I 

108TH CONGRESS 

1ST SESSION H. R. 3625

To amend the Internal Revenue Code of 1986 to consolidate the Inspectors 

General relating to the Department of the Treasury, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2003

Mr. PORTMAN (for himself, Mr. HOUGHTON, and Mr. POMEROY) introduced 

the following bill; which was referred to the Committee on Ways and 

Means, and in addition to the Committee on Government Reform, 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 consolidate 

the Inspectors General relating to the Department of 

the Treasury, 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. 

4 This Act may be cited as the ‘‘Department of the 

5 Treasury Inspector General Consolidation Act of 2003’’. 
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1 SEC. 2. OFFICE OF THE TREASURY INSPECTOR GENERAL. 

2 (a) IN GENERAL.—Subchapter A of chapter 80 of the 

3 Internal Revenue Code of 1986 is amended by inserting 

4 after section 7804 the following new section: 

5 ‘‘SEC. 7804A. OFFICE OF THE TREASURY INSPECTOR GEN6 ERAL. 

7 ‘‘(a) IN GENERAL.—There shall be in the Depart8 ment of the Treasury the Office of the Treasury Inspector 

9 General. 

10 ‘‘(b) TREASURY INSPECTOR GENERAL.—

11 ‘‘(1) IN GENERAL.—There shall be at the head 

12 of such Office the Treasury Inspector General. The 

13 Treasury Inspector General shall be under the au14 thority, direction, and control of the Secretary of the 

15 Treasury with respect to audits or investigations, or 

16 the issuance of subpoenas, which require access to 

17 sensitive information concerning—

18 ‘‘(A) ongoing criminal investigations or 

19 proceedings; 

20 ‘‘(B) undercover operations; 

21 ‘‘(C) the identity of confidential sources, 

22 including protected witnesses; 

23 ‘‘(D) deliberations and decisions on policy 

24 matters, including documented information 

25 used as a basis for making policy decisions, the 

26 disclosure of which could reasonably be ex-
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1 pected to have a significant influence on the 

2 economy or market behavior; 

3 ‘‘(E) intelligence or counterintelligence 

4 matters; or 

5 ‘‘(F) other matters the disclosure of which 

6 would constitute a serious threat to national se7 curity. 

8 ‘‘(2) SPECIAL RULE RELATING TO NATIONAL

9 INTERESTS OF THE UNITED STATES.—With respect 

10 to the information described under paragraph (1), 

11 the Secretary of the Treasury may prohibit the 

12 Treasury Inspector General from carrying out or 

13 completing any audit or investigation, or from 

14 issuing any subpoena, after such Inspector General 

15 has decided to initiate, carry out, or complete such 

16 audit or investigation or to issue such subpoena, if 

17 the Secretary determines that such prohibition is 

18 necessary to prevent the disclosure of any informa19 tion described under paragraph (1) or to prevent 

20 significant impairment to the national interests of 

21 the United States. 

22 ‘‘(3) NOTICE OF EXERCISE OF SECRETARY’S

23 POWER.—If the Secretary of the Treasury exercises 

24 any power under paragraph (1) or (2), the Secretary 

25 of the Treasury shall notify the Treasury Inspector 
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1 General in writing stating the reasons for such exer2 cise. Within 30 days after receipt of any such notice, 

3 the Treasury Inspector General shall transmit a 

4 copy of such notice to the Committees on Govern5 mental Affairs and Finance of the Senate and the 

6 Committees on Government Operations and Ways 

7 and Means of the House of Representatives, and to 

8 other appropriate committees or subcommittees of 

9 the Congress. 

10 ‘‘(4) LIMITATION ON EXERCISE OF SEC11 RETARY’S POWER.—The Secretary of the Treasury 

12 may not exercise any power under paragraph (1) or 

13 (2) with respect to the duties and responsibilities of 

14 the Treasury Inspector General concerning the In15 ternal Revenue Service, the Internal Revenue Service 

16 Oversight Board, or the Office of Chief Counsel of 

17 the Internal Revenue Service. 

18 ‘‘(c) AUTHORITY OF TREASURY INSPECTOR GEN19 ERAL.—

20 ‘‘(1) INSPECTOR GENERAL ACT OF 1978.—The 

21 Office of the Treasury Inspector General shall be 

22 deemed an establishment of an office of Inspector 

23 General under the Inspector General Act of 1978. 

24 The Treasury Inspector General shall exercise all 

25 duties and responsibilities of an Inspector General of 
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1 an establishment with respect to the Department of 

2 the Treasury and the Secretary of the Treasury. 

