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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3151 Enrolled Bill (ENR)]

        H.R.3151

                     One Hundred Sixteenth Congress

                                 of the

                        United States of America

                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Thursday,
           the third day of January, two thousand and nineteen

                                 An Act

 
To amend the Internal Revenue Code of 1986 to modernize and improve the 
            Internal Revenue Service, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
    (a) Short Title.--This Act may be cited as the ``Taxpayer First 
Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; etc.

                    TITLE I--PUTTING TAXPAYERS FIRST

                 Subtitle A--Independent Appeals Process

Sec. 1001. Establishment of Internal Revenue Service Independent Office 
          of Appeals.

                      Subtitle B--Improved Service

Sec. 1101. Comprehensive customer service strategy.
Sec. 1102. Low-income exception for payments otherwise required in 
          connection with a submission of an offer-in-compromise.

                    Subtitle C--Sensible Enforcement

Sec. 1201. Internal Revenue Service seizure requirements with respect to 
          structuring transactions.
Sec. 1202. Exclusion of interest received in action to recover property 
          seized by the Internal Revenue Service based on structuring 
          transaction.
Sec. 1203. Clarification of equitable relief from joint liability.
Sec. 1204. Modification of procedures for issuance of third-party 
          summons.
Sec. 1205. Private debt collection and special compliance personnel 
          program.
Sec. 1206. Reform of notice of contact of third parties.
Sec. 1207. Modification of authority to issue designated summons.
Sec. 1208. Limitation on access of non-Internal Revenue Service 
          employees to returns and return information.

                Subtitle D--Organizational Modernization

Sec. 1301. Office of the National Taxpayer Advocate.
Sec. 1302. Modernization of Internal Revenue Service organizational 
          structure.

                      Subtitle E--Other Provisions

Sec. 1401. Return preparation programs for applicable taxpayers.
Sec. 1402. Provision of information regarding low-income taxpayer 
          clinics.
Sec. 1403. Notice from IRS regarding closure of taxpayer assistance 
          centers.
Sec. 1404. Rules for seizure and sale of perishable goods restricted to 
          only perishable goods.
Sec. 1405. Whistleblower reforms.
Sec. 1406. Customer service information.
Sec. 1407. Misdirected tax refund deposits.

                       TITLE II--21ST CENTURY IRS

            Subtitle A--Cybersecurity and Identity Protection

Sec. 2001. Public-private partnership to address identity theft refund 
          fraud.
Sec. 2002. Recommendations of Electronic Tax Administration Advisory 
          Committee regarding identity theft refund fraud.
Sec. 2003. Information sharing and analysis center.
Sec. 2004. Compliance by contractors with confidentiality safeguards.
Sec. 2005. Identity protection personal identification numbers.
Sec. 2006. Single point of contact for tax-related identity theft 
          victims.
Sec. 2007. Notification of suspected identity theft.
Sec. 2008. Guidelines for stolen identity refund fraud cases.
Sec. 2009. Increased penalty for improper disclosure or use of 
          information by preparers of returns.

            Subtitle B--Development of Information Technology

Sec. 2101. Management of Internal Revenue Service information 
          technology.
Sec. 2102. Internet platform for Form 1099 filings.
Sec. 2103. Streamlined critical pay authority for information technology 
          positions.

  Subtitle C--Modernization of Consent-Based Income Verification System

Sec. 2201. Disclosure of taxpayer information for third-party income 
          verification.
Sec. 2202. Limit redisclosures and uses of consent-based disclosures of 
          tax return information.

             Subtitle D--Expanded Use of Electronic Systems

Sec. 2301. Electronic filing of returns.
Sec. 2302. Uniform standards for the use of electronic signatures for 
          disclosure authorizations to, and other authorizations of, 
          practitioners.
Sec. 2303. Payment of taxes by debit and credit cards.
Sec. 2304. Authentication of users of electronic services accounts.

                      Subtitle E--Other Provisions

Sec. 2401. Repeal of provision regarding certain tax compliance 
          procedures and reports.
Sec. 2402. Comprehensive training strategy.

                   TITLE III--MISCELLANEOUS PROVISIONS

 Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

Sec. 3001. Prohibition on rehiring any employee of the Internal Revenue 
          Service who was involuntarily separated from service for 
          misconduct.
Sec. 3002. Notification of unauthorized inspection or disclosure of 
          returns and return information.

         Subtitle B--Provisions Relating to Exempt Organizations

Sec. 3101. Mandatory e-filing by exempt organizations.
Sec. 3102. Notice required before revocation of tax-exempt status for 
          failure to file return.

                      Subtitle C--Revenue Provision

Sec. 3201. Increase in penalty for failure to file.

                       TITLE IV--BUDGETARY EFFECTS

Sec. 4001. Determination of budgetary effects.

                    TITLE I--PUTTING TAXPAYERS FIRST
                Subtitle A--Independent Appeals Process

SEC. 1001. ESTABLISHMENT OF INTERNAL REVENUE SERVICE INDEPENDENT OFFICE 
OF APPEALS.
    (a) In General.--Section 7803 is amended by adding at the end the 
following new subsection:
    ``(e) Independent Office of Appeals.--
        ``(1) Establishment.--There is established in the Internal 
    Revenue Service an office to be known as the `Internal Revenue 
    Service Independent Office of Appeals'.
        ``(2) Chief of appeals.--
            ``(A) In general.--The Internal Revenue Service Independent 
        Office of Appeals shall be under the supervision and direction 
        of an official to be known as the `Chief of Appeals'. The Chief 
        of Appeals shall report directly to the Commissioner of 
        Internal Revenue and shall be entitled to compensation at the 
        same rate as the highest rate of basic pay established for the 
        Senior Executive Service under section 5382 of title 5, United 
        States Code.
            ``(B) Appointment.--The Chief of Appeals shall be appointed 
        by the Commissioner of Internal Revenue without regard to the 
        provisions of title 5, United States Code, relating to 
        appointments in the competitive service or the Senior Executive 
        Service.
            ``(C) Qualifications.--An individual appointed under 
        subparagraph (B) shall have experience and expertise in--
                ``(i) administration of, and compliance with, Federal 
            tax laws,
                ``(ii) a broad range of compliance cases, and
                ``(iii) management of large service organizations.
        ``(3) Purposes and duties of office.--It shall be the function 
    of the Internal Revenue Service Independent Office of Appeals to 
    resolve Federal tax controversies without litigation on a basis 
    which--
            ``(A) is fair and impartial to both the Government and the 
        taxpayer,
            ``(B) promotes a consistent application and interpretation 
        of, and voluntary compliance with, the Federal tax laws, and
            ``(C) enhances public confidence in the integrity and 
        efficiency of the Internal Revenue Service.
        ``(4) Right of appeal.--The resolution process described in 
    paragraph (3) shall be generally available to all taxpayers.
        ``(5) Limitation on designation of cases as not eligible for 
    referral to independent office of appeals.--
            ``(A) In general.--If any taxpayer which is in receipt of a 
        notice of deficiency authorized under section 6212 requests 
        referral to the Internal Revenue Service Independent Office of 
        Appeals and such request is denied, the Commissioner of 
        Internal Revenue shall provide such taxpayer a written notice 
        which--
                ``(i) provides a detailed description of the facts 
            involved, the basis for the decision to deny the request, 
            and a detailed explanation of how the basis of such 
            decision applies to such facts, and
                ``(ii) describes the procedures prescribed under 
            subparagraph (C) for protesting the decision to deny the 
            request.
            ``(B) Report to congress.--The Commissioner of Internal 
        Revenue shall submit a written report to Congress on an annual 
        basis which includes the number of requests described in 
        subparagraph (A) which were denied and the reasons (described 
        by category) that such requests were denied.
            ``(C) Procedures for protesting denial of request.--The 
        Commissioner of Internal Revenue shall prescribe procedures for 
        protesting to the Commissioner of Internal Revenue a denial of 
        a request described in subparagraph (A).
            ``(D) Not applicable to frivolous positions.--This 
        paragraph shall not apply to a request for referral to the 
        Internal Revenue Service Independent Office of Appeals which is 
        denied on the basis that the issue involved is a frivolous 
        position (within the meaning of section 6702(c)).
        ``(6) Staff.--
            ``(A) In general.--All personnel in the Internal Revenue 
        Service Independent Office of Appeals shall report to the Chief 
        of Appeals.
            ``(B) Access to staff of office of the chief counsel.--The 
        Chief of Appeals shall have authority to obtain legal 
        assistance and advice from the staff of the Office of the Chief 
        Counsel. The Chief Counsel shall ensure, to the extent 
        practicable, that such assistance and advice is provided by 
        staff of the Office of the Chief Counsel who were not involved 
        in the case with respect to which such assistance and advice is 
        sought and who are not involved in preparing such case for 
        litigation.
        ``(7) Access to case files.--
            ``(A) In general.--In any case in which a conference with 
        the Internal Revenue Service Independent Office of Appeals has 
        been scheduled upon request of a specified taxpayer, the Chief 
        of Appeals shall ensure that such taxpayer is provided access 
        to the nonprivileged portions of the case file on record 
        regarding the disputed issues (other than documents provided by 
        the taxpayer to the Internal Revenue Service) not later than 10 
        days before the date of such conference.
            ``(B) Taxpayer election to expedite conference.--If the 
        taxpayer so elects, subparagraph (A) shall be applied by 
        substituting `the date of such conference' for `10 days before 
        the date of such conference'.
            ``(C) Specified taxpayer.--For purposes of this paragraph--
                ``(i) In general.--The term `specified taxpayer' 
            means--

                    ``(I) in the case of any taxpayer who is a natural 
                person, a taxpayer whose adjusted gross income does not 
                exceed $400,000 for the taxable year to which the 
                dispute relates, and
                    ``(II) in the case of any other taxpayer, a 
                taxpayer whose gross receipts do not exceed $5 million 
                for the taxable year to which the dispute relates.

