Strengthening Taxpayer Rights Act of 2017

Summary: Strengthening Taxpayer Rights Act of 2017  This bill modifies requirements for the preparation of tax returns and Internal Revenue Service (IRS) procedures for the collection of taxes.  The bill amends the Internal Revenue Code to:   apply tax preparer penalties for the understatement of a taxpayer's liability and other violations to other submissions to the IRS, in addition to tax returns or refund claims;  increase tax preparer penalties for gross misconduct and other violations; require identifying numbers to be included for all submissions to the IRS by tax return preparers (limited to tax returns or refund claims under current law);   limit the disclosure of taxpayer information to the express purpose for which the taxpayer granted consent;  provide for de novo review by the Tax Court of IRS innocent spouse relief determinations;   specify that the determination of whether or not a debt has been discharged may not be based solely on a nonpayment period; and restrict the authority of the IRS to use a levy after the collection period has expired.   The bill amends the Fair Credit Reporting Act to reduce from seven years to two years the period that a tax lien may appear on a taxpayer's credit report. 

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Strengthening 
Taxpayer Rights Act of 2017''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986, as amended.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.
                  TITLE I--PREPARATION OF TAX RETURNS

Sec. 101. Preparer penalties with respect to preparation of returns and 
                            other submissions.
Sec. 102. Limit redisclosures and uses of consent-based disclosures of 
                            tax return information.
                   TITLE II--IMPROVING IRS PROCEDURES

Sec. 201. Modification of requirements relating to tax lien information 
                            contained in consumer credit reports.
Sec. 202. De novo tax court review of innocent spouse relief 
                            determinations.
Sec. 203. Removal of nonpayment period from list of triggering events 
                            for returns relating to cancellation of 
                            indebtedness.
Sec. 204. Special rules for levies that attach to a fixed and 
                            determinable right.

                  TITLE I--PREPARATION OF TAX RETURNS

SEC. 101. PREPARER PENALTIES WITH RESPECT TO PREPARATION OF RETURNS AND 
              OTHER SUBMISSIONS.

    (a) Inclusion of Other Submissions in Penalty Provisions.--
            (1) Understatement of taxpayer's liability by tax return 
        preparer.--
                    (A) In general.--Section 6694 is amended by 
                striking ``return or claim of refund'' each place it 
                appears and inserting ``return, claim of refund, or 
                other submission to the Secretary''.
                    (B) Conforming amendments.--Section 6694, as 
                amended by paragraph (1), is amended by striking 
                ``return or claim'' each place it appears and inserting 
                ``return, claim, or other submission to the 
                Secretary''.
            (2) Increase in penalty in case of gross misconduct.--
        Subsection (b) of section 6694 is amended by adding at the end 
        the following new paragraph:
            ``(4) Increase in penalty in case of gross misconduct.--In 
        the case of an understatement to which this section applies 
        that is attributable to the tax return preparer's making a 
        false or fraudulent return or claim for refund without the 
        taxpayer's knowledge, subsection (a) shall be applied by 
        substituting `100 percent of the amount of the understatement' 
        for `50 percent of the amount derived (or to be derived) by the 
        tax return preparer with respect to the return or claim'. This 
        penalty shall be in addition to any other penalties provided by 
        law.''.
            (3) Other assessable penalties.--
                    (A) In general.--Section 6695 is amended by 
                striking ``return or claim for refund'' each place it 
                appears and inserting ``return, claim for refund, or 
                other submission''.
                    (B) Conforming amendments.--Section 6695, as 
                amended by paragraph (1), is amended by striking 
                ``return or claim'' each place it appears and inserting 
                ``return, claim, or other submission''.
    (b) Increase in Certain Other Assessable Penalty Amounts.--
            (1) In general.--Subsections (a), (b), and (c) of section 
        6695 are each amended by striking ``$50'' and inserting 
        ``$1,000''.
            (2) Removal of annual limitation.--Subsections (a), (b), 
        and (c) of section 6695 are each amended by striking the last 
        sentence thereof.
    (c) Review by the Treasury Inspector General for Tax 
Administration.--Subparagraph (A) of section 7803(d)(2) is amended by 
striking ``and'' at the end of clause (iii), by striking the period at 
the end of clause (iv) and inserting ``, and'', and by adding at the 
end the following new clause:
                            ``(v) a summary of the penalties assessed 
                        and collected during the reporting period under 
                        sections 6694 and 6695 and under the 
                        regulations promulgated under section 330 of 
                        title 31, United States Code, and a review of 
                        the procedures by which violations are 
                        identified and penalties are assessed under 
                        those sections,''.
    (d) Additional Certification on Documents Other Than Returns.--
            (1) Identifying number required for all submissions to the 
        irs by tax return preparers.--The first sentence of paragraph 
        (4) of section 6109(a) is amended by striking ``return or claim 
        for refund'' and inserting ``return, claim for refund, 
        statement, or other document''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to any return, claim for refund, or submission to 
        the Secretary that is filed after the date of the enactment of 
        this Act.
    (e) Coordination With Section 6060(a).--The Secretary of the 
Treasury shall coordinate the requirements under the regulations 
promulgated under sections 330 and 330A of title 31, United States 
Code, with the return requirements of section 6060 of the Internal 
Revenue Code of 1986.
    (f) Effective Date.--The regulations required by this section shall 
be prescribed not later than one year after the date of the enactment 
of this Act.

