[House Report 114-70]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-70
======================================================================
TAXPAYER BILL OF RIGHTS ACT OF 2015
_______
April 13, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Ryan of Wisconsin, from the Committee on Ways and Means, submitted
the following
R E P O R T
[To accompany H.R. 1058]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 1058) to amend the Internal Revenue Code of 1986 to
clarify that a duty of the Commissioner of Internal Revenue is
to ensure that Internal Revenue Service employees are familiar
with and act in accord with certain taxpayer rights, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................2
A. Purpose and Summary................................... 2
B. Background and Need for Legislation................... 3
C. Legislative History................................... 3
II. EXPLANATION OF THE BILL...........................................4
A. Duty to Ensure that IRS Employees are Familiar With
and Act in Accordance With Certain Taxpayer Rights
(sec. 2 of bill and sec. 7803 of the Code)........... 4
III.VOTES OF THE COMMITTEE............................................5
IV. BUDGET EFFECTS OF THE BILL........................................5
A. Committee Estimate of Budgetary Effects............... 5
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 5
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 6
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........6
A. Committee Oversight Findings and Recommendations...... 6
B. Statement of General Performance Goals and Objectives. 7
C. Information Relating to Unfunded Mandates............. 7
D. Applicability of House Rule XXI 5(b).................. 7
E. Tax Complexity Analysis............................... 7
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 7
G. Duplication of Federal Programs....................... 8
H. Disclosure of Directed Rule Makings................... 8
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............8
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 8
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 15
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Taxpayer Bill of Rights Act of 2015''.
SEC. 2. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FAMILIAR WITH AND ACT IN
ACCORD WITH CERTAIN TAXPAYER RIGHTS.
(a) In General.--Section 7803(a) of the Internal Revenue Code of 1986
is amended by redesignating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following new paragraph:
``(3) Execution of duties in accord with taxpayer rights.--In
discharging his duties, the Commissioner shall ensure that
employees of the Internal Revenue Service are familiar with and
act in accord with taxpayer rights as afforded by other
provisions of this title, including--
``(A) the right to be informed,
``(B) the right to quality service,
``(C) the right to pay no more than the correct
amount of tax,
``(D) the right to challenge the position of the
Internal Revenue Service and be heard,
``(E) the right to appeal a decision of the Internal
Revenue Service in an independent forum,
``(F) the right to finality,
``(G) the right to privacy,
``(H) the right to confidentiality,
``(I) the right to retain representation, and
``(J) the right to a fair and just tax system.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
H.R. 1058, reported by the Committee on Ways and Means,
requires that Internal Revenue Service (``IRS'') employees be
familiar with and act in accordance with the Taxpayer Bill of
Rights, which include:
the right to be informed,
the right to quality service,
the right to pay no more than the correct amount
of tax,
the right to challenge the position of the IRS and
be heard
the right to appeal a decision of the IRS in an
independent forum,
the right to finality,
the right to privacy,
the right to confidentiality,
the right to retain representation, and
the right to a fair and just tax system.
The bill makes it the affirmative duty of the IRS
Commissioner to promote and protect these rights.
B. Background and Need for Legislation
Through its oversight, the Committee has found examples in
which IRS employees have failed to respect taxpayer rights,
including mishandling of sensitive taxpayer information,
seizing taxpayer assets without due process, and targeting
groups for adverse treatment based on name and policy position,
among others. Overall, the IRS has demonstrated a pattern of
failing to act consistently in the best interest of the
taxpayer. H.R. 1058 would ensure that the IRS acts in
accordance with taxpayer rights.
C. Legislative History
Background
H.R. 1058 was introduced on February 25, 2015, and was
referred to the Committee on Ways and Means. Nearly identical
legislation, H.R. 2768, passed the House of Representatives in
the 113th Congress under suspension of the rules by voice vote
on July 31, 2013.
Committee action
The Committee on Ways and Means marked up H.R. 1058, the
``Taxpayer Bill of Rights Act of 2015,'' on March 25, 2015, and
ordered the bill, as amended, favorably reported (with a quorum
being present).
Committee hearings
The need for permanent rules at the IRS regarding enhanced
protection for taxpayers was discussed at Committee hearings in
the 112th, 113th, and 114th Congresses:
Oversight Subcommittee Hearing on the IRS
Operations and the 2012 Tax Return Filing Season (March 22,
2012).
Full Committee Hearing on IRS Targeting
Conservative Groups (May 17, 2013).
Full Committee Hearing Organizations Targeted by
Internal Revenue Service for Their Personal Beliefs (June 4,
2013).
Full Committee Hearing on the Status of Internal
Revenue Service's Review of Taxpayer Targeting Practices (June
27, 2013).
Oversight Subcommittee Hearing on the IRS Exempt
Organizations Division Post-U.S. Treasury Inspector General for
Tax Administration Audit Report (September 18, 2013).
Oversight Subcommittee Hearing with IRS
Commissioner Koskinen (February 5, 2014).