3 ‘‘(2) GENERAL AUTHORITY FOR AUDITS AND

4 INVESTIGATIONS.—Subject to subsection (b), the 

5 Treasury Inspector General may initiate, conduct, 

6 and supervise such audits and investigations in the 

7 Department of the Treasury as the Treasury Inspec8 tor General considers appropriate. 

9 ‘‘(3) NOTICE OF AUDITS AND INVESTIGA10 TIONS.—If the Treasury Inspector General initiates 

11 an audit or investigation under paragraph (2), the 

12 Treasury Inspector General may provide the head of 

13 the affected bureau or office that is the subject of 

14 the audit or investigation with written notice that 

15 the Treasury Inspector General has initiated such 

16 audit or investigation. If the Treasury Inspector 

17 General issues a notice under the preceding sen18 tence, no other audit or investigation shall be initi19 ated into the matter under audit or investigation by 

20 the Treasury Inspector General and any other audit 

21 or investigation of such matter shall cease. 

22 ‘‘(4) ADDITIONAL DUTIES.—

23 ‘‘(A) ANNUAL REPORTING.—The Treasury 

24 Inspector General shall include in one of the
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1 semiannual reports under section 5 of the In2 spector General Act of 1978—

3 ‘‘(i) an evaluation of the compliance of 

4 the Internal Revenue Service with—

5 ‘‘(I) restrictions under section 

6 1204 of the Internal Revenue Service 

7 Restructuring and Reform Act of 

8 1998 on the use of enforcement statis9 tics to evaluate Internal Revenue 

10 Service employees, 

11 ‘‘(II) restrictions under section 

12 7521 on directly contacting taxpayers 

13 who have indicated that they prefer 

14 their representatives be contacted, 

15 ‘‘(III) required procedures under 

16 section 6320 upon the filing of a no17 tice of a lien, 

18 ‘‘(IV) required procedures under 

19 subchapter D of chapter 64 for sei20 zure of property for collection of 

21 taxes, including required procedures 

22 under section 6330 regarding levies, 

23 and 

24 ‘‘(V) restrictions under section 

25 3707 of the Internal Revenue Service 
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1 Restructuring and Reform Act of 

2 1998 on designation of taxpayers, 

3 ‘‘(ii) a review and a certification of 

4 whether or not the Secretary is complying 

5 with the requirements of section 

6 6103(e)(8) to disclose information to an 

7 individual filing a joint return on collection 

8 activity involving the other individual filing 

9 the return, 

10 ‘‘(iii) information regarding extensions 

11 of the statute of limitations for assessment 

12 and collection of tax under section 6501 

13 and the provision of notice to taxpayers re14 garding requests for such extension, 

15 ‘‘(iv) an evaluation of the adequacy 

16 and security of the technology of the Inter17 nal Revenue Service, 

18 ‘‘(v) any termination or mitigation 

19 under section 1203 of the Internal Rev20 enue Service Restructuring and Reform 

21 Act of 1998, 

22 ‘‘(vi) information regarding improper 

23 denial of requests for information from the 

24 Internal Revenue Service identified under 

25 subparagraph (C)(i), and 
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1 ‘‘(vii) information regarding any ad2 ministrative or civil actions with respect to 

3 violations of the fair debt collection provi4 sions of section 6304, including—

5 ‘‘(I) a summary of such actions 

6 initiated since the date of the last re7 port, and 

8 ‘‘(II) a summary of any judg9 ments or awards granted as a result 

10 of such actions. 

11 ‘‘(B) SEMIANNUAL REPORTS.—

12 ‘‘(i) IN GENERAL.—The Treasury In13 spector General shall include in each semi14 annual report under section 5 of the In15 spector General Act of 1978—

16 ‘‘(I) the number of taxpayer com17 plaints during the reporting period, 

18 ‘‘(II) the number of employee 

19 misconduct and taxpayer abuse allega20 tions received by the Internal Revenue 

21 Service or the Inspector General dur22 ing the period from taxpayers, Inter23 nal Revenue Service employees, and 

24 other sources, 
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1 ‘‘(III) a summary of the status of 

2 such complaints and allegations, and 

3 ‘‘(IV) a summary of the disposi4 tion of such complaints and allega5 tions, including the outcome of any 

6 Department of Justice action and any 

7 monies paid as a settlement of such 

8 complaints and allegations. 

9 ‘‘(ii) Subclauses (III) and (IV) of 

10 clause (i) shall only apply to complaints 

11 and allegations of serious employee mis12 conduct. 

