    [United States Statutes at Large, Volume 133, 116th Congress, 1st Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 116-25
    116th Congress

    An Act

    To amend the Internal Revenue Code of 1986 to modernize and improve the
    Internal Revenue Service, and for other purposes. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>
    SECTION 1. SHORT TITLE; ETC.

    (a) <>  Short Title.--This Act may be cited as
    the ``Taxpayer First Act''.

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

    Sec. 1. Short title; etc.

    TITLE I--PUTTING TAXPAYERS FIRST

    Subtitle A--Independent Appeals Process

    Sec. 1001. Establishment of Internal Revenue Service Independent Office
    of Appeals.

    Subtitle B--Improved Service

    Sec. 1101. Comprehensive customer service strategy.
    Sec. 1102. Low-income exception for payments otherwise required in
    connection with a submission of an offer-in-compromise.

    Subtitle C--Sensible Enforcement

    Sec. 1201. Internal Revenue Service seizure requirements with respect to
    structuring transactions.
    Sec. 1202. Exclusion of interest received in action to recover property
    seized by the Internal Revenue Service based on structuring
    transaction.
    Sec. 1203. Clarification of equitable relief from joint liability.
    Sec. 1204. Modification of procedures for issuance of third-party
    summons.
    Sec. 1205. Private debt collection and special compliance personnel
    program.
    Sec. 1206. Reform of notice of contact of third parties.
    Sec. 1207. Modification of authority to issue designated summons.
    Sec. 1208. Limitation on access of non-Internal Revenue Service
    employees to returns and return information.

    Subtitle D--Organizational Modernization

    Sec. 1301. Office of the National Taxpayer Advocate.
    Sec. 1302. Modernization of Internal Revenue Service organizational
    structure.

    Subtitle E--Other Provisions

    Sec. 1401. Return preparation programs for applicable taxpayers.
    Sec. 1402. Provision of information regarding low-income taxpayer
    clinics.
    Sec. 1403. Notice from IRS regarding closure of taxpayer assistance
    centers.

    [[Page 982]]

    Sec. 1404. Rules for seizure and sale of perishable goods restricted to
    only perishable goods.
    Sec. 1405. Whistleblower reforms.
    Sec. 1406. Customer service information.
    Sec. 1407. Misdirected tax refund deposits.

    TITLE II--21ST CENTURY IRS

    Subtitle A--Cybersecurity and Identity Protection

    Sec. 2001. Public-private partnership to address identity theft refund
    fraud.
    Sec. 2002. Recommendations of Electronic Tax Administration Advisory
    Committee regarding identity theft refund fraud.
    Sec. 2003. Information sharing and analysis center.
    Sec. 2004. Compliance by contractors with confidentiality safeguards.
    Sec. 2005. Identity protection personal identification numbers.
    Sec. 2006. Single point of contact for tax-related identity theft
    victims.
    Sec. 2007. Notification of suspected identity theft.
    Sec. 2008. Guidelines for stolen identity refund fraud cases.
    Sec. 2009. Increased penalty for improper disclosure or use of
    information by preparers of returns.

    Subtitle B--Development of Information Technology

    Sec. 2101. Management of Internal Revenue Service information
    technology.
    Sec. 2102. Internet platform for Form 1099 filings.
    Sec. 2103. Streamlined critical pay authority for information technology
    positions.

    Subtitle C--Modernization of Consent-Based Income Verification System

    Sec. 2201. Disclosure of taxpayer information for third-party income
    verification.
    Sec. 2202. Limit redisclosures and uses of consent-based disclosures of
    tax return information.

    Subtitle D--Expanded Use of Electronic Systems

    Sec. 2301. Electronic filing of returns.
    Sec. 2302. Uniform standards for the use of electronic signatures for
    disclosure authorizations to, and other authorizations of,
    practitioners.
    Sec. 2303. Payment of taxes by debit and credit cards.
    Sec. 2304. Authentication of users of electronic services accounts.

    Subtitle E--Other Provisions

    Sec. 2401. Repeal of provision regarding certain tax compliance
    procedures and reports.
    Sec. 2402. Comprehensive training strategy.

    TITLE III--MISCELLANEOUS PROVISIONS

    Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

    Sec. 3001. Prohibition on rehiring any employee of the Internal Revenue
    Service who was involuntarily separated from service for
    misconduct.
    Sec. 3002. Notification of unauthorized inspection or disclosure of
    returns and return information.

    Subtitle B--Provisions Relating to Exempt Organizations

    Sec. 3101. Mandatory e-filing by exempt organizations.
    Sec. 3102. Notice required before revocation of tax-exempt status for
    failure to file return.

    Subtitle C--Revenue Provision

    Sec. 3201. Increase in penalty for failure to file.

    TITLE IV--BUDGETARY EFFECTS

    Sec. 4001. Determination of budgetary effects.

    [[Page 983]]

    TITLE I--PUTTING TAXPAYERS FIRST

    Subtitle A--Independent Appeals Process

    SEC. 1001. ESTABLISHMENT OF INTERNAL REVENUE SERVICE INDEPENDENT
    OFFICE OF APPEALS.

    (a) <>  In General.--Section 7803 is amended by
    adding at the end the following new subsection:

    ``(e) Independent Office of Appeals.--
    ``(1) Establishment.--There is established in the Internal
    Revenue Service an office to be known as the `Internal Revenue
    Service Independent Office of Appeals'.
    ``(2) Chief of appeals.--
    ``(A) In general.--The Internal Revenue Service
    Independent Office of Appeals shall be under the
    supervision and direction of an official to be known as
    the `Chief of Appeals'. The Chief of Appeals shall
    report directly to the Commissioner of 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.
    ``(B) Appointment.--The Chief of Appeals shall be
    appointed by the Commissioner of Internal Revenue
    without regard to the provisions of title 5, United
    States Code, relating to appointments in the competitive
    service or the Senior Executive Service.
    ``(C) Qualifications.--An individual appointed under
    subparagraph (B) shall have experience and expertise
    in--
    ``(i) administration of, and compliance with,
    Federal tax laws,
    ``(ii) a broad range of compliance cases, and
    ``(iii) management of large service
    organizations.
    ``(3) Purposes and duties of office.--It shall be the
    function of the Internal Revenue Service Independent Office of
    Appeals to resolve Federal tax controversies without litigation
    on a basis which--
    ``(A) is fair and impartial to both the Government
    and the taxpayer,
    ``(B) promotes a consistent application and
    interpretation of, and voluntary compliance with, the
    Federal tax laws, and
    ``(C) enhances public confidence in the integrity
    and efficiency of the Internal Revenue Service.
    ``(4) Right of appeal.--The resolution process described in
    paragraph (3) shall be generally available to all taxpayers.
    ``(5) Limitation on designation of cases as not eligible for
    referral to independent office of appeals.--
    ``(A) <>  In general.--If any
    taxpayer which is in receipt of a notice of deficiency
    authorized under section 6212 requests referral to the
    Internal Revenue Service Independent Office of Appeals
    and such request is denied, the Commissioner of Internal
    Revenue shall provide such taxpayer a written notice
    which--
    ``(i) provides a detailed description of the
    facts involved, the basis for the decision to deny
    the request,

    [[Page 984]]

    and a detailed explanation of how the basis of
    such decision applies to such facts, and
    ``(ii) describes the procedures prescribed
    under subparagraph (C) for protesting the decision
    to deny the request.
    ``(B) Report to congress.--The Commissioner of
    Internal Revenue shall submit a written report to
    Congress on an annual basis which includes the number of
    requests described in subparagraph (A) which were denied
    and the reasons (described by category) that such
    requests were denied.
    ``(C) Procedures for protesting denial of request.--
    The Commissioner of Internal Revenue shall prescribe
    procedures for protesting to the Commissioner of
    Internal Revenue a denial of a request described in
    subparagraph (A).
    ``(D) Not applicable to frivolous positions.--This
    paragraph shall not apply to a request for referral to
    the Internal Revenue Service Independent Office of
    Appeals which is denied on the basis that the issue
    involved is a frivolous position (within the meaning of
    section 6702(c)).
    ``(6) Staff.--
    ``(A) In general.--All personnel in the Internal
    Revenue Service Independent Office of Appeals shall
    report to the Chief of Appeals.
    ``(B) Access to staff of office of the chief
    counsel.--The Chief of Appeals shall have authority to
    obtain legal assistance and advice from the staff of the
    Office of the Chief Counsel. The Chief Counsel shall
    ensure, to the extent practicable, that such assistance
    and advice is provided by staff of the Office of the
    Chief Counsel who were not involved in the case with
    respect to which such assistance and advice is sought
    and who are not involved in preparing such case for
    litigation.
    ``(7) Access to case files.--
    ``(A) <>  In general.--In any case
    in which a conference with the Internal Revenue Service
    Independent Office of Appeals has been scheduled upon
    request of a specified taxpayer, the Chief of Appeals
    shall ensure that such taxpayer is provided access to
    the nonprivileged portions of the case file on record
    regarding the disputed issues (other than documents
    provided by the taxpayer to the Internal Revenue
    Service) not later than 10 days before the date of such
    conference.
    ``(B) <>  Taxpayer election to
    expedite conference.--If the taxpayer so elects,
    subparagraph (A) shall be applied by substituting `the
    date of such conference' for `10 days before the date of
    such conference'.
    ``(C) Specified taxpayer.--For purposes of this
    paragraph--
    ``(i) <>  In general.--The
    term `specified taxpayer' means--
    ``(I) in the case of any taxpayer
    who is a natural person, a taxpayer
    whose adjusted gross income does not
    exceed $400,000 for the taxable year to
    which the dispute relates, and

    [[Page 985]]

    ``(II) in the case of any other
    taxpayer, a taxpayer whose gross
    receipts do not exceed $5 million for
    the taxable year to which the dispute
    relates.
    ``(ii) <>  Aggregation
    rule.--Rules similar to the rules of section
    448(c)(2) shall apply for purposes of clause
    (i)(II).''.

    (b) Conforming Amendments.--
    (1) The following provisions are each amended by striking
    ``Internal Revenue Service Office of Appeals'' and inserting
    ``Internal Revenue Service Independent Office of Appeals'':
    (A) <>  Section
    6015(c)(4)(B)(ii)(I).
    (B) Section 6320(b)(1).
    (C) Subsections (b)(1) and (d)(3) of section 6330.
    (D) Section 6603(d)(3)(B).
    (E) Section 6621(c)(2)(A)(i).
    (F) Section 7122(e)(2).
    (G) Subsections (a), (b)(1), (b)(2), and (c)(1) of
    section 7123.
    (H) Subsections (c)(7)(B)(i) and (g)(2)(A) of
    section 7430.
    (I) Section 7522(b)(3).
    (J) Section 7612(c)(2)(A).
    (2) Section 7430(c)(2) is amended by striking ``Internal
    Revenue Service Office of Appeals'' each place it appears and
    inserting ``Internal Revenue Service Independent Office of
    Appeals''.
    (3) The heading of section 6330(d)(3) is amended by
    inserting ``independent'' after ``irs''.

    (c) <>  Other References.--Any reference in
    any provision of law, or regulation or other guidance, to the Internal
    Revenue Service Office of Appeals shall be treated as a reference to the
    Internal Revenue Service Independent Office of Appeals.

