Bill Summary
The Taxpayer First Act of 2019, also known as Subtitle C - Sensible Enforcement, seeks to modernize and improve the operations of the Internal Revenue Service (IRS). It includes provisions for creating an independent office of appeals, improving customer service, enforcing sensible tax collection practices, modernizing the organizational structure of the IRS, and implementing other various measures to benefit taxpayers. It also addresses issues related to cybersecurity and identity protection, development of information technology, and expanded use of electronic systems. The legislation also includes provisions for reforming laws governing IRS employees and addressing issues related to exempt organizations. The Act establishes the Internal Revenue Service Independent Office of Appeals, outlines its responsibilities and provides for the appointment of a Chief of Appeals. It also includes provisions for a comprehensive customer service strategy, taxpayer rights to appeal, and limitations on cases that can be denied referral to the office. Additionally, it amends several sections of the Internal Revenue Code to improve tax collection practices, create a Community Volunteer Income Tax Assistance Matching Grant Program, and establish a streamlined critical pay authority for information technology positions. The Act also introduces modifications and protections for whistleblowers and addresses identity theft refund fraud. It also includes provisions for electronic payments, identity theft protection, and the establishment of an information sharing and analysis center.
Possible Impacts
1. Taxpayers will benefit from the creation of the Independent Office of Appeals, which will provide a fair and consistent way to resolve tax controversies without litigation.
2. Low-income taxpayers will be exempt from certain payments for submitting an offer-in-compromise under the Sensible Enforcement Subtitle, providing them with relief from financial burdens.
3. Highly qualified individuals will have the opportunity to be appointed to critical IT positions at the IRS at a higher rate of pay, helping to improve the organization's technological systems.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 928 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 928
To amend the Internal Revenue Code of 1986 to modernize and improve the
Internal Revenue Service, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 28, 2019
Mr. Grassley (for himself and Mr. Wyden) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
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
of 2019''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--PUTTING TAXPAYERS FIRST
Subtitle A--Independent Appeals Process
Sec. 1001. Establishment of Internal Revenue Service Independent Office
of Appeals.
Subtitle B--Improved Service
Sec. 1101. Comprehensive customer service strategy.
Sec. 1102. IRS Free File Program.
Sec. 1103. Low-income exception for payments otherwise required in
connection with a submission of an offer-
in-compromise.
Subtitle C--Sensible Enforcement
Sec. 1201. Internal Revenue Service seizure requirements with respect
to structuring transactions.
Sec. 1202. Exclusion of interest received in action to recover property
seized by the Internal Revenue Service
based on structuring transaction.
Sec. 1203. Clarification of equitable relief from joint liability.
Sec. 1204. Modification of procedures for issuance of third-party
summons.
Sec. 1205. Private debt collection and special compliance personnel
program.
Sec. 1206. Reform of notice of contact of third parties.
Sec. 1207. Modification of authority to issue designated summons.
Sec. 1208. Limitation on access of non-Internal Revenue Service
employees to returns and return
information.
Subtitle D--Organizational Modernization
Sec. 1301. Office of the National Taxpayer Advocate.
Sec. 1302. Modernization of Internal Revenue Service organizational
structure.
Subtitle E--Other Provisions
Sec. 1401. Return preparation programs for applicable taxpayers.
Sec. 1402. Provision of information regarding low-income taxpayer
clinics.
Sec. 1403. Notice from IRS regarding closure of taxpayer assistance
centers.
Sec. 1404. Rules for seizure and sale of perishable goods restricted to
only perishable goods.
Sec. 1405. Whistleblower reforms.
Sec. 1406. Customer service information.
Sec. 1407. Misdirected tax refund deposits.
TITLE II--21ST CENTURY IRS
Subtitle A--Cybersecurity and Identity Protection
Sec. 2001. Public-private partnership to address identity theft refund
fraud.
Sec. 2002. Recommendations of Electronic Tax Administration Advisory
Committee regarding identity theft refund
fraud.
Sec. 2003. Information sharing and analysis center.
Sec. 2004. Compliance by contractors with confidentiality safeguards.
Sec. 2005. Report on electronic payments.
Sec. 2006. Identity protection personal identification numbers.
Sec. 2007. Single point of contact for tax-related identity theft
victims.
Sec. 2008. Notification of suspected identity theft.
Sec. 2009. Guidelines for stolen identity refund fraud cases.
Sec. 2010. Increased penalty for improper disclosure or use of
information by preparers of returns.
Subtitle B--Development of Information Technology
Sec. 2101. Management of Internal Revenue Service information
technology.
Sec. 2102. Internet platform for Form 1099 filings.
Sec. 2103. Streamlined critical pay authority for information
technology positions.
Subtitle C--Modernization of Consent-Based Income Verification System
Sec. 2201. Disclosure of taxpayer information for third-party income
verification.
Sec. 2202. Limit redisclosures and uses of consent-based disclosures of
tax return information.
Subtitle D--Expanded Use of Electronic Systems
Sec. 2301. Electronic filing of returns.
Sec. 2302. Uniform standards for the use of electronic signatures for
disclosure authorizations to, and other
authorizations of, practitioners.
Sec. 2303. Payment of taxes by debit and credit cards.
Sec. 2304. 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 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, 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
``(II) in the case of any other
taxpayer, a taxpayer whose gross
receipts do not exceed $5,000,000 for
the taxable year to which the dispute
relates.
``(ii) Aggregation rule.--Rules similar to
the rules of section 448(c)(2) shall apply for
purposes of clause (i)(II).''.
(b) Conforming Amendments.--
(1) The following provisions are each amended by striking
``Internal Revenue Service Office of Appeals'' and inserting
``Internal Revenue Service Independent Office of Appeals'':
(A) Section 6015(c)(4)(B)(ii)(I).
(B) Section 6320(b)(1).
