I 

114TH CONGRESS 

1ST SESSION H. R. 4128 

To amend the Internal Revenue Code of 1986 to provide taxpayer protection 

and assistance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 30, 2015 

Mr. BECERRA introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

taxpayer protection and assistance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Taxpayer Rights Act of 2015’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 


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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986, as amended. 

3 (c) TABLE OF CONTENTS.—The table of contents of 

4 this Act is as follows: 

Sec. 1. Short title; etc. 

TITLE I—TAXPAYER RIGHTS 

Sec. 101. Statement of taxpayer rights. 

TITLE II—PREPARATION OF TAX RETURNS 

Sec. 201. Programs for the benefit of low-income taxpayers. 

Sec. 202. Regulation of tax return preparers. 

Sec. 203. Preparer penalties with respect to preparation of returns and other 

submissions. 

Sec. 204. Clarification of enrolled agent credentials. 

Sec. 205. Limit redisclosures and uses of consent-based disclosures of tax return information. 

TITLE III—IMPROVING IRS PROCEDURES 

Sec. 301. Modifications to lien notice filing procedures. 

Sec. 302. Modification of requirements relating to tax lien information contained in consumer credit reports. 

Sec. 303. De novo tax court review of innocent spouse relief determinations. 

Sec. 304. Release of Federal tax levies which cause business hardship. 

Sec. 305. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness. 

Sec. 306. Special rules for levies that attach to a fixed and determinable right. 

Sec. 307. Rules related to levies on qualified retirement plans. 

Sec. 308. Taxpayer rights training. 

Sec. 309. Notice and opportunity for hearing by the Office of Appeals. 

TITLE IV—NATIONAL TAXPAYER ADVOCATE 

Sec. 401. Modifications relating to taxpayer assistance orders. 

Sec. 402. Taxpayer advocate directives. 

Sec. 403. Office of the Taxpayer Advocate Access to Administrative Files. 

Sec. 404. Office of the Taxpayer Advocate operations during a lapse in appropriations. 

5 TITLE I—TAXPAYER RIGHTS 

6 SEC. 101. STATEMENT OF TAXPAYER RIGHTS. 

7 (a) IN GENERAL.—Chapter 77 is amended by adding 

8 at the end the following new section: 


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1 ‘‘SEC. 7529. STATEMENT OF TAXPAYER RIGHTS. 

2 ‘‘(a) IN GENERAL.—The Secretary shall— 

3 ‘‘(1) in consultation with the National Taxpayer 

4 Advocate, publish a summary statement of primary 

5 taxpayer rights (as described in subsection (b)), and 

6 ‘‘(2) in coordination with the Commissioner of 

7 the Internal Revenue Service, ensure that the em8 ployees of the Internal Revenue Service are familiar 

9 with and act in accordance with such rights. 

10 ‘‘(b) STATEMENT OF RIGHTS.—The statement of 

11 rights is as follows: 

12 ‘‘(1) Right to be informed. 

13 ‘‘(2) Right to quality service. 

14 ‘‘(3) Right to pay no more than the correct 

15 amount of tax. 

16 ‘‘(4) Right to challenge the position of the In17 ternal Revenue Service and be heard. 

18 ‘‘(5) Right of appeal from a decision of the In19 ternal Revenue Service in an independent forum. 

20 ‘‘(6) Right to finality. 

21 ‘‘(7) Right to privacy. 

22 ‘‘(8) Right to confidentiality. 

23 ‘‘(9) Right to retain representation. 

24 ‘‘(10) Right to a fair and just tax system, in25 cluding access to the Taxpayer Advocate Service.’’. 


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1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for chapter 77 is amended by adding at the end the fol3 lowing new item: 

‘‘Sec. 7529. Statement of taxpayer rights.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect 180 days after the date of 

6 the enactment of this Act. 

7 TITLE II—PREPARATION OF TAX 

8 RETURNS 

9 SEC. 201. PROGRAMS FOR THE BENEFIT OF LOW-INCOME 

10 TAXPAYERS. 

11 (a) GRANTS TO FACILITATE NATIONWIDE AVAIL12 ABILITY OF VOLUNTEER INCOME TAX ASSISTANCE FOR

13 LOW-INCOME AND UNDERSERVED POPULATIONS.— 

14 (1) IN GENERAL.—The Secretary, through the 

15 Internal Revenue Service, shall establish a Commu16 nity Volunteer Income Tax Assistance Matching 

17 Grant Program (hereinafter in this subsection re18 ferred to as the ‘‘VITA grant program’’). Except as 

19 otherwise provided in this subsection, the VITA 

20 grant program shall be administered in a manner 

21 which is substantially similar to the Community Vol22 unteer Income Tax Assistance matching grants dem23 onstration program established under title I of divi24 sion D of the Consolidated Appropriations Act, 

25 2008. 


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1 (2) MATCHING GRANTS.— 

2 (A) IN GENERAL.—The Secretary shall 

3 make available grants under the VITA grant 

4 program to provide matching funds for the de5 velopment, expansion, or continuation of quali6 fied return preparation programs assisting low7 income taxpayers and members of underserved 

8 populations. 

9 (B) APPLICATION.—In order to be eligible 

10 for a grant under this subsection, a qualified 

11 return preparation program shall submit an ap12 plication to the Secretary at such time, in such 

13 manner, and containing such information as the 

14 Secretary may reasonably require for each fiscal 

15 year. 

16 (C) PRIORITY.—In awarding grants under 

17 this subsection, the Secretary shall give priority 

18 to applications— 

19 (i) demonstrating assistance to low-in20 come taxpayers, with emphasis on outreach 

21 to and services for such taxpayers, 

22 (ii) demonstrating taxpayer outreach 

23 and education around available income 

24 supports and refundable credits such as 

25 the earned income tax credit under section 


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1 32 of the Internal Revenue Code of 1986, 

2 and 

3 (iii) demonstrating specific outreach 

4 and focus on one or more underserved pop5 ulations. 

6 (D) USE OF FUNDS.—Qualified return 

7 preparation programs receiving a grant under 

8 this subsection may use the grant for— 

9 (i) ordinary and necessary costs asso10 ciated with program operation in accord11 ance with Cost Principles Circulars as set 

12 forth by the Office of Management and 

13 Budget, including— 

14 (I) for wages or salaries of per15 sons coordinating the activities of the 

16 program, 

17 (II) to develop training materials, 

18 conduct training, and perform quality 

19 reviews of the returns, and 

20 (III) for equipment purchases 

21 and vehicle-related expenses associ22 ated with remote or rural tax prepara23 tion services, 

24 (ii) outreach and educational activities 

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1 come supports available through the Inter2 nal Revenue Code of 1986, such as the 

3 earned income tax credit, and 

4 (iii) services related to financial edu5 cation and capability, asset development, 

6 and the establishment of savings accounts 

7 in connection with tax return preparation. 

8 (E) DURATION OF GRANTS.— 

9 (i) IN GENERAL.—Except as provided 

10 in clause (ii), a grant awarded under this 

11 subsection shall be for a period of 1 year 

12 and shall not be renewed other than 

13 through an application under subpara14 graph (B). 

15 (ii) EXTENDED GRANTS.—The Sec16 retary may award a grant under this sub17 section for a period of not more than 3 

18 years to any qualified return preparation 

19 program which— 

20 (I) received a grant under this 

21 subsection for the preceding year, and 

22 (II) received a score of 90 per23 cent or better on a technical evalua24 tion. 


