides an itemized computation of
any adjustments to be made to the items
described in the notice of mathematical or
clerical error, including any changes to any
item described in paragraph (1)(B)(i)(III).''.
(c) Effective Date.--The amendments made by this section shall apply
to notices sent after the date which is 12 months after the date of the
enactment of this Act.
(d) Procedures.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of the Treasury (or such
Secretary's delegate) shall provide for procedures by which a taxpayer
may request an abatement referred to in section 6213(b)(1)(B)(i)(V) of
the Internal Revenue Code of 1986 in writing, electronically, by
telephone, or in person.
(e) Pilot Program.--Not later than 18 months after the date of the
enactment of this Act, the Secretary of the Treasury (or such
Secretary's delegate), in consultation with the National Taxpayer
Advocate, shall--
(1) implement a pilot program to send a trial number of
notices, in an amount which is a statistically significant
portion of all such notices, of mathematical or clerical error
pursuant to section 6213(b) of the Internal Revenue Code of
1986 by certified or registered mail with e-signature
confirmation of receipt, and
(2) report to Congress, aggregated by the type of error under
section 6213(g) of such Code to which the notices relate, on--
(A) the number of mathematical or clerical errors
noticed under the program and the dollar amounts
involved,
(B) the number of abatements of tax and the dollar
amounts of such abatements, and
(C) the effect of such pilot program on taxpayer
response and adjustments or abatements to tax,
with conclusions drawn about the effectiveness of certified or
registered mail, with and without return receipt, and any other
recommendations for improving taxpayer response rates.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 998, the ``Internal Revenue Service Math and
Taxpayer Help Act,'' as amended, was ordered reported by the
Committee on Ways and Means on February 12, 2025.
The provision establishes rules for the content required in
a notice of math or clerical error, to ensure that the
recipient will understand the nature of the error identified by
the IRS and how to seek an abatement of the additional tax if
the taxpayer believes the IRS is in error. In addition, it
requires that the IRS issue notices of abatements when it
reverses the math error assessment on taxpayer request and
prescribes specific rules for such notices. Within 180 days of
enactment, the Secretary is required to establish new rules and
guidance on how to seek abatement of a tax assessment made
under math error authority. Finally, the provision requires
that the IRS conduct a pilot program to evaluate the
effectiveness of issuing such notices of math error by
certified or registered mail, with or without confirmation of
receipt, to report to Congress on the results of that program,
and to make recommendations on how to further improve taxpayer
response to notices.
B. Background and Need for Legislation
Each year, the IRS sends millions of ``math error'' notices
to taxpayers that propose to adjust their tax liabilities.\1\
These math error notices often do not explain the reasons for
the adjustments, and some are never received by the taxpayer
due to lost mail.\2\ The IRS is not currently required to
inform taxpayers that they must dispute the adjustments within
60 days if they disagree or generally forfeit their right to do
so.\3\ Many taxpayers do not understand that the failure to
respond to an IRS math error notice within 60 days means they
have conceded the adjustment and have forfeited their right to
challenge the IRS's position in Tax Court.\4\
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\1\Legislative Recommendation #37--Clarify That the National
Taxpayer Advocate May Hire Legal Counsel to Enable Her to Advocate More
Effectively for Taxpayers, National Taxpayer Advocate 2025 Purple Book
(Dec. 31, 2024), https://www.taxpayeradvocate.irs.gov/reports/2024-
annual-report-to-congress/national-taxpayer-advocate-2025-purple-book/.
\2\Id.
\3\Id.
\4\Id.
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The Committee on Ways and Means is committed to leveling
the playing field for taxpayers by ensuring that they are
notified of any adjustments to their tax return and giving them
enough time to challenge the adjustment, if necessary.
Taxpayers deserve full transparency and an ability to challenge
the IRS when they exercise their math error authority.
C. Legislative History
Background
H.R. 998 was introduced on February 10, 2025, and was
referred to the Committee on Ways and Means.