Oversight Subcommittee Hearing on the IRS
Operations and the 2014 Tax Return Filing Season (May 7, 2014).
Full Committee Hearing with IRS Commissioner
Koskinen (June 20, 2014).
Oversight Subcommittee Hearing on Protecting Small
Businesses from IRS Abuse (February 11, 2015).
II. EXPLANATION OF THE BILL
A. Duty To Ensure that IRS Employees Are Familiar With and Act in
Accordance With Certain Taxpayer Rights (sec. 2 of bill and sec. 7803
of the Code)
PRESENT LAW
The Code\1\ provides that the Commissioner has such duties
and powers as prescribed by the Secretary. Unless otherwise
specified by the Secretary, such duties and powers include the
power to administer, manage, conduct, direct, and supervise the
execution and application of the internal revenue laws or
related statutes and tax conventions to which the United States
is a party, and to recommend to the President a candidate for
Chief Counsel (and recommend the removal of the Chief Counsel).
If the Secretary determines not to delegate such specified
duties to the Commissioner, such determination will not take
effect until 30 days after the Secretary notifies the House
Committees on Ways and Means, Oversight and Government Reform,
and Appropriations, and the Senate Committees on Finance,
Homeland Security and Governmental Affairs, and Appropriations.
The Commissioner is to consult with the Oversight Board on all
matters within the Board's authority (other than the
recommendation of candidates for Commissioner and the
recommendation to remove the Commissioner).
---------------------------------------------------------------------------
\1\Sec. 7803(a).
---------------------------------------------------------------------------
Unless otherwise specified by the Secretary, the
Commissioner is authorized to employ such persons as the
Commissioner deems proper for the administration and
enforcement of the internal revenue laws and is required to
issue all necessary directions, instructions, orders, and rules
applicable to such persons. Unless otherwise provided by the
Secretary, the Commissioner will determine and designate the
posts of duty.
REASONS FOR CHANGE
The Committee has found examples of IRS employees showing
disregard for the rights and protections afforded taxpayers
under the Code, and that such disregard may be a result of lack
of emphasis on the importance of such rights. Any public
perception that such disregard is common and not taken
seriously by upper management at the IRS undermines trust in
the integrity of the IRS. The Committee believes that the
public trust that the top management of the IRS is committed to
ensuring such rights is imperative to good tax administration.
Although the IRS has recently published a Taxpayer Bill of
Rights, such publication does not itself carry force of law or
impose any obligations on the management or employees of the
IRS. Accordingly, codifying the requirement that the
Commissioner assume responsibility to implement the bill of
rights is warranted to ensure public trust.
EXPLANATION OF PROVISION
The provision adds to the Commissioner's duties the
requirement to ensure that employees of the IRS are familiar
with and act in accordance with taxpayer rights as afforded by
other provisions of the Internal Revenue Code. These rights are
enumerated as follows: (A) the right to be informed, (B) the
right to quality service, (C) the right to pay no more than the
correct amount of tax, (D) the right to challenge the position
of the Internal Revenue Service and be heard, (E) the right to
appeal a decision of the Internal Revenue Service in an
independent forum, (F) the right to finality, (G) the right to
privacy, (H) the right to confidentiality, (I) the right to
retain representation, and (J) the right to a fair and just tax
system.
EFFECTIVE DATE
The provision is effective on the date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 1058, the ``Taxpayer Bill of Rights Act
of 2015,'' on March 25, 2015.
The Chairman's amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 1058, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 1058, as
reported.
The bill, as reported, is estimated to have no effect on
Federal budget receipts for fiscal years 2015-2025.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: the gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that there are no new or increased tax
expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 6, 2015.
Hon. Paul Ryan,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1058, the Taxpayer
Bill of Rights Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 1058--Taxpayer Bill of Rights Act of 2015
H.R. 1058 would amend federal law to require the
Commissioner of the Internal Revenue Service (IRS) to ensure
that IRS employees are familiar with and act in accordance with
certain taxpayer rights. CBO estimates that implementing H.R.
1058 would not have a significant cost over the next five
years. CBO and the staff of the Joint Committee on Taxation
(JCT) estimate that enacting the bill would not affect direct
spending or revenues; therefore, pay-as-you-go procedures do
not apply.
According to the IRS, H.R. 1058 would codify the agency's
current policies and practices. As recommended by the National
Taxpayer Advocate (an independent organization within the IRS
that advocates for taxpayers), the IRS has adopted several
guidelines known as the Taxpayer Bill of Rights, which are
identical to the provisions of H.R. 1058.
CBO and JCT have determined that H.R. 1058 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would not affect the budgets
of state, local, or tribal governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's review of the provisions of H.R. 1058 that the
Committee concluded that it is appropriate to report the bill,
as amended, favorably to the House of Representatives with the
recommendation that the bill do pass.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4). The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
The following statement is made pursuant to clause 3(h)(1)
of rule XIII of the Rules of the House of Representatives.
