II 

117TH CONGRESS 

1ST SESSION S. 2721 

To require the Internal Revenue Service to issue a report on the tax gap, 

to establish a fellowship program within the Internal Revenue Service 

to recruit mid-career tax professionals to create and participate in an 

audit task force, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 13, 2021 

Mr. CRAPO (for himself, Mr. TILLIS, Mr. BARRASSO, Mr. CASSIDY, Mr. 

CRAMER, Mr. BRAUN, Mr. RUBIO, Mr. ROUNDS, Mr. LANKFORD, Ms. 

MURKOWSKI, Mr. YOUNG, and Mr. BOOZMAN) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

To require the Internal Revenue Service to issue a report 

on the tax gap, to establish a fellowship program within 

the Internal Revenue Service to recruit mid-career tax 

professionals to create and participate in an audit task 

force, 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. TAX GAP PROJECTION. 

4 (a) IN GENERAL.—Not later than 180 days after the 

5 date of the enactment of this section, and no later than 

6 July 31 annually thereafter, the Commissioner of Internal 


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1 Revenue shall submit to Congress a projection detailing 

2 the tax gap estimate for the most recent taxable year as 

3 is practicable using the most recently available data, and 

4 including identification and detailed descriptions of the 

5 data used for such projection and clear identification of 

6 the amount of the projected tax gap associated with non7 filing, underreporting, and underpayment (including iden8 tifying the amount subject to collection actions). 

9 (b) USE OF ARTIFICIAL INTELLIGENCE.—To the ex10 tent practicable, for purposes of reducing the burden on 

11 taxpayers subject to National Research Program audits, 

12 the Commissioner shall use artificial intelligence, including 

13 neural machine learning, and other available data analysis 

14 tools, including commercial analytic data providers, to cal15 culate a projection described in subsection (a). 

16 (c) NATIONAL RESEARCH PROGRAM AUDITS.—In 

17 calculating a projection described in subsection (a), the 

18 Commissioner of Internal Revenue shall not undertake 

19 more National Research Program audits in any one fiscal 

20 year than are undertaken in fiscal year 2021. 

21 (d) TAX GAP.—For purposes of this section, the term 

22 ‘‘tax gap’’ means the difference between tax liabilities 

23 owed to the United States under the Internal Revenue 

24 Code of 1986 and those liabilities actually collected by the 

25 Internal Revenue Service. 


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1 SEC. 2. JCT REPORT. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 submission of the first tax gap projection to Congress 

4 under section 1, and not later than 90 days after the sub5 mission of each successive submission, the Chief of Staff 

6 of the Joint Committee on Taxation shall submit to the 

7 Committee on Ways and Means of the House of Rep8 resentatives and the Committee on Finance of the Senate 

9 a report analyzing such projection, including— 

10 (1) identification of methodologies used, 

11 (2) any statistical or methodological uncertain12 ties, 

13 (3) the effect of outdated data, if any, on the 

14 accuracy of such projection, and 

15 (4) such additional information as the Joint 

16 Committee on Taxation determines is useful for 

17 Congress to use to assess and analyze the tax gap 

18 projections provided by the Commissioner of Inter19 nal Revenue. 

20 (b) RELEASE OF INFORMATION.—For purposes of fa21 cilitating the report described in subsection (a), the Sec22 retary of the Treasury shall, in a timely manner, provide 

23 to the Joint Committee on Taxation such information as 

24 such committee requests. 


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1 SEC. 3. RESTRICTION ON INCREASED ENFORCEMENT 

2 FUNDS. 

3 (a) IN GENERAL.—Notwithstanding any other provi4 sion of law, no funds appropriated to the Department of 

5 the Treasury for audit and enforcement purposes in excess 

6 of the levels appropriated for such purposes in fiscal year 

7 2021 may be expended for such purposes, including for 

8 salaries, expenses, and enforcement activities, until 180 

9 days after the Internal Revenue Service publishes an up10 dated tax gap projection pursuant to, and compliant with, 

11 section 1. 

