II 

114TH CONGRESS 

1ST SESSION S. 1578 

To amend the Internal Revenue Code of 1986 to enhance taxpayer rights, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 16, 2015 

Mr. GRASSLEY (for himself and Mr. THUNE) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to enhance 

taxpayer rights, 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 Bill of Rights Enhancement 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 


emcdonald on DSK67QTVN1PROD with BILLS
2 

•S 1578 IS

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

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

4 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—TAXPAYER BILL OF RIGHTS AND INTERNAL REVENUE 

SERVICE ACCOUNTABILITY 

Sec. 101. Duty to ensure that IRS employees are familiar with and act in accord with certain taxpayer rights. 

Sec. 102. Revisions relating to termination of employment of IRS employees for 

misconduct. 

Sec. 103. Codification of rules for retention of Internal Revenue Service emails. 

TITLE II—THE RIGHT TO PRIVACY 

Sec. 201. Criminal penalty for unauthorized disclosure or inspection. 

Sec. 202. Civil damages for unauthorized disclosure or inspection. 

Sec. 203. IRS employees prohibited from using personal email accounts for official business. 

Sec. 204. Compliance by contractors with confidentiality safeguards. 

TITLE III—THE RIGHT TO APPEAL IN AN INDEPENDENT FORUM 

AND TO CHALLENGE THE INTERNAL REVENUE SERVICE POSITION AND BE HEARD 

Sec. 301. Increase in limitations on civil damages for certain unauthorized collection actions. 

Sec. 302. Extension of time limit for contesting IRS levy. 

Sec. 303. Expansion of declaratory judgment remedy to tax-exempt organizations. 

TITLE IV—THE RIGHT TO A FAIR AND JUST TAX SYSTEM 

Sec. 401. Waiver of user fee for installment agreements using automated withdrawals. 

Sec. 402. Individuals held harmless on improper levy on individual retirement 

plan. 

Sec. 403. Office of Chief Counsel review of offers-in-compromise. 

Sec. 404. Authority of the National Taxpayer Advocate to comment on Treasury regulations. 

Sec. 405. Individual estimated tax. 

Sec. 406. Corporate estimated tax. 

Sec. 407. Increase in large corporation threshold for estimated tax payments. 

Sec. 408. Expansion of interest netting. 

Sec. 409. Clarification of application of Federal tax deposit penalty. 

TITLE V—THE RIGHT TO BE INFORMED 

Sec. 501. Collection activities with respect to joint return disclosable to either 

spouse based on oral request. 

Sec. 502. Disclosure of taxpayer identity for tax refund purposes. 


emcdonald on DSK67QTVN1PROD with BILLS
3 

•S 1578 IS

Sec. 503. Release of information regarding the status of certain investigations. 

Sec. 504. Mandatory electronic filing for annual returns of exempt organizations. 

TITLE VI—THE RIGHT TO QUALIFY SERVICE 

Sec. 601. Free electronic filing. 

Sec. 602. Access to appeals. 

1 TITLE I—TAXPAYER BILL OF 

2 RIGHTS AND INTERNAL REV3 ENUE SERVICE ACCOUNT4 ABILITY 

5 SEC. 101. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FA6 MILIAR WITH AND ACT IN ACCORD WITH CER7 TAIN TAXPAYER RIGHTS. 

8 (a) IN GENERAL.—Section 7803(a) of the Internal 

9 Revenue Code of 1986 is amended by redesignating para10 graph (3) as paragraph (4) and by inserting after para11 graph (2) the following new paragraph: 

12 ‘‘(3) EXECUTION OF DUTIES IN ACCORD WITH

13 TAXPAYER RIGHTS.—In discharging his duties, the 

14 Commissioner shall ensure that employees of the In15 ternal Revenue Service are familiar with and act in 

16 accord with taxpayer rights as afforded by other 

17 provisions of this title, including— 

18 ‘‘(A) the right to be informed, 

19 ‘‘(B) the right to quality service, 

20 ‘‘(C) the right to pay no more than the 

21 correct amount of tax, 


emcdonald on DSK67QTVN1PROD with BILLS
4 

•S 1578 IS

1 ‘‘(D) the right to challenge the position of 

2 the Internal Revenue Service and be heard, 

3 ‘‘(E) the right to appeal a decision of the 

4 Internal Revenue Service in an independent 

5 forum, 

6 ‘‘(F) the right to finality, 

7 ‘‘(G) the right to privacy, 

8 ‘‘(H) the right to confidentiality, 

9 ‘‘(I) the right to retain representation, and 

10 ‘‘(J) the right to a fair and just tax sys11 tem.’’. 

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

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

14 of this Act. 

15 SEC. 102. REVISIONS RELATING TO TERMINATION OF EM16 PLOYMENT OF IRS EMPLOYEES FOR MIS17 CONDUCT. 

18 (a) TERMINATION FOR TAKING OFFICIAL ACTIONS

19 FOR POLITICAL PURPOSES.—Paragraph (10) of section 

20 1203(b) of the Internal Revenue Service Restructuring 

21 and Reform Act of 1998 is amended to read as follows: 

22 ‘‘(10) performing, delaying, or failing to per23 form (or threatening to perform, delay, or fail to 

24 perform) any official action (including any audit) 


emcdonald on DSK67QTVN1PROD with BILLS
5 

•S 1578 IS

1 with respect to a taxpayer for purpose of extracting 

2 personal gain or benefit or for a political purpose.’’. 

3 (b) NOTIFICATION OF DECISION NOT TO TERMI4 NATE EMPLOYMENT.—Section 1203(c) of the Internal 

5 Revenue Service Restructuring and Reform Act of 1998 

6 is amended by adding at the end the following new para7 graph: 

8 ‘‘(4) NOTIFICATION.—In any case in which the 

9 Commissioner exercises the authority under para10 graph (1), the Commissioner shall submit to the 

11 chairman and ranking member of the Committee on 

12 Finance of the Senate and the chairman and rank13 ing member of the Committee on Ways and Means 

14 of the House of Representatives of the reasons for 

15 taking a personnel action other than termination.’’. 