Section 4022(b) of the Internal Revenue Service Restructuring
and Reform Act of 1998 requires the staff of the Joint
Committee on Taxation (in consultation with the Internal
Revenue Service and the Treasury Department) to provide a tax
complexity analysis. The complexity analysis is required for
all legislation reported by the Senate Committee on Finance,
the House Committee on Ways and Means, or any committee of
conference if the legislation includes a provision that
directly or indirectly amends the Internal Revenue Code and has
widespread applicability to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code and that have ``widespread applicability'' to individuals
or small businesses, within the meaning of the rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL,
AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 80--GENERAL RULES
* * * * * * *
Subchapter A--Application of Internal Revenue Laws
* * * * * * *
SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.
(a) Commissioner of Internal Revenue.--
(1) Appointment.--
(A) In general.--There shall be in the
Department of the Treasury a Commissioner of
Internal Revenue who shall be appointed by the
President, by and with the advice and consent
of the Senate. Such appointment shall be made
from individuals who, among other
qualifications, have a demonstrated ability in
management.
(B) Term.--The term of the Commissioner of
Internal Revenue shall be a 5-year term,
beginning with a term to commence on November
13, 1997. Each subsequent term shall begin on
the day after the date on which the previous
term expires.
(C) Vacancy.--Any individual appointed as
Commissioner of Internal Revenue during a term
as defined in subparagraph (B) shall be
appointed for the remainder of that term.
(D) Removal.--The Commissioner may be removed
at the will of the President.
(E) Reappointment.--The Commissioner may be
appointed to serve more than one term.
(2) Duties.--The Commissioner shall have such duties
and powers as the Secretary may prescribe, including
the power to--
(A) administer, manage, conduct, direct, and
supervise the execution and application of the
internal revenue laws or related statutes and
tax conventions to which the United States is a
party; and
(B) recommend to the President a candidate
for appointment as Chief Counsel for the
Internal Revenue Service when a vacancy occurs,
and recommend to the President the removal of
such Chief Counsel.
If the Secretary determines not to delegate a power
specified in subparagraph (A) or (B), such
determination may not take effect until 30 days after
the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Consultation with Board.--The Commissioner shall
consult with the Oversight Board on all matters set
forth in paragraphs (2) and (3) (other than paragraph
(3)(A)) of section 7802(d).
(b) Chief Counsel for the Internal Revenue Service.--
(1) Appointment.--There shall be in the Department of
the Treasury a Chief Counsel for the Internal Revenue
Service who shall be appointed by the President, by and
with the consent of the Senate.
(2) Duties.--The Chief Counsel shall be the chief law
officer for the Internal Revenue Service and shall
perform such duties as may be prescribed by the
Secretary, including the duty--
(A) to be legal advisor to the Commissioner
and the Commissioner's officers and employees;
(B) to furnish legal opinions for the
preparation and review of rulings and memoranda
of technical advice;
(C) to prepare, review, and assist in the
preparation of proposed legislation, treaties,
regulations, and Executive orders relating to
laws which affect the Internal Revenue Service;
(D) to represent the Commissioner in cases
before the Tax Court; and
(E) to determine which civil actions should
be litigated under the laws relating to the
Internal Revenue Service and prepare
recommendations for the Department of Justice
regarding the commencement of such actions.
If the Secretary determines not to delegate a power
specified in subparagraph (A), (B), (C), (D), or (E),
such determination may not take effect until 30 days
after the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Persons to whom Chief Counsel reports.--The Chief
Counsel shall report directly to the Commissioner of
Internal Revenue, except that--
(A) the Chief Counsel shall report to both
the Commissioner and the General Counsel for
the Department of the Treasury with respect
to--
(i) legal advice or interpretation of
the tax law not relating solely to tax
policy;
(ii) tax litigation; and (B) the
Chief Counsel shall report to the
General Counsel with respect to legal
advice or interpretation of the tax law
relating solely to tax policy.
If there is any disagreement between the Commissioner
and the General Counsel with respect to any matter
jointly referred to them under subparagraph (A), such
matter shall be submitted to the Secretary or Deputy
Secretary for resolution.
(4) Chief Counsel personnel.--All personnel in the
Office of Chief Counsel shall report to the Chief
Counsel.
(c) Office of the Taxpayer Advocate.--
(1) Establishment.--
(A) In general.--There is established in the
Internal Revenue Service an office to be known
as the ``Office of the Taxpayer Advocate''.
(B) National Taxpayer Advocate.--
(i) In general.--The Office of the
Taxpayer Advocate shall be under the
supervision and direction of an
official to be known as the ``National
Taxpayer Advocate''. The National
Taxpayer Advocate shall report directly
to the Commissioner of Internal Revenue
and shall be entitled to compensation
at the same rate as the highest rate of
basic pay established for the Senior
Executive Service under section 5382 of
title 5, United States Code, or, if the
Secretary of the Treasury so
determines, at a rate fixed under
section 9503 of such title.