    (d) <>  Savings Provisions.--Rules similar to
    the rules of paragraphs (2) through (6) <>  of
    section 1001(b) of the Internal Revenue Service Restructuring and Reform
    Act of 1998 shall apply for purposes of this section (and the amendments
    made by this section).

    (e) <>  Effective Date.--
    (1) In general.--Except as otherwise provided in this
    subsection, the amendments made by this section shall take
    effect on the date of the enactment of this Act.
    (2) <>  Access to case
    files.--Section 7803(e)(7) of the Internal Revenue Code of 1986,
    as added by subsection (a), shall apply to conferences occurring
    after the date which is 1 year after the date of the enactment
    of this Act.

    Subtitle B--Improved Service

    SEC. 1101. <>  COMPREHENSIVE
    CUSTOMER SERVICE STRATEGY.

    (a) In General.--Not later than the date which is 1 year after the
    date of the enactment of this Act, the Secretary of the Treasury (or the
    Secretary's delegate) shall submit to Congress a written comprehensive
    customer service strategy for the Internal Revenue Service. Such
    strategy shall include--
    (1) <>  a plan to provide assistance to
    taxpayers that is secure, designed to meet reasonable taxpayer
    expectations, and adopts appropriate best practices of customer
    service provided in the

    [[Page 986]]

    private sector, including online services, telephone call back
    services, and training of employees providing customer services;
    (2) <>  a thorough assessment of the
    services that the Internal Revenue Service can co-locate with
    other Federal services or offer as self-service options;
    (3) <>  proposals to improve
    Internal Revenue Service customer service in the short term (the
    current and following fiscal year), medium term (approximately 3
    to 5 fiscal years), and long term (approximately 10 fiscal
    years);
    (4) <>  a plan to update guidance and training
    materials for customer service employees of the Internal Revenue
    Service, including the Internal Revenue Manual, to reflect such
    strategy; and
    (5) identified metrics and benchmarks for quantitatively
    measuring the progress of the Internal Revenue Service in
    implementing such strategy.

    (b) <>  Updated Guidance and Training Materials.--
    Not later than 2 years after the date of the enactment of this Act, the
    Secretary of the Treasury (or the Secretary's delegate) shall make
    available the updated guidance and training materials described in
    subsection (a)(4) (including the Internal Revenue Manual). Such updated
    guidance and training materials (including the Internal Revenue Manual)
    shall be written in a manner so as to be easily understood by customer
    service employees of the Internal Revenue Service and shall provide
    clear instructions.
    SEC. 1102. LOW-INCOME EXCEPTION FOR PAYMENTS OTHERWISE REQUIRED IN
    CONNECTION WITH A SUBMISSION OF AN
    OFFER-IN-COMPROMISE.

    (a) <>  In General.--Section 7122(c) is amended
    by adding at the end the following new paragraph:
    ``(3) Exception for low-income taxpayers.--Paragraph (1),
    and any user fee otherwise required in connection with the
    submission of an offer-in-compromise, shall not apply to any
    offer-in-compromise with respect to a taxpayer who is an
    individual with adjusted gross income, as determined for the
    most recent taxable year for which such information is
    available, which does not exceed 250 percent of the applicable
    poverty level (as determined by the Secretary).''.

    (b) <>  Effective Date.--The amendment made
    by this section shall apply to offers-in-compromise submitted after the
    date of the enactment of this Act.

    Subtitle C--Sensible Enforcement

    SEC. 1201. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH
    RESPECT TO STRUCTURING TRANSACTIONS.

    Section 5317(c)(2) of title 31, United States Code, is amended--
    (1) by striking ``Any property'' and inserting the
    following:
    ``(A) In general.--Any property''; and
    (2) by adding at the end the following:
    ``(B) Internal revenue service seizure requirements
    with respect to structuring transactions.--
    ``(i) Property derived from an illegal
    source.--Property may only be seized by the
    Internal Revenue Service pursuant to subparagraph
    (A) by reason of

    [[Page 987]]

    a claimed violation of section 5324 if the
    property to be seized was derived from an illegal
    source or the funds were structured for the
    purpose of concealing the violation of a criminal
    law or regulation other than section 5324.
    ``(ii) <>  Notice.--Not later
    than 30 days after property is seized by the
    Internal Revenue Service pursuant to subparagraph
    (A), the Internal Revenue Service shall--
    ``(I) make a good faith effort to
    find all persons with an ownership
    interest in such property; and
    ``(II) provide each such person so
    found with a notice of the seizure and
    of the person's rights under clause
    (iv).
    ``(iii) Extension of notice under certain
    circumstances.--The Internal Revenue Service may
    apply to a court of competent jurisdiction for one
    30-day extension of the notice requirement under
    clause (ii) if the Internal Revenue Service can
    establish probable cause of an imminent threat to
    national security or personal safety necessitating
    such extension.
    ``(iv) <>  Post-seizure
    hearing.--If a person with an ownership interest
    in property seized pursuant to subparagraph (A) by
    the Internal Revenue Service requests a hearing by
    a court of competent jurisdiction within 30 days
    after the date on which notice is provided under
    subclause (ii), such property shall be returned
    unless the court holds an adversarial hearing and
    finds within 30 days of such request (or such
    longer period as the court may provide, but only
    on request of an interested party) that there is
    probable cause to believe that there is a
    violation of section 5324 involving such property
    and probable cause to believe that the property to
    be seized was derived from an illegal source or
    the funds were structured for the purpose of
    concealing the violation of a criminal law or
    regulation other than section 5324.''.
    SEC. 1202. EXCLUSION OF INTEREST RECEIVED IN ACTION TO RECOVER
    PROPERTY SEIZED BY THE INTERNAL REVENUE
    SERVICE BASED ON STRUCTURING
    TRANSACTION.

    (a) In General.--Part III of subchapter B of chapter 1 is amended by
    inserting before section 140 the following new section:
    ``SEC. 139H. <>  INTEREST RECEIVED IN ACTION
    TO RECOVER PROPERTY SEIZED BY THE
    INTERNAL REVENUE SERVICE BASED ON
    STRUCTURING TRANSACTION.

    ``Gross income shall not include any interest received from the
    Federal Government in connection with an action to recover property
    seized by the Internal Revenue Service pursuant to section 5317(c)(2) of
    title 31, United States Code, by reason of a claimed violation of
    section 5324 of such title.''.

    [[Page 988]]

    (b) Clerical Amendment.--The table of sections for part III of
    subchapter B of chapter 1 <>  is amended by
    inserting before the item relating to section 140 the following new
    item:

    ``Sec. 139H. Interest received in action to recover property seized by
    the Internal Revenue Service based on structuring
    transaction.''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to interest received on or after the
    date of the enactment of this Act.
    SEC. 1203. CLARIFICATION OF EQUITABLE RELIEF FROM JOINT LIABILITY.

    (a) <>  In General.--Section 6015 is amended--
    (1) in subsection (e), by adding at the end the following
    new paragraph:
    ``(7) Standard and scope of review.--Any review of a
    determination made under this section shall be reviewed de novo
    by the Tax Court and shall be based upon--
    ``(A) the administrative record established at the
    time of the determination, and
    ``(B) any additional newly discovered or previously
    unavailable evidence.''; and
    (2) by amending subsection (f) to read as follows:

    ``(f) Equitable Relief.--
    ``(1) In general.--Under procedures prescribed by the
    Secretary, if--
    ``(A) taking into account all the facts and
    circumstances, it is inequitable to hold the individual
    liable for any unpaid tax or any deficiency (or any
    portion of either), and
    ``(B) relief is not available to such individual
    under subsection (b) or (c),
    the Secretary may relieve such individual of such liability.
    ``(2) Limitation.--A request for equitable relief under this
    subsection may be made with respect to any portion of any
    liability that--
    ``(A) has not been paid, provided that such request
    is made before the expiration of the applicable period
    of limitation under section 6502, or
    ``(B) has been paid, provided that such request is
    made during the period in which the individual could
    submit a timely claim for refund or credit of such
    payment.''.

    (b) <>  Effective Date.--The amendments
    made by this section shall apply to petitions or requests filed or
    pending on or after the date of the enactment of this Act.
    SEC. 1204. MODIFICATION OF PROCEDURES FOR ISSUANCE OF THIRD-PARTY
    SUMMONS.

    (a) In General.--Section 7609(f) is amended by adding at the end the
    following flush sentence:
    ``The Secretary shall not issue any summons described in the preceding
    sentence unless the information sought to be obtained is narrowly
    tailored to information that pertains to the failure (or potential
    failure) of the person or group or class of persons referred to in
    paragraph (2) to comply with one or more provisions of the internal
    revenue law which have been identified for purposes of such
    paragraph.''.

    [[Page 989]]

    (b) <>  Effective
    Date.--The amendments made by this section shall apply to summonses
    served after the date that is 45 days after the date of the enactment of
    this Act.
    SEC. 1205. PRIVATE DEBT COLLECTION AND SPECIAL COMPLIANCE
    PERSONNEL PROGRAM.

    (a) Certain Tax Receivables Not Eligible for Collection Under Tax
    Collection Contracts.--Section 6306(d)(3) <>  is
    amended by striking ``or'' at the end of subparagraph (C) and by
    inserting after subparagraph (D) the following new subparagraphs:
    ``(E) a taxpayer substantially all of whose income
    consists of disability insurance benefits under section
    223 of the Social Security Act or supplemental security
    income benefits under title XVI of the Social Security
    Act (including supplemental security income benefits of
    the type described in section 1616 of such Act or
    section 212 of Public Law 93-66), or
    ``(F) a taxpayer who is an individual with adjusted
    gross income, as determined for the most recent taxable
    year for which such information is available, which does
    not exceed 200 percent of the applicable poverty level
    (as determined by the Secretary),''.

    (b) Determination of Inactive Tax Receivables Eligible for
    Collection Under Tax Collection Contracts.--Section 6306(c)(2)(A)(ii) is
    amended by striking ``more than \1/3\ of the period of the applicable
    statute of limitation has lapsed'' and inserting ``more than 2 years has
    passed since assessment''.
    (c) Maximum Length of Installment Agreements Offered Under Tax
    Collection Contracts.--Section 6306(b)(1)(B) is amended by striking ``5
    years'' and inserting ``7 years''.
    (d) Clarification That Special Compliance Personnel Program Account
    May Be Used for Program Costs.--
    (1) In general.--Section 6307(b) is amended--
    (A) in paragraph (2), by striking all that follows
    ``under such program'' and inserting a period, and
    (B) in paragraph (3), by striking all that follows
    ``out of such account'' and inserting ``for other than
    program costs.''.
    (2) Communications, software, and technology costs treated
    as program costs.--Section 6307(d)(2)(B) is amended by striking
    ``telecommunications'' and inserting ``communications, software,
    technology''.
    (3) Conforming amendment.--Section 6307(d)(2) is amended by
    striking ``and'' at the end of subparagraph (A), by striking the
    period at the end of subparagraph (B) and inserting ``, and'',
    and by inserting after subparagraph (B) the following new
    subparagraph:
    ``(C) reimbursement of the Internal Revenue Service
    or other government agencies for the cost of
    administering the qualified tax collection program under
    section 6306.''.

    (e) <>  Effective Dates.--
    (1) In general.--Except as otherwise provided in this
    subsection, the amendments made by this section shall apply to
    tax receivables identified by the Secretary (or the Secretary's
    delegate) after December 31, 2020.