16 SEC. 103. CODIFICATION OF RULES FOR RETENTION OF IN17 TERNAL REVENUE SERVICE EMAILS. 

18 (a) RETENTION OF RECORDS.—Email records of the 

19 Internal Revenue Service shall be retained in an appro20 priate electronic system that supports records manage21 ment and litigation requirements, including the capability 

22 to identify, retrieve, and retain the records, in accordance 

23 with this subsection: 

24 (1) Prior to the date on which the Treasury In25 spector General for Tax Administration makes the 


emcdonald on DSK67QTVN1PROD with BILLS
6 

•S 1578 IS

1 certification under subsection (c)(1), the Commis2 sioner of Internal Revenue and the Chief Counsel for 

3 the Internal Revenue Service shall retain all email 

4 records. 

5 (2) Not later than December 31, 2016, the 

6 Commissioner of Internal Revenue and the Chief 

7 Counsel for the Internal Revenue Service shall main8 tain email records of all principal officers and speci9 fied employees of the Internal Revenue Service for a 

10 period of 15 years beginning on the date such record 

11 was generated. 

12 (b) TRANSMISSION OF RECORDS TO THE NATIONAL

13 ARCHIVES.—Not later than the last day of the 15-year 

14 period described in subsection (a)(2), the Commissioner 

15 of Internal Revenue and the Chief Counsel for the Internal 

16 Revenue Service shall transfer the email records of prin17 cipal officers of the Internal Revenue Service to the Archi18 vist of the United States. 

19 (c) COMPLIANCE.— 

20 (1) CERTIFICATION.—On the date that the 

21 Treasury Inspector General for Tax Administration 

22 determines that the Internal Revenue Service has a 

23 program in place that complies with the require24 ments of subsections (a)(2) and (b), the Treasury 

25 Inspector General for Tax Administration shall cerVerDate Sep 11 2014 01:04 Jun 19, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1578.IS S1578

emcdonald on DSK67QTVN1PROD with BILLS
7 

•S 1578 IS

1 tify to the Committee on Finance of the Senate and 

2 the Committee on Ways and Means of the House of 

3 Representatives that the Internal Revenue Service is 

4 in compliance with such requirements. 

5 (2) REPORTS.— 

6 (A) INTERIM REPORT.—Not later than 

7 March 1, 2016, the Treasury Inspector General 

8 for Tax Administration shall submit a report to 

9 the Committee on Finance of the Senate and 

10 the Committee on Ways and Means of the 

11 House of Representatives on the steps being 

12 taken by the Commissioner of Internal Revenue 

13 and the Chief Counsel for the Internal Revenue 

14 Service to comply with the requirements of sub15 sections (a)(2) and (b). 

16 (B) FINAL REPORT.—Not later than 

17 March 1, 2017, the Treasury Inspector General 

18 for Tax Administration shall submit a report to 

19 the Committee on Finance of the Senate and 

20 the Committee on Ways and Means of the 

21 House of Representatives describing whether 

22 the Internal Revenue Service is in compliance 

23 with the requirements of subsections (a)(2) and 

24 (b). 

25 (d) DEFINITIONS.— 


emcdonald on DSK67QTVN1PROD with BILLS
8 

•S 1578 IS

1 (1) PRINCIPAL OFFICERS.—For purposes of 

2 this section, the term ‘‘principal officer’’ means, with 

3 respect to the Internal Revenue Service— 

4 (A) any employee whose position is listed 

5 under the Internal Revenue Service in the most 

6 recent version of the United States Government 

7 Manual published by the Office of the Federal 

8 Register, 

9 (B) any employee who is a senior staff 

10 member reporting directly to the Commissioner 

11 of Internal Revenue, and 

12 (C) any— 

13 (i) associate counsel, deputy counsel, 

14 or division head in the Office of the Chief 

15 Counsel for the Internal Revenue Service, 

16 and 

17 (ii) any employee who is a senior staff 

18 member, 

19 who reports directly to such Chief Counsel. 

20 (2) SPECIFIED EMPLOYEES.—The term ‘‘speci21 fied employee’’ means, with respect to the Internal 

22 Revenue Service, any employee who— 

23 (A) holds a Senior Executive Service posi24 tion (as defined in section 3132 of title 5, 

25 United States Code) in the Internal Revenue 


emcdonald on DSK67QTVN1PROD with BILLS
9 

•S 1578 IS

1 Service or the Office of Chief Counsel for the 

2 Internal Revenue Service), and 

3 (B) is not a principal officer of the Inter4 nal Revenue Service. 

5 TITLE II—THE RIGHT TO 

6 PRIVACY 

7 SEC. 201. CRIMINAL PENALTY FOR UNAUTHORIZED DIS8 CLOSURE OR INSPECTION. 

9 (a) UNAUTHORIZED DISCLOSURE.—Section 7213 is 

10 amended by striking ‘‘$5,000’’ each place it appears in 

11 subsections (a) and (d) and inserting ‘‘$20,000’’. 

12 (b) UNAUTHORIZED INSPECTION.—Section 

13 7213A(b)(1) is amended by striking ‘‘$1,000’’ and insert14 ing ‘‘$5,000’’. 

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

16 this section shall apply to violations occurring after the 

17 date of the enactment of this Act. 