(ii) Appointment.--The National
Taxpayer Advocate shall be appointed by
the Secretary of the Treasury after
consultation with the Commissioner of
Internal Revenue and the Oversight
Board and without regard to the
provisions of title 5, United States
Code, relating to appointments in the
competitive service or the Senior
Executive Service.
(iii) Qualifications.--An individual
appointed under clause (ii) shall
have--
(I) a background in customer
service as well as tax law; and
(II) experience in
representing individual
taxpayers.
(iv) Restriction on employment.--An
individual may be appointed as the
National Taxpayer Advocate only if such
individual was not an officer or
employee of the Internal Revenue
Service during the 2-year period ending
with such appointment and such
individual agrees not to accept any
employment with the Internal Revenue
Service for at least 5 years after
ceasing to be the National Taxpayer
Advocate. Service as an officer or
employee of the Office of the Taxpayer
Advocate shall not be taken into
account in applying this clause.
(2) Functions of office.--
(A) In general.--It shall be the function of
the Office of the Taxpayer Advocate to--
(i) assist taxpayers in resolving
problems with the Internal Revenue
Service;
(ii) identify areas in which
taxpayers have problems in dealings
with the Internal Revenue Service;
(iii) to the extent possible, propose
changes in the administrative practices
of the Internal Revenue Service to
mitigate problems identified under
clause (ii); and
(iv) identify potential legislative
changes which may be appropriate to
mitigate such problems.
(B) Annual reports.--
(i) Objectives.--Not later than June
30 of each calendar year, the National
Taxpayer Advocate shall report to the
Committee on Ways and Means of the
House of Representatives and the
Committee on Finance of the Senate on
the objectives of the Office of the
Taxpayer Advocate for the fiscal year
beginning in such calendar year. Any
such report shall contain full and
substantive analysis, in addition to
statistical information.
(ii) Activities.--Not later than
December 31 of each calendar year, the
National Taxpayer Advocate shall report
to the Committee on Ways and Means of
the House of Representatives and the
Committee on Finance of the Senate on
the activities of the Office of the
Taxpayer Advocate during the fiscal
year ending during such calendar year.
Any such report shall contain full and
substantive analysis, in addition to
statistical information, and shall--
(I) identify the initiatives
the Office of the Taxpayer
Advocate has taken on improving
taxpayer services and Internal
Revenue Service responsiveness;
(II) contain recommendations
received from individuals with
the authority to issue Taxpayer
Assistance Orders under section
7811;
(III) contain a summary of at
least 20 of the most serious
problems encountered by
taxpayers, including a
description of the nature of
such problems;
(IV) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action has been taken
and the result of such action;
(V) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action remains to be
completed and the period during
which each item has remained on
such inventory;
(VI) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which no action has been
taken, the period during which
each item has remained on such
inventory, the reasons for the
inaction, and identify any
Internal Revenue Service
official who is responsible for
such inaction;
(VII) identify any Taxpayer
Assistance Order which was not
honored by the Internal Revenue
Service in a timely manner, as
specified under section
7811(b);
(VIII) contain
recommendations for such
administrative and legislative
action as may be appropriate to
resolve problems encountered by
taxpayers;
(IX) identify areas of the
tax law that impose significant
compliance burdens on taxpayers
or the Internal Revenue
Service, including specific
recommendations for remedying
these problems;
(X) identify the 10 most
litigated issues for each
category of taxpayers,
including recommendations for
mitigating such disputes; and
(XI) include such other
information as the National
Taxpayer Advocate may deem
advisable.
(iii) Report to be submitted
directly.--Each report required under
this subparagraph shall be provided
directly to the committees described in
clause (i) without any prior review or
comment from the Commissioner, the
Secretary of the Treasury, the
Oversight Board, any other officer or
employee of the Department of the
Treasury, or the Office of Management
and Budget.
(iv) Coordination with report of
Treasury Inspector General for Tax
Administration.--To the extent that
information required to be reported
under clause (ii) is also required to
be reported under paragraph (1) or (2)
of subsection (d) by the Treasury
Inspector General for Tax
Administration, the National Taxpayer
Advocate shall not contain such
information in the report submitted
under such clause.
(C) Other responsibilities.--The National
Taxpayer Advocate shall--
(i) monitor the coverage and
geographic allocation of local offices
of taxpayer advocates;
(ii) develop guidance to be
distributed to all Internal Revenue
Service officers and employees
outlining the criteria for referral of
taxpayer inquiries to local offices of
taxpayer advocates;
(iii) ensure that the local telephone
number for each local office of the
taxpayer advocate is published and
available to taxpayers served by the
office; and
(iv) in conjunction with the
Commissioner, develop career paths for
local taxpayer advocates choosing to
make a career in the Office of the
Taxpayer Advocate.