(C) Subsections (b)(1) and (d)(3) of section 6330.
(D) Section 6603(d)(3)(B).
(E) Section 6621(c)(2)(A)(i).
(F) Section 7122(e)(2).
(G) Subsections (a), (b)(1), (b)(2), and (c)(1) of
section 7123.
(H) Subsections (c)(7)(B)(i) and (g)(2)(A) of
section 7430.
(I) Section 7522(b)(3).
(J) Section 7612(c)(2)(A).
(2) Section 7430(c)(2) is amended by striking ``Internal
Revenue Service Office of Appeals'' each place it appears and
inserting ``Internal Revenue Service Independent Office of
Appeals''.
(3) The heading of section 6330(d)(3) is amended by
inserting ``Independent'' after ``IRS''.
(c) Other References.--Any reference in any provision of law, or
regulation or other guidance, to the Internal Revenue Service Office of
Appeals shall be treated as a reference to the Internal Revenue Service
Independent Office of Appeals.
(d) Savings Provisions.--Rules similar to the rules of paragraphs
(2) through (6) of section 1001(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 shall apply for purposes of this
section (and the amendments made by this section).
(e) Effective Date.--
(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 private sector, including online services, telephone
call back services, and training of employees providing
customer services;
(2) a thorough assessment of the services that the Internal
Revenue Service can co-locate with other Federal services or
offer as self-service options;
(3) proposals to improve Internal Revenue Service customer
service in the short term (the current and following fiscal
year), medium term (approximately 3 to 5 fiscal years), and
long term (approximately 10 fiscal years);
(4) a plan to update guidance and training materials for
customer service employees of the Internal Revenue Service,
including the Internal Revenue Manual, to reflect such
strategy; and
(5) identified metrics and benchmarks for quantitatively
measuring the progress of the Internal Revenue Service in
implementing such strategy.
(b) Updated Guidance and Training Materials.--Not later than 2
years after the date of the enactment of this Act, the Secretary of the
Treasury (or the Secretary's delegate) shall make available the updated
guidance and training materials described in subsection (a)(4)
(including the Internal Revenue Manual). Such updated guidance and
training materials (including the Internal Revenue Manual) shall be
written in a manner so as to be easily understood by customer service
employees of the Internal Revenue Service and shall provide clear
instructions.
SEC. 1102. IRS FREE FILE PROGRAM.
(a) In General.--
(1) The Secretary of the Treasury, or the Secretary's
delegate, shall continue to operate the IRS Free File Program
as established by the Internal Revenue Service and published in
the Federal Register on November 4, 2002 (67 Fed. Reg. 67247),
including any subsequent agreements and governing rules
established pursuant thereto.
(2) The IRS Free File Program shall continue to provide
free commercial-type online individual income tax preparation
and electronic filing services to the lowest 70 percent of
taxpayers by adjusted gross income. The number of taxpayers
eligible to receive such services each year shall be calculated
by the Internal Revenue Service annually based on prior year
aggregate taxpayer adjusted gross income data.
(3) In addition to the services described in paragraph (2),
and in the same manner, the IRS Free File Program shall
continue to make available to all taxpayers (without regard to
income) a basic, online electronic fillable forms utility.
(4) The IRS Free File Program shall continue to work
cooperatively with the private sector to provide the free
individual income tax preparation and the electronic filing
services described in paragraphs (2) and (3).
(5) The IRS Free File Program shall work cooperatively with
State government agencies to enhance and expand the use of the
program to provide needed benefits to the taxpayer while
reducing the cost of processing returns.
(b) Innovations.--The Secretary of the Treasury, or the Secretary's
delegate, shall work with the private sector through the IRS Free File
Program to identify and implement, consistent with applicable law,
innovative new program features to improve and simplify the taxpayer's
experience with completing and filing individual income tax returns
through voluntary compliance.
SEC. 1103. LOW-INCOME EXCEPTION FOR PAYMENTS OTHERWISE REQUIRED IN
CONNECTION WITH A SUBMISSION OF AN OFFER-IN-COMPROMISE.
(a) In General.--Section 7122(c) is amended by adding at the end
the following new paragraph:
``(3) Exception for low-income taxpayers.--Paragraph (1),
and any user fee otherwise required in connection with the
submission of an offer-in-compromise, shall not apply to any
offer-in-compromise with respect to a taxpayer who is an
individual with adjusted gross income, as determined for the
most recent taxable year for which such information is
available, which does not exceed 250 percent of the applicable
poverty level (as determined by the Secretary).''.
(b) Effective Date.--The amendment made by this section shall apply
to offers-in-compromise submitted after the date of the enactment of
this Act.
Subtitle C--Sensible Enforcement
SEC. 1201. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH RESPECT
TO STRUCTURING TRANSACTIONS.
Section 5317(c)(2) of title 31, United States Code, is amended--
(1) by striking ``Any property'' and inserting the
following:
``(A) In general.--Any property''; and
(2) by adding at the end the following:
``(B) Internal revenue service seizure requirements
with respect to structuring transactions.--
``(i) Property derived from an illegal
source.--Property may only be seized by the
Internal Revenue Service pursuant to
subparagraph (A) by reason of a claimed
violation of section 5324 if the property to be
seized was derived from an illegal source or
the funds were structured for the purpose of
concealing the violation of a criminal law or
regulation other than section 5324.
``(ii) Notice.--Not later than 30 days
after property is seized by the Internal
Revenue Service pursuant to subparagraph (A),
the Internal Revenue Service shall--
``(I) make a good faith effort to
find all persons with an ownership
interest in such property; and
``(II) provide each such person so
found with a notice of the seizure and
of the person's rights under clause
(iv).