    [[Page 990]]

    (2) Maximum length of installment agreements.--The amendment
    made by subsection (c) shall apply to contracts entered into
    after the date of the enactment of this Act.
    (3) Use of special compliance personnel program account.--
    The amendment made by subsection (d) shall apply to amounts
    expended from the special compliance personnel program account
    after the date of the enactment of this Act.
    SEC. 1206. REFORM OF NOTICE OF CONTACT OF THIRD PARTIES.

    (a) <>  In General.--Section 7602(c)(1) is
    amended to read as follows:
    ``(1) <>  General notice.--An officer or
    employee of the Internal Revenue Service may not contact any
    person other than the taxpayer with respect to the determination
    or collection of the tax liability of such taxpayer unless such
    contact occurs during a period (not greater than 1 year) which
    is specified in a notice which--
    ``(A) informs the taxpayer that contacts with
    persons other than the taxpayer are intended to be made
    during such period, and
    ``(B) <>  except as otherwise
    provided by the Secretary, is provided to the taxpayer
    not later than 45 days before the beginning of such
    period.
    Nothing in the preceding sentence shall prevent the issuance of
    notices to the same taxpayer with respect to the same tax
    liability with periods specified therein that, in the aggregate,
    exceed 1 year. A notice shall not be issued under this paragraph
    unless there is an intent at the time such notice is issued to
    contact persons other than the taxpayer during the period
    specified in such notice. The preceding sentence shall not
    prevent the issuance of a notice if the requirement of such
    sentence is met on the basis of the assumption that the
    information sought to be obtained by such contact will not be
    obtained by other means before such contact.''.

    (b) <>
    Effective Date.--The amendment made by this section shall apply to
    notices provided, and contacts of persons made, after the date which is
    45 days after the date of the enactment of this Act.
    SEC. 1207. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED SUMMONS.

    (a) In General.--Paragraph (1) of section 6503(j) is amended by
    striking ``coordinated examination program'' and inserting ``coordinated
    industry case program''.
    (b) Requirements for Summons.--Clause (i) of section 6503(j)(2)(A)
    is amended to read as follows:
    ``(i) the issuance of such summons is preceded
    by a review and written approval of such issuance
    by the Commissioner of the relevant operating
    division of the Internal Revenue Service and the
    Chief Counsel which--
    ``(I) states facts clearly
    establishing that the Secretary has made
    reasonable requests for the information
    that is the subject of the summons, and
    ``(II) is attached to such
    summons,''.

    [[Page 991]]

    (c) Establishment That Reasonable Requests for Information Were
    Made.--Subsection (j) of section 6503 <>  is amended
    by adding at the end the following new paragraph:
    ``(4) Establishment that reasonable requests for information
    were made.--In any court proceeding described in paragraph (3),
    the Secretary shall establish that reasonable requests were made
    for the information that is the subject of the summons.''.

    (d) <>
    Effective Date.--The amendments made by this section shall apply to
    summonses issued after the date which is 45 days after the date of the
    enactment of this Act.
    SEC. 1208. LIMITATION ON ACCESS OF NON-INTERNAL REVENUE SERVICE
    EMPLOYEES TO RETURNS AND RETURN
    INFORMATION.

    (a) In General.--Section 7602 is amended by adding at the end the
    following new subsection:
    ``(f) Limitation on Access of Persons Other Than Internal Revenue
    Service Officers and Employees.--The Secretary shall not, under the
    authority of section 6103(n), provide any books, papers, records, or
    other data obtained pursuant to this section to any person authorized
    under section 6103(n), except when such person requires such information
    for the sole purpose of providing expert evaluation and assistance to
    the Internal Revenue Service. No person other than an officer or
    employee of the Internal Revenue Service or the Office of Chief Counsel
    may, on behalf of the Secretary, question a witness under oath whose
    testimony was obtained pursuant to this section.''.
    (b) <>  Effective Date.--The amendment made
    by this section--
    (1) shall take effect on the date of the enactment of this
    Act; and
    (2) <>  shall not fail to apply to a
    contract in effect under section 6103(n) of the Internal Revenue
    Code of 1986 merely because such contract was in effect before
    the date of the enactment of this Act.

    Subtitle D--Organizational Modernization

    SEC. 1301. OFFICE OF THE NATIONAL TAXPAYER ADVOCATE.

    (a) Taxpayer Advocate Directives.--
    (1) In general.--Section 7803(c) is amended by adding at the
    end the following new paragraph:
    ``(5) <>  Taxpayer advocate directives.--
    In the case of any Taxpayer Advocate Directive issued by the
    National Taxpayer Advocate pursuant to a delegation of authority
    from the Commissioner of Internal Revenue--
    ``(A) the Commissioner or a Deputy Commissioner
    shall modify, rescind, or ensure compliance with such
    directive not later than 90 days after the issuance of
    such directive, and
    ``(B) in the case of any directive which is modified
    or rescinded by a Deputy Commissioner, the National
    Taxpayer Advocate may (not later than 90 days after such
    modification or rescission) appeal to the Commissioner,
    and the Commissioner shall (not later than 90 days after
    such appeal is made) ensure compliance with such
    directive

    [[Page 992]]

    as issued by the National Taxpayer Advocate or provide
    the National Taxpayer Advocate with the reasons for any
    modification or rescission made or upheld by the
    Commissioner pursuant to such appeal.''.
    (2) Report to certain committees of congress regarding
    directives.--Section 7803(c)(2)(B)(ii) <>
    is amended by redesignating subclauses (VIII) through (XI) as
    subclauses (IX) through (XII), respectively, and by inserting
    after subclause (VII) the following new subclause:
    ``(VIII) identify any Taxpayer
    Advocate Directive which was not honored
    by the Internal Revenue Service in a
    timely manner, as specified under
    paragraph (5);''.

    (b) National Taxpayer Advocate Annual Reports to Congress.--
    (1) Inclusion of most serious taxpayer problems.--Section
    7803(c)(2)(B)(ii)(III) is amended by striking ``at least 20 of
    the'' and inserting ``the 10''.
    (2) Coordination with treasury inspector general for tax
    administration.--Section 7803(c)(2) is amended by adding at the
    end the following new subparagraph:
    ``(E) Coordination with treasury inspector general
    for tax administration.--Before beginning any research
    or study, the National Taxpayer Advocate shall
    coordinate with the Treasury Inspector General for Tax
    Administration to ensure that the National Taxpayer
    Advocate does not duplicate any action that the Treasury
    Inspector General for Tax Administration has already
    undertaken or has a plan to undertake.''.
    (3) Statistical support.--
    (A) In general.--Section 6108 is amended by adding
    at the end the following new subsection:

    ``(d) Statistical Support for National Taxpayer Advocate.--Upon
    request of the National Taxpayer Advocate, the Secretary shall, to the
    extent practicable, provide the National Taxpayer Advocate with
    statistical support in connection with the preparation by the National
    Taxpayer Advocate of the annual report described in section
    7803(c)(2)(B)(ii). Such statistical support shall include statistical
    studies, compilations, and the review of information provided by the
    National Taxpayer Advocate for statistical validity and sound
    statistical methodology.''.
    (B) Disclosure of review.--Section
    7803(c)(2)(B)(ii), as amended by subsection (a), is
    amended by striking ``and'' at the end of subclause
    (XI), by redesignating subclause (XII) as subclause
    (XIII), and by inserting after subclause (XI) the
    following new subclause:
    ``(XII) with respect to any
    statistical information included in such
    report, include a statement of whether
    such statistical information was
    reviewed or provided by the Secretary
    under section 6108(d) and, if so,
    whether the Secretary determined such
    information to be statistically valid
    and based on sound statistical
    methodology; and''.
    (C) Conforming amendment.--Section
    7803(c)(2)(B)(iii) is amended by adding at the end the
    following: ``The preceding sentence shall not apply with

    [[Page 993]]

    respect to statistical information provided to the
    Secretary for review, or received from the Secretary,
    under section 6108(d).''.

    (c) Salary of National Taxpayer Advocate.--Section 7803(c)(1)(B)(i)
    is amended <>  by striking ``, or, if the Secretary
    of the Treasury so determines, at a rate fixed under section 9503 of
    such title''.

    (d) <>  Effective Date.--
    (1) In general.--Except as otherwise provided in this
    subsection, the amendments made by this section shall take
    effect on the date of the enactment of this Act.
    (2) <>  Salary of national taxpayer
    advocate.--The amendment made by subsection (c) shall apply to
    compensation paid to individuals appointed as the National
    Taxpayer Advocate after March 31, 2019.
    SEC. <>  1302. MODERNIZATION OF INTERNAL
    REVENUE SERVICE ORGANIZATIONAL
    STRUCTURE.

    (a) <>  In General.--Not later than September
    30, 2020, the Secretary of the Treasury (or the Secretary's delegate)
    shall submit to Congress a comprehensive written plan to redesign the
    organization of the Internal Revenue Service. Such plan shall--
    (1) ensure the successful implementation of the priorities
    specified by Congress in this Act;
    (2) prioritize taxpayer services to ensure that all
    taxpayers easily and readily receive the assistance that they
    need;
    (3) streamline the structure of the agency including
    minimizing the duplication of services and responsibilities
    within the agency;
    (4) best position the Internal Revenue Service to combat
    cybersecurity and other threats to the Internal Revenue Service;
    and
    (5) address whether the Criminal Investigation Division of
    the Internal Revenue Service should report directly to the
    Commissioner of Internal Revenue.

    (b) Repeal of Restriction on Organizational Structure of Internal
    Revenue Service.--Paragraph (3) <>  of section
    1001(a) of the Internal Revenue Service Restructuring and Reform Act of
    1998 shall cease to apply beginning 1 year after the date on which the
    plan described in subsection (a) is submitted to Congress.

    Subtitle E--Other Provisions

    SEC. 1401. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.

    (a) In General.--Chapter 77 is amended by inserting after section
    7526 the following new section:
    ``SEC. <>  7526A. RETURN PREPARATION PROGRAMS
    FOR APPLICABLE TAXPAYERS.

    ``(a) Establishment of Volunteer Income Tax Assistance Matching
    Grant Program.--The Secretary shall establish a Community Volunteer
    Income Tax Assistance Matching Grant Program under which the Secretary
    may, subject to the availability of appropriated funds, make grants to
    provide matching funds for the development, expansion, or continuation
    of qualified return

    [[Page 994]]

    preparation programs assisting applicable taxpayers and members of
    underserved populations.
    ``(b) Use of Funds.--
    ``(1) In general.--Qualified return preparation programs may
    use grants received under this section for--
    ``(A) ordinary and necessary costs associated with
    program operation in accordance with cost principles
    under the applicable Office of Management and Budget
    circular, including--
    ``(i) wages or salaries of persons
    coordinating the activities of the program,
    ``(ii) developing training materials,
    conducting training, and performing quality
    reviews of the returns prepared under the program,
    ``(iii) equipment purchases, and
    ``(iv) vehicle-related expenses associated
    with remote or rural tax preparation services,
    ``(B) outreach and educational activities described
    in subsection (c)(2)(B), and
    ``(C) services related to financial education and
    capability, asset development, and the establishment of
    savings accounts in connection with tax return
    preparation.
    ``(2) Requirement of matching funds.--A qualified return
    preparation program must provide matching funds on a dollar-for-
    dollar basis for all grants provided under this section.
    Matching funds may include--
    ``(A) the salary (including fringe benefits) of
    individuals performing services for the program,
    ``(B) the cost of equipment used in the program, and
    ``(C) other ordinary and necessary costs associated
    with the program.
    Indirect expenses, including general overhead of any entity
    administering the program, shall not be counted as matching
    funds.