18 SEC. 202. CIVIL DAMAGES FOR UNAUTHORIZED DISCLO19 SURE OR INSPECTION. 

20 (a) NOTICE TO TAXPAYER.—Subsection (e) of section 

21 7431 is amended by adding at the end the following new 

22 sentences: ‘‘The Secretary shall also notify such taxpayer 

23 if the Internal Revenue Service or, upon notice to the Sec24 retary by a Federal or State agency, if such Federal or 

25 State agency, proposes an administrative determination as 


emcdonald on DSK67QTVN1PROD with BILLS
10 

•S 1578 IS

1 to disciplinary or adverse action against an employee aris2 ing from the employee’s unauthorized inspection or disclo3 sure of the taxpayer’s return or return information. The 

4 notice described in this subsection shall include the date 

5 of the inspection or disclosure and the rights of the tax6 payer under such administrative determination.’’. 

7 (b) PAYMENT AUTHORITY CLARIFIED.— 

8 (1) IN GENERAL.—Section 7431 is amended by 

9 adding at the end the following new subsection: 

10 ‘‘(i) PAYMENT AUTHORITY.—Claims pursuant to 

11 subsection (a)(1) shall be payable out of funds appro12 priated under section 1304 of title 31, United States 

13 Code.’’. 

14 (2) ANNUAL REPORTS OF PAYMENTS.—The 

15 Secretary of the Treasury shall annually report to 

16 the Committee on Finance of the Senate and the 

17 Committee on Ways and Means of the House of 

18 Representatives regarding payments made from the 

19 United States Judgment Fund under section 7431(i) 

20 of the Internal Revenue Code of 1986. 

21 (c) BURDEN OF PROOF FOR GOOD FAITH EXCEP22 TION RESTS WITH PERSON MAKING INSPECTION OR DIS23 CLOSURE.—Section 7431(b) is amended by adding at the 

24 end the following new flush sentence: 


emcdonald on DSK67QTVN1PROD with BILLS
11 

•S 1578 IS

1 ‘‘In any proceeding involving the issue of the existence of 

2 good faith, the burden of proof with respect to such issue 

3 shall be on the person who made the inspection or disclo4 sure.’’. 

5 (d) REPORTS.—Subsection (p) of section 6103 is 

6 amended by adding at the end the following new para7 graph: 

8 ‘‘(9) REPORT ON WILLFUL UNAUTHORIZED DIS9 CLOSURE AND INSPECTION.—As part of the report 

10 required by paragraph (3)(C) for each calendar year, 

11 the Secretary shall furnish information regarding 

12 the willful unauthorized disclosure and inspection of 

13 returns and return information, including the num14 ber, status, and results of— 

15 ‘‘(A) administrative investigations, 

16 ‘‘(B) civil lawsuits brought under section 

17 7431 (including the amounts for which such 

18 lawsuits were settled and the amounts of dam19 ages awarded), and 

20 ‘‘(C) criminal prosecutions.’’. 

21 (e) INCREASE IN AMOUNT OF DAMAGES PER VIOLA22 TION.— 

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

24 7431(c)(1) is amended to read as follows: 

25 ‘‘(A) the sum of— 


emcdonald on DSK67QTVN1PROD with BILLS
12 

•S 1578 IS

1 ‘‘(i) $5,000 for each act of unauthor2 ized inspection of a return or return infor3 mation with respect to which such defend4 ant is found liable, and 

5 ‘‘(ii) $10,000 for each act of unau6 thorized disclosure of a return or return 

7 information with respect to which such de8 fendant is found liable, or’’. 

9 (2) PUNITIVE DAMAGES.— 

10 (A) IN GENERAL.—Section 7431(c) is 

11 amended by redesignating paragraphs (2) and 

12 (3) as paragraphs (3) and (4), respectively, and 

13 by inserting after paragraph (1) the following 

14 new paragraph: 

15 ‘‘(2) in the case of willful inspection or disclo16 sure or an inspection or disclosure which is the re17 sult of gross negligence, punitive damages, plus’’. 

18 (B) CONFORMING AMENDMENT.—Subpara19 graph (B) of section 7431(c) is amended to 

20 read as follows: 

21 ‘‘(B) the actual damages sustained by the 

22 plaintiff as a result of such unauthorized in23 spection or disclosure, plus’’. 

24 (f) EFFECTIVE DATES.— 


emcdonald on DSK67QTVN1PROD with BILLS
13 

•S 1578 IS

1 (1) NOTICE.—The amendment made by sub2 section (a) shall apply to determinations made after 

3 the date which is 180 days after the date of the en4 actment of this Act. 

5 (2) PAYMENT AUTHORITY.—The amendment 

6 made by subsection (b)(1) shall take effect on the 

7 date which is 180 days after the date of the enact8 ment of this Act. 

9 (3) BURDEN OF PROOF.—The amendments 

10 made by subsection (c) shall apply to inspections 

11 and disclosures occurring on and after the date 

12 which is 180 days after the date of the enactment 

13 of this Act. 

14 (4) REPORTS.—Subsection (b)(2) and the 

15 amendment made by subsection (d) shall apply to 

16 calendar years ending after the date which is 180 

17 days after the date of the enactment of this Act. 

18 (5) INCREASE IN DAMAGES.—The amendment 

19 made by subsection (e) shall apply to proceedings 

20 commenced after the date of the enactment of this 

21 Act. 


emcdonald on DSK67QTVN1PROD with BILLS
14 

•S 1578 IS

1 SEC. 203. IRS EMPLOYEES PROHIBITED FROM USING PER2 SONAL EMAIL ACCOUNTS FOR OFFICIAL 

3 BUSINESS. 

4 No officer or employee of the Internal Revenue Serv5 ice may use a personal email account to conduct any offi6 cial business of the Government. 

