II 

112TH CONGRESS 

2D SESSION S. 3355 

To amend the Internal Revenue Code of 1986 to provide taxpayer protection 

and assistance, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2012 

Mr. BINGAMAN (for himself, Mr. KERRY, Mr. AKAKA, Mr. UDALL of New 

Mexico, Mr. BROWN of Ohio, Mr. LIEBERMAN, Mr. PRYOR, Mr. MENENDEZ, and Mr. DURBIN) introduced the following bill; which was read 

twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

taxpayer protection and assistance, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Taxpayer Bill of Rights Act of 2012’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 


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

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

4 this Act is as follows: 

Sec. 1. Short title; etc. 

TITLE I—TAXPAYER RIGHTS AND OBLIGATIONS 

Sec. 101. Statement of taxpayer rights and obligations. 

TITLE II—PREPARATION OF TAX RETURNS 

Sec. 201. Programs for the benefit of low-income taxpayers. 

Sec. 202. Regulation of Federal income tax return preparers. 

Sec. 203. Refund delivery products. 

Sec. 204. Preparer penalties with respect to preparation of returns and other 

submissions. 

Sec. 205. Clarification of enrolled agent credentials. 

TITLE III—IMPROVING TAXPAYER SERVICES 

Sec. 301. Modifications to lien notice filing procedures. 

Sec. 302. Modification of requirements relating to tax lien information contained in consumer credit reports. 

Sec. 303. Ban on audit insurance. 

Sec. 304. Public awareness. 

Sec. 305. Clarification of taxpayer assistance order authority. 

Sec. 306. Taxpayer advocate directives. 

Sec. 307. Improved services for taxpayers. 

Sec. 308. Taxpayer access to financial institutions. 

Sec. 309. Additional studies. 

Sec. 310. De novo tax court review of innocent spouse relief determinations. 

5 TITLE I—TAXPAYER RIGHTS AND 

6 OBLIGATIONS 

7 SEC. 101. STATEMENT OF TAXPAYER RIGHTS AND OBLIGA8 TIONS. 

9 (a) IN GENERAL.—Chapter 77 is amended by adding 

10 at the end the following new section: 


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1 ‘‘SEC. 7529. STATEMENT OF TAXPAYER RIGHTS AND OBLI2 GATIONS. 

3 ‘‘(a) IN GENERAL.—The Secretary, in consultation 

4 with the National Taxpayer Advocate, shall publish a sum5 mary statement of rights and obligations arising under 

6 this title. Such statement shall provide citations to the 

7 main provisions of this title which provide for the right 

8 or obligation (as the case may be). This statement of 

9 rights and obligations does not create or confer any rights 

10 or obligations not otherwise provided for under this title. 

11 ‘‘(b) STATEMENT OF RIGHTS AND OBLIGATIONS.— 

12 The statement of rights and obligations is as follows: 

13 ‘‘(1) TAXPAYER RIGHTS.— 

14 ‘‘(A) Right to be informed (including ade15 quate legal and procedural guidance and infor16 mation about taxpayer rights). 

17 ‘‘(B) Right to be assisted. 

18 ‘‘(C) Right to be heard. 

19 ‘‘(D) Right to pay no more than the cor20 rect amount of tax. 

21 ‘‘(E) Right of appeal (administrative and 

22 judicial). 

23 ‘‘(F) Right to certainty (including guid24 ance, periods of limitation, no second exam, and 

25 closing agreements). 


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1 ‘‘(G) Right to privacy (including due proc2 ess considerations, least intrusive enforcement 

3 action, and search and seizure protections). 

4 ‘‘(H) Right to confidentiality. 

5 ‘‘(I) Right to appoint a representative in 

6 matters before the Internal Revenue Service. 

7 ‘‘(J) Right to fair and just tax system 

8 (offer in compromise, abatement, assistance 

9 from the Office of the Taxpayer Advocate under 

10 section 7803(c), apology, and other compensa11 tion payments). 