12 (b) SUNSET.—The provisions of subsection (a) shall 

13 not apply after the date which is one year after the date 

14 of the enactment of this section. 

15 SEC. 4. RESTRICTION ON INCREASED FUNDING FOR OTHER 

16 SPECIFIED PURPOSES. 

17 (a) IN GENERAL.—Notwithstanding any other provi18 sion of law, no funds appropriated to the Department of 

19 the Treasury in excess of the levels appropriated for speci20 fied purposes in fiscal year 2021 may be expended for 

21 specified purposes. 

22 (b) SPECIFIED PURPOSES.—For purposes of sub23 section (a), the term ‘‘specified purposes’’ means— 

24 (1) the implementation of new information re25 porting requirements on flows of deposits and withVerDate Sep 11 2014 01:29 Sep 14, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2721.IS S2721

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1 drawals in individual and small–business banking ac2 counts and other financial accounts, 

3 (2) the targeting of United States citizens in re4 sponse to the exercise by such citizens of any legally 

5 protected or recognized right guaranteed under the 

6 First Amendment to the United States Constitution, 

7 (3) the targeting of a group for regulatory scru8 tiny based on the ideological beliefs of such group, 

9 (4) the auditing of individual taxpayers with an 

10 adjusted gross income of less than $400,000, and 

11 (5) the hiring under an agreement pursuant to 

12 the Intragovernmental Personnel Act of 1970 (sec13 tions 3371 et seq. of title 5, United States Code) or 

14 any other authority of an authorized researcher who 

15 is not a full time Federal employee to access data 

16 subject to privacy protections afforded by section 

17 6103 of the Internal Revenue Code of 1986. 

18 SEC. 5. EFFICIENT USE OF EXISTING IRS RESOURCES. 

19 For purposes of increasing enforcement actions in 

20 areas of high noncompliance and reducing the corporate 

21 audit no-change rate of the Internal Revenue Service to 

22 below 20 percent by 2023— 

23 (1) the Secretary (or the Secretary’s delegate) 

24 shall, not later than 180 days after the date of the 

25 enactment of this section— 


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1 (A) update the methodology that is used 

2 for the selection of corporate returns for audit, 

3 and 

4 (B) reassign resources of the Internal Rev5 enue Service such that the majority of high-in6 come nonfilers are subject to enforcement ac7 tions, and 

8 (2) the Comptroller General of the United 

9 States shall, within one year after the date of the 

10 enactment of this section, issue a comprehensive re11 port to Congress on information returns and data 

12 collected by the Internal Revenue Service that could 

13 be deployed for compliance activities but that are 

14 not currently used for such activities. 

15 SEC. 6. IRS FELLOWSHIP PROGRAM. 

16 (a) ESTABLISHMENT.—Not later than September 30, 

17 2022, the Commissioner of Internal Revenue (hereinafter 

18 known as the ‘‘Commissioner’’) after consultation with the 

19 Chief Counsel of the Internal Revenue Service (hereinafter 

20 known as the ‘‘Chief Counsel’’), shall establish within the 

21 Internal Revenue Service a fellowship program (herein22 after known as the ‘‘program’’) to recruit private sector 

23 tax experts to join the Internal Revenue Service to create 

24 and participate in the audit task force established under 

25 subsection (e). 


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1 (b) OBJECTIVE.—The Commissioner, after consulta2 tion with the Chief Counsel, shall design the program in 

3 a manner such that the program— 

4 (1) addresses such tax cases handled by the In5 ternal Revenue Service as the Commissioner deter6 mines— 

7 (A) are the most complex, or 

8 (B) include new and emerging issues, and 

9 (2) recruits and retains outstanding and quali10 fied tax experts. 

11 (c) ADVERTISEMENT OF PROGRAM.—The Commis12 sioner shall advertise the program in such a way as to 

13 attract mid-career tax professionals, including certified 

14 public accountants, tax attorneys, and such other tax pro15 fessionals as the Commissioner determines are appro16 priately qualified to handle the most complex tax cases. 