    ``(c) Application.--
    ``(1) In general.--Each applicant for a grant under this
    section shall submit an application to the Secretary at such
    time, in such manner, and containing such information as the
    Secretary may reasonably require.
    ``(2) Priority.--In awarding grants under this section, the
    Secretary shall give priority to applications which
    demonstrate--
    ``(A) assistance to applicable taxpayers, with
    emphasis on outreach to, and services for, such
    taxpayers,
    ``(B) taxpayer outreach and educational activities
    relating to eligibility and availability of income
    supports available through this title, including the
    earned income tax credit, and
    ``(C) specific outreach and focus on one or more
    underserved populations.
    ``(3) Amounts taken into account.--In determining matching
    grants under this section, the Secretary shall only take into
    account amounts provided by the qualified return preparation
    program for expenses described in subsection (b).

    ``(d) Program Adherence.--
    ``(1) <>  In general.--The
    Secretary shall establish procedures for, and shall conduct not
    less frequently than once every

    [[Page 995]]

    5 calendar years during which a qualified return preparation
    program is operating under a grant under this section, periodic
    site visits--
    ``(A) to ensure the program is carrying out the
    purposes of this section, and
    ``(B) <>  to determine whether
    the program meets such program adherence standards as
    the Secretary shall by regulation or other guidance
    prescribe.
    ``(2) Additional requirements for grant recipients not
    meeting program adherence standards.--In the case of any
    qualified return preparation program which--
    ``(A) is awarded a grant under this section, and
    ``(B) is subsequently determined--
    ``(i) not to meet the program adherence
    standards described in paragraph (1)(B), or
    ``(ii) not to be otherwise carrying out the
    purposes of this section,
    such program shall not be eligible for any additional grants
    under this section unless such program provides sufficient
    documentation of corrective measures established to address any
    such deficiencies determined.

    ``(e) Definitions.--For purposes of this section--
    ``(1) Qualified return preparation program.--The term
    `qualified return preparation program' means any program--
    ``(A) which provides assistance to individuals, not
    less than 90 percent of whom are applicable taxpayers,
    in preparing and filing Federal income tax returns,
    ``(B) which is administered by a qualified entity,
    ``(C) in which all volunteers who assist in the
    preparation of Federal income tax returns meet the
    training requirements prescribed by the Secretary, and
    ``(D) which uses a quality review process which
    reviews 100 percent of all returns.
    ``(2) Qualified entity.--
    ``(A) In general.--The term `qualified entity' means
    any entity which--
    ``(i) is an eligible organization,
    ``(ii) is in compliance with Federal tax
    filing and payment requirements,
    ``(iii) is not debarred or suspended from
    Federal contracts, grants, or cooperative
    agreements, and
    ``(iv) agrees to provide documentation to
    substantiate any matching funds provided pursuant
    to the grant program under this section.
    ``(B) Eligible organization.--The term `eligible
    organization' means--
    ``(i) an institution of higher education which
    is described in section 102 (other than subsection
    (a)(1)(C) thereof) of the Higher Education Act of
    1965 (20 U.S.C. 1002), as in effect on the date of
    the enactment of this section, and which has not
    been disqualified from participating in a program
    under title IV of such Act,
    ``(ii) an organization described in section
    501(c) and exempt from tax under section 501(a),
    ``(iii) a local government agency, including--
    ``(I) a county or municipal
    government agency, and

    [[Page 996]]

    ``(II) an Indian tribe, as defined
    in section 4(13) of the Native American
    Housing Assistance and Self-
    Determination Act of 1996 (25 U.S.C.
    4103(13)), including any tribally
    designated housing entity (as defined in
    section 4(22) of such Act (25 U.S.C.
    4103(22))), tribal subsidiary,
    subdivision, or other wholly owned
    tribal entity,
    ``(iv) a local, State, regional, or national
    coalition (with one lead organization which meets
    the eligibility requirements of clause (i), (ii),
    or (iii) acting as the applicant organization), or
    ``(v) in the case of applicable taxpayers and
    members of underserved populations with respect to
    which no organizations described in the preceding
    clauses are available--
    ``(I) a State government agency, or
    ``(II) an office providing
    Cooperative Extension services (as
    established at the land-grant colleges
    and universities under the Smith-Lever
    Act of May 8, 1914).
    ``(3) Applicable taxpayers.--The term `applicable taxpayer'
    means a taxpayer whose income for the taxable year does not
    exceed an amount equal to the completed phaseout amount under
    section 32(b) for a married couple filing a joint return with
    three or more qualifying children, as determined in a revenue
    procedure or other published guidance.
    ``(4) Underserved population.--The term `underserved
    population' includes populations of persons with disabilities,
    persons with limited English proficiency, Native Americans,
    individuals living in rural areas, members of the Armed Forces
    and their spouses, and the elderly.

    ``(f) Special Rules and Limitations.--
    ``(1) Duration of grants.--Upon application of a qualified
    return preparation program, the Secretary is authorized to award
    a multi-year grant not to exceed 3 years.
    ``(2) Aggregate limitation.--Unless otherwise provided by
    specific appropriation, the Secretary shall not allocate more
    than $30 million per fiscal year (exclusive of costs of
    administering the program) to grants under this section.

    ``(g) Promotion of Programs.--
    ``(1) In general.--The Secretary shall promote tax
    preparation through qualified return preparation programs
    through the use of mass communications and other means.
    ``(2) Provision of information regarding qualified return
    preparation programs.--The Secretary may provide taxpayers
    information regarding qualified return preparation programs
    receiving grants under this section.
    ``(3) Referrals to low-income taxpayer clinics.--Qualified
    return preparation programs receiving a grant under this section
    are encouraged, in appropriate cases, to--
    ``(A) advise taxpayers of the availability of, and
    eligibility requirements for receiving, advice and
    assistance from qualified low-income taxpayer clinics
    receiving funding under section 7526, and
    ``(B) provide information regarding the location of,
    and contact information for, such clinics.''.

    [[Page 997]]

    (b) Clerical Amendment.--The table of sections for chapter 77
    is <> amended by inserting after the item
    relating to section 7526 the following new item:

    ``Sec. 7526A. Return preparation programs for applicable taxpayers.''.

    SEC. 1402. PROVISION OF INFORMATION REGARDING LOW-INCOME TAXPAYER
    CLINICS.

    (a) In General.--Section 7526(c) is amended by adding at the end the
    following new paragraph:
    ``(6) Provision of information regarding qualified low-
    income taxpayer clinics.--Notwithstanding any other provision of
    law, officers and employees of the Department of the Treasury
    may--
    ``(A) advise taxpayers of the availability of, and
    eligibility requirements for receiving, advice and
    assistance from one or more specific qualified low-
    income taxpayer clinics receiving funding under this
    section, and
    ``(B) provide information regarding the location of,
    and contact information for, such clinics.''.

    (b) <>  Effective Date.--The amendment made
    by this section shall take effect on the date of the enactment of this
    Act.
    SEC. 1403. <>  NOTICE FROM IRS REGARDING
    CLOSURE OF TAXPAYER ASSISTANCE CENTERS.

    Not <>  later than 90 days before the date that a
    proposed closure of a Taxpayer Assistance Center would take effect, the
    Secretary of the Treasury (or the Secretary's delegate) shall--
    (1) <>  make publicly available
    (including by non-electronic means) a notice which--
    (A) identifies the Taxpayer Assistance Center
    proposed for closure and the date of such proposed
    closure; and
    (B) identifies the relevant alternative sources of
    taxpayer assistance which may be utilized by taxpayers
    affected by such proposed closure; and
    (2) <>  submit to Congress a written report
    that includes--
    (A) the information included in the notice described
    in paragraph (1);
    (B) the reasons for such proposed closure; and
    (C) such other information as the Secretary may
    determine appropriate.
    SEC. 1404. RULES FOR SEIZURE AND SALE OF PERISHABLE GOODS
    RESTRICTED TO ONLY PERISHABLE GOODS.

    (a) In General.--Section 6336 is amended by striking ``or become
    greatly reduced in price or value by keeping, or that such property
    cannot be kept without great expense''.
    (b) <>  Effective Date.--The amendment made
    by this section shall apply to property seized after the date of the
    enactment of this Act.
    SEC. 1405. WHISTLEBLOWER REFORMS.

    (a) Modifications to Disclosure Rules for Whistleblowers.--
    (1) In general.--Section 6103(k) is amended by adding at the
    end the following new paragraph:
    ``(13) Disclosure to whistleblowers.--
    ``(A) In general.--The Secretary may disclose, to
    any individual providing information relating to any
    purpose

    [[Page 998]]

    described in paragraph (1) or (2) of section 7623(a),
    return information related to the investigation of any
    taxpayer with respect to whom the individual has
    provided such information, but only to the extent that
    such disclosure is necessary in obtaining information,
    which is not otherwise reasonably available, with
    respect to the correct determination of tax liability
    for tax, or the amount to be collected with respect to
    the enforcement of any other provision of this title.
    ``(B) <>  Updates on whistleblower
    investigations.--The Secretary shall disclose to an
    individual providing information relating to any purpose
    described in paragraph (1) or (2) of section 7623(a) the
    following:
    ``(i) Not later than 60 days after a case for
    which the individual has provided information has
    been referred for an audit or examination, a
    notice with respect to such referral.
    ``(ii) Not later than 60 days after a taxpayer
    with respect to whom the individual has provided
    information has made a payment of tax with respect
    to tax liability to which such information
    relates, a notice with respect to such payment.
    ``(iii) Subject to such requirements and
    conditions as are prescribed by the Secretary,
    upon a written request by such individual--
    ``(I) information on the status and
    stage of any investigation or action
    related to such information, and
    ``(II) in the case of a
    determination of the amount of any award
    under section 7623(b), the reasons for
    such determination.
    Clause (iii) shall not apply to any information if the
    Secretary determines that disclosure of such information
    would seriously impair Federal tax administration.
    Information described in clauses (i), (ii), and (iii)
    may be disclosed to a designee of the individual
    providing such information in accordance with guidance
    provided by the Secretary.''.
    (2) Conforming amendments.--
    (A) Confidentiality of information.--Section
    6103(a)(3) is amended <>  by
    striking ``subsection (k)(10)'' and inserting
    ``paragraph (10) or (13) of subsection (k)''.
    (B) Penalty for unauthorized disclosure.--Section
    7213(a)(2) is amended by striking ``(k)(10)'' and
    inserting ``(k)(10) or (13)''.
    (C) Coordination with authority to disclose for
    investigative purposes.--Section 6103(k)(6) is amended
    by adding at the end the following new sentence: ``This
    paragraph shall not apply to any disclosure to an
    individual providing information relating to any purpose
    described in paragraph (1) or (2) of section 7623(a)
    which is made under paragraph (13)(A).''.