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1 (F) USE OF GRANTS FOR OVERHEAD EX2 PENSES PROHIBITED.—No grant made under 

3 this subsection may be used for overhead ex4 penses that are not directly related to any 

5 qualified return preparation program. 

6 (3) PROMOTION AND REFERRAL.— 

7 (A) PROMOTION.—The Secretary shall pro8 mote the benefits of, and encourage the use of, 

9 tax preparation through the Volunteer Income 

10 Tax Assistance program through the use of 

11 mass communications, referrals, and other 

12 means. 

13 (B) INTERNAL REVENUE SERVICE REFER14 RALS.—The Secretary may refer taxpayers to 

15 qualified return preparation programs receiving 

16 funding under this subsection. 

17 (C) VITA GRANTEE REFERRAL.—Qualified 

18 return preparation programs receiving a grant 

19 under this subsection are encouraged to refer, 

20 as appropriate, to local or regional Low Income 

21 Tax Clinics individuals who are eligible to re22 ceive services at such clinics. 

23 (4) AUTHORIZATION OF APPROPRIATIONS.— 

24 (A) IN GENERAL.—For each of fiscal years 

25 2016, 2017, 2018, 2019, and 2020, there are 


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1 authorized to be appropriated $30,000,000 to 

2 carry out the purposes of this subsection. 

3 (B) RESERVATION.—From the funds ap4 propriated under subparagraph (A) for any fis5 cal year, the Secretary shall reserve not more 

6 than 3 percent for administration of the pro7 gram. 

8 (C) AVAILABILITY.—Amounts appro9 priated pursuant to the authority of subpara10 graph (A) shall remain available without fiscal 

11 year limitation until expended. 

12 (b) NATIONAL CENTER TO PROMOTE QUALITY, EX13 CELLENCE, AND EVALUATION IN VOLUNTEER INCOME

14 TAX ASSISTANCE.— 

15 (1) NATIONAL CENTER TO PROMOTE QUALITY, 

16 EXCELLENCE, AND EVALUATION IN VOLUNTEER IN17 COME TAX ASSISTANCE.— 

18 (A) ESTABLISHMENT.—There is hereby es19 tablished the National Center to Promote Qual20 ity, Excellence, and Evaluation in Volunteer In21 come Tax Assistance (hereinafter in this sub22 section referred to as the ‘‘Center’’). 

23 (B) PURPOSE.—The Center shall— 

24 (i) promote the adoption of a univer25 sally accessible volunteer training platform 


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1 for the preparation of Federal income tax 

2 returns, 

3 (ii) provide capacity-building technical 

4 assistance to qualified return preparation 

5 program managers, 

6 (iii) identify and disseminate best 

7 practices related to tax site management 

8 emerging from States, community-based 

9 organizations, nonprofit providers, and 

10 local government entities, 

11 (iv) support outreach and marketing 

12 efforts to encourage the use of qualified re13 turn preparation programs receiving fund14 ing under subsection (a), and 

15 (v) provide evaluation of programs 

16 and activities funded under this section, in17 cluding— 

18 (I) identification, both in aggre19 gate and disaggregate, of gaps in 

20 services for low-income taxpayers and 

21 underserved populations, and 

22 (II) independent evaluation of 

23 progress toward program objectives, 

24 as defined by the Secretary. 

25 (C) ADMINISTRATION.— 


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1 (i) IN GENERAL.—The Secretary 

2 shall— 

3 (I) designate, through a competi4 tive process, one qualified entity to be 

5 the lead national organization, and 

6 (II) provide an annual grant to 

7 the lead national organization des8 ignated under subclause (I). 

9 (ii) DUTIES OF LEAD NATIONAL OR10 GANIZATION.—The lead national organiza11 tion shall use funds provided through the 

12 grant in clause (i)(II) to— 

13 (I) carry out the purposes of the 

14 Center, and 

15 (II) make subgrants as provided 

16 in paragraph (2). 

17 (2) SUBGRANTS.— 

18 (A) IN GENERAL.—The lead national orga19 nization shall make available subgrants to eligi20 ble organizations to facilitate specialized tech21 nical assistance in reaching one or more under22 served populations. 

23 (B) ELIGIBLE ORGANIZATION.—For pur24 poses of this paragraph, the term ‘‘eligible orga25 nization’’ means any organization which— 


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1 (i) is described in section 501(c) of 

2 the Internal Revenue Code of 1986 and ex3 empt from tax under section 501(a) of 

4 such Code, 

5 (ii) has, to the satisfaction of the lead 

6 national organization, demonstrated exper7 tise and evidenced-based practices in spe8 cialized outreach to, and service of, one or 

9 more underserved populations, and 

10 (iii) has, to the satisfaction of the lead 

11 national organization, demonstrated exper12 tise in the provision of specialized technical 

13 assistance relating to qualified return prep14 aration programs for one or more targeted 

15 underserved populations. 

16 (C) APPLICATION.—In order to be eligible 

17 for a subgrant under this paragraph, an eligible 

18 organization shall submit an application to the 

19 lead national organization at such time, in such 

20 manner, and containing such information as the 

21 lead national organization may reasonably re22 quire for each fiscal year. 

23 (D) USE OF FUNDS.—An eligible organiza24 tion which receives a subgrant under this para25 graph shall assist the Center by— 


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1 (i) providing technical assistance to 

2 qualified return preparation programs with 

3 targeted outreach and assistance to one or 

4 more underserved populations, and 

5 (ii) including strategies for the provi6 sion of technical assistance targeting indi7 viduals and families with annual household 

8 earnings at or below 250 percent of the 

9 poverty line within the underserved popu10 lations served by the subgrant. 

11 (E) SUBGRANT AMOUNT.— 

12 (i) IN GENERAL.—Each year, the lead 

13 national organization shall make available 

14 subgrants which, in the aggregate, do not 

15 exceed 40 percent of the grant received 

16 under paragraph (1). 

17 (ii) UNDERSERVED POPULATIONS.— 

18 Of the amount of subgrants provided 

19 under clause (i)— 

20 (I) not less than 25 percent shall 

21 be dedicated to specialized technical 

22 assistance in serving taxpayers with 

23 disabilities, 

24 (II) not less than 25 percent 

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1 nical assistance in serving limited 

2 English speaking taxpayers, and 

3 (III) not less than 25 percent 

4 shall be dedicated to specialized tech5 nical assistance in serving Native 

6 American taxpayers. 

7 (F) DURATION OF SUBGRANTS.—A 

8 subgrant awarded under this paragraph shall be 

9 for a period of 1 year and shall not be renewed 

10 other than through an application under sub11 paragraph (C). 

12 (3) AUTHORIZATION OF APPROPRIATIONS.— 

13 (A) IN GENERAL.—For each of fiscal years 

14 2016, 2017, 2018, 2019, and 2020, there are 

15 authorized to be appropriated $5,000,000 to 

16 carry out the purposes of this subsection. 

17 (B) AVAILABILITY.—Amounts appro18 priated pursuant to the authority of subpara19 graph (A) shall remain available without fiscal 

20 year limitation until expended. 

21 (c) DEFINITIONS.—As used in subsections (a) and 

22 (b): 

23 (1) QUALIFIED RETURN PREPARATION PRO24 GRAM.—The term ‘‘qualified return preparation pro25 gram’’ means any program— 


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1 (A) which provides assistance to individ2 uals, not less than 90 percent of whom are low3 income taxpayers, in preparing and filing Fed4 eral income tax returns, including schedules re5 porting sole proprietorship or farm income, 

6 (B) which is administered by a qualified 

7 entity, 

8 (C) in which all of the volunteers who as9 sist in the preparation of Federal income tax 

10 returns meet the training requirements pre11 scribed by the Secretary, and 

12 (D) which uses a quality review process 

13 which reviews 100 percent of all returns. 