``(iii) Extension of notice under certain
circumstances.--The Internal Revenue Service
may apply to a court of competent jurisdiction
for one 30-day extension of the notice
requirement under clause (ii) if the Internal
Revenue Service can establish probable cause of
an imminent threat to national security or
personal safety necessitating such extension.
``(iv) Post-seizure hearing.--If a person
with an ownership interest in property seized
pursuant to subparagraph (A) by the Internal
Revenue Service requests a hearing by a court
of competent jurisdiction within 30 days after
the date on which notice is provided under
subclause (ii), such property shall be returned
unless the court holds an adversarial hearing
and finds within 30 days of such request (or
such longer period as the court may provide,
but only on request of an interested party)
that there is probable cause to believe that
there is a violation of section 5324 involving
such property and probable cause to believe
that the property to be seized was derived from
an illegal source or the funds were structured
for the purpose of concealing the violation of
a criminal law or regulation other than section
5324.''.
SEC. 1202. EXCLUSION OF INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY
SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON
STRUCTURING TRANSACTION.
(a) In General.--Part III of subchapter B of chapter 1 is amended
by inserting before section 140 the following new section:
``SEC. 139H. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY
THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING
TRANSACTION.
``Gross income shall not include any interest received from the
Federal Government in connection with an action to recover property
seized by the Internal Revenue Service pursuant to section 5317(c)(2)
of title 31, United States Code, by reason of a claimed violation of
section 5324 of such title.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 is amended by inserting before the item
relating to section 140 the following new item:
``Sec. 139H. Interest received in action to recover property seized by
the Internal Revenue Service based on
structuring transaction.''.
(c) Effective Date.--The amendments made by this section shall
apply to interest received on or after the date of the enactment of
this Act.
SEC. 1203. CLARIFICATION OF EQUITABLE RELIEF FROM JOINT LIABILITY.
(a) In General.--Section 6015 is amended--
(1) in subsection (e), by adding at the end the following
new paragraph:
``(7) Standard and scope of review.--Any review of a
determination made under this section shall be reviewed de novo
by the Tax Court and shall be based upon--
``(A) the administrative record established at the
time of the determination, and
``(B) any additional newly discovered or previously
unavailable evidence.''; and
(2) by amending subsection (f) to read as follows:
``(f) Equitable Relief.--
``(1) In general.--Under procedures prescribed by the
Secretary, if--
``(A) taking into account all the facts and
circumstances, it is inequitable to hold the individual
liable for any unpaid tax or any deficiency (or any
portion of either), and
``(B) relief is not available to such individual
under subsection (b) or (c),
the Secretary may relieve such individual of such liability.
``(2) Limitation.--A request for equitable relief under
this subsection may be made with respect to any portion of any
liability that--
``(A) has not been paid, provided that such request
is made before the expiration of the applicable period
of limitation under section 6502, or
``(B) has been paid, provided that such request is
made during the period in which the individual could
submit a timely claim for refund or credit of such
payment.''.
(b) Effective Date.--The amendments made by this section shall
apply to petitions or requests filed or pending on or after the date of
the enactment of this Act.
SEC. 1204. MODIFICATION OF PROCEDURES FOR ISSUANCE OF THIRD-PARTY
SUMMONS.
(a) In General.--Section 7609(f) is amended by adding at the end
the following flush sentence:
``The Secretary shall not issue any summons described in the preceding
sentence unless the information sought to be obtained is narrowly
tailored to information that pertains to the failure (or potential
failure) of the person or group or class of persons referred to in
paragraph (2) to comply with one or more provisions of the internal
revenue law which have been identified for purposes of such
paragraph.''.
(b) Effective Date.--The amendments made by this section shall
apply to summonses served after the date 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.
(2) Maximum length of installment agreements.--The
amendment made by subsection (c) shall apply to contracts
entered into after the date of the enactment of this Act.
(3) Use of special compliance personnel program account.--
The amendment made by subsection (d) shall apply to amounts
expended from the special compliance personnel program account
after the date of the enactment of this Act.
SEC. 1206. REFORM OF NOTICE OF CONTACT OF THIRD PARTIES.
(a) In General.--Section 7602(c)(1) is amended to read as follows:
``(1) General notice.--An officer or employee of the
Internal Revenue Service may not contact any person other than
the taxpayer with respect to the determination or collection of
the tax liability of such taxpayer unless such contact occurs
during a period (not greater than 1 year) which is specified in
a notice which--
``(A) informs the taxpayer that contacts with
persons other than the taxpayer are intended to be made
during such period, and
``(B) except as otherwise provided by the
Secretary, is provided to the taxpayer not later than
45 days before the beginning of such period.
Nothing in the preceding sentence shall prevent the issuance of
notices to the same taxpayer with respect to the same tax
liability with periods specified therein that, in the
aggregate, exceed 1 year. A notice shall not be issued under
this paragraph unless there is an intent at the time such
notice is issued to contact persons other than the taxpayer
during the period specified in such notice. The preceding
sentence shall not prevent the issuance of a notice if the
requirement of such sentence is met on the basis of the
assumption that the information sought to be obtained by such
contact will not be obtained by other means before such
contact.''.
(b) Effective Date.--The amendment made by this section shall apply
to notices provided, and contacts of persons made, after the date which
is 45 days after the date of the enactment of this Act.
SEC. 1207. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED SUMMONS.
(a) In General.--Paragraph (1) of section 6503(j) is amended by
striking ``coordinated examination program'' and inserting
``coordinated industry case program''.
(b) Requirements for Summons.--Clause (i) of section 6503(j)(2)(A)
is amended to read as follows:
``(i) the issuance of such summons is
preceded by a review and written approval of
such issuance by the Commissioner of the
relevant operating division of the Internal
Revenue Service and the Chief Counsel which--
``(I) states facts clearly
establishing that the Secretary has
made reasonable requests for the
information that is the subject of the
summons, and
``(II) is attached to such
summons,''.
