Text of Senate Amendment 6847

Quick facts

Record: Senate Floor
Section type: Amendments
Chamber: Senate
Date: September 30, 2026
Congress: 119th Congress
Why this source matters: This section came from the Senate floor portion of the record.

Linked context

People mentioned: Crapo, Mike
Committees: Committee on Ways and Means, Committee on Finance

Readable version of the official text

SA 6847. Mr. CRAPO (for himself and Mr. Wyden) proposed an amendment to the bill H.R. 5349, to improve services provided to taxpayers by the Internal Revenue Service; as follows:

Strike all after the enacting clause and insert the

following:

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.—This Act may be cited as the “Taxpayer

Assistance and Service Act” or the “TAS Act”.

(b) Amendment of 1986 Code.—Except as otherwise expressly

provided, whenever in this Act an amendment is expressed in

terms of an amendment to 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.

term “Secretary” means the Secretary of the Treasury or the

Secretary's delegate.

(d) Table of Contents.—The table of contents of this Act

is as follows:

Sec. 1. Short title; etc.

TITLE I—TAX ADMINISTRATION AND CUSTOMER SERVICE

Sec. 101. Digitization of tax returns and correspondence. Sec. 102. Establishment of dashboard to inform taxpayers of backlogs

and wait times. Sec. 103. Expansion of electronic access to information about returns

and refunds. Sec. 104. Expansion of callback technology. Sec. 105. Expansion of online accounts. Sec. 106. Automation of refund offset bypass. Sec. 107. Installment agreement fees eliminated for certain

individuals. Sec. 108. Individuals facing economic hardships informed of collection

alternatives. Sec. 109. Quarterly notices to certain taxpayers with delinquencies. Sec. 110. Low-income taxpayer clinic funding unlocked. Sec. 111. Chief Counsel reviews of offers-in-compromise streamlined. Sec. 112. Modification of procedural requirements for penalties and

disallowance periods. Sec. 113. Return of amounts collected by IRS in excess of accepted

offer-in-compromise amount. Sec. 114. Extension of period for return of amounts subject to wrongful

levy.
Sec. 115. Reports to Congress.

TITLE II—AMERICAN CITIZENS ABROAD

Sec. 201. Report on combined tax and foreign bank and financial account

reporting. Sec. 202. Study and reports on simplification. Sec. 203. Extension of time for persons outside of the United States to

request abatement of math error. Sec. 204. Clarification of assessment authority; pre-assessment appeals

of foreign information return penalties. Sec. 205. Repeal of due date requirements for certain information

returns relating to foreign gifts and trusts.

TITLE III—JUDICIAL REVIEW

Sec. 301. Authorization of subpoenas before hearings to facilitate

settlements. Sec. 302. Clarification of Tax Court authority to order relief from a

judgment or order. Sec. 303. Authorization of special trial judges to hear additional

cases and address contempt. Sec. 304. Disqualification of judges and special trial judges. Sec. 305. Notice and review with respect to multi-year bans on claiming

credits. Sec. 306. Authorization of de novo review of innocent spouse relief by

the Tax Court and other courts. Sec. 307. Clarification of certain court filing deadlines. Sec. 308. Clarification of Tax Court jurisdiction to determine tax

liability in collection due process appeals. Sec. 309. Authorization of the Tax Court to issue refunds in collection

due process cases. Sec. 310. Authorization of the Tax Court to hear suits for refunds or

credits. Sec. 311. Authorization to allow claims for refund in certain cases

where full tax not paid.
Sec. 312. Adjustment of threshold for small disputes.

TITLE IV—OFFICE OF THE TAXPAYER ADVOCATE

Sec. 401. NTA authorization to direct hire attorneys. Sec. 402. NTA authorization to make personnel decisions. Sec. 403. Access to Internal Revenue Service information, legal advice,

and meetings. Sec. 404. Repeal of limitation period suspension for taxpayers seeking

assistance from TAS. Sec. 405. Operations to assist taxpayers experiencing hardships during

lapse in appropriations.

TITLE V—TAX RETURN PREPARERS

Sec. 501. Penalties for tax return preparers who improperly alter

returns. Sec. 502. Ensuring the use of valid preparer identification numbers and

electronic filing identification numbers. Sec. 503. Penalties for improper tax preparation or misappropriation of

refunds. Sec. 504. Authority to deny, revoke, or suspend preparer tax

identification numbers.

TITLE VI—APPEALS

Sec. 601. Authorization for Office of Appeals to hire attorneys. Sec. 602. Authorization for Office of Appeals to direct hire certain

individuals. Sec. 603. Responses to claims for refund required; appeal of claims for

refund authorized. Sec. 604. Appeals of returned offers. Sec. 605. Purposes and duties of Independent Office of Appeals; right

of appeal clarified.

TITLE VII—WHISTLEBLOWERS

Sec. 701. Standard and scope of review of whistleblower award

determinations.
Sec. 702. Exemption from sequestration.
Sec. 703. Whistleblower privacy protections.
Sec. 704. Modification of IRS whistleblower report.
Sec. 705. Interest on whistleblower awards.
Sec. 706. Correction regarding deductions for attorney's fees.

TITLE VIII—HOSTAGES

Sec. 801. Postponement of tax deadlines for hostages and individuals

wrongfully detained abroad. Sec. 802. Refund and abatement of penalties and fines paid by eligible

individuals.

TITLE IX—SMALL BUSINESSES

Sec. 901. Implementation of voluntary withholding agreements for

payments to independent contractors. Sec. 902. Extension of mailbox rule to electronic submissions and

payments. Sec. 903. Specificity of third-party contact notices. Sec. 904. Modification of estimated tax rules for farmers and

fishermen.
Sec. 905. Business child care liaison.

TITLE X—MISCELLANEOUS

Sec. 1001. Authority for redisclosure of certain tax information

related to education loans to the Congressional Budget

Office. Sec. 1002. Authorization to require large partnerships to file on

magnetic media. Sec. 1003. Limitation period not extended for victims of preparer

fraud. Sec. 1004. Technical amendment related to the Disaster Related

Extension of Deadlines Act. Sec. 1005. Time for filing certain information returns. Sec. 1006. Modifications to penalties for unauthorized disclosures of

taxpayer information.

TITLE I—TAX ADMINISTRATION AND CUSTOMER SERVICE

SEC. 101. DIGITIZATION OF TAX RETURNS AND CORRESPONDENCE.

(a) Returns Accepted Electronically.—Any Federal tax

return which any person is required to file with the

Secretary, as well as any amendments to such return—

(1) may be filed by such person electronically, and

(2) if such return or amendment is filed electronically,

shall be processed electronically by the Secretary.

(b) Digitization of Returns and Correspondence.—The

Internal Revenue Service shall use optical character

recognition technology (or any functionally similar

technology) to transcribe—

(1) any return which is received by the Internal Revenue

Service only in a paper form, or

(2) any correspondence which is received by the Internal

Revenue Service only in a paper form.

(1) In general.—Subsection (b) shall not apply to any

technology to the extent that the Secretary determines such

technology is slower or less reliable than—

(A) the process of manually transcribing returns or

correspondence received in a paper form, or

(B) any other process that the Internal Revenue Service is

using or would otherwise use.

(2) Report to congress.—Any exception to the application

of a technology described in subsection (b) pursuant to

paragraph (1) shall not take effect unless the Secretary

provides a report to the Committee on Ways and Means of the

House of Representatives and the Committee on Finance of the

Senate regarding the determination made by the Secretary

under such paragraph within 30 days of such determination.

(d) Effective Date.—This section shall apply to—

(1) any individual income tax return (as defined in section

6011(e)(3)(C) of the Internal Revenue Code of 1986) received

on or after January 1 of the first calendar year beginning

more than 180 days after the date of enactment of this Act,

(2) any estate tax return (as described in section 6018 of

such Code) or gift tax return (as described in section 6019

of such Code) received on or after January 1 of the first

calendar year beginning more than 24 months after the date of

enactment of this Act, and

(3) any other return or correspondence received on or after

January 1 of the first calendar year beginning more than 18

months after the date of enactment of this Act.

SEC. 102. ESTABLISHMENT OF DASHBOARD TO INFORM TAXPAYERS OF

BACKLOGS AND WAIT TIMES.

(a) In General.—The Secretary shall require the Internal

Revenue Service to provide in real time on its public

website, to the extent practical, the following:

(1) Separately with respect to each applicable phone number

extension—

(A) the number of callers connected to speak directly with

a representative of the Internal Revenue Service,

(B) the number of callers connected to speak with an

automated system,

to speak directly with a representative of the Internal

Revenue Service or an automated system,

(D) the longest amount of time that any caller has been

waiting to be connected to speak directly with a

representative of the Internal Revenue Service, and

(E) whether callback service is currently available, and if

not, when such service is scheduled to be available.

(2) An application or tool embedded on the website which—

(A) displays all of the information described in paragraph

(1), and

(B) estimates the approximate wait time to speak directly

with a representative of the Internal Revenue Service.

(3) An application programming interface which allows any

person to access the information described in subsection

(a)(1) using automation and to create an application or tool

embedded on a website to display such information.

(4) For each applicable phone number extension, a summary

of the information described in paragraph (1) with respect to

the prior month, including—

(A) the average and median length of calls,

(B) the average and median amount of time that callers were

speaking directly with a representative of the Internal

Revenue Service,

an automated system,

(D) the number and percent of calls that were disconnected

or terminated by the Internal Revenue Service,

(E) the number of callers who were transferred to another

applicable phone number extension after the call was

initially answered by a representative of the Internal

Revenue Service,

(F) the average and median amount of time that callers

described in subparagraph (E) were on hold following the

transfer, and

(G) the number and percent of callers who indicated that

they received the answers or service for which they were

contacting the Internal Revenue Service.

(b) Detection of Automated Calls.—The Secretary shall

require the Internal Revenue Service to use technology to

detect and screen out automated calls.

there was a significant delay with respect to any applicable

item (referred to in this subsection as an “applicable

week”), the Secretary shall require the Internal Revenue

Service to provide on its public website, during the week

subsequent to the applicable week, information with respect

to each such applicable item regarding the earliest date on

which any such applicable items that were processed during

the applicable week were received by the Internal Revenue

Service.

(d) Definitions.— For purposes of this section—

(1) Applicable item.—The term “applicable item” means

each category of tax return, claim, statement, or other

document filed with the Internal Revenue Service.

(2) Applicable phone number extension.—The term

“applicable phone number extension” means any extension or

application which may be reached by calling a phone number

which is listed by the Internal Revenue Service on any

website, publication, form, or instruction which is available

to the public and—

(A) operated by the Internal Revenue Service accounts

management function,

(B) operated by the Internal Revenue Service automated

collection function,

Operations Center,

(D) managed and staffed by a contractor on behalf of the

Internal Revenue Service, or

(E) received not less than 200,000 calls during the

preceding calendar year.

(3) Significant delay.—The term “significant delay”

means, in the case of any applicable item for any week, the

failure to process all of such applicable items which were

received by the Internal Revenue Service at least 21 days

before the first day of the week.

(e) Effective Date.—The requirements of this section shall

apply to periods beginning after the date which is 12 months

after the date of enactment of this Act.

SEC. 103. EXPANSION OF ELECTRONIC ACCESS TO INFORMATION ABOUT

RETURNS AND REFUNDS.

Not later than January 1 of the first calendar year

beginning more than 12 months after the date of enactment of

this Act, through a website and mobile application, the

Secretary shall provide individualized, specific, and up-to-

date information to taxpayers regarding their tax returns and

amended returns, including information with respect to

whether the Internal Revenue Service has—

(1) received such return and entered such return into their

systems,

(2) completed processing such return, including—

(A) the date on which the Internal Revenue Service issued

any refund of any overpayment of tax,

(B) the estimated date on which the taxpayer can expect to

receive such refund, and

(C)(i) if the refund will be issued by electronic fund

transfer, the financial account to which such refund will be

deposited, including—

(I) the partial or full account number for such account,

and

(II) the name and routing number of the financial

institution, or

(ii) if the refund will be issued by paper check, the

address to which the check will be mailed, or

(3) suspended processing such return, including—

(A) the reason for the suspension, and

(B) in the case of any information which was requested by

the Internal Revenue Service—

(i) the information requested,

(ii) the form and manner for submission of such

information, and

(iii) the date on which such information is due to be

submitted to the Internal Revenue Service.

SEC. 104. EXPANSION OF CALLBACK TECHNOLOGY.

It is the sense of Congress that—

(1) taxpayers contacting the Internal Revenue Service

should have the option to receive a callback, and

(2) not later than calendar year 2028, the Internal Revenue

Service should provide any taxpayer (including any taxpayer

residing outside of the United States) the option to receive

a callback for any call made by the taxpayer to an applicable

phone number extension (as defined in section 102(d)(2) of

this Act) which has not been answered within 5 minutes.

SEC. 105. EXPANSION OF ONLINE ACCOUNTS.

(a) In General.—Not later than January 1 of the first

calendar year beginning more than 18 months after the date of

enactment of this Act, the Secretary shall make available a

website or mobile application which allows any taxpayer

(including any taxpayer residing outside of the United

States) the ability to—

(1) in a manner consistent with any applicable limitations

under section 6103 of the Internal Revenue Code of 1986, view

any return (as defined in section 6103(b)(1) of the Internal

Revenue Code of 1986), document, notice, or letter (with the

exception of any educational item which has no legal effect)

which, during the applicable period (as defined in subsection

(d)), has been—

(A) sent by the Internal Revenue Service to such taxpayer,

(B) filed with (or, in the case of any document not

required to be filed, sent to) the Internal Revenue Service—

(i) by such taxpayer,

(ii) by a person described in subsection (c) of section

6103 of the Internal Revenue Code of 1986 with respect to

such taxpayer, or

(iii) with respect to such taxpayer in a manner described

in subsection (e) of such section,

(2) with respect to any document, notice, or letter sent to

such taxpayer by the Internal Revenue Service, respond to

such document, notice, or letter by uploading or otherwise

transmitting the taxpayer's response through the website or

mobile application, and

(3) in the case of—

(A) any representative of such taxpayer who is authorized

to practice before the Department of the Treasury pursuant to

section 330 of title 31, United States Code,

(B) any tax return preparer (as defined in section

7701(a)(36) of the Internal Revenue Code of 1986) with an

identifying number (as described in section 6109(a)(4) of

such Code), or

permit such representative, preparer, or agent, to the extent

authorized by the taxpayer, to access the information

described in paragraph (1) or transmit any information

described in paragraph (2).

(b) Availability for Viewing.—With respect to any return,

document, notice, or letter described in paragraph (1) of

subsection (a), such return, document, notice, or letter

shall be made available for viewing by the taxpayer (or,

pursuant to paragraph (3) of such subsection, any

representative, tax return preparer, or qualified reporting

agent authorized by the taxpayer) as soon as is practicable

and within such periods as are established pursuant to

regulations prescribed by the Secretary.

Preparer, or Agent.—For purposes of subsection (a)(3), the

website or mobile application shall allow a representative,

tax return preparer, or qualified reporting agent to be able

to access information for multiple taxpayers who have

provided permission under such subsection without any

requirement to individually and separately access the account

of each such taxpayer.

(d) Applicable Period.—

(1) In general.—Subject to paragraph (2), for purposes of

subsection (a)(1), the term “applicable period” means the

preceding 6-year period.

(2) Prospective application.—The term “applicable

period” shall not include any years ending before the date

of enactment of this Act.

(e) Qualified Reporting Agent.—

(1) In general.—For purposes of this section, the term

“qualified reporting agent” means a person—

(A) which is properly authorized as an agent to sign and

file employment tax returns, make related payments and

deposits, and perform such other acts on behalf of a taxpayer

under procedures set forth by the Secretary,

(B) which has met such requirements as may be established

by the Secretary, and

suspended by the Secretary pursuant to procedures established

by the Secretary.

(2) Employment tax return.—For purposes of paragraph

(1)(A), the term “employment tax return” means—

(A) any return required to be filed by an employer to

report the obligations of the employer and its employees

under section 3101, 3111, 3301, or 3402 of the Internal

Revenue Code of 1986, and

(B) such other returns as designated by the Secretary.

(f) Preventing Unauthorized Disclosure of Return

Information by Persons Designated by Taxpayers.—Not later

than January 1 of the first calendar year beginning more than

18 months after the date of enactment of this Act, the

Secretary shall—

(1) establish a program to investigate and address—

(A) any access, use, or disclosure of return information

(as defined in section 6103(b) of the Internal Revenue Code

of 1986) by any person which is in excess of the

authorization permitted to such person pursuant to subsection

(a)(3), and

(B) any related misconduct, and

(2) annually publish, on the public website of the Internal

Revenue Service, the actions undertaken pursuant to the

program described in paragraph (1), such as the number of

complaints investigated, the number of persons whose access

was revoked, and other relevant statistical data.

(g) Focus Groups.—For purposes of subsection (a), prior to

the date that the website or mobile application described in

such subsection is made available, the Secretary shall

conduct focus groups with taxpayers and tax professionals to

ensure that any amounts appropriated or otherwise made

available for such purposes are expended in an appropriate

manner.

SEC. 106. AUTOMATION OF REFUND OFFSET BYPASS.

(a) In General.—Section 6402(a) is amended—

(1) by striking “In the case” and inserting the

following:

“(1) Authority.—Except as provided in paragraph (2), in

the case”, and

(2) by adding at the end the following new paragraphs:

“(2) Special rule for certain individuals.—In the case of

an overpayment with respect to any taxable year for which a

credit is allowed to an applicable taxpayer under section 32,

the Secretary shall, subject to subsections (c), (d), (e),

and (f), refund such overpayment in an amount not to exceed

the amount of the credit allowed under such section for such

taxable year.

“(3) Applicable taxpayer.—For purposes of paragraph (2),

the term `applicable taxpayer' means a taxpayer who was

classified by the Secretary as currently not collectible

(within the meaning of section 6343(e)) prior to the date on

which the refund was requested by the taxpayer.”.

(b) Effective Date.—The amendments made by this section

shall apply to offsets made after the date which is 12 months

after the date of enactment of this Act.

SEC. 107. INSTALLMENT AGREEMENT FEES ELIMINATED FOR CERTAIN

INDIVIDUALS.

(a) In General.—Section 6159(f) is amended by striking

paragraph (2) and inserting the following:

“(2) Waiver.—No fee shall be imposed on an installment

agreement under this section in the case of any taxpayer with

an adjusted gross income, as determined for the most recent

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 installment agreements entered into after the

date which is 12 months after the date of enactment of this

Act.

SEC. 108. INDIVIDUALS FACING ECONOMIC HARDSHIPS INFORMED OF

COLLECTION ALTERNATIVES.

(a) In General.—Not later than 12 months after the date of

enactment of this Act, the Secretary shall—

(1) establish a program to identify taxpayers who—

(A) are reasonably likely to be experiencing an economic

hardship, and

(B) have an unpaid tax liability, and

(2) in the case of any taxpayer described in paragraph (1)

who requests to enter into an agreement described in section

6159(a) of the Internal Revenue Code of 1986, provide such

taxpayer with information regarding other options which the

Internal Revenue Service makes available to taxpayers who

have an unpaid tax liability and are experiencing an economic

hardship, including—

(A) an agreement described in such section for partial

collection of a tax liability,

(B) an offer-in-compromise (as described in section 7122 of

such Code), and

meaning of section 6343(e) of such Code).