    (b) Protection Against Retaliation.--Section 7623 is amended by
    adding at the end the following new subsection:
    ``(d) Civil Action To Protect Against Retaliation Cases.--
    ``(1) Anti-retaliation whistleblower protection for
    employees.--No employer, or any officer, employee, contractor,
    subcontractor, or agent of such employer, may discharge,

    [[Page 999]]

    demote, suspend, threaten, harass, or in any other manner
    discriminate against an employee in the terms and conditions of
    employment (including through an act in the ordinary course of
    such employee's duties) in reprisal for any lawful act done by
    the employee--
    ``(A) to provide information, cause information to
    be provided, or otherwise assist in an investigation
    regarding underpayment of tax or any conduct which the
    employee reasonably believes constitutes a violation of
    the internal revenue laws or any provision of Federal
    law relating to tax fraud, when the information or
    assistance is provided to the Internal Revenue Service,
    the Secretary of the Treasury, the Treasury Inspector
    General for Tax Administration, the Comptroller General
    of the United States, the Department of Justice, the
    United States Congress, a person with supervisory
    authority over the employee, or any other person working
    for the employer who has the authority to investigate,
    discover, or terminate misconduct, or
    ``(B) to testify, participate in, or otherwise
    assist in any administrative or judicial action taken by
    the Internal Revenue Service relating to an alleged
    underpayment of tax or any violation of the internal
    revenue laws or any provision of Federal law relating to
    tax fraud.
    ``(2) Enforcement action.--
    ``(A) In general.--A person who alleges discharge or
    other reprisal by any person in violation of paragraph
    (1) may seek relief under paragraph (3) by--
    ``(i) filing a complaint with the Secretary of
    Labor, or
    ``(ii) <>  if the
    Secretary of Labor has not issued a final decision
    within 180 days of the filing of the complaint and
    there is no showing that such delay is due to the
    bad faith of the claimant, bringing an action at
    law or equity for de novo review in the
    appropriate district court of the United States,
    which shall have jurisdiction over such an action
    without regard to the amount in controversy.
    ``(B) Procedure.--
    ``(i) In general.--An action under
    subparagraph (A)(i) shall be governed under the
    rules and procedures set forth in section 42121(b)
    of title 49, United States Code.
    ``(ii) Exception.--Notification made under
    section 42121(b)(1) of title 49, United States
    Code, shall be made to the person named in the
    complaint and to the employer.
    ``(iii) Burdens of proof.--An action brought
    under subparagraph (A)(ii) shall be governed by
    the legal burdens of proof set forth in section
    42121(b) of title 49, United States Code, except
    that in applying such section--
    ``(I) `behavior described in
    paragraph (1)' shall be substituted for
    `behavior described in paragraphs (1)
    through (4) of subsection (a)' each
    place it appears in paragraph (2)(B)
    thereof, and

    [[Page 1000]]

    ``(II) `a violation of paragraph
    (1)' shall be substituted for `a
    violation of subsection (a)' each place
    it appears.
    ``(iv) <>  Statute of
    limitations.--A complaint under subparagraph
    (A)(i) shall be filed not later than 180 days
    after the date on which the violation occurs.
    ``(v) Jury trial.--A party to an action
    brought under subparagraph (A)(ii) shall be
    entitled to trial by jury.
    ``(3) Remedies.--
    ``(A) In general.--An employee prevailing in any
    action under paragraph (2)(A) shall be entitled to all
    relief necessary to make the employee whole.
    ``(B) Compensatory damages.--Relief for any action
    under subparagraph (A) shall include--
    ``(i) reinstatement with the same seniority
    status that the employee would have had, but for
    the reprisal,
    ``(ii) the sum of 200 percent of the amount of
    back pay and 100 percent of all lost benefits,
    with interest, and
    ``(iii) compensation for any special damages
    sustained as a result of the reprisal, including
    litigation costs, expert witness fees, and
    reasonable attorney fees.
    ``(4) Rights retained by employee.--Nothing in this section
    shall be deemed to diminish the rights, privileges, or remedies
    of any employee under any Federal or State law, or under any
    collective bargaining agreement.
    ``(5) Nonenforceability of certain provisions waiving rights
    and remedies or requiring arbitration of disputes.--
    ``(A) Waiver of rights and remedies.--The rights and
    remedies provided for in this subsection may not be
    waived by any agreement, policy form, or condition of
    employment, including by a predispute arbitration
    agreement.
    ``(B) Predispute arbitration agreements.--No
    predispute arbitration agreement shall be valid or
    enforceable, if the agreement requires arbitration of a
    dispute arising under this subsection.''.

    (c) Effective Date.--
    (1) <>  In general.--The amendments
    made by subsection (a) shall apply to disclosures made after the
    date of the enactment of this Act.
    (2) <>  Civil protection.--The
    amendment made by subsection (b) shall take effect on the date
    of the enactment of this Act.
    SEC. 1406. <>  CUSTOMER SERVICE
    INFORMATION.

    The Secretary of the Treasury (or the Secretary's delegate) shall
    provide helpful information to taxpayers placed on hold during a
    telephone call to any Internal Revenue Service help line, including the
    following:
    (1) Information about common tax scams.
    (2) Information on where and how to report tax scams.
    (3) Additional advice on how taxpayers can protect
    themselves from identity theft and tax scams.

    [[Page 1001]]

    SEC. 1407. MISDIRECTED TAX REFUND DEPOSITS.

    Section 6402 <>  is amended by adding at the end
    the following new subsection:

    ``(n) <>  Misdirected
    Direct Deposit Refund.--Not later than the date which is 6 months after
    the date of the enactment of the Taxpayer First Act, the Secretary shall
    prescribe regulations to establish procedures to allow for--
    ``(1) taxpayers to report instances in which a refund made
    by the Secretary by electronic funds transfer was not
    transferred to the account of the taxpayer;
    ``(2) <>  coordination with financial
    institutions for the purpose of--
    ``(A) identifying the accounts to which transfers
    described in paragraph (1) were made; and
    ``(B) recovery of the amounts so transferred; and
    ``(3) the refund to be delivered to the correct account of
    the taxpayer.''.

    TITLE II--21ST CENTURY IRS

    Subtitle A--Cybersecurity and Identity Protection

    SEC. 2001. <>  PUBLIC-PRIVATE PARTNERSHIP
    TO ADDRESS IDENTITY THEFT REFUND FRAUD.

    The Secretary of the Treasury (or the Secretary's delegate) shall
    work collaboratively with the public and private sectors to protect
    taxpayers from identity theft refund fraud.
    SEC. 2002. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION
    ADVISORY COMMITTEE REGARDING IDENTITY
    THEFT REFUND FRAUD.

    The Secretary of the Treasury shall ensure that the advisory group
    convened by the Secretary pursuant to section 2001(b)(2) of the Internal
    Revenue Service Restructuring and Reform Act of 1998 (commonly known as
    the Electronic Tax Administration Advisory Committee) studies (including
    by providing organized public forums) and makes recommendations to the
    Secretary regarding methods to prevent identity theft and refund fraud.
    SEC. 2003. INFORMATION SHARING AND ANALYSIS CENTER.

    (a) <>  In General.--The Secretary of the
    Treasury (or the Secretary's delegate) may participate in an information
    sharing and analysis center to centralize, standardize, and enhance data
    compilation and analysis to facilitate sharing actionable data and
    information with respect to identity theft tax refund fraud.

    (b) <>  Development of Performance
    Metrics.--The Secretary of the Treasury (or the Secretary's delegate)
    shall develop metrics for measuring the success of such center in
    detecting and preventing identity theft tax refund fraud.

    (c) Disclosure.--
    (1) In general.--Section 6103(k), as amended by this Act, is
    amended by adding at the end the following new paragraph:
    ``(14) Disclosure of return information for purposes of
    cybersecurity and the prevention of identity theft tax refund
    fraud.--

    [[Page 1002]]

    ``(A) In general.--Under such procedures and subject
    to such conditions as the Secretary may prescribe, the
    Secretary may disclose specified return information to
    specified ISAC participants to the extent that the
    Secretary determines such disclosure is in furtherance
    of effective Federal tax administration relating to the
    detection or prevention of identity theft tax refund
    fraud, validation of taxpayer identity, authentication
    of taxpayer returns, or detection or prevention of
    cybersecurity threats.
    ``(B) <>  Specified isac
    participants.--For purposes of this paragraph--
    ``(i) In general.--The term `specified ISAC
    participant' means--
    ``(I) any person designated by the
    Secretary as having primary
    responsibility for a function performed
    with respect to the information sharing
    and analysis center described in section
    2003(a) of the Taxpayer First Act, and
    ``(II) any person subject to the
    requirements of section 7216 and which
    is a participant in such information
    sharing and analysis center.
    ``(ii) Information sharing agreement.--Such
    term shall not include any person unless such
    person has entered into a written agreement with
    the Secretary setting forth the terms and
    conditions for the disclosure of information to
    such person under this paragraph, including
    requirements regarding the protection and
    safeguarding of such information by such person.
    ``(C) <>  Specified return
    information.--For purposes of this paragraph, the term
    `specified return information' means--
    ``(i) in the case of a return which is in
    connection with a case of potential identity theft
    refund fraud--
    ``(I) in the case of such return
    filed electronically, the internet
    protocol address, device identification,
    email domain name, speed of completion,
    method of authentication, refund method,
    and such other return information
    related to the electronic filing
    characteristics of such return as the
    Secretary may identify for purposes of
    this subclause, and
    ``(II) in the case of such return
    prepared by a tax return preparer,
    identifying information with respect to
    such tax return preparer, including the
    preparer taxpayer identification number
    and electronic filer identification
    number of such preparer,
    ``(ii) in the case of a return which is in
    connection with a case of a identity theft refund
    fraud which has been confirmed by the Secretary
    (pursuant to such procedures as the Secretary may
    provide), the information referred to in
    subclauses (I) and (II) of clause (i), the name
    and taxpayer identification number of the taxpayer
    as it appears on the return, and any bank account
    and routing information provided for making a
    refund in connection with such return, and

    [[Page 1003]]

    ``(iii) in the case of any cybersecurity
    threat to the Internal Revenue Service,
    information similar to the information described
    in subclauses (I) and (II) of clause (i) with
    respect to such threat.
    ``(D) Restriction on use of disclosed information.--
    ``(i) Designated third parties.--Any return
    information received by a person described in
    subparagraph (B)(i)(I) shall be used only for the
    purposes of and to the extent necessary in--
    ``(I) performing the function such
    person is designated to perform under
    such subparagraph,
    ``(II) facilitating disclosures
    authorized under subparagraph (A) to
    persons described in subparagraph
    (B)(i)(II), and
    ``(III) facilitating disclosures
    authorized under subsection (d) to
    participants in such information sharing
    and analysis center.
    ``(ii) Return preparers.--Any return
    information received by a person described in
    subparagraph (B)(i)(II) shall be treated for
    purposes of section 7216 as information furnished
    to such person for, or in connection with, the
    preparation of a return of the tax imposed under
    chapter 1.
    ``(E) Data protection and safeguards.--Return
    information disclosed under this paragraph shall be
    subject to such protections and safeguards as the
    Secretary may require in regulations or other guidance
    or in the written agreement referred to in subparagraph
    (B)(ii). Such written agreement shall include a
    requirement that any unauthorized access to information
    disclosed under this paragraph, and any breach of any
    system in which such information is held, be reported to
    the Treasury Inspector General for Tax
    Administration.''.
    (2) Application of civil and criminal penalties.--
    (A) <>  Section 6103(a)(3), as
    amended by this Act, is amended by striking ``or (13)''
    and inserting ``, (13), or (14)''.
    (B) Section 7213(a)(2), as amended by this Act, is
    amended by striking ``or (13)'' and inserting ``, (13),
    or (14)''.
    SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY
    SAFEGUARDS.