(c) Establishment That Reasonable Requests for Information Were
Made.--Subsection (j) of section 6503 is amended by adding at the end
the following new paragraph:
``(4) Establishment that reasonable requests for
information were made.--In any court proceeding described in
paragraph (3), the Secretary shall establish that reasonable
requests were made for the information that is the subject of
the summons.''.
(d) Effective Date.--The amendments made by this section shall
apply to summonses issued after the date 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 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 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 preparation programs assisting applicable taxpayers
and members of underserved populations.
``(b) Use of Funds.--
``(1) In general.--Qualified return preparation programs
may use grants received under this section for--
``(A) ordinary and necessary costs associated with
program operation in accordance with cost principles
under the applicable Office of Management and Budget
circular, including--
``(i) wages or salaries of persons
coordinating the activities of the program,
``(ii) developing training materials,
conducting training, and performing quality
reviews of the returns prepared under the
program,
``(iii) equipment purchases, and
``(iv) vehicle-related expenses associated
with remote or rural tax preparation services,
``(B) outreach and educational activities described
in subsection (c)(2)(B), and
``(C) services related to financial education and
capability, asset development, and the establishment of
savings accounts in connection with tax return
preparation.
``(2) Requirement of matching funds.--A qualified return
preparation program must provide matching funds on a dollar-
for-dollar basis for all grants provided under this section.
Matching funds may include--
``(A) the salary (including fringe benefits) of
individuals performing services for the program,
``(B) the cost of equipment used in the program,
and
``(C) other ordinary and necessary costs associated
with the program.
Indirect expenses, including general overhead of any entity
administering the program, shall not be counted as matching
funds.
``(c) Application.--
``(1) In general.--Each applicant for a grant under this
section shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may reasonably require.
``(2) Priority.--In awarding grants under this section, the
Secretary shall give priority to applications which
demonstrate--
``(A) assistance to applicable taxpayers, with
emphasis on outreach to, and services for, such
taxpayers,
``(B) taxpayer outreach and educational activities
relating to eligibility and availability of income
supports available through this title, including the
earned income tax credit, and
``(C) specific outreach and focus on one or more
underserved populations.
``(3) Amounts taken into account.--In determining matching
grants under this section, the Secretary shall only take into
account amounts provided by the qualified return preparation
program for expenses described in subsection (b).
``(d) Program Adherence.--
``(1) In general.--The Secretary shall establish procedures
for, and shall conduct not less frequently than once every 5
calendar years during which a qualified return preparation
program is operating under a grant under this section, periodic
site visits--
``(A) to ensure the program is carrying out the
purposes of this section, and
``(B) to determine whether the program meets such
program adherence standards as the Secretary shall by
regulation or other guidance prescribe.
``(2) Additional requirements for grant recipients not
meeting program adherence standards.--In the case of any
qualified return preparation program which--
``(A) is awarded a grant under this section, and
``(B) is subsequently determined--
``(i) not to meet the program adherence
standards described in paragraph (1)(B), or
``(ii) not to be otherwise carrying out the
purposes of this section,
such program shall not be eligible for any additional grants
under this section unless such program provides sufficient
documentation of corrective measures established to address any
such deficiencies determined.
``(e) Definitions.--For purposes of this section--
``(1) Qualified return preparation program.--The term
`qualified return preparation program' means any program--
``(A) which provides assistance to individuals, not
less than 90 percent of whom are applicable taxpayers,
in preparing and filing Federal income tax returns,
``(B) which is administered by a qualified entity,
``(C) in which all volunteers who assist in the
preparation of Federal income tax returns meet the
training requirements prescribed by the Secretary, and
``(D) which uses a quality review process which
reviews 100 percent of all returns.
``(2) Qualified entity.--
``(A) In general.--The term `qualified entity'
means any entity which--
``(i) is an eligible organization,
``(ii) is in compliance with Federal tax
filing and payment requirements,
``(iii) is not debarred or suspended from
Federal contracts, grants, or cooperative
agreements, and
``(iv) agrees to provide documentation to
substantiate any matching funds provided
pursuant to the grant program under this
section.
``(B) Eligible organization.--The term `eligible
organization' means--
``(i) an institution of higher education
which is described in section 102 (other than
subsection (a)(1)(C) thereof) of the Higher
Education Act of 1965 (20 U.S.C. 1002), as in
effect on the date of the enactment of this
section, and which has not been disqualified
from participating in a program under title IV
of such Act,
``(ii) an organization described in section
501(c) and exempt from tax under section
501(a),
``(iii) a local government agency,
including--
``(I) a county or municipal
government agency, and
``(II) an Indian tribe, as defined
in section 4(13) of the Native American
Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C.
4103(13)), including any tribally
designated housing entity (as defined
in section 4(22) of such Act (25 U.S.C.
4103(22))), tribal subsidiary,
subdivision, or other wholly owned
tribal entity,
``(iv) a local, State, regional, or
national coalition (with one lead organization
which meets the eligibility requirements of
clause (i), (ii), or (iii) acting as the
applicant organization), or
``(v) in the case of applicable taxpayers
and members of underserved populations with
respect to which no organizations described in
the preceding clauses are available--
``(I) a State government agency, or
``(II) an office providing
Cooperative Extension services (as
established at the land-grant colleges
and universities under the Smith-Lever
Act of May 8, 1914).
``(3) Applicable taxpayers.--The term `applicable taxpayer'
means a taxpayer whose income for the taxable year does not
exceed an amount equal to the completed phaseout amount under
section 32(b) for a married couple filing a joint return with
three or more qualifying children, as determined in a revenue
procedure or other published guidance.
``(4) Underserved population.--The term `underserved
population' includes populations of persons with disabilities,
persons with limited English proficiency, Native Americans,
individuals living in rural areas, members of the Armed Forces
and their spouses, and the elderly.