SEC. 102. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF 
              TAX RETURN INFORMATION.

    (a) In General.--Subsection (c) of section 6103 is amended by 
striking ``However, return'' and inserting the following: ``Persons 
designated by the taxpayer to receive return information shall not use 
the information for any purpose other than the express purpose for 
which consent was granted and shall not disclose return information to 
any other person without the express permission of, or request by, the 
taxpayer. Return''.
    (b) Effective Date.--The amendment made by this section shall apply 
to disclosures after the date of the enactment of this Act.

                   TITLE II--IMPROVING IRS PROCEDURES

SEC. 201. MODIFICATION OF REQUIREMENTS RELATING TO TAX LIEN INFORMATION 
              CONTAINED IN CONSUMER CREDIT REPORTS.

    (a) In General.--Paragraph (3) of section 605(a) of the Fair Credit 
Reporting Act (15 U.S.C. 1681c(a)(3)) is amended to read as follows:
            ``(3) Tax liens.--The following tax liens:
                    ``(A) Any tax lien released pursuant to section 
                6325(a) of the Internal Revenue Code of 1986 not more 
                than 2 years after the date that the notice of such 
                lien was filed.
                    ``(B) Any tax lien released pursuant to section 
                6325(a) of such Code--
                            ``(i) more than 2 years after the date that 
                        the notice of such lien was filed, and
                            ``(ii) more than 2 years before the report.
                    ``(C) Any tax lien if--
                            ``(i) the notice of such lien was not 
                        refiled during the required refiling period (as 
                        defined in section 6323(g)(3) of such Code), 
                        and
                            ``(ii) such period ends more than 6 years 
                        before the report.
                    ``(D) Any tax lien the notice of which is withdrawn 
                pursuant to section 6323(j)(1) of such Code.
                    ``(E) Any tax lien released pursuant to section 
                6326(b) of such Code if the notice of such lien was 
                erroneously filed.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 202. DE NOVO TAX COURT REVIEW OF INNOCENT SPOUSE RELIEF 
              DETERMINATIONS.

    (a) In General.--Section 6015 is amended--
            (1) in subsection (e), by adding at the end the following 
        new paragraph:
            ``(6) Standard and scope of review.--Any review of a 
        determination made under this section shall be reviewed de novo 
        by the Tax Court and shall be based upon--
                    ``(A) the administrative record established at the 
                time of the determination, and
                    ``(B) any additional newly discovered or previously 
                unavailable evidence.''; and
            (2) by amending subsection (f) to read as follows:
    ``(f) Equitable Relief.--
            ``(1) In general.--Under procedures prescribed by the 
        Secretary, if--
                    ``(A) taking into account all the facts and 
                circumstances, it is inequitable to hold the individual 
                liable for any unpaid tax or any deficiency (or any 
                portion of either), and
                    ``(B) relief is not available to such individual 
                under subsection (b) or (c),
        the Secretary may relieve such individual of such liability.
            ``(2) Limitation.--A request for equitable relief under 
        this subsection may be made with respect to any portion of any 
        liability that--
                    ``(A) has not been paid, provided that such request 
                is made before the expiration of the applicable period 
                of limitation under section 6502, or
                    ``(B) has been paid, provided that such request is 
                made during the period in which the individual could 
                submit a timely claim for refund or credit of such 
                payment.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to petitions or requests filed or pending on and after the date 
of the enactment of this Act.

SEC. 203. REMOVAL OF NONPAYMENT PERIOD FROM LIST OF TRIGGERING EVENTS 
              FOR RETURNS RELATING TO CANCELLATION OF INDEBTEDNESS.

    (a) In General.--Subsection (c) of section 6050P is amended by 
adding at the end the following new paragraph:
            ``(4) Determining date of discharge.--Whether an entity has 
        discharged the indebtedness of any person shall not be 
        determined based solely on the passage of a specified period of 
        time during which the entity has not received payment on such 
        indebtedness.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to discharges of indebtedness after the date of the enactment of 
this Act.

SEC. 204. SPECIAL RULES FOR LEVIES THAT ATTACH TO A FIXED AND 
              DETERMINABLE RIGHT.

    (a) In General.--Section 6331 is amended by redesignating 
subsection (l) as subsection (m) and by inserting after subsection (k) 
the following new subsection:
    ``(l) Limitation on Levy After Expiration of Collection Period.--
            ``(1) Penalties and interest.--In the case of a levy that 
        attaches to a fixed and determinable right to payments or other 
        property, penalties, additions to tax, and interest shall not 
        accrue after the expiration of the period of limitations 
        provided in section 6502.
            ``(2) Retirement and disability payments.--In the case of a 
        levy on benefits under title II of the Social Security Act, 
        benefits under a plan on account of a disability, or retirement 
        benefits or amounts held in a retirement plan, such levy is not 
        enforceable with respect to such benefits or amounts after the 
        expiration of the period of limitations provided in section 
        6502 unless the taxpayer has committed a flagrant act (as 
        defined in section 6334(f)(2)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to levies served after the date of the enactment of this Act.