14 (2) QUALIFIED ENTITY.— 

15 (A) IN GENERAL.—The term ‘‘qualified en16 tity’’ means any entity which— 

17 (i) is described in subparagraph (B), 

18 (ii) is in compliance with Federal tax 

19 filing and payment requirements, 

20 (iii) is not debarred or suspended 

21 from Federal contracts, grants, or coopera22 tive agreements, and 

23 (iv) agrees to provide documentation 

24 to substantiate any matching funds pro25 vided under the VITA grant program. 


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1 (B) ENTITY DESCRIBED.—An entity is de2 scribed in this subparagraph if such entity is— 

3 (i) an institution of higher education 

4 which is described in section 102 (other 

5 than subsection (a)(1)(C) thereof) of the 

6 Higher Education Act of 1965 (20 U.S.C. 

7 1088), as in effect on the date of the en8 actment of this section, and which has not 

9 been disqualified from participating in a 

10 program under title IV of such Act, 

11 (ii) an organization described in sec12 tion 501(c) of the Internal Revenue Code 

13 of 1986 and exempt from tax under sec14 tion 501(a) of such Code, 

15 (iii) a State or local government agen16 cy, including— 

17 (I) a county or municipal govern18 ment agency, 

19 (II) an Indian tribe, as defined in 

20 section 4(12) of the Native American 

21 Housing Assistance and Self-Deter22 mination Act of 1996 (25 U.S.C. 

23 4103(12)), including any tribally des24 ignated housing entity (as defined in 

25 section 4(21) of such Act (25 U.S.C. 


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1 4103(21))), tribal subsidiary, subdivi2 sion, or other wholly owned tribal en3 tity, and 

4 (III) a State government agency, 

5 but only if no other eligible organiza6 tion is available to assist the targeted 

7 population or community, 

8 (iv) a local, State, regional, or na9 tional coalition (with one lead organization 

10 which meets the eligibility requirements of 

11 clause (i), (ii), or (iii) acting as the appli12 cant organization), or 

13 (v) a Cooperative Extension Service 

14 office, but only if no other eligible organi15 zation is available to assist the targeted 

16 population or community. 

17 (3) LOW-INCOME TAXPAYERS.—The term ‘‘low18 income taxpayer’’ means a taxpayer who has an in19 come which does not exceed 250 percent of the pov20 erty line (as defined in section 2110(c)(5) of the So21 cial Security Act (42 U.S.C. 1397jj(c)(5))). 

22 (4) UNDERSERVED POPULATION.—The term 

23 ‘‘underserved population’’ includes populations of 

24 persons with disabilities, persons with limited 


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1 English proficiency, Native Americans, individuals 

2 living in rural areas, and the elderly. 

3 (5) LEAD NATIONAL ORGANIZATION.—The term 

4 ‘‘lead national organization’’ means an organization 

5 described in section 501(c) of the Internal Revenue 

6 Code of 1986 and exempt from tax under section 

7 501(a) of such Code which has demonstrated, to the 

8 satisfaction of the Secretary— 

9 (A) capacity in a minimum of 15 States, 

10 territories, or tribal areas, 

11 (B) expertise in the provision of tax prepa12 ration services to low-income taxpayers and un13 derserved populations, 

14 (C) an ability to train program leadership 

15 and staff, 

16 (D) capacity to disseminate information 

17 throughout the United States, and 

18 (E) capacity to— 

19 (i) maintain a Web site through which 

20 information is disseminated in an easily ac21 cessible manner, and 

22 (ii) provide technical assistance and 

23 training through Web-based technologies. 


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1 (6) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Treasury or the Secretary’s del3 egate. 

4 (d) LOW-INCOME TAXPAYER CLINICS.— 

5 (1) INCREASE IN AUTHORIZED GRANTS.—Para6 graph (1) of section 7526(c) is amended by striking 

7 ‘‘$6,000,000’’ and inserting ‘‘$20,000,000’’. 

8 (2) USE OF GRANTS FOR OVERHEAD EXPENSES

9 PROHIBITED.— 

10 (A) IN GENERAL.—Section 7526(c) is 

11 amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(6) USE OF GRANTS FOR OVERHEAD EX14 PENSES PROHIBITED.—No grant made under this 

15 section may be used for overhead expenses that are 

16 not directly related to the clinic.’’. 

17 (B) CONFORMING AMENDMENTS.—Section 

18 7526(c)(5) is amended— 

19 (i) by inserting ‘‘qualified’’ before 

20 ‘‘low-income’’, and 

21 (ii) by striking the last sentence. 

22 (3) PROMOTION OF CLINICS.—Section 7526 is 

23 amended by adding at the end the following new 

24 subsection: 


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1 ‘‘(d) PROMOTION OF CLINICS.—The Secretary is au2 thorized to promote the benefits of and encourage the use 

3 of qualified low-income taxpayer clinics through the use 

4 of mass communications, referrals, and other means.’’. 

5 (4) IRS REFERRALS TO CLINICS.—Subsection 

6 (c) of section 7526, as amended by paragraph 

7 (2)(A), is amended by adding at the end the fol8 lowing new paragraph: 

9 ‘‘(7) IRS REFERRALS.—Notwithstanding any 

10 other provision of law, the Secretary may refer tax11 payers to specific qualified low-income taxpayer clin12 ics receiving funding under this section.’’. 

13 (5) POVERTY LINE.—Section 7526(b)(1)(B)(i) 

14 is amended by striking ‘‘poverty level, as determined 

15 in accordance with criteria established by the Direc16 tor of the Office of Management and Budget’’ and 

17 inserting ‘‘poverty line (as defined in section 

18 2110(c)(5) of the Social Security Act (42 U.S.C. 

19 1397jj(c)(5)))’’. 

20 (6) NOTICE OF AVAILABILITY OF CLINICS IN

21 NOTICE OF DEFICIENCY.—Subsection (a) of section 

22 6212 is amended by inserting ‘‘, as well as notice re23 garding the availability of low-income taxpayer clin24 ics and information about how to contact them’’ be25 fore the period at the end. 


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1 (7) NOTICE OF AVAILABILITY OF CLINICS IN

2 NOTICE OF HEARING UPON FILING OF NOTICE OF

3 LIEN.—Subsection (a) of section 6320 is amended 

4 by adding at the end the following new sentence: 

5 ‘‘Such notice shall include a notice to the taxpayer of the 

6 availability of low-income taxpayer clinics and information 

7 about how to contact them.’’. 

8 (8) NOTICE OF AVAILABILITY OF CLINICS IN

9 NOTICE AND OPPORTUNITY OF HEARING BEFORE

10 LEVY.—Paragraph (3) of section 6330(a) is amend11 ed by adding at the end the following flush sentence: 

12 ‘‘Such notice shall include a notice to the taxpayer 

13 of the availability of low-income taxpayer clinics and 

14 information about how to contact them.’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall take effect on the date of the enactment 

17 of this Act. 