(b) Economic Hardship.—For purposes of this section, in

determining whether a taxpayer is reasonably likely to be

experiencing an economic hardship, such determination shall

be made in the same manner as determined under section

6343(a)(1)(D) of the Internal Revenue Code of 1986 based on—

(1) the most recent income and asset data which the

Secretary has received from a return or a report from, or

with respect to, such taxpayer, and

(2) the schedules described in section 7122(d)(2)(A) of

such Code.

enactment of this Act, the Secretary, in consultation with

the National Taxpayer Advocate, shall submit a report to the

Committee on Ways and Means of the House of Representatives

and the Committee on Finance of the Senate regarding—

(1) the accuracy of the Internal Revenue Service with

respect to identifying taxpayers who are reasonably likely to

be experiencing an economic hardship under subsection (a)(1),

(2) whether such identification procedures may be

appropriately applied for other purposes, and

(3)(A) the number of taxpayers with an unpaid tax liability

who were identified as reasonably likely to be experiencing

an economic hardship under subsection (a)(1),

(B) the options described in subsection (a)(2) that were

provided to such taxpayers, and

SEC. 109. QUARTERLY NOTICES TO CERTAIN TAXPAYERS WITH

DELINQUENCIES.

(a) In General.—Section 7524 is amended—

(1) in the heading, by striking “annual notice” and

inserting “notice”,

(2) by striking “Not less often than annually” and

inserting the following:

“(a) In General.—Except as provided in subsection (c),

not less often than quarterly”, and

(3) by adding at the end the following:

“(b) Information on Penalties and Interest.—The notice

described in subsection (a) shall include—

“(1) an estimate of the amount of penalties and interest

that may accrue if the delinquent tax debt is not fully paid

within the period remaining under section 6502(a), and

“(2) programs and services that can provide assistance to

the taxpayer.

“(c) Exception.—The requirement under subsection (a)

shall not apply—

“(1) during any period in which an agreement described in

section 6159(a) or an accepted offer-in-compromise (as

described in section 7122) is in effect, or

“(2) in the case of a taxpayer for which the Secretary has

determined that the tax is not collectible (within the

meaning of section 6343(e)).”.

(b) Conforming Amendment.—The table of sections for

chapter 77 is amended by striking the item relating to

section 7524 and inserting the following new item:

“Sec. 7524. Notice of tax delinquency.”.

shall take effect on the date which is 24 months after the

date of enactment of this Act.

SEC. 110. LOW-INCOME TAXPAYER CLINIC FUNDING UNLOCKED.

(a) Matching Funds.—Paragraph (5) of section 7526(c) is

amended to read as follows:

“(5) Requirement of matching funds.—

“(A) In general.—With respect to any grant provided to a

low-income taxpayer clinic under this section, such clinic

shall provide matching funds equal to the applicable

percentage of the amount of such grant.

“(B) Matching funds.—

“(i) In general.—For purposes of this paragraph, the term

`matching funds' may include—

“(I) the salary (including fringe benefits) of individuals

performing services for the low-income taxpayer clinic, and

“(II) the cost of equipment used in the low-income

taxpayer clinic.

“(ii) Exclusion.—For purposes of this paragraph, the term

`matching funds' shall not include any indirect expenses,

such as general overhead of the institution sponsoring the

low-income taxpayer clinic.

“(C) Applicable percentage.—For purposes of subparagraph

(A), the applicable percentage shall be 100 percent, except

that the Secretary may establish a lower percentage (not

below 25 percent) if the Secretary determines that such

percentage would expand the coverage of the low-income

taxpayer clinic to additional taxpayers.”.

(b) Technical Amendments.—Section 7526(c), as amended by

subsection (a), is further amended—

(1) by striking paragraphs (1) and (2), and

(2) by redesignating paragraphs (3) through (6) as

paragraphs (1) through (4).

shall apply to calendar years beginning after the date of

enactment of this Act.

SEC. 111. CHIEF COUNSEL REVIEWS OF OFFERS-IN-COMPROMISE

STREAMLINED.

(a) In General.—Section 7122(b) is amended by striking

“in any case” and all that follows through “his delegate”

and inserting “in any case which the Secretary determines

presents a significant legal issue, there shall be placed on

file in the office of the Secretary the opinion of the

General Counsel for the Department of the Treasury, or the

Counsel's delegate”.

(b) Conforming Amendments.—Section 7122(b) is amended by

striking the second and third sentences.

shall apply to offers-in-compromise submitted or pending on

or after the date of the enactment of this Act.

SEC. 112. MODIFICATION OF PROCEDURAL REQUIREMENTS FOR

PENALTIES AND DISALLOWANCE PERIODS.

(a) In General.—Section 6751(b) is amended—

(1) by striking paragraph (1) and inserting the following:

“(1) In general.—No penalty under this title shall be

assessed, and no disallowance period shall take effect,

unless—

“(A) the decision (as defined by the Secretary in

regulations) to apply such penalty or disallowance period, as

applicable, is personally approved (in writing on an

electronic form) by—

“(i) the immediate supervisor of the individual making

such decision, or

“(ii) the Internal Revenue Service Office of Servicewide

Penalties (or any successor organization), and

“(B) the approval described in subparagraph (A) is

obtained on or before the date any appealable notice is sent

to the taxpayer regarding the application of such penalty or

disallowance period.”, and

(2) by adding at the end the following:

“(3) Appealable notice.—For purposes of this subsection,

the term `appealable notice' means the first written notice

issued to a taxpayer that provides the taxpayer an

opportunity to—

“(A) appeal the decision to the Internal Revenue Service

Independent Office of Appeals, or

“(B) petition a Federal court for review of the

decision.”.

(b) Disallowance Period.—Section 6751 is amended by adding

at the end the following new subsection:

“(d) Disallowance Period.—

“(1) In general.—For purposes of this section, the term

`disallowance period' means—

“(A) with respect to any credit under section 24, the

period determined under section 24(g)(1),

“(B) with respect to any credit under section 25A, the

period determined under section 25A(b)(4)(A), and

“(C) with respect to any credit under section 32, the

period determined under section 32(k)(1).

“(2) Approval required for disallowance period

automatically calculated through electronic means.—With

respect to the application of any disallowance period,

subsection (b)(2)(B) shall not apply.”.

shall apply to notices sent after the date which is 12 months

after the date of the enactment of this Act.

(d) Report.—Not later than 24 months after the date of

enactment of this Act, and annually thereafter, the Secretary

shall make publicly available a report regarding all

penalties assessed by the Internal Revenue Service pursuant

to the Internal Revenue Code of 1986 during the preceding

calendar year, with all relevant data regarding such

penalties to be collected and reported with respect to—

(1) every organizational unit of the Internal Revenue

Service that has power to assess, abate, or otherwise enforce

any penalty imposed by the Internal Revenue Service under the

Internal Revenue Code of 1986, and

(2) the progression of such penalties at each step of the

determination, assessment, and review processes, as well as

the final result with respect to such penalties.

SEC. 113. RETURN OF AMOUNTS COLLECTED BY IRS IN EXCESS OF

ACCEPTED OFFER-IN-COMPROMISE AMOUNT.

(a) In General.—Section 7122 is amended by adding at the

end the following:

“(h) Return Amounts Collected in Excess of Payment Amount

of Accepted Offer-in-compromise.—

“(1) In general.—Subject to paragraph (2), in the case of

any taxpayer for which an offer-in-compromise has been

accepted under this section, any proceeds collected with

respect to the Federal income tax liability that is the

subject of the accepted offer-in-compromise which are in

excess of any remaining payments scheduled under such

compromise shall be transferred to the taxpayer.

“(2) Exception.—Paragraph (1) shall not apply if—

“(A) the taxpayer and the Secretary have specifically

agreed otherwise, or

“(B) the Secretary has—

“(i) determined that, under the terms of the compromise,

such compromise is in default, and

“(ii) elected to terminate such compromise.”.

(b) Authority to Release Levy and Return Property.—Section

6343 is amended—

(1) in subsection (a)(1)—

(A) in subparagraph (D), by striking “or” at the end,

(B) in subparagraph (E), by striking the period at the end

and inserting “, or”, and

“(F) subject to subsection (h)(2) of section 7122, an

offer-in-compromise is accepted under such section with

respect to the liability for which the levy was imposed.”,

and

(2) in subsection (d)(2)—

(A) in subparagraph (C), by striking “or” at the end,

(B) in subparagraph (D), by striking the comma at the end

and inserting “, or”, and

“(E) subject to subsection (h)(2) of section 7122, an

offer-in-compromise is accepted under such section with

respect to the liability for which the levy was imposed,”.

shall apply to any compromise made under section 7122 of the

Internal Revenue Code of 1986 which is accepted by the

Secretary after the date of enactment of this Act.

SEC. 114. EXTENSION OF PERIOD FOR RETURN OF AMOUNTS SUBJECT

TO WRONGFUL LEVY.

(a) In General.—Section 6343(b) is amended, in the flush

text following paragraph (3), by striking “the date of such

levy” and inserting “the date that the Secretary received

any such amount”.

(b) Effective Date.—The amendments made by this section

shall apply to any money levied upon or any amount of money

received from the sale of property after the date which is 12

months after the date of enactment of this Act.

SEC. 115. REPORTS TO CONGRESS.

(a) Implementation.—Not later than the date which is 2

years after the date of enactment of this Act, the Secretary

(following consultation with the National Taxpayer Advocate,

the Treasury Inspector General for Tax Administration, and

the Comptroller General of the United States) shall provide a

report to the Committee on Ways and Means of the House of

Representatives and the Committee on Finance of the Senate

regarding the actions taken by the Internal Revenue Service

to implement this title and the amendments made by this

title, including—

(1) an analysis of successes and challenges with respect to

implementation of such title, and

(2) any recommendations to Congress with respect to the

implementation or administration of such title.

(b) Fraud.—

(1) In general.—Not later than the date which is 12 months

after the date of enactment of this Act, and annually

thereafter, the Secretary shall provide a report to the

Committee on Ways and Means of the House of Representatives

and the Committee on Finance of the Senate regarding efforts

made by the Internal Revenue Service to identify, prevent,

and resolve each type of tax fraud, including first-person

fraud and stolen identity refund fraud.

(2) Information included in report.—The report described

in paragraph (1) shall include—

(A) a detailed description, timeline, and analysis of any

efforts undertaken by the Internal Revenue Service and any of

the other members of the Security Summit during the most

recent tax filing season to address and prevent each type of

tax fraud, including—

(i) any specific information or guidelines provided by the

Internal Revenue Service to any of the other members of the

Security Summit (and vice versa) with respect to tax fraud,

including—

(I) any “be on the lookout” alerts or other warnings,

(II) updated guidelines or restrictions,

(III) potential threat analyses,

(IV) specific data or analytics, and

(V) any other actionable threat information, and

(ii) any specific recommendations provided by the Internal

Revenue Service to any of the other members of the Security

Summit (and vice versa) with respect to identifying,

preventing, and resolving tax fraud, including any potential

improvements to data, analytics, information sharing, and

collaboration between the Internal Revenue Service and other

members of the Security Summit,

(B) a detailed description and timeline of any interactions

between the Internal Revenue Service and any provider of tax

filing options which does not participate in the Security

Summit, including—

(i) any specific information or guidelines provided by the

Internal Revenue Service to such provider (and vice versa)

with respect to each type of tax fraud, including any items

described in subclauses (I) through (V) of subparagraph

(A)(i), and

(ii) any specific recommendations provided by the Internal

Revenue Service to such provider (and vice versa) with

respect to identifying, preventing, and resolving tax fraud,

including any potential improvements to data, analytics,

information sharing, and collaboration between the Internal

Revenue Service and such provider,

season—

(i) with respect to each specific type or form of tax fraud

that has been identified by the Internal Revenue Service, any

relevant data and analysis regarding the amount of such fraud

during such tax filing season, including detailed numerical

data regarding such fraud in relation to each separate

Federal tax return form (including any amended returns) and

the manner in which such returns were filed, and

(ii) the total dollar amount of fraudulent claims for

refund—

(I) for which any disbursement was erroneously made, and

(II) which were identified and disallowed prior to any

disbursement being made.

(3) Publicly available.—Data included in the report

described in paragraph (1) shall be made available on the

public website of the Internal Revenue Service, provided that

such data is appropriately redacted by the Secretary.

Internal Revenue Service Restructuring and Reform Act of 1998

(26 U.S.C. 7801 note), the submission of the report required

under section 7803(c)(2)(B) of the Internal Revenue Code of

1986 shall not satisfy the requirement under subsection (a)

of section 4022 of such Act to conduct an analysis of the

sources of complexity in administration of the Federal tax

laws and report the results of such analysis.

(d) Document Management to Avoid Duplicative Requests to

Constituents.—

(1) In general.—Not later than one year after the date of

the enactment of this Act, and annually thereafter for the

following 5 years, the Secretary shall submit to the

Committee on Finance of the Senate a report describing the

systems and practices for tracking documents submitted to the

Internal Revenue Service by taxpayers, Congressional offices,

and authorized third-party representatives.

(2) Matters included.—The report described in paragraph

(1) shall include the following:

(A) A description of how the Internal Revenue Service

catalogues, tracks, and retains documents and communications,

including procedures for internal document sharing and for

avoiding lost documents and duplicative requests to

taxpayers.

(B) A description of the status and future plans for

managing electronic and paper submissions through online

accounts, new document submission tools, and paper-retention

processes.

reducing duplicative document requests and any barriers the

Internal Revenue Service has identified to implementing

improvements.

TITLE II—AMERICAN CITIZENS ABROAD

SEC. 201. REPORT ON COMBINED TAX AND FOREIGN BANK AND

FINANCIAL ACCOUNT REPORTING.

(a) Study.—

(1) In general.—The Secretary shall conduct a study on—

(A) combining and simplifying reporting required under

section 5314 of title 31, United States Code and sections

6038, 6038A, 6038B, 6038C, 6038D, 6039F, 6046A, and 6048 of

the Internal Revenue Code of 1986; and

(B) eliminating duplicative requests for information from

nonresident United States taxpayers.

(2) Consultation.—The study conducted under paragraph (1)

shall include input from the National Taxpayer Advocate and

nonresident United States taxpayers.

(b) Report.—Not later than 180 days after the date of

enactment of this Act, the Secretary shall submit to Congress

a report on the study conducted under subsection (a), which

shall include any actions taken by the Secretary as a result

of such study and any recommendations for legislative changes

necessary to effectuate the goal described in subsection

(a)(1).

SEC. 202. STUDY AND REPORTS ON SIMPLIFICATION.

(a) GAO Study and Report.—

(1) In general.—The Comptroller General of the United

States shall conduct a study on the burdens of compliance

with Federal tax laws applicable to individuals who are

United States persons (as defined in section 7701(a)(30) of

the Internal Revenue Code of 1986) living abroad.

(2) Factors considered.—The study conducted under

subsection (a) shall identify problems relating to compliance

of Federal tax laws for such United States persons, including

burdens specific to low-income and moderate-income

individuals, related to—

(A) understanding and complying with United States tax

obligations, including obligations with respect to—

(i) the duty to file returns and pay taxes while living

abroad, including in the absence of tax treaties that

otherwise eliminate double taxation of income;

(ii) the filing (including through electronic means) of

Federal tax returns and any reports required under section

5314 of title 31, United States Code, in a timely, accurate,

and affordable manner,

(iii) foreign retirement plans treated as passive foreign

investment companies; and

(iv) foreign currency gains;

(B) receiving and responding to inquiries from the Internal

Revenue Service and the Financial Crimes Enforcement Network

about returns and reports described in subparagraph (A)(ii),

and access to services of such agencies with respect to such

returns and reports;

including local retirement vehicles and bank accounts;

(D) access to affordable tax preparation services for

United States income tax obligations; and

(E) compliance burdens that are disproportionate to the

amount of tax owed.

(3) Report.—Not later than 1 year after the date of the

enactment of this Act, the Comptroller General shall submit

to the Secretary of Treasury and to Congress, and make

publicly available, a report on the study conducted under

paragraph (1).

(b) Treasury Report.—Not later than 1 year after the date

on which the Comptroller General submits the report under

subsection (a)(3), the Secretary of the Treasury shall submit

to Congress a report that describes—

(1) actions taken by the Department of Treasury to address

any problems identified by the Comptroller General in such

report; and

(2) any legislation necessary to address such problems.

SEC. 203. EXTENSION OF TIME FOR PERSONS OUTSIDE OF THE UNITED

STATES TO REQUEST ABATEMENT OF MATH ERROR.

(a) In General.—Section 6213(b)(2)(A) is amended by

inserting “(120 days in the case of a notice addressed to a

person outside the United States)” after “60 days”.

(b) Effective Date.—The amendment made by this section

shall apply to notices sent after the date that is 180 days

after the date of the enactment of this Act.

SEC. 204. CLARIFICATION OF ASSESSMENT AUTHORITY; PRE-

ASSESSMENT APPEALS OF FOREIGN INFORMATION

RETURN PENALTIES.

(a) Treatment of Penalties as Taxes.—Section 6671(a) is

amended—

(1) by striking “The penalties and liabilities provided by

this subchapter” and inserting the following:

“(1) In general.—Any penalties provided by this title,

including the penalties and liabilities provided by this

subchapter,”,

(2) by striking “the penalties and liabilities provided by

this subchapter.” and inserting “the penalties provided by

this title, including the penalties and liabilities provided

by this subchapter.”, and

(3) by adding at the end the following new paragraph:

“(2) Exception.—Paragraph (1) shall not apply to any

penalty not provided by this subchapter if such penalty is a

penalty for which a civil or criminal action is prescribed as

the method of collection or has been consistently treated by

the Secretary before the date of the enactment of this

paragraph as such a penalty.”.

(b) Notice Requirement for Certain Penalties.—

(1) In general.—Subchapter C of chapter 68 is amended by

adding at the end the following new section:

“SEC. 6752. PRELIMINARY NOTICE AND RIGHT OF REVIEW FOR

COVERED PENALTIES.

“(a) Notice.—

“(1) In general.—No covered penalty shall be assessed

unless the Secretary provides a notice to the taxpayer in

writing by mail to an address as determined under section

6212(b) that contains the following information:

“(A) The covered penalty proposed to be assessed.

“(B) The taxable years or periods involved.

“(C) The basis for the proposed penalty.

“(D) Information about the right of the taxpayer to

request review as provided in subsection (b).

“(2) Timing of notice.—The mailing of the notice

described in paragraph (1) shall precede any notice and

demand of any covered penalty by at least 60 days (120 days

in the case of a notice addressed to a taxpayer outside the

United States).

“(b) Right to a Review.—Within 60 days (120 days in the

case of a notice sent to a taxpayer outside the United

States) of the mailing of the notice described in subsection

(a), the taxpayer may request a review of the proposed

penalty by the Internal Revenue Service Independent Office of

Appeals.