Committee Hearings
On February 11, 2025, the Committee on Ways and Means held
a hearing titled, ``IRS Return on Investment and the Need for
Modernization''.
Committee Action
The Committee on Ways and Means marked up H.R. 998, on
February 12, 2025, and order the bill, as amended, favorably
reported (with a quorum being present).
D. Designated Hearing
Pursuant to clause 3(c)(6) of rule XIII, the following
hearing was used to develop and consider H.R. 998:
``IRS Return on Investment and the Need for
Modernization'' on February 11, 2025.
II. EXPLANATION OF THE BILL
A. The Internal Revenue Service Math Error and Taxpayer Help Act (Sec.
2 of the Bill and Sec. 6213(b)\5\ of the Code)
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\5\All section references in the document are to the Internal
Revenue Code of 1986, as amended (the ``Code''), unless otherwise
stated.
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PRESENT LAW
In general
The Federal income tax system relies upon self-reporting
and assessment. A taxpayer is expected to prepare a report of
his or her liability\6\ and submit it to the Internal Revenue
Service (``IRS'') with any payment due. The Code provides
general authority for the IRS to assess all taxes shown on
returns, including assessment of tax computed by the
taxpayer,\7\ other than certain Federal unemployment tax and
estimated income taxes.\8\ The assessment is required to be
made by recording the liability in the ``office of the
Secretary'' in a manner determined under regulations.\9\ In
addition, the IRS may make supplemental assessments within the
limitations period whenever it determines that an assessment
was imperfect or incomplete.\10\
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\6\Secs. 6011 and 6012.
\7\Sec. 6201.
\8\Sec. 6201(b).
\9\Sec. 6203.
\10\Sec. 6204.
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The authority of the IRS to assess additional tax is
generally subject to certain restrictions on assessment known
as deficiency procedures.\11\ These deficiency procedures
generally ensure a taxpayer access to administrative review and
a pre-payment judicial forum (i.e., the United States Tax
Court) for reviewing disputed adjustments proposed by the IRS.
A deficiency of tax is the amount by which the liability
determined under the Code exceeds the sum of certain taxes\12\
assessed for a period (including amounts shown on a return),
after reduction for any rebates of tax.
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\11\Secs. 6211 through 6215.
\12\The taxes to which deficiency procedures apply are income,
estate and gift and excise taxes arising under chapters 41, 42, or 44.
Secs. 6211 and 6213.
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Math error exception to restrictions on assessments
There are several exceptions to the restrictions on
assessment of tax.\13\ One of the principal exceptions is the
IRS's authority to make a summary assessment of tax without
issuance of a notice of deficiency if the error is a result of
a mathematical or clerical error, generally referred to as math
error authority. Purely mathematical or clerical issues are
often identified early in the processing of a return, prior to
issuance of any refund rather than as a result of an
examination of a return. Other grounds for math error authority
may be identified after initial processing, including in the
course of an examination of other issues subject to the general
restrictions on assessment.
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\13\Section 6213 provides that a taxpayer may waive the
restrictions on assessment, permits immediate assessment to reflect
payments of tax remitted to the IRS and to correct amounts credited or
applied as a result of claims for carrybacks under section 1341(b), and
requires assessment of amounts ordered as criminal restitution.
Assessment is also permitted in certain circumstances in which
collection of the tax would be in jeopardy. Secs. 6851, 6852, and 6861.
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Definition of math error
The definition of mathematical or clerical errors is not
limited to math, clerical, or transcription errors. It
addresses over 20 categories of errors,\14\ many of which
relate to rules regarding refundable credits.\15\ Since 2015,
the math error authority covers situations for which a taxpayer
claiming certain refundable credits either is subject to a
multi-year ban against claiming such credits as a consequence
of having made a prior fraudulent or reckless claim or, in the
case of taxpayer who has made prior improper claims, omits
information required by the Secretary to demonstrate
eligibility for the credit.\16\ In 2020 and 2021, math error
authority was expanded to cover certain errors related to valid
taxpayer identification numbers and reconciliation of advance
payments with respect to the 2020 recovery rebate credit, 2020
additional recovery rebate credit, and 2021 recovery rebate
credit.\17\ In 2022, math error authority was again expanded to
apply to errors in documenting energy related credits,
including omission of product or vehicle identification
numbers.\18\
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\14\Secs. 6213(g)(2)(A) through (V).