7 SEC. 204. COMPLIANCE BY CONTRACTORS WITH CONFIDEN8 TIALITY SAFEGUARDS. 

9 (a) IN GENERAL.—Section 6103(p), as amended by 

10 this Act, is amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(10) DISCLOSURE TO CONTRACTORS AND

13 OTHER AGENTS.—Notwithstanding any other provi14 sion of this section, no return or return information 

15 shall be disclosed to any contractor or other agent 

16 of a Federal, State, or local agency unless such 

17 agency, to the satisfaction of the Secretary— 

18 ‘‘(A) has requirements in effect which re19 quire each such contractor or other agent which 

20 would have access to returns or return informa21 tion to provide safeguards (within the meaning 

22 of paragraph (4)) to protect the confidentiality 

23 of such returns or return information, 

24 ‘‘(B) agrees to conduct an on-site review 

25 every 3 years (or a mid-point review in the case 

26 of contracts or agreements of less than 3 years 


emcdonald on DSK67QTVN1PROD with BILLS
15 

•S 1578 IS

1 in duration) of each contractor or other agent 

2 to determine compliance with such require3 ments, 

4 ‘‘(C) submits the findings of the most re5 cent review conducted under subparagraph (B) 

6 to the Secretary as part of the report required 

7 by paragraph (4)(E), and 

8 ‘‘(D) certifies to the Secretary for the most 

9 recent annual period that such contractor or 

10 other agent is in compliance with all such re11 quirements. 

12 The certification required by subparagraph (D) shall 

13 include the name and address of each contractor and 

14 other agent, a description of the contract or agree15 ment with such contractor or other agent, and the 

16 duration of such contract or agreement. The require17 ments of this paragraph shall not apply to disclo18 sures pursuant to subsection (n) for purposes of 

19 Federal tax administration.’’. 

20 (b) CONFORMING AMENDMENT.—Subparagraph (B) 

21 of section 6103(p)(8) is amended by inserting ‘‘or para22 graph (10)’’ after ‘‘subparagraph (A)’’. 

23 (c) EFFECTIVE DATE.— 


emcdonald on DSK67QTVN1PROD with BILLS
16 

•S 1578 IS

1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply to disclosures made after the 

3 date of the enactment of this Act. 

4 (2) CERTIFICATIONS.—The first certification 

5 under section 6103(p)(10)(D) of the Internal Rev6 enue Code of 1986, as added by subsection (a), shall 

7 be made with respect to the portion of calendar year 

8 2015 following the date of the enactment of this 

9 Act. 

10 TITLE III—THE RIGHT TO AP11 PEAL IN AN INDEPENDENT 

12 FORUM AND TO CHALLENGE 

13 THE INTERNAL REVENUE 

14 SERVICE POSITION AND BE 

15 HEARD 

16 SEC. 301. INCREASE IN LIMITATIONS ON CIVIL DAMAGES 

17 FOR CERTAIN UNAUTHORIZED COLLECTION 

18 ACTIONS. 

19 (a) IN GENERAL.—Section 7433(b) is amended by 

20 striking ‘‘$1,000,000 ($100,000’’ and inserting 

21 ‘‘$1,500,000 ($150,000’’. 

22 (b) PUNITIVE DAMAGES IN THE CASE OF RECKLESS

23 OR INTENTIONAL ACTION.—Subsection (b) of section 

24 7433 is amended— 


emcdonald on DSK67QTVN1PROD with BILLS
17 

•S 1578 IS

1 (1) by redesignating paragraphs (1) and (2) as 

2 subparagraphs (A) and (B), respectively, and by 

3 moving such subparagraphs 2 ems to the right, 

4 (2) by striking ‘‘In any action’’ and inserting 

5 the following: 

6 ‘‘(1) IN GENERAL.—In any action’’, and 

7 (3) by adding at the end the following new 

8 paragraph: 

9 ‘‘(2) PUNITIVE DAMAGES FOR WILLFUL AND

10 RECKLESS ACTIONS.—In any action brought under 

11 subsection (a) or petition filed under subsection (e) 

12 in which the defendant is found to be liable and to 

13 have acted recklessly or intentionally, the court may 

14 award the plaintiff punitive damages.’’. 

15 (c) PERIOD FOR BRINGING ACTION.—Paragraph (3) 

16 of section 7433(d) is amended by striking ‘‘the date the 

17 right of action accrues’’ and inserting ‘‘the later of the 

18 date of on which administrative remedies available within 

19 the Internal Revenue Service have been exhausted or the 

20 date on which the taxpayer reasonably could have discov21 ered that the actions of the officer or employee were done 

22 in disregard of a provision of this title or any regulation 

23 promulgated under this title’’. 


emcdonald on DSK67QTVN1PROD with BILLS
18 

•S 1578 IS

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

2 this section shall apply in the case of proceedings com3 menced after the date of the enactment of this Act. 

4 SEC. 302. EXTENSION OF TIME LIMIT FOR CONTESTING IRS 

5 LEVY. 

6 (a) EXTENSION OF TIME FOR RETURN OF PROPERTY

7 SUBJECT TO LEVY.—Subsection (b) of section 6343 is 

8 amended by striking ‘‘9 months’’ and inserting ‘‘2 years’’. 

9 (b) PERIOD OF LIMITATION ON SUITS.—Subsection 

10 (c) of section 6532 is amended— 

11 (1) by striking ‘‘9 months’’ in paragraph (1) 

12 and inserting ‘‘2 years’’, and 

13 (2) by striking ‘‘9-month’’ in paragraph (2) and 

14 inserting ‘‘2-year’’. 