“(c) Suspension of Assessment and Collection.—

“(1) In general.—A covered penalty may not be assessed,

demanded, or collected before—

“(A) the expiration of the period provided under

subsection (b), or

“(B) in any case in which the taxpayer requests a review

under subsection (b), the date a final determination is

issued in such review.

“(2) Statute of limitations.—If a notice described in

subsection (a) with respect to any covered penalty is mailed

before the expiration of the period provided by section 6501

for the assessment of such penalty (determined without regard

to this paragraph), the running of such period shall be

suspended for the period during which assessment is

prohibited under this section and for 30 days thereafter.

“(d) Covered Penalty.—For purposes of this section, the

term `covered penalty' means any penalty imposed under

section 6038(b)(1), 6038A(d)(1), 6038B(c), 6038C(c),

6038D(d)(1), 6039F(c)(1)(B), or 6677.

“(e) Exception for Jeopardy.—This section shall not apply

if the Secretary finds that the collection of the penalty is

in jeopardy.

“(f) Regulations.—The Secretary shall prescribe such

regulations or other guidance as may be necessary or

appropriate to carry out this section, including regulations

or other guidance relating to—

“(1) procedures for issuing notices under subsection (a),

and

“(2) establishing simplified reviews for cases in which

the penalty amount at issue does not exceed a designated

dollar threshold.”.

(2) Clerical amendment.—The table of sections for

subchapter C of chapter 68 is amended by adding at the end

the following new item:

“Sec. 6752. Preliminary notice and right of review for covered

penalties.”.

(1) Taxpayer rights.—Nothing in the amendments made by

this section shall be construed to create any limitation on

the rights of a taxpayer—

(A) under subchapter C or D of chapter 64 of the Internal

Revenue Code of 1986, or

(B) to pursue refund litigation with respect to the

assessment or imposition of any penalty imposed under such

Code.

(2) No inference.—Nothing in the amendments made by this

section shall be construed to create any inference with

respect to the treatment of any covered penalty (as defined

in section 6752 of the Internal Revenue Code of 1986, as

added by this section) before the date of the enactment of

this Act.

SEC. 205. REPEAL OF DUE DATE REQUIREMENTS FOR CERTAIN

INFORMATION RETURNS RELATING TO FOREIGN GIFTS

AND TRUSTS.

(a) In General.—Section 2006(b) of the Surface

Transportation and Veterans Health Care Choice Improvement

Act of 2015 is amended by striking paragraphs (9) and (10).

(b) Effective Date.—The amendment made by this section

shall apply to returns for taxable years beginning after

December 31, 2026.

TITLE III—JUDICIAL REVIEW

SEC. 301. AUTHORIZATION OF SUBPOENAS BEFORE HEARINGS TO

FACILITATE SETTLEMENTS.

Section 7456(a) is amended to read as follows:

“(a) In General.—

“(1) Administration of oaths.—For the efficient

administration of the functions vested in the Tax Court or

any division thereof, any judge or special trial judge, the

clerk or the clerk's deputies, as such, or any other employee

of the Tax Court designated in writing for the purpose by the

chief judge, may administer oaths or affirmations.

“(2) Examination.—Any judge or special trial judge may

examine parties or witnesses.

“(3) Subpoena authority.—Any judge or special trial judge

may require, by subpoena ordered by the Tax Court or any

division thereof and signed by the judge or special trial

judge (or by the clerk of the Tax Court or by any other

employee of the Tax Court when acting as deputy clerk), any

of the following:

“(A) The attendance and testimony of parties or witnesses.

“(B) The production of books, papers, documents,

electronically stored information, or tangible things from

any place in the United States by any party or witness having

custody or control thereof for purposes of discovery or for

use of the things produced as evidence in accordance with the

rules and orders of the Tax Court.

Any such subpoena shall be issued and served, and compliance

therewith shall be compelled, as provided in the rules and

orders of the Tax Court.

“(4) Depositions.—Pursuant to rules and orders of the

Court, the deposition of a witness may be taken before any

designated individual competent to administer oaths under

this title. Any deposition testimony shall be reduced to

writing by the individual taking the deposition, or under

such individual's direction, and shall be subscribed by the

deponent.”.

SEC. 302. CLARIFICATION OF TAX COURT AUTHORITY TO ORDER

RELIEF FROM A JUDGMENT OR ORDER.

Section 7481 is amended—

(1) by striking “and (d),” in subsection (a) and

inserting “(d), and (e),” and

(2) by adding at the end the following new subsection:

“(e) Relief From a Judgment or Order.—

“(1) Corrections based on clerical mistakes; oversights

and omissions.—

“(A) In general.—The Tax Court may correct a clerical

mistake, or a mistake arising from oversight or omission,

whenever one is found in a judgment, order, or other part of

the record. The Tax Court may do so on motion or on its own,

with or without notice.

“(B) Appellate court leave required on appeal.—After an

appeal has been docketed in the appellate court, and while

such appeal is pending, any such mistake may be corrected

only with the appellate court's leave.

“(2) Grounds for relief from a final judgment or order.—

On motion and just terms, the Tax Court may relieve a party

or its legal representative from a final judgment or order

for any of the following reasons:

“(A) Mistake, inadvertence, surprise, or excusable

neglect.

“(B) Newly discovered evidence that, with reasonable

diligence, could not have been discovered in time to move for

a new trial under rules prescribed by the Court and that

would have a reasonable likelihood of changing the outcome.

“(C) Fraud (whether previously called intrinsic or

extrinsic), misrepresentation, or misconduct by an opposing

party.

“(D) The judgment is void.

“(E) Any other circumstance where justice so requires.

“(3) Timing and effect of the motion.—

“(A) Timing.—A motion under paragraph (2)—

“(i) must be made within a reasonable time, and

“(ii) in the case of a reason described in subparagraphs

(A), (B), or (C), not later than 1 year after the entry of

the judgment or order.

“(B) Effect on finality.—While pending, any such motion

does not affect the judgment's finality or suspend its

operation.

“(4) Other powers to grant relief.—This subsection shall

not limit the Tax Court's power to set aside a judgment for

fraud on the Tax Court.

“(5) Court of appeals jurisdiction.—If the Tax Court

provides relief from a judgment or order that is otherwise

final under this section, either or both parties may obtain

review of such relief by filing a notice of appeal under this

subchapter within 90 days of the Court's judgment or order

directing such relief.”.

SEC. 303. AUTHORIZATION OF SPECIAL TRIAL JUDGES TO HEAR

ADDITIONAL CASES AND ADDRESS CONTEMPT.

(a) Consent to Assignment.—Section 7443A(b) is amended by

striking “and” at the end of paragraph (6), by

redesignating paragraph (7) as paragraph (8), and by

inserting after paragraph (6) the following new paragraph:

“(7) upon the consent of the parties, and pursuant to

rules promulgated by the Tax Court, any proceeding not

described in paragraphs (1) through (6), and”.

(b) Authorizing Special Trial Judge.—Section 7443A(c) is

amended by striking “or (6)” and inserting “(6), or (7)”.

at the end the following new subsection:

“(f) Incidental Powers.—A special trial judge appointed

under this section shall have the independent power to punish

for contempt of the authority of the Tax Court as provided in

section 7456(c), except the sentence imposed by such a

special trial judge for any contempt shall not exceed the

penalties for a Class C misdemeanor as set forth in sections

3571(b)(6) and 3581(b)(8) of title 18, United States Code.

This subsection shall not be construed to limit the authority

of a special trial judge to order sanctions under any other

statute or any rule of the Tax Court prescribed pursuant to

section 7453.”.

(d) Effective Date.—The amendments made by subsections (a)

and (b) shall take effect on the date the United States Tax

Court adopts rules implementing the consent procedures of

section 7443A.

SEC. 304. DISQUALIFICATION OF JUDGES AND SPECIAL TRIAL

JUDGES.

(a) In General.—Part II of subchapter C of chapter 76 is

amended by adding at the end the following new section:

“SEC. 7467. DISQUALIFICATION OF JUDGE OR SPECIAL TRIAL

JUDGE.

“Section 455 of title 28, United States Code, shall apply

to judges, special trial judges, and proceedings of the Tax

Court.”.

(b) Clerical Amendment.—The table of sections for such

part is amended by adding at the end the following new item:

“Sec. 7467. Disqualification of judge or special trial judge.”.

SEC. 305. NOTICE AND REVIEW WITH RESPECT TO MULTI-YEAR BANS

ON CLAIMING CREDITS.

(a) Notice.—

(1) In general.—Section 6212(a) is amended—

(A) by striking “If the” and inserting the following:

“(1) Notice.—If the”,

(B) by striking “Such notice shall include a notice” and

inserting the following:

“(2) Matters included.—Such notice shall include—

“(A) a notice”,

and inserting “, and”, and

(D) by adding at the end the following new subparagraph:

“(B) in any case in which such deficiency for a taxable

year is attributable to the denial of a credit under section

24, 25A, or 32, a statement—

“(i) identifying the credit or credits which are denied

and providing the grounds for each such denial,

“(ii) informing the taxpayer that, unless the denial is

overturned on appeal, the taxpayer will not be able to claim

such credit for any subsequent taxable year unless the

taxpayer provides information required by the Secretary to

demonstrate eligibility for the credit, and

“(iii) in any case in which the Secretary has made a

determination to impose a disallowance period under section

24(g)(1), 25A(b)(4)(A), or 32(k)(1), providing the grounds

for such disallowance period (and the length of the

disallowance period unless overturned on appeal).”.

(2) Effective date.—The amendments made by this subsection

shall apply to notices mailed on or after the date that is 36

months after the date of enactment of this Act.

(b) Authority of the Tax Court.—

(1) In general.—Section 6214 is amended by redesignating

subsection (e) as subsection (f) and by inserting after

subsection (d) the following new subsection:

“(e) Jurisdiction With Respect to Multi-Year Bans With

Respect to Certain Credits.—

“(1) In general.—The Tax Court shall have jurisdiction—

“(A) to redetermine the imposition of any disallowance

period with respect to any credit under section 24, 25A, or

32 for the taxable year in which such disallowance period was

imposed if the deficiency relates to such taxable year, and

“(B) to determine whether any such disallowance period

should be imposed if claim therefor is asserted by the

Secretary in the answer or an amended answer filed in

accordance with the rules of the Tax Court.

“(2) Disallowance period.—For purposes of this

subsection, the term `disallowance period' has the meaning

given such term under section 6751(d).”.

(2) Effective date.—The amendments made by this subsection

apply to petitions filed on or after the date of enactment of

this Act.

(3) Transition rule for review of previously imposed

disallowance periods.—

(A) In general.—In the case of any deficiency which is

attributable to an entry on the return claiming a credit

under section 24, 25A, or 32 of the Internal Revenue Code of

1986 for a taxable year in a disallowance period described in

subparagraph (B), the Tax Court shall have jurisdiction to

redetermine whether the disallowance period was properly

imposed.

(B) Disallowance period described.—A disallowance period

is described in this subparagraph if the notice of the

deficiency under section 6212 of such Code for the taxable

year with respect to which the determination to impose the

disallowance period was made—

(i) did not include the grounds for such disallowance

period, and

(ii) was mailed before the date that is 36 months after the

date of the enactment of this Act.

the term “disallowance period” has the meaning given such

term under section 6751(d) of the Internal Revenue Code of

1986 (as added by this Act).

(D) Refunds.—Notwithstanding section 6512(b)(1) of the

Internal Revenue Code of 1986, in the case of a petition with

respect to a disallowance period described in subparagraph

(B), the Tax Court shall have jurisdiction to determine the

amount of an overpayment for any taxable year in the

disallowance period, and such amount shall, notwithstanding

section 6511, when the decision of the Tax Court has become

final, be credited or refunded to the taxpayer. If a notice

of appeal in respect of the decision of the Tax Court is

filed under section 7483 of such Code, the Secretary is

authorized to refund or credit the overpayment determined by

the Tax Court to the extent the overpayment is not contested

on appeal.

(1) In general.—Section 7491(c) is amended—

(A) by striking “Notwithstanding” and inserting the

following:

“(1) In general.—Notwithstanding”,

(B) by striking “with respect to the liability” and

inserting “with respect to—

“(A) the liability”,

“, and”,

(D) by adding at the end the following new subparagraph:

“(B) the application of any disallowance period (as

defined in section 6751(d)) to any individual.”, and

(E) by adding at the end the following new paragraph:

“(2) Standard of proof for certain disallowance periods.—

In the case of any court proceeding with respect to any

disallowance period described in section 24(g)(1)(B)(i),

25A(b)(4)(A)(ii)(I), or 32(k)(1)(B)(i), the standard of proof

shall be the same standard as required in a proceeding under

section 7454(a).”.

(2) Effective date.—The amendments made by this subsection

shall apply to court proceedings beginning after the date

that is 36 months after the date of the enactment of this Act

in connection with disallowance periods (as defined in

section 6751(d) of the Internal Revenue Code of 1986, as

added by this Act) determined after such date.

(d) Modification of Disallowance Period.—

(1) Child tax credit.—Section 24(g)(1) is amended—

(A) in subparagraph (B), by striking “for which there was

a final determination that the taxpayer's claim of credit

under this section was” each place it appears in clauses (i)

and (ii) and inserting “for which a notice of deficiency has

been sent under section 6212(a) which notifies the taxpayer

that the taxpayer's claim of credit under this section was

denied, or a determination that has become final under

section 7481 has been made by the Tax Court to deny such

claim,”, and

(B) by adding at the end the following new subparagraph:

“(C) Allowance of previously denied credits after tax

court consideration.—Notwithstanding subparagraphs (A) and

(B), a taxable year shall not be treated as a taxable year in

the disallowance period if the Tax Court determines that the

disallowance period was not properly imposed for such year

pursuant to section 6214(e).”.

(2) American opportunity tax credit.—Section 25A(b)(4)(A)

is amended—

(A) in clause (ii), by striking “for which there was a

final determination that the taxpayer's claim of the American

Opportunity Credit under this section was” each place it

appears in subclauses (I) and (II) and inserting “for which

a notice of deficiency has been sent under section 6212(a)

which notifies the taxpayer that the taxpayer's claim of

credit under this section was denied, or a determination that

has become final under section 7481 has been made by the Tax

Court to deny such claim,”, and

(B) by adding at the end the following new clause:

“(iii) Allowance of previously denied credits after tax

court consideration.—Notwithstanding clauses (i) and (ii), a

taxable year shall not be treated as a taxable year in the

disallowance period if the Tax Court determines that the

disallowance period was not properly imposed for such year

pursuant to section 6214(e).”.

(3) Earned income tax credit.—Section 32(k)(1) is

amended—

(A) in subparagraph (B), by striking “for which there was

a final determination that the taxpayer's claim of credit

under this section was” each place it appears in clauses (i)

and (ii) and inserting “for which a notice of deficiency has

been sent under section 6212(a) which notifies the taxpayer

that the taxpayer's claim of credit under this section was

denied, or a determination that has become final under

section 7481 has been made by the Tax Court to deny such

claim,”, and

(B) by adding at the end the following new subparagraph:

“(C) Allowance of previously denied credits after tax

court consideration.—Notwithstanding subparagraphs (A) and

(B), a taxable year shall not be treated as a taxable year in

the disallowance period if the Tax Court determines that the

disallowance period was not properly imposed for such year

pursuant to section 6214(e).”.

(4) Suspension of running of limitations period filing of a

claim for credit or refund.—Section 6511(d) is amended by

adding at the end the following new paragraph:

“(9) Special rules relating to disallowance periods.—The

running of the periods described in subsections (a) and

(b)(2) with respect to any claim for a credit allowed under

section 24, 25A, or 32 for any taxable year in a disallowance

period (as defined in section 6751(d)) shall be suspended

during any period in which the imposition of such

disallowance period is pending before the Tax Court.”.

(5) Effective date.—

(A) In general.—The amendments made by paragraphs (1),

(2), and (3) shall apply to—

(i) taxable years beginning after the date that is 36

months after the date of the enactment of this Act, and

(ii) disallowance periods (as defined in section 6751(d) of

the Internal Revenue Code of 1986, as added by this Act) in

taxable years beginning on or before such date if the notice

of deficiency for the taxable year with respect to which the

determination to impose such disallowance period was made was

sent after such date.

(B) Suspension of running of limitations period.—The

amendment made by paragraph (4) shall apply to petitions

filed after the date of the enactment of this Act.

SEC. 306. AUTHORIZATION OF DE NOVO REVIEW OF INNOCENT SPOUSE

RELIEF BY THE TAX COURT AND OTHER COURTS.

(a) Review.—Section 6015(e)(7) is amended by striking “by

the Tax Court and shall be based upon” and all that follows

and inserting a period.

(b) Clarification of Scope of Review.—Section

6015(e)(1)(A) is amended by inserting “(including any remedy

applicable in a suit for refund or collection or in a

bankruptcy case)” after “In addition to any other remedy

provided by law”.

shall apply to petitions, requests, and suits filed or

pending on or after the date of the enactment of this Act.

(d) No Inference.—Nothing in the amendments made by this

section shall be construed to limit the authority or

jurisdiction of the Tax Court or any other court to grant

relief under section 6015 of the Internal Revenue Code of

1986 or to review any relief granted under such section.

SEC. 307. CLARIFICATION OF CERTAIN COURT FILING DEADLINES.

(a) In General.—

(1) Treatment of deadlines.—Section 7451 is amended by

redesignating subsection (b) as subsection (c) and by

inserting after subsection (a) the following new subsection:

“(b) Treatment of Deadlines for Certain Petitions.—

“(1) In general.—The deadlines for filing petitions under

section 6015(e)(1)(A), the first sentence of section 6213(a),

and section 6330(d)(1)(A) shall be considered

nonjurisdictional claims-processing rules subject to waiver,

forfeiture, estoppel, and equitable tolling. For purposes of

section 6015(e)(1)(B), the second and fourth sentences of

section 6213(a), and the last sentence of section 6330(e)(1),

a petition not timely filed shall be treated as timely filed

if the Tax Court determines that the failure to timely file

is excused by waiver, forfeiture, estoppel, or equitable

tolling.

“(2) Treatment of collection activity.—If the Tax Court

determines that the failure to timely file a petition under

section 6015(e)(1)(A), 6213(a), or 6330(d)(1)(A) is excused

by waiver, forfeiture, estoppel, or equitable tolling, the

Secretary (or the Attorney General, as the case may be) shall

abate any assessment made under section 6213(c) to which the

petition relates, suspend any levy or proceeding for the

collection of the liability to which the petition relates,

and (unless the taxpayer otherwise requests) refund any

amount of such liability previously collected. The previous

sentence shall not apply if section 6330(e)(2), 6330(f),

6330(g), 6851, 6852, or 6861 applies. The Tax Court shall

have jurisdiction to enforce this paragraph.”.