    (a) In General.--Section 6103(p) is amended by adding at the end the
    following new paragraph:
    ``(9) Disclosure to contractors and other agents.--
    Notwithstanding any other provision of this section, no return
    or return information shall be disclosed to any contractor or
    other agent of a Federal, State, or local agency unless such
    agency, to the satisfaction of the Secretary--
    ``(A) has requirements in effect which require each
    such contractor or other agent which would have access
    to returns or return information to provide safeguards
    (within the meaning of paragraph (4)) to protect the
    confidentiality of such returns or return information,

    [[Page 1004]]

    ``(B) <>  agrees to
    conduct an on-site review every 3 years (or a mid-point
    review in the case of contracts or agreements of less
    than 3 years in duration) of each contractor or other
    agent to determine compliance with such requirements,
    ``(C) submits the findings of the most recent review
    conducted under subparagraph (B) to the Secretary as
    part of the report required by paragraph (4)(E), and
    ``(D) <>  certifies to the
    Secretary for the most recent annual period that such
    contractor or other agent is in compliance with all such
    requirements.
    The certification required by subparagraph (D) shall include the
    name and address of each contractor or other agent, a
    description of the contract or agreement with such contractor or
    other agent, and the duration of such contract or agreement. The
    requirements of this paragraph shall not apply to disclosures
    pursuant to subsection (n) for purposes of Federal tax
    administration.''.

    (b) <>  Conforming Amendment.--Section
    6103(p)(8)(B) is amended by inserting ``or paragraph (9)'' after
    ``subparagraph (A)''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to disclosures made after December 31,
    2022.
    SEC. 2005. <>  IDENTITY PROTECTION
    PERSONAL IDENTIFICATION NUMBERS.

    (a) In General.--Subject to subsection (b), the Secretary of the
    Treasury or the Secretary's delegate (hereafter referred to in this
    section as the ``Secretary'') shall establish a program to issue, upon
    the request of any individual, a number which may be used in connection
    with such individual's social security number (or other identifying
    information with respect to such individual as determined by the
    Secretary) to assist the Secretary in verifying such individual's
    identity.
    (b) Requirements.--
    (1) Annual expansion.--For each calendar year beginning
    after the date of the enactment of this Act, the Secretary shall
    provide numbers through the program described in subsection (a)
    to individuals residing in such States as the Secretary deems
    appropriate, provided that the total number of States served by
    such program during such year is greater than the total number
    of States served by such program during the preceding year.
    (2) <>  Nationwide availability.--Not later
    than 5 years after the date of the enactment of this Act, the
    Secretary shall ensure that the program described in subsection
    (a) is made available to any individual residing in the United
    States.
    SEC. 2006. <>  SINGLE POINT OF CONTACT
    FOR TAX-RELATED IDENTITY THEFT VICTIMS.

    (a) <>  In General.--The Secretary of the
    Treasury (or the Secretary's delegate) shall establish and implement
    procedures to ensure that any taxpayer whose return has been delayed or
    otherwise adversely affected due to tax-related identity theft has a
    single point of contact at the Internal Revenue Service throughout the
    processing of the taxpayer's case. <>  The single
    point of contact shall track the taxpayer's case to completion and
    coordinate with other Internal Revenue Service employees to resolve case
    issues as quickly as possible.

    [[Page 1005]]

    (b) Single Point of Contact.--
    (1) In general.--For purposes of subsection (a), the single
    point of contact shall consist of a team or subset of specially
    trained employees who--
    (A) have the ability to work across functions to
    resolve the issues involved in the taxpayer's case; and
    (B) shall be accountable for handling the case until
    its resolution.
    (2) <>  Team or subset.--The employees
    included within the team or subset described in paragraph (1)
    may change as required to meet the needs of the Internal Revenue
    Service, provided that procedures have been established to--
    (A) ensure continuity of records and case history;
    and
    (B) <>  notify the taxpayer
    when appropriate.
    SEC. 2007. NOTIFICATION OF SUSPECTED IDENTITY THEFT.

    (a) In General.--Chapter 77 is amended by adding at the end the
    following new section:
    ``SEC. 7529. <>  NOTIFICATION OF SUSPECTED
    IDENTITY THEFT.

    ``(a) <>  In General.--If the Secretary
    determines that there has been or may have been an unauthorized use of
    the identity of any individual, the Secretary shall, without
    jeopardizing an investigation relating to tax administration--
    ``(1) as soon as practicable--
    ``(A) notify the individual of such determination,
    ``(B) provide instructions on how to file a report
    with law enforcement regarding the unauthorized use,
    ``(C) identify any steps to be taken by the
    individual to permit law enforcement to access personal
    information of the individual during the investigation,
    ``(D) provide information regarding actions the
    individual may take in order to protect the individual
    from harm relating to the unauthorized use, and
    ``(E) offer identity protection measures to the
    individual, such as the use of an identity protection
    personal identification number, and
    ``(2) at the time the information described in paragraph (1)
    is provided (or, if not available at such time, as soon as
    practicable thereafter), issue additional notifications to such
    individual (or such individual's designee) regarding--
    ``(A) whether an investigation has been initiated in
    regards to such unauthorized use,
    ``(B) whether the investigation substantiated an
    unauthorized use of the identity of the individual, and
    ``(C) whether--
    ``(i) any action has been taken against a
    person relating to such unauthorized use, or
    ``(ii) any referral has been made for criminal
    prosecution of such person and, to the extent such
    information is available, whether such person has
    been criminally charged by indictment or
    information.

    ``(b) Employment-Related Identity Theft.--
    ``(1) In general.--For purposes of this section, the
    unauthorized use of the identity of an individual includes the
    unauthorized use of the identity of the individual to obtain
    employment.

    [[Page 1006]]

    ``(2) Determination of employment-related identity theft.--
    For purposes <>  of this section, in making a
    determination as to whether there has been or may have been an
    unauthorized use of the identity of an individual to obtain
    employment, the Secretary shall review any information--
    ``(A) obtained from a statement described in section
    6051 or an information return relating to compensation
    for services rendered other than as an employee, or
    ``(B) provided to the Internal Revenue Service by
    the Social Security Administration regarding any
    statement described in section 6051,
    which indicates that the social security account number provided
    on such statement or information return does not correspond with
    the name provided on such statement or information return or the
    name on the tax return reporting the income which is included on
    such statement or information return.''.

    (b) Additional Measures.--
    (1) <>  Examination of both paper
    and electronic statements and returns.--The Secretary of the
    Treasury (or the Secretary's delegate) shall examine the
    statements, information returns, and tax returns described in
    section 7529(b)(2) of the Internal Revenue Code of 1986 (as
    added by subsection (a)) for any evidence of employment-related
    identity theft, regardless of whether such statements or returns
    are submitted electronically or on paper.
    (2) Improvement of effective return processing program with
    social security administration.--Section 232 of the Social
    Security Act (42 U.S.C. 432) is amended by inserting after the
    third sentence the following: ``For purposes of carrying out the
    return processing program described in the preceding sentence,
    the Commissioner of Social Security shall request, not less than
    annually, such information described in section 7529(b)(2) of
    the Internal Revenue Code of 1986 as may be necessary to ensure
    the accuracy of the records maintained by the Commissioner of
    Social Security related to the amounts of wages paid to, and the
    amounts of self-employment income derived by, individuals.''.
    (3) <>  Underreporting
    of income.--The Secretary of the Treasury (or the Secretary's
    delegate) shall establish procedures to ensure that income
    reported in connection with the unauthorized use of a taxpayer's
    identity is not taken into account in determining any penalty
    for underreporting of income by the victim of identity theft.

    (c) Clerical Amendment.--The table of sections for chapter 77
    is <> amended by adding at the end the
    following new item:

    ``Sec. 7529. Notification of suspected identity theft.''.

    (d) <>  Effective
    Date.--The amendments made by this section shall apply to determinations
    made after the date that is 6 months after the date of the enactment of
    this Act.
    SEC. 2008. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.

    (a) In General.--Not later than 1 year after the date of the
    enactment of this Act, the Secretary of the Treasury (or the Secretary's
    delegate), in consultation with the National Taxpayer Advocate, shall
    develop and implement publicly available guidelines for management of
    cases involving stolen identity refund fraud

    [[Page 1007]]

    in a manner that reduces the administrative burden on taxpayers who are
    victims of such fraud.
    (b) Standards and Procedures To Be Considered.--The guidelines
    described in subsection (a) may include--
    (1) standards for--
    (A) the average length of time in which a case
    involving stolen identity refund fraud should be
    resolved;
    (B) the maximum length of time, on average, a
    taxpayer who is a victim of stolen identity refund fraud
    and is entitled to a tax refund which has been stolen
    should have to wait to receive such refund; and
    (C) the maximum number of offices and employees
    within the Internal Revenue Service with whom a taxpayer
    who is a victim of stolen identity refund fraud should
    be required to interact in order to resolve a case;
    (2) standards for opening, assigning, reassigning, or
    closing a case involving stolen identity refund fraud; and
    (3) procedures for implementing and accomplishing the
    standards described in paragraphs (1) and (2), and measures for
    evaluating such procedures and determining whether such
    standards have been successfully implemented.
    SEC. 2009. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF
    INFORMATION BY PREPARERS OF RETURNS.

    (a) <>  In General.--Section 6713 is amended--
    (1) by redesignating subsections (b) and (c) as subsections
    (c) and (d), respectively; and
    (2) by inserting after subsection (a) the following new
    subsection:

    ``(b) Enhanced Penalty for Improper Use or Disclosure Relating to
    Identity Theft.--
    ``(1) In general.--In the case of a disclosure or use
    described in subsection (a) that is made in connection with a
    crime relating to the misappropriation of another person's
    taxpayer identity (as defined in section 6103(b)(6)), whether or
    not such crime involves any tax filing, subsection (a) shall be
    applied--
    ``(A) by substituting `$1,000' for `$250', and
    ``(B) by substituting `$50,000' for `$10,000'.
    ``(2) Separate application of total penalty limitation.--The
    limitation on the total amount of the penalty under subsection
    (a) shall be applied separately with respect to disclosures or
    uses to which this subsection applies and to which it does not
    apply.''.

    (b) Criminal Penalty.--Section 7216(a) is amended by striking
    ``$1,000'' and inserting ``$1,000 ($100,000 in the case of a disclosure
    or use to which section 6713(b) applies)''.
    (c) <>  Effective Date.--The amendments
    made by this section shall apply to disclosures or uses on or after the
    date of the enactment of this Act.

    [[Page 1008]]

    Subtitle B--Development of Information Technology

    SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION
    TECHNOLOGY.