                ``(ii) Aggregation rule.--Rules similar to the rules of 
            section 448(c)(2) shall apply for purposes of clause 
            (i)(II).''.
    (b) Conforming Amendments.--
        (1) The following provisions are each amended by striking 
    ``Internal Revenue Service Office of Appeals'' and inserting 
    ``Internal Revenue Service Independent Office of Appeals'':
            (A) Section 6015(c)(4)(B)(ii)(I).
            (B) Section 6320(b)(1).
            (C) Subsections (b)(1) and (d)(3) of section 6330.
            (D) Section 6603(d)(3)(B).
            (E) Section 6621(c)(2)(A)(i).
            (F) Section 7122(e)(2).
            (G) Subsections (a), (b)(1), (b)(2), and (c)(1) of section 
        7123.
            (H) Subsections (c)(7)(B)(i) and (g)(2)(A) of section 7430.
            (I) Section 7522(b)(3).
            (J) Section 7612(c)(2)(A).
        (2) Section 7430(c)(2) is amended by striking ``Internal 
    Revenue Service Office of Appeals'' each place it appears and 
    inserting ``Internal Revenue Service Independent Office of 
    Appeals''.
        (3) The heading of section 6330(d)(3) is amended by inserting 
    ``independent'' after ``irs''.
    (c) Other References.--Any reference in any provision of law, or 
regulation or other guidance, to the Internal Revenue Service Office of 
Appeals shall be treated as a reference to the Internal Revenue Service 
Independent Office of Appeals.
    (d) Savings Provisions.--Rules similar to the rules of paragraphs 
(2) through (6) of section 1001(b) of the Internal Revenue Service 
Restructuring and Reform Act of 1998 shall apply for purposes of this 
section (and the amendments made by this section).
    (e) Effective Date.--
        (1) In general.--Except as otherwise provided in this 
    subsection, the amendments made by this section shall take effect 
    on the date of the enactment of this Act.
        (2) Access to case files.--Section 7803(e)(7) of the Internal 
    Revenue Code of 1986, as added by subsection (a), shall apply to 
    conferences occurring after the date which is 1 year after the date 
    of the enactment of this Act.

                      Subtitle B--Improved Service

SEC. 1101. COMPREHENSIVE CUSTOMER SERVICE STRATEGY.
    (a) In General.--Not later than the date which is 1 year after the 
date of the enactment of this Act, the Secretary of the Treasury (or 
the Secretary's delegate) shall submit to Congress a written 
comprehensive customer service strategy for the Internal Revenue 
Service. Such strategy shall include--
        (1) a plan to provide assistance to taxpayers that is secure, 
    designed to meet reasonable taxpayer expectations, and adopts 
    appropriate best practices of customer service provided in the 
    private sector, including online services, telephone call back 
    services, and training of employees providing customer services;
        (2) a thorough assessment of the services that the Internal 
    Revenue Service can co-locate with other Federal services or offer 
    as self-service options;
        (3) proposals to improve Internal Revenue Service customer 
    service in the short term (the current and following fiscal year), 
    medium term (approximately 3 to 5 fiscal years), and long term 
    (approximately 10 fiscal years);
        (4) a plan to update guidance and training materials for 
    customer service employees of the Internal Revenue Service, 
    including the Internal Revenue Manual, to reflect such strategy; 
    and
        (5) identified metrics and benchmarks for quantitatively 
    measuring the progress of the Internal Revenue Service in 
    implementing such strategy.
    (b) Updated Guidance and Training Materials.--Not later than 2 
years after the date of the enactment of this Act, the Secretary of the 
Treasury (or the Secretary's delegate) shall make available the updated 
guidance and training materials described in subsection (a)(4) 
(including the Internal Revenue Manual). Such updated guidance and 
training materials (including the Internal Revenue Manual) shall be 
written in a manner so as to be easily understood by customer service 
employees of the Internal Revenue Service and shall provide clear 
instructions.
SEC. 1102. LOW-INCOME EXCEPTION FOR PAYMENTS OTHERWISE REQUIRED IN 
CONNECTION WITH A SUBMISSION OF AN OFFER-IN-COMPROMISE.
    (a) In General.--Section 7122(c) is amended by adding at the end 
the following new paragraph:
        ``(3) Exception for low-income taxpayers.--Paragraph (1), and 
    any user fee otherwise required in connection with the submission 
    of an offer-in-compromise, shall not apply to any offer-in-
    compromise with respect to a taxpayer who is an individual with 
    adjusted gross income, as determined for the most recent taxable 
    year for which such information is available, which does not exceed 
    250 percent of the applicable poverty level (as determined by the 
    Secretary).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to offers-in-compromise submitted after the date of the enactment of 
this Act.

                    Subtitle C--Sensible Enforcement

SEC. 1201. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH RESPECT 
TO STRUCTURING TRANSACTIONS.
    Section 5317(c)(2) of title 31, United States Code, is amended--
        (1) by striking ``Any property'' and inserting the following:
            ``(A) In general.--Any property''; and
        (2) by adding at the end the following:
            ``(B) Internal revenue service seizure requirements with 
        respect to structuring transactions.--
                ``(i) Property derived from an illegal source.--
            Property may only be seized by the Internal Revenue Service 
            pursuant to subparagraph (A) by reason of a claimed 
            violation of section 5324 if the property to be seized was 
            derived from an illegal source or the funds were structured 
            for the purpose of concealing the violation of a criminal 
            law or regulation other than section 5324.
                ``(ii) Notice.--Not later than 30 days after property 
            is seized by the Internal Revenue Service pursuant to 
            subparagraph (A), the Internal Revenue Service shall--

                    ``(I) make a good faith effort to find all persons 
                with an ownership interest in such property; and
                    ``(II) provide each such person so found with a 
                notice of the seizure and of the person's rights under 
                clause (iv).

                ``(iii) Extension of notice under certain 
            circumstances.--The Internal Revenue Service may apply to a 
            court of competent jurisdiction for one 30-day extension of 
            the notice requirement under clause (ii) if the Internal 
            Revenue Service can establish probable cause of an imminent 
            threat to national security or personal safety 
            necessitating such extension.
                ``(iv) Post-seizure hearing.--If a person with an 
            ownership interest in property seized pursuant to 
            subparagraph (A) by the Internal Revenue Service requests a 
            hearing by a court of competent jurisdiction within 30 days 
            after the date on which notice is provided under subclause 
            (ii), such property shall be returned unless the court 
            holds an adversarial hearing and finds within 30 days of 
            such request (or such longer period as the court may 
            provide, but only on request of an interested party) that 
            there is probable cause to believe that there is a 
            violation of section 5324 involving such property and 
            probable cause to believe that the property to be seized 
            was derived from an illegal source or the funds were 
            structured for the purpose of concealing the violation of a 
            criminal law or regulation other than section 5324.''.
SEC. 1202. EXCLUSION OF INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY 
SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING 
TRANSACTION.
    (a) In General.--Part III of subchapter B of chapter 1 is amended 
by inserting before section 140 the following new section:
``SEC. 139H. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY 
THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING TRANSACTION.
    ``Gross income shall not include any interest received from the 
Federal Government in connection with an action to recover property 
seized by the Internal Revenue Service pursuant to section 5317(c)(2) 
of title 31, United States Code, by reason of a claimed violation of 
section 5324 of such title.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 is amended by inserting before the item 
relating to section 140 the following new item:

``Sec. 139H. Interest received in action to recover property seized by 
          the Internal Revenue Service based on structuring 
          transaction.''.

    (c) Effective Date.--The amendments made by this section shall 
apply to interest received on or after the date of the enactment of 
this Act.
SEC. 1203. CLARIFICATION OF EQUITABLE RELIEF FROM JOINT LIABILITY.
    (a) In General.--Section 6015 is amended--
        (1) in subsection (e), by adding at the end the following new 
    paragraph:
        ``(7) Standard and scope of review.--Any review of a 
    determination made under this section shall be reviewed de novo by 
    the Tax Court and shall be based upon--
            ``(A) the administrative record established at the time of 
        the determination, and
            ``(B) any additional newly discovered or previously 
        unavailable evidence.''; and
        (2) by amending subsection (f) to read as follows:
    ``(f) Equitable Relief.--
        ``(1) In general.--Under procedures prescribed by the 
    Secretary, if--
            ``(A) taking into account all the facts and circumstances, 
        it is inequitable to hold the individual liable for any unpaid 
        tax or any deficiency (or any portion of either), and
            ``(B) relief is not available to such individual under 
        subsection (b) or (c),
    the Secretary may relieve such individual of such liability.
        ``(2) Limitation.--A request for equitable relief under this 
    subsection may be made with respect to any portion of any liability 
    that--
            ``(A) has not been paid, provided that such request is made 
        before the expiration of the applicable period of limitation 
        under section 6502, or
            ``(B) has been paid, provided that such request is made 
        during the period in which the individual could submit a timely 
        claim for refund or credit of such payment.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to petitions or requests filed or pending on or after the date of 
the enactment of this Act.
SEC. 1204. MODIFICATION OF PROCEDURES FOR ISSUANCE OF THIRD-PARTY 
SUMMONS.
    (a) In General.--Section 7609(f) is amended by adding at the end 
the following flush sentence:
``The Secretary shall not issue any summons described in the preceding 
sentence unless the information sought to be obtained is narrowly 
tailored to information that pertains to the failure (or potential 
failure) of the person or group or class of persons referred to in 
paragraph (2) to comply with one or more provisions of the internal 
revenue law which have been identified for purposes of such 
paragraph.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to summonses served after the date that is 45 days after the date 
of the enactment of this Act.
SEC. 1205. PRIVATE DEBT COLLECTION AND SPECIAL COMPLIANCE PERSONNEL 
PROGRAM.
    (a) Certain Tax Receivables Not Eligible for Collection Under Tax 
Collection Contracts.--Section 6306(d)(3) is amended by striking ``or'' 
at the end of subparagraph (C) and by inserting after subparagraph (D) 
the following new subparagraphs:
            ``(E) a taxpayer substantially all of whose income consists 
        of disability insurance benefits under section 223 of the 
        Social Security Act or supplemental security income benefits 
        under title XVI of the Social Security Act (including 
        supplemental security income benefits of the type described in 
        section 1616 of such Act or section 212 of Public Law 93-66), 
        or
            ``(F) a taxpayer who is an individual with adjusted gross 
        income, as determined for the most recent taxable year for 
        which such information is available, which does not exceed 200 
        percent of the applicable poverty level (as determined by the 
        Secretary),''.
    (b) Determination of Inactive Tax Receivables Eligible for 
Collection Under Tax Collection Contracts.--Section 6306(c)(2)(A)(ii) 
is amended by striking ``more than \1/3\ of the period of the 
applicable statute of limitation has lapsed'' and inserting ``more than 
2 years has passed since assessment''.
    (c) Maximum Length of Installment Agreements Offered Under Tax 
Collection Contracts.--Section 6306(b)(1)(B) is amended by striking ``5 
years'' and inserting ``7 years''.
    (d) Clarification That Special Compliance Personnel Program Account 
May Be Used for Program Costs.--
        (1) In general.--Section 6307(b) is amended--
            (A) in paragraph (2), by striking all that follows ``under 
        such program'' and inserting a period, and
            (B) in paragraph (3), by striking all that follows ``out of 
        such account'' and inserting ``for other than program costs.''.
        (2) Communications, software, and technology costs treated as 
    program costs.--Section 6307(d)(2)(B) is amended by striking 
    ``telecommunications'' and inserting ``communications, software, 
    technology''.
        (3) Conforming amendment.--Section 6307(d)(2) is amended by 
    striking ``and'' at the end of subparagraph (A), by striking the 
    period at the end of subparagraph (B) and inserting ``, and'', and 
    by inserting after subparagraph (B) the following new subparagraph:
            ``(C) reimbursement of the Internal Revenue Service or 
        other government agencies for the cost of administering the 
        qualified tax collection program under section 6306.''.
    (e) Effective Dates.--
        (1) In general.--Except as otherwise provided in this 
    subsection, the amendments made by this section shall apply to tax 
    receivables identified by the Secretary (or the Secretary's 
    delegate) after December 31, 2020.
        (2) Maximum length of installment agreements.--The amendment 
    made by subsection (c) shall apply to contracts entered into after 
    the date of the enactment of this Act.
        (3) Use of special compliance personnel program account.--The 
    amendment made by subsection (d) shall apply to amounts expended 
    from the special compliance personnel program account after the 
    date of the enactment of this Act.
SEC. 1206. REFORM OF NOTICE OF CONTACT OF THIRD PARTIES.
    (a) In General.--Section 7602(c)(1) is amended to read as follows:
        ``(1) General notice.--An officer or employee of the Internal 
    Revenue Service may not contact any person other than the taxpayer 
    with respect to the determination or collection of the tax 
    liability of such taxpayer unless such contact occurs during a 
    period (not greater than 1 year) which is specified in a notice 
    which--
            ``(A) informs the taxpayer that contacts with persons other 
        than the taxpayer are intended to be made during such period, 
        and
            ``(B) except as otherwise provided by the Secretary, is 
        provided to the taxpayer not later than 45 days before the 
        beginning of such period.
    Nothing in the preceding sentence shall prevent the issuance of 
    notices to the same taxpayer with respect to the same tax liability 
    with periods specified therein that, in the aggregate, exceed 1 
    year. A notice shall not be issued under this paragraph unless 
    there is an intent at the time such notice is issued to contact 
    persons other than the taxpayer during the period specified in such 
    notice. The preceding sentence shall not prevent the issuance of a 
    notice if the requirement of such sentence is met on the basis of 
    the assumption that the information sought to be obtained by such 
    contact will not be obtained by other means before such contact.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to notices provided, and contacts of persons made, after the date which 
is 45 days after the date of the enactment of this Act.
SEC. 1207. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED SUMMONS.
    (a) In General.--Paragraph (1) of section 6503(j) is amended by 
striking ``coordinated examination program'' and inserting 
``coordinated industry case program''.
    (b) Requirements for Summons.--Clause (i) of section 6503(j)(2)(A) 
is amended to read as follows:
                ``(i) the issuance of such summons is preceded by a 
            review and written approval of such issuance by the 
            Commissioner of the relevant operating division of the 
            Internal Revenue Service and the Chief Counsel which--