(2) Conforming amendments.—

(A) Section 6015(e) is amended—

(i) in paragraph (1)(B)(i), by striking “or, if a petition

has been filed with the Tax Court under subparagraph (A),

until the decision of the Tax Court has become final” and

inserting “or, if a timely petition has been filed with the

Tax Court under subparagraph (A), from the date such petition

is filed (or, if filed after the close of the 90th day

referred to in subparagraph (A)(ii), the date the Tax Court

determines such petition is excused under section 7451(b))

until the decision of the Tax Court has become final”, and

(ii) in paragraph (2)—

(I) by redesignating subparagraphs (A) and (B) as clauses

(i) and (ii), respectively, and by moving such clauses two

ems to the right,

(II) by striking “for the period” and inserting “for any

period”,

(III) by striking “for 60 days thereafter” and inserting

“for 60 days after the latest of such periods”,

(IV) by striking “shall be suspended” and inserting

“shall—

“(A) be suspended—”, and

(V) by striking the period after “Secretary” and

inserting “, and

“(B) if the Tax Court determines that the failure to

timely file a petition under paragraph (1)(A) is excused

under section 7451(b), be extended by the number of days

between the deadline for filing the petition (determined

without regard to the application of section 7451(b)) and the

date on which the court determines that the failure to timely

file the petition is excused.”.

(B) The second sentence of section 6213(a) is amended—

(i) by inserting “timely” before “petition”, and

(ii) by inserting “from the time such petition is filed

(or, if filed after the close of the 90-day or 150-day

period, the date the Tax Court determines such filing is

excused under section 7451(b))” before “until the

decision”.

regard to the application of section 7451(b))” after “the

time prescribed in subsection (a)”.

(D) Section 6330(e)(1) is amended—

(i) by inserting “timely” before “appeals therein”, and

(ii) by striking “are pending” through “a final

determination in such hearing.” and inserting the following:

“are pending, but in no event shall any such period expire

before the 90th day after the day on which there is a final

determination in such hearing. If the Tax Court determines

that the failure to timely file a petition under subsection

(d) is excused under section 7451(b), such levy actions shall

be suspended between the date the court so determines and the

date which is 90 days after the decision of the Tax Court

becomes final, and the running of any such period of

limitations shall be extended by the number of days between

the deadline for filing the petition (determined without

regard to the application of section 7451(b)) and the date on

which the court determines that the failure to timely file

the petition is excused.”.

(E) Section 6503(a)(1) is amended—

(i) by striking “the period” and inserting “any

period”,

(ii) by striking “for 60 days thereafter” and inserting

“for 60 days after the latest of such periods”, and

(iii) by adding at the end the following new sentence: “If

the Tax Court determines that the failure to timely file a

petition under section 6213(a) is excused under section

7451(b), the periods of limitations provided in sections 6501

and 6502 on the making of assessments and the collection by

levy or a proceeding in court shall be extended by the number

of days between the deadline for filing the petition

(determined without regard to the application of section

7451(b)) and the date on which the court determines that the

failure to timely file the petition is excused.”.

(F) Section 7459(d) is amended to read as follows:

“(d) Effect of Decision Dismissing Petition.—

“(1) In general.—If a petition has been filed by the

taxpayer under section 6015(e)(1)(A), 6213(a), or

6330(d)(1)(A), a decision of the Tax Court dismissing the

proceeding shall be considered as its decision on the merits,

unless the dismissal is—

“(A) for lack of jurisdiction,

“(B) for failure to timely file the petition, or

“(C) in the case of a petition under section 6015(e)(1)(A)

or 6330(d)(1)(A), at the request of the taxpayer (unless the

Tax Court orders that the dismissal shall be considered its

decision on the merits).

“(2) Entry of order.—An order specifying the amount of

deficiency or liability, if appropriate, shall be entered in

the records of the Tax Court unless the Tax Court cannot

determine such amount from the record in the proceeding.”.

(b) Tolling of Time in Certain Cases.—Section 7451(c), as

redesignated by subsection (a)(1), is amended by striking

“date” and inserting “day (in whole or in part)”.

shall apply to cases

pending on or after the date of the enactment of this Act.

(d) No Inference.—The amendments made by subsection (a)

shall not be construed to create any inference with respect

to the treatment of—

(1) any case brought under section 6015(e)(1)(A), the

second sentence of section 6213(a), or section 6330(d)(1)(A)

of the Internal Revenue Code of 1986 for which there is a

final determination by the Tax Court before the date of the

enactment of this Act, or

(2) any other petition filed with the Tax Court under any

other provision of the Internal Revenue Code of 1986 before,

on, or after such date.

SEC. 308. CLARIFICATION OF TAX COURT JURISDICTION TO

DETERMINE TAX LIABILITY IN COLLECTION DUE

PROCESS APPEALS.

(a) In General.—Section 6330(c)(2)(B) is amended by

inserting “in the Tax Court or any other Federal court

(other than through a suit for a refund under section 7442 or

under section 1346(a)(1) of title 28, United States Code)”

after “otherwise have an opportunity to dispute such tax

liability”.

(b) Underlying Tax Liability.—Section 6330(c)(4) is

amended by striking “An issue may not be raised” and

inserting “An issue which is not related to the amount or

existence of the underlying tax liability may not be

raised”.

SEC. 309. AUTHORIZATION OF THE TAX COURT TO ISSUE REFUNDS IN

COLLECTION DUE PROCESS CASES.

(a) In General.—Section 6330(d)(1) is amended—

(1) by striking “The person may” and inserting the

following:

“(A) In general.—The person may”,

(2) by inserting “and, unless a challenge was precluded

under subsection (c), with respect to the determination of

any overpayments of tax for the taxable periods or events at

issue in the determination” after “matter” , and

(3) by adding at the end the following new subparagraphs:

“(B) Determination and enforcement of overpayments.—Rules

similar to the rules of paragraphs (1) and (2) of section

6512(b) shall apply for purposes of this paragraph.

“(C) Limitation on amount of credit or refund.—

“(i) In general.—In the case of any petition under

subparagraph (A), no credit or refund shall be allowed or

made of any portion of the tax unless the Tax Court

determines as part of its decision that such portion was

paid—

“(I) after the notice described in subsection (a)(1) or

section 6320(a)(1) (as the case may be) was given,

“(II) within the period which would be applicable under

section 6511(b)(2), (c), or (d), if, on the date the notice

described in subsection (a)(1) or section 6320(a)(1) (as the

case may be) was given, a claim had been filed (whether or

not filed) stating the grounds upon which the Tax Court finds

that there is an overpayment, or

“(III) within the period which would be applicable under

section 6511(b)(2), (c), or (d), in respect of any claim for

refund filed within the applicable period specified in

section 6511 and before the date the notice described in

subsection (a)(1) or section 6320(a)(1) (as the case may be)

was given—

“(aa) which had not been disallowed before that date,

“(bb) which had been disallowed before that date and in

respect of which a timely suit for refund could have

commenced as of that date, or

“(cc) in respect of which a suit for refund had been

commenced before that date and within the period specified in

section 6532.

In a case described in subclause (II) where the date the

notice described in subsection (a)(1) or section 6320(a)(1)

(as the case may be) is given is during the third year after

the due date (determined without regard to any extensions)

for filing the return of tax and no return was filed before

such date, the applicable period under subsections (a) and

(b)(2) of section 6511 shall be 3 years.

“(ii) Date notice was given.—For purposes of this

subparagraph—

“(I) if notice was given under subsection (a)(2) or

section 6320(a)(2) by mail, the date the notice was given

shall be the date such notice was mailed, and

“(II) if notice was given under subsection (a)(2) or

6320(a)(2) by leaving such notice at the dwelling or usual

place of business of the person, the date the notice was

given shall be the date such notice was left.”.

(b) Suspension of Period of Limitations for Credit or

Refund During Proceedings.—

(1) In general.—Section 6330(e)(1) is amended by inserting

“section 6511 (relating to limitations on credit or

refund),” after “section 6502 (relating to collection after

assessment)”.

(2) Prohibition on crediting of overpayments against

disputed tax liability during collection action

proceedings.—Section 6402 is amended by adding at the end

the following new subsection:

“(o) Prohibition on Crediting of Overpayments Against

Disputed Tax Liability During Collection Action

Proceedings.—If a hearing is properly requested under

section 6320(a)(3)(B) or 6330(a)(3)(B), and an underlying tax

liability referred to in section 6330(c)(2)(B) is properly

disputed at such hearing, such tax liability shall not,

except with the consent of the taxpayer, be taken into

account under subsection (a) for the period during which the

period of limitations for filing a claim for credit or refund

relating to such tax liability is suspended by reason of

section 6330(e).”.

Rules to Lien Hearings.—Section 6330(c)(2)(A) is amended by

striking “unpaid tax or the proposed levy” and inserting

“unpaid tax, collection action, or proposed collection

action”.

(d) Effective Date.—

(1) In general.—Except as otherwise provided in paragraph

(2) or (3), the amendments made by this section shall apply

to cases pending on or after the date of the enactment of

this Act.

(2) Prohibition on crediting of overpayments.—The

amendment made by subsection (b)(2) shall apply with respect

to any period described in section 6402(o) of the Internal

Revenue Code of 1986 (as added by this section) if any

portion of such period is after the date of the enactment of

this Act.

(3) Clarification of application of certain levy hearing

rules to lien hearings.—The amendment made by subsection (c)

shall take effect on the date of the enactment of this Act.

SEC. 310. AUTHORIZATION OF THE TAX COURT TO HEAR SUITS FOR

REFUNDS OR CREDITS.

(a) In General.—Section 7442 is amended—

(1) by striking “The Tax Court” and inserting the

following:

“(a) In General.—The Tax Court”, and

(2) by adding at the end the following new subsection:

“(b) Actions for Refunds.—

“(1) Jurisdiction.—

“(A) In general.—In addition to any other court

authorized by law, the Tax Court shall, subject to section

7422, have jurisdiction over any action, not exceeding the

applicable amount, for the recovery of any internal revenue

tax alleged to have been erroneously or illegally assessed or

collected, or any penalty claimed to have been collected

without authority or of any sum alleged to have been

excessive or in any manner wrongfully collected under the

internal revenue laws to the same extent as the district

courts of the United States.

“(B) Applicable amount.—For purposes of this paragraph,

the applicable amount means—

“(i) $2,000,000 for any one taxable year, in the case of

taxes imposed by subtitle A,

“(ii) $2,000,000, in the case of the tax imposed by

chapter 11,

“(iii) $2,000,000 for any one calendar year, in the case

of the tax imposed by chapter 12,

“(iv) $2,000,000 for any 1 taxable period (or, if there is

no taxable period, taxable event) in the case of any tax

imposed by subtitle C, D, or E, and

“(v) $2,000,000, in the case of any other amount

collected.

“(2) Further notice of deficiency.—If the Secretary prior

to the hearing of a suit brought by a taxpayer under

paragraph (1) mails to the taxpayer a notice that a

deficiency has been determined in respect of the tax which is

the subject matter of the taxpayer's suit, the proceedings in

the taxpayer's suit shall be stayed during the period of time

in which the taxpayer may file a petition with the Tax Court

for a redetermination of the asserted deficiency, and for 60

days thereafter. If the taxpayer files such a petition with

the Tax Court, such petition shall be consolidated with the

suit brought under paragraph (1).”.

(b) Use of Small Dispute Procedures.—Section 7463(f) is

amended by striking “and” at the end of paragraph (2), by

striking the period at the end of paragraph (3) and inserting

“, and”, and by adding at the end the following new

paragraph:

“(4) a petition to the Tax Court under section 7442(b) in

which the amount of the refund sought does not exceed

$50,000.”.

(1) Section 7422(k) is amended by adding at the end the

following new paragraph:

“(5) For jurisdiction of the Tax Court, see section

7442(b).”.

(2) Section 7482(b)(1) is amended by striking “or” at the

end of subparagraph (F), by striking the period at the end of

subparagraph (G) and inserting “, or”, and by adding at the

end the following new subparagraph:

“(H) in the case of a petition under section 7442(b)—

“(i) the legal residence of the petitioner if the

petitioner is an individual, and

“(ii) the principal place of business or principal office

or agency if the petitioner is an entity other than an

individual.”.

(3) Section 1346(a) of title 28, United States Code, is

amended—

(A) in the matter preceding paragraph (1), by striking “,

concurrent with the United States Court of Federal Claims,”,

(B) in paragraph (1), by striking “Any” and inserting

“Concurrent with the United States Court of Federal Claims

and the Tax Court, any”, and

“Concurrent with the United States Court of Federal Claims,

any”.

(d) Effective Date.—The amendments made by this section

shall apply to actions filed after the date that is 12 months

after the date of the enactment of this Act.

SEC. 311. AUTHORIZATION TO ALLOW CLAIMS FOR REFUND IN CERTAIN

CASES WHERE FULL TAX NOT PAID.

(a) In General.—Section 7422, as amended by this Act, is

amended by redesignating subsection (k) as subsection (l) and

by inserting after subsection (j) the following new

subsection:

“(k) Special Rule for Actions Where There Is an Agreement

in Effect With the

Taxpayer Under Section 6159 or When the Taxpayer Is in

Currently Not Collectible Status.—

“(1) In general.—The district courts of the United

States, the United States Court of Federal Claims, and the

Tax Court shall not fail to have jurisdiction over any

applicable action brought by a taxpayer to determine the

correct amount of liability of such taxpayer solely because

the full amount of such liability has not been paid.

“(2) Applicable action.—For purposes of this subsection,

the term `applicable action' means any action to determine

the correct amount of the liability of such taxpayer (or for

any refund with respect thereto) with respect to any amount

if, as of the date such action is filed, such amount—

“(A) is the subject of an agreement under section 6159 for

which all installments the due date for which is on or before

the date the action is filed have been paid, or

“(B) has been determined by the Secretary to be not

collectible (within the meaning of section 6343(e)).

“(3) Permissive dismissal.—

“(A) Request for dismissal.—The United States (or the

Secretary, in the case of a case in the Tax Court) may

request the dismissal of an applicable action if the taxpayer

is no longer in compliance with an installment agreement

under section 6159 or is no longer in currently not

collectible status (within the meaning of section 6343(e)).

“(B) Court action.—In any case in which there is a

request for dismissal under subparagraph (A), the court may,

with or without taking any evidence or holding a hearing,

dismiss the action with leave to refile when either the full

amount of such liability has been paid or the conditions in

paragraph (2) are met at the time of refiling. In deciding

whether to dismiss the action, the court may consider the

extent to which the action has proceeded, the extent to which

full payment has been made, any burden that may result to the

taxpayer, the United States, the Secretary, or the court from

such dismissal (including reasons the taxpayer is no longer

in compliance with an installment agreement under section

6159), and any other reason relating to the policy of the

full payment rule. A dismissal under this paragraph shall not

be reviewed by any other court.

“(4) Prohibition on collection of disallowed liability.—

If the court redetermines under paragraph (1) the correct

amount of liability of the taxpayer, no part of such

liability which is disallowed by a decision of such court

which has become final may be collected by the Secretary, and

amounts paid in excess of the amount determined by the court

as correctly paid shall be refunded.”.

(b) Effective Date.—The amendments made by this section

shall apply to actions filed on or after the date that is 12

months after the date of the enactment of this Act.

SEC. 312. ADJUSTMENT OF THRESHOLD FOR SMALL DISPUTES.

(a) In General.—Section 7463, as amended by this Act, is

amended—

(1) by striking “$50,000” each place it appears in

subsections (a) and (f) and inserting “$100,000”, and

(2) by adding at the end the following new subsection:

“(g) Inflation Adjustment.—

“(1) In general.— In the case of any petition filed in a

calendar year beginning after 2026, each of the $100,000

amounts in subsections (a) and (f) shall be increased by an

amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year, determined by

substituting `calendar year 2025' for `calendar year 2016' in

subparagraph (A)(ii) thereof.

“(2) Rounding.—If any increase determined under paragraph

(1) is not a multiple of $1,000, such increase shall be

rounded to the next lowest multiple of $1,000.”.

(b) Proceedings for Determination of Employment Status.—

Section 7436(c)(1) is amended by striking “if the amount of

employment taxes placed in dispute is $50,000 or less for

each calendar quarter involved” and inserting “if the

amount of employment taxes placed in dispute is equal to or

less than the dollar amount in effect under section

7463(a)(1) (determined at the time the pleading is filed

under subsection (a)) for each calendar quarter involved”.

(1) Section 7443A(b)(3) is amended by striking “$50,000”

and inserting “the dollar amount in effect under section

7463(a)(1) (determined at the time the pleading is filed)”.

(2) Section 7463(f)(2) is amended by striking “an appeal”

and inserting “a petition”.

(3) The heading for section 7463 is amended by striking

“disputes involving $50,000 or less” and inserting “small

disputes”.

(4) The item relating to section 7463 in the table of

section for part II of subchapter C of chapter 76 is amended

by striking “Disputes involving $50,000 or less” and

inserting “Small disputes”.

(d) Effective Date.—The amendments made by this section

shall apply to proceedings commencing after the date of the

enactment of this Act.

TITLE IV—OFFICE OF THE TAXPAYER ADVOCATE

SEC. 401. NTA AUTHORIZATION TO DIRECT HIRE ATTORNEYS.

Section 7803(c)(2)(D) is amended—

(1) in clause (i)—

(A) in subclause (I), by striking “and” at the end,

(B) in subclause (II), by striking the period at the end

and inserting “; and”, and

“(III) appoint counsel in the Office of the Taxpayer

Advocate to report directly to the National Taxpayer Advocate

or delegate thereof.”, and

(2) by adding at the end the following:

“(iii) Counsel.—For purposes of clause (i)(III)—

“(I) the National Taxpayer Advocate may utilize direct

hire authority to recruit and appoint qualified applicants,

without regard to any preference requirements,

“(II) any counsel appointed pursuant to such clause shall

not report to the Chief Counsel for the Internal Revenue

Service and shall not represent the Government in litigation,

“(III) any legal interpretation of counsel appointed

pursuant to such clause shall not be binding on the

Secretary, and

“(IV) pursuant to section 301(f)(2) of title 31, United

States Code, and subsection (b)(2)(A), the Chief Counsel for

the Internal Revenue Service shall continue to provide advice

to the National Taxpayer Advocate and the Office of the

Taxpayer Advocate.”.

SEC. 402. NTA AUTHORIZATION TO MAKE PERSONNEL DECISIONS.

(a) In General.—Section 7803(c)(2)(D)(i)(II) is amended by

striking “any employee of any local office of a taxpayer

advocate described in subclause (I)” and inserting “any

officer or employee of the Office of the Taxpayer Advocate”.

(b) Effective Date.—The amendment made by this section

shall take effect on the date which is 12 months after the

date of enactment of this Act.

SEC. 403. ACCESS TO INTERNAL REVENUE SERVICE INFORMATION,

LEGAL ADVICE, AND MEETINGS.

(a) In General.—Section 7803(c) is amended by adding at

the end the following new paragraph:

“(6) Access to information and meetings.—

“(A) In general.—Upon request, the Commissioner shall

provide the Office of the Taxpayer Advocate with access to

any of the following:

“(i) In the case of any request made by a taxpayer for

assistance by the Office of the Taxpayer Advocate which is

open and pending—

“(I) any return or return information (as such terms are

defined in section 6103(b)) which the National Taxpayer

Advocate determines is necessary to assist such taxpayer,

“(II) any legal advice provided by the staff of the Office

of Chief Counsel to any employee of the Internal Revenue

Service (including any legal advice prepared in contemplation

of litigation) which the National Taxpayer Advocate

determines is necessary to assist such taxpayer, regardless

of whether such legal advice cannot be disclosed to such

taxpayer, and

“(III) any meeting between such taxpayer and any employee

of the Internal Revenue Service.

