I

103D CONGRESS

1ST SESSION H. R. 917

To amend the Internal Revenue Code of 1986 to require an investigation

of Internal Revenue Service abuse of taxpayers’ rights, to safeguard

taxpayer rights, to monitor the effectiveness of the Internal Revenue

Service’s program for the prevention of taxpayer abuse, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 16, 1993

Mr. TRAFICANT introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to require

an investigation of Internal Revenue Service abuse of

taxpayers’ rights, to safeguard taxpayer rights, to monitor the effectiveness of the Internal Revenue Service’s

program for the prevention of taxpayer abuse, and for

other purposes.

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

3 SECTION 1. INVESTIGATION OF INTERNAL REVENUE SERV4 ICE ABUSE OF TAXPAYERS’ RIGHTS.

5 (a) FINDINGS.—The Congress hereby finds that—
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1 (1) although generally IRS employees perform

2 their duties in a competent and professional manner,

3 many instances have been reported concerning IRS

4 abuse of taxpayers’ rights, including the improper

5 targeting of taxpayers or groups of taxpayers for

6 political purposes;

7 (2) there is a need to enable the public to scru8 tinize the activities of the IRS and to ensure that

9 the IRS is subject to public accountability;

10 (3) there is a need to improve the oversight of

11 the IRS;

12 (4) there is a need for procedures by which

13 Congress can obtain necessary information to effec14 tively perform its oversight role on behalf of the

15 public; and

16 (5) there currently exists no effective reporting

17 or monitoring mechanism to assist Congress in safe18 guarding taxpayer rights.

19 (b) PURPOSE.—It is the purpose of this Act to im20 prove oversight by the Congress of the IRS, to safeguard

21 taxpayer rights, to discourage abuse of taxpayer rights,

22 to encourage reporting of taxpayer abuse, to uncover past

23 instances of such abuse so that they do not occur in the

24 future, and to provide independent monitoring of IRS ac25 tions taken to prevent taxpayer abuse.
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1 (c) REPORTING RESPONSIBILITIES OF INTERNAL

2 REVENUE SERVICE.—

3 (1) ANNUAL REPORTS.—During each calendar

4 year beginning after the date of the enactment of

5 this Act, the Secretary of the Treasury shall submit

6 to the Congress a compliance report on—

7 (A) the nature of its program to prevent

8 abuses of taxpayers’ rights by the Internal Rev9 enue Service, and to comply with the Taxpayer

10 Bill of Rights,

11 (B) the implementation of such program,

12 (C) the effectiveness of such program and

13 the evidence on the basis of which such analysis

14 is made, and

15 (D) detailed descriptions of the types of

16 taxpayer abuse cases that have occurred and

17 IRS measures instituted to correct such abuses

18 and prevent their recurrence.

19 Such report shall be submitted to the Committee on

20 Ways and Means of the House of Representatives

21 and the Committee on Finance of the Senate by Oc22 tober 1 of each year.

23 (d) INVESTIGATION BY GENERAL ACCOUNTING OF24 FICE.—

25 (1) IN GENERAL.—The Comptroller General—
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1 (A) shall conduct a full and complete in2 vestigation of past instances in which the Inter3 nal Revenue Service has abused taxpayers’

4 rights, has been used for political purposes, has

5 improperly targeted taxpayers (or groups of

6 taxpayers) for investigation, has promoted over7 zealous agents on the strength of collections,

8 has maintained illegal dossiers on taxpayers,

9 has conducted investigations for political pur10 poses, has retaliated against IRS employees

11 who have reported IRS misconduct, or has en12 gaged in other significant misconduct; and

13 (B) shall provide an assessment and eval14 uation of the implementation and effectiveness

15 of the program of the Internal Revenue Service

16 to prevent such abuses from occurring in the

17 future.

18 (2) REPORT.—Not later than 1 year after the

19 date of the enactment of this Act, the Comptroller

20 General shall submit to the Oversight Subcommittee

21 of the Committee on Ways and Means of the House

22 of Representatives and the Oversight Committee of

23 the Committee on Finance of the Senate, a report

24 on the investigation conducted under paragraph (1),

25 together with such recommendations as he may
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1 deem advisable. The Comptroller General shall have

2 access to any IRS return information he deems nec3 essary to perform his duties under this section.