\15\Math error authority currently applies to certain errors
related to the earned income tax credit, the child tax credit, the
American opportunity tax credit, recovery rebate credits, and various
energy-related credits.
\16\Secs. 6213(g)(2)(K), (P), and (Q). Pub. L. No. 114-113, Div. Q,
sec. 208.
\17\Pub. L. No. 116-136, sec. 2201; Pub. L. No. 116-260, Div. N,
sec. 272; Pub. L. No. 117-2, title IX, sec. 9601. See also secs.
6213(g)(2)(L); 6428(e)(1), (g)(4); 6428A(e)(1), (g)(7); 6428B(e)(2)(G),
(f)(1).
\18\Secs. 6213(g)(2)(R), (S), (T), (U), and (V). Pub. L. No. 117-
169, secs. 13301(g)(2), 13401(i)(4), 13402(c), and 13403(b)(2).
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Notice of math error assessment and request for abatement
If a mistake on the return is of a type that is within the
meaning of mathematical or clerical error, the IRS immediately
assesses the additional tax due as a result of correcting the
mistake and sends notice to the taxpayer informing the taxpayer
of the assessment. The statute is silent as to the level of
detail required in the notice. Math error authority may be used
to deny an improperly claimed credit, either during initial
processing of a return on which the credit is claimed or in an
examination of the return after the refund has been issued, and
to assess immediately any additional tax due as a result
without issuing a notice of deficiency. The issuance of a
notice of math error begins a 60-day period within which the
taxpayer may submit a request for abatement of the math error
adjustment. If a taxpayer timely submits a request, the statute
directs the IRS to abate the assessment. The IRS may then refer
the unresolved issue for examination under the deficiency
procedures.\19\
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\19\Sec. 6213(b)(2)(A).
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REASONS FOR CHANGE
Under present law, the IRS is not required to send notices
of its exercise of math error authority by certified or
registered mail, unlike the requirements applicable to notices
of deficiency following an examination, which must be sent to
the last known address of the taxpayer, by certified mail
(registered mail if the address is outside the United States).
As a result, the IRS has developed form letters intended to
inform the taxpayer of the nature of the problem, which
sometimes include preprinted lists of potential bases on which
an assessment is made. Furthermore, many taxpayers are not
aware of their right to right to question the assessment by
seeking an abatement. Even for those who are aware of the right
to do so, the lack of clarity in some form letters used by the
IRS have prevented taxpayers from understanding the nature of
the error they may have made on a return and how to refute it.
EXPLANATION OF PROVISION
The provision amends the statute authorizing use of math
error assessment authority. It prescribes specific procedures
and content for notices of math or clerical error, requires the
IRS to update procedures on how to request abatement and, upon
determination of an abatement, to issue a notice of abatement
to the taxpayer. In addition, the provision requires
implementation of a pilot program to explore use of certified
or registered mail for issuance of math error notices.
Notice of math or clerical error
With respect to the issuance of a notice of math or
clerical assessment, the provision requires that the IRS send
such notice to the taxpayer's last known address and describe
the math or clerical error in plain language. The due date for
submission of a request for abatement must be included in 14-
point font, boldface, next to the address of the taxpayer on
the first page of the notice. The notice must include the
telephone number for the automated phone transcript service, as
well as an itemized computation of adjustments.
With respect to the description of the math error
adjustment, the IRS must include the type of error, the section
of the Code to which the error relates, and the line on the
return on which the error was made. In identifying the type of
error, the notice may not rely on a list of multiple categories
of math errors in the alternative. Instead, it must identify
the specific type of math error authority relied upon for each
specific error on the return.