    (a) Duties and Responsibilities of Internal Revenue Service Chief
    Information Officer.--Section 7803, as amended by section
    1001, <>  is amended by adding at the end the
    following new subsection:

    ``(f) Internal Revenue Service Chief Information Officer.--
    ``(1) <>  In general.--There shall be in
    the Internal Revenue Service an Internal Revenue Service Chief
    Information Officer (hereafter referred to in this subsection as
    the `IRS CIO') who shall be appointed by the Commissioner of
    Internal Revenue.
    ``(2) Centralized responsibility for internal revenue
    service information technology.--The Commissioner of Internal
    Revenue (and the Secretary) shall act through the IRS CIO with
    respect to all development, implementation, and maintenance of
    information technology for the Internal Revenue Service. Any
    reference in this subsection to the IRS CIO which directs the
    IRS CIO to take any action, or to assume any responsibility,
    shall be treated as a reference to the Commissioner of Internal
    Revenue acting through the IRS CIO.
    ``(3) General duties and responsibilities.--The IRS CIO
    shall--
    ``(A) be responsible for the development,
    implementation, and maintenance of information
    technology for the Internal Revenue Service,
    ``(B) ensure that the information technology of the
    Internal Revenue Service is secure and integrated,
    ``(C) maintain operational control of all
    information technology for the Internal Revenue Service,
    ``(D) be the principal advocate for the information
    technology needs of the Internal Revenue Service, and
    ``(E) <>  consult with the
    Chief Procurement Officer of the Internal Revenue
    Service to ensure that the information technology
    acquired for the Internal Revenue Service is consistent
    with--
    ``(i) the goals and requirements specified in
    subparagraphs (A) through (D), and
    ``(ii) the strategic plan developed under
    paragraph (4).
    ``(4) Strategic plan.--
    ``(A) In general.--The IRS CIO shall develop and
    implement a multiyear strategic plan for the information
    technology needs of the Internal Revenue Service. Such
    plan shall--
    ``(i) include performance measurements of such
    technology and of the implementation of such plan,
    ``(ii) include a plan for an integrated
    enterprise architecture of the information
    technology of the Internal Revenue Service,
    ``(iii) include and take into account the
    resources needed to accomplish such plan,

    [[Page 1009]]

    ``(iv) take into account planned major
    acquisitions of information technology by the
    Internal Revenue Service, and
    ``(v) align with the needs and strategic plan
    of the Internal Revenue Service.
    ``(B) <>  Plan
    updates.--The IRS CIO shall, not less frequently than
    annually, review and update the strategic plan under
    subparagraph (A) (including the plan for an integrated
    enterprise architecture described in subparagraph
    (A)(ii)) to take into account the development of new
    information technology and the needs of the Internal
    Revenue Service.
    ``(5) Scope of authority.--
    ``(A) <>  Information
    technology.--For purposes of this subsection, the term
    `information technology' has the meaning given such term
    by section 11101 of title 40, United States Code.
    ``(B) Internal revenue service.--Any reference in
    this subsection to the Internal Revenue Service includes
    a reference to all components of the Internal Revenue
    Service, including--
    ``(i) the Office of the Taxpayer Advocate,
    ``(ii) the Criminal Investigation Division of
    the Internal Revenue Service, and
    ``(iii) except as otherwise provided by the
    Secretary with respect to information technology
    related to matters described in subsection
    (b)(3)(B), the Office of the Chief Counsel.''.

    (b) Independent Verification and Validation of the Customer Account
    Data Engine 2 and Enterprise Case Management System.--
    (1) <>  In general.--The Commissioner of
    Internal Revenue shall enter into a contract with an independent
    reviewer to verify and validate the implementation plans
    (including the performance milestones and cost estimates
    included in such plans) developed for the Customer Account Data
    Engine 2 and the Enterprise Case Management System.
    (2) Deadline for completion.--Such contract shall require
    that such verification and validation be completed not later
    than the date which is 1 year after the date of the enactment of
    this Act.
    (3) Application to phases of cade 2.--
    (A) In general.--Paragraphs (1) and (2) shall not
    apply to phase 1 of the Customer Account Data Engine 2
    and shall apply separately to each other phase.
    (B) Deadline for completing plans.--Not later than 1
    year after the date of the enactment of this Act, the
    Commissioner of Internal Revenue shall complete the
    development of plans for all phases of the Customer
    Account Data Engine 2.
    (C) Deadline for completion of verification and
    validation of plans.--In the case of any phase after
    phase 2 of the Customer Account Data Engine 2, paragraph
    (2) shall be applied by substituting ``the date on which
    the plan for such phase was completed'' for ``the date
    of the enactment of this Act''.

    [[Page 1010]]

    (c) <>  Coordination of IRS CIO and Chief
    Procurement Officer of the Internal Revenue Service.--
    (1) In general.--The Chief Procurement Officer of the
    Internal Revenue Service shall--
    (A) <>  identify all
    significant IRS information technology acquisitions and
    provide written notification to the Internal Revenue
    Service Chief Information Officer (hereafter referred to
    in this subsection as the ``IRS CIO'') of each such
    acquisition in advance of such acquisition, and
    (B) <>  regularly consult with
    the IRS CIO regarding acquisitions of information
    technology for the Internal Revenue Service, including
    meeting with the IRS CIO regarding such acquisitions
    upon request.
    (2) Significant irs information technology acquisitions.--
    For purposes <>  of this subsection, the term
    ``significant IRS information technology acquisitions'' means--
    (A) any acquisition of information technology for
    the Internal Revenue Service in excess of $1 million;
    and
    (B) such other acquisitions of information
    technology for the Internal Revenue Service (or
    categories of such acquisitions) as the IRS CIO, in
    consultation with the Chief Procurement Officer of the
    Internal Revenue Service, may identify.
    (3) Scope.--Terms used in this subsection which are also
    used in section 7803(f) of the Internal Revenue Code of 1986 (as
    added by subsection (a)) shall have the same meaning as when
    used in such section.
    SEC. 2102. <>  INTERNET
    PLATFORM FOR FORM 1099 FILINGS.

    (a) In General.--Not later than January 1, 2023, the Secretary of
    the Treasury or the Secretary's delegate (hereafter referred to in this
    section as the ``Secretary'') shall make available an internet website
    or other electronic media, with a user interface and functionality
    similar to the Business Services Online Suite of Services provided by
    the Social Security Administration, that provides access to resources
    and guidance provided by the Internal Revenue Service and allows persons
    to--
    (1) prepare and file Forms 1099;
    (2) prepare Forms 1099 for distribution to recipients other
    than the Internal Revenue Service; and
    (3) maintain a record of completed, filed, and distributed
    Forms 1099.

    (b) Electronic Services Treated as Supplemental; Application of
    Security Standards.--The Secretary shall ensure that the services
    described in subsection (a)--
    (1) are a supplement to, and not a replacement for, other
    services provided by the Internal Revenue Service to taxpayers;
    and
    (2) <>  comply with applicable security
    standards and guidelines.
    SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION
    TECHNOLOGY POSITIONS.

    (a) In General.--Subchapter A of chapter 80 is amended by adding at
    the end the following new section:

    [[Page 1011]]

    ``SEC. 7812. <>  STREAMLINED
    CRITICAL PAY AUTHORITY FOR INFORMATION
    TECHNOLOGY POSITIONS.

    ``In the case of any position which is critical to the functionality
    of the information technology operations of the Internal Revenue
    Service--
    ``(1) section 9503 of title 5, United States Code, shall be
    applied--
    ``(A) by substituting `during the period beginning
    on the date of the enactment of section 7812 of the
    Internal Revenue Code of 1986, and ending on September
    30, 2025' for `Before September 30, 2013 in subsection
    (a)',
    ``(B) without regard to subparagraph (B) of
    subsection (a)(1), and
    ``(C) by substituting `the date of the enactment of
    the Taxpayer First Act' for `June 1, 1998' in subsection
    (a)(6),
    ``(2) section 9504 of such title 5 shall be applied by
    substituting `During the period beginning on the date of the
    enactment of section 7812 of the Internal Revenue Code of 1986,
    and ending on September 30, 2025' for `Before September 30,
    2013' each place it appears in subsections (a) and (b), and
    ``(3) section 9505 of such title shall be applied--
    ``(A) by substituting `During the period beginning
    on the date of the enactment of section 7812 of the
    Internal Revenue Code of 1986, and ending on September
    30, 2025' for `Before September 30, 2013' in subsection
    (a), and
    ``(B) by substituting `the information technology
    operations' for `significant functions' in subsection
    (a).''.

    (b) Clerical Amendment.--The table of sections for subchapter A of
    chapter 80 is <> amended by adding at the end
    the following new item:

    ``Sec. 7812. Streamlined critical pay authority for information
    technology positions.''.

    Subtitle C--Modernization of Consent-Based Income Verification System

    SEC. 2201. <>  DISCLOSURE OF TAXPAYER
    INFORMATION FOR THIRD-PARTY INCOME
    VERIFICATION.

    (a) <>  In General.--Not later than 1 year after
    the close of the 2-year period described in subsection (d)(1), the
    Secretary of the Treasury or the Secretary's delegate (hereafter
    referred to in this section as the ``Secretary'') shall implement a
    program to ensure that any qualified disclosure--
    (1) is fully automated and accomplished through the
    internet; and
    (2) is accomplished in as close to real-time as is
    practicable.

    (b) Qualified Disclosure.--For purposes <>  of
    this section, the term ``qualified disclosure'' means a disclosure under
    section 6103(c) of the Internal Revenue Code of 1986 of returns or
    return information by the Secretary to a person seeking to verify the
    income or creditworthiness of a taxpayer who is a borrower in the
    process of a loan application.

    (c) <>  Application of Security Standards.--The
    Secretary shall ensure that the program described in subsection (a)
    complies with applicable security standards and guidelines.

    [[Page 1012]]

    (d) User Fee.--
    (1) <>  In general.--During the 2-year
    period beginning on the first day of the sixth calendar month
    beginning after the date of the enactment of this Act, the
    Secretary shall assess and collect a fee for qualified
    disclosures (in addition to any other fee assessed and collected
    for such disclosures) at such rates as the Secretary determines
    are sufficient to cover the costs related to implementing the
    program described in subsection (a), including the costs of any
    necessary infrastructure or technology.
    (2) Deposit of collections.--Amounts received from fees
    assessed and collected under paragraph (1) shall be deposited
    in, and credited to, an account solely for the purpose of
    carrying out the activities described in subsection (a). Such
    amounts shall be available to carry out such activities without
    need of further appropriation and without fiscal year
    limitation.
    SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED
    DISCLOSURES OF TAX RETURN INFORMATION.

    (a) <>  In General.--Section 6103(c) is amended
    by adding at the end the following: ``Persons designated by the taxpayer
    under this subsection to receive return information shall not use the
    information for any purpose other than the express purpose for which
    consent was granted and shall not disclose return information to any
    other person without the express permission of, or request by, the
    taxpayer.''.

    (b) Application of Penalties.--Section 6103(a)(3) is amended by
    inserting ``subsection (c),'' after ``return information under''.
    (c) <>
    Effective Date.--The amendments made by this section shall apply to
    disclosures made after the date which is 180 days after the date of the
    enactment of this Act.

    Subtitle D--Expanded Use of Electronic Systems

    SEC. 2301. ELECTRONIC FILING OF RETURNS.

    (a) In General.--Section 6011(e)(2)(A) is amended by striking
    ``250'' and inserting ``the applicable number of''.
    (b) Applicable Number.--Section 6011(e) is amended by striking
    paragraph (5) and inserting the following new paragraphs:
    ``(5) Applicable number.--
    ``(A) In general.--For purposes of paragraph (2)(A),
    the applicable number shall be--
    ``(i) except as provided in subparagraph (B),
    in the case of calendar years before 2021, 250,
    ``(ii) in the case of calendar year 2021, 100,
    and
    ``(iii) in the case of calendar years after
    2021, 10.
    ``(B) Special rule for partnerships for 2018, 2019,
    2020, and 2021.--In the case of a partnership, for any
    calendar year before 2022, the applicable number shall
    be--
    ``(i) in the case of calendar year 2018, 200,
    ``(ii) in the case of calendar year 2019, 150,
    ``(iii) in the case of calendar year 2020,
    100, and
    ``(iv) in the case of calendar year 2021, 50.
    ``(6) Partnerships required to file on magnetic media.--
    Notwithstanding paragraph (2)(A), the Secretary shall

    [[Page 1013]]

    require partnerships having more than 100 partners to file
    returns on magnetic media.''.