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

16 this section shall apply to— 

17 (1) levies made after the date of the enactment 

18 of this Act, and 

19 (2) levies made on or before such date if the 9- 

20 month period has not expired under section 6343(b) 

21 of the Internal Revenue Code of 1986 (without re22 gard to this section) as of such date. 


emcdonald on DSK67QTVN1PROD with BILLS
19 

•S 1578 IS

1 SEC. 303. EXPANSION OF DECLARATORY JUDGMENT REM2 EDY TO TAX-EXEMPT ORGANIZATIONS. 

3 (a) IN GENERAL.—Paragraph (1) of section 7428(a) 

4 is amended— 

5 (1) in subparagraph (B) by inserting after 

6 ‘‘509(a))’’ the following: ‘‘or as a private operating 

7 foundation (as defined in section 4942(j)(3))’’; and 

8 (2) by amending subparagraph (C) to read as 

9 follows: 

10 ‘‘(C) with respect to the initial qualifica11 tion or continuing qualification of an organiza12 tion as an organization described in section 

13 501(c) (other than paragraph (3)) or 501(d) 

14 which is exempt from tax under section 501(a), 

15 or’’. 

16 (b) COURT JURISDICTION.—Subsection (a) of section 

17 7428 is amended in the material following paragraph (2) 

18 by striking ‘‘United States Tax Court, the United States 

19 Claims Court, or the district court of the United States 

20 for the District of Columbia’’ and inserting the following: 

21 ‘‘United States Tax Court (in the case of any such deter22 mination or failure) or the Court of Federal Claims or the 

23 district court of the United States for the District of Co24 lumbia (in the case of a determination or failure with re25 spect to an issue referred to in subparagraph (A), (B), 

26 or (D) of paragraph (1)),’’. 


emcdonald on DSK67QTVN1PROD with BILLS
20 

•S 1578 IS

1 (c) TECHNICAL AMENDMENT.—Section 7428, as 

2 amended by subsection (b), is amended by striking 

3 ‘‘Claims Court’’ each place it appears in subsection (a), 

4 (b)(2), and (c)(1)(C)(iii) and inserting ‘‘Court of Federal 

5 Claims’’. 

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

7 this section shall apply to pleadings filed after the date 

8 of the enactment of this Act. 

9 TITLE IV—THE RIGHT TO A FAIR 

10 AND JUST TAX SYSTEM 

11 SEC. 401. WAIVER OF USER FEE FOR INSTALLMENT AGREE12 MENTS USING AUTOMATED WITHDRAWALS. 

13 (a) IN GENERAL.—Section 6159 is amended by re14 designating subsections (e) and (f) as subsections (f) and 

15 (g), respectively, and by inserting after subsection (d) the 

16 following new subsection: 

17 ‘‘(e) WAIVER OF USER FEES FOR INSTALLMENT

18 AGREEMENTS USING AUTOMATED WITHDRAWALS.—In 

19 the case of a taxpayer who enters into an installment 

20 agreement in which automated installment payments are 

21 agreed to, the Secretary shall waive the fee (if any) for 

22 entering into the installment agreement.’’. 

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

24 this section shall apply to agreements entered into on or 


emcdonald on DSK67QTVN1PROD with BILLS
21 

•S 1578 IS

1 after the date which is 180 days after the date of the en2 actment of this Act. 

3 SEC. 402. INDIVIDUALS HELD HARMLESS ON IMPROPER 

4 LEVY ON INDIVIDUAL RETIREMENT PLAN. 

5 (a) IN GENERAL.—Section 6343 is amended by add6 ing at the end the following new subsection: 

7 ‘‘(f) INDIVIDUALS HELD HARMLESS ON WRONGFUL

8 LEVY, ETC. ON INDIVIDUAL RETIREMENT PLAN.— 

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

10 that an individual retirement plan has been levied 

11 upon in a case to which subsection (b) or (d)(2)(A) 

12 applies and property or an amount of money is re13 turned to the individual who is the beneficiary of 

14 such plan— 

15 ‘‘(A) the individual may contribute such 

16 property or an amount equal to the sum of— 

17 ‘‘(i) the amount of money returned by 

18 the Secretary on account of such levy, and 

19 ‘‘(ii) interest paid under subsection (c) 

20 on such amount of money, 

21 into an individual retirement plan (other than 

22 an endowment contract) to which a rollover 

23 contribution of a distribution from the plan lev24 ied upon is permitted if such contribution is 

25 made not later than the due date (not including 


emcdonald on DSK67QTVN1PROD with BILLS
22 

•S 1578 IS

1 extensions) for filing the return of tax for the 

2 taxable year in which such property or amount 

3 of money is returned, and 

4 ‘‘(B) the Secretary shall, at the time such 

5 property or amount of money is returned, notify 

6 such individual that a contribution described in 

7 subparagraph (A) may be made. 

8 ‘‘(2) TREATMENT AS ROLLOVER.—The distribu9 tion on account of the levy and any contribution 

10 under paragraph (1) with respect to such distribu11 tion shall be treated for purposes of this title as if 

12 such distribution and contribution were part of a 

13 rollover contribution described in section 

14 408(d)(3)(A)(i); except that— 

15 ‘‘(A) the contribution shall be treated as 

16 having been made to the individual retirement 

17 plan for the taxable year in which the distribu18 tion on account of the levy occurred, and the in19 terest paid under subsection (c) shall be treated 

20 as earnings within such plan after the contribu21 tion and as not includible in gross income, and 

22 ‘‘(B) such contribution shall not be taken 

23 into account under section 408(d)(3)(B). 

24 ‘‘(3) REFUND, ETC., OF INCOME TAX ON

25 LEVY.—Except in the case of a rollover contribution 


emcdonald on DSK67QTVN1PROD with BILLS
23 

•S 1578 IS

1 under this subsection from an individual retirement 

2 plan that is not a Roth IRA to a Roth IRA, if any 

3 amount is includible in gross income for a taxable 

4 year by reason of a levy referred to in paragraph (1) 

5 and any portion of such amount is treated as a roll6 over contribution under paragraph (2), any tax im7 posed by chapter 1 on such portion shall not be as8 sessed, and if assessed shall be abated, and if col9 lected shall be credited or refunded as an overpay10 ment made on the due date for filing the return of 

11 tax for such taxable year. 