The itemized computation of the adjustments must address
all changes to any component of the computation of taxable
income and tax liability or tax due. These items include
adjusted gross income, taxable income, itemized or standard
deductions, credits (whether or not refundable), losses, and
other items specifically listed in the provision.
Abatement process
The IRS is directed to prescribe procedures that permit
taxpayers to request abatement in writing, electronically, by
telephone, or in person. Such procedures are to be issued no
later than 180 days after date of enactment.
If an abatement is made after a notice of math error, a
notice of abatement sent to the taxpayer's last known address
is required. Such notice must include a plain language
description of the abatement as well as an itemized computation
of any adjustments made to the items that were included in the
notice of math or clerical error.
Pilot program and report to Congress
The provision requires that the Secretary, in cooperation
with the National Taxpayer Advocate, conduct a study of the
effectiveness of use of certified or registered mail, with e-
signature confirmation of receipt and report the results to
Congress. The study is to include issuance of trial notices in
an amount which is a statistically significant portion of all
such notices. The program must be implemented no later than 18
months after date of enactment. For each type of math error
authority relied upon in the notices, the report shall include
information on the number and dollar amounts of notices under
the trial, as well as similar information on the number and
dollar amount of abatements under the trial and the pilot
program effect on taxpayer responsiveness. The report is to
include conclusions about the effectiveness of using certified
or registered mail, with or without confirmation of receipt, as
well as any recommendations on how to improve taxpayer response
rates.
EFFECTIVE DATE
The provision is effective on date of enactment, except for
amendments to the Code, which are effective for notices sent
after the date which is 12 months after date of enactment.
III. VOTE OF THE COMMITTEE
Pursuant to 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. 998, the ``Internal Revenue Service Math
and Taxpayer Help Act,'' on February 12, 2025.
The bill, H.R. 998, the ``Internal Revenue Service Math and
Taxpayer Help Act,'' as amended, was ordered favorably reported
to the House of Representatives by a recorded vote of 43 yeas
and 0 nays (with a quorum being present).
----------------------------------------------------------------------------------------------------------------
Representative Yea Nay Present Representative Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith (MO)................ X ......... ......... Mr. Neal........ X ......... .........
Mr. Buchanan.................. X ......... ......... Mr. Doggett..... X ......... .........
Mr. Smith (NE)................ X ......... ......... Mr. Thompson.... X ......... .........
Mr. Kelly..................... ........ ......... ......... Mr. Larson...... X ......... .........
Mr. Schweikert................ X ......... ......... Mr. Davis....... X ......... .........
Mr. LaHood.................... X ......... ......... Ms. Sanchez..... X ......... .........
Mr. Arrington................. X ......... ......... Ms. Sewell...... X ......... .........
Mr. Estes..................... X ......... ......... Ms. DelBene..... X ......... .........
Mr. Smucker................... X ......... ......... Ms. Chu......... X ......... .........
Mr. Hern...................... X ......... ......... Ms. Moore (WI).. X ......... .........
Mrs. Miller (WV).............. X ......... ......... Mr. Boyle....... X ......... .........
Dr. Murphy.................... X ......... ......... Mr. Beyer....... X ......... .........
Mr. Kustoff................... X ......... ......... Mr. Evans....... X ......... .........
Mr. Fitzpatrick............... X ......... ......... Mr. Schneider... X ......... .........
Mr. Steube.................... X ......... ......... Mr. Panetta..... X ......... .........
Ms. Tenney.................... X ......... ......... Mr. Gomez....... ........ ......... .........
Mrs. Fischbach................ X ......... ......... Mr. Horsford.... X ......... .........
Mr. Moore (UT)................ X ......... ......... Ms. Plaskett.... X ......... .........
Ms. Van Duyne................. X ......... ......... Mr. Suozzi...... X ......... .........