``(f) Special Rules and Limitations.--
``(1) Duration of grants.--Upon application of a qualified
return preparation program, the Secretary is authorized to
award a multi-year grant not to exceed 3 years.
``(2) Aggregate limitation.--Unless otherwise provided by
specific appropriation, the Secretary shall not allocate more
than $30,000,000 per fiscal year (exclusive of costs of
administering the program) to grants under this section.
``(g) Promotion of Programs.--
``(1) In general.--The Secretary shall promote tax
preparation through qualified return preparation programs
through the use of mass communications and other means.
``(2) Provision of information regarding qualified return
preparation programs.--The Secretary may provide taxpayers
information regarding qualified return preparation programs
receiving grants under this section.
``(3) 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.''.
(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 described in paragraph (1) or (2) of section
7623(a), return information related to the
investigation of any taxpayer with respect to whom the
individual has provided such information, but only to
the extent that such disclosure is necessary in
obtaining information, which is not otherwise
reasonably available, with respect to the correct
determination of tax liability for tax, or the amount
to be collected with respect to the enforcement of any
other provision of this title.
``(B) Updates on whistleblower investigations.--The
Secretary shall disclose to an individual providing
information relating to any purpose described in
paragraph (1) or (2) of section 7623(a) the following:
``(i) Not later than 60 days after a case
for which the individual has provided
information has been referred for an audit or
examination, a notice with respect to such
referral.
``(ii) Not later than 60 days after a
taxpayer with respect to whom the individual
has provided information has made a payment of
tax with respect to tax liability to which such
information relates, a notice with respect to
such payment.
``(iii) Subject to such requirements and
conditions as are prescribed by the Secretary,
upon a written request by such individual--
``(I) information on the status and
stage of any investigation or action
related to such information, and
``(II) in the case of a
determination of the amount of any
award under section 7623(b), the
reasons for such determination.
Clause (iii) shall not apply to any information if the
Secretary determines that disclosure of such
information would seriously impair Federal tax
administration. Information described in clauses (i),
(ii), and (iii) may be disclosed to a designee of the
individual providing such information in accordance
with guidance provided by the Secretary.''.
(2) Conforming amendments.--
(A) Confidentiality of information.--Section
6103(a)(3) is amended by striking ``subsection
(k)(10)'' and inserting ``paragraph (10) or (13) of
subsection (k)''.
(B) Penalty for unauthorized disclosure.--Section
7213(a)(2) is amended by striking ``(k)(10)'' and
inserting ``(k)(10) or (13)''.
(C) Coordination with authority to disclose for
investigative purposes.--Section 6103(k)(6) is amended
by adding at the end the following new sentence: ``This
paragraph shall not apply to any disclosure to an
individual providing information relating to any
purpose described in paragraph (1) or (2) of section
7623(a) which is made under paragraph (13)(A).''.
(b) Protection Against Retaliation.--Section 7623 is amended by
adding at the end the following new subsection:
``(d) Civil Action To Protect Against Retaliation Cases.--
``(1) Anti-retaliation whistleblower protection for
employees.--No employer, or any officer, employee, contractor,
subcontractor, or agent of such employer, may discharge,
demote, suspend, threaten, harass, or in any other manner
discriminate against an employee in the terms and conditions of
employment (including through an act in the ordinary course of
such employee's duties) in reprisal for any lawful act done by
the employee--
``(A) to provide information, cause information to
be provided, or otherwise assist in an investigation
regarding underpayment of tax or any conduct which the
employee reasonably believes constitutes a violation of
the internal revenue laws or any provision of Federal
law relating to tax fraud, when the information or
assistance is provided to the Internal Revenue Service,
the Secretary of Treasury, the Treasury Inspector
General for Tax Administration, the Comptroller General
of the United States, the Department of Justice, the
United States Congress, a person with supervisory
authority over the employee, or any other person
working for the employer who has the authority to
investigate, discover, or terminate misconduct, or
``(B) to testify, participate in, or otherwise
assist in any administrative or judicial action taken
by the Internal Revenue Service relating to an alleged
underpayment of tax or any violation of the internal
revenue laws or any provision of Federal law relating
to tax fraud.
``(2) Enforcement action.--
``(A) In general.--A person who alleges discharge
or other reprisal by any person in violation of
paragraph (1) may seek relief under paragraph (3) by--
``(i) filing a complaint with the Secretary
of Labor, or
``(ii) if the Secretary of Labor has not
issued a final decision within 180 days of the
filing of the complaint and there is no showing
that such delay is due to the bad faith of the
claimant, bringing an action at law or equity
for de novo review in the appropriate district
court of the United States, which shall have
jurisdiction over such an action without regard
to the amount in controversy.
``(B) Procedure.--
``(i) In general.--An action under
subparagraph (A)(i) shall be governed under the
rules and procedures set forth in section
42121(b) of title 49, United States Code.
``(ii) Exception.--Notification made under
section 42121(b)(1) of title 49, United States
Code, shall be made to the person named in the
complaint and to the employer.
``(iii) Burdens of proof.--An action
brought under subparagraph (A)(ii) shall be
governed by the legal burdens of proof set
forth in section 42121(b) of title 49, United
States Code, except that in applying such
section--
``(I) `behavior described in
paragraph (1)' shall be substituted for
`behavior described in paragraphs (1)
through (4) of subsection (a)' each
place it appears in paragraph (2)(B)
thereof, and
``(II) `a violation of paragraph
(1)' shall be substituted for `a
violation of subsection (a)' each place
it appears.
``(iv) Statute of limitations.--A complaint
under subparagraph (A)(i) shall be filed not
later than 180 days after the date on which the
violation occurs.
``(v) Jury trial.--A party to an action
brought under subparagraph (A)(ii) shall be
entitled to trial by jury.