18 SEC. 202. REGULATION OF TAX RETURN PREPARERS. 

19 (a) IN GENERAL.—Subsection (a) of section 330 of 

20 title 31, United States Code, is amended— 

21 (1) by striking paragraph (1) and inserting the 

22 following: 

23 ‘‘(1) regulate— 


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1 ‘‘(A) the practice of representatives of per2 sons before the Department of the Treasury; 

3 and 

4 ‘‘(B) the practice of tax return preparers; 

5 and’’, and 

6 (2) in paragraph (2)— 

7 (A) by inserting ‘‘or tax return preparer’’ 

8 after ‘‘representative’’ each place it appears, 

9 and 

10 (B) by inserting ‘‘or in preparing their tax 

11 returns, claims for refund, or documents in con12 nection with tax returns or claims for refund’’ 

13 after ‘‘cases’’ in subparagraph (D). 

14 (b) AUTHORITY TO SANCTION REGULATED TAX RE15 TURN PREPARERS.—Subsection (b) of section 330 of title 

16 31, United States Code, is amended— 

17 (1) by striking ‘‘before the Department’’, 

18 (2) by inserting ‘‘or tax return preparer’’ after 

19 ‘‘representative’’ each place it appears, and 

20 (3) in paragraph (4), by striking ‘‘misleads or 

21 threatens’’ and all that follows and inserting ‘‘mis22 leads or threatens— 

23 ‘‘(A) any person being represented or any 

24 prospective person being represented; or 


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1 ‘‘(B) any person or prospective person 

2 whose tax return, claim for refund, or document 

3 in connection with a tax return or claim for re4 fund, is being or may be prepared.’’. 

5 (c) TAX RETURN PREPARER DEFINED.—Section 330 

6 of title 31, United States Code, is amended by adding at 

7 the end the following new subsection: 

8 ‘‘(e) TAX RETURN PREPARER.—For purposes of this 

9 section— 

10 ‘‘(1) IN GENERAL.—The term ‘tax return pre11 parer’ has the meaning given such term under sec12 tion 7701(a)(36) of the Internal Revenue Code of 

13 1986. 

14 ‘‘(2) TAX RETURN.—The term ‘tax return’ has 

15 the meaning given to the term ‘return’ under section 

16 6696(e)(1) of the Internal Revenue Code of 1986. 

17 ‘‘(3) CLAIM FOR REFUND.—The term ‘claim for 

18 refund’ has the meaning given such term under sec19 tion 6696(e)(2) of such Code.’’. 

20 SEC. 203. PREPARER PENALTIES WITH RESPECT TO PREPA21 RATION OF RETURNS AND OTHER SUBMIS22 SIONS. 

23 (a) INCLUSION OF OTHER SUBMISSIONS IN PENALTY

24 PROVISIONS.— 


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1 (1) UNDERSTATEMENT OF TAXPAYER’S LIABIL2 ITY BY TAX RETURN PREPARER.— 

3 (A) IN GENERAL.—Section 6694 is amend4 ed by striking ‘‘return or claim of refund’’ each 

5 place it appears and inserting ‘‘return, claim of 

6 refund, or other submission to the Secretary’’. 

7 (B) CONFORMING AMENDMENTS.—Section 

8 6694, as amended by paragraph (1), is amend9 ed by striking ‘‘return or claim’’ each place it 

10 appears and inserting ‘‘return, claim, or other 

11 submission to the Secretary’’. 

12 (2) INCREASE IN PENALTY IN CASE OF GROSS

13 MISCONDUCT.—Subsection (b) of section 6694 is 

14 amended by adding at the end the following new 

15 paragraph: 

16 ‘‘(4) INCREASE IN PENALTY IN CASE OF GROSS

17 MISCONDUCT.—In the case of an understatement to 

18 which this section applies that is attributable to the 

19 tax return preparer’s making a false or fraudulent 

20 return or claim for refund without the taxpayer’s 

21 knowledge, subsection (a) shall be applied by sub22 stituting ‘100 percent of the amount of the under23 statement’ for ‘50 percent of the amount derived (or 

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1 spect to the return or claim’. This penalty shall be 

2 in addition to any other penalties provided by law.’’. 

3 (3) OTHER ASSESSABLE PENALTIES.— 

4 (A) IN GENERAL.—Section 6695 is amend5 ed by striking ‘‘return or claim of refund’’ each 

6 place it appears and inserting ‘‘return, claim of 

7 refund, or other submission’’. 

8 (B) CONFORMING AMENDMENTS.—Section 

9 6695, as amended by paragraph (1), is amend10 ed by striking ‘‘return or claim’’ each place it 

11 appears and inserting ‘‘return, claim, or other 

12 submission’’. 

13 (b) INCREASE IN CERTAIN OTHER ASSESSABLE PEN14 ALTY AMOUNTS.— 

15 (1) IN GENERAL.—Subsections (a), (b), and (c) 

16 of section 6695 are each amended by striking ‘‘$50’’ 

17 and inserting ‘‘$1,000’’. 

18 (2) REMOVAL OF ANNUAL LIMITATION.—Sub19 sections (a), (b), and (c) of section 6695 are each 

20 amended by striking the last sentence thereof. 

21 (c) REVIEW BY THE TREASURY INSPECTOR GEN22 ERAL FOR TAX ADMINISTRATION.—Subparagraph (A) of 

23 section 7803(d)(2) is amended by striking ‘‘and’’ at the 

24 end of clause (iii), by striking the period at the end of 


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1 clause (iv) and inserting ‘‘, and’’, and by adding at the 

2 end the following new clause: 

3 ‘‘(v) a summary of the penalties as4 sessed and collected during the reporting 

5 period under sections 6694 and 6695 and 

6 under the regulations promulgated under 

7 section 330 of title 31, United States 

8 Code, and a review of the procedures by 

9 which violations are identified and pen10 alties are assessed under those sections,’’. 

11 (d) ADDITIONAL CERTIFICATION ON DOCUMENTS

12 OTHER THAN RETURNS.— 

13 (1) IDENTIFYING NUMBER REQUIRED FOR ALL

14 SUBMISSIONS TO THE IRS BY TAX RETURN PRE15 PARERS.—The first sentence of paragraph (4) of 

16 section 6109(a) is amended by striking ‘‘return or 

17 claim for refund’’ and inserting ‘‘return, claim for 

18 refund, statement, or other document’’. 

19 (2) EFFECTIVE DATE.—The amendment made 

20 by paragraph (1) shall apply to any return, claim for 

21 refund, or submission to the Secretary that is filed 

22 after the date of the enactment of this Act. 

23 (e) COORDINATION WITH SECTION 6060(a).—The 

24 Secretary of the Treasury shall coordinate the require25 ments under the regulations promulgated under sections 


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1 330 and 330A of title 31, United States Code, with the 

2 return requirements of section 6060 of the Internal Rev3 enue Code of 1986. 

4 (f) EFFECTIVE DATE.—The regulations required by 

5 this section shall be prescribed not later than one year 

6 after the date of the enactment of this Act. 

7 SEC. 204. CLARIFICATION OF ENROLLED AGENT CREDEN8 TIALS. 

9 Section 330 of title 31, United States Code, is 

10 amended— 

11 (1) by redesignating subsections (b), (c), and 

12 (d) as subsections (c), (d), and (e), respectively, and 

13 (2) by inserting after subsection (a) the fol14 lowing new subsection: 

15 ‘‘(b) Any enrolled agents properly licensed to practice 

16 as required under rules promulgated under subsection (a) 

17 shall be allowed to use the credentials or designation of 

18 ‘enrolled agent’, ‘EA’, or ‘E.A.’.’’. 