(D) Personnel actions.--
(i) In general.--The National
Taxpayer Advocate shall have the
responsibility and authority to--
(I) appoint local taxpayer
advocates and make available at
least 1 such advocate for each
State; and
(II) evaluate and take
personnel actions (including
dismissal) with respect to any
employee of any local office of
a taxpayer advocate described
in subclause (I).
(ii) Consultation.--The National
Taxpayer Advocate may consult with the
appropriate supervisory personnel of
the Internal Revenue Service in
carrying out the National Taxpayer
Advocate's responsibilities under this
subparagraph.
(3) Responsibilities of Commissioner.--The
Commissioner shall establish procedures requiring a
formal response to all recommendations submitted to the
Commissioner by the National Taxpayer Advocate within 3
months after submission to the Commissioner.
(4) Operation of local offices.--
(A) In general.--Each local taxpayer
advocate--
(i) shall report to the National
Taxpayer Advocate or delegate thereof;
(ii) may consult with the appropriate
supervisory personnel of the Internal
Revenue Service regarding the daily
operation of the local office of the
taxpayer advocate;
(iii) shall, at the initial meeting
with any taxpayer seeking the
assistance of a local office of the
taxpayer advocate, notify such taxpayer
that the taxpayer advocate offices
operate independently of any other
Internal Revenue Service office and
report directly to Congress through the
National Taxpayer Advocate; and
(iv) may, at the taxpayer advocate's
discretion, not disclose to the
Internal Revenue Service contact with,
or information provided by, such
taxpayer.
(B) Maintenance of independent
communications.--Each local office of the
taxpayer advocate shall maintain a separate
phone, facsimile, and other electronic
communication access, and a separate post
office address.
(d) Additional Duties of the Treasury Inspector General for
Tax Administration.--
(1) Annual reporting.--The Treasury Inspector General
for Tax Administration shall include in one of the
semiannual reports under section 5 of the Inspector
General Act of 1978--
(A) an evaluation of the compliance of the
Internal Revenue Service with--
(i) restrictions under section 1204
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
the use of enforcement statistics to
evaluate Internal Revenue Service
employees;
(ii) restrictions under section 7521
on directly contacting taxpayers who
have indicated that they prefer their
representatives be contacted;
(iii) required procedures under
section 6320 upon the filing of a
notice of a lien;
(iv) required procedures under
subchapter D of chapter 64 for seizure
of property for collection of taxes,
including required procedures under
section 6330 regarding levies; and
(v) restrictions under section 3707
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
designation of taxpayers;
(B) a review and a certification of whether
or not the Secretary is complying with the
requirements of section 6103(e)(8) to disclose
information to an individual filing a joint
return on collection activity involving the
other individual filing the return;
(C) information regarding extensions of the
statute of limitations for assessment and
collection of tax under section 6501 and the
provision of notice to taxpayers regarding
requests for such extension;
(D) an evaluation of the adequacy and
security of the technology of the Internal
Revenue Service;
(E) any termination or mitigation under
section 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998;
(F) information regarding improper denial of
requests for information from the Internal
Revenue Service identified under paragraph
(3)(A); and
(G) information regarding any administrative
or civil actions with respect to violations of
the fair debt collection provisions of section
6304, including--
(i) a summary of such actions
initiated since the date of the last
report; and
(ii) a summary of any judgments or
awards granted as a result of such
actions.
(2) Semiannual reports.--
(A) In general.--The Treasury Inspector
General for Tax Administration shall include in
each semiannual report under section 5 of the
Inspector General Act of 1978--
(i) the number of taxpayer complaints
during the reporting period;
(ii) the number of employee
misconduct and taxpayer abuse
allegations received by the Internal
Revenue Service or the Inspector
General during the period from
taxpayers, Internal Revenue Service
employees, and other sources;
(iii) a summary of the status of such
complaints and allegations; and
(iv) a summary of the disposition of
such complaints and allegations,
including the outcome of any Department
of Justice action and any monies paid
as a settlement of such complaints and
allegations.
(B) Clauses (iii) and (iv) of subparagraph
(A) shall only apply to complaints and
allegations of serious employee misconduct.
(3) Other responsibilities.--The Treasury Inspector
General for Tax Administration shall--
(A) conduct periodic audits of a
statistically valid sample of the total number
of determinations made by the Internal Revenue
Service to deny written requests to disclose
information to taxpayers on the basis of
section 6103 of this title or section 552(b)(7)
of title 5, United States Code;
(B) establish and maintain a toll-free
telephone number for taxpayers to use to
confidentially register complaints of
misconduct by Internal Revenue Service
employees and incorporate the telephone number
in the statement required by section 6227 of
the Omnibus Taxpayer Bill of Rights (Internal
Revenue Service Publication No. 1); and
(C) not later than December 31, 2010, submit
a written report to Congress on the
implementation of section 6103(k)(10).
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, and existing law in
which no change is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 80--GENERAL RULES
* * * * * * *
Subchapter A--Application of Internal Revenue Laws
* * * * * * *
SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER OFFICIALS.