    (c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is
    amended <>  by adding at the end the following new
    subparagraph:
    ``(D) Exception for certain preparers located in
    areas without internet access.--The
    Secretary <>
    may waive the requirement of subparagraph (A) if the
    Secretary determines, on the basis of an application by
    the tax return preparer, that the preparer cannot meet
    such requirement by reason of being located in a
    geographic area which does not have access to internet
    service (other than dial-up or satellite service).''.

    (d) Conforming Amendment.--Section 6724(c) is amended by striking
    ``250 information returns (more than 100 information returns in the case
    of a partnership having more than 100 partners)'' and inserting ``the
    applicable number (determined under section 6011(e)(5) with respect to
    the calendar year to which such returns relate) of information
    returns''.
    (e) <>  Effective Date.--The amendments
    made by this section shall take effect on the date of the enactment of
    this Act.
    SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES
    FOR DISCLOSURE AUTHORIZATIONS TO, AND
    OTHER AUTHORIZATIONS OF, PRACTITIONERS.

    Section 6061(b)(3) is amended to read as follows:
    ``(3) Published guidance.--
    ``(A) In general.--The Secretary shall publish
    guidance as appropriate to define and implement any
    waiver of the signature requirements or any method
    adopted under paragraph (1).
    ``(B) Electronic signatures for disclosure
    authorizations to, and other authorizations of,
    practitioners.--Not later than 6
    months <>  after the date
    of the enactment of this subparagraph, the Secretary
    shall publish guidance to establish uniform standards
    and procedures for the acceptance of taxpayers'
    signatures appearing in electronic form with respect to
    any request for disclosure of a taxpayer's return or
    return information under section 6103(c) to a
    practitioner or any power of attorney granted by a
    taxpayer to a practitioner.
    ``(C) <>  Practitioner.--For
    purposes of subparagraph (B), the term `practitioner'
    means any individual in good standing who is regulated
    under section 330 of title 31, United States Code.''.
    SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.

    Section 6311(d)(2) is amended by adding at the end the following:
    ``The preceding sentence shall not apply to the extent that the
    Secretary ensures that any such fee or other consideration is fully
    recouped by the Secretary in the form of fees paid to the Secretary by
    persons paying taxes imposed under subtitle A with credit, debit, or
    charge cards pursuant to such contract. Notwithstanding the preceding
    sentence, the Secretary shall seek to minimize the amount of any fee or
    other consideration that the Secretary pays under any such contract.''.

    [[Page 1014]]

    SEC. 2304. <>  AUTHENTICATION OF USERS OF
    ELECTRONIC SERVICES ACCOUNTS.

    Beginning 180 days <>  after the
    date of the enactment of this Act, the Secretary of the Treasury (or the
    Secretary's delegate) shall verify the identity of any individual
    opening an e-Services account with the Internal Revenue Service before
    such individual is able to use the e-Services tools.

    Subtitle E--Other Provisions

    SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN TAX COMPLIANCE
    PROCEDURES AND REPORTS.

    Section 2004 of the Internal Revenue Service Restructuring and
    Reform Act of 1998 (26 U.S.C. 6012 note) is repealed.
    SEC. 2402. COMPREHENSIVE TRAINING STRATEGY.

    Not <>  later than 1 year after the
    date of the enactment of this Act, the Commissioner of Internal Revenue
    shall submit to Congress a written report providing a comprehensive
    training strategy for employees of the Internal Revenue Service,
    including--
    (1) <>  a plan to streamline current
    training processes, including an assessment of the utility of
    further consolidating internal training programs, technology,
    and funding;
    (2) a plan to develop annual training regarding taxpayer
    rights, including the role of the Office of the Taxpayer
    Advocate, for employees that interface with taxpayers and the
    direct managers of such employees;
    (3) a plan to improve technology-based training;
    (4) <>  proposals to--
    (A) focus employee training on early, fair, and
    efficient resolution of taxpayer disputes for employees
    that interface with taxpayers and the direct managers of
    such employees; and
    (B) ensure consistency of skill development and
    employee evaluation throughout the Internal Revenue
    Service; and
    (5) <>  a thorough assessment of the
    funding necessary to implement such strategy.

    TITLE III--MISCELLANEOUS PROVISIONS

    Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

    SEC. 3001. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE INTERNAL
    REVENUE SERVICE WHO WAS INVOLUNTARILY
    SEPARATED FROM SERVICE FOR MISCONDUCT.

    (a) <>  In General.--Section 7804 is amended by
    adding at the end the following new subsection:

    ``(d) Prohibition on Rehiring Employees Involuntarily Separated.--
    The Commissioner may not hire any individual previously employed by the
    Commissioner who was removed for misconduct under this subchapter or
    chapter 43 or chapter 75 of

    [[Page 1015]]

    title 5, United States Code, or whose employment was terminated under
    section 1203 of the Internal Revenue Service Restructuring and Reform
    Act of 1998 (26 U.S.C. 7804 note).''.
    (b) <>  Effective Date.--The amendment made
    by subsection (a) shall apply with respect to the hiring of employees
    after the date of the enactment of this Act.
    SEC. 3002. <>  NOTIFICATION OF UNAUTHORIZED
    INSPECTION OR DISCLOSURE OF RETURNS AND
    RETURN INFORMATION.

    (a) <>  In General.--Subsection (e) of section
    7431 is amended by adding at the end the following new sentences: ``The
    Secretary shall also notify such taxpayer if the Internal Revenue
    Service or a Federal or State agency (upon notice to the Secretary by
    such Federal or State agency) proposes an administrative determination
    as to disciplinary or adverse action against an employee arising from
    the employee's unauthorized inspection or disclosure of the taxpayer's
    return or return information. The notice described in this subsection
    shall include the date of the unauthorized inspection or disclosure and
    the rights of the taxpayer under such administrative determination.''.

    (b) <>
    Effective Date.--The amendment made by this section shall apply to
    determinations proposed after the date which is 180 days after the date
    of the enactment of this Act.

    Subtitle B--Provisions Relating to Exempt Organizations

    SEC. 3101. MANDATORY E-FILING BY EXEMPT ORGANIZATIONS.

    (a) In General.--Section 6033 is amended by redesignating subsection
    (n) as subsection (o) and by inserting after subsection (m) the
    following new subsection:
    ``(n) Mandatory Electronic Filing.--Any organization required to
    file a return under this section shall file such return in electronic
    form.''.
    (b) Other Reports and Returns.--
    (1) Political organizations.--Section 527(j)(7) is amended
    by striking ``if the organization has'' and all that follows
    through ``such calendar year''.
    (2) Unrelated business income tax returns.--Section 6011 is
    amended by redesignating subsection (h) as subsection (i) and by
    inserting after subsection (g) the following new subsection:

    ``(h) Mandatory E-Filing of Unrelated Business Income Tax Return.--
    Any organization required to file an annual return under this section
    which relates to any tax imposed by section 511 shall file such return
    in electronic form.''.
    (c) Inspection of Electronically Filed Annual Returns.--Section
    6104(b) is amended by adding at the end the following: ``Any annual
    return required to be filed electronically under section 6033(n) shall
    be made available by the Secretary to the public as soon as practicable
    in a machine readable format.''.
    (d) <>  Effective Date.--
    (1) In general.--Except as provided in paragraph (2), the
    amendments made by this section shall apply to taxable years
    beginning after the date of the enactment of this Act.
    (2) Transitional relief.--

    [[Page 1016]]

    (A) Small organizations.--
    (i) <>  In
    general.--In the case of any small organizations,
    or any other organizations for which the Secretary
    of the Treasury or the Secretary's delegate
    (hereafter referred to in this paragraph as the
    ``Secretary'') determines the application of the
    amendments made by this section would cause undue
    burden without a delay, the Secretary may delay
    the application of such amendments, but such delay
    shall not apply to any taxable year beginning on
    or after the date that is 2 years after the
    enactment of this Act.
    (ii) <>  Small
    organization.--For purposes of clause (i), the
    term ``small organization'' means any
    organization--
    (I) the gross receipts of which for
    the taxable year are less than $200,000;
    and
    (II) the aggregate gross assets of
    which at the end of the taxable year are
    less than $500,000.
    (B) <>  Organizations filing
    form 990-t.--In the case of any organization described
    in section 511(a)(2) of the Internal Revenue Code of
    1986 which is subject to the tax imposed by section
    511(a)(1) of such Code on its unrelated business taxable
    income, or any organization required to file a return
    under section 6033 of such Code and include information
    under subsection (e) thereof, the Secretary may delay
    the application of the amendments made by this section,
    but such delay shall not apply to any taxable year
    beginning on or after the date that is 2 years after the
    enactment of this Act.
    SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX-EXEMPT STATUS
    FOR FAILURE TO FILE RETURN.

    (a) <>  In General.--Section 6033(j)(1) is
    amended by striking ``If an organization'' and inserting the following:
    ``(A) <>  Notice.--If an
    organization described in subsection (a)(1) or (i) fails
    to file the annual return or notice required under
    either subsection for 2 consecutive years, the Secretary
    shall notify the organization--
    ``(i) that the Internal Revenue Service has no
    record of such a return or notice from such
    organization for 2 consecutive years, and
    ``(ii) about the revocation that will occur
    under subparagraph (B) if the organization fails
    to file such a return or notice by the due date
    for the next such return or notice required to be
    filed.
    The notification under the preceding sentence shall
    include information about how to comply with the filing
    requirements under subsections (a)(1) and (i).
    ``(B) Revocation.--If an organization''.

    (b) <>
    Effective Date.--The amendment made by this section shall apply to
    failures to file returns or notices for 2 consecutive years if the
    return or notice for the second year is required to be filed after
    December 31, 2019.

    [[Page 1017]]

    Subtitle C--Revenue Provision

    SEC. 3201. INCREASE IN PENALTY FOR FAILURE TO FILE.

    (a) In General.--The second sentence of subsection (a) of section
    6651 <>  is amended by striking ``$205'' and
    inserting ``$330''.

    (b) Inflation Adjustment.--Section 6651(j)(1) is amended--
    (1) by striking ``2014'' and inserting ``2020'',
    (2) by striking ``$205'' and inserting ``$330'', and
    (3) by striking ``2013'' and inserting ``2019''.

    (c) <>  Effective Date.--The amendments
    made by this section shall apply to returns required to be filed after
    December 31, 2019.

    TITLE IV--BUDGETARY EFFECTS

    SEC. 4001. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying with
    the Statutory Pay-As-You-Go Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, submitted for printing in the Congressional
    Record by the Chairman of the House Budget Committee, provided that such
    statement has been submitted prior to the vote on passage.

    Approved July 1, 2019.

    LEGISLATIVE HISTORY--H.R. 3151:
    ---------------------------------------------------------------------------

    CONGRESSIONAL RECORD, Vol. 165 (2019):
    June 10, considered and passed House.
    June 13, considered and passed Senate.
    DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2019):
    July 1, Presidential statement.