19 SEC. 205. LIMIT REDISCLOSURES AND USES OF CONSENT20 BASED DISCLOSURES OF TAX RETURN INFOR21 MATION. 

22 (a) IN GENERAL.—Subsection (c) of section 6103 is 

23 amended by striking ‘‘However, return’’ and inserting the 

24 following: ‘‘Persons designated by the taxpayer to receive 

25 return information shall not use the information for any 


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1 purpose other than the express purpose for which consent 

2 was granted and shall not disclose return information to 

3 any other person without the express permission of, or re4 quest by, the taxpayer. Return’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to disclosures after the date of the 

7 enactment of this Act. 

8 TITLE III—IMPROVING IRS 

9 PROCEDURES 

10 SEC. 301. MODIFICATIONS TO LIEN NOTICE FILING PROCE11 DURES. 

12 (a) IN GENERAL.—Section 6323 is amended by add13 ing at the end the following new subsection: 

14 ‘‘(k) REQUIRED PROCEDURES BEFORE FILING NO15 TICE OF LIEN.— 

16 ‘‘(1) SECRETARIAL DETERMINATION.— 

17 ‘‘(A) IN GENERAL.—The Secretary may 

18 not file a notice of lien with respect to any tax19 payer unless— 

20 ‘‘(i) the lien attaches to distrainable 

21 property, and 

22 ‘‘(ii) weighing all facts and cir23 cumstances pertaining to the collection of 

24 a taxpayer’s delinquent tax assessment, the 

25 Secretary determines that— 


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1 ‘‘(I) the benefit to the Federal 

2 Government of the filing outweighs 

3 the harm to the taxpayer, and 

4 ‘‘(II) the filing will not jeopardize 

5 the taxpayer’s prospective ability— 

6 ‘‘(aa) to comply with the in7 ternal revenue laws, and 

8 ‘‘(bb) if the taxpayer is an 

9 otherwise viable business tax10 payer, to continue to secure fund11 ing to maintain business oper12 ations. 

13 ‘‘(B) FACTORS TO CONSIDER.—In making 

14 the determination under subparagraph (A)(ii), 

15 the Secretary shall consider— 

16 ‘‘(i) the amount due, 

17 ‘‘(ii) the lien filing fee, 

18 ‘‘(iii) the value of the taxpayer’s eq19 uity in the property or rights to property, 

20 ‘‘(iv) the taxpayer’s tax compliance 

21 history, 

22 ‘‘(v) extenuating circumstances, if 

23 any, that explain the delinquency, and 

24 ‘‘(vi) the effect of the filing on the 

25 taxpayer’s ability to obtain financing, genVerDate Sep 11 2014 02:59 Dec 01, 2015 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H4128.IH H4128

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1 erate future income, and pay current and 

2 future tax liabilities. 

3 ‘‘(2) TAXPAYER APPEAL PRIOR TO FILING.— 

4 ‘‘(A) IN GENERAL.—The Secretary may 

5 not file a notice of lien with respect to any tax6 payer unless— 

7 ‘‘(i) the Secretary notifies the tax8 payer that the Secretary has determined to 

9 file such a notice with respect to the tax10 payer, and 

11 ‘‘(ii) the taxpayer is afforded an op12 portunity to appeal such determination to 

13 the Internal Revenue Service Office of Ap14 peals. 

15 The Secretary shall provide the notice under 

16 subparagraph (A) in writing and make reason17 able efforts to provide such notice by telephone 

18 or direct personal contact. 

19 ‘‘(B) JEOPARDY NOTICE OF LIEN.—The 

20 Secretary may file a notice of lien without re21 gard to subparagraph (A)(ii) if the Secretary 

22 finds that the collection of the tax would be in 

23 jeopardy if the notice of lien is not filed before 

24 the conclusion of such an appeal. 


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1 ‘‘(3) SUPERVISORY APPROVAL REQUIRED FOR

2 LIENS IN CERTAIN CASES.— 

3 ‘‘(A) IN GENERAL.—In any case to which 

4 this paragraph applies, a notice of lien may not 

5 be filed unless the immediate supervisor (or 

6 such higher level official as the Secretary may 

7 designate) of the individual making the initial 

8 determination under paragraph (1) has individ9 ually reviewed and approved such determina10 tion. 

11 ‘‘(B) CASES TO WHICH PARAGRAPH AP12 PLIES.—This paragraph shall apply in any case 

13 in which— 

14 ‘‘(i) the collection of the liability 

15 would create an economic hardship within 

16 the meaning of section 6343(a)(1)(D), 

17 ‘‘(ii) the taxpayer has no equity in as18 sets, or 

19 ‘‘(iii) there has been no personal con20 tact with the taxpayer to discuss collection 

21 alternatives, including an offer in com22 promise and partial payment installment 

23 agreement.’’. 

24 (b) JEOPARDY NOTICE OF LIEN.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 7429(a)(1) is amended by inserting after ‘‘or 6862,’’ 

3 the following: ‘‘no notice of lien may be filed pursu4 ant to section 6323(k)(2)(B),’’. 

5 (2) REDETERMINATION BY SECRETARY.—Para6 graph (3) of section 7429(a) is amended by striking 

7 ‘‘or’’ at the end of subparagraph (A), by redesig8 nating subparagraph (B) as subparagraph (C), and 

9 by inserting after subparagraph (A) the following 

10 new subparagraph: 

11 ‘‘(B) whether or not the filing of the notice 

12 of lien pursuant to section 6323(k)(2)(B) is 

13 reasonable under the circumstances, or’’. 

14 (3) REDETERMINATION BY TAX COURT.—Para15 graph (3) of section 7429(b) is amended by striking 

16 ‘‘or’’ at the end of subparagraph (A), by redesig17 nating subparagraph (B) as subparagraph (C), and 

18 by inserting after subparagraph (A) the following 

19 new subparagraph: 

20 ‘‘(B) whether or not the filing of the notice 

21 of lien pursuant to section 6323(k)(2)(B) is 

22 reasonable under the circumstances, or’’. 

23 (4) CONFORMING AMENDMENTS.— 


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1 (A) The heading for section 7429 is 

2 amended by inserting ‘‘, NOTICE OF LIEN

3 FILING,’’ after ‘‘LEVY’’. 

4 (B) Subparagraphs (A) and (B) of section 

5 7429(a)(1) are each amended by striking ‘‘as6 sessment or levy’’ each place it appears and in7 serting ‘‘assessment, notice of lien filing, or 

8 levy’’. 

9 (C) Subparagraph (B) of section 

10 7429(b)(2) is amended by striking ‘‘assessment 

11 or levy’’ and inserting ‘‘assessment, notice of 

12 lien filing, or levy’’. 

13 (D) Paragraph (4) of section 7429(b) is 

14 amended— 

15 (i) by inserting ‘‘that the filing of 

16 such notice of lien is unreasonable,’’ after 

17 ‘‘that the making of such levy is unreason18 able,’’, and 

19 (ii) by inserting ‘‘to withdraw such 

20 notice of lien,’’ after ‘‘to release such 

21 levy,’’. 

22 (E) Paragraph (1) of section 7429(g) is 

23 amended— 

24 (i) by inserting ‘‘, the filing of a no25 tice of lien pursuant to section 


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1 6323(k)(2)(B),’’ after ‘‘the making of a 

2 levy described in subsection (a)(1)’’, and 

3 (ii) by inserting ‘‘NOTICE OF LIEN

4 FILING’’ after ‘‘REASONABLENESS OF’’ in 

5 the heading thereof. 