                    ``(I) states facts clearly establishing that the 
                Secretary has made reasonable requests for the 
                information that is the subject of the summons, and
                    ``(II) is attached to such summons,''.

    (c) Establishment That Reasonable Requests for Information Were 
Made.--Subsection (j) of section 6503 is amended by adding at the end 
the following new paragraph:
        ``(4) Establishment that reasonable requests for information 
    were made.--In any court proceeding described in paragraph (3), the 
    Secretary shall establish that reasonable requests were made for 
    the information that is the subject of the summons.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to summonses issued after the date which is 45 days after the 
date of the enactment of this Act.
SEC. 1208. LIMITATION ON ACCESS OF NON-INTERNAL REVENUE SERVICE 
EMPLOYEES TO RETURNS AND RETURN INFORMATION.
    (a) In General.--Section 7602 is amended by adding at the end the 
following new subsection:
    ``(f) Limitation on Access of Persons Other Than Internal Revenue 
Service Officers and Employees.--The Secretary shall not, under the 
authority of section 6103(n), provide any books, papers, records, or 
other data obtained pursuant to this section to any person authorized 
under section 6103(n), except when such person requires such 
information for the sole purpose of providing expert evaluation and 
assistance to the Internal Revenue Service. No person other than an 
officer or employee of the Internal Revenue Service or the Office of 
Chief Counsel may, on behalf of the Secretary, question a witness under 
oath whose testimony was obtained pursuant to this section.''.
    (b) Effective Date.--The amendment made by this section--
        (1) shall take effect on the date of the enactment of this Act; 
    and
        (2) shall not fail to apply to a contract in effect under 
    section 6103(n) of the Internal Revenue Code of 1986 merely because 
    such contract was in effect before the date of the enactment of 
    this Act.

                Subtitle D--Organizational Modernization

SEC. 1301. OFFICE OF THE NATIONAL TAXPAYER ADVOCATE.
    (a) Taxpayer Advocate Directives.--
        (1) In general.--Section 7803(c) is amended by adding at the 
    end the following new paragraph:
        ``(5) Taxpayer advocate directives.--In the case of any 
    Taxpayer Advocate Directive issued by the National Taxpayer 
    Advocate pursuant to a delegation of authority from the 
    Commissioner of Internal Revenue--
            ``(A) the Commissioner or a Deputy Commissioner shall 
        modify, rescind, or ensure compliance with such directive not 
        later than 90 days after the issuance of such directive, and
            ``(B) in the case of any directive which is modified or 
        rescinded by a Deputy Commissioner, the National Taxpayer 
        Advocate may (not later than 90 days after such modification or 
        rescission) appeal to the Commissioner, and the Commissioner 
        shall (not later than 90 days after such appeal is made) ensure 
        compliance with such directive as issued by the National 
        Taxpayer Advocate or provide the National Taxpayer Advocate 
        with the reasons for any modification or rescission made or 
        upheld by the Commissioner pursuant to such appeal.''.
        (2) Report to certain committees of congress regarding 
    directives.--Section 7803(c)(2)(B)(ii) is amended by redesignating 
    subclauses (VIII) through (XI) as subclauses (IX) through (XII), 
    respectively, and by inserting after subclause (VII) the following 
    new subclause:

                    ``(VIII) identify any Taxpayer Advocate Directive 
                which was not honored by the Internal Revenue Service 
                in a timely manner, as specified under paragraph 
                (5);''.

    (b) National Taxpayer Advocate Annual Reports to Congress.--
        (1) Inclusion of most serious taxpayer problems.--Section 
    7803(c)(2)(B)(ii)(III) is amended by striking ``at least 20 of 
    the'' and inserting ``the 10''.
        (2) Coordination with treasury inspector general for tax 
    administration.--Section 7803(c)(2) is amended by adding at the end 
    the following new subparagraph:
            ``(E) Coordination with treasury inspector general for tax 
        administration.--Before beginning any research or study, the 
        National Taxpayer Advocate shall coordinate with the Treasury 
        Inspector General for Tax Administration to ensure that the 
        National Taxpayer Advocate does not duplicate any action that 
        the Treasury Inspector General for Tax Administration has 
        already undertaken or has a plan to undertake.''.
        (3) Statistical support.--
            (A) In general.--Section 6108 is amended by adding at the 
        end the following new subsection:
    ``(d) Statistical Support for National Taxpayer Advocate.--Upon 
request of the National Taxpayer Advocate, the Secretary shall, to the 
extent practicable, provide the National Taxpayer Advocate with 
statistical support in connection with the preparation by the National 
Taxpayer Advocate of the annual report described in section 
7803(c)(2)(B)(ii). Such statistical support shall include statistical 
studies, compilations, and the review of information provided by the 
National Taxpayer Advocate for statistical validity and sound 
statistical methodology.''.
            (B) Disclosure of review.--Section 7803(c)(2)(B)(ii), as 
        amended by subsection (a), is amended by striking ``and'' at 
        the end of subclause (XI), by redesignating subclause (XII) as 
        subclause (XIII), and by inserting after subclause (XI) the 
        following new subclause:

                    ``(XII) with respect to any statistical information 
                included in such report, include a statement of whether 
                such statistical information was reviewed or provided 
                by the Secretary under section 6108(d) and, if so, 
                whether the Secretary determined such information to be 
                statistically valid and based on sound statistical 
                methodology; and''.

            (C) Conforming amendment.--Section 7803(c)(2)(B)(iii) is 
        amended by adding at the end the following: ``The preceding 
        sentence shall not apply with respect to statistical 
        information provided to the Secretary for review, or received 
        from the Secretary, under section 6108(d).''.
    (c) Salary of National Taxpayer Advocate.--Section 7803(c)(1)(B)(i) 
is amended by striking ``, or, if the Secretary of the Treasury so 
determines, at a rate fixed under section 9503 of such title''.
    (d) Effective Date.--
        (1) In general.--Except as otherwise provided in this 
    subsection, the amendments made by this section shall take effect 
    on the date of the enactment of this Act.
        (2) Salary of national taxpayer advocate.--The amendment made 
    by subsection (c) shall apply to compensation paid to individuals 
    appointed as the National Taxpayer Advocate after March 31, 2019.
SEC. 1302. MODERNIZATION OF INTERNAL REVENUE SERVICE ORGANIZATIONAL 
STRUCTURE.
    (a) In General.--Not later than September 30, 2020, the Secretary 
of the Treasury (or the Secretary's delegate) shall submit to Congress 
a comprehensive written plan to redesign the organization of the 
Internal Revenue Service. Such plan shall--
        (1) ensure the successful implementation of the priorities 
    specified by Congress in this Act;
        (2) prioritize taxpayer services to ensure that all taxpayers 
    easily and readily receive the assistance that they need;
        (3) streamline the structure of the agency including minimizing 
    the duplication of services and responsibilities within the agency;
        (4) best position the Internal Revenue Service to combat 
    cybersecurity and other threats to the Internal Revenue Service; 
    and
        (5) address whether the Criminal Investigation Division of the 
    Internal Revenue Service should report directly to the Commissioner 
    of Internal Revenue.
    (b) Repeal of Restriction on Organizational Structure of Internal 
Revenue Service.--Paragraph (3) of section 1001(a) of the Internal 
Revenue Service Restructuring and Reform Act of 1998 shall cease to 
apply beginning 1 year after the date on which the plan described in 
subsection (a) is submitted to Congress.