13 ‘‘(C) OTHER RESPONSIBILITIES.—The 

14 Treasury Inspector General shall—

15 ‘‘(i) conduct periodic audits of a sta16 tistically valid sample of the total number 

17 of determinations made by the Internal 

18 Revenue Service to deny written requests 

19 to disclose information to taxpayers on the 

20 basis of section 6103 of this title or section 

21 552(b)(7) of title 5, United States Code, 

22 and 

23 ‘‘(ii) establish and maintain a toll-free 

24 telephone number for taxpayers to use to 

25 confidentially register complaints of mis-
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1 conduct by Internal Revenue Service em2 ployees and incorporate the telephone num3 ber in the statement required by section 

4 6227 of the Omnibus Taxpayer Bill of 

5 Rights (Internal Revenue Service Publica6 tion No. 1). 

7 ‘‘(d) RELATING TO ADMINISTRATIVE REVIEW OF DE8 CISIONS.—An audit or investigation conducted by the 

9 Treasury Inspector General shall not affect a final deci10 sion of the Secretary under section 6406. 

11 ‘‘(e) TRANSMISSION OF REPORTS TO CONGRESS.—

12 ‘‘(1) IN GENERAL.—Any report required to be 

13 transmitted by the Secretary to the appropriate com14 mittees or subcommittees of the Congress under sec15 tion 5(d) of the Inspector General Act of 1978 shall 

16 also be transmitted, within the seven-day period 

17 specified under such section, to the Committees on 

18 Governmental Affairs and Finance of the Senate 

19 and the Committees on Government Reform and 

20 Oversight and Ways and Means of the House of 

21 Representatives. 

22 ‘‘(2) REPORTS RELATING TO THE IRS.—Any re23 port made by the Treasury Inspector General con24 cerning the Internal Revenue Service, the Internal 

25 Revenue Service Oversight Board, or the Office of
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1 Chief Counsel of the Internal Revenue Service that 

2 is required to be transmitted by the Secretary to the 

3 appropriate committees or subcommittees of Con4 gress under section 5(d) of the Inspector General of 

5 1978 shall also be transmitted, within the 7-day pe6 riod specified under such section, to the Internal 

7 Revenue Service Oversight Board and the Commis8 sioner of Internal Revenue. 

9 ‘‘(f) ADDITIONAL SELECTION CRITERIA FOR TREAS10 URY INSPECTOR GENERAL.—In addition to the require11 ments of the first sentence of section 3(a) of the Inspector 

12 General Act of 1978, the Treasury Inspector General 

13 should have demonstrated ability to lead a large and com14 plex organization. 

15 ‘‘(g) TREASURY INSPECTOR GENERAL NOT EM16 PLOYEE OF IRS.—An individual appointed to the position 

17 of Treasury Inspector General may not be an employee 

18 of the Internal Revenue Service—

19 ‘‘(1) during the 2-year period preceding the 

20 date of appointment to such position, or 

21 ‘‘(2) during the 5-year period following the date 

22 such individual ends service in such position. 

23 ‘‘(h) CRIMINAL AUTHORITY.—

24 ‘‘(1) IN GENERAL.—In addition to the duties 

25 and responsibilities exercised by an Inspector Gen-
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1 eral of an establishment, the Treasury Inspector 

2 General—

3 ‘‘(A) shall have the authority and duty to 

4 enforce the criminal provisions within the scope 

5 of the Treasury Inspector General’s jurisdic6 tion, powers, duties and responsibilities as an 

7 Inspector General of an establishment under 

8 the Inspector General Act of 1978 and under 

9 this section, 

10 ‘‘(B) in enforcing the criminal provisions 

11 described in subparagraph (A), shall have the 

12 authority to—

13 ‘‘(i) execute and serve search warrants 

14 and arrest warrants, and serve subpoenas 

15 and summonses issued under authority of 

16 the United States, 

17 ‘‘(ii) make arrests without warrant for 

18 any offense against the United States re19 lating to the laws under the jurisdiction, 

20 powers, duties and responsibilities of the 

21 Treasury Inspector General committed in 

22 the presence of an employee of the Treas23 ury Inspector General authorized to en24 force such laws, or for any felony cog25 nizable under such laws if there is a rea-
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1 sonable ground to believe that the person 

2 to be arrested has committed or is commit3 ting any such felony, 

4 ‘‘(iii) make seizures of property sub5 ject to forfeiture under such laws, and 

6 ‘‘(iv) carry firearms, 

7 ‘‘(C) shall be responsible for protecting the 

8 Department of the Treasury against external 

9 attempts to corrupt or threaten employees of 

10 the Department of the Treasury, but shall not 

11 be responsible for the conducting of background 

12 checks, and 

13 ‘‘(D) may designate any employee in the 

14 Office of the Treasury Inspector General to en15 force such laws and perform such functions re16 ferred to under subparagraphs (A), (B), and 

17 (C). 

