II 

109TH CONGRESS 

1ST SESSION S. 2122 

To terminate the Internal Revenue Code of 1986, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 16, 2005 

Mr. ISAKSON introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To terminate the Internal Revenue Code of 1986, 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 ‘‘Date Certain Tax Code 

5 Replacement Act’’. 

6 SEC. 2. PURPOSE. 

7 The purpose of this Act is to set a date certain for 

8 replacing the Internal Revenue Code of 1986 with a simple 

9 and fair alternative. 
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1 SEC. 3. TERMINATION OF INTERNAL REVENUE CODE OF 

2 1986. 

3 (a) IN GENERAL.—No tax shall be imposed by the 

4 Internal Revenue Code of 1986— 

5 (1) for any taxable year beginning after Decem6 ber 31, 2008; and 

7 (2) in the case of any tax not imposed on the 

8 basis of a taxable year, on any taxable event or for 

9 any period after December 31, 2008. 

10 (b) EXCEPTION.—Subsection (a) shall not apply to 

11 taxes imposed by— 

12 (1) chapter 2 of such Code (relating to tax on 

13 self-employment income); 

14 (2) chapter 21 of such Code (relating to Fed15 eral Insurance Contributions Act); and 

16 (3) chapter 22 of such Code (relating to Rail17 road Retirement Tax Act). 

18 SEC. 4. NATIONAL COMMISSION ON TAX REFORM AND SIM19 PLIFICATION. 

20 (a) FINDINGS.—The Congress finds the following: 

21 (1) The Internal Revenue Code of 1986 is over22 ly complex, imposes significant burdens on individ23 uals and businesses and the economy, is extremely 

24 difficult for the Internal Revenue Service to admin25 ister, and is in need of fundamental reform and sim26 plification. 
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1 (2) Many of the problems encountered by tax2 payers in dealing with the Internal Revenue Service 

3 could be eliminated or alleviated by fundamental re4 form and simplification. 

5 (3) Recent efforts to simplify or reform the tax 

6 laws have not been successful due in part to the dif7 ficulty of developing broad-based, nonpartisan sup8 port for proposals to make such changes. 

9 (4) Many of the problems with the Internal 

10 Revenue Service stem from the overly complex tax 

11 code the agency is asked to administer. 

12 (b) ESTABLISHMENT.— 

13 (1) IN GENERAL.—To carry out the purposes of 

14 this section, there is established within the legislative 

15 branch a National Commission on Tax Reform and 

16 Simplification (in this section referred to as the 

17 ‘‘Commission’’). 

18 (2) COMPOSITION.—The Commission shall be 

19 composed of 15 members (of which not less than 2 

20 members are from small businesses with less than 

21 50 employees), as follows: 

22 (A) Three members appointed by the 

23 President, two from the executive branch of the 

24 Government and one from the private sector. 
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1 (B) Four members appointed by the ma2 jority leader of the Senate, one from Members 

3 of the Senate and three from the private sector. 

4 (C) Two members appointed by the minor5 ity leader of the Senate, one from Members of 

6 the Senate and one from the private sector. 

7 (D) Four members appointed by the 

8 Speaker of the House of Representatives, one 

9 from Members of the House and three from the 

10 private sector. 

11 (E) Two members appointed by the minor12 ity leader of the House of Representatives, one 

13 from Members of the House and one from the 

14 private sector. 

15 (3) CHAIR.—The Commission shall elect a 

16 Chair (or two Co-Chairs) from among its members. 

17 (4) MEETINGS, QUORUMS, VACANCIES.—After 

18 its initial meeting, the Commission shall meet upon 

19 the call of the Chair (Co-Chairs, if elected) or a ma20 jority of its members. Nine members of the Commis21 sion shall constitute a quorum. Any vacancy in the 

22 Commission shall not affect its powers, but shall be 

23 filled in the same manner in which the original ap24 pointment was made. Any meeting of the Commis25 sion or any subcommittee thereof may be held in ex-
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1 ecutive session to the extent that the Chair (Co2 Chairs, if elected) or a majority of the members of 

3 the Commission or subcommittee determine appro4 priate. 

5 (5) CONTINUATION OF MEMBERSHIP.—If— 

6 (A) any individual who appointed a mem7 ber to the Commission by virtue of holding a 

8 position described in paragraph (2) ceases to 

9 hold such position before the report of the Com10 mission is submitted under subsection (g); or 

11 (B) a member was appointed to the Com12 mission as a Member of Congress and the mem13 ber ceases to be a Member of Congress, or was 

14 appointed to the Commission because the mem15 ber was not an officer or employee of any gov16 ernment and later becomes an officer or em17 ployee of a government, 

18 that member may continue as a member for not 

19 longer than the 30-day period beginning on the date 

20 that such individual ceases to hold such position or 

21 such member ceases to be a Member of Congress or 

22 becomes such an officer or employee, as the case 

23 may be. 