                      Subtitle E--Other Provisions

SEC. 1401. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.
    (a) In General.--Chapter 77 is amended by inserting after section 
7526 the following new section:
``SEC. 7526A. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.
    ``(a) Establishment of Volunteer Income Tax Assistance Matching 
Grant Program.--The Secretary shall establish a Community Volunteer 
Income Tax Assistance Matching Grant Program under which the Secretary 
may, subject to the availability of appropriated funds, make grants to 
provide matching funds for the development, expansion, or continuation 
of qualified return preparation programs assisting applicable taxpayers 
and members of underserved populations.
    ``(b) Use of Funds.--
        ``(1) In general.--Qualified return preparation programs may 
    use grants received under this section for--
            ``(A) ordinary and necessary costs associated with program 
        operation in accordance with cost principles under the 
        applicable Office of Management and Budget circular, 
        including--
                ``(i) wages or salaries of persons coordinating the 
            activities of the program,
                ``(ii) developing training materials, conducting 
            training, and performing quality reviews of the returns 
            prepared under the program,
                ``(iii) equipment purchases, and
                ``(iv) vehicle-related expenses associated with remote 
            or rural tax preparation services,
            ``(B) outreach and educational activities described in 
        subsection (c)(2)(B), and
            ``(C) services related to financial education and 
        capability, asset development, and the establishment of savings 
        accounts in connection with tax return preparation.
        ``(2) Requirement of matching funds.--A qualified return 
    preparation program must provide matching funds on a dollar-for-
    dollar basis for all grants provided under this section. Matching 
    funds may include--
            ``(A) the salary (including fringe benefits) of individuals 
        performing services for the program,
            ``(B) the cost of equipment used in the program, and
            ``(C) other ordinary and necessary costs associated with 
        the program.
    Indirect expenses, including general overhead of any entity 
    administering the program, shall not be counted as matching funds.
    ``(c) Application.--
        ``(1) In general.--Each applicant for a grant under this 
    section shall submit an application to the Secretary at such time, 
    in such manner, and containing such information as the Secretary 
    may reasonably require.
        ``(2) Priority.--In awarding grants under this section, the 
    Secretary shall give priority to applications which demonstrate--
            ``(A) assistance to applicable taxpayers, with emphasis on 
        outreach to, and services for, such taxpayers,
            ``(B) taxpayer outreach and educational activities relating 
        to eligibility and availability of income supports available 
        through this title, including the earned income tax credit, and
            ``(C) specific outreach and focus on one or more 
        underserved populations.
        ``(3) Amounts taken into account.--In determining matching 
    grants under this section, the Secretary shall only take into 
    account amounts provided by the qualified return preparation 
    program for expenses described in subsection (b).
    ``(d) Program Adherence.--
        ``(1) In general.--The Secretary shall establish procedures 
    for, and shall conduct not less frequently than once every 5 
    calendar years during which a qualified return preparation program 
    is operating under a grant under this section, periodic site 
    visits--
            ``(A) to ensure the program is carrying out the purposes of 
        this section, and
            ``(B) to determine whether the program meets such program 
        adherence standards as the Secretary shall by regulation or 
        other guidance prescribe.
        ``(2) Additional requirements for grant recipients not meeting 
    program adherence standards.--In the case of any qualified return 
    preparation program which--
            ``(A) is awarded a grant under this section, and
            ``(B) is subsequently determined--
                ``(i) not to meet the program adherence standards 
            described in paragraph (1)(B), or
                ``(ii) not to be otherwise carrying out the purposes of 
            this section,
    such program shall not be eligible for any additional grants under 
    this section unless such program provides sufficient documentation 
    of corrective measures established to address any such deficiencies 
    determined.
    ``(e) Definitions.--For purposes of this section--
        ``(1) Qualified return preparation program.--The term 
    `qualified return preparation program' means any program--
            ``(A) which provides assistance to individuals, not less 
        than 90 percent of whom are applicable taxpayers, in preparing 
        and filing Federal income tax returns,
            ``(B) which is administered by a qualified entity,
            ``(C) in which all volunteers who assist in the preparation 
        of Federal income tax returns meet the training requirements 
        prescribed by the Secretary, and
            ``(D) which uses a quality review process which reviews 100 
        percent of all returns.
        ``(2) Qualified entity.--
            ``(A) In general.--The term `qualified entity' means any 
        entity which--
                ``(i) is an eligible organization,
                ``(ii) is in compliance with Federal tax filing and 
            payment requirements,
                ``(iii) is not debarred or suspended from Federal 
            contracts, grants, or cooperative agreements, and
                ``(iv) agrees to provide documentation to substantiate 
            any matching funds provided pursuant to the grant program 
            under this section.
            ``(B) Eligible organization.--The term `eligible 
        organization' means--
                ``(i) an institution of higher education which is 
            described in section 102 (other than subsection (a)(1)(C) 
            thereof) of the Higher Education Act of 1965 (20 U.S.C. 
            1002), as in effect on the date of the enactment of this 
            section, and which has not been disqualified from 
            participating in a program under title IV of such Act,
                ``(ii) an organization described in section 501(c) and 
            exempt from tax under section 501(a),
                ``(iii) a local government agency, including--

                    ``(I) a county or municipal government agency, and
                    ``(II) an Indian tribe, as defined in section 4(13) 
                of the Native American Housing Assistance and Self-
                Determination Act of 1996 (25 U.S.C. 4103(13)), 
                including any tribally designated housing entity (as 
                defined in section 4(22) of such Act (25 U.S.C. 
                4103(22))), tribal subsidiary, subdivision, or other 
                wholly owned tribal entity,

                ``(iv) a local, State, regional, or national coalition 
            (with one lead organization which meets the eligibility 
            requirements of clause (i), (ii), or (iii) acting as the 
            applicant organization), or
                ``(v) in the case of applicable taxpayers and members 
            of underserved populations with respect to which no 
            organizations described in the preceding clauses are 
            available--

                    ``(I) a State government agency, or
                    ``(II) an office providing Cooperative Extension 
                services (as established at the land-grant colleges and 
                universities under the Smith-Lever Act of May 8, 1914).

        ``(3) Applicable taxpayers.--The term `applicable taxpayer' 
    means a taxpayer whose income for the taxable year does not exceed 
    an amount equal to the completed phaseout amount under section 
    32(b) for a married couple filing a joint return with three or more 
    qualifying children, as determined in a revenue procedure or other 
    published guidance.
        ``(4) Underserved population.--The term `underserved 
    population' includes populations of persons with disabilities, 
    persons with limited English proficiency, Native Americans, 
    individuals living in rural areas, members of the Armed Forces and 
    their spouses, and the elderly.
    ``(f) Special Rules and Limitations.--
        ``(1) Duration of grants.--Upon application of a qualified 
    return preparation program, the Secretary is authorized to award a 
    multi-year grant not to exceed 3 years.
        ``(2) Aggregate limitation.--Unless otherwise provided by 
    specific appropriation, the Secretary shall not allocate more than 
    $30 million per fiscal year (exclusive of costs of administering 
    the program) to grants under this section.
    ``(g) Promotion of Programs.--
        ``(1) In general.--The Secretary shall promote tax preparation 
    through qualified return preparation programs through the use of 
    mass communications and other means.
        ``(2) Provision of information regarding qualified return 
    preparation programs.--The Secretary may provide taxpayers 
    information regarding qualified return preparation programs 
    receiving grants under this section.
        ``(3) Referrals to low-income taxpayer clinics.--Qualified 
    return preparation programs receiving a grant under this section 
    are encouraged, in appropriate cases, to--
            ``(A) advise taxpayers of the availability of, and 
        eligibility requirements for receiving, advice and assistance 
        from qualified low-income taxpayer clinics receiving funding 
        under section 7526, and
            ``(B) provide information regarding the location of, and 
        contact information for, such clinics.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by inserting after the item relating to section 7526 the 
following new item:

``Sec. 7526A. Return preparation programs for applicable taxpayers.''.
SEC. 1402. PROVISION OF INFORMATION REGARDING LOW-INCOME TAXPAYER 
CLINICS.
    (a) In General.--Section 7526(c) is amended by adding at the end 
the following new paragraph:
        ``(6) Provision of information regarding qualified low-income 
    taxpayer clinics.--Notwithstanding any other provision of law, 
    officers and employees of the Department of the Treasury may--
            ``(A) advise taxpayers of the availability of, and 
        eligibility requirements for receiving, advice and assistance 
        from one or more specific qualified low-income taxpayer clinics 
        receiving funding under this section, and
            ``(B) provide information regarding the location of, and 
        contact information for, such clinics.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
SEC. 1403. NOTICE FROM IRS REGARDING CLOSURE OF TAXPAYER ASSISTANCE 
CENTERS.
    Not later than 90 days before the date that a proposed closure of a 
Taxpayer Assistance Center would take effect, the Secretary of the 
Treasury (or the Secretary's delegate) shall--
        (1) make publicly available (including by non-electronic means) 
    a notice which--
            (A) identifies the Taxpayer Assistance Center proposed for 
        closure and the date of such proposed closure; and
            (B) identifies the relevant alternative sources of taxpayer 
        assistance which may be utilized by taxpayers affected by such 
        proposed closure; and
        (2) submit to Congress a written report that includes--
            (A) the information included in the notice described in 
        paragraph (1);
            (B) the reasons for such proposed closure; and
            (C) such other information as the Secretary may determine 
        appropriate.
SEC. 1404. RULES FOR SEIZURE AND SALE OF PERISHABLE GOODS RESTRICTED TO 
ONLY PERISHABLE GOODS.
    (a) In General.--Section 6336 is amended by striking ``or become 
greatly reduced in price or value by keeping, or that such property 
cannot be kept without great expense''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property seized after the date of the enactment of this Act.
SEC. 1405. WHISTLEBLOWER REFORMS.
    (a) Modifications to Disclosure Rules for Whistleblowers.--
        (1) In general.--Section 6103(k) is amended by adding at the 
    end the following new paragraph:
        ``(13) Disclosure to whistleblowers.--
            ``(A) In general.--The Secretary may disclose, to any 
        individual providing information relating to any purpose 
        described in paragraph (1) or (2) of section 7623(a), return 
        information related to the investigation of any taxpayer with 
        respect to whom the individual has provided such information, 
        but only to the extent that such disclosure is necessary in 
        obtaining information, which is not otherwise reasonably 
        available, with respect to the correct determination of tax 
        liability for tax, or the amount to be collected with respect 
        to the enforcement of any other provision of this title.
            ``(B) Updates on whistleblower investigations.--The 
        Secretary shall disclose to an individual providing information 
        relating to any purpose described in paragraph (1) or (2) of 
        section 7623(a) the following:
                ``(i) Not later than 60 days after a case for which the 
            individual has provided information has been referred for 
            an audit or examination, a notice with respect to such 
            referral.
                ``(ii) Not later than 60 days after a taxpayer with 
            respect to whom the individual has provided information has 
            made a payment of tax with respect to tax liability to 
            which such information relates, a notice with respect to 
            such payment.
                ``(iii) Subject to such requirements and conditions as 
            are prescribed by the Secretary, upon a written request by 
            such individual--

                    ``(I) information on the status and stage of any 
                investigation or action related to such information, 
                and
                    ``(II) in the case of a determination of the amount 
                of any award under section 7623(b), the reasons for 
                such determination.

