SECTION 1. INVESTIGATION OF INTERNAL REVENUE SERVICE ABUSE OF 
              TAXPAYERS' RIGHTS.

    (a) Findings.--The Congress hereby finds that--
            (1) although generally IRS employees perform their duties 
        in a competent and professional manner, many instances have 
        been reported concerning IRS abuse of taxpayers' rights, 
        including the improper targeting of taxpayers or groups of 
        taxpayers for political purposes;
            (2) there is a need to enable the public to scrutinize the 
        activities of the IRS and to ensure that the IRS is subject to 
        public accountability;
            (3) there is a need to improve the oversight of the IRS;
            (4) there is a need for procedures by which Congress can 
        obtain necessary information to effectively perform its 
        oversight role on behalf of the public; and
            (5) there currently exists no effective reporting or 
        monitoring mechanism to assist Congress in safeguarding 
        taxpayer rights.
    (b) Purpose.--It is the purpose of this Act to improve oversight by 
the Congress of the IRS, to safeguard taxpayer rights, to discourage 
abuse of taxpayer rights, to encourage reporting of taxpayer abuse, to 
uncover past instances of such abuse so that they do not occur in the 
future, and to provide independent monitoring of IRS actions taken to 
prevent taxpayer abuse.
    (c) Reporting Responsibilities of Internal Revenue Service.--
            (1) Annual reports.--During each calendar year beginning 
        after the date of the enactment of this Act, the Secretary of 
        the Treasury shall submit to the Congress a compliance report 
        on--
                    (A) the nature of its program to prevent abuses of 
                taxpayers' rights by the Internal Revenue Service, and 
                to comply with the Taxpayer Bill of Rights,
                    (B) the implementation of such program,
                    (C) the effectiveness of such program and the 
                evidence on the basis of which such analysis is made, 
                and
                    (D) detailed descriptions of the types of taxpayer 
                abuse cases that have occurred and IRS measures 
                instituted to correct such abuses and prevent their 
                recurrence.
        Such report shall be submitted to the Committee on Ways and 
        Means of the House of Representatives and the Committee on 
        Finance of the Senate by October 1 of each year.
    (d) Investigation by General Accounting Office.--
            (1) In general.--The Comptroller General--
                    (A) shall conduct a full and complete investigation 
                of past instances in which the Internal Revenue Service 
                has abused taxpayers' rights, has been used for 
                political purposes, has improperly targeted taxpayers 
                (or groups of taxpayers) for investigation, has 
                promoted overzealous agents on the strength of 
                collections, has maintained illegal dossiers on 
                taxpayers, has conducted investigations for political 
                purposes, has retaliated against IRS employees who have 
                reported IRS misconduct, or has engaged in other 
                significant misconduct; and
                    (B) shall provide an assessment and evaluation of 
                the implementation and effectiveness of the program of 
                the Internal Revenue Service to prevent such abuses 
                from occurring in the future.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Comptroller General shall submit to 
        the Oversight Subcommittee of the Committee on Ways and Means 
        of the House of Representatives and the Oversight Committee of 
        the Committee on Finance of the Senate, a report on the 
        investigation conducted under paragraph (1), together with such 
        recommendations as he may deem advisable. The Comptroller 
        General shall have access to any IRS return information he 
        deems necessary to perform his duties under this section. 
        Nothing in this section shall be construed to permit the 
        Comptroller General to make public the names or similar 
        identifying information of any taxpayer.
            (3) Access to returns and return information.--The purposes 
        for which returns and return information may be open to 
        inspection or disclosure under section 6103(i)(7)(A) of the 
        Internal Revenue Code of 1986 (relating to disclosure to 
        General Accounting Office) shall include the purposes of 
        carrying out the Comptroller General's duties as specified in 
        this section.
    (e) Definitions.--For purpose of this section--
            (1) the term ``Service'' or ``IRS'' refer to the Internal 
        Revenue Service of the Department of Treasury; and
            (2) the term ``employee'' includes any IRS officer or 
        employee.