12 ‘‘(4) INTEREST.—Notwithstanding subsection 

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

14 a case in which the Secretary makes a determination 

15 described in subsection (d)(2)(A) with respect to a 

16 levy upon an individual retirement plan. 

17 ‘‘(5) TREATMENT OF INHERITED ACCOUNTS.— 

18 For purposes of paragraph (1)(A), section 

19 408(d)(3)(C) shall be disregarded in determining 

20 whether an individual retirement plan is a plan to 

21 which a rollover contribution of a distribution from 

22 the plan levied upon is permitted.’’. 

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

24 this section shall apply to amounts paid under subsections 


emcdonald on DSK67QTVN1PROD with BILLS
24 

•S 1578 IS

1 (b), (c), and (d)(2)(A) of section 6343 of the Internal Rev2 enue Code of 1986 after December 31, 2015. 

3 SEC. 403. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS4 IN-COMPROMISE. 

5 (a) IN GENERAL.—Section 7122(b) is amended by 

6 striking ‘‘Whenever a compromise’’ and all that follows 

7 through ‘‘his delegate’’ and inserting ‘‘If the Secretary de8 termines that an opinion of the General Counsel for the 

9 Department of the Treasury, or the Counsel’s delegate, 

10 is required with respect to a compromise, there shall be 

11 placed on file in the office of the Secretary such opinion’’. 

12 (b) CONFORMING AMENDMENTS.—Section 7122(b) is 

13 amended by striking the second and third sentences. 

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

15 this section shall apply to offers-in-compromise submitted 

16 or pending on or after the date of the enactment of this 

17 Act. 

18 SEC. 404. AUTHORITY OF THE NATIONAL TAXPAYER ADVO19 CATE TO COMMENT ON TREASURY REGULA20 TIONS. 

21 (a) IN GENERAL.—Section 7805 is amended by add22 ing at the end the following new subsection: 

23 ‘‘(g) REVIEW OF IMPACT OF REGULATIONS ON TAX24 PAYER RIGHTS.— 


emcdonald on DSK67QTVN1PROD with BILLS
25 

•S 1578 IS

1 ‘‘(1) SUBMISSIONS TO NATIONAL TAXPAYER AD2 VOCATE.—Prior to publication of any proposed or 

3 temporary regulation by the Secretary, the Secretary 

4 shall submit such regulation to the National Tax5 payer Advocate for comment on the impact of such 

6 regulation on taxpayer rights or taxpayer burden. 

7 Not later than the date 4 weeks after the date of 

8 such submission, the National Taxpayer Advocate 

9 shall submit comments, if any, on such regulation to 

10 the Secretary. 

11 ‘‘(2) CONSIDERATION OF COMMENTS.—In pre12 scribing any final regulation which supersedes a pro13 posed or temporary regulation with respect to which 

14 the National Taxpayer Advocate has submitted com15 ments— 

16 ‘‘(A) the Secretary shall consider the com17 ments of the National Taxpayer Advocate on 

18 such proposed or temporary regulation, and 

19 ‘‘(B) the Secretary shall discuss its re20 sponse to such comments in the preamble of 

21 such final regulation.’’. 

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

23 this section shall apply with respect to regulations issued 

24 after the date of the enactment of this Act. 


emcdonald on DSK67QTVN1PROD with BILLS
26 

•S 1578 IS

1 SEC. 405. INDIVIDUAL ESTIMATED TAX. 

2 (a) INCREASE IN EXCEPTION FOR INDIVIDUALS

3 OWING SMALL AMOUNT OF TAX.—Section 6654(e)(1) is 

4 amended by striking ‘‘$1,000’’ and inserting ‘‘$2,000’’. 

5 (b) COMPUTATION OF ADDITION TO TAX.—Section 

6 6654 is amended by striking subsections (a) and (b) and 

7 inserting the following: 

8 ‘‘(a) ADDITION TO THE TAX.— 

9 ‘‘(1) IN GENERAL.—Except as otherwise pro10 vided in this section, in the case of any under11 payment of estimated tax by an individual for a tax12 able year, there shall be added to the tax under 

13 chapter 1, the tax under chapter 2, and the tax 

14 under chapter 2A for such taxable year the sum of 

15 the amounts determined under paragraph (2) for 

16 each day for which there is an underpayment. 

17 ‘‘(2) AMOUNT OF ADDITION TO TAX.—The 

18 amount determined under this paragraph for any 

19 day shall be the product of— 

20 ‘‘(A) the underpayment rate established 

21 under subsection (b)(2) for such day, multiplied 

22 by 

23 ‘‘(B) the amount of the underpayment for 

24 such day. 

25 ‘‘(b) AMOUNT OF UNDERPAYMENT; UNDERPAYMENT

26 RATE.—For purposes of subsection (a)— 


emcdonald on DSK67QTVN1PROD with BILLS
27 

•S 1578 IS

1 ‘‘(1) AMOUNT.—The amount of underpayment 

2 on any day shall be the excess (if any) of— 

3 ‘‘(A) the sum of the required installments 

4 for the taxable year the due dates for which are 

5 on or before such day, over 

6 ‘‘(B) the sum of the amounts of estimated 

7 tax payments made for such taxable year on or 

8 before such day. 

9 ‘‘(2) DETERMINATION OF UNDERPAYMENT

10 RATE.— 

11 ‘‘(A) IN GENERAL.—The underpayment 

12 rate with respect to any day in an installment 

13 underpayment period shall be the under14 payment rate established under section 6621 

15 for the first day of the calendar quarter in 

16 which such installment underpayment period 

17 begins. 