(a) Commissioner of Internal Revenue.--
(1) Appointment.--
(A) In general.--There shall be in the
Department of the Treasury a Commissioner of
Internal Revenue who shall be appointed by the
President, by and with the advice and consent
of the Senate. Such appointment shall be made
from individuals who, among other
qualifications, have a demonstrated ability in
management.
(B) Term.--The term of the Commissioner of
Internal Revenue shall be a 5-year term,
beginning with a term to commence on November
13, 1997. Each subsequent term shall begin on
the day after the date on which the previous
term expires.
(C) Vacancy.--Any individual appointed as
Commissioner of Internal Revenue during a term
as defined in subparagraph (B) shall be
appointed for the remainder of that term.
(D) Removal.--The Commissioner may be removed
at the will of the President.
(E) Reappointment.--The Commissioner may be
appointed to serve more than one term.
(2) Duties.--The Commissioner shall have such duties
and powers as the Secretary may prescribe, including
the power to--
(A) administer, manage, conduct, direct, and
supervise the execution and application of the
internal revenue laws or related statutes and
tax conventions to which the United States is a
party; and
(B) recommend to the President a candidate
for appointment as Chief Counsel for the
Internal Revenue Service when a vacancy occurs,
and recommend to the President the removal of
such Chief Counsel.
If the Secretary determines not to delegate a power
specified in subparagraph (A) or (B), such
determination may not take effect until 30 days after
the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Execution of duties in accord with taxpayer
rights.--In discharging his duties, the Commissioner
shall ensure that employees of the Internal Revenue
Service are familiar with and act in accord with
taxpayer rights as afforded by other provisions of this
title, including--
(A) the right to be informed,
(B) the right to quality service,
(C) the right to pay no more than the correct
amount of tax,
(D) the right to challenge the position of
the Internal Revenue Service and be heard,
(E) the right to appeal a decision of the
Internal Revenue Service in an independent
forum,
(F) the right to finality,
(G) the right to privacy,
(H) the right to confidentiality,
(I) the right to retain representation, and
(J) the right to a fair and just tax system.
[(3)] (4) Consultation with Board.--The Commissioner
shall consult with the Oversight Board on all matters
set forth in paragraphs (2) and (3) (other than
paragraph (3)(A)) of section 7802(d).
(b) Chief Counsel for the Internal Revenue Service.--
(1) Appointment.--There shall be in the Department of
the Treasury a Chief Counsel for the Internal Revenue
Service who shall be appointed by the President, by and
with the consent of the Senate.
(2) Duties.--The Chief Counsel shall be the chief law
officer for the Internal Revenue Service and shall
perform such duties as may be prescribed by the
Secretary, including the duty--
(A) to be legal advisor to the Commissioner
and the Commissioner's officers and employees;
(B) to furnish legal opinions for the
preparation and review of rulings and memoranda
of technical advice;
(C) to prepare, review, and assist in the
preparation of proposed legislation, treaties,
regulations, and Executive orders relating to
laws which affect the Internal Revenue Service;
(D) to represent the Commissioner in cases
before the Tax Court; and
(E) to determine which civil actions should
be litigated under the laws relating to the
Internal Revenue Service and prepare
recommendations for the Department of Justice
regarding the commencement of such actions.
If the Secretary determines not to delegate a power
specified in subparagraph (A), (B), (C), (D), or (E),
such determination may not take effect until 30 days
after the Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and
Appropriations of the House of Representatives and the
Committees on Finance, Governmental Affairs, and
Appropriations of the Senate.
(3) Persons to whom Chief Counsel reports.--The Chief
Counsel shall report directly to the Commissioner of
Internal Revenue, except that--
(A) the Chief Counsel shall report to both
the Commissioner and the General Counsel for
the Department of the Treasury with respect
to--
(i) legal advice or interpretation of
the tax law not relating solely to tax
policy;
(ii) tax litigation; and (B) the
Chief Counsel shall report to the
General Counsel with respect to legal
advice or interpretation of the tax law
relating solely to tax policy.
If there is any disagreement between the Commissioner
and the General Counsel with respect to any matter
jointly referred to them under subparagraph (A), such
matter shall be submitted to the Secretary or Deputy
Secretary for resolution.
(4) Chief Counsel personnel.--All personnel in the
Office of Chief Counsel shall report to the Chief
Counsel.
(c) Office of the Taxpayer Advocate.--
(1) Establishment.--
(A) In general.--There is established in the
Internal Revenue Service an office to be known
as the ``Office of the Taxpayer Advocate''.
(B) National Taxpayer Advocate.--
(i) In general.--The Office of the
Taxpayer Advocate shall be under the
supervision and direction of an
official to be known as the ``National
Taxpayer Advocate''. The National
Taxpayer Advocate shall report directly
to the Commissioner of Internal Revenue
and shall be entitled to compensation
at the same rate as the highest rate of
basic pay established for the Senior
Executive Service under section 5382 of
title 5, United States Code, or, if the
Secretary of the Treasury so
determines, at a rate fixed under
section 9503 of such title.