Mr. Feenstra.................. X ......... .........
Ms. Malliotakis............... X ......... .........
Mr. Carey..................... X ......... .........
Mr. Yakym..................... X ......... .........
Mr. Miller (OH)............... X ......... .........
Mr. Bean...................... X ......... .........
Mr. Moran..................... X ......... .........
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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. 998 as
reported. The estimate prepared by the Joint Committee on
Taxation (JCT) is included below.
The staff of the Joint Committee on Taxation estimates the
bill to have the following effect on Federal fiscal year budget
receipts for the period 2025 through 2034:
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Fiscal years, millions of dollars--
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2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2025-29 2025-34
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0.................................................. -3 -3 -3 -4 -4 -4 -4 -4 -4 -14 -33
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NOTE: Details may not add to totals due to rounding. The date of enactment is assumed to be March 1, 2025.
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.
C. Cost Estimate Prepared by the Congressional Budget Office
The Congressional Budget Act of 1974, as amended stipulates
that revenue estimates provided by the staff of the Joint
Committee on Taxation (``JCT'') will be the official estimates
for all tax legislation considered by Congress. As such CBO
incorporates these estimates into its cos estimates of the
effects of the legislation. The estimates for the revenue
provisions of H.R. 998 were provided by JCT (See Section IV,
Subsection).
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, the Committee made findings and
recommendations that are reflected in this report.
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 does not authorize funding, so no statement of general
performance goals and objectives is required.
C. Applicability of House Rule XXI, Clause 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
provide such a Federal income tax rate increase.
D. 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.
E. 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.
F. Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, 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 (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
G. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') 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.
The staff of the Joint Committee on Taxation has determined
that there are no provisions that are of widespread
applicability to individuals or small businesses.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
Pursuant to clause 3(e) of rule XIII of the Rules of the
House of Representatives, the text of each section proposed to
be repealed by the bill is shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made 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 italics, and existing law in which no
change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 63--ASSESSMENT
* * * * * * *
Subchapter B--DEFICIENCY PROCEDURES IN THE CASE OF INCOME, ESTATE,
GIFT, AND CERTAIN EXCISE TAXES
* * * * * * *
SEC. 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX
COURT.
(a) Time for filing petition and restriction on assessment.--
Within 90 days, or 150 days if the notice is addressed to a
person outside the United States, after the notice of
deficiency authorized in section 6212 is mailed (not counting
Saturday, Sunday, or a legal holiday in the District of
Columbia as the last day), the taxpayer may file a petition
with the Tax Court for a redetermination of the deficiency.
Except as otherwise provided in section 6851, 6852, or 6861 no
assessment of a deficiency in respect of any tax imposed by
subtitle A, or B, chapter 41, 42, 43, or 44 and no levy or
proceeding in court for its collection shall be made, begun, or
prosecuted until such notice has been mailed to the taxpayer,
nor until the expiration of such 90-day or 150-day period, as
the case may be, nor, if a petition has been filed with the Tax
Court, until the decision of the Tax Court has become final.
Notwithstanding the provisions of section 7421(a), the making
of such assessment or the beginning of such proceeding or levy
during the time such prohibition is in force may be enjoined by
a proceeding in the proper court, including the Tax Court, and
a refund may be ordered by such court of any amount collected
within the period during which the Secretary is prohibited from
collecting by levy or through a proceeding in court under the
provisions of this subsection. The Tax Court shall have no
jurisdiction to enjoin any action or proceeding or order any
refund under this subsection unless a timely petition for a
redetermination of the deficiency has been filed and then only
in respect of the deficiency that is the subject of such
petition. Any petition filed with the Tax Court on or before
the last date specified for filing such petition by the
Secretary in the notice of deficiency shall be treated as
timely filed.