24 (6) APPOINTMENT; INITIAL MEETING.— 
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1 (A) APPOINTMENT.—It is the sense of the 

2 Congress that members of the Commission 

3 should be appointed not more than 60 days 

4 after the date of the enactment of this Act. 

5 (B) INITIAL MEETING.—If, after 60 days 

6 from the date of the enactment of this Act, 

7 eight or more members of the Commission have 

8 been appointed, members who have been ap9 pointed may meet and select the Chair (or Co10 Chairs) who thereafter shall have the authority 

11 to begin the operations of the Commission, in12 cluding the hiring of staff. 

13 (c) FUNCTIONS OF THE COMMISSION.— 

14 (1) IN GENERAL.—The functions of the Com15 mission shall be— 

16 (A) to conduct, for a period not to exceed 

17 18 months from the date of its first meeting, 

18 the review described in paragraph (2); and 

19 (B) to submit to the Congress a report of 

20 the results of such review, including rec21 ommendations for fundamental reform and sim22 plification of the Internal Revenue Code of 

23 1986, as described in subsection (g). 

24 (2) REVIEW.—The Commission shall review— 
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1 (A) the present structure and provisions of 

2 the Internal Revenue Code of 1986, especially 

3 with respect to— 

4 (i) its impact on the economy (includ5 ing the impact on savings, capital forma6 tion and capital investment); 

7 (ii) its impact on families and the 

8 workforce (including issues relating to dis9 tribution of tax burden); 

10 (iii) the compliance cost to taxpayers, 

11 including small businesses and corpora12 tions; and 

13 (iv) the ability of the Internal Rev14 enue Service to administer such provisions; 

15 (B) whether tax systems imposed under 

16 the laws of other countries could provide more 

17 efficient and fair methods of funding the rev18 enue requirements of the government; 

19 (C) whether the present income tax system 

20 should be replaced with a flat tax, a national 

21 sales tax, or any other specified tax system; 

22 (D) whether the Internal Revenue Code of 

23 1986 can be simplified, absent wholesale re24 structuring or replacement thereof; and 
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1 (E) the transition costs (including the 

2 length of time recommended for a smooth tran3 sition) associated with any changes to the 

4 present Federal tax system (both real and im5 plied) which would be imposed on citizens, busi6 nesses, and the Government. 

7 (d) POWERS OF THE COMMISSION.— 

8 (1) IN GENERAL.—The Commission or, on the 

9 authorization of the Commission, any subcommittee 

10 or member thereof, may, for the purpose of carrying 

11 out the provisions of this section, hold such hearings 

12 and sit and act at such times and places, take such 

13 testimony, receive such evidence, and administer 

14 such oaths, as the Commission or such designated 

15 subcommittee or designated member may deem ad16 visable. 

17 (2) CONTRACTING.—The Commission may, to 

18 such extent and in such amounts as are provided in 

19 appropriation Acts, enter into contracts to enable 

20 the Commission to discharge its duties under this 

21 section. 

22 (3) ASSISTANCE FROM FEDERAL AGENCIES AND

23 OFFICES.— 

24 (A) INFORMATION.—The Commission is 

25 authorized to secure directly from any executive 
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1 department, bureau, agency, board, commission, 

2 office, independent establishment, or instrumen3 tality of the Government, as well as from any 

4 committee or other office of the legislative 

5 branch, such information, suggestions, esti6 mates, and statistics as it requires for the pur7 poses of its review and report. Each such de8 partment, bureau, agency, board, commission, 

9 office, establishment, instrumentality, or com10 mittee shall, to the extent not prohibited by 

11 law, furnish such information, suggestions, esti12 mates, and statistics directly to the Commis13 sion, upon request made by the Chair (Co14 Chairs, if elected). 

15 (B) TREASURY DEPARTMENT.—The Sec16 retary of the Treasury is authorized on a non17 reimbursable basis to provide the Commission 

18 with administrative services, funds, facilities, 

19 staff, and other support services for the per20 formance of the Commission’s functions. 

21 (C) GENERAL SERVICES ADMINISTRA22 TION.—The Administrator of General Services 

23 shall provide to the Commission on a non24 reimbursable basis such administrative support 

25 services as the Commission may request. 
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1 (D) JOINT COMMITTEE ON TAXATION.— 

2 The staff of the Joint Committee on Taxation 

3 is authorized on a nonreimbursable basis to 

4 provide the Commission with such legal, eco5 nomic, or policy analysis, including revenue esti6 mates, as the Commission may request. 

7 (E) OTHER ASSISTANCE.—In addition to 

8 the assistance set forth in subparagraphs (A), 

9 (B), (C), and (D), departments and agencies of 

10 the United States are authorized to provide to 

11 the Commission such services, funds, facilities, 

12 staff, and other support services as they may 

13 deem advisable and as may be authorized by 

14 law. 