“(ii) To the extent necessary to perform a full and

substantive analysis included in any report described in

paragraph (2)(B)—

“(I) any relevant document, data, or statistical

information, and

“(II) any legal advice provided by the staff of the Office

of the Chief Counsel to any employee of the Internal Revenue

Service (including any legal advice prepared in contemplation

of litigation).

“(iii) Legal advice from the staff of the Office of Chief

Counsel on any matter or issue.

“(B) Deadline.—Access to any information, advice, or

meeting described in subparagraph (A) shall be provided by

the Commissioner not later than—

“(i) the date which is 2 weeks after the date on which a

written request submitted by the Office of the Taxpayer

Advocate has been received by the Commissioner, or

“(ii) such date as is otherwise agreed to by the

Commissioner and the Office of the Taxpayer Advocate.

“(C) Meetings.—For purposes of subparagraph (A)(i)(III),

the Commissioner shall be deemed to have satisfied the

requirement under such subparagraph if the Commissioner has

extended an invitation to attend the meeting to the Office of

the Taxpayer Advocate, without regard to whether such an

invitation was declined by any employee of the Office of the

Taxpayer Advocate.

“(D) Privilege.—Any access provided to the Office of the

Taxpayer Advocate pursuant to this paragraph with respect to

information or legal advice from the staff of the Office of

Chief Counsel shall have no effect on any privilege which

otherwise applies to such information or legal advice.”.

(b) Annual Reports.—Section 7803(c)(2)(B)(ii) is amended—

(1) in subclause (XII), by striking “and” at the end,

(2) in subclause (XIII), by striking the period at the end

and inserting “; and”, and

(3) by adding at the end the following new subclause:

“(XIV) identify any failure by the Commissioner to provide

access to any information, advice, or meeting described in

subparagraph (A) of paragraph (6) by the date required under

subparagraph (B) of such paragraph.”.

shall take effect on the date of enactment of this Act.

SEC. 404. REPEAL OF LIMITATION PERIOD SUSPENSION FOR

TAXPAYERS SEEKING ASSISTANCE FROM TAS.

(a) In General.—Section 7811 is amended—

(1) by striking subsection (d), and

(2) by redesignating subsections (e) through (g) as

subsections (d) through (f), respectively.

(b) Conforming Amendment.—Section 6306(k)(2) is amended by

striking “section 7811(g)” and inserting “section

7811(f)”.

shall take effect on the date of enactment of this Act.

SEC. 405. OPERATIONS TO ASSIST TAXPAYERS EXPERIENCING

HARDSHIPS DURING LAPSE IN APPROPRIATIONS.

(a) In General.—Notwithstanding the third sentence of

section 1342 of title 31, United States Code, for purposes of

the first sentence of such section, during any lapse in

appropriations, functions described in subsection (b)

performed by an employee of the Internal Revenue Service who

is designated by the Commissioner of Internal Revenue or the

National Taxpayer Advocate for purposes of this section shall

be treated in the same manner as an emergency involving the

safety of human life or the protection of property.

(b) Function Described.—The functions described in this

subsection are functions necessary—

(1) to assist any taxpayer who is or may be experiencing an

economic hardship (within the meaning of section

6343(a)(1)(D) of the Internal Revenue Code of 1986) as a

result of any action or inaction by the Internal Revenue

Service, and

(2) to comply with any Taxpayer Assistance Order issued

pursuant to section 7811 of such Code.

TITLE V—TAX RETURN PREPARERS

SEC. 501. PENALTIES FOR TAX RETURN PREPARERS WHO IMPROPERLY

ALTER RETURNS.

(a) In General.—Paragraph (1) of section 6696(e) is

amended to read as follows:

“(1) Return.—The term `return' means—

“(A) any return of any tax imposed by this title,

“(B) any administrative adjustment request under section

6227,

“(C) any partnership adjustment tracking report under

section 6226(b)(4)(A), and

“(D) any other document purporting to be a return,

request, or report described in subparagraphs (A) through

(C).”.

(b) Effective Date.—The amendment made by this section

shall take effect on the date of enactment of this Act.

SEC. 502. ENSURING THE USE OF VALID PREPARER IDENTIFICATION

NUMBERS AND ELECTRONIC FILING IDENTIFICATION

NUMBERS.

(a) In General.—

(1) Penalty.—Section 6695 is amended—

(A) by striking subsection (c) and inserting the following:

“(c) Failure to Furnish Valid Identifying Number.—

“(1) In general.—

“(A) Penalty.—Any person who is a tax return preparer

with respect to any return or claim for refund and who fails

to furnish an identifying number which complies with section

6109(a)(4)(A) with respect to such return or claim shall pay

a penalty of $250 for such failure.

“(B) Non-compliance.—For purposes of this paragraph, an

identifying number shall be deemed to not comply with section

6109(a)(4)(A) if such identifying number—

“(i) is assigned to another person,

“(ii) does not exist,

“(iii) is inactive or expired,

“(iv) has been withdrawn,

“(v) is suspended or has been revoked, or

“(vi) is otherwise invalid for use by the tax return

preparer.

“(2) Exception.—The penalty imposed under paragraph (1)

shall not apply if it is shown that such failure is due to

reasonable cause and not due to willful neglect.

“(3) Limitation.—The maximum penalty imposed under this

subsection on any person with respect to documents filed

during any calendar year shall not exceed $75,000.”,

(B) by redesignating subsection (h) as subsection (i),

subsection:

“(h) Use of Invalid or Appropriated Electronic Filing

Identification Number.—

“(1) In general.—Any person who is an electronic return

originator with respect to any applicable electronically

filed document who fails to meet the requirements of

paragraph (2), with respect to such applicable electronically

filed document, shall pay a penalty of $250 for such failure,

unless it is shown that such failure is due to reasonable

cause and not due to willful neglect.

“(2) Requirement.—The requirements of this paragraph are

met if—

“(A) the electronic return originator uses an electronic

filing identification number which is assigned to such person

by the Secretary, and

“(B) in the case of any applicable electronically filed

document filed after the date on which the program under

paragraph (4) is established, the electronic filing

identification number has been validated under such program

at the time of the filing.

“(3) Definitions.—For purposes of this subsection—

“(A) Electronic return originator.—

“(i) In general.—The term `electronic return originator'

means a person who originates the electronic submission of 1

or more applicable electronically filed documents.

“(ii) Exceptions.—The term `electronic return originator'

shall not include a person merely because such person

originates an electronic submission described in clause (i)—

“(I) by providing services which are limited to typing,

reproduction, or other mechanical assistance,

“(II) at the direction of an employer (or of an officer or

employee of the employer) by whom such person is regularly

and continuously employed,

“(III) as a fiduciary, or

“(IV) in response to a determination by the Secretary that

directly or indirectly affects the tax liability of a

taxpayer.

“(B) Electronic filing identification number.—

“(i) In general.—The term `electronic filing

identification number' means a unique identifier issued by

the Secretary to authorize a person or entity to

electronically file on behalf of other taxpayers—

“(I) any return of Federal tax,

“(II) any claim for a refund, and

“(III) except as provided by the Secretary, any other

document required to be filed with the Secretary under this

title.

“(ii) Suspension or revocation.—In the case of any

electronic filing identification number which has been

suspended or revoked by the Secretary, such number shall not

be deemed valid for purposes of paragraph (1).

“(C) Applicable electronically filed document.—The term

`applicable electronically filed document' means any document

which is described in subclause (I), (II), or (III) of

subparagraph (B)(i) and filed electronically on behalf of

other taxpayers.

“(4) Electronic filing identification number validation

program.—

“(A) In general.—Not later than 24 months after the date

of the enactment of this paragraph, the Secretary shall

establish and maintain a program for the validation of

electronic filing identification numbers.

“(B) Timing and frequency of validation.—The Secretary

shall validate an electronic filing identification number—

“(i) prior to the initial use of such electronic filing

identification number for electronic filing, and

“(ii) at such intervals, or upon such events, as the

Secretary determines appropriate, to ensure the continued

validity and integrity of such electronic filing

identification number.

“(C) Real-time validation system.—

“(i) In general.—The program established under this

paragraph shall provide a real-time system for the validation

of electronic filing identification numbers.

“(ii) System requirements.—The system provided under

clause (i) shall—

“(I) provide immediate confirmation of the validity status

of an electronic filing identification number,

“(II) identify whether an electronic filing identification

number has been suspended, revoked, or compromised or is

otherwise ineligible for the activity for which it is used,

and

“(III) be designed to support secure, automated, and high-

volume validation requests, including usage by large-scale

tax preparation software systems.

“(D) Access.—The Secretary shall—

“(i) provide access to the system in such form and manner

as the Secretary may prescribe, and

“(ii) accept a validation request only from a person

authenticated and authorized in accordance with requirements

prescribed by the Secretary and only with respect to an

electronic filing identification number and electronic filing

activity for which such person is authorized to request

validation, whether on its own behalf or in connection with

services provided to the person to whom the electronic filing

identification number was issued.”, and

(D) in subsection (i)(1), as redesignated by paragraph (2),

by striking “and (g)” and inserting “(g), and (h)”.

(2) Requirement for filing software to provide for use of

validation program.—Software which enables the electronic

filing of applicable electronically filed documents (as

defined in section 6695(h) of the Internal Revenue Code of

1986, as amended by paragraph (1)(C)) with the Secretary—

(A) shall require validation of an electronic filing

identification number (as defined in section 6695(h) of such

Code, as amended by this section) under the program described

in section 6695(h)(4) of such Code (as amended by this

section) prior to the electronic filing of any applicable

electronically filed document (as so defined) filed after the

date such program has been established, and

(B) shall not permit such electronic filing unless such

electronic filing identification number has been validated

under such program.

(3) Validation program implementation plan and report.—

(A) Implementation plan.—Not later than 180 days after the

date of enactment of this section, the Secretary shall submit

to the Committee on Finance of the Senate and the Committee

on Ways and Means of the House of Representatives an

implementation plan for the program established under section

6695(h)(4) of the Internal Revenue Code of 1986 (as added by

this subsection). Such plan shall include—

(i) a description of the planned design and operation of

the program,

(ii) the implementation timeline, major milestones, and

testing schedule,

(iii) the categories of persons eligible to submit

validation requests and the procedures for authorizing such

persons,

(iv) the proposed performance and reliability standards and

contingency procedures, and

(v) a description of the administrative, technical, and

physical safeguards to prevent unauthorized discovery,

enumeration, testing, or bulk verification of electronic

filing identification numbers.

(B) Post-implementation report.—Not later than 2 years

after the date on which the program under section 6695(h)(4)

of the Internal Revenue Code of 1986 (as added by this

subsection) is established, the Secretary shall submit to the

Committee on Finance of the Senate and the Committee on Ways

and Means of the House of Representatives a report on the

implementation and operation of the program. Such report

shall include—

(i) the performance of the program, including system

availability, response times, and peak-volume performance,

(ii) the number, duration, and effect on electronic filing

of any material service disruptions,

(iii) the aggregate number of validation requests and the

aggregate number of affirmative, negative, and unable-to-

validate responses,

(iv) the nature and extent of any use of contingency

procedures,

(v) any material deviation from the implementation plan

submitted under subparagraph (A), and the actions taken or

planned to address such deviation, and

(vi) any recommendations for administrative or legislative

changes.

(b) Modification of Definition of Tax Return Preparer.—

Section 7701(a)(36) is amended—

(1) by striking subparagraph (A) and inserting the

following:

“(A) In general.—The term `tax return preparer' means any

person who prepares for compensation, or who employs one or

more persons to prepare for compensation, any return of tax

imposed by this title, any document purporting to be a return

of tax imposed by this title, or any claim for refund of tax

imposed by this title. For purposes of the preceding

sentence, the preparation of a substantial portion of a

return, document purporting to be a return, or claim for

refund shall be treated as if it were the preparation of such

return, document purporting to be a return, or claim for

refund.”, and

(2) in subparagraph (B)—

(A) in clause (ii), by striking “return or claim for

refund” and inserting “return, document purporting to be a

return, or claim for refund”, and

(B) in clause (iii), by striking “return or claim for

refund” and inserting “return, document purporting to be a

return, or claim for refund”.

Numbers.—

(1) In general.—Not later than 18 months after the date of

enactment of this Act, the Secretary shall establish a

program to improve voluntary compliance with respect to

requirements under subsections (c) and (h) of section 6695 of

the Internal Revenue Code of 1986 (as amended by this

section) and avoid the imposition of penalties under such

subsections.

(2) Consultation.—The program described in paragraph (1)

shall be established by the Secretary following consultation

with—

(A) the National Taxpayer Advocate,

(B) qualified low-income taxpayer clinics that have

received a grant under section 7526 of the Internal Revenue

Code of 1986, and

(3) Opportunity to correct.—For purposes of the program

described in paragraph (1), the Secretary shall—

(A) prior to acceptance for processing, identify—

(i) any return or claim for refund which has been

electronically submitted and does not include an identifying

number which complies with section 6109(a)(4)(A) of the

Internal Revenue Code of 1986, and

(ii) any return or claim for refund which has been

electronically submitted and does not use an electronic

filing identification number (as defined in section

6695(h)(3)(B) of such Code) or which uses an electronic

filing identification number which been suspended, revoked,

or compromised or is otherwise ineligible for the activity

for which it is used, and

(B) provide an opportunity for the person who submitted

such return or claim for refund to avoid imposition of a

penalty under subsection (c) or (h) of section 6695 of such

Code, as applicable, if the correct identifying number or

electronic filing identification number is provided.

(d) Criminal Penalty.—

(1) In general.—Part I of subchapter A of chapter 75 is

amended by adding at the end the following new section:

“SEC. 7218. WILLFUL FAILURE TO PROVIDE A VALID PREPARER

IDENTIFICATION NUMBER.

“(a) In General.—Any tax return preparer who, with

respect to any return, document purporting to be a return, or

claim for refund willfully fails to furnish an identifying

number which complies with section 6109(a)(4)(A) with respect

to such return or document or willfully furnishes a preparer

tax identification number which is described in section

6695(c)(1)(B) with intent to evade or defeat the application

of any requirement under any provision of this title which

requires such preparer to obtain and furnish such number,

shall, in addition to any other penalties provided by law, be

guilty of a felony and, upon conviction thereof, shall be

fined not more than $50,000 ($100,000 in the case of a

corporation), or imprisoned not more than 3 years, or both,

together with the costs of prosecution.

“(b) Preparer Tax Identification Number.—In this section,

the term `preparer tax identification number' means an

identifying number described in section 6109(a)(4)(A).”.

(2) Clerical amendment.—The table of sections for part I

of subchapter A of chapter 75 is amended by adding at the end

the following new item:

“Sec. 7218. Willful failure to provide a valid preparer identification

number.”.

(e) Effective Date.—The amendments made by this section

shall apply to returns or claims for refund filed after the

date which is 18 months after the date of enactment of this

Act.

SEC. 503. PENALTIES FOR IMPROPER TAX PREPARATION OR

MISAPPROPRIATION OF REFUNDS.

(a) Other Assessable Penalties With Respect to the

Preparation of Tax Returns for Other Persons.—Section 6695,

as amended by the preceding provisions of this Act, is

amended—

(1) in subsection (a)—

(A) by striking “$50” and inserting “$250”, and

(B) by striking “$25,000” and inserting “$50,000”,

(2) in subsection (b)—

(A) by striking “$50” and inserting “$250”, and

(B) by striking “$25,000” and inserting “$75,000”,

(3) in subsection (d)—

(A) by striking “$50” and inserting “$250”, and

(B) by striking “$25,000” and inserting “$50,000”,

(4) in subsection (e)—

(A) by striking “$50” and inserting “$250”, and

(B) by striking “$25,000” and inserting “$75,000”,

(5) in subsection (g), by striking “$500” and inserting

“$1,000”, and

(6) in subsection (i)(1)—

(A) by striking “2014” and inserting “2025”, and

(B) by striking “calendar year 2013” and inserting

“calendar year 2024”.

(b) Misappropriation of Refunds.—

(1) In general.—Subsection (f) of section 6695 is amended

to read as follows:

“(f) Misappropriation.—

“(1) In general.—Any person who is a tax return preparer

who misappropriates any payment made in respect of the taxes

imposed by this title which is issued to a taxpayer (other

than the tax return preparer) shall pay a penalty in an

amount determined under paragraph (2).

“(2) Penalty.—The amount of the penalty determined under

this paragraph shall, with respect to each payment described

in paragraph (1), be equal to the greater of—

“(A) $1,000, or

“(B) the full amount of such payment.

“(3) Exception.—Paragraph (1) shall not apply with

respect to the deposit by a bank (within the meaning of

section 581) of the full amount of the payment in the

taxpayer's account in such bank for the benefit of the

taxpayer.”.

(2) Conforming amendment.—Section 6695(i)(1) is amended by

striking “(f),” and inserting “(f)(2)(A),”.

SEC. 504. AUTHORITY TO DENY, REVOKE, OR SUSPEND PREPARER TAX

IDENTIFICATION NUMBERS.

(a) In General.—Section 6109 is amended—

(1) in subsection (a), by striking paragraph (4) and

inserting the following:

“(4) Furnishing identifying number of tax return

preparer.—

“(A) In general.—Any return, claim for refund, or

document purporting to be a return or claim for refund which

is prepared by a tax return preparer shall bear such

identifying number for securing proper identification of such

preparer, their employer, or both, as may be prescribed.

“(B) Suspension or revocation.—In the case of any

identifying number which has been suspended or revoked by the

Secretary under subsection (e), such number shall not be

deemed valid for purposes of subparagraph (A).

“(C) Definitions.—For purposes of this section—

“(i) Specified practitioner.—The term `specified

practitioner' means a certified public accountant, attorney,

or enrolled agent—

“(I) who is—

“(aa) in good standing with—

“(AA) the Department of the Treasury, and,

“(BB) in the case of a certified public accountant or

attorney, State licensing authorities, and

“(bb) authorized to represent persons before the

Department of the Treasury under section 330 of title 31,

United States Code, and

“(II) whose professional license or certification has not

been revoked or suspended.

“(ii) Return; claim for refund.—The terms `return' and

`claim for refund' have the respective meanings given to such

terms by section 6696(e).”, and

(2) by inserting after subsection (d) the following:

“(e) Identifying Number of Tax Return Preparer.—

“(1) In general.—The Secretary shall maintain a program

for administration of preparer tax identification numbers

required under subsection (a)(4), which shall include

restrictions on the issuance of such numbers to any

individual other than an individual who—

“(A) meets the suitability requirements of paragraph (2)

and the education requirements of paragraph (3),

“(B) meets the state program requirements of paragraph

(4), or

“(C) is a specified practitioner.