18 ‘‘(2) REPORTING TO ATTORNEY GENERAL OF

19 UNITED STATES.—

20 ‘‘(A) IN GENERAL.—In performing a law 

21 enforcement function under paragraph (1), the 

22 Treasury Inspector General shall report any 

23 reasonable grounds to believe there has been a 

24 violation of Federal criminal law to the Attor25 ney General of the United States at an appro-
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1 priate time as determined by the Treasury In2 spector General, notwithstanding section 4(d) of 

3 the Inspector General Act of 1978. 

4 ‘‘(B) EXCEPTION.—In the administration 

5 of section 5(d) of the Inspector General Act of 

6 1978 and subsection (e)(2) of this section, the 

7 Secretary of the Treasury may transmit the re8 quired report at an appropriate time as deter9 mined by the Secretary, if the problem, abuse, 

10 or deficiency relates to—

11 ‘‘(i) the performance of a law enforce12 ment function under paragraph (1) of this 

13 subsection, and 

14 ‘‘(ii) sensitive information concerning 

15 matters under any of the subsection 

16 (b)(1)(A) through (F). 

17 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

18 this subsection shall be construed to affect the au19 thority of any other person to carry out or enforce 

20 any provision specified in paragraph (1). 

21 ‘‘(i) SPECIAL RULES RELATING TO INTERNAL REV22 ENUE SERVICE.—

23 ‘‘(1) IN GENERAL.—The Commissioner of In24 ternal Revenue or the Internal Revenue Service 

25 Oversight Board may request, in writing, the Treas-
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1 ury Inspector General to conduct an audit or inves2 tigation relating to the Internal Revenue Service, the 

3 Internal Revenue Service Oversight Board, or the of4 fice of Chief Counsel of the Internal Revenue Serv5 ice. If the Treasury Inspector General determines 

6 not to conduct such audit or investigation, the 

7 Treasury Inspector General shall timely provide a 

8 written explanation for such determination to the 

9 person making the request. 

10 ‘‘(2) REPORTS.—

11 ‘‘(A) AUDITS.—Any final report of an 

12 audit conducted by the Treasury Inspector Gen13 eral concerning the Internal Revenue Service, 

14 the Internal Revenue Service Oversight Board, 

15 or the Office of the Chief Counsel of the Inter16 nal Revenue Service shall be timely submitted 

17 by the Treasury Inspector General to the Com18 missioner of Internal Revenue and the Internal 

19 Revenue Service Oversight Board. 

20 ‘‘(B) INVESTIGATIONS.—The Treasury In21 spector General shall periodically submit to the 

22 Commissioner and Board a list of investigations 

23 concerning the Internal Revenue Service, the 

24 Internal Revenue Service Oversight Board, or 

25 the Office of the Chief Counsel of the Internal
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1 Revenue Service for which a final report has 

2 been completed by the Treasury Inspector Gen3 eral and shall provide a copy of any such report 

4 upon request of the Commissioner or Board. 

5 ‘‘(C) APPLICATION.—This paragraph ap6 plies regardless of whether the applicable audit 

7 or investigation is requested under paragraph 

8 (1).’’. 

9 (b) CONFORMING AMENDMENTS TO THE INTERNAL

10 REVENUE CODE OF 1986.—

11 (1) The following provisions of the Internal 

12 Revenue Code of 1986 are each amended by striking 

13 ‘‘Treasury Inspector General for Tax Administra14 tion’’ each place it appears in the headings and the 

15 text and inserting ‘‘Treasury Inspector General’’: 

16 (A) Section 6103(h)(6). 

17 (B) Section 6103(k)(6). 

18 (C) Section 7217(b). 

19 (D) Section 7803(c)(2)(B)(iv). 

20 (2) Section 6103(p)(3) of such Code is amend21 ed by adding at the end the following new subpara22 graph: 

23 ‘‘(D) SPECIAL RULE RELATING TO THE

24 TREASURY INSPECTOR GENERAL.—The excep25 tion under subparagraph (A) that the Secretary 
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1 not be required to maintain records or account2 ings shall not apply with respect to the Treas3 ury Inspector General.’’. 

4 (3) Section 6103(p)(4) of such Code is amend5 ed by inserting ‘‘the Treasury Inspector General,’’ 

6 before ‘‘the General Accounting Office’’. 