6 (c) EFFECTIVE DATE.—The amendment made by 

7 this section shall take effect on the date of the enactment 

8 of this Act. 

9 SEC. 302. MODIFICATION OF REQUIREMENTS RELATING TO 

10 TAX LIEN INFORMATION CONTAINED IN CON11 SUMER CREDIT REPORTS. 

12 (a) IN GENERAL.—Paragraph (3) of section 605(a) 

13 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(3)) 

14 is amended to read as follows: 

15 ‘‘(3) TAX LIENS.—The following tax liens: 

16 ‘‘(A) Any tax lien released pursuant to sec17 tion 6325(a) of the Internal Revenue Code of 

18 1986 not more than 2 years after the date that 

19 the notice of such lien was filed. 

20 ‘‘(B) Any tax lien released pursuant to sec21 tion 6325(a) of such Code— 

22 ‘‘(i) more than 2 years after the date 

23 that the notice of such lien was filed, and 

24 ‘‘(ii) more than 2 years before the re25 port. 


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1 ‘‘(C) Any tax lien if— 

2 ‘‘(i) the notice of such lien was not 

3 refiled during the required refiling period 

4 (as defined in section 6323(g)(3) of such 

5 Code), and 

6 ‘‘(ii) such period ends more than 6 

7 years before the report. 

8 ‘‘(D) Any tax lien the notice of which is 

9 withdrawn pursuant to section 6323(j)(1) of 

10 such Code. 

11 ‘‘(E) Any tax lien released pursuant to sec12 tion 6326(b) of such Code if the notice of such 

13 lien was erroneously filed.’’. 

14 (b) EFFECTIVE DATE.—The amendment made by 

15 this section shall take effect on the date of the enactment 

16 of this Act. 

17 SEC. 303. DE NOVO TAX COURT REVIEW OF INNOCENT 

18 SPOUSE RELIEF DETERMINATIONS. 

19 (a) IN GENERAL.—Section 6015 is amended— 

20 (1) in subsection (e), by adding at the end the 

21 following new paragraph: 

22 ‘‘(6) STANDARD AND SCOPE OF REVIEW.—Any 

23 review of a determination made under this section 

24 shall be reviewed de novo by the Tax Court and shall 

25 be based upon— 


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1 ‘‘(A) the administrative record established 

2 at the time of the determination, and 

3 ‘‘(B) any additional newly discovered or 

4 previously unavailable evidence.’’, and 

5 (2) by amending subsection (f) to read as fol6 lows: 

7 ‘‘(f) EQUITABLE RELIEF.— 

8 ‘‘(1) IN GENERAL.—Under procedures pre9 scribed by the Secretary, if— 

10 ‘‘(A) taking into account all the facts and 

11 circumstances, it is inequitable to hold the indi12 vidual liable for any unpaid tax or any defi13 ciency (or any portion of either), and 

14 ‘‘(B) relief is not available to such indi15 vidual under subsection (b) or (c), 

16 the Secretary may relieve such individual of such li17 ability. 

18 ‘‘(2) LIMITATION.—A request for equitable re19 lief under this subsection may be made with respect 

20 to any portion of any liability that— 

21 ‘‘(A) has not been paid, provided that such 

22 request is made before the expiration of the ap23 plicable period of limitation under section 6502, 

24 or 


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1 ‘‘(B) has been paid, provided that such re2 quest is made during the period in which the 

3 individual could submit a timely claim for re4 fund or credit of such payment.’’. 

5 (b) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to petitions or requests filed or 

7 pending on and after the date of the enactment of this 

8 Act. 

9 SEC. 304. RELEASE OF FEDERAL TAX LEVIES WHICH CAUSE 

10 BUSINESS HARDSHIP. 

11 (a) IN GENERAL.—Subparagraph (D) of section 

12 6343(a)(1) is amended by inserting ‘‘or any trade or busi13 ness of the taxpayer’’ before ‘‘, or’’. 

14 (b) CRITERIA FOR DETERMINING BUSINESS HARD15 SHIP.—Subsection (a) of section 6343 is amended by add16 ing at the end the following new paragraph: 

17 ‘‘(4) CRITERIA FOR DETERMINING BUSINESS

18 HARDSHIP.—For purposes of making a determina19 tion under paragraph (1)(D), with respect to a trade 

20 or business of the taxpayer, the Secretary shall take 

21 into consideration— 

22 ‘‘(A) the economic viability of such trade 

23 or business, 

24 ‘‘(B) the nature and extent of the hard25 ship, including the extent to which the taxpayer 


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1 exercised ordinary business care and prudence, 

2 and 

3 ‘‘(C) any hardships which would be caused 

4 to other individuals or businesses if such trade 

5 or business were liquidated.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect on the date of the enactment 

8 of this Act. 

9 SEC. 305. REMOVAL OF NONPAYMENT PERIOD FROM LIST 

10 OF TRIGGERING EVENTS FOR RETURNS RE11 LATING TO CANCELLATION OF INDEBTED12 NESS. 

13 (a) IN GENERAL.—Subsection (c) of section 6050P 

14 is amended by adding at the end the following new para15 graph: 

16 ‘‘(4) DETERMINING DATE OF DISCHARGE.— 

17 Whether an entity has discharged the indebtedness 

18 of any person shall not be determined based solely 

19 on the passage of a specified period of time during 

20 which the entity has not received payment on such 

21 indebtedness.’’. 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to discharges of indebtedness after 

24 the date of the enactment of this Act. 


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1 SEC. 306. SPECIAL RULES FOR LEVIES THAT ATTACH TO A 

2 FIXED AND DETERMINABLE RIGHT. 

3 (a) IN GENERAL.—Section 6331 is amended by re4 designating subsection (l) as subsection (m) and by insert5 ing after subsection (k) the following new subsection: 

6 ‘‘(l) LIMITATION ON LEVY AFTER EXPIRATION OF

7 COLLECTION PERIOD.— 

8 ‘‘(1) PENALTIES AND INTEREST.—In the case 

9 of a levy that attaches to a fixed and determinable 

10 right to payments or other property, penalties, addi11 tions to tax, and interest shall not accrue after the 

12 expiration of the period of limitations provided in 

13 section 6502. 

14 ‘‘(2) RETIREMENT AND DISABILITY PAY15 MENTS.—In the case of a levy on benefits under title 

16 II of the Social Security Act, benefits under a plan 

17 on account of a disability, or retirement benefits or 

18 amounts held in a retirement plan, such levy is not 

19 enforceable with respect to such benefits or amounts 

20 after the expiration of the period of limitations pro21 vided in section 6502 unless the taxpayer has com22 mitted a flagrant act (as defined in section 

23 6334(f)(2)).’’. 

24 (b) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to levies served after the date of 

26 the enactment of this Act. 


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1 SEC. 307. RULES RELATED TO LEVIES ON QUALIFIED RE2 TIREMENT PLANS. 