“(2) Demonstration of suitability.—

“(A) In general.—An individual meets the suitability

requirements of this paragraph if such individual has

demonstrated to the Secretary the individual's suitability to

be a tax return preparer by—

“(i) providing such information as the Secretary

determines necessary, and

“(ii) passing a background check, including a review by

the Secretary regarding compliance with personal tax

obligations.

“(B) Conduct demonstrating lack of suitability.—For

purposes of subparagraph (A), an individual shall be deemed

to have failed to demonstrate their suitability to be a tax

return preparer if—

“(i) any license or registration issued to such individual

by a State to prepare tax returns has been suspended or

revoked by such State, or

“(ii) the Secretary determines that such individual is

described in clauses (ii) through (vi) of paragraph (5)(A).

“(C) Regulations and guidance.—The Secretary shall issue

such regulations or other guidance as the Secretary

determines necessary to carry out the purposes of this

paragraph.

“(D) Prohibition on examinations.—For purposes of

subparagraph (A), except as provided in paragraph

(3)(C)(iii), the Secretary may not require an examination as

a prerequisite for the assignment or renewal of a preparer

tax identification number.

“(E) Grandfathering of prior background checks.—

“(i) In general.—Subject to clause (ii), for purposes of

subparagraph (A)(ii), in the case of a class of individuals

(as identified by the Secretary) who have passed a background

check prior to the date of enactment of this subsection, the

Secretary may deem such class of individuals to have

satisfied the requirement under such subparagraph.

“(ii) Nonapplication to requirement regarding compliance

with personal tax obligations.—Clause (i) shall not apply

with respect to review by the Secretary under subparagraph

(A)(ii) regarding compliance with personal tax obligations.

“(3) Educational programs.—

“(A) In general.—An individual shall meet the education

requirements of this paragraph if such individual completes a

specified number of hours of educational programs on ethics,

professional responsibility, and tax law (including recently

enacted Federal income tax legislation) as required by the

Secretary prior to the assignment or renewal of a preparer

tax identification number.

“(B) Additional educational requirements for renewal.—The

Secretary may require any individual seeking the renewal of a

preparer tax identification number to complete educational

programs in addition to those required under subparagraph

(A). Any educational programs required under this

subparagraph shall be based on—

“(i) a review of returns which include the preparer tax

identification number of such preparer, and

“(ii) any errors identified by the Secretary as part of

the review described in clause (i).

“(C) Other requirements.—For purposes of this paragraph,

the Secretary—

“(i) may not require a tax return preparer to annually

complete more than 18 hours of educational programs,

“(ii) shall require that any educational program include

written materials which satisfy such standards as are

established by the Secretary,

“(iii) shall require that any educational program include

a method to ensure that the tax return preparer attended the

program and sufficiently understood the material presented,

and

“(iv) may not direct any educational program to be

completed through a specific provider.

“(D) Notice of failure to timely complete requirements.—

The Secretary shall provide any tax return preparer who fails

to complete the requirements of this paragraph notice of such

failure and a 30-day period in which to cure such failure.

“(E) Publication of approved courses.—The Secretary shall

publish, on the public website of the Internal Revenue

Service—

“(i) a list of educational programs which have been

determined by the Secretary to satisfy the requirement under

clause (ii) of subparagraph (C) (and, if applicable, the

requirement under clause (iii) of such subparagraph),

including the providers of such programs, and

“(ii) any such requirements as the Secretary deems

necessary to impose with respect to any additional programs

required under subparagraph (B), provided that such

requirements are similar to the requirements provided under

section 330 of title 31, United States Code, or regulations

prescribed thereunder.

“(4) Exemption.—

“(A) In general.—Subject to subparagraph (B), any

individual meets the state program requirements of this

paragraph if such individual maintains a valid State license

or registration issued by a State licensing program or State

registration program (including State tax education councils)

which includes examination, education, and background check

requirements that are comparable to the suitability

requirements described in paragraph (2) and the education

requirements described in paragraph (3).

“(B) Grandfathering of certain programs.—For purposes of

subparagraph (A), with respect to determining whether a State

licensing program or State registration program (including

State tax education councils) includes examination,

education, and background check requirements which are

comparable to the suitability requirements described in

paragraph (2) and the education requirements described in

paragraph (3), such determination shall be made by the

Secretary without regard to whether such requirements were

included in such program at the time that such individual was

licensed or registered under such program, provided that such

requirements are, as of the date that such individual

requested assignment or renewal of a preparer tax

identification number under this subsection, presently

included in such program.

“(5) Authority to revoke or suspend preparer tax

identification number.—

“(A) In general.—The Secretary may suspend or revoke a

preparer tax identification number if, after notice and

opportunity for a hearing, the Secretary makes a

determination that the tax return preparer—

“(i) has not met—

“(I) the suitability requirements of paragraph (2) and the

education requirements of paragraph (3), or

“(II) the state program requirements of paragraph (4),

“(ii) is incompetent, as demonstrated by a repeated

pattern of errors in returns that were prepared by such

preparer which affected the determination of tax liability in

such returns,

“(iii) is disreputable, as demonstrated by—

“(I) giving false or misleading information under

paragraph (2)(A)(i),

“(II) willful failure to comply with personal tax

obligations,

“(III) an unpaid tax delinquency—

“(aa) which is outstanding for greater than 180 days,

“(bb) which is not being actively disputed, and

“(cc) which is not—

“(AA) subject to an agreement or compromise under section

6159 or 7122,

“(BB) classified as currently not collectible (within the

meaning of section 6343(e)), or

“(CC) subject to a pending application for such an

agreement, compromise, or status,

“(IV) revocation or suspension of any license or

registration issued by a State for the preparation of tax

returns,

“(V) conviction of any criminal offense—

“(aa) involving dishonesty or breach of trust, or

“(bb) which is punishable under this title,

“(VI) a final determination of liability for a penalty

pursuant to section 6694, 6695(h), 6700, 6701, 6702, or 6713,

“(VII) subject to an injunction under section 7407 or

7408, or

“(VIII) any conduct similar to the conduct described in

subclauses (I) through (VII), as provided under regulations

prescribed by the Secretary,

“(iv) in the case of a person subject to regulation under

section 330 of title 31, United States Code, or regulations

prescribed thereunder, has violated the requirements under

such section or such regulations,

“(v) with intent to defraud, willfully and knowingly

misleads or threatens—

“(I) the person whose return or claim for refund is being

prepared, or

“(II) a prospective person seeking for a return or claim

for refund to be prepared, or

“(vi) has engaged in conduct (as identified in regulations

or guidance issued by the Secretary) which is similar to the

conduct described in clauses (i) through (v) and that the

denial, suspension, or revocation of such number would

promote compliance with the requirements of this title and

effective tax administration.

“(B) Monetary penalty.—

“(i) In general.—In addition to, or in lieu of, any

suspension or revocation of a preparer tax identification

number under subparagraph (A), the Secretary may impose a

penalty in any amount not exceeding $5,000.

“(ii) Reduction.—Any penalty imposed under clause (i)

shall be reduced by the amount of any penalty imposed under

section 6694, 6695, 6700, 6701, 6702, or 6713 with regard to

the same conduct.

“(iii) Adjustment for inflation.—

“(I) In general.—In the case of any penalty imposed

during any calendar year beginning after 2025, the dollar

amount in clause (i) shall be increased by an amount equal

to—

“(aa) such dollar amount, multiplied by

“(bb) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year, determined by

substituting `calendar year 2024' for `calendar year 2016' in

subparagraph (A)(ii) thereof.

“(II) Rounding.—If any amount determined under subclause

(I) is not a multiple of $100, such amount shall be rounded

to the nearest multiple of $100.

“(C) Reinstatement.—The Secretary shall, through

regulations or other guidance, establish procedures to allow

any tax return preparer whose preparer tax identification

number has been suspended or revoked pursuant to subparagraph

(A) to have such number reissued (or, in the case of a

suspension, for such suspension to be terminated), provided

that such preparer demonstrates, to the satisfaction of the

Secretary, that—

“(i) the conduct described in such paragraph which was the

basis for such suspension or revocation has been sufficiently

addressed or resolved (such as through completion of

educational programs described in paragraph (3) or

reinstatement of a license issued by a State for the

preparation of tax returns), and

“(ii) effective tax administration would be promoted by

terminating the suspension of such number or reissuing such

number to such preparer.

“(D) Preliminary suspension.—

“(i) In general.—After notice and opportunity to respond,

the Secretary may suspend the preparer tax identification

number of a tax return preparer for a period of not greater

than 180 days if the Secretary determines that—

“(I) such tax return preparer has engaged in any conduct

described in clauses (i) through (vi) of subparagraph (A),

and

“(II) such suspension is necessary to prevent serious

economic harm to taxpayers or serious impairment of effective

tax administration, such as to prevent the filing of

fraudulent returns or claims for refund.

“(ii) Limitation.—For purposes of clause (i), if the

preparer tax identification number of a tax return preparer

has been suspended pursuant to such clause 2 times during any

5-year period, the Secretary may not issue an additional

suspension pursuant to such clause with respect to such

preparer during such period unless such suspension is

subsequent to a determination by the Secretary to suspend or

revoke the preparer tax identification number of such

preparer pursuant to subparagraph (A).

“(E) Regulations.—Not later than 24 months after the date

of enactment of this subsection, the Secretary shall issue

such regulations or other guidance as the Secretary

determines necessary to carry out the purposes of this

paragraph, including—

“(i) guidelines that identify the particular penalty

applicable to any conduct described in subparagraph (A), and

“(ii) the manner of notice and opportunity to respond for

purposes of subparagraph (D).

“(F) No inference.—Nothing in this paragraph shall be

construed to create any inference with respect to the

definition or meaning of any term used in section 330 of

title 31, United States Code, or regulations prescribed

thereunder.

“(6) Appeal.—In the case of any tax return preparer for

whom the Secretary has made a determination—

“(A) that such preparer has not met the requirements of

paragraphs (2) and (3) or of paragraph (4) and that issuance

of a preparer tax identification number should be denied,

“(B) under paragraph (5)(A) that the preparer tax

identification number for such preparer should be suspended

or revoked, or

“(C) that a penalty should be imposed pursuant to

paragraph (5)(B),

such preparer shall be provided with an opportunity to appeal

such determination pursuant to procedures (as established by

the Secretary through regulations or other guidance) which

are similar to the procedures provided under section 330 of

title 31, United States Code, and regulations prescribed

thereunder.

“(7) Disclosure of final determinations.—

“(A) In general.—In the case of any determination—

“(i) in which an extended suspension or revocation of a

preparer tax identification number is imposed under this

subsection, and

“(ii) for which all administrative and judicial appeals

are exhausted,

not later than 30 days following such determination, the

Secretary shall publish such determination on the public

website of the Internal Revenue Service, which shall include

a statement of the facts and circumstances relating to such

determination and the reasons for the determination.

“(B) Extended suspension.—For purposes of subparagraph

(A), the term `extended suspension' means a suspension issued

by the Secretary pursuant to paragraph (5)(A) for a period of

greater than 180 days.

“(8) Preparer tax identification number.—For purposes of

this subsection, the term `preparer tax identification

number' means an identifying number described in subsection

(a)(4)(A).”.

(b) Determinations Regarding Practice Before the

Department.—Section 330 of title 31, United States Code, is

amended—

(1) by redesignating subsection (e) as subsection (f); and

(2) by inserting after subsection (d) the following:

“(e) Disclosure of Final Determinations.—In the case of

any determination under subsection (c) or (d)—

“(1) in which a suspension, disbarment, or censure, or

other penalty is imposed, and

“(2) for which all administrative and judicial appeals are

exhausted,

not later than 30 days following such determination, the

Secretary shall publish such determination on a public

website, which shall include a statement of the facts and

circumstances relating to such determination and the reasons

for the determination.”.

Tax Return Preparers.—

(1) In general.—Section 6103(k) is amended by adding at

the end the following new paragraph:

“(16) Disclosure relating to misconduct by practitioners

and tax return preparers.—Under such procedures as the

Secretary may prescribe, the Secretary may disclose returns

and return information to the extent the Secretary determines

it is necessary to publish determinations pursuant to section

6109(e)(7) and section 330(e) of title 31, United States

Code, provided that such disclosure is redacted to remove—

“(A) any name, address, or other identifying information

with respect to any persons other than the representative or

tax return preparer who is the subject of such determination,

and

“(B) such other information as the Secretary determines

appropriate to protect the privacy of such persons.”.

(2) Conforming amendment.—Section 6103(p)(3)(A) is amended

by striking “or (9)” and inserting “(9), or (16)”.

(d) Requirement to Include Identifying Number for Paid

Preparer of Offer-in-compromise.—

(1) In general.—Section 6109(a) is amended by inserting

after paragraph (4) the following new paragraph:

“(5) Furnishing identifying number for offer-in-

compromise.—Any offer-in-compromise (as described in section

7122), including any required schedule or statement, which

has been prepared by any person for compensation shall

include such identifying number as may be prescribed for

securing proper identification of such person.”.

(2) Penalty.—Section 7122, as amended by this Act, is

amended by adding at the end the following new subsection:

“(i) Failure to Furnish Identifying Number.—

“(1) In general.—

“(A) Penalty.—Any person who prepares an offer-in-

compromise (including any required schedule or statement) for

compensation and who fails to include an identifying number

which complies with section 6109(a)(5) with respect to such

offer-in-compromise shall pay a penalty of $250 for such

failure.

“(B) Non-compliance.—For purposes of this paragraph, an

identifying number shall be deemed to not comply with section

6109(a)(5) if such identifying number—

“(i) is assigned to another person,

“(ii) does not exist,

“(iii) is inactive or expired,

“(iv) has been withdrawn,

“(v) is suspended or has been revoked, or

“(vi) is otherwise invalid for use by the preparer.

“(C) Adjustment for inflation.—

“(i) In general.—In the case of any documents filed

during any calendar year beginning after 2025, the $250

amount in subparagraph (A) shall be increased by an amount

equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year, determined by

substituting `calendar year 2024' for `calendar year 2016' in

subparagraph (A)(ii) thereof.

“(ii) Rounding.—If any amount determined under clause (i)

is not a multiple of $10, such amount shall be rounded to the

nearest multiple of $10.

“(2) Exception.—The penalty imposed under paragraph (1)

shall not apply if it is shown that such failure is due to

reasonable cause and not due to willful neglect.

“(3) Limitation.—

“(A) In general.—The maximum penalty imposed under this

subsection on any person with respect to documents filed

during any calendar year shall not exceed $75,000.

“(B) Adjustment for inflation.—

“(i) In general.—In the case of any penalty imposed

during any calendar year beginning after 2025, the $75,000

amount in subparagraph (A) shall be increased by an amount

equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year, determined by

substituting `calendar year 2024' for `calendar year 2016' in

subparagraph (A)(ii) thereof.

“(ii) Rounding.—If any amount determined under clause (i)

is not a multiple of $1,000, such amount shall be rounded to

the nearest multiple of $1,000.

“(4) Other applicable rules.—Rules similar to the rules

of section 6696 shall apply for purposes of this

subsection.”.

(e) GAO Study and Report on the Exchange of Information

Between the IRS and State Taxation Authorities.—

(1) In general.—Not later than 18 months after the date of

the enactment of this Act, the Comptroller General of the

United States shall conduct a study and submit to Congress a

report on the sharing of information between the Secretary

and State authorities, as authorized under subsections (d)

and (k)(5) of section 6103 of the Internal Revenue Code of

1986, regarding identification numbers issued to paid tax

return preparers and return preparer minimum standards.

(2) Increased information sharing.—The study and report

described in paragraph (1) shall include an analysis of the

impact that

increased information sharing between Federal and State

authorities would have on efforts to enforce minimum

standards on paid tax return preparers.

(3) Audit of internal revenue service.—Section 6103(i)(8)

is amended by adding at the end the following new

subparagraph:

“(D) Application to study conducted under taxpayer

assistance and service act.—For purposes of this paragraph,

the study and report described in section 504(e)(1) of the

Taxpayer Assistance and Service Act shall be deemed to be an

audit of the Internal Revenue Service.”.

(f) Publication of Common Errors and Penalties.—Not later

than 36 months after the date of the enactment of this Act

and annually thereafter, the Commissioner of the Internal

Revenue shall publish on the public website of the Internal

Revenue Service—

(1) the 10 most frequent errors found on tax returns which

were prepared by tax return preparers (as defined in section

7701(a)(36) of the Internal Revenue Code of 1986) during the

most recent calendar year for which data is available, and

(2) with respect to the preceding calendar year, the top 10

reasons that tax return preparers were—

(A) subject to penalties imposed under the Internal Revenue

Code of 1986, or

(B) otherwise disciplined under section 6109 of such Code

or section 330 of title 31, United States Code.

(g) Rule of Construction.—Nothing in this section (or

amendment made by this section) shall be construed to require

the Secretary to eliminate or terminate any existing program

or authority—

(1) which, pursuant to section 330 of title 31, United

States Code, permits a tax return preparer to represent a

taxpayer before the Department of the Treasury in cases in

which such preparer prepared and signed the return of tax, or

(2) for publication of a public database on the website of

the Internal Revenue Service of tax return preparers who have

satisfied the requirements for issuance of a preparer tax

identification number (as defined in section 6109(e)(8) of

the Internal Revenue Code of 1986).

(h) Effective Date.—

(1) In general.—The amendments made by this section shall

take effect on the date which is 180 days after the date of

enactment of this Act.

(2) Transition rules for educational requirements for tax

return preparers.—

(A) Annual filing season program.—In the case of any tax

return preparer who, as of the date of enactment of this Act,

has received a record of completion with respect to the

Annual Filing Season Program established by the Internal

Revenue Service, such tax return preparer shall be deemed to

have satisfied the education requirements of section

6109(e)(3) of the Internal Revenue Code of 1986 (as added by

this section) for the calendar year for which such record of

completion applies.

(B) Approved courses.—In the case of any entity which, as

of the date of enactment of this Act, is approved to provide

continuing education for purposes of the Annual Filing Season

Program established by the Internal Revenue Service, such

entity shall be deemed to satisfy the applicable requirements

under section 6109(e)(3) of the Internal Revenue Code of 1986

until the date on which the Secretary has—

(i) issued such regulations or other guidance as the

Secretary determines necessary for purposes of establishing

standards for educational programs under such section, and

(ii) pursuant to subparagraph (E) of such section,

published a list of educational programs which have been

determined by the Secretary to satisfy the applicable

requirements under such section.

TITLE VI—APPEALS

SEC. 601. AUTHORIZATION FOR OFFICE OF APPEALS TO HIRE

ATTORNEYS.

Subparagraph (B) of section 7803(e)(6) is amended to read

as follows:

“(B) Hiring of counsel.—The Chief of Appeals shall have

the authority to appoint counsel in the Internal Revenue

Service Independent Office of Appeals to report directly to

the Chief of Appeals. Any counsel appointed pursuant to this

subparagraph shall not report to the Chief Counsel for the

Internal Revenue Service and shall not represent the

Government in litigation. Any legal interpretation of counsel

appointed pursuant to this subparagraph shall not be binding

on the Secretary.”.

SEC. 602. AUTHORIZATION FOR OFFICE OF APPEALS TO DIRECT HIRE

CERTAIN INDIVIDUALS.