(b) Exceptions to restrictions on assessment.--
(1) Assessments arising out of mathematical or
clerical [errors.--] [If the taxpayer] errors._
(A) In general._If the taxpayer is notified
that, on account of a mathematical or clerical
error appearing on the return, an amount of tax
in excess of that shown on the return is due,
and that an assessment of the tax has been or
will be made on the basis of what would have
been the correct amount of tax but for the
mathematical or clerical error, such notice
shall not be considered as a notice of
deficiency for the purposes of subsection (a)
(prohibiting assessment and collection until
notice of the deficiency has been mailed), or
of section 6212(c)(1) (restricting further
deficiency letters), or of section 6512(a)
(prohibiting credits or refunds after petition
to the Tax Court), and the taxpayer shall have
no right to file a petition with the Tax Court
based on such notice, nor shall such assessment
or collection be prohibited by the provisions
of subsection (a) of this section. [Each
notice] Subject to subparagraph (B), each
notice under this paragraph shall set forth the
error alleged and an explanation thereof.
(B) Specificity of math or clerical error
notice.--
(i) In general.--The notice provided
under subparagraph (A) shall--
(I) be sent to the taxpayer's
last known address,
(II) describe the
mathematical or clerical error
in comprehensive, plain
language, including--
(aa) the type of
error,
(bb) the section of
this title to which the
error relates,
(cc) a description of
the nature of the
error, and
(dd) the specific
line of the return on
which the error was
made,
(III) an itemized computation
of any direct or incidental
adjustments to be made to the
return in correction of the
error, including any adjustment
to the amount of--
(aa) adjusted gross
income,
(bb) taxable income,
(cc) itemized or
standard deductions,
(dd) nonrefundable
credits,
(ee) credits under
section 24, 25A, 32,
35, or 36B, credits
claimed with respect to
undistributed long-term
capital gains on Form
2439, credits for
Federal taxes paid on
fuels claimed on Form
4136, and any other
refundable credits,
(ff) income tax,
(gg) other taxes,
(hh) total tax,
(ii) Federal income
tax withheld or excess
tax withheld under
section 3101 or
3201(a),
(jj) estimated tax
payments, including
amount applied from
prior year's return,
(kk) refund or amount
owed,
(ll) net operating
loss carryforwards, or
(mm) credit
carryforwards,
(IV) include the telephone
number for the automated phone
transcript service, and
(V) display the date by which
the taxpayer may request to
abate any assessment specified
in such notice pursuant to
paragraph (2)(A), in bold, font
size 14, and immediately next
to the taxpayer's address on
page 1 of the notice.
(ii) No lists of potential errors.--A
notice which provides multiple
potential or alternative errors which
may be applicable to the return shall
not be sufficiently specific for
purposes of clause (i)(II); however, if
multiple specific errors apply to the
return all such errors should be
listed.
(2) Abatement of assessment of mathematical or
clerical errors.--
(A) Request for abatement.--Notwithstanding
section 6404(b), a taxpayer may file with the
Secretary within 60 days after notice is sent
under paragraph (1) a request for an abatement
of any assessment specified in such notice, and
upon receipt of such request, the Secretary
shall abate the assessment. Any reassessment of
the tax with respect to which an abatement is
made under this subparagraph shall be subject
to the deficiency procedures prescribed by this
subchapter.
(B) Stay of collection.--In the case of any
assessment referred to in paragraph (1),
notwithstanding paragraph (1), no levy or
proceeding in court for the collection of such
assessment shall be made, begun, or prosecuted
during the period in which such assessment may
be abated under this paragraph.
(C) Notice.--Upon determination of an
abatement pursuant to subparagraph (A), the
Secretary shall send notice to the taxpayer of
such abatement which--
(i) is sent to the taxpayer's last
known address,
(ii) describes the abatement in
comprehensive, plain language, and
(iii) provides an itemized
computation of any adjustments to be
made to the items described in the
notice of mathematical or clerical
error, including any changes to any
item described in paragraph
(1)(B)(i)(III).