        Clause (iii) shall not apply to any information if the 
        Secretary determines that disclosure of such information would 
        seriously impair Federal tax administration. Information 
        described in clauses (i), (ii), and (iii) may be disclosed to a 
        designee of the individual providing such information in 
        accordance with guidance provided by the Secretary.''.
        (2) Conforming amendments.--
            (A) Confidentiality of information.--Section 6103(a)(3) is 
        amended by striking ``subsection (k)(10)'' and inserting 
        ``paragraph (10) or (13) of subsection (k)''.
            (B) Penalty for unauthorized disclosure.--Section 
        7213(a)(2) is amended by striking ``(k)(10)'' and inserting 
        ``(k)(10) or (13)''.
            (C) Coordination with authority to disclose for 
        investigative purposes.--Section 6103(k)(6) is amended by 
        adding at the end the following new sentence: ``This paragraph 
        shall not apply to any disclosure to an individual providing 
        information relating to any purpose described in paragraph (1) 
        or (2) of section 7623(a) which is made under paragraph 
        (13)(A).''.
    (b) Protection Against Retaliation.--Section 7623 is amended by 
adding at the end the following new subsection:
    ``(d) Civil Action To Protect Against Retaliation Cases.--
        ``(1) Anti-retaliation whistleblower protection for 
    employees.--No employer, or any officer, employee, contractor, 
    subcontractor, or agent of such employer, may discharge, demote, 
    suspend, threaten, harass, or in any other manner discriminate 
    against an employee in the terms and conditions of employment 
    (including through an act in the ordinary course of such employee's 
    duties) in reprisal for any lawful act done by the employee--
            ``(A) to provide information, cause information to be 
        provided, or otherwise assist in an investigation regarding 
        underpayment of tax or any conduct which the employee 
        reasonably believes constitutes a violation of the internal 
        revenue laws or any provision of Federal law relating to tax 
        fraud, when the information or assistance is provided to the 
        Internal Revenue Service, the Secretary of the Treasury, the 
        Treasury Inspector General for Tax Administration, the 
        Comptroller General of the United States, the Department of 
        Justice, the United States Congress, a person with supervisory 
        authority over the employee, or any other person working for 
        the employer who has the authority to investigate, discover, or 
        terminate misconduct, or
            ``(B) to testify, participate in, or otherwise assist in 
        any administrative or judicial action taken by the Internal 
        Revenue Service relating to an alleged underpayment of tax or 
        any violation of the internal revenue laws or any provision of 
        Federal law relating to tax fraud.
        ``(2) Enforcement action.--
            ``(A) In general.--A person who alleges discharge or other 
        reprisal by any person in violation of paragraph (1) may seek 
        relief under paragraph (3) by--
                ``(i) filing a complaint with the Secretary of Labor, 
            or
                ``(ii) if the Secretary of Labor has not issued a final 
            decision within 180 days of the filing of the complaint and 
            there is no showing that such delay is due to the bad faith 
            of the claimant, bringing an action at law or equity for de 
            novo review in the appropriate district court of the United 
            States, which shall have jurisdiction over such an action 
            without regard to the amount in controversy.
            ``(B) Procedure.--
                ``(i) In general.--An action under subparagraph (A)(i) 
            shall be governed under the rules and procedures set forth 
            in section 42121(b) of title 49, United States Code.
                ``(ii) Exception.--Notification made under section 
            42121(b)(1) of title 49, United States Code, shall be made 
            to the person named in the complaint and to the employer.
                ``(iii) Burdens of proof.--An action brought under 
            subparagraph (A)(ii) shall be governed by the legal burdens 
            of proof set forth in section 42121(b) of title 49, United 
            States Code, except that in applying such section--

                    ``(I) `behavior described in paragraph (1)' shall 
                be substituted for `behavior described in paragraphs 
                (1) through (4) of subsection (a)' each place it 
                appears in paragraph (2)(B) thereof, and
                    ``(II) `a violation of paragraph (1)' shall be 
                substituted for `a violation of subsection (a)' each 
                place it appears.

                ``(iv) Statute of limitations.--A complaint under 
            subparagraph (A)(i) shall be filed not later than 180 days 
            after the date on which the violation occurs.
                ``(v) Jury trial.--A party to an action brought under 
            subparagraph (A)(ii) shall be entitled to trial by jury.
        ``(3) Remedies.--
            ``(A) In general.--An employee prevailing in any action 
        under paragraph (2)(A) shall be entitled to all relief 
        necessary to make the employee whole.
            ``(B) Compensatory damages.--Relief for any action under 
        subparagraph (A) shall include--
                ``(i) reinstatement with the same seniority status that 
            the employee would have had, but for the reprisal,
                ``(ii) the sum of 200 percent of the amount of back pay 
            and 100 percent of all lost benefits, with interest, and
                ``(iii) compensation for any special damages sustained 
            as a result of the reprisal, including litigation costs, 
            expert witness fees, and reasonable attorney fees.
        ``(4) Rights retained by employee.--Nothing in this section 
    shall be deemed to diminish the rights, privileges, or remedies of 
    any employee under any Federal or State law, or under any 
    collective bargaining agreement.
        ``(5) Nonenforceability of certain provisions waiving rights 
    and remedies or requiring arbitration of disputes.--
            ``(A) Waiver of rights and remedies.--The rights and 
        remedies provided for in this subsection may not be waived by 
        any agreement, policy form, or condition of employment, 
        including by a predispute arbitration agreement.
            ``(B) Predispute arbitration agreements.--No predispute 
        arbitration agreement shall be valid or enforceable, if the 
        agreement requires arbitration of a dispute arising under this 
        subsection.''.
    (c) Effective Date.--
        (1) In general.--The amendments made by subsection (a) shall 
    apply to disclosures made after the date of the enactment of this 
    Act.
        (2) Civil protection.--The amendment made by subsection (b) 
    shall take effect on the date of the enactment of this Act.
SEC. 1406. CUSTOMER SERVICE INFORMATION.
    The Secretary of the Treasury (or the Secretary's delegate) shall 
provide helpful information to taxpayers placed on hold during a 
telephone call to any Internal Revenue Service help line, including the 
following:
        (1) Information about common tax scams.
        (2) Information on where and how to report tax scams.
        (3) Additional advice on how taxpayers can protect themselves 
    from identity theft and tax scams.
SEC. 1407. MISDIRECTED TAX REFUND DEPOSITS.
    Section 6402 is amended by adding at the end the following new 
subsection:
    ``(n) Misdirected Direct Deposit Refund.--Not later than the date 
which is 6 months after the date of the enactment of the Taxpayer First 
Act, the Secretary shall prescribe regulations to establish procedures 
to allow for--
        ``(1) taxpayers to report instances in which a refund made by 
    the Secretary by electronic funds transfer was not transferred to 
    the account of the taxpayer;
        ``(2) coordination with financial institutions for the purpose 
    of--
            ``(A) identifying the accounts to which transfers described 
        in paragraph (1) were made; and
            ``(B) recovery of the amounts so transferred; and
        ``(3) the refund to be delivered to the correct account of the 
    taxpayer.''.

                       TITLE II--21ST CENTURY IRS
           Subtitle A--Cybersecurity and Identity Protection

SEC. 2001. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY THEFT REFUND 
FRAUD.
    The Secretary of the Treasury (or the Secretary's delegate) shall 
work collaboratively with the public and private sectors to protect 
taxpayers from identity theft refund fraud.
SEC. 2002. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION ADVISORY 
COMMITTEE REGARDING IDENTITY THEFT REFUND FRAUD.
    The Secretary of the Treasury shall ensure that the advisory group 
convened by the Secretary pursuant to section 2001(b)(2) of the 
Internal Revenue Service Restructuring and Reform Act of 1998 (commonly 
known as the Electronic Tax Administration Advisory Committee) studies 
(including by providing organized public forums) and makes 
recommendations to the Secretary regarding methods to prevent identity 
theft and refund fraud.
SEC. 2003. INFORMATION SHARING AND ANALYSIS CENTER.
    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) may participate in an information sharing and analysis center 
to centralize, standardize, and enhance data compilation and analysis 
to facilitate sharing actionable data and information with respect to 
identity theft tax refund fraud.
    (b) Development of Performance Metrics.--The Secretary of the 
Treasury (or the Secretary's delegate) shall develop metrics for 
measuring the success of such center in detecting and preventing 
identity theft tax refund fraud.
    (c) Disclosure.--
        (1) In general.--Section 6103(k), as amended by this Act, is 
    amended by adding at the end the following new paragraph:
        ``(14) Disclosure of return information for purposes of 
    cybersecurity and the prevention of identity theft tax refund 
    fraud.--
            ``(A) In general.--Under such procedures and subject to 
        such conditions as the Secretary may prescribe, the Secretary 
        may disclose specified return information to specified ISAC 
        participants to the extent that the Secretary determines such 
        disclosure is in furtherance of effective Federal tax 
        administration relating to the detection or prevention of 
        identity theft tax refund fraud, validation of taxpayer 
        identity, authentication of taxpayer returns, or detection or 
        prevention of cybersecurity threats.
            ``(B) Specified isac participants.--For purposes of this 
        paragraph--
                ``(i) In general.--The term `specified ISAC 
            participant' means--

                    ``(I) any person designated by the Secretary as 
                having primary responsibility for a function performed 
                with respect to the information sharing and analysis 
                center described in section 2003(a) of the Taxpayer 
                First Act, and
                    ``(II) any person subject to the requirements of 
                section 7216 and which is a participant in such 
                information sharing and analysis center.

                ``(ii) Information sharing agreement.--Such term shall 
            not include any person unless such person has entered into 
            a written agreement with the Secretary setting forth the 
            terms and conditions for the disclosure of information to 
            such person under this paragraph, including requirements 
            regarding the protection and safeguarding of such 
            information by such person.
            ``(C) Specified return information.--For purposes of this 
        paragraph, the term `specified return information' means--
                ``(i) in the case of a return which is in connection 
            with a case of potential identity theft refund fraud--

                    ``(I) in the case of such return filed 
                electronically, the internet protocol address, device 
                identification, email domain name, speed of completion, 
                method of authentication, refund method, and such other 
                return information related to the electronic filing 
                characteristics of such return as the Secretary may 
                identify for purposes of this subclause, and
                    ``(II) in the case of such return prepared by a tax 
                return preparer, identifying information with respect 
                to such tax return preparer, including the preparer 
                taxpayer identification number and electronic filer 
                identification number of such preparer,

                ``(ii) in the case of a return which is in connection 
            with a case of a identity theft refund fraud which has been 
            confirmed by the Secretary (pursuant to such procedures as 
            the Secretary may provide), the information referred to in 
            subclauses (I) and (II) of clause (i), the name and 
            taxpayer identification number of the taxpayer as it 
            appears on the return, and any bank account and routing 
            information provided for making a refund in connection with 
            such return, and
                ``(iii) in the case of any cybersecurity threat to the 
            Internal Revenue Service, information similar to the 
            information described in subclauses (I) and (II) of clause 
            (i) with respect to such threat.
            ``(D) Restriction on use of disclosed information.--
                ``(i) Designated third parties.--Any return information 
            received by a person described in subparagraph (B)(i)(I) 
            shall be used only for the purposes of and to the extent 
            necessary in--

                    ``(I) performing the function such person is 
                designated to perform under such subparagraph,
                    ``(II) facilitating disclosures authorized under 
                subparagraph (A) to persons described in subparagraph 
                (B)(i)(II), and
                    ``(III) facilitating disclosures authorized under 
                subsection (d) to participants in such information 
                sharing and analysis center.