SEC. 2. ESTABLISHMENT OF POSITION OF TAXPAYER ADVOCATE WITHIN INTERNAL 
              REVENUE SERVICE.

    (a) General Rule.--Section 7802 of the Internal Revenue Code of 
1986 (relating to Commissioner of Internal Revenue; Assistant 
Commissioner (Employee Plans and Exempt Organizations)) is amended by 
adding at the end thereof the following new subsection:
    ``(d) Office of Taxpayer Advocate.--
            ``(1) In general.--There is established in the Internal 
        Revenue Service an office to be known as the `Office of the 
        Taxpayer Advocate'. Such office, including all problem 
        resolution officers, shall be under the supervision and 
        direction of an official to be known as the `Taxpayer Advocate' 
        who shall be appointed by the President by and with the advice 
        and consent of the Senate, and who shall report directly to the 
        Commissioner of Internal Revenue. The Taxpayer Advocate shall 
        be entitled to compensation at the same rate as the Chief 
        Counsel for the Internal Revenue Service.
            ``(2) Functions of office.--
                    ``(A) In general.--It shall be the function of the 
                Office of Taxpayer Advocate to--
                            ``(i) assist taxpayers in resolving 
                        problems with the Internal Revenue Service,
                            ``(ii) identify areas in which taxpayers 
                        have problems in dealings with the Internal 
                        Revenue Service,
                            ``(iii) to the extent possible, propose 
                        changes in the administrative practices of the 
                        Internal Revenue Service to mitigate problems 
                        identified under clause (ii), and
                            ``(iv) identify potential legislative 
                        changes which may be appropriate to mitigate 
                        such problems.
                    ``(B) Annual reports.--
                            ``(i) Objectives.--Not later than October 
                        31 of each calendar year after 1992, the 
                        Taxpayer Advocate shall report to the Committee 
                        on Ways and Means of the House of 
                        Representatives and the Committee on Finance of 
                        the Senate on the objectives of the Taxpayer 
                        Advocate for the following calendar year. Any 
                        such report shall contain full and substantive 
                        analysis, in addition to statistical 
                        information.
                            ``(ii) Activities.--Not later than June 30 
                        of each calendar year after 1992, the Taxpayer 
                        Advocate shall report to the Committee on Ways 
                        and Means of the House of Representatives and 
                        the Committee on Finance of the Senate on the 
                        activities of the Taxpayer Advocate during the 
                        fiscal year ending during such calendar year. 
                        Any such report shall contain full and 
                        substantive analysis, in addition to 
                        statistical information, and shall--
                                    ``(I) identify the initiatives the 
                                Taxpayer Advocate has taken on 
                                improving taxpayer services and 
                                Internal Revenue Service 
                                responsiveness,
                                    ``(II) contain recommendations 
                                received from individuals with the 
                                authority to issue taxpayer assistance 
                                orders under section 7811,
                                    ``(III) contain a summary of at 
                                least 20 of the most serious problems 
                                encountered by taxpayers, including a 
                                description of the nature of such 
                                problems,
                                    ``(IV) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action has 
                                been taken and the result of such 
                                action,
                                    ``(V) contain an inventory of the 
                                items described in subclauses (I), 
                                (II), and (III) for which action 
                                remains to be completed and the period 
                                during which each item has remained on 
                                such inventory,
                                    ``(VI) contain an inventory of the 
                                items described in subclauses (II) and 
                                (III) for which no action has been 
                                taken, the period during which each 
                                item has remained on such inventory, 
                                the reasons for the inaction, and 
                                identify any Internal Revenue Service 
                                official who is responsible for such 
                                inaction,
                                    ``(VII) identify any Taxpayer 
                                Assistance Order which was not honored 
                                by the Internal Revenue Service in a 
                                timely manner, as specified under 
                                section 7811(b),
                                    ``(VIII) contain recommendations 
                                for such administrative and legislative 
                                action as may be appropriate to resolve 
                                problems encountered by taxpayers, and
                                    ``(IX) include such other 
                                information as the Taxpayer Advocate 
                                may deem advisable.
                            ``(iii) Report to be submitted directly.--
                        Each report required under this subparagraph 
                        shall be provided directly to the Committees 
                        referred to in clauses (i) and (ii) without any 
                        prior review or comment from the Commissioner 
                        of the Internal Revenue Service, the Secretary 
                        of the Treasury, any other officer or employee 
                        of the Department of the Treasury, or the 
                        Office of Management and Budget.
            ``(3) Responsibilities of Commissioner of Internal Revenue 
        Service.--The Commissioner of Internal Revenue shall establish 
        procedures requiring a formal response to all recommendations 
        submitted to the Commissioner by the Taxpayer Advocate.''
    (b) Conforming Amendments.--
            (1) Section 7811 of such Code (relating to taxpayer 
        assistance orders) is amended--
                    (A) by striking ``the Office of Ombudsman'' in 
                subsection (a) and inserting ``the Office of the 
                Taxpayer Advocate'', and
                    (B) by striking ``Ombudsman'' each place it appears 
                (including in the headings of subsections (e) and (f)) 
                and inserting ``Taxpayer Advocate''.
            (2) The heading for section 7802 of such Code is amended to 
        read as follows:

``SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; ASSISTANT COMMISSIONERS; 
              TAXPAYER ADVOCATE.''

            (3) The table of sections for subchapter A of chapter 80 of 
        subtitle F is amended by striking the item relating to section 
        7802 and inserting the following new item:

                              ``Sec. 7802. Commissioner of Internal 
                                        Revenue; Assistant 
                                        Commissioners; Taxpayer 
                                        Advocate.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 3. REPORTS ON TAXPAYER-RIGHTS EDUCATION PROGRAM.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary of the Treasury or his delegate shall submit a 
report to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate on the scope 
and content of the Internal Revenue Service's taxpayer-rights education 
program for its officers and employees. Not later than 8 months after 
the date of the enactment of this Act, such Secretary shall submit a 
report to such Committees on the effectiveness of the program referred 
to in the preceding sentence.

SEC. 4. BIENNIAL REPORTS ON MISCONDUCT BY INTERNAL REVENUE SERVICE 
              EMPLOYEES.

    During December of 1993 and during December of each second calendar 
year thereafter, the Secretary of the Treasury or his delegate shall 
report to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate on all cases 
involving complaints about misconduct of Internal Revenue Service 
employees and the disposition of such complaints.
Requires the Secretary of the Treasury to report to specified committees annually on the program to prevent abuses of taxpayers' rights by the Internal Revenue Service (IRS). 
Requires the Comptroller General to report to specified congressional committees on:  (1) an investigation of past instances in which the Service has abused taxpayers' rights or has engaged in other significant misconduct; and (2) an assessment and evaluation of the implementation and effectiveness of the program to prevent such abuses. 
Provides access to returns and return information by the Comptroller General to carry out the purposes of this Act. 
Amends the Internal Revenue Code to establish in the IRS the Office of Taxpayers' Advocate, headed by the Taxpayers' Advocate.  Requires the Office to:  (1) assist taxpayers in resolving problems with the IRS; (2) identify areas in which taxpayers have problems in dealings with the IRS; (3) propose changes in the administrative practices of the IRS to mitigate such problems; and (4) identify potential legislative changes which may be appropriate to mitigate such problems.   Requires the Taxpayers' Advocate to annually report to specified congressional committees on Office activities. 
Requires the Commissioner of Internal Revenue to establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the Taxpayers' Advocate. 
Requires the Secretary of the Treasury to report to specified congressional committees on the effectiveness of the taxpayer-rights education program for its officers and employees. 
Requires the Secretary to report biennially to specified congressional committees on all cases involving complaints about misconduct of IRS employees and the disposition of the complaints.
To amend the Internal Revenue Code of 1986 to require an investigation of Internal Revenue Service abuse of taxpayers' rights, to safeguard taxpayer rights, to monitor the effectiveness of the Internal Revenue Service's program for the prevention of taxpayer abuse, and for other purposes.