(ii) Appointment.--The National
Taxpayer Advocate shall be appointed by
the Secretary of the Treasury after
consultation with the Commissioner of
Internal Revenue and the Oversight
Board and without regard to the
provisions of title 5, United States
Code, relating to appointments in the
competitive service or the Senior
Executive Service.
(iii) Qualifications.--An individual
appointed under clause (ii) shall
have--
(I) a background in customer
service as well as tax law; and
(II) experience in
representing individual
taxpayers.
(iv) Restriction on employment.--An
individual may be appointed as the
National Taxpayer Advocate only if such
individual was not an officer or
employee of the Internal Revenue
Service during the 2-year period ending
with such appointment and such
individual agrees not to accept any
employment with the Internal Revenue
Service for at least 5 years after
ceasing to be the National Taxpayer
Advocate. Service as an officer or
employee of the Office of the Taxpayer
Advocate shall not be taken into
account in applying this clause.
(2) Functions of office.--
(A) In general.--It shall be the function of
the Office of the Taxpayer Advocate to--
(i) assist taxpayers in resolving
problems with the Internal Revenue
Service;
(ii) identify areas in which
taxpayers have problems in dealings
with the Internal Revenue Service;
(iii) to the extent possible, propose
changes in the administrative practices
of the Internal Revenue Service to
mitigate problems identified under
clause (ii); and
(iv) identify potential legislative
changes which may be appropriate to
mitigate such problems.
(B) Annual reports.--
(i) Objectives.--Not later than June
30 of each calendar year, the National
Taxpayer Advocate shall report to the
Committee on Ways and Means of the
House of Representatives and the
Committee on Finance of the Senate on
the objectives of the Office of the
Taxpayer Advocate for the fiscal year
beginning in such calendar year. Any
such report shall contain full and
substantive analysis, in addition to
statistical information.
(ii) Activities.--Not later than
December 31 of each calendar year, the
National Taxpayer Advocate shall report
to the Committee on Ways and Means of
the House of Representatives and the
Committee on Finance of the Senate on
the activities of the Office of the
Taxpayer Advocate during the fiscal
year ending during such calendar year.
Any such report shall contain full and
substantive analysis, in addition to
statistical information, and shall--
(I) identify the initiatives
the Office of the Taxpayer
Advocate has taken on improving
taxpayer services and Internal
Revenue Service responsiveness;
(II) contain recommendations
received from individuals with
the authority to issue Taxpayer
Assistance Orders under section
7811;
(III) contain a summary of at
least 20 of the most serious
problems encountered by
taxpayers, including a
description of the nature of
such problems;
(IV) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action has been taken
and the result of such action;
(V) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which action remains to be
completed and the period during
which each item has remained on
such inventory;
(VI) contain an inventory of
the items described in
subclauses (I), (II), and (III)
for which no action has been
taken, the period during which
each item has remained on such
inventory, the reasons for the
inaction, and identify any
Internal Revenue Service
official who is responsible for
such inaction;
(VII) identify any Taxpayer
Assistance Order which was not
honored by the Internal Revenue
Service in a timely manner, as
specified under section
7811(b);
(VIII) contain
recommendations for such
administrative and legislative
action as may be appropriate to
resolve problems encountered by
taxpayers;
(IX) identify areas of the
tax law that impose significant
compliance burdens on taxpayers
or the Internal Revenue
Service, including specific
recommendations for remedying
these problems;
(X) identify the 10 most
litigated issues for each
category of taxpayers,
including recommendations for
mitigating such disputes; and
(XI) include such other
information as the National
Taxpayer Advocate may deem
advisable.
(iii) Report to be submitted
directly.--Each report required under
this subparagraph shall be provided
directly to the committees described in
clause (i) without any prior review or
comment from the Commissioner, the
Secretary of the Treasury, the
Oversight Board, any other officer or
employee of the Department of the
Treasury, or the Office of Management
and Budget.
(iv) Coordination with report of
Treasury Inspector General for Tax
Administration.--To the extent that
information required to be reported
under clause (ii) is also required to
be reported under paragraph (1) or (2)
of subsection (d) by the Treasury
Inspector General for Tax
Administration, the National Taxpayer
Advocate shall not contain such
information in the report submitted
under such clause.
(C) Other responsibilities.--The National
Taxpayer Advocate shall--
(i) monitor the coverage and
geographic allocation of local offices
of taxpayer advocates;
(ii) develop guidance to be
distributed to all Internal Revenue
Service officers and employees
outlining the criteria for referral of
taxpayer inquiries to local offices of
taxpayer advocates;
(iii) ensure that the local telephone
number for each local office of the
taxpayer advocate is published and
available to taxpayers served by the
office; and
(iv) in conjunction with the
Commissioner, develop career paths for
local taxpayer advocates choosing to
make a career in the Office of the
Taxpayer Advocate.