15 (4) POSTAL SERVICES.—The Commission may 

16 use the United States mails in the same manner and 

17 under the same conditions as departments and agen18 cies of the United States. 

19 (5) GIFTS.—The Commission may accept, use, 

20 and dispose of gifts or donations of services or prop21 erty in carrying out its duties under this section. 

22 (e) STAFF OF THE COMMISSION.— 

23 (1) IN GENERAL.—The Chair (Co-Chairs, if 

24 elected), in accordance with rules agreed upon by the 

25 Commission, may appoint and fix the compensation 
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1 of a staff director and such other personnel as may 

2 be necessary to enable the Commission to carry out 

3 its functions without regard to the provisions of title 

4 5, United States Code, governing appointments in 

5 the competitive service, and without regard to the 

6 provisions of chapter 51 and subchapter III or chap7 ter 53 of such title relating to classification and 

8 General Schedule pay rates, except that no rate of 

9 pay fixed under this subsection may exceed the 

10 equivalent of that payable to a person occupying a 

11 position at level V of the Executive Schedule under 

12 section 5316 of title 5, United States Code. Any 

13 Federal Government employee may be detailed to 

14 the Commission without reimbursement from the 

15 Commission, and such detailee shall retain the 

16 rights, status, and privileges of his or her regular 

17 employment without interruption. 

18 (2) CONSULTANT SERVICES.—The Commission 

19 is authorized to procure the services of experts and 

20 consultants in accordance with section 3109 of title 

21 5, United States Code, but at rates not to exceed the 

22 daily rate paid a person occupying a position at level 

23 IV of the Executive Schedule under section 5315 of 

24 title 5, United States Code. 

25 (f) COMPENSATION AND TRAVEL EXPENSES.— 
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1 (1) COMPENSATION.— 

2 (A) IN GENERAL.—Except as provided in 

3 subparagraph (B), each member of the Com4 mission may be compensated at not to exceed 

5 the daily equivalent of the annual rate of basic 

6 pay in effect for a position at level IV of the 

7 Executive Schedule under section 5315 of title 

8 5, United States Code, for each day during 

9 which that member is engaged in the actual 

10 performance of the duties of the Commission. 

11 (B) EXCEPTION.—Members of the Com12 mission who are officers or employees of the 

13 United States or Members of Congress shall re14 ceive no additional pay on account of their serv15 ice on the Commission. 

16 (2) TRAVEL EXPENSES.—While away from 

17 their homes or regular places of business in the per18 formance of services for the Commission, members 

19 of the Commission shall be allowed travel expenses, 

20 including per diem in lieu of subsistence, in the 

21 same manner as persons employed intermittently in 

22 the Government service are allowed expenses under 

23 section 5703(b) of title 5, United States Code. 

24 (g) REPORT OF THE COMMISSION; TERMINATION.— 
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1 (1) REPORT.—Not later than 18 months after 

2 the date of the first meeting of the Commission, the 

3 Commission shall submit a report to the Committee 

4 on Ways and Means of the House of Representatives 

5 and the Committee on Finance of the Senate. The 

6 report of the Commission shall describe the results 

7 of its review (as described in subsection (c)(2)), shall 

8 make such recommendations for fundamental reform 

9 and simplification of the Internal Revenue Code of 

10 1986 as the Commission considers appropriate, and 

11 shall describe the expected impact of such rec12 ommendations on the economy. The measurement of 

13 such impact shall be made using both static and dy14 namic scoring models. 

15 (2) TERMINATION.— 

16 (A) IN GENERAL.—The Commission, and 

17 all the authorities of this section, shall termi18 nate on the date which is 90 days after the date 

19 on which the report is required to be submitted 

20 under paragraph (1). 

21 (B) CONCLUDING ACTIVITIES.—The Com22 mission may use the 90-day period referred to 

23 in subparagraph (A) for the purposes of con24 cluding its activities, including providing testi-
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1 mony to committees of Congress concerning its 

2 report and disseminating that report. 

3 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

4 authorized to be appropriated such sums as may be nec5 essary for the activities of the Commission. Until such 

6 time as funds are specifically appropriated for such activi7 ties, $2,000,000 shall be available from fiscal year 2006 

8 funds appropriated to the Treasury Department, ‘‘Depart9 mental Offices’’ account, for the activities of the Commis10 sion, to remain available until expended. 

11 SEC. 5. TIMING OF IMPLEMENTATION. 

12 In order to ensure an easy transition and effective 

13 implementation, the Congress hereby declares that any 

14 new Federal tax system shall be approved by Congress in 

15 its final form no later than July 4, 2008. If a new Federal 

16 tax system is not so approved by July 4, 2008, then Con17 gress shall be required to vote to reauthorize the Internal 

18 Revenue Code of 1986. 

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