12 ‘‘(2) TAXPAYER OBLIGATIONS.— 

13 ‘‘(A) Obligation to be honest. 

14 ‘‘(B) Obligation to be cooperative. 

15 ‘‘(C) Obligation to provide accurate infor16 mation and documents on time. 

17 ‘‘(D) Obligation to keep records. 

18 ‘‘(E) Obligation to pay taxes on time.’’. 

19 (b) CLERICAL AMENDMENT.—The table of sections 

20 for chapter 77 is amended by adding at the end the fol21 lowing new item: 

‘‘Sec. 7529. Statement of taxpayer rights and obligations.’’. 

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

23 this section shall take effect 180 days after the date of 

24 the enactment of this Act. 


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1 TITLE II—PREPARATION OF TAX 

2 RETURNS 

3 SEC. 201. PROGRAMS FOR THE BENEFIT OF LOW-INCOME 

4 TAXPAYERS. 

5 (a) VOLUNTEER INCOME TAX ASSISTANCE PLUS.— 

6 Chapter 77 is amended by inserting after section 7526 the 

7 following new section: 

8 ‘‘SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PLUS. 

9 ‘‘(a) IN GENERAL.—The Secretary may, subject to 

10 the availability of appropriated funds, make grants to pro11 vide matching funds for the development, expansion, or 

12 continuation of qualified return preparation programs. 

13 ‘‘(b) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) QUALIFIED RETURN PREPARATION PRO15 GRAM.— 

16 ‘‘(A) IN GENERAL.—The term ‘qualified 

17 return preparation program’ means a pro18 gram— 

19 ‘‘(i) which does not charge taxpayers 

20 for its return preparation services, 

21 ‘‘(ii) which operates programs which 

22 assist low-income taxpayers, including 

23 those programs that serve taxpayers for 

24 whom English is a second language, in 

25 preparing and filing their Federal income 


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1 tax returns, including schedules reporting 

2 sole proprietorship or farm income, 

3 ‘‘(iii) in which all of the volunteers 

4 who assist in the preparation of Federal 

5 income tax returns meet the training re6 quirements prescribed by the Secretary, 

7 and 

8 ‘‘(iv) which may establish procedures 

9 to— 

10 ‘‘(I) provide taxpayers with train11 ing on preparation of their own re12 turns, and 

13 ‘‘(II) provide assistance from the 

14 volunteers for taxpayers who prepare 

15 and file their own tax returns using 

16 computer equipment and tax prepara17 tion software provided by the pro18 gram. 

19 ‘‘(B) ASSISTANCE TO LOW-INCOME TAX20 PAYERS.—For purposes of subparagraph (A), a 

21 program is treated as assisting low-income tax22 payers if at least 90 percent of the taxpayers 

23 assisted by the program have incomes which do 

24 not exceed 250 percent of the poverty level, as 

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1 lished by the Director of the Office of Manage2 ment and Budget. 

3 ‘‘(2) PROGRAM.—The term ‘program’ in4 cludes— 

5 ‘‘(A) a program at an institution of higher 

6 education which— 

7 ‘‘(i) is described in section 102 (other 

8 than subsection (a)(1)(C) thereof) of the 

9 Higher Education Act of 1965 (20 U.S.C. 

10 1088), as in effect on the date of the en11 actment of this section, and which has not 

12 been disqualified from participating in a 

13 program under title IV of such Act, and 

14 ‘‘(ii) satisfies the requirements of 

15 paragraph (1) through student assistance 

16 of taxpayers in return preparation and fil17 ing; 

18 ‘‘(B) an organization described in section 

19 501(c) and exempt from tax under section 

20 501(a) which satisfies the requirements of para21 graph (1); 

22 ‘‘(C) a regional, State or local coalition 

23 (with one lead organization, which meets the 

24 eligibility requirements, acting as the applicant 

25 organization); 


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1 ‘‘(D) a county or municipal government 

2 agency; 