``(3) Remedies.--
``(A) In general.--An employee prevailing in any
action under paragraph (2)(A) shall be entitled to all
relief necessary to make the employee whole.
``(B) Compensatory damages.--Relief for any action
under subparagraph (A) shall include--
``(i) reinstatement with the same seniority
status that the employee would have had, but
for the reprisal,
``(ii) the sum of 200 percent of the amount
of back pay and 100 percent of all lost
benefits, with interest, and
``(iii) compensation for any special
damages sustained as a result of the reprisal,
including litigation costs, expert witness
fees, and reasonable attorney fees.
``(4) Rights retained by employee.--Nothing in this section
shall be deemed to diminish the rights, privileges, or remedies
of any employee under any Federal or State law, or under any
collective bargaining agreement.
``(5) Nonenforceability of certain provisions waiving
rights and remedies or requiring arbitration of disputes.--
``(A) Waiver of rights and remedies.--The rights
and remedies provided for in this subsection may not be
waived by any agreement, policy form, or condition of
employment, including by a predispute arbitration
agreement.
``(B) Predispute arbitration agreements.--No
predispute arbitration agreement shall be valid or
enforceable, if the agreement requires arbitration of a
dispute arising under this subsection.''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall apply to disclosures made after the date of the enactment
of this Act.
(2) Civil protection.--The amendment made by subsection (b)
shall take effect on the date of the enactment of this Act.
SEC. 1406. CUSTOMER SERVICE INFORMATION.
The Secretary of the Treasury (or the Secretary's delegate) shall
provide helpful information to taxpayers placed on hold during a
telephone call to any Internal Revenue Service help line, including the
following:
(1) Information about common tax scams.
(2) Information on where and how to report tax scams.
(3) Additional advice on how taxpayers can protect
themselves from identity theft and tax scams.
SEC. 1407. MISDIRECTED TAX REFUND DEPOSITS.
Section 6402 is amended by adding at the end the following new
subsection:
``(n) Misdirected Direct Deposit Refund.--Not later than the date
which is 6 months after the date of the enactment of the Taxpayer First
Act of 2019, 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.--
``(A) In general.--Under such procedures and
subject to such conditions as the Secretary may
prescribe, the Secretary may disclose specified return
information to specified ISAC participants to the
extent that the Secretary determines such disclosure is
in furtherance of effective Federal tax administration
relating to the detection or prevention of identity
theft tax refund fraud, validation of taxpayer
identity, authentication of taxpayer returns, or
detection or prevention of cybersecurity threats.
``(B) Specified isac participants.--For purposes of
this paragraph--
``(i) In general.--The term `specified ISAC
participant' means--
``(I) any person designated by the
Secretary as having primary
responsibility for a function performed
with respect to the information sharing
and analysis center described in
section 2003(a) of the Taxpayer First
Act of 2019, and
``(II) any person subject to the
requirements of section 7216 and which
is a participant in such information
sharing and analysis center.
``(ii) Information sharing agreement.--Such
term shall not include any person unless such
person has entered into a written agreement
with the Secretary setting forth the terms and
conditions for the disclosure of information to
such person under this paragraph, including
requirements regarding the protection and
safeguarding of such information by such
person.
``(C) Specified return information.--For purposes
of this paragraph, the term `specified return
information' means--
``(i) in the case of a return which is in
connection with a case of potential identity
theft refund fraud--
``(I) in the case of such return
filed electronically, the internet
protocol address, device
identification, email domain name,
speed of completion, method of
authentication, refund method, and such
other return information related to the
electronic filing characteristics of
such return as the Secretary may
identify for purposes of this
subclause, and
``(II) in the case of such return
prepared by a tax return preparer,
identifying information with respect to
such tax return preparer, including the
preparer taxpayer identification number
and electronic filer identification
number of such preparer,
``(ii) in the case of a return which is in
connection with a case of a identity theft
refund fraud which has been confirmed by the
Secretary (pursuant to such procedures as the
Secretary may provide), the information
referred to in subclauses (I) and (II) of
clause (i), the name and taxpayer
identification number of the taxpayer as it
appears on the return, and any bank account and
routing information provided for making a
refund in connection with such return, and
``(iii) in the case of any cybersecurity
threat to the Internal Revenue Service,
information similar to the information
described in subclauses (I) and (II) of clause
(i) with respect to such threat.
``(D) Restriction on use of disclosed
information.--
``(i) Designated third parties.--Any return
information received by a person described in
subparagraph (B)(i)(I) shall be used only for
the purposes of and to the extent necessary
in--
``(I) performing the function such
person is designated to perform under
such subparagraph,
``(II) facilitating disclosures
authorized under subparagraph (A) to
persons described in subparagraph
(B)(i)(II), and
``(III) facilitating disclosures
authorized under subsection (d) to
participants in such information
sharing and analysis center.
``(ii) Return preparers.--Any return
information received by a person described in
subparagraph (B)(i)(II) shall be treated for
purposes of section 7216 as information
furnished to such person for, or in connection
with, the preparation of a return of the tax
imposed under chapter 1.
``(E) Data protection and safeguards.--Return
information disclosed under this paragraph shall be
subject to such protections and safeguards as the
Secretary may require in regulations or other guidance
or in the written agreement referred to in subparagraph
(B)(ii). Such written agreement shall include a
requirement that any unauthorized access to information
disclosed under this paragraph, and any breach of any
system in which such information is held, be reported
to the Treasury Inspector General for Tax
Administration.''.
(2) Application of civil and criminal penalties.--
(A) Section 6103(a)(3), as amended by this Act, is
amended by striking ``or (13)'' and inserting ``(13),
or (14)''.
(B) Section 7213(a)(2), as amended by this Act, is
amended by striking ``or (13)'' and inserting ``(13),
or (14)''.
SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.
(a) In General.--Section 6103(p) is amended by adding at the end
the following new paragraph:
``(9) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no return
or return information shall be disclosed to any contractor or
other agent of a Federal, State, or local agency unless such
agency, to the satisfaction of the Secretary--
``(A) has requirements in effect which require each
such contractor or other agent which would have access
to returns or return information to provide safeguards
(within the meaning of paragraph (4)) to protect the
confidentiality of such returns or return information,
``(B) agrees to conduct an on-site review every 3
years (or a mid-point review in the case of contracts
or agreements of less than 3 years in duration) of each
contractor or other agent to determine compliance with
such requirements,
``(C) submits the findings of the most recent
review conducted under subparagraph (B) to the
Secretary as part of the report required by paragraph
(4)(E), and
``(D) certifies to the Secretary for the most
recent annual period that such contractor or other
agent is in compliance with all such requirements.
The certification required by subparagraph (D) shall include
the name and address of each contractor or other agent, a
description of the contract or agreement with such contractor
or other agent, and the duration of such contract or agreement.
The requirements of this paragraph shall not apply to
disclosures pursuant to subsection (n) for purposes of Federal
tax administration.''.
(b) Conforming Amendment.--Section 6103(p)(8)(B) is amended by
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures made after December 31, 2022.
SEC. 2005. REPORT ON ELECTRONIC PAYMENTS.
Not later than 2 years after the date of the enactment of this Act,
the Secretary of the Treasury (or the Secretary's delegate), in
coordination with the Bureau of Fiscal Service and the Internal Revenue
Service, and in consultation with private sector financial
institutions, shall submit a written report to Congress describing how
the government can utilize new payment platforms to increase the number
of tax refunds paid by electronic funds transfer. Such report shall
weigh the interests of reducing identity theft tax refund fraud,
reducing the Federal Government's costs in delivering tax refunds, the
costs and any associated fees charged to taxpayers (including monthly
and point-of-service fees) to access their tax refunds, the impact on
individuals who do not have access to financial accounts or
institutions, and ensuring payments are made to accounts at a financial
institution that complies with section 21 of the Federal Deposit
Insurance Act, chapter 2 of title I of Public Law 91-508, and
subchapter II of chapter 53 of title 31, United States Code (commonly
referred to collectively as the ``Bank Secrecy Act'') and the USA
PATRIOT Act. Such report shall include any legislative recommendations
necessary to accomplish these goals.
SEC. 2006. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBERS.
(a) In General.--Subject to subsection (b), the Secretary of the
Treasury or the Secretary's delegate (hereafter referred to in this
section as the ``Secretary'') shall establish a program to issue, upon
the request of any individual, a number which may be used in connection
with such individual's social security number (or other identifying
information with respect to such individual as determined by the
Secretary) to assist the Secretary in verifying such individual's
identity.
(b) Requirements.--
(1) Annual expansion.--For each calendar year beginning
after the date of the enactment of this Act, the Secretary
shall provide numbers through the program described in
subsection (a) to individuals residing in such States as the
Secretary deems appropriate, provided that the total number of
States served by such program during such year is greater than
the total number of States served by such program during the
preceding year.
(2) Nationwide availability.--Not later than 5 years after
the date of the enactment of this Act, the Secretary shall
ensure that the program described in subsection (a) is made
available to any individual residing in the United States.
SEC. 2007. SINGLE POINT OF CONTACT FOR TAX-RELATED IDENTITY THEFT
VICTIMS.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall establish and implement procedures to ensure that any
taxpayer whose return has been delayed or otherwise adversely affected
due to tax-related identity theft has a single point of contact at the
Internal Revenue Service throughout the processing of the taxpayer's
case. The single point of contact shall track the taxpayer's case to
completion and coordinate with other Internal Revenue Service employees
to resolve case issues as quickly as possible.
(b) Single Point of Contact.--
(1) In general.--For purposes of subsection (a), the single
point of contact shall consist of a team or subset of specially
trained employees who--
(A) have the ability to work across functions to
resolve the issues involved in the taxpayer's case; and
(B) shall be accountable for handling the case
until its resolution.
(2) Team or subset.--The employees included within the team
or subset described in paragraph (1) may change as required to
meet the needs of the Internal Revenue Service, provided that
procedures have been established to--
(A) ensure continuity of records and case history;
and
(B) notify the taxpayer when appropriate.
SEC. 2008. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
(a) In General.--Chapter 77 is amended by adding at the end the
following new section:
``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
``(a) In General.--If the Secretary determines that there has been
or may have been an unauthorized use of the identity of any individual,
the Secretary shall, without jeopardizing an investigation relating to
tax administration--
``(1) as soon as practicable--
``(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.
``(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 (or the
Secretary's delegate) shall establish procedures to ensure that
income reported in connection with the unauthorized use of a
taxpayer's identity is not taken into account in determining
any penalty for underreporting of income by the victim of
identity theft.
(c) Clerical Amendment.--The table of sections for chapter 77 is
amended by adding at the end the following new item:
``Sec. 7529. Notification of suspected identity theft.''.
(d) Effective Date.--The amendments made by this section shall
apply to determinations made after the date that is 6 months after the
date of the enactment of this Act.
SEC. 2009. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Secretary (or the Secretary's delegate), in
consultation with the National Taxpayer Advocate, shall develop and
implement publicly available guidelines for management of cases
involving stolen identity refund fraud in a manner that reduces the
administrative burden on taxpayers who are victims of such fraud.