4 Nothing in this section shall be construed to permit

5 the Comptroller General to make public the names

6 or similar identifying information of any taxpayer.

7 (3) ACCESS TO RETURNS AND RETURN INFOR8 MATION.—The purposes for which returns and re9 turn information may be open to inspection or dis10 closure under section 6103(i)(7)(A) of the Internal

11 Revenue Code of 1986 (relating to disclosure to

12 General Accounting Office) shall include the pur13 poses of carrying out the Comptroller General’s du14 ties as specified in this section.

15 (e) DEFINITIONS.—For purpose of this section—

16 (1) the term ‘‘Service’’ or ‘‘IRS’’ refer to the

17 Internal Revenue Service of the Department of

18 Treasury; and

19 (2) the term ‘‘employee’’ includes any IRS offi20 cer or employee.

21 SEC. 2. ESTABLISHMENT OF POSITION OF TAXPAYER AD22 VOCATE WITHIN INTERNAL REVENUE SERV23 ICE.

24 (a) GENERAL RULE.—Section 7802 of the Internal

25 Revenue Code of 1986 (relating to Commissioner of Inter-
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1 nal Revenue; Assistant Commissioner (Employee Plans

2 and Exempt Organizations)) is amended by adding at the

3 end thereof the following new subsection:

4 ‘‘(d) OFFICE OF TAXPAYER ADVOCATE.—

5 ‘‘(1) IN GENERAL.—There is established in the

6 Internal Revenue Service an office to be known as

7 the ‘Office of the Taxpayer Advocate’. Such office,

8 including all problem resolution officers, shall be

9 under the supervision and direction of an official to

10 be known as the ‘Taxpayer Advocate’ who shall be

11 appointed by the President by and with the advice

12 and consent of the Senate, and who shall report di13 rectly to the Commissioner of Internal Revenue. The

14 Taxpayer Advocate shall be entitled to compensation

15 at the same rate as the Chief Counsel for the Inter16 nal Revenue Service.

17 ‘‘(2) FUNCTIONS OF OFFICE.—

18 ‘‘(A) IN GENERAL.—It shall be the func19 tion of the Office of Taxpayer Advocate to—

20 ‘‘(i) assist taxpayers in resolving prob21 lems with the Internal Revenue Service,

22 ‘‘(ii) identify areas in which taxpayers

23 have problems in dealings with the Internal

24 Revenue Service,
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1 ‘‘(iii) to the extent possible, propose

2 changes in the administrative practices of

3 the Internal Revenue Service to mitigate

4 problems identified under clause (ii), and

5 ‘‘(iv) identify potential legislative

6 changes which may be appropriate to miti7 gate such problems.

8 ‘‘(B) ANNUAL REPORTS.—

9 ‘‘(i) OBJECTIVES.—Not later than Oc10 tober 31 of each calendar year after 1992,

11 the Taxpayer Advocate shall report to the

12 Committee on Ways and Means of the

13 House of Representatives and the Commit14 tee on Finance of the Senate on the objec15 tives of the Taxpayer Advocate for the fol16 lowing calendar year. Any such report shall

17 contain full and substantive analysis, in

18 addition to statistical information.

19 ‘‘(ii) ACTIVITIES.—Not later than

20 June 30 of each calendar year after 1992,

21 the Taxpayer Advocate shall report to the

22 Committee on Ways and Means of the

23 House of Representatives and the Commit24 tee on Finance of the Senate on the activi25 ties of the Taxpayer Advocate during the
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1 fiscal year ending during such calendar

2 year. Any such report shall contain full

3 and substantive analysis, in addition to

4 statistical information, and shall—

5 ‘‘(I) identify the initiatives the

6 Taxpayer Advocate has taken on im7 proving taxpayer services and Internal

8 Revenue Service responsiveness,

9 ‘‘(II) contain recommendations

10 received from individuals with the au11 thority to issue taxpayer assistance

12 orders under section 7811,

13 ‘‘(III) contain a summary of at

14 least 20 of the most serious problems

15 encountered by taxpayers, including a

16 description of the nature of such prob17 lems,

18 ‘‘(IV) contain an inventory of the

19 items described in subclauses (I), (II),

20 and (III) for which action has been

21 taken and the result of such action,

22 ‘‘(V) contain an inventory of the

23 items described in subclauses (I), (II),

24 and (III) for which action remains to

25 be completed and the period during
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1 which each item has remained on such