                ``(ii) Return preparers.--Any return information 
            received by a person described in subparagraph (B)(i)(II) 
            shall be treated for purposes of section 7216 as 
            information furnished to such person for, or in connection 
            with, the preparation of a return of the tax imposed under 
            chapter 1.
            ``(E) Data protection and safeguards.--Return information 
        disclosed under this paragraph shall be subject to such 
        protections and safeguards as the Secretary may require in 
        regulations or other guidance or in the written agreement 
        referred to in subparagraph (B)(ii). Such written agreement 
        shall include a requirement that any unauthorized access to 
        information disclosed under this paragraph, and any breach of 
        any system in which such information is held, be reported to 
        the Treasury Inspector General for Tax Administration.''.
        (2) Application of civil and criminal penalties.--
            (A) Section 6103(a)(3), as amended by this Act, is amended 
        by striking ``or (13)'' and inserting ``, (13), or (14)''.
            (B) Section 7213(a)(2), as amended by this Act, is amended 
        by striking ``or (13)'' and inserting ``, (13), or (14)''.
SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.
    (a) In General.--Section 6103(p) is amended by adding at the end 
the following new paragraph:
        ``(9) Disclosure to contractors and other agents.--
    Notwithstanding any other provision of this section, no return or 
    return information shall be disclosed to any contractor or other 
    agent of a Federal, State, or local agency unless such agency, to 
    the satisfaction of the Secretary--
            ``(A) has requirements in effect which require each such 
        contractor or other agent which would have access to returns or 
        return information to provide safeguards (within the meaning of 
        paragraph (4)) to protect the confidentiality of such returns 
        or return information,
            ``(B) agrees to conduct an on-site review every 3 years (or 
        a mid-point review in the case of contracts or agreements of 
        less than 3 years in duration) of each contractor or other 
        agent to determine compliance with such requirements,
            ``(C) submits the findings of the most recent review 
        conducted under subparagraph (B) to the Secretary as part of 
        the report required by paragraph (4)(E), and
            ``(D) certifies to the Secretary for the most recent annual 
        period that such contractor or other agent is in compliance 
        with all such requirements.
    The certification required by subparagraph (D) shall include the 
    name and address of each contractor or other agent, a description 
    of the contract or agreement with such contractor or other agent, 
    and the duration of such contract or agreement. The requirements of 
    this paragraph shall not apply to disclosures pursuant to 
    subsection (n) for purposes of Federal tax administration.''.
    (b) Conforming Amendment.--Section 6103(p)(8)(B) is amended by 
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after December 31, 2022.
SEC. 2005. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBERS.
    (a) In General.--Subject to subsection (b), the Secretary of the 
Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall establish a program to issue, upon 
the request of any individual, a number which may be used in connection 
with such individual's social security number (or other identifying 
information with respect to such individual as determined by the 
Secretary) to assist the Secretary in verifying such individual's 
identity.
    (b) Requirements.--
        (1) Annual expansion.--For each calendar year beginning after 
    the date of the enactment of this Act, the Secretary shall provide 
    numbers through the program described in subsection (a) to 
    individuals residing in such States as the Secretary deems 
    appropriate, provided that the total number of States served by 
    such program during such year is greater than the total number of 
    States served by such program during the preceding year.
        (2) Nationwide availability.--Not later than 5 years after the 
    date of the enactment of this Act, the Secretary shall ensure that 
    the program described in subsection (a) is made available to any 
    individual residing in the United States.
SEC. 2006. SINGLE POINT OF CONTACT FOR TAX-RELATED IDENTITY THEFT 
VICTIMS.
    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall establish and implement procedures to ensure that any 
taxpayer whose return has been delayed or otherwise adversely affected 
due to tax-related identity theft has a single point of contact at the 
Internal Revenue Service throughout the processing of the taxpayer's 
case. The single point of contact shall track the taxpayer's case to 
completion and coordinate with other Internal Revenue Service employees 
to resolve case issues as quickly as possible.
    (b) Single Point of Contact.--
        (1) In general.--For purposes of subsection (a), the single 
    point of contact shall consist of a team or subset of specially 
    trained employees who--
            (A) have the ability to work across functions to resolve 
        the issues involved in the taxpayer's case; and
            (B) shall be accountable for handling the case until its 
        resolution.
        (2) Team or subset.--The employees included within the team or 
    subset described in paragraph (1) may change as required to meet 
    the needs of the Internal Revenue Service, provided that procedures 
    have been established to--
            (A) ensure continuity of records and case history; and
            (B) notify the taxpayer when appropriate.
SEC. 2007. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
    (a) In General.--Chapter 77 is amended by adding at the end the 
following new section:
``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
    ``(a) In General.--If the Secretary determines that there has been 
or may have been an unauthorized use of the identity of any individual, 
the Secretary shall, without jeopardizing an investigation relating to 
tax administration--
        ``(1) as soon as practicable--
            ``(A) notify the individual of such determination,
            ``(B) provide instructions on how to file a report with law 
        enforcement regarding the unauthorized use,
            ``(C) identify any steps to be taken by the individual to 
        permit law enforcement to access personal information of the 
        individual during the investigation,
            ``(D) provide information regarding actions the individual 
        may take in order to protect the individual from harm relating 
        to the unauthorized use, and
            ``(E) offer identity protection measures to the individual, 
        such as the use of an identity protection personal 
        identification number, and
        ``(2) at the time the information described in paragraph (1) is 
    provided (or, if not available at such time, as soon as practicable 
    thereafter), issue additional notifications to such individual (or 
    such individual's designee) regarding--
            ``(A) whether an investigation has been initiated in 
        regards to such unauthorized use,
            ``(B) whether the investigation substantiated an 
        unauthorized use of the identity of the individual, and
            ``(C) whether--
                ``(i) any action has been taken against a person 
            relating to such unauthorized use, or
                ``(ii) any referral has been made for criminal 
            prosecution of such person and, to the extent such 
            information is available, whether such person has been 
            criminally charged by indictment or information.
    ``(b) Employment-Related Identity Theft.--
        ``(1) In general.--For purposes of this section, the 
    unauthorized use of the identity of an individual includes the 
    unauthorized use of the identity of the individual to obtain 
    employment.
        ``(2) Determination of employment-related identity theft.--For 
    purposes of this section, in making a determination as to whether 
    there has been or may have been an unauthorized use of the identity 
    of an individual to obtain employment, the Secretary shall review 
    any information--
            ``(A) obtained from a statement described in section 6051 
        or an information return relating to compensation for services 
        rendered other than as an employee, or
            ``(B) provided to the Internal Revenue Service by the 
        Social Security Administration regarding any statement 
        described in section 6051,
    which indicates that the social security account number provided on 
    such statement or information return does not correspond with the 
    name provided on such statement or information return or the name 
    on the tax return reporting the income which is included on such 
    statement or information return.''.
    (b) Additional Measures.--
        (1) Examination of both paper and electronic statements and 
    returns.--The Secretary of the Treasury (or the Secretary's 
    delegate) shall examine the statements, information returns, and 
    tax returns described in section 7529(b)(2) of the Internal Revenue 
    Code of 1986 (as added by subsection (a)) for any evidence of 
    employment-related identity theft, regardless of whether such 
    statements or returns are submitted electronically or on paper.
        (2) Improvement of effective return processing program with 
    social security administration.--Section 232 of the Social Security 
    Act (42 U.S.C. 432) is amended by inserting after the third 
    sentence the following: ``For purposes of carrying out the return 
    processing program described in the preceding sentence, the 
    Commissioner of Social Security shall request, not less than 
    annually, such information described in section 7529(b)(2) of the 
    Internal Revenue Code of 1986 as may be necessary to ensure the 
    accuracy of the records maintained by the Commissioner of Social 
    Security related to the amounts of wages paid to, and the amounts 
    of self-employment income derived by, individuals.''.
        (3) Underreporting of income.--The Secretary of the Treasury 
    (or the Secretary's delegate) shall establish procedures to ensure 
    that income reported in connection with the unauthorized use of a 
    taxpayer's identity is not taken into account in determining any 
    penalty for underreporting of income by the victim of identity 
    theft.
    (c) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

``Sec. 7529. Notification of suspected identity theft.''.

    (d) Effective Date.--The amendments made by this section shall 
apply to determinations made after the date that is 6 months after the 
date of the enactment of this Act.
SEC. 2008. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.
    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate), in consultation with the National Taxpayer 
Advocate, shall develop and implement publicly available guidelines for 
management of cases involving stolen identity refund fraud in a manner 
that reduces the administrative burden on taxpayers who are victims of 
such fraud.
    (b) Standards and Procedures To Be Considered.--The guidelines 
described in subsection (a) may include--
        (1) standards for--
            (A) the average length of time in which a case involving 
        stolen identity refund fraud should be resolved;
            (B) the maximum length of time, on average, a taxpayer who 
        is a victim of stolen identity refund fraud and is entitled to 
        a tax refund which has been stolen should have to wait to 
        receive such refund; and
            (C) the maximum number of offices and employees within the 
        Internal Revenue Service with whom a taxpayer who is a victim 
        of stolen identity refund fraud should be required to interact 
        in order to resolve a case;
        (2) standards for opening, assigning, reassigning, or closing a 
    case involving stolen identity refund fraud; and
        (3) procedures for implementing and accomplishing the standards 
    described in paragraphs (1) and (2), and measures for evaluating 
    such procedures and determining whether such standards have been 
    successfully implemented.
SEC. 2009. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF 
INFORMATION BY PREPARERS OF RETURNS.
    (a) In General.--Section 6713 is amended--
        (1) by redesignating subsections (b) and (c) as subsections (c) 
    and (d), respectively; and
        (2) by inserting after subsection (a) the following new 
    subsection:
    ``(b) Enhanced Penalty for Improper Use or Disclosure Relating to 
Identity Theft.--
        ``(1) In general.--In the case of a disclosure or use described 
    in subsection (a) that is made in connection with a crime relating 
    to the misappropriation of another person's taxpayer identity (as 
    defined in section 6103(b)(6)), whether or not such crime involves 
    any tax filing, subsection (a) shall be applied--
            ``(A) by substituting `$1,000' for `$250', and
            ``(B) by substituting `$50,000' for `$10,000'.
        ``(2) Separate application of total penalty limitation.--The 
    limitation on the total amount of the penalty under subsection (a) 
    shall be applied separately with respect to disclosures or uses to 
    which this subsection applies and to which it does not apply.''.
    (b) Criminal Penalty.--Section 7216(a) is amended by striking 
``$1,000'' and inserting ``$1,000 ($100,000 in the case of a disclosure 
or use to which section 6713(b) applies)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures or uses on or after the date of the enactment of 
this Act.