17 (d) STRUCTURE.— 

18 (1) IN GENERAL.—The program shall be 

19 staffed by not fewer than 30 fellows at the discretion 

20 of the Commissioner based on needs of the Internal 

21 Revenue Service and the availability of qualified can22 didates. 

23 (2) TERM OF SERVICE.— 

24 (A) IN GENERAL.—Each fellow shall be 

25 hired for a 2-, 3-, or 4-year term of service. 


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1 (B) EXTENSIONS.— 

2 (i) IN GENERAL.—A fellow may apply 

3 for, and the Commissioner may grant, a 1- 

4 year extension of the fellowship. 

5 (ii) NO LIMIT ON NUMBER OF EXTEN6 SIONS.—There shall be no limit on the 

7 number of extensions under clause (i). 

8 (3) FELLOWSHIP VACANCIES.—The Commis9 sioner, after consultation with the Chief Counsel, 

10 shall fill vacant fellowships— 

11 (A) in such a manner as to ensure that the 

12 program is staffed with no fewer than 15 fel13 lows, and 

14 (B) as soon as practicable after the va15 cancy arises. 

16 (4) HIRING AUTHORITY.—The Commissioner 

17 shall have authority to permanently hire a fellow at 

18 the end of the term of service for such fellow. 

19 (e) TASK FORCE.—Not later than the date on which 

20 the first fellowship is awarded under this section, the Com21 missioner shall establish a task force within the Internal 

22 Revenue Service and the office of the Chief Counsel in 

23 both national and regional office placements that includes 

24 the fellows hired pursuant to subsection (d), the purpose 

25 of which is to— 


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1 (1) perform audit case selection, 

2 (2) educate Internal Revenue Service employees 

3 on emerging issues, 

4 (3) audit selected taxpayers, 

5 (4) address offshore tax evasion and issues im6 plicating the Foreign Account Tax Compliance Act, 

7 and 

8 (5) identify, mentor, and train junior employees 

9 from the Internal Revenue Service with respect to 

10 audits. 

11 (f) COMPOSITION.—The task force established under 

12 subsection (e) may be composed of both— 

13 (1) fellows, and 

14 (2) permanent employees of the Internal Rev15 enue Service. 

16 (g) PAY OF FELLOWS.— 

17 (1) IN GENERAL.—The Secretary of the Treas18 ury (or the Secretary’s delegate) shall determine, 

19 subject to the provisions of this subsection, the pay 

20 of fellows recruited under subsection (a). 

21 (2) PAY SCALE.—For purposes of paragraph 

22 (1), the pay of a fellow shall not be less than the 

23 minimum rate payable for GS–15 of the General 

24 Schedule and shall not exceed the amount of annual 


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1 compensation (excluding expenses) specified in sec2 tion 102 of title 3, United States Code. 

3 (h) ADMINISTRATION OF PROGRAM.—The Secretary 

4 may appoint a lead program officer to administer and ad5 vertise the program. 

6 (i) ANNUAL REVIEW AND REPORT.—Not later than 

7 1 year after the date on which the first fellowship is 

8 awarded under this section, and annually thereafter, the 

9 Commissioner shall submit to Congress a report con10 taining— 

11 (1) an analysis of the effects of the program, 

12 (2) an analysis of the return on investment of 

13 the program, including calculations of all costs in14 curred and all tax revenue and penalties collected 

15 due to the work of the task force, 

16 (3) a description of the total number of fellows 

17 who apply each year, and 

18 (4) recommendations for changes to the pro19 gram, if any. 

20 (j) RULES AND REGULATIONS.—The Commissioner, 

21 with the approval of the Secretary of the Treasury (or the 

22 Secretary’s delegate, other than the Commissioner), shall 

23 promulgate such rules and regulations as may be nec24 essary for the efficient administration of the program. 

Æ 


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