(3) Assessments arising out of tentative carryback or
refund adjustments.--If the Secretary determines that
the amount applied, credited, or refunded under section
6411 is in excess of the overassessment attributable to
the carryback or the amount described in section
1341(b)(1) with respect to which such amount was
applied, credited, or refunded, he may assess without
regard to the provisions of paragraph (2) the amount of
the excess as a deficiency as if it were due to a
mathematical or clerical error appearing on the return.
(4) Assessment of amount paid.--Any amount paid as a
tax or in respect of a tax may be assessed upon the
receipt of such payment notwithstanding the provisions
of subsection (a). In any case where such amount is
paid after the mailing of a notice of deficiency under
section 6212, such payment shall not deprive the Tax
Court of jurisdiction over such deficiency determined
under section 6211 without regard to such assessment.
(5) Certain orders of criminal restitution.--If the
taxpayer is notified that an assessment has been or
will be made pursuant to section 6201(a)(4)--
(A) such notice shall not be considered as a
notice of deficiency for the purposes of
subsection (a) (prohibiting assessment and
collection until notice of the deficiency has
been mailed), section 6212(c)(1) (restricting
further deficiency letters), or section 6512(a)
(prohibiting credits or refunds after petition
to the Tax Court), and
(B) subsection (a) shall not apply with
respect to the amount of such assessment.
(c) Failure to file petition.--If the taxpayer does not file
a petition with the Tax Court within the time prescribed in
subsection (a), the deficiency, notice of which has been mailed
to the taxpayer, shall be assessed, and shall be paid upon
notice and demand from the Secretary.
(d) Waiver of restrictions.--The taxpayer shall at any time
(whether or not a notice of deficiency has been issued) have
the right, by a signed notice in writing filed with the
Secretary, to waive the restrictions provided in subsection (a)
on the assessment and collection of the whole or any part of
the deficiency.
(e) Suspension of filing period for certain excise taxes.--
The running of the time prescribed by subsection (a) for filing
a petition in the Tax Court with respect to the taxes imposed
by section 4941 (relating to taxes on self-dealing), 4942
(relating to taxes on failure to distribute income), 4943
(relating to taxes on excess business holdings), 4944 (relating
to investments which jeopardize charitable purpose), 4945
(relating to taxes on taxable expenditures), 4951 (relating to
taxes on self-dealing), or 4952 (relating to taxes on taxable
expenditures), 4955 (relating to taxes on political
expenditures), 4958 (relating to private excess benefit), 4971
(relating to excise taxes on failure to meet minimum funding
standard), 4975 (relating to excise taxes on prohibited
transactions) shall be suspended for any period during which
the Secretary has extended the time allowed for making
correction under section 4963(e).
(f) Coordination with title 11.--
(1) Suspension of running of period for filing
petition in title 11 cases.--In any case under title 11
of the United States Code, the running of the time
prescribed by subsection (a) for filing a petition in
the Tax Court with respect to any deficiency shall be
suspended for the period during which the debtor is
prohibited by reason of such case from filing a
petition in the Tax Court with respect to such
deficiency, and for 60 days thereafter.
(2) Certain action not taken into account.--For
purposes of the second and third sentences of
subsection (a), the filing of a proof of claim or
request for payment (or the taking of any other action)
in a case under title 11 of the United States Code
shall not be treated as action prohibited by such
second sentence.
(g) Definitions.--For purposes of this section--
(1) Return.--The term ``return'' includes any return,
statement, schedule, or list, and any amendment or
supplement thereto, filed with respect to any tax
imposed by subtitle A or B, or chapter 41, 42, 43, or
44.