(D) Personnel actions.--
(i) In general.--The National
Taxpayer Advocate shall have the
responsibility and authority to--
(I) appoint local taxpayer
advocates and make available at
least 1 such advocate for each
State; and
(II) evaluate and take
personnel actions (including
dismissal) with respect to any
employee of any local office of
a taxpayer advocate described
in subclause (I).
(ii) Consultation.--The National
Taxpayer Advocate may consult with the
appropriate supervisory personnel of
the Internal Revenue Service in
carrying out the National Taxpayer
Advocate's responsibilities under this
subparagraph.
(3) Responsibilities of Commissioner.--The
Commissioner shall establish procedures requiring a
formal response to all recommendations submitted to the
Commissioner by the National Taxpayer Advocate within 3
months after submission to the Commissioner.
(4) Operation of local offices.--
(A) In general.--Each local taxpayer
advocate--
(i) shall report to the National
Taxpayer Advocate or delegate thereof;
(ii) may consult with the appropriate
supervisory personnel of the Internal
Revenue Service regarding the daily
operation of the local office of the
taxpayer advocate;
(iii) shall, at the initial meeting
with any taxpayer seeking the
assistance of a local office of the
taxpayer advocate, notify such taxpayer
that the taxpayer advocate offices
operate independently of any other
Internal Revenue Service office and
report directly to Congress through the
National Taxpayer Advocate; and
(iv) may, at the taxpayer advocate's
discretion, not disclose to the
Internal Revenue Service contact with,
or information provided by, such
taxpayer.
(B) Maintenance of independent
communications.--Each local office of the
taxpayer advocate shall maintain a separate
phone, facsimile, and other electronic
communication access, and a separate post
office address.
(d) Additional Duties of the Treasury Inspector General for
Tax Administration.--
(1) Annual reporting.--The Treasury Inspector General
for Tax Administration shall include in one of the
semiannual reports under section 5 of the Inspector
General Act of 1978--
(A) an evaluation of the compliance of the
Internal Revenue Service with--
(i) restrictions under section 1204
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
the use of enforcement statistics to
evaluate Internal Revenue Service
employees;
(ii) restrictions under section 7521
on directly contacting taxpayers who
have indicated that they prefer their
representatives be contacted;
(iii) required procedures under
section 6320 upon the filing of a
notice of a lien;
(iv) required procedures under
subchapter D of chapter 64 for seizure
of property for collection of taxes,
including required procedures under
section 6330 regarding levies; and
(v) restrictions under section 3707
of the Internal Revenue Service
Restructuring and Reform Act of 1998 on
designation of taxpayers;
(B) a review and a certification of whether
or not the Secretary is complying with the
requirements of section 6103(e)(8) to disclose
information to an individual filing a joint
return on collection activity involving the
other individual filing the return;
(C) information regarding extensions of the
statute of limitations for assessment and
collection of tax under section 6501 and the
provision of notice to taxpayers regarding
requests for such extension;
(D) an evaluation of the adequacy and
security of the technology of the Internal
Revenue Service;
(E) any termination or mitigation under
section 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998;
(F) information regarding improper denial of
requests for information from the Internal
Revenue Service identified under paragraph
(3)(A); and
(G) information regarding any administrative
or civil actions with respect to violations of
the fair debt collection provisions of section
6304, including--
(i) a summary of such actions
initiated since the date of the last
report; and
(ii) a summary of any judgments or
awards granted as a result of such
actions.
(2) Semiannual reports.--
(A) In general.--The Treasury Inspector
General for Tax Administration shall include in
each semiannual report under section 5 of the
Inspector General Act of 1978--
(i) the number of taxpayer complaints
during the reporting period;
(ii) the number of employee
misconduct and taxpayer abuse
allegations received by the Internal
Revenue Service or the Inspector
General during the period from
taxpayers, Internal Revenue Service
employees, and other sources;
(iii) a summary of the status of such
complaints and allegations; and
(iv) a summary of the disposition of
such complaints and allegations,
including the outcome of any Department
of Justice action and any monies paid
as a settlement of such complaints and
allegations.
(B) Clauses (iii) and (iv) of subparagraph
(A) shall only apply to complaints and
allegations of serious employee misconduct.
(3) Other responsibilities.--The Treasury Inspector
General for Tax Administration shall--
(A) conduct periodic audits of a
statistically valid sample of the total number
of determinations made by the Internal Revenue
Service to deny written requests to disclose
information to taxpayers on the basis of
section 6103 of this title or section 552(b)(7)
of title 5, United States Code;
(B) establish and maintain a toll-free
telephone number for taxpayers to use to
confidentially register complaints of
misconduct by Internal Revenue Service
employees and incorporate the telephone number
in the statement required by section 6227 of
the Omnibus Taxpayer Bill of Rights (Internal
Revenue Service Publication No. 1); and
(C) not later than December 31, 2010, submit
a written report to Congress on the
implementation of section 6103(k)(10).
* * * * * * *
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