2 inventory,

3 ‘‘(VI) contain an inventory of the

4 items described in subclauses (II) and

5 (III) for which no action has been

6 taken, the period during which each

7 item has remained on such inventory,

8 the reasons for the inaction, and iden9 tify any Internal Revenue Service

10 official who is responsible for such

11 inaction,

12 ‘‘(VII) identify any Taxpayer As13 sistance Order which was not honored

14 by the Internal Revenue Service in a

15 timely manner, as specified under sec16 tion 7811(b),

17 ‘‘(VIII) contain recommendations

18 for such administrative and legislative

19 action as may be appropriate to re20 solve problems encountered by tax21 payers, and

22 ‘‘(IX) include such other infor23 mation as the Taxpayer Advocate may

24 deem advisable.
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1 ‘‘(iii) REPORT TO BE SUBMITTED DI2 RECTLY.—Each report required under this

3 subparagraph shall be provided directly to

4 the Committees referred to in clauses (i)

5 and (ii) without any prior review or com6 ment from the Commissioner of the Inter7 nal Revenue Service, the Secretary of the

8 Treasury, any other officer or employee of

9 the Department of the Treasury, or the

10 Office of Management and Budget.

11 ‘‘(3) RESPONSIBILITIES OF COMMISSIONER OF

12 INTERNAL REVENUE SERVICE.—The Commissioner

13 of Internal Revenue shall establish procedures re14 quiring a formal response to all recommendations

15 submitted to the Commissioner by the Taxpayer

16 Advocate.’’

17 (b) CONFORMING AMENDMENTS.—

18 (1) Section 7811 of such Code (relating to tax19 payer assistance orders) is amended—

20 (A) by striking ‘‘the Office of Ombuds21 man’’ in subsection (a) and inserting ‘‘the Of22 fice of the Taxpayer Advocate’’, and

23 (B) by striking ‘‘Ombudsman’’ each place

24 it appears (including in the headings of sub-
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1 sections (e) and (f)) and inserting ‘‘Taxpayer

2 Advocate’’.

3 (2) The heading for section 7802 of such Code

4 is amended to read as follows:

5 ‘‘SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; AS6 SISTANT COMMISSIONERS; TAXPAYER ADVO7 CATE.’’

8 (3) The table of sections for subchapter A of

9 chapter 80 of subtitle F is amended by striking the

10 item relating to section 7802 and inserting the fol11 lowing new item:

‘‘Sec. 7802. Commissioner of Internal Revenue; Assistant Commissioners; Taxpayer Advocate.’’

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

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

14 of this Act.

15 SEC. 3. REPORTS ON TAXPAYER-RIGHTS EDUCATION PRO16 GRAM.

17 Not later than 6 months after the date of the enact18 ment of this Act, the Secretary of the Treasury or his dele19 gate shall submit a report to the Committee on Ways and

20 Means of the House of Representatives and the Committee

21 on Finance of the Senate on the scope and content of the

22 Internal Revenue Service’s taxpayer-rights education pro23 gram for its officers and employees. Not later than 8

24 months after the date of the enactment of this Act, such
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1 Secretary shall submit a report to such Committees on the

2 effectiveness of the program referred to in the preceding

3 sentence.

4 SEC. 4. BIENNIAL REPORTS ON MISCONDUCT BY INTERNAL

5 REVENUE SERVICE EMPLOYEES.

6 During December of 1993 and during December of

7 each second calendar year thereafter, the Secretary of the

8 Treasury or his delegate shall report to the Committee on

9 Ways and Means of the House of Representatives and the

10 Committee on Finance of the Senate on all cases involving

11 complaints about misconduct of Internal Revenue Service

12 employees and the disposition of such complaints.

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