           Subtitle B--Development of Information Technology

SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION 
TECHNOLOGY.
    (a) Duties and Responsibilities of Internal Revenue Service Chief 
Information Officer.--Section 7803, as amended by section 1001, is 
amended by adding at the end the following new subsection:
    ``(f) Internal Revenue Service Chief Information Officer.--
        ``(1) In general.--There shall be in the Internal Revenue 
    Service an Internal Revenue Service Chief Information Officer 
    (hereafter referred to in this subsection as the `IRS CIO') who 
    shall be appointed by the Commissioner of Internal Revenue.
        ``(2) Centralized responsibility for internal revenue service 
    information technology.--The Commissioner of Internal Revenue (and 
    the Secretary) shall act through the IRS CIO with respect to all 
    development, implementation, and maintenance of information 
    technology for the Internal Revenue Service. Any reference in this 
    subsection to the IRS CIO which directs the IRS CIO to take any 
    action, or to assume any responsibility, shall be treated as a 
    reference to the Commissioner of Internal Revenue acting through 
    the IRS CIO.
        ``(3) General duties and responsibilities.--The IRS CIO shall--
            ``(A) be responsible for the development, implementation, 
        and maintenance of information technology for the Internal 
        Revenue Service,
            ``(B) ensure that the information technology of the 
        Internal Revenue Service is secure and integrated,
            ``(C) maintain operational control of all information 
        technology for the Internal Revenue Service,
            ``(D) be the principal advocate for the information 
        technology needs of the Internal Revenue Service, and
            ``(E) consult with the Chief Procurement Officer of the 
        Internal Revenue Service to ensure that the information 
        technology acquired for the Internal Revenue Service is 
        consistent with--
                ``(i) the goals and requirements specified in 
            subparagraphs (A) through (D), and
                ``(ii) the strategic plan developed under paragraph 
            (4).
        ``(4) Strategic plan.--
            ``(A) In general.--The IRS CIO shall develop and implement 
        a multiyear strategic plan for the information technology needs 
        of the Internal Revenue Service. Such plan shall--
                ``(i) include performance measurements of such 
            technology and of the implementation of such plan,
                ``(ii) include a plan for an integrated enterprise 
            architecture of the information technology of the Internal 
            Revenue Service,
                ``(iii) include and take into account the resources 
            needed to accomplish such plan,
                ``(iv) take into account planned major acquisitions of 
            information technology by the Internal Revenue Service, and
                ``(v) align with the needs and strategic plan of the 
            Internal Revenue Service.
            ``(B) Plan updates.--The IRS CIO shall, not less frequently 
        than annually, review and update the strategic plan under 
        subparagraph (A) (including the plan for an integrated 
        enterprise architecture described in subparagraph (A)(ii)) to 
        take into account the development of new information technology 
        and the needs of the Internal Revenue Service.
        ``(5) Scope of authority.--
            ``(A) Information technology.--For purposes of this 
        subsection, the term `information technology' has the meaning 
        given such term by section 11101 of title 40, United States 
        Code.
            ``(B) Internal revenue service.--Any reference in this 
        subsection to the Internal Revenue Service includes a reference 
        to all components of the Internal Revenue Service, including--
                ``(i) the Office of the Taxpayer Advocate,
                ``(ii) the Criminal Investigation Division of the 
            Internal Revenue Service, and
                ``(iii) except as otherwise provided by the Secretary 
            with respect to information technology related to matters 
            described in subsection (b)(3)(B), the Office of the Chief 
            Counsel.''.
    (b) Independent Verification and Validation of the Customer Account 
Data Engine 2 and Enterprise Case Management System.--
        (1) In general.--The Commissioner of Internal Revenue shall 
    enter into a contract with an independent reviewer to verify and 
    validate the implementation plans (including the performance 
    milestones and cost estimates included in such plans) developed for 
    the Customer Account Data Engine 2 and the Enterprise Case 
    Management System.
        (2) Deadline for completion.--Such contract shall require that 
    such verification and validation be completed not later than the 
    date which is 1 year after the date of the enactment of this Act.
        (3) Application to phases of cade 2.--
            (A) In general.--Paragraphs (1) and (2) shall not apply to 
        phase 1 of the Customer Account Data Engine 2 and shall apply 
        separately to each other phase.
            (B) Deadline for completing plans.--Not later than 1 year 
        after the date of the enactment of this Act, the Commissioner 
        of Internal Revenue shall complete the development of plans for 
        all phases of the Customer Account Data Engine 2.
            (C) Deadline for completion of verification and validation 
        of plans.--In the case of any phase after phase 2 of the 
        Customer Account Data Engine 2, paragraph (2) shall be applied 
        by substituting ``the date on which the plan for such phase was 
        completed'' for ``the date of the enactment of this Act''.
    (c) Coordination of IRS CIO and Chief Procurement Officer of the 
Internal Revenue Service.--
        (1) In general.--The Chief Procurement Officer of the Internal 
    Revenue Service shall--
            (A) identify all significant IRS information technology 
        acquisitions and provide written notification to the Internal 
        Revenue Service Chief Information Officer (hereafter referred 
        to in this subsection as the ``IRS CIO'') of each such 
        acquisition in advance of such acquisition, and
            (B) regularly consult with the IRS CIO regarding 
        acquisitions of information technology for the Internal Revenue 
        Service, including meeting with the IRS CIO regarding such 
        acquisitions upon request.
        (2) Significant irs information technology acquisitions.--For 
    purposes of this subsection, the term ``significant IRS information 
    technology acquisitions'' means--
            (A) any acquisition of information technology for the 
        Internal Revenue Service in excess of $1 million; and
            (B) such other acquisitions of information technology for 
        the Internal Revenue Service (or categories of such 
        acquisitions) as the IRS CIO, in consultation with the Chief 
        Procurement Officer of the Internal Revenue Service, may 
        identify.
        (3) Scope.--Terms used in this subsection which are also used 
    in section 7803(f) of the Internal Revenue Code of 1986 (as added 
    by subsection (a)) shall have the same meaning as when used in such 
    section.
SEC. 2102. INTERNET PLATFORM FOR FORM 1099 FILINGS.
    (a) In General.--Not later than January 1, 2023, the Secretary of 
the Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall make available an internet website 
or other electronic media, with a user interface and functionality 
similar to the Business Services Online Suite of Services provided by 
the Social Security Administration, that provides access to resources 
and guidance provided by the Internal Revenue Service and allows 
persons to--
        (1) prepare and file Forms 1099;
        (2) prepare Forms 1099 for distribution to recipients other 
    than the Internal Revenue Service; and
        (3) maintain a record of completed, filed, and distributed 
    Forms 1099.
    (b) Electronic Services Treated as Supplemental; Application of 
Security Standards.--The Secretary shall ensure that the services 
described in subsection (a)--
        (1) are a supplement to, and not a replacement for, other 
    services provided by the Internal Revenue Service to taxpayers; and
        (2) comply with applicable security standards and guidelines.
SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION 
TECHNOLOGY POSITIONS.
    (a) In General.--Subchapter A of chapter 80 is amended by adding at 
the end the following new section:
``SEC. 7812. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION 
TECHNOLOGY POSITIONS.
    ``In the case of any position which is critical to the 
functionality of the information technology operations of the Internal 
Revenue Service--
        ``(1) section 9503 of title 5, United States Code, shall be 
    applied--
            ``(A) by substituting `during the period beginning on the 
        date of the enactment of section 7812 of the Internal Revenue 
        Code of 1986, and ending on September 30, 2025' for `Before 
        September 30, 2013 in subsection (a)',
            ``(B) without regard to subparagraph (B) of subsection 
        (a)(1), and
            ``(C) by substituting `the date of the enactment of the 
        Taxpayer First Act' for `June 1, 1998' in subsection (a)(6),
        ``(2) section 9504 of such title 5 shall be applied by 
    substituting `During the period beginning on the date of the 
    enactment of section 7812 of the Internal Revenue Code of 1986, and 
    ending on September 30, 2025' for `Before September 30, 2013' each 
    place it appears in subsections (a) and (b), and
        ``(3) section 9505 of such title shall be applied--
            ``(A) by substituting `During the period beginning on the 
        date of the enactment of section 7812 of the Internal Revenue 
        Code of 1986, and ending on September 30, 2025' for `Before 
        September 30, 2013' in subsection (a), and
            ``(B) by substituting `the information technology 
        operations' for `significant functions' in subsection (a).''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 80 is amended by adding at the end the following new item:

``Sec. 7812. Streamlined critical pay authority for information 
          technology positions.''.

 Subtitle C--Modernization of Consent-Based Income Verification System

SEC. 2201. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY INCOME 
VERIFICATION.
    (a) In General.--Not later than 1 year after the close of the 2-
year period described in subsection (d)(1), the Secretary of the 
Treasury or the Secretary's delegate (hereafter referred to in this 
section as the ``Secretary'') shall implement a program to ensure that 
any qualified disclosure--
        (1) is fully automated and accomplished through the internet; 
    and
        (2) is accomplished in as close to real-time as is practicable.
    (b) Qualified Disclosure.--For purposes of this section, the term 
``qualified disclosure'' means a disclosure under section 6103(c) of 
the Internal Revenue Code of 1986 of returns or return information by 
the Secretary to a person seeking to verify the income or 
creditworthiness of a taxpayer who is a borrower in the process of a 
loan application.
    (c) Application of Security Standards.--The Secretary shall ensure 
that the program described in subsection (a) complies with applicable 
security standards and guidelines.
    (d) User Fee.--
        (1) In general.--During the 2-year period beginning on the 
    first day of the sixth calendar month beginning after the date of 
    the enactment of this Act, the Secretary shall assess and collect a 
    fee for qualified disclosures (in addition to any other fee 
    assessed and collected for such disclosures) at such rates as the 
    Secretary determines are sufficient to cover the costs related to 
    implementing the program described in subsection (a), including the 
    costs of any necessary infrastructure or technology.
        (2) Deposit of collections.--Amounts received from fees 
    assessed and collected under paragraph (1) shall be deposited in, 
    and credited to, an account solely for the purpose of carrying out 
    the activities described in subsection (a). Such amounts shall be 
    available to carry out such activities without need of further 
    appropriation and without fiscal year limitation.
SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF 
TAX RETURN INFORMATION.
    (a) In General.--Section 6103(c) is amended by adding at the end 
the following: ``Persons designated by the taxpayer under this 
subsection to receive return information shall not use the information 
for any purpose other than the express purpose for which consent was 
granted and shall not disclose return information to any other person 
without the express permission of, or request by, the taxpayer.''.
    (b) Application of Penalties.--Section 6103(a)(3) is amended by 
inserting ``subsection (c),'' after ``return information under''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date which is 180 days after the 
date of the enactment of this Act.