Section 7803(e)(6) is amended by adding at the end the

following:

“(C) Authority to appoint individuals not employed by

internal revenue service.—The Secretary may utilize direct

hire authority to recruit and appoint qualified applicants,

without regard to any notice or preference requirements, to

positions within the Internal Revenue Service Independent

Office of Appeals, provided that such applicants are not

employees of the Internal Revenue Service engaged in

enforcement functions.”.

SEC. 603. RESPONSES TO CLAIMS FOR REFUND REQUIRED; APPEAL OF

CLAIMS FOR REFUND AUTHORIZED.

(a) In General.—Subsection (l) of section 6402 is amended

to read as follows:

“(l) Explanation of Reason for Refund Disallowance;

Appeals.—

“(1) In general.—Not later than the applicable date, the

Secretary shall review any claim for refund, make a

determination with respect to such claim, and, in the case of

a disallowance of such claim (in whole or in part), provide

the taxpayer with a detailed written explanation for such

disallowance, which shall—

“(A) be mailed to the last known address of the taxpayer,

and

“(B) in the case of any taxpayer entitled to an appeal of

such determination, include instructions for appealing such

disallowance to the Internal Revenue Service Independent

Office of Appeals.

“(2) Failure to make timely determination.—

“(A) In general.—In the case of any claim for refund for

which the Secretary fails to satisfy the requirements of

paragraph (1) by the applicable date, for purposes of

determining interest on any overpayment for any period

subsequent to such date, the overpayment rate (as established

under section 6621(a)(1)) shall be increased by 1 percentage

point.

“(B) Limitation.—With respect to any claim for refund

described in subparagraph (A), the amount of any increase in

interest on any overpayment pursuant to such subparagraph

shall not exceed $500.

“(C) Adjustment for inflation.—

“(i) In general.—In the case of any claim for refund

filed during any calendar year beginning after 2026, the $500

amount in subparagraph (B) shall be increased by an amount

equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year, determined by

substituting `calendar year 2024' for `calendar year 2016' in

subparagraph (A)(ii) thereof.

“(ii) Rounding.—If any amount determined under clause (i)

is not a multiple of $50, such amount shall be rounded to the

nearest multiple of $50.

“(3) Appeals.—

“(A) In general.—Any disallowance of a claim for refund

may, within 30 days after the date such disallowance is

mailed (or, if mailed to an address outside of the United

States, 90 days), be appealed to the Internal Revenue Service

Independent Office of Appeals. Notwithstanding paragraph (4)

of section 6532(a), during the period in which any such

appeal is pending before the Internal Revenue Service

Independent Office of Appeals (and for 30 days thereafter),

the 2-year period in paragraph (1) of such section for filing

suit for refund after disallowance of a claim shall be

suspended.

“(B) Deemed disallowance.—For purposes of subparagraph

(A), in the case of any claim for refund for which the

Secretary has failed to make a determination with respect to

such claim by the date described in paragraph (5)(A), the

taxpayer may elect for such claim to be deemed to have been

disallowed by the Secretary as of such date.

“(4) Frivolous claims.—

“(A) In general.—In the case of any frivolous claim—

“(i) paragraphs (1) and (3) shall not apply, and

“(ii) not later than the applicable date, written

notification of the denial of such claim shall be mailed to

the last known address of the taxpayer.

“(B) Definition.—For purposes of this paragraph, the term

`frivolous claim' means a claim for refund which is based

on—

“(i) a position which the Secretary has identified as

frivolous for purposes of subsection (c) of section 6702, or

“(ii) a position which is substantially similar to a

position described in clause (i).

“(5) Applicable date.—For purposes of this subsection,

the term `applicable date' means, with respect to any claim

for refund—

“(A) the date which is 12 months after the date of receipt

of such claim by the Secretary, or

“(B) such other date as is agreed to by the Secretary and

the taxpayer.”.

(b) Effective Date.—The amendment made by this section

shall apply to any claim for refund received after the date

which is 12 months after the date of enactment of this Act.

SEC. 604. APPEALS OF RETURNED OFFERS.

Section 7122(e) is amended—

(1) by striking paragraph (1) and inserting the following:

“(1) for an independent administrative review of—

“(A) any determination that an offer-in-compromise be

returned to the taxpayer because such offer-in-compromise is

not accepted for processing or is otherwise determined to be

nonprocessable before such determination is communicated to

the taxpayer, and

“(B) any rejection of a proposed offer-in-compromise or

installment agreement made by a taxpayer under this section

or section 6159 before such rejection is communicated to the

taxpayer, and”, and

(2) in paragraph (2), by striking “any rejection of such

offer or agreement” and inserting “any determination

described in paragraph (1)(A) or any rejection described in

paragraph (1)(B)”.

SEC. 605. PURPOSES AND DUTIES OF INDEPENDENT OFFICE OF

APPEALS; RIGHT OF APPEAL CLARIFIED.

(a) In General.—Section 7803(e) is amended—

(1) in paragraph (3)—

(A) in subparagraph (B), by striking “and” at the end,

(B) in subparagraph (C), by striking the period at the end

and inserting “, and”, and

“(D) without exception, evaluates and considers all

hazards of litigation in resolving any case referred to the

Internal Revenue Service Independent Office of Appeals.”,

(2) by striking paragraph (4) and inserting the following

new paragraph:

“(4) Right of appeal.—

“(A) In general.—Except as otherwise provided under this

title, the resolution process described in paragraph (3)

shall be available to all taxpayers with respect to any

determination by the Secretary concerning a Federal tax

controversy regarding subtitles A, B, or C and relating to—

“(i) liability for, or any claim for refund of, any tax,

“(ii) liability for, or any claim for refund of, any

penalty or addition to tax,

“(iii) eligibility for alternatives to collection of a tax

liability, such as an installment agreement or compromise

under section 6159 or 7122,

“(iv) any determination to deny or revoke the tax-exempt

status of an organization, or

“(v) any exercise of discretion by the Secretary with

respect to any determination described in clauses (i) through

(iv).

“(B) Exceptions.—Notwithstanding subparagraph (A), the

Secretary may restrict access to the resolution process

described in paragraph (3) with respect to any appeal—

“(i) to the extent that such appeal is based on a claim

that—

“(I) a law is unconstitutional, unless there is a final

and unreviewable decision rendered by a Federal court that

the relevant provision of such law is unconstitutional, or

“(II) a regulation, notice, or revenue procedure which was

issued by the Secretary is procedurally invalid, unless there

is a final and unreviewable decision rendered by a Federal

court that the relevant provision of such regulation, notice,

or revenue procedure is procedurally invalid,

“(ii) which—

“(I) is based on a position which—

“(aa) a Federal court has determined to be frivolous, and

“(bb) the Secretary has identified as frivolous for

purposes of subsection (c) of section 6702,

“(II) is substantially similar to a position described in

subclause (I), or

“(III) relates to any penalty imposed under such section

with respect to such position,

“(iii) which relates to any matter agreed upon pursuant to

an agreement under section 7121,

“(iv) subject to subparagraph (C), during any period in

which—

“(I) the Secretary is actively investigating whether to

refer the taxpayer to the Attorney General for criminal

prosecution,

“(II) a recommendation made by the Secretary to the

Attorney General for the criminal prosecution of the taxpayer

for any offense connected with the administration or

enforcement of the internal revenue laws is pending, or

“(III) any criminal prosecution of the taxpayer, or of any

other person in a case in which the taxpayer is a witness,

for any offense connected with the administration or

enforcement of the internal revenue laws is pending, or

“(v) with respect to any issue in a case which, based on

the relevant facts and circumstances of such case, the Chief

Counsel for the Internal Revenue Service—

“(I) has designated for litigation, and

“(II) is prepared to proceed with such litigation in a

timely manner.

“(C) Exception for certain criminal prosecutions.—

Subparagraph (B)(iv) shall not apply if the Chief Counsel for

the Internal Revenue Service determines that the resolution

process described in paragraph (3) would not interfere with

the criminal prosecution of a taxpayer.

“(D) Notice to tax-exempt organizations.—In the case of

any determination described in subparagraph (A)(iv), the

Secretary shall provide written notice to the organization of

the availability of the resolution process described in

paragraph (3).

“(E) Definitions.—In this paragraph—

“(i) Federal tax controversy.—The term `Federal tax

controversy' means a dispute described in paragraph (2) or

(3) of section 301.7803-2 of title 26, Code of Federal

Regulations (as in effect on the date of enactment of the

Taxpayer Assistance and Service Act).

“(ii) Procedurally invalid.—The term `procedurally

invalid' means, with respect to any regulation, notice, or

revenue procedure, that such regulation, notice, or revenue

procedure failed to comply with any applicable requirement

under subchapter II of chapter 5 and chapter 7 of title 5,

United States Code (commonly known as the `Administrative

Procedure Act').

“(F) Rule of construction.—Nothing in this paragraph

shall be construed to limit the availability of the

resolution process described in paragraph (3) solely to the

Federal tax controversies described in subparagraph (A).”,

and

(3) in paragraph (5)—

(A) by redesignating subparagraph (D) as subparagraph (E),

and

(B) by inserting after subparagraph (C) the following new

subparagraph:

“(D) Clarification of tax court authority.—In any case

before the Tax Court, the Tax Court may direct the parties to

request referral to the Internal Revenue Service Independent

Office of Appeals in any case in which the Tax Court

determines that the resolution process described in paragraph

(3) is appropriate.”.

TITLE VII—WHISTLEBLOWERS

SEC. 701. STANDARD AND SCOPE OF REVIEW OF WHISTLEBLOWER AWARD

DETERMINATIONS.

(a) In General.—Paragraph (4) of section 7623(b) is

amended—

(1) by striking “appealed to” and inserting “reviewed

by”; and

(2) by adding at the end the following: “Any review by the

Tax Court under the preceding sentence shall be de novo and

shall be based on the administrative record established at

the time of the original determination and any additional

newly discovered or previously unavailable evidence.”.

(b) Conforming Amendment.—The heading of paragraph (4) of

section 7623(b) is amended by striking “Appeal” and

inserting “Review”.

shall apply to petitions under section 7623(b)(4) of the

Internal Revenue Code of 1986 which are pending on, or filed

on or after, the date of the enactment of this Act.

SEC. 702. EXEMPTION FROM SEQUESTRATION.

(a) In General.—Section 255 of the Balanced Budget and

Emergency Deficit Control Act of 1985 (2 U.S.C. 905) is

amended—

(1) by redesignating subsection (k) as subsection (l); and

(2) by inserting after subsection (j) the following:

“(k) Awards to Whistleblowers.—An award authorized under

section 7623 of the Internal Revenue Code of 1986 shall be

exempt from reduction under any order issued under this

part.”.

(b) Applicability.—The amendment made by this section

shall apply to any sequestration order issued under the

Balanced Budget and Emergency Deficit Control Act of 1985 (2

U.S.C. 900 et seq.) after the date of enactment of this Act.

SEC. 703. WHISTLEBLOWER PRIVACY PROTECTIONS.

(a) In General.—Paragraph (6) of section 7623(b) is

amended by adding at the end the following new subparagraph:

“(D) Whistleblower anonymity before the tax court.—

Notwithstanding sections 7458 and 7461, a whistleblower shall

proceed anonymously before the Tax Court for all proceedings

under this section absent a finding by the Tax Court that a

societal interest exists for disclosing the whistleblower's

identity which exceeds the potential harm disclosure could

cause to the whistleblower.”.

(b) Effective Date.—The amendment made by this section

shall apply to petitions filed with the Tax Court which are

pending on, or filed on or after, the date of the enactment

of this Act.

SEC. 704. MODIFICATION OF IRS WHISTLEBLOWER REPORT.

(a) In General.—Section 406(c) of division A of the Tax

Relief and Health Care Act of 2006 is amended by striking

“such use,” in paragraph (1) and inserting “such use

(which shall include a list and descriptions of the top tax

avoidance schemes, not to exceed 10, disclosed by

whistleblowers during such year),”.

(b) Effective Date.— The amendments made by this section

shall apply to reports for fiscal years ending after the

enactment of this Act.

SEC. 705. INTEREST ON WHISTLEBLOWER AWARDS.

(a) In General.—Section 7623(b) is amended by adding at

the end the following new paragraph:

“(7) Interest.—

“(A) In general.—If the Secretary has not provided notice

to an individual described in paragraph (1) of a preliminary

award recommendation before the applicable date, the amount

of any award under this subsection shall include interest

from such date at the overpayment rate under section 6621(a).

“(B) Exception.—No interest shall accrue under this

paragraph after the date on which the Secretary provides

notice to the individual of a preliminary award

recommendation.

“(C) Applicable date.—For purposes of this paragraph, the

applicable date is the date that is 12 months after the first

date on which—

“(i) all of the proceeds resulting from actions subject to

the award recommendation have been collected, and

“(ii) either—

“(I) the statutory period for filing a claim or suit for

refund has expired, or

“(II) the taxpayers subject to the actions and the

Secretary have agreed with finality to the tax or other

liabilities for the periods at issue, and either the

taxpayers have waived the right to file a claim or suit for

refund or any claim or suit for refund has been resolved.”.

(b) Effective Date.—

(1) In general.—The amendments made by this section shall

take effect 180 days after the date of the enactment of this

Act.

(2) Special rule.—If, as of the date described in

paragraph (1)—

(A) the Secretary has not provided notice to the individual

of a preliminary award recommendation as described in

paragraph (7)(A) of section 7623(b) of the Internal Revenue

Code of 1986, as added by this Act, and

(B) the applicable date provided in paragraph (7)(C) of

such section, as so added, has passed,

the applicable date for purposes of such paragraph (7)(C) is

the date that is 12 months after the date described in

paragraph (1).

SEC. 706. CORRECTION REGARDING DEDUCTIONS FOR ATTORNEY'S

FEES.

(a) In General.—Section 62(a)(21)(A)(i) is amended by

striking “7623(b)” and inserting “7623”.

(b) Effective Date.—The amendment made by this section

shall apply to taxable years ending after the date of the

enactment of this Act.

TITLE VIII—HOSTAGES

SEC. 801. POSTPONEMENT OF TAX DEADLINES FOR HOSTAGES AND

INDIVIDUALS WRONGFULLY DETAINED ABROAD.

(a) In General.—Chapter 77 is amended by inserting after

section 7510 the following new section:

“SEC. 7511. TIME FOR PERFORMING CERTAIN ACTS POSTPONED FOR

HOSTAGES AND INDIVIDUALS WRONGFULLY DETAINED

ABROAD.

“(a) Time to Be Disregarded.—

“(1) In general.—The period during which an applicable

individual was unlawfully or wrongfully detained abroad, or

held hostage abroad, shall be disregarded in determining,

under the internal revenue laws, in respect of any tax

liability of such individual—

“(A) whether any of the acts described in section

7508(a)(1) were performed within the time prescribed thereof

(determined without regard to extension under any other

provision of this subtitle for periods after the initial date

(as determined by the Secretary) on which such individual was

unlawfully or wrongfully detained abroad or held hostage

abroad),

“(B) the amount of any interest, penalty, additional

amount, or addition to the tax for periods after such date,

and

“(C) the amount of any credit or refund.

“(2) Application to spouse.—The provisions of paragraph

(1) shall apply to the spouse of any individual entitled to

the benefits of such paragraph.

“(b) Applicable Individual.—

“(1) In general.—For purposes of this section, the term

`applicable individual' means any individual who is—

“(A) a United States national unlawfully or wrongfully

detained abroad, as determined under section 302 of the

Robert Levinson Hostage Recovery and Hostage-Taking

Accountability Act (22 U.S.C. 1741), or

“(B) a United States national taken hostage abroad, as

determined pursuant to the findings of the Hostage Recovery

Fusion Cell (as described in section 304 of the Robert

Levinson Hostage Recovery and Hostage-Taking Accountability

Act (22 U.S.C. 1741b)).

“(2) Information provided to treasury.—For purposes of

identifying individuals described in paragraph (1), not later

than January 1, 2027, and annually thereafter—

“(A) the Secretary of State shall provide the Secretary

with a list of the individuals described in paragraph (1)(A),

as well as any other information necessary to identify such

individuals, and

“(B) the Attorney General, acting through the Hostage

Recovery Fusion Cell, shall provide the Secretary with a list

of the individuals described in paragraph (1)(B), as well as

any other information necessary to identify such individuals.

“(c) Special Rule for Overpayments.—

“(1) In general.—Subsection (a) shall not apply for

purposes of determining the amount of interest on any

overpayment of tax.

“(2) Special rules.—If an individual is entitled to the

benefits of subsection (a) with respect to any return and

such return is timely filed (determined after the application

of such subsection), subsections (b)(3) and (e) of section

6611 shall not apply.

“(d) Modification of Treasury Databases and Information

Systems.—The Secretary shall update, as necessary, any

database or information system of the Department of the

Treasury in order to ensure that the provisions of subsection

(a) are applied with respect to each applicable individual.

“(e) Refund and Abatement of Penalties and Fines Imposed

Prior to Identification as Applicable Individual.—In the

case of any applicable individual—

“(1) for whom any interest, penalty, additional amount, or

addition to the tax in respect to any tax liability for any

taxable year ending during the period described in subsection

(a)(1) was assessed or collected, and

“(2) who was, subsequent to such assessment or collection,

determined to be an individual described in subparagraph (A)

or (B) of subsection (b)(1),

the Secretary shall abate any such assessment and refund any

amount collected to such applicable individual in the same

manner as any refund of an overpayment of tax under section

6402.”.

(b) Clerical Amendment.—The table of sections for chapter

77 is amended by inserting after the item relating to section

7510 the following new item:

“Sec. 7511. Time for performing certain acts postponed for hostages

and individuals wrongfully detained abroad.”.

shall apply to taxable years ending after the date of

enactment of this Act.

SEC. 802. REFUND AND ABATEMENT OF PENALTIES AND FINES PAID BY

ELIGIBLE INDIVIDUALS.

(a) In General.—Section 7511, as added by section 801 of

this Act, is amended by adding at the end the following new

subsection:

“(f) Refund and Abatement of Penalties and Fines Paid by

Eligible Individuals.—

“(1) In general.—

“(A) Establishment.—Not later than January 1, 2027, the

Secretary (in consultation with the Secretary of State and

the Attorney General) shall establish a program to allow any

eligible individual (or the spouse or any dependent (as

defined in section 152) of such individual) to apply for a

refund or an abatement of any amount described in paragraph

(2) (including interest) to the extent such amount was

attributable to the applicable period.

“(B) Identification of individuals.—Not later than

January 1, 2027, the Secretary of State and the Attorney

General, acting through the Hostage Recovery Fusion Cell (as

described in section 304 of the Robert Levinson Hostage

Recovery and Hostage-Taking Accountability Act (22 U.S.C.

1741b)), shall—

“(i) compile a list, based on such information as is

available, of individuals who were applicable individuals

during the applicable period, and

“(ii) provide the list described in clause (i) to the

Secretary.