3 (a) LEVY ALLOWED ON QUALIFIED RETIREMENT

4 PLANS IN CERTAIN CIRCUMSTANCES.—Section 6334 is 

5 amended— 

6 (1) by redesignating subsections (f) and (g) as 

7 subsections (g) and (h), respectively, 

8 (2) by inserting after subsection (e) the fol9 lowing new subsection: 

10 ‘‘(f) LEVY ALLOWED ON CERTAIN RETIREMENT

11 PLANS.— 

12 ‘‘(1) IN GENERAL.—Amounts in a qualified re13 tirement plan (as defined in section 4974(c)) or 

14 amounts in a taxpayer’s account in the Thrift Sav15 ings Fund (as described in section 8439(a)(2) of 

16 title 5, United States Code) shall be exempt from 

17 levy unless— 

18 ‘‘(A) the amount of tax (excluding interest 

19 and penalties) owed by the taxpayer exceeds 

20 $10,000, 

21 ‘‘(B) the Secretary determines that the 

22 taxpayer has committed a flagrant act, and 

23 ‘‘(C) the Secretary determines that such 

24 levy will not create an economic hardship due to 

25 the financial condition of the taxpayer (as de26 scribed in section 6343(a)(1)(D)). 


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1 ‘‘(2) FLAGRANT ACT.—For purposes of this 

2 subsection, the term ‘flagrant act’ means— 

3 ‘‘(A) the filing of a fraudulent return by 

4 the taxpayer, or 

5 ‘‘(B) that the taxpayer acted with the in6 tent to evade or defeat any tax imposed by this 

7 title or the collection or payment thereof.’’, and 

8 (3) in subsection (h), as redesignated by para9 graph (1)— 

10 (A) by redesignating paragraph (2) as 

11 paragraph (3), 

12 (B) in paragraph (3), as redesignated by 

13 subparagraph (A), by inserting ‘‘or (2)’’ after 

14 ‘‘paragraph (1)’’, and 

15 (C) by inserting after paragraph (1) the 

16 following new paragraph: 

17 ‘‘(2) OTHER AMOUNTS.—In the case of any cal18 endar year beginning after 2015, the dollar amount 

19 referred to in subsection (f)(1)(A) shall be increased 

20 by an amount equal to— 

21 ‘‘(A) $10,000, multiplied by 

22 ‘‘(B) the cost-of-living adjustment deter23 mined under section 1(f)(3) for such calendar 

24 year, by substituting ‘calendar year 2014’ for 


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1 ‘calendar year 1992’ in subparagraph (B) 

2 thereof.’’. 

3 (b) AUTHORITY TO RELEASE LEVY AND RETURN

4 PROPERTY.—Section 6343 is amended by adding at the 

5 end the following new subsection: 

6 ‘‘(f) INDIVIDUAL HELD HARMLESS FOR WRONGFUL

7 LEVY ON CERTAIN RETIREMENT PLANS.— 

8 ‘‘(1) IN GENERAL.—If the Secretary determines 

9 that a qualified retirement plan (as defined in sec10 tion 4974(c)) or a taxpayer’s account in the Thrift 

11 Savings Fund (as described in section 8439(a)(2) of 

12 title 5, United States Code) has been levied upon in 

13 a manner described in section 7433 or subsection (b) 

14 or (d) of this section, the applicable amount (as de15 termined under paragraph (2)) may be deposited 

16 into— 

17 ‘‘(A) if permissible, the plan or account 

18 levied upon, or 

19 ‘‘(B) an individual retirement plan (other 

20 than an endowment contract) to which a roll21 over from the plan or account levied upon is 

22 permitted. 

23 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

24 paragraph (1), the applicable amount is an amount 

25 equal to the sum of— 


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1 ‘‘(A) the amount of money or damages re2 turned by the Secretary on account of a levy de3 scribed in paragraph (1), and 

4 ‘‘(B) any interest paid pursuant to sub5 section (c) on such amount. 

6 ‘‘(3) TREATMENT AS ROLLOVER.—For purposes 

7 of this title, the distribution on account of the levy 

8 and any deposit under paragraph (1) with respect to 

9 such distribution shall be treated as if such distribu10 tion and deposit were a rollover contribution de11 scribed in section 408(d)(3)(A)(i), except that— 

12 ‘‘(A) any interest paid pursuant to sub13 section (c) shall be treated as a part of such 

14 distribution and not included in gross income, 

15 ‘‘(B) the 60-day requirement under such 

16 section shall be deemed to have been met if the 

17 deposit is made not later than the 60th day 

18 after the day on which the taxpayer receives an 

19 amount described in paragraph (1) from the 

20 Secretary, and 

21 ‘‘(C) such deposit shall not be taken into 

22 account for purposes of section 408(d)(3)(B). 

23 ‘‘(4) TREATMENT OF INCOME TAX ON LEVY.— 

24 If any amount is includible in gross income for a 

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1 graph (1) and any portion of such amount is treated 

2 as a rollover pursuant to paragraph (3), any tax im3 posed by chapter 1 on such portion shall not be as4 sessed, and if assessed shall be abated, and if col5 lected shall be credited or refunded as an overpay6 ment made on the due date for filing the return of 

7 tax for such taxable year. 

8 ‘‘(5) INTEREST.—Notwithstanding subsection 

9 (d), interest shall be allowed under subsection (c) in 

10 any case in which the Secretary makes a determina11 tion described under section 7433 or paragraph (2) 

12 of subsection (d) with respect to a levy upon a quali13 fied retirement plan or an account in the Thrift Sav14 ings Fund.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to levies served after the date of 

17 the enactment of this Act. 

18 SEC. 308. TAXPAYER RIGHTS TRAINING. 

19 (a) IN GENERAL.— 

20 (1) TAXPAYER ADVOCATE.—Subparagraph (C) 

21 of section 7803(c)(2) is amended by striking ‘‘and’’ 

22 at the end of clause (iii), by striking the period at 

23 the end of clause (iv) and inserting ‘‘; and’’, and by 

24 adding at the end the following new clause: 


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1 ‘‘(v) develop annual training for all 

2 Internal Revenue Service officers and em3 ployees regarding taxpayer rights, the Of4 fice of the Taxpayer Advocate’s case cri5 teria and mission, and Taxpayer Assist6 ance Order procedures.’’. 

7 (2) COMMISSIONER.—Paragraph (3) of section 

8 7803(c) is amended— 

9 (A) by striking the period at the end and 

10 inserting ‘‘; and’’, and 

11 (B) by striking ‘‘shall establish procedures 

12 requiring’’ and inserting the following: ‘‘shall 

13 establish procedures— 

14 ‘‘(A) requiring’’, and 

15 (C) by adding at the end the following new 

16 subparagraph: 

17 ‘‘(B) for providing annually the training 

18 described in subsection (c)(2)(C)(v)’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall take effect on the date of the enactment 

21 of this Act. 

22 SEC. 309. NOTICE AND OPPORTUNITY FOR HEARING BY 

23 THE OFFICE OF APPEALS. 

24 (a) IN GENERAL.—Section 6212 is amended by add25 ing at the end the following new subsection: 


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1 ‘‘(e) REQUIREMENT OF PRELIMINARY NOTICE AND

2 OPPORTUNITY FOR HEARING.— 

3 ‘‘(1) RIGHT TO A HEARING.—Subject to para4 graph (3), any taxpayer which receives a notice of 

5 deficiency under this section shall be entitled to a 

6 hearing held by the Internal Revenue Service Office 

7 of Appeals with respect to the proposed deficiency. 

8 ‘‘(2) REQUIREMENT OF PRELIMINARY NO9 TICE.—Subject to paragraph (3), any notice of defi10 ciency sent to a taxpayer under this section shall in11 clude notice of their right to a hearing (as described 

12 in paragraph (1)). 