             Subtitle D--Expanded Use of Electronic Systems

SEC. 2301. ELECTRONIC FILING OF RETURNS.
    (a) In General.--Section 6011(e)(2)(A) is amended by striking 
``250'' and inserting ``the applicable number of''.
    (b) Applicable Number.--Section 6011(e) is amended by striking 
paragraph (5) and inserting the following new paragraphs:
        ``(5) Applicable number.--
            ``(A) In general.--For purposes of paragraph (2)(A), the 
        applicable number shall be--
                ``(i) except as provided in subparagraph (B), in the 
            case of calendar years before 2021, 250,
                ``(ii) in the case of calendar year 2021, 100, and
                ``(iii) in the case of calendar years after 2021, 10.
            ``(B) Special rule for partnerships for 2018, 2019, 2020, 
        and 2021.--In the case of a partnership, for any calendar year 
        before 2022, the applicable number shall be--
                ``(i) in the case of calendar year 2018, 200,
                ``(ii) in the case of calendar year 2019, 150,
                ``(iii) in the case of calendar year 2020, 100, and
                ``(iv) in the case of calendar year 2021, 50.
        ``(6) Partnerships required to file on magnetic media.--
    Notwithstanding paragraph (2)(A), the Secretary shall require 
    partnerships having more than 100 partners to file returns on 
    magnetic media.''.
    (c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is 
amended by adding at the end the following new subparagraph:
            ``(D) Exception for certain preparers located in areas 
        without internet access.--The Secretary may waive the 
        requirement of subparagraph (A) if the Secretary determines, on 
        the basis of an application by the tax return preparer, that 
        the preparer cannot meet such requirement by reason of being 
        located in a geographic area which does not have access to 
        internet service (other than dial-up or satellite service).''.
    (d) Conforming Amendment.--Section 6724(c) is amended by striking 
``250 information returns (more than 100 information returns in the 
case of a partnership having more than 100 partners)'' and inserting 
``the applicable number (determined under section 6011(e)(5) with 
respect to the calendar year to which such returns relate) of 
information returns''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES FOR 
DISCLOSURE AUTHORIZATIONS TO, AND OTHER AUTHORIZATIONS OF, 
PRACTITIONERS.
    Section 6061(b)(3) is amended to read as follows:
        ``(3) Published guidance.--
            ``(A) In general.--The Secretary shall publish guidance as 
        appropriate to define and implement any waiver of the signature 
        requirements or any method adopted under paragraph (1).
            ``(B) Electronic signatures for disclosure authorizations 
        to, and other authorizations of, practitioners.--Not later than 
        6 months after the date of the enactment of this subparagraph, 
        the Secretary shall publish guidance to establish uniform 
        standards and procedures for the acceptance of taxpayers' 
        signatures appearing in electronic form with respect to any 
        request for disclosure of a taxpayer's return or return 
        information under section 6103(c) to a practitioner or any 
        power of attorney granted by a taxpayer to a practitioner.
            ``(C) Practitioner.--For purposes of subparagraph (B), the 
        term `practitioner' means any individual in good standing who 
        is regulated under section 330 of title 31, United States 
        Code.''.
SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.
    Section 6311(d)(2) is amended by adding at the end the following: 
``The preceding sentence shall not apply to the extent that the 
Secretary ensures that any such fee or other consideration is fully 
recouped by the Secretary in the form of fees paid to the Secretary by 
persons paying taxes imposed under subtitle A with credit, debit, or 
charge cards pursuant to such contract. Notwithstanding the preceding 
sentence, the Secretary shall seek to minimize the amount of any fee or 
other consideration that the Secretary pays under any such contract.''.
SEC. 2304. AUTHENTICATION OF USERS OF ELECTRONIC SERVICES ACCOUNTS.
    Beginning 180 days after the date of the enactment of this Act, the 
Secretary of the Treasury (or the Secretary's delegate) shall verify 
the identity of any individual opening an e-Services account with the 
Internal Revenue Service before such individual is able to use the e-
Services tools.

                      Subtitle E--Other Provisions

SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN TAX COMPLIANCE 
PROCEDURES AND REPORTS.
    Section 2004 of the Internal Revenue Service Restructuring and 
Reform Act of 1998 (26 U.S.C. 6012 note) is repealed.
SEC. 2402. COMPREHENSIVE TRAINING STRATEGY.
    Not later than 1 year after the date of the enactment of this Act, 
the Commissioner of Internal Revenue shall submit to Congress a written 
report providing a comprehensive training strategy for employees of the 
Internal Revenue Service, including--
        (1) a plan to streamline current training processes, including 
    an assessment of the utility of further consolidating internal 
    training programs, technology, and funding;
        (2) a plan to develop annual training regarding taxpayer 
    rights, including the role of the Office of the Taxpayer Advocate, 
    for employees that interface with taxpayers and the direct managers 
    of such employees;
        (3) a plan to improve technology-based training;
        (4) proposals to--
            (A) focus employee training on early, fair, and efficient 
        resolution of taxpayer disputes for employees that interface 
        with taxpayers and the direct managers of such employees; and
            (B) ensure consistency of skill development and employee 
        evaluation throughout the Internal Revenue Service; and
        (5) a thorough assessment of the funding necessary to implement 
    such strategy.

                  TITLE III--MISCELLANEOUS PROVISIONS
Subtitle A--Reform of Laws Governing Internal Revenue Service Employees

SEC. 3001. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE INTERNAL REVENUE 
SERVICE WHO WAS INVOLUNTARILY SEPARATED FROM SERVICE FOR MISCONDUCT.
    (a) In General.--Section 7804 is amended by adding at the end the 
following new subsection:
    ``(d) Prohibition on Rehiring Employees Involuntarily Separated.--
The Commissioner may not hire any individual previously employed by the 
Commissioner who was removed for misconduct under this subchapter or 
chapter 43 or chapter 75 of title 5, United States Code, or whose 
employment was terminated under section 1203 of the Internal Revenue 
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to the hiring of employees after the date of the 
enactment of this Act.
SEC. 3002. NOTIFICATION OF UNAUTHORIZED INSPECTION OR DISCLOSURE OF 
RETURNS AND RETURN INFORMATION.
    (a) In General.--Subsection (e) of section 7431 is amended by 
adding at the end the following new sentences: ``The Secretary shall 
also notify such taxpayer if the Internal Revenue Service or a Federal 
or State agency (upon notice to the Secretary by such Federal or State 
agency) proposes an administrative determination as to disciplinary or 
adverse action against an employee arising from the employee's 
unauthorized inspection or disclosure of the taxpayer's return or 
return information. The notice described in this subsection shall 
include the date of the unauthorized inspection or disclosure and the 
rights of the taxpayer under such administrative determination.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to determinations proposed after the date which is 180 days after the 
date of the enactment of this Act.

        Subtitle B--Provisions Relating to Exempt Organizations

SEC. 3101. MANDATORY E-FILING BY EXEMPT ORGANIZATIONS.
    (a) In General.--Section 6033 is amended by redesignating 
subsection (n) as subsection (o) and by inserting after subsection (m) 
the following new subsection:
    ``(n) Mandatory Electronic Filing.--Any organization required to 
file a return under this section shall file such return in electronic 
form.''.
    (b) Other Reports and Returns.--
        (1) Political organizations.--Section 527(j)(7) is amended by 
    striking ``if the organization has'' and all that follows through 
    ``such calendar year''.
        (2) Unrelated business income tax returns.--Section 6011 is 
    amended by redesignating subsection (h) as subsection (i) and by 
    inserting after subsection (g) the following new subsection:
    ``(h) Mandatory E-Filing of Unrelated Business Income Tax Return.--
Any organization required to file an annual return under this section 
which relates to any tax imposed by section 511 shall file such return 
in electronic form.''.
    (c) Inspection of Electronically Filed Annual Returns.--Section 
6104(b) is amended by adding at the end the following: ``Any annual 
return required to be filed electronically under section 6033(n) shall 
be made available by the Secretary to the public as soon as practicable 
in a machine readable format.''.
    (d) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to taxable years 
    beginning after the date of the enactment of this Act.
        (2) Transitional relief.--
            (A) Small organizations.--
                (i) In general.--In the case of any small 
            organizations, or any other organizations for which the 
            Secretary of the Treasury or the Secretary's delegate 
            (hereafter referred to in this paragraph as the 
            ``Secretary'') determines the application of the amendments 
            made by this section would cause undue burden without a 
            delay, the Secretary may delay the application of such 
            amendments, but such delay shall not apply to any taxable 
            year beginning on or after the date that is 2 years after 
            the enactment of this Act.
                (ii) Small organization.--For purposes of clause (i), 
            the term ``small organization'' means any organization--

                    (I) the gross receipts of which for the taxable 
                year are less than $200,000; and
                    (II) the aggregate gross assets of which at the end 
                of the taxable year are less than $500,000.

            (B) Organizations filing form 990-t.--In the case of any 
        organization described in section 511(a)(2) of the Internal 
        Revenue Code of 1986 which is subject to the tax imposed by 
        section 511(a)(1) of such Code on its unrelated business 
        taxable income, or any organization required to file a return 
        under section 6033 of such Code and include information under 
        subsection (e) thereof, the Secretary may delay the application 
        of the amendments made by this section, but such delay shall 
        not apply to any taxable year beginning on or after the date 
        that is 2 years after the enactment of this Act.
SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX-EXEMPT STATUS FOR 
FAILURE TO FILE RETURN.
    (a) In General.--Section 6033(j)(1) is amended by striking ``If an 
organization'' and inserting the following:
            ``(A) Notice.--If an organization described in subsection 
        (a)(1) or (i) fails to file the annual return or notice 
        required under either subsection for 2 consecutive years, the 
        Secretary shall notify the organization--
                ``(i) that the Internal Revenue Service has no record 
            of such a return or notice from such organization for 2 
            consecutive years, and
                ``(ii) about the revocation that will occur under 
            subparagraph (B) if the organization fails to file such a 
            return or notice by the due date for the next such return 
            or notice required to be filed.
        The notification under the preceding sentence shall include 
        information about how to comply with the filing requirements 
        under subsections (a)(1) and (i).
            ``(B) Revocation.--If an organization''.
    (b) Effective Date.--The amendment made by this section shall apply 
to failures to file returns or notices for 2 consecutive years if the 
return or notice for the second year is required to be filed after 
December 31, 2019.

                     Subtitle C--Revenue Provision

SEC. 3201. INCREASE IN PENALTY FOR FAILURE TO FILE.
    (a) In General.--The second sentence of subsection (a) of section 
6651 is amended by striking ``$205'' and inserting ``$330''.
    (b) Inflation Adjustment.--Section 6651(j)(1) is amended--
        (1) by striking ``2014'' and inserting ``2020'',
        (2) by striking ``$205'' and inserting ``$330'', and
        (3) by striking ``2013'' and inserting ``2019''.
    (c) Effective Date.--The amendments made by this section shall 
apply to returns required to be filed after December 31, 2019.

                      TITLE IV--BUDGETARY EFFECTS

SEC. 4001. DETERMINATION OF BUDGETARY EFFECTS.
    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the House Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
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