(b) Standards and Procedures To Be Considered.--The guidelines
described in subsection (a) may include--
(1) standards for--
(A) the average length of time in which a case
involving stolen identity refund fraud should be
resolved;
(B) the maximum length of time, on average, a
taxpayer who is a victim of stolen identity refund
fraud and is entitled to a tax refund which has been
stolen should have to wait to receive such refund; and
(C) the maximum number of offices and employees
within the Internal Revenue Service with whom a
taxpayer who is a victim of stolen identity refund
fraud should be required to interact in order to
resolve a case;
(2) standards for opening, assigning, reassigning, or
closing a case involving stolen identity refund fraud; and
(3) procedures for implementing and accomplishing the
standards described in paragraphs (1) and (2), and measures for
evaluating such procedures and determining whether such
standards have been successfully implemented.
SEC. 2010. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF
INFORMATION BY PREPARERS OF RETURNS.
(a) In General.--Section 6713 is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Enhanced Penalty for Improper Use or Disclosure Relating to
Identity Theft.--
``(1) In general.--In the case of a disclosure or use
described in subsection (a) that is made in connection with a
crime relating to the misappropriation of another person's
taxpayer identity (as defined in section 6103(b)(6)), whether
or not such crime involves any tax filing, subsection (a) shall
be applied--
``(A) by substituting `$1,000' for `$250', and
``(B) by substituting `$50,000' for `$10,000'.
``(2) Separate application of total penalty limitation.--
The limitation on the total amount of the penalty under
subsection (a) shall be applied separately with respect to
disclosures or uses to which this subsection applies and to
which it does not apply.''.
(b) Criminal Penalty.--Section 7216(a) is amended by striking
``$1,000'' and inserting ``$1,000 ($100,000 in the case of a disclosure
or use to which section 6713(b) applies)''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures or uses on or after the date of the enactment of
this Act.
Subtitle B--Development of Information Technology
SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION
TECHNOLOGY.
(a) Duties and Responsibilities of Internal Revenue Service Chief
Information Officer.--Section 7803, as amended by section 1001, is
amended by adding at the end the following new subsection:
``(f) Internal Revenue Service Chief Information Officer.--
``(1) In general.--There shall be in the Internal Revenue
Service an Internal Revenue Service Chief Information Officer
(hereafter referred to in this subsection as the `IRS CIO') who
shall be appointed by the Commissioner of 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,
``(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''.
(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 $1,000,000;
and
(B) such other acquisitions of information
technology for the Internal Revenue Service (or
categories of such acquisitions) as the IRS CIO, in
consultation with the Chief Procurement Officer of the
Internal Revenue Service, may identify.
(3) Scope.--Terms used in this subsection which are also
used in section 7803(f) of the Internal Revenue Code of 1986
(as 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:
``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 of 2019' 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.
(d) User Fee.--
(1) In general.--During the 2-year period beginning on the
first day of the 6th calendar month beginning after the date of
the enactment of this Act, the Secretary shall assess and
collect a fee for qualified disclosures (in addition to any
other fee assessed and collected for such disclosures) at such
rates as the Secretary determines are sufficient to cover the
costs related to implementing the program described in
subsection (a), including the costs of any necessary
infrastructure or technology.
(2) Deposit of collections.--Amounts received from fees
assessed and collected under paragraph (1) shall be deposited
in, and credited to, an account solely for the purpose of
carrying out the activities described in subsection (a). Such
amounts shall be available to carry out such activities without
need of further appropriation and without fiscal year
limitation.
SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF
TAX RETURN INFORMATION.
(a) In General.--Section 6103(c) is amended by adding at the end
the following: ``Persons designated by the taxpayer under this
subsection to receive return information shall not use the information
for any purpose other than the express purpose for which consent was
granted and shall not disclose return information to any other person
without the express permission of, or request by, the taxpayer.''.
(b) Application of Penalties.--Section 6103(a)(3) is amended by
inserting ``subsection (c),'' after ``return information under''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures made after the date 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 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.''.
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 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) Conforming Amendment.--Paragraph (7) of section 527(j) is
amended by striking ``if the organization has'' and all that follows
through ``such calendar year''.
(c) Inspection of Electronically Filed Annual Returns.--Subsection
(b) of section 6104 is amended by adding at the end the following:
``Any annual return required to be filed electronically under section
6033(n) shall be made available by the Secretary to the public as soon
as practicable in a machine readable format.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after the date of the enactment of this Act.
(2) Transitional relief.--
(A) Small organizations.--
(i) In general.--In the case of any small
organizations, or any other organizations for
which the Secretary of the Treasury or the
Secretary's delegate (hereafter referred to in
this paragraph as the ``Secretary'') determines
the application of the amendments made by this
section would cause undue burden without a
delay, the Secretary may delay the application
of such amendments, but such delay shall not
apply to any taxable year beginning on or after
the date 2 years after of the enactment of this
Act.
(ii) Small organization.--For purposes of
clause (i), the term ``small organization''
means any organization--
(I) the gross receipts of which for
the taxable year are less than
$200,000; and
(II) the aggregate gross assets of
which at the end of the taxable year
are less than $500,000.
(B) Organizations filing form 990-t.--In the case
of any organization described in section 511(a)(2) of
the Internal Revenue Code of 1986 which is subject to
the tax imposed by section 511(a)(1) of such Code on
its unrelated business taxable income, or any
organization required to file a return under section
6033 of such Code and include information under
subsection (e) thereof, the Secretary may delay the
application of the amendments made by this section, but
such delay shall not apply to any taxable year
beginning on or after the date 2 years after of the
enactment of this Act.
SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX-EXEMPT STATUS FOR
FAILURE TO FILE RETURN.
(a) In General.--Section 6033(j)(1) is amended by striking ``If an
organization'' and inserting the following:
``(A) Notice.--
``(i) In general.--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 subsection
(a)(1) and (i).
``(B) Revocation.--If an organization''.
(b) Effective Date.--The amendment made by this section shall apply
to failures to file returns or notices for 2 consecutive years if the
return or notice for the second year is required to be filed after
December 31, 2019.
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.
<all>