[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:
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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.