18 ‘‘(B) INSTALLMENT UNDERPAYMENT PE19 RIOD.—For purposes of subparagraph (A), the 

20 term ‘installment underpayment period’ means 

21 the period beginning on the day after the due 

22 date for a required installment and ending on 

23 the due date for the subsequent required in24 stallment (or in the case of the 4th required inVerDate Sep 11 2014 01:04 Jun 19, 2015 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1578.IS S1578

emcdonald on DSK67QTVN1PROD with BILLS
28 

•S 1578 IS

1 stallment, the 15th day of the 4th month fol2 lowing the close of a taxable year). 

3 ‘‘(C) DAILY RATE.—The rate determined 

4 under subparagraph (A) shall be applied on a 

5 daily basis and shall be based on the assump6 tion of 365 days in a calendar year. 

7 ‘‘(3) TERMINATION OF ESTIMATED TAX UNDER8 PAYMENT.—No day after the end of the installment 

9 underpayment period for the 4th required install10 ment specified in paragraph (2)(B) for a taxable 

11 year shall be treated as a day of underpayment with 

12 respect to such taxable year.’’. 

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2015. 

16 SEC. 406. CORPORATE ESTIMATED TAX. 

17 (a) INCREASE IN SMALL TAX AMOUNT EXCEP18 TION.—Section 6655(f) is amended by striking ‘‘$500’’ 

19 and inserting ‘‘$1,000’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2015. 

23 SEC. 407. INCREASE IN LARGE CORPORATION THRESHOLD 

24 FOR ESTIMATED TAX PAYMENTS. 

25 (a) IN GENERAL.—Section 6655(g)(2) is amended— 


emcdonald on DSK67QTVN1PROD with BILLS
29 

•S 1578 IS

1 (1) by striking ‘‘$1,000,000’’ in subparagraph 

2 (A) and inserting ‘‘the applicable amount’’, 

3 (2) by striking ‘‘the $1,000,000 amount speci4 fied in subparagraph (A)’’ in subparagraph (B)(ii) 

5 and inserting ‘‘the applicable amount’’, 

6 (3) by redesignating subparagraph (B) as sub7 paragraph (C), and 

8 (4) by inserting after subparagraph (A) the fol9 lowing new subparagraph: 

10 ‘‘(B) APPLICABLE AMOUNT.—For purposes 

11 of this paragraph, the applicable amount is 

12 $1,000,000 increased (but not above 

13 $1,500,000) by $50,000 for each taxable year 

14 beginning after 2015.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2015. 

18 SEC. 408. EXPANSION OF INTEREST NETTING. 

19 (a) IN GENERAL.—Subsection (d) of section 6621 is 

20 amended by adding at the end the following new sentence: 

21 ‘‘Solely for purposes of the preceding sentence, section 

22 6611(e) shall not apply.’’. 

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

24 this section shall apply to interest accrued after December 

25 31, 2015. 


emcdonald on DSK67QTVN1PROD with BILLS
30 

•S 1578 IS

1 SEC. 409. CLARIFICATION OF APPLICATION OF FEDERAL 

2 TAX DEPOSIT PENALTY. 

3 Nothing in section 6656 of the Internal Revenue 

4 Code of 1986 shall be construed to permit the percentage 

5 specified in subsection (b)(1)(A)(iii) thereof to apply other 

6 than in a case where the failure is for more than 15 days. 

7 TITLE V—THE RIGHT TO BE 

8 INFORMED 

9 SEC. 501. COLLECTION ACTIVITIES WITH RESPECT TO 

10 JOINT RETURN DISCLOSABLE TO EITHER 

11 SPOUSE BASED ON ORAL REQUEST. 

12 (a) IN GENERAL.—Paragraph (8) of section 6103(e) 

13 is amended by striking ‘‘in writing’’ the first place it ap14 pears. 

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

16 this section shall apply to requests made after the date 

17 of the enactment of this Act. 

18 SEC. 502. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX 

19 REFUND PURPOSES. 

20 Section 6103(m)(1) is amended by striking ‘‘taxpayer 

21 identity information to the press and other media’’ and 

22 by inserting ‘‘a person’s name and the city and State of 

23 the person’s mailing address to the press, other media, 

24 and through any other means of mass communication,’’. 


emcdonald on DSK67QTVN1PROD with BILLS
31 

•S 1578 IS

1 SEC. 503. RELEASE OF INFORMATION REGARDING THE STA2 TUS OF CERTAIN INVESTIGATIONS. 

3 (a) IN GENERAL.—Subsection (e) of section 6103 is 

4 amended by adding at the end the following new para5 graph: 

6 ‘‘(11) DISCLOSURE TO CERTAIN RELEVANT

7 PERSONS OF INFORMATION REGARDING STATUS OF

8 CERTAIN INVESTIGATIONS.— 

9 ‘‘(A) INFORMATION UPON REQUEST.— 

10 With respect to any investigation conducted by 

11 the officers and employees of the Treasury In12 spector General for Tax Administration which 

13 relates to possible violations of the internal rev14 enue laws or related statutes, the Secretary and 

15 the Attorney General may, upon written request 

16 by any relevant person, disclose to such person 

17 (or such person’s designee)— 

18 ‘‘(i) whether there is or has been such 

19 an investigation with respect to which such 

20 person is a relevant person, and 

21 ‘‘(ii) if there is or has been such an 

22 investigation— 

23 ‘‘(I) whether such investigation is 

24 on-going or has been completed, and 

25 ‘‘(II) if such investigation has 

26 been completed, the conclusions of 


emcdonald on DSK67QTVN1PROD with BILLS
32 

•S 1578 IS

1 such investigation, including whether 

2 there was a referral to administrative 

3 authorities or for criminal prosecu4 tion, and the contact information of 

5 the person handling the referred mat6 ter. 