7 (4) Section 7803 of such Code is amended by 

8 striking subsection (d). 

9 (5) Section 7608(b) of such Code is amended 

10 by striking ‘‘of the Intelligence Division’’. 

11 (c) CONFORMING AMENDMENTS TO INSPECTOR GEN12 ERAL ACT OF 1978.—

13 (1) Section 2 of the Inspector General Act of 

14 1978 (5 U.S.C. App.) is amended by striking ‘‘estab15 lished—’’ and all that follows and inserting ‘‘estab16 lished in each of such establishments an Office of 

17 Inspector General.’’. 

18 (2) The Inspector General Act of 1978 (5 

19 U.S.C. App.) is amended by striking section 8D. 

20 (d) CLERICAL AMENDMENT.—The table of sections 

21 for subchapter A of chapter 80 of such Code is amended 

22 by inserting after the item relating to section 7804 the 

23 following new item:

‘‘Sec. 7804A. Office of the Treasury Inspector General.’’.
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1 SEC. 3. TRANSFER OF OFFICE OF THE INSPECTOR GEN2 ERAL OF THE DEPARTMENT OF THE TREAS3 URY TO THE OFFICE OF TREASURY INSPEC4 TOR GENERAL FOR TAX ADMINISTRATION. 

5 (a) IN GENERAL.—The Office of the Inspector Gen6 eral of the Department of the Treasury is hereby trans7 ferred to the Office of Treasury Inspector General for Tax 

8 Administration. 

9 (b) ABOLISHMENT OF OFFICE OF THE INSPECTOR

10 GENERAL OF THE DEPARTMENT OF THE TREASURY.—

11 Effective upon the transfer under subsection (a) and con12 sistent with the Inspector General Act of 1978 (as amend13 ed by this Act), the Office of Inspector General of the De14 partment of the Treasury established by the Inspector 

15 General Act Amendments of 1988 is abolished. 

16 (c) RENAMING OF TREASURY INSPECTOR GENERAL

17 FOR TAX ADMINISTRATION.—The Office of Treasury In18 spector General for Tax Administration is hereby redesig19 nated as the Office of the Treasury Inspector General. 

20 (d) TRANSFER OF FUNCTIONS, ETC.—Subparagraph 

21 (L) of section 9(a)(1) of the Inspector General Act of 

22 1978 (5 U.S.C. App.) is amended to read as follows: 

23 ‘‘(L) of the Department of the Treasury 

24 (established by the Department of the Treasury 

25 Inspector General Consolidation Act of 2003), 

26 the offices of that department referred to as the 
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1 ‘Office of the Inspector General of the Depart2 ment of the Treasury’ (established by the In3 spector General Act Amendments of 1988);’’.

4 SEC. 4. SAVINGS PROVISIONS. 

5 (a) COMPLETED OR PENDING MATTERS.—Completed 

6 or pending administrative actions, proceedings, orders, de7 terminations, rules, regulations, personnel actions, per8 mits, agreements, grants, contracts, certificates, licenses, 

9 registrations, privileges, or civil actions, of either the In10 spector General of the Department of the Treasury or the 

11 Treasury Inspector General for Tax Administration shall 

12 not be affected by the enactment of this Act or the consoli13 dation of the Office of the Inspector General of the De14 partment of the Treasury and the Office of the Treasury 

15 Inspector General for Tax Administration under this Act 

16 as the Office of the Treasury Inspector General, but shall 

17 continue in effect according to their terms until amended, 

18 modified, superseded, terminated, set aside, or revoked, in 

19 accordance with law by an officer of the United States 

20 or a court of competent jurisdiction, or by operation of 

21 law. 

22 (b) REFERENCES.—Any reference to either the In23 spector General of the Department of the Treasury or the 

24 Treasury Inspector General for Tax Administration in any 

25 statute, Executive Order, rule, regulation, directive, or del-
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1 egation of authority that precedes the effective date of this 

2 Act shall be deemed to be a reference to the Treasury In3 spector General established under the Inspector General 

4 Act of 1978, as amended by this Act, unless otherwise pro5 vided by this Act or the Inspector General Act of 1978. 

6 SEC. 5. TRANSITION PROVISION. 

7 The President may designate an individual to serve 

8 as the Treasury Inspector General (as consolidated under 

9 section 2 of this Act and the amendments made by this 

10 Act) until a Treasury Inspector General is appointed pur11 suant to section 3 of the Inspector General Act of 1978. 

12 SEC. 6. EFFECTIVE DATE. 

13 This Act and the amendments made by this Act shall 

14 take effect 120 days after the date of the enactment of 

15 this Act.

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