(2) Mathematical or clerical error.--The term
``mathematical or clerical error'' means--
(A) an error in addition, subtraction,
multiplication, or division shown on any
return,
(B) an incorrect use of any table provided by
the Internal Revenue Service with respect to
any return if such incorrect use is apparent
from the existence of other information on the
return,
(C) an entry on a return of an item which is
inconsistent with another entry of the same or
another item on such return,
(D) an omission of information which is
required to be supplied on the return to
substantiate an entry on the return,
(E) an entry on a return of a deduction or
credit in an amount which exceeds a statutory
limit imposed by subtitle A or B, or chapter
41, 42, 43, or 44, if such limit is expressed--
(i) as a specified monetary amount,
or
(ii) as a percentage, ratio, or
fraction,
and if the items entering into the application
of such limit appear on such return,
(F) an omission of a correct taxpayer
identification number required under section 32
(relating to the earned income credit) to be
included on a return,
(G) an entry on a return claiming the credit
under section 32 with respect to net earnings
from self-employment described in section
32(c)(2)(A) to the extent the tax imposed by
section 1401 (relating to self-employment tax)
on such net earnings has not been paid,
(H) an omission of a correct TIN required
under section 21 (relating to expenses for
household and dependent care services necessary
for gainful employment) or section 151
(relating to allowance of deductions for
personal exemptions),
(I) an omission of a correct TIN required
under section 24(e) (relating to child tax
credit) to be included on a return,
(J) an omission of a correct TIN required
under section 25A(g)(1) (relating to higher
education tuition and related expenses) to be
included on a return,
(K) an omission of information required by
section 32(k)(2) (relating to taxpayers making
improper prior claims of earned income credit)
or an entry on the return claiming the credit
under section 32 for a taxable year for which
the credit is disallowed under subsection
(k)(1) thereof,
(L) the inclusion on a return of a TIN
required to be included on the return under
section 21, 24, 32, 6428, or 6428A if--
(i) such TIN is of an individual
whose age affects the amount of the
credit under such section, and
(ii) the computation of the credit on
the return reflects the treatment of
such individual as being of an age
different from the individual's age
based on such TIN,
(M) the entry on the return claiming the
credit under section 32 with respect to a child
if, according to the Federal Case Registry of
Child Support Orders established under section
453(h) of the Social Security Act, the taxpayer
is a noncustodial parent of such child,
(N) an omission of any increase required
under section 36(f) with respect to the
recapture of a credit allowed under section 36,
(O) the inclusion on a return of an
individual taxpayer identification number
issued under section 6109(i) which has expired,
been revoked by the Secretary, or is otherwise
invalid,
(P) an omission of information required by
section 24(g)(2) or an entry on the return
claiming the credit under section 24 for a
taxable year for which the credit is disallowed
under subsection (g)(1) thereof,
(Q) an omission of information required by
section 25A(b)(4)(B) or an entry on the return
claiming the American Opportunity Tax Credit
for a taxable year for which such credit is
disallowed under section 25A(b)(4)(A),
(R) an omission of information or
documentation required under section
25C(b)(6)(B) (relating to home energy audits)
to be included on a return,
(S) an omission of a correct product
identification number required under section
25C(h) (relating to credit for nonbusiness
energy property) to be included on a return,
(T) an omission of a correct vehicle
identification number required under section
30D(f)(9) (relating to credit for new clean
vehicles) to be included on a return,
(U) an omission of a correct vehicle
identification number required under section
25E(d) (relating to credit for previously-owned
clean vehicles) to be included on a return, and
(V) an omission of a correct vehicle
identification number required under section
45W(e) (relating to commercial clean vehicle
credit) to be included on a return.
A taxpayer shall be treated as having omitted a correct
TIN for purposes of the preceding sentence if
information provided by the taxpayer on the return with
respect to the individual whose TIN was provided
differs from the information the Secretary obtains from
the person issuing the TIN.
(h) Cross references.--
(1) For assessment as if a mathematical error
on the return, in the case of erroneous claims
for income tax prepayment credits, see section
6201(a)(3).
(2) For assessments without regard to
restrictions imposed by this section in the
case of--
(A) Recovery of foreign income taxes,
see section 905(c).
(B) Recovery of foreign estate tax,
see section 2016.
(3) For provisions relating to application of
this subchapter in the case of certain
partnership items, etc., see section 6230(a).
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