7 ‘‘(B) NOTIFICATION UPON CONCLUSION.— 

8 Not later than 30 days after the completion of 

9 any investigation— 

10 ‘‘(i) which is conducted by the officers 

11 and employees of the Treasury Inspector 

12 General for Tax Administration, and 

13 ‘‘(ii) the results of which indicate 

14 that— 

15 ‘‘(I) there is substantial evidence 

16 that there has been a violation of the 

17 internal revenue laws or related stat18 utes, and 

19 ‘‘(II) such violation involves one 

20 or more relevant persons, 

21 the Secretary shall disclose to all such relevant 

22 persons (or designees) the conclusions of the in23 vestigation, including whether there was a re24 ferral to administrative authorities or for crimiVerDate Sep 11 2014 01:04 Jun 19, 2015 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S1578.IS S1578

emcdonald on DSK67QTVN1PROD with BILLS
33 

•S 1578 IS

1 nal prosecution, and the contact information of 

2 the person handling the referred matter. 

3 ‘‘(C) RELEVANT PERSON.—For purposes 

4 of this paragraph, the term ‘relevant person’ 

5 means, with respect to any investigation— 

6 ‘‘(i) any complainant who provided in7 formation to the Treasury Inspector Gen8 eral for Tax Administration related to the 

9 investigation, and 

10 ‘‘(ii) any taxpayer who is directly con11 nected with the matter being inves12 tigated.’’. 

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

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

15 of this Act. 

16 SEC. 504. MANDATORY ELECTRONIC FILING FOR ANNUAL 

17 RETURNS OF EXEMPT ORGANIZATIONS. 

18 (a) IN GENERAL.—Section 6033 is amended by re19 designating subsection (n) as subsection (o) and by insert20 ing after subsection (m) the following new subsection: 

21 ‘‘(n) MANDATORY ELECTRONIC FILING.—Any orga22 nization required to file a return under this section shall 

23 file such return in electronic form.’’. 

24 (b) INSPECTION OF ELECTRONICALLY FILED AN25 NUAL RETURNS.—Subsection (b) of section 6104 is 


emcdonald on DSK67QTVN1PROD with BILLS
34 

•S 1578 IS

1 amended by adding at the end the following: ‘‘Any annual 

2 return required to be filed electronically under section 

3 6033(n) shall be made available by the Secretary to the 

4 public in machine readable format as soon as prac5 ticable.’’. 

6 (c) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section 

9 shall apply to taxable years beginning after the date 

10 of the enactment of this Act. 

11 (2) TRANSITIONAL RELIEF.— 

12 (A) SMALL ORGANIZATIONS.— 

13 (i) IN GENERAL.—In the case of any 

14 small organizations, or any other organiza15 tions for which the Secretary determines 

16 the application of the amendments made 

17 by subsection (a) would cause undue bur18 den without a delay, the Secretary may 

19 delay the application of such amendments, 

20 but not later than taxable years beginning 

21 2 years after the date of the enactment of 

22 this Act. 

23 (ii) SMALL ORGANIZATION.—For pur24 poses of clause (i), the term ‘‘small organi25 zation’’ means any organization— 


emcdonald on DSK67QTVN1PROD with BILLS
35 

•S 1578 IS

1 (I) the gross receipts of which for 

2 the taxable year are less than 

3 $200,000, and 

4 (II) the aggregate gross assets of 

5 which at the end of the taxable year 

6 are less than $500,000. 

7 (B) ORGANIZATIONS FILING FORM 990– 

8 T.—In the case of any organization described 

9 in section 511(a)(2) of the Internal Revenue 

10 Code of 1986 which is subject to the tax im11 posed by section 511(a)(1) of such Code on its 

12 unrelated business taxable income, or any orga13 nization required to file a return under section 

14 6033 of such Code and include information 

15 under subsection (e) thereof, the Secretary may 

16 delay the application of the amendments made 

17 by this section, but not later than taxable years 

18 beginning 2 years after the date of the enact19 ment of this Act. 

20 TITLE VI—THE RIGHT TO 

21 QUALIFY SERVICE 

22 SEC. 601. FREE ELECTRONIC FILING. 

23 (a) IN GENERAL.—The Secretary of the Treasury (or 

24 the Secretary’s delegate) shall, in cooperation with the pri25 vate sector technology industry, maintain a program that 


emcdonald on DSK67QTVN1PROD with BILLS
36 

•S 1578 IS

1 provides free individual income tax preparation and elec2 tronic filing services to low-income taxpayers and elderly 

3 taxpayers. 

4 (b) REQUIREMENTS OF PROGRAM.—The Secretary 

5 shall by regulation or other guidance prescribe with re6 spect to the program— 

7 (1) the qualifications, selection process, and 

8 contract term for businesses participating in the pro9 gram, 

10 (2) a process for periodic review of businesses 

11 participating in the program, 

12 (3) procedures for terminating business partici13 pation in the program for failure to comply with any 

14 program requirements, and 

15 (4) such other procedures as the Secretary de16 termines are necessary or appropriate to carry out 

17 the purposes of the program. 

18 (c) FREE FILE PROGRAM.—The Internal Revenue 

19 Service Free File program, as set forth in the notice pub20 lished in the Federal Register on November 4, 2002 (67 

21 Fed. Reg. 67247), shall be treated as meeting the require22 ments of subsection (a). 

23 SEC. 602. ACCESS TO APPEALS. 

24 Subsection (b) of section 3465 of the Internal Rev25 enue Service Restructuring and Reform Act of 1998 is 


emcdonald on DSK67QTVN1PROD with BILLS
37 

•S 1578 IS

1 amended by striking ‘‘an appeals officer is regularly avail2 able within each State’’ and inserting ‘‘there is at least 

3 one appeals officer and one settlement officer located and 

4 permanently available in each State, the District of Co5 lumbia, and Puerto Rico’’. 

Æ 


emcdonald on DSK67QTVN1PROD with BILLS