13 ‘‘(3) REGULATORY AUTHORITY.—The Secretary 

14 shall prescribe such regulations as may be necessary 

15 to carry out the purposes of this section, including 

16 establishing procedures and exceptions with respect 

17 to the right to a hearing established under para18 graph (1) and notice of such right under paragraph 

19 (2).’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 subsection (a) shall take effect on the date of the enact22 ment of the Act. 

23 (c) ENSURING NATIONWIDE ACCESS TO APPEALS

24 OFFICERS AND SETTLEMENT AGENTS.—The Secretary of 

25 the Treasury shall ensure that not less than 1 Appeals 


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1 Officer and 1 Settlement Agent from the Office of Appeals 

2 of the Internal Revenue Service are assigned to each State 

3 and made available to the residents of each such State. 

4 TITLE IV—NATIONAL TAXPAYER 

5 ADVOCATE 

6 SEC. 401. MODIFICATIONS RELATING TO TAXPAYER ASSIST7 ANCE ORDERS. 

8 (a) CLARIFICATION OF AUTHORITY WITH RESPECT

9 TO CLOSING AGREEMENTS AND COMPROMISES.—Para10 graph (2) of section 7811(b) is amended— 

11 (1) by redesignating subparagraphs (C) and 

12 (D) as subparagraphs (D) and (E), respectively, and 

13 (2) by inserting after subparagraph (B) the fol14 lowing new subparagraph: 

15 ‘‘(C) chapter 74 (relating to closing agree16 ments and compromises),’’. 

17 (b) APPEAL OF CERTAIN MODIFIED OR RESCINDED

18 ORDERS.—Subsection (c) of section 7811 is amended by 

19 adding at the end the following new sentence: 

20 ‘‘If the Deputy Commissioner of Internal Revenue modi21 fies or rescinds a Taxpayer Assistance Order, the National 

22 Taxpayer Advocate may appeal the decision to the Com23 missioner of Internal Revenue for a final determination.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to orders issued after the date of 

3 the enactment of this Act. 

4 SEC. 402. TAXPAYER ADVOCATE DIRECTIVES. 

5 (a) IN GENERAL.—Subchapter A of chapter 80 is 

6 amended by adding at the end the following new section: 

7 ‘‘SEC. 7812. TAXPAYER ADVOCATE DIRECTIVES. 

8 ‘‘(a) AUTHORITY TO ISSUE.—The National Taxpayer 

9 Advocate (but not a delegate thereof) may issue a Tax10 payer Advocate Directive to mandate changes to improve 

11 the operation of a functional process or to grant relief to 

12 groups of taxpayers (or all taxpayers) if, as a result of 

13 the manner in which the internal revenue laws are being 

14 administered by the Secretary, its implementation will 

15 protect the rights of taxpayers, prevent undue burden, en16 sure equitable treatment, or provide an essential service 

17 to taxpayers. The terms of a Taxpayer Advocate Directive 

18 may require the Internal Revenue Service to implement 

19 it within a specified period of time. 

20 ‘‘(b) AUTHORITY TO MODIFY OR RESCIND.— 

21 ‘‘(1) APPEAL.—An Internal Revenue Service di22 vision or other function may appeal a Taxpayer Ad23 vocate Directive by delivering a written explanation 

24 that facilitates a full and fair consideration of the 

25 issues to the National Taxpayer Advocate and DepVerDate Sep 11 2014 02:59 Dec 01, 2015 Jkt 059200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\H4128.IH H4128

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1 uty Commissioner of Internal Revenue, either of 

2 whom may modify or rescind such Taxpayer Advo3 cate Directive. If the Deputy Commissioner of Inter4 nal Revenue modifies or rescinds a Taxpayer Advo5 cate Directive, the Deputy Commissioner (or a dele6 gate chosen by the Deputy Commissioner) shall pro7 vide a detailed written explanation of the reasons for 

8 the modification or rescission. 

9 ‘‘(2) FINAL DETERMINATION.—The National 

10 Taxpayer Advocate may appeal such decision to the 

11 Commissioner of Internal Revenue for a final deter12 mination. If the Commissioner does not affirm the 

13 Taxpayer Advocate Directive in full, then the Com14 missioner shall provide a written explanation of such 

15 determination, and the reasons therefor, not later 

16 than 90 days after the submission of such appeal. 

17 Such explanation shall address in detail each issue 

18 raised in the Taxpayer Advocate Directive.’’. 

19 (b) ANNUAL REPORT.— 

20 (1) IN GENERAL.—Clause (ii) of section 

21 7803(c)(2)(B) is amended by redesignating sub22 clauses (III) through (XI) as subclauses (IV) 

23 through (XII), respectively, and by inserting after 

24 subclause (II) the following new subclause: 


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1 ‘‘(III) contain Taxpayer Advocate 

2 Directives issued under section 

3 7812;’’. 

4 (2) CONFORMING AMENDMENTS.—Clause (ii) of 

5 section 7803(c)(2)(B), as amended by paragraph 

6 (1), is amended— 

7 (A) by striking ‘‘subclauses (I), (II), and 

8 (III)’’ in subclauses (V), (VI), and (VII) thereof 

9 and inserting ‘‘subclauses (I), (II), (III), and 

10 (IV)’’, and 

11 (B) in subclause (VIII)— 

12 (i) by inserting ‘‘or Taxpayer Advo13 cate Directive’’ after ‘‘Taxpayer Assistance 

14 Order’’, and 

15 (ii) by inserting ‘‘or 7812(a)’’ after 

16 ‘‘section 7811(b)’’. 

17 (c) CLERICAL AMENDMENT.—The table of sections 

18 for subchapter A of chapter 80 is amended by inserting 

19 after the item relating to section 7811 the following new 

20 item: 

‘‘Sec. 7812. Taxpayer advocate directives.’’. 

21 SEC. 403. OFFICE OF THE TAXPAYER ADVOCATE ACCESS TO 

22 ADMINISTRATIVE FILES. 

23 Section 7803(c) is amended by adding at the end the 

24 following new paragraph: 


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1 ‘‘(5) ACCESS TO TAXPAYER ADMINISTRATIVE

2 FILES.— 

3 ‘‘(A) IN GENERAL.—In furtherance of the 

4 functions, responsibilities, and authorities de5 scribed in this subsection, and in addition to 

6 the authority provided under section 

7 6103(h)(1), taxpayer administrative files shall, 

8 upon request, be open to inspection by or dis9 closure to officers and employees of the Office 

10 of the Taxpayer Advocate whose duties require 

11 such inspection or disclosure. 

12 ‘‘(B) MEETINGS WITH IRS.—In the case of 

13 a taxpayer seeking the assistance of the Office 

14 of the Taxpayer Advocate, any officer or em15 ployee of such Office may, at the request of the 

16 taxpayer, attend any meeting between the In17 ternal Revenue Service and such taxpayer.’’. 

18 SEC. 404. OFFICE OF THE TAXPAYER ADVOCATE OPER19 ATIONS DURING A LAPSE IN APPROPRIA20 TIONS. 

21 Paragraph (2) of section 7803(c) is amended by add22 ing at the end the following new subparagraph: 

23 ‘‘(E) OPERATIONS DURING A LAPSE IN AP24 PROPRIATIONS.—During any lapse in appro25 priations for the Internal Revenue Service, the 


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1 Commissioner of Internal Revenue, in consulta2 tion with the National Taxpayer Advocate, shall 

3 designate as essential employees a sufficient 

4 number of employees of the Office of the Tax5 payer Advocate to provide assistance to tax6 payers relating to enforcement actions carried 

7 out during the lapse in appropriations.’’. 

Æ 


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