“(C) Notice.—For purposes of carrying out the program

described in subparagraph (A), the Secretary (in consultation

with the Secretary of State and the Attorney General) shall,

with respect to any individual identified under subparagraph

(B), provide notice to such individual—

“(i) in the case of an individual who has been released on

or before the date of enactment of this subsection, not later

than 90 days after the date of enactment of this subsection,

“(ii) in the case of an individual who is released after

the date of enactment of this subsection, not later than 90

days after the date on which such individual is released,

that such individual may be eligible for a refund or an

abatement of any amount described in paragraph (2) pursuant

to the program described in subparagraph (A).

“(D) Authorization.—

“(i) In general.—Subject to clause (ii), in the case of

any refund described in subparagraph (A), the Secretary shall

issue such refund to the eligible individual in the same

manner as any refund of an overpayment of tax under section

“(ii) Extension of limitation on time for refund.—With

respect to any refund under subparagraph (A)—

“(I) the 3-year period of limitation prescribed by section

6511(a) shall be extended until the end of the 1-year period

beginning on the date that the notice described in

subparagraph (C) is provided to the eligible individual, and

“(II) any limitation under section 6511(b)(2) shall not

apply.

“(2) Eligible individual.—For purposes of this

subsection, the term `eligible individual' means any

applicable individual who, for any taxable year ending during

the applicable period, paid or incurred any interest,

penalty, additional amount, or addition to the tax in respect

to any tax liability for such year of such individual based

on a determination that an act described in section

7508(a)(1) which was not performed by the time prescribed

therefor (without regard to any extensions).

“(3) Applicable period.—For purposes of this subsection,

the term `applicable period' means the period—

“(A) beginning on January 1, 2021, and

“(B) ending on the date of enactment of this

subsection.”.

(b) Effective Date.—The amendment made by this section

shall apply to taxable years ending on or before the date of

enactment of this Act.

TITLE IX—SMALL BUSINESSES

SEC. 901. IMPLEMENTATION OF VOLUNTARY WITHHOLDING AGREEMENTS

FOR PAYMENTS TO INDEPENDENT CONTRACTORS.

(a) In General.—Section 3402(p) is amended by

redesignating paragraph (3) as paragraph (4) and by inserting

after paragraph (2) the following new paragraph:

“(3) Voluntary withholding on certain non-wage

remuneration.—

“(A) In general.—If, at the time a payment of applicable

non-wage remuneration is made to any person, there is a

voluntary agreement in effect between the person making and

the person receiving the payment that the applicable non-wage

remuneration be subject to withholding, then for purposes of

this chapter and so much of subtitle F as relates to this

chapter, such payment shall be treated as if it were a

payment of wages by an employer to an employee.

“(B) Applicable non-wage remuneration.—For purposes of

this subsection, the term `applicable non-wage remuneration'

means remuneration for services performed by an individual

which (without regard to this paragraph) does not constitute

wages.

“(C) Regulations and guidance.—Not later than the date

that is 18 months after the date of the enactment of this

subparagraph, the Secretary shall issue such regulations or

other guidance as may be necessary or appropriate to carry

out the provisions of this section, including such

regulations or guidance for determining the amount to be

deducted and withheld and the types of payments which are

considered to be applicable non-wage remuneration.”.

SEC. 902. EXTENSION OF MAILBOX RULE TO ELECTRONIC SUBMISSIONS

AND PAYMENTS.

(a) In General.—Section 7502(c) is amended—

(1) in the heading, by inserting “and Payment” after

“Filing”,

(2) in paragraph (2)—

(A) in the heading, by striking “; electronic filing”,

and

(B) by striking “and electronic filing”, and

(3) by adding at the end the following:

“(3) Electronic filing and payment.—

“(A) In general.—In the case of any document or payment

which the Secretary has permitted to be filed or made by

electronic means, if such document or payment is—

“(i) authorized to be submitted by the taxpayer using a

permitted electronic means to the agency, officer, or office

to which the document was required to be filed (or payment

was required to be made) on or before the prescribed date (or

within the period required) with respect to such document or

payment, and

“(ii) received (or, in the case of a payment, received and

accounted for) no later than 3 business days after the

prescribed date or period required with respect to such

document or payment,

the date that such document or payment was authorized to be

submitted (as described in clause (i)) shall be deemed to be

the date that such document was filed or such payment was

made.

“(B) Exception.—This paragraph shall not apply to any

payment if the Secretary determines that the taxpayer (or any

intermediary used by the taxpayer) used a system designed

with a principal purpose of delaying the transfer of funds to

the Treasury to derive economic benefit from the period of

such delay.

“(C) Regulations.—Not later than the date which is 1 year

after the date of enactment of the Taxpayer Assistance and

Service Act, the Secretary shall issue such regulations or

other guidance as the Secretary determines necessary to carry

out the purposes of this paragraph, including regulations or

other guidance describing the records or proof sufficient to

demonstrate timely electronic submission.”.

(b) Effective Date.—The amendments made by subsection (a)

shall apply to any document or payment sent on or after the

date which is 1 year after the date of enactment of this Act.

SEC. 903. SPECIFICITY OF THIRD-PARTY CONTACT NOTICES.

(a) In General.—Paragraph (1) of section 7602(c) is

amended—

(1) by striking “and” at the end of subparagraph (A),

(2) by redesignating subparagraph (B) as subparagraph (C)

and by inserting after subparagraph (A) the following new

subparagraph:

“(B) in any case in which the information sought to be

obtained from such other persons could reasonably be provided

by the taxpayer, identifies the item of information intended

to be sought from such persons, and”, and

(3) by amending subparagraph (C), as redesignated by

paragraph (2), to read as follows:

“(C) provides the taxpayer with reasonable opportunity and

a period of not less than 45 days (or more, if the taxpayer

requests additional time and shows reasonable cause) to

respond, including by providing the information described in

subparagraph (B), before contact is made with such other

persons.”.

(b) Exception.—Section 7602(c)(3) is amended—

(1) by redesignating subparagraphs (A), (B), and (C) as

clauses (i), (ii), and (iii), respectively, and by moving

such clauses 2 ems to the right,

(2) by striking “This subsection” and inserting the

following:

“(A) In general.—This subsection”, and

(3) by adding at the end the following new subparagraph:

“(B) Good cause.—For purposes of subparagraph (A)(ii),

good cause includes a reasonable belief that compliance with

this subsection will lead to—

“(i) attempts by any person to conceal, remove, destroy,

or alter records or assets that may be relevant to any tax

examination or collection activity;

“(ii) attempts by any person to prevent other persons,

through intimidation, bribery, or collusion, from

communicating any information that may be relevant to any tax

examination or collection activity; or

“(iii) attempts by any person to flee, or otherwise avoid

testifying or producing records that may be relevant to any

tax examination or collection activity.”.

shall apply to notices provided under section 7602(c) of the

Internal Revenue Code of 1986 after the date that is 12

months after the date of the enactment of this Act.

SEC. 904. MODIFICATION OF ESTIMATED TAX RULES FOR FARMERS AND

FISHERMEN.

(a) In General.—Section 6654(i)(1)(D)(i) is amended by

striking “March 1” and inserting “April 15”.

(b) Effective Date.—The amendment made by this section

shall apply to taxable years beginning after the date of the

enactment of this Act.

SEC. 905. BUSINESS CHILD CARE LIAISON.

Section 7803 is amended by adding at the end the following

new subsection:

“(g) Business Child Care Liaison.—

“(1) In general.—The Commissioner of Internal Revenue

shall appoint within the Internal Revenue Service a Business

Child Care Liaison. The appointment shall be made without

regard to the provisions of title 5, United States Code,

relating to appointments in the competitive service or Senior

Executive Service. At the Commissioner's discretion, the

Commissioner may create an office with additional support

staff to assist the Business Child Care Liaison in carrying

out the duties described in this subsection.

“(2) Duties.—The Business Child Care Liaison shall—

“(A) act as a liaison between the Internal Revenue

Service, employer-provided child care benefit advocates,

businesses considering providing or expanding child care

benefits for their employees, state workforce boards, state

economic development agencies, child care resource and

referral agencies, tribal organizations (as defined in

section 4(l) of the Indian Self-Determination and Education

Assistance Act), and other stakeholders, including child

development experts,

“(B) provide public education and assistance related to

the expansion of employer-provided child care benefits

through the establishment and maintenance of practices that

promote employer-provided child care benefits, including the

use of dependent care assistance programs (as defined in

section 129(d)), on-site or subsidized child care, Dependent

Care Flexible Spending Accounts, child care stipends, near-

site child care partnerships, shared and pooled child-care

arrangements, backup child care, and resource and referral

services,

“(C) issue a fact sheet for use by tax return preparers

listing the different tax benefits for employer-provided

child care and the appropriate rules for each such benefit,

“(D) help facilitate communication between businesses and

the Internal Revenue Service about the operational challenges

and opportunities that exist to improve the use of Federally

incentivized child care benefits such as dependent care

assistance programs (as so defined), Dependent Care Flexible

Spending Accounts, and the credit under section 45F,

“(E) in collaboration with the General Services

Administration, within 120 days of the date of the enactment

of this subsection, establish a link on the homepage of

SAM.gov, which allows website visitors to access a landing

page on the SAM.gov website which is tailored to helping

businesses learn about utilizing dependent care assistance

programs (as so defined), Dependent Care Flexible Spending

Accounts, and the credit under section 45F, resources for

understanding the rules and regulations with these programs,

and the benefits of utilizing these programs on worker

recruitment, retention, productivity, and well-being,

“(F) identify and recommend to Congress potential

legislative and administrative changes to increase practices

that promote employer-provided child care benefits, and

“(G) coordinate with other Federal agencies and officials,

including the Secretary, the Administrator of the Small

Business Administration, the Secretary of Commerce, the

Secretary of Health and Human Services, the Secretary of the

Interior, the Secretary of Labor, and the Secretary of

Education, or the designee of any such individual, and State

and local governments on outreach and education to inform

employers and employees about the possibilities and benefits

of employer-provided child care benefits and particularly

reducing information barriers for small businesses.

“(3) Consultation and input.—The Commissioner of Internal

Revenue shall solicit advice and input from the Business

Child Care Liaison in developing regulations or

interpretations of this title that relate to employer-

provided child care benefits.

“(4) Compensation.—The Business Child Care Liaison shall

be entitled to compensation at the same rate as the rate of

basic pay in effect for a position at level V of the

Executive Schedule under section 5316 of title 5, United

States Code.

“(5) Annual report.—

“(A) In general.—Not later than December 31 of each

calendar year beginning after the date of the enactment of

this subsection, the Business Child Care Liaison shall submit

a report to the Committee on Finance of the Senate and the

Committee on Ways and Means of the House of Representatives

on the activities of the Business Child Care Liaison during

the fiscal year ending during such calendar year.

“(B) Contents.—Each report submitted pursuant to

subparagraph (A) shall—

“(i) summarize the assistance requests received by the

Business Child Care Liaison during the fiscal year ending

during the calendar year of such report,

“(ii) describe the activities conducted by the Business

Child Care Liaison, including the activities described under

subparagraphs (B) and (F) of paragraph (2), and evaluate the

effectiveness of the Business Child Care Liaison during such

fiscal year,

“(iii) describe any significant problems the Business

Child Care Liaison has identified during such fiscal year and

ways to mitigate such problems,

“(iv) contain recommendations for any administrative or

legislative action which may be appropriate to resolve

barriers to, and to incentivize, practices which promote

employer-provided child care benefits, and

“(v) describe progress related to employer-provided child

care benefits in businesses in the United States, including

data updated at least annually on the utilization of

dependent care assistance programs, Dependent Care Flexible

Spending Accounts, and the credit under section 45F, in

particular—

“(I) the number of employers utilizing these tax benefits,

“(II) a breakdown of the size of employers utilizing these

tax benefits, and

“(III) other relevant information as deemed appropriate by

the Business Child Care Liaison.

“(C) Concurrent submission.—The Business Child Care

Liaison shall submit a copy of each report submitted pursuant

to subparagraph (A) to the Commissioner of Internal Revenue,

and any other appropriate official, at the same time such

report is submitted pursuant to such subparagraph.

“(D) Public availability.—The Commissioner shall make a

copy of each report submitted pursuant to subparagraph (A)

available and widely accessible to the public.”.

TITLE X—MISCELLANEOUS

SEC. 1001. AUTHORITY FOR REDISCLOSURE OF CERTAIN TAX

INFORMATION RELATED TO EDUCATION LOANS TO THE

CONGRESSIONAL BUDGET OFFICE.

(a) In General.—Section 6103(l)(13)(D) is amended by

adding at the end the following new clause:

“(vii) Redisclosure to the congressional budget office.—

Authorized persons may, upon written request by the Director

of the Congressional Budget Office to the Secretary of

Education, redisclose return information received under

subparagraphs (A), (B), and (C) to officers and employees of

the Congressional Budget Office for the purpose of, but only

to the extent necessary in, carrying out the purposes

described in subclause (III) of clause (i).”.

(b) Conforming Amendment.—Section 6103(l)(13)(F) is

amended by striking “(iv) (v), or (vi)” and inserting

“(iv), (v), (vi), or (vii)”.

shall apply to disclosures made after the date of the

enactment of this Act.

(d) Reports.—The Secretary of Education shall annually

submit a written report to the Secretary of the Treasury—

(1) regarding redisclosures of return information under

subparagraph (D)(vii) of section 6103(l)(13) of the Internal

Revenue Code of 1986 (as added by this section), including

the number of such redisclosures; and

(2) regarding any unauthorized use, access, or disclosure

of return information disclosed under such section.

SEC. 1002. AUTHORIZATION TO REQUIRE LARGE PARTNERSHIPS TO

FILE ON MAGNETIC MEDIA.

(a) In General.—Section 6011(e) is amended—

(1) by striking the first paragraph (6), as added by

section 2301(b) of the Taxpayer First Act, and inserting the

following:

“(6) Partnerships required to file on magnetic media.—

Notwithstanding paragraph (2)(A), the Secretary shall require

a partnership to file returns on magnetic media if, at the

close of the partnership's taxable year—

“(A) the partnership has more than 50 partners, or

“(B) the value of the partnership's assets equals or

exceeds $1,000,000, as determined under regulations

prescribed by the Secretary.”, and

(2) by redesignating the second paragraph (6), as added by

section 202(d) of the Setting Every Community Up for

Retirement Enhancement Act of 2019, as paragraph (7).

(b) Effective Date.—The amendments made by this section

shall apply to returns filed on or after January 1 of the

first calendar year beginning after the date of enactment of

this Act.

SEC. 1003. LIMITATION PERIOD NOT EXTENDED FOR VICTIMS OF

PREPARER FRAUD.

(a) In General.—Section 6501(c)(1) is amended—

(1) by inserting “by the taxpayer” after “intent”, and

(2) by adding at the end the following new sentence: “For

purposes of this paragraph, in the case of a joint return

under section 6013, intent by either spouse to evade tax with

respect to such return shall be treated as intent by the

taxpayer, and this paragraph shall apply to both spouses.”.

(b) Effective Date.—The amendments made by this section

shall apply to assessments made or proceedings begun after

the date of enactment of this Act.

SEC. 1004. TECHNICAL AMENDMENT RELATED TO THE DISASTER

RELATED EXTENSION OF DEADLINES ACT.

(a) In General.—Subsection (f) of section 7508A (as added

by the Disaster Related Extension of Deadlines Act) is

redesignated as subsection (g).

(b) Effective Date.—The amendment made by this section

shall take effect as if included in section 2(a) of the

Disaster Related Extension of Deadlines Act.

SEC. 1005. TIME FOR FILING CERTAIN INFORMATION RETURNS.

(a) In General.—Section 6071(b) is amended—

(1) by striking “Returns made under” and inserting the

following:

“(1) In general.—Returns made under”, and

(2) by adding at the end the following new paragraph:

“(2) Special rule for certain returns.—

“(A) In general.—In the case of any return to which this

paragraph applies and which is filed electronically, such

return shall be filed on or before January 31 of the year

following the calendar year to which such return relates.

“(B) Returns.—This paragraph shall apply to any return

required to be filed under section 6041 (other than returns

and statements required to be filed with respect to

nonemployee compensation), 6042, 6047(d), 6049, 6050F, or

6050W.”.

(b) IRA Reporting.—Section 408(i)(1) is amended by

inserting “(but not later than January 31 of the calendar

year following the calendar year to which reports relate in

the case of reports relating to distributions)” after “at

such time”.

shall apply to returns relating to calendar years after

December 31, 2027.

SEC. 1006. MODIFICATIONS TO PENALTIES FOR UNAUTHORIZED

DISCLOSURES OF TAXPAYER INFORMATION.

(a) Criminal Penalties.—

(1) In general.—Paragraphs (1), (2), (3), (4), and (5) of

section 7213(a) are each amended by striking “$5,000, or

imprisonment of not more than 5 years” each place it appears

and inserting “$250,000, or imprisonment of not more than 7

years”.

(2) Failure of contractors to maintain safeguards.—

(A) In general.—Part I of subchapter A of chapter 75 of

subtitle F is amended by inserting after section 7213A the

following new section:

“SEC. 7213B. FAILURE OF IRS CONTRACTORS TO MAINTAIN

SAFEGUARDS.

“(a) In General.—In the case of a contractor of the

Internal Revenue Service that willfully fails to implement or

enforce any applicable requirement under section 6103 (or

regulations prescribed thereunder) to protect the

confidentiality of returns or return information, if such

failure results in the unauthorized disclosure of returns or

return information, such contractor shall be guilty of a

felony and, upon conviction thereof, shall be fined the

greater of—

“(1) $500,000, or

“(2) an amount equal to 25 percent of the specific

contract with the Internal Revenue Service under which such

contractor was provided access to the returns or return

information related to the unauthorized disclosure.

“(b) Definitions.—For purposes of this section, the term

`contractor of the Internal Revenue Service' means any person

described in section 6103(n) (including any officer or

employee of such person) in connection with a written

contract with the Internal Revenue Service.”.

(B) Clerical amendment.—The table of sections for part I

of subchapter A of chapter 75 of subtitle F is amended by

inserting after the item relating to section 7213A the

following new item:

“Sec. 7213B. Failure of IRS contractors to maintain safeguards.”.

(i) Section 6103(e)(11) is amended by inserting “7213B,”

after “7213A,”.

(ii) Section 6105(d) is amended by inserting “7213B,”

after “7213A,”.

(iii) Section 7431(e) is amended by striking the first

sentence and inserting the following: “If any person is

criminally charged by indictment or information with—

“(1) inspection or disclosure of a taxpayer's return or

return information in violation of—

“(A) paragraph (1) or (2) of section 7213(a),

“(B) section 7213A(a), or

“(C) subparagraph (B) of section 1030(a)(2) of title 18,

United States Code, or

“(2) failure to protect the confidentiality of returns or

return information which results in the unauthorized

disclosure of the taxpayer's return or return information in

violation of section 7213B(a),

the Secretary shall notify such taxpayer as soon as

practicable of such inspection or disclosure.”.

(iv) Section 7513(c) is amended by striking “section

7213” and inserting “sections 7213 and 7213B”.

(b) Civil Damages.—Section 7431(c)(1)(A) is amended by

striking “$1,000” and inserting “$5,000”.

shall apply to disclosures or inspections made after the date

of the enactment of this Act.

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