3 ‘‘(E) an Indian tribe, as defined in section 

4 4(12) of the Native American Housing Assist5 ance and Self-Determination Act of 1996 (25 

6 U.S.C. 4103(12)), and includes any tribally 

7 designated housing entity (as defined in section 

8 4(21) of such Act (25 U.S.C. 4103(21)), tribal 

9 subsidiary, subdivision, or other wholly owned 

10 tribal entity; 

11 ‘‘(F) a section 501(c)(5) organization; 

12 ‘‘(G) a State government agency if no 

13 other eligible organization is available to assist 

14 the targeted population or community; 

15 ‘‘(H) a Cooperative Extension Service of16 fice if no other eligible organization is available 

17 to assist the targeted population or community; 

18 and 

19 ‘‘(I) a nonprofit Community Development 

20 Financial Institution (CDFI) and federally and 

21 State-chartered credit union that qualifies for a 

22 tax exemption under sections 501(c)(1) and 

23 501(c)(14), respectively. 

24 ‘‘(c) SPECIAL RULES AND LIMITATIONS.— 


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1 ‘‘(1) AGGREGATE LIMITATION.—Unless other2 wise provided by specific appropriation, the Sec3 retary shall not allocate more than $35,000,000 per 

4 year (exclusive of costs of administering the pro5 gram) to grants under this section. 

6 ‘‘(2) USE OF GRANTS FOR OVERHEAD EX7 PENSES PROHIBITED.—No grant made under this 

8 section may be used for overhead expenses that are 

9 not directly related to any program or that are in10 curred by any institution sponsoring such program. 

11 ‘‘(3) OTHER APPLICABLE RULES.—Rules simi12 lar to the rules under paragraphs (2) through (6) of 

13 section 7526(c) shall apply with respect to the 

14 awarding of grants to qualified return preparation 

15 programs. 

16 ‘‘(4) PROMOTION OF PROGRAMS.—The Sec17 retary is authorized to promote the benefits of and 

18 encourage the use of qualified VITA Plus through 

19 the use of mass communications, referrals, and other 

20 means. 

21 ‘‘(5) SERVICES RELATED TO TAX RETURN

22 PREPARATION.—A qualified return preparation pro23 gram receiving a grant under this section may use 

24 such grant to provide services related to financial lit25 eracy, asset development, and the establishment of 


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1 savings accounts in connection with tax return prep2 aration services performed through the program.’’. 

3 (b) LOW-INCOME TAXPAYER CLINICS.— 

4 (1) INCREASE IN AUTHORIZED GRANTS.—Para5 graph (1) of section 7526(c) is amended by striking 

6 ‘‘$6,000,000’’ and inserting ‘‘$20,000,000’’. 

7 (2) USE OF GRANTS FOR OVERHEAD EXPENSES

8 PROHIBITED.— 

9 (A) IN GENERAL.—Section 7526(c) is 

10 amended by adding at the end the following 

11 new paragraph: 

12 ‘‘(6) USE OF GRANTS FOR OVERHEAD EX13 PENSES PROHIBITED.—No grant made under this 

14 section may be used for the overhead expenses that 

15 are not directly related to the clinic or that are of 

16 any institution sponsoring such clinic.’’. 

17 (B) CONFORMING AMENDMENTS.—Section 

18 7526(c)(5) is amended— 

19 (i) by inserting ‘‘qualified’’ before 

20 ‘‘low-income’’, and 

21 (ii) by striking the last sentence. 

22 (3) PROMOTION OF CLINICS.—Subsection (c) of 

23 section 7526, as amended by paragraph (2), is 

24 amended by adding at the end the following new 

25 paragraph: 


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1 ‘‘(7) PROMOTION OF CLINICS.—The Secretary 

2 is authorized to promote the benefits of and encour3 age the use of qualified low-income taxpayer clinics 

4 through the use of mass communications, referrals, 

5 and other means.’’. 

6 (4) IRS REFERRALS TO CLINICS.—Subsection 

7 (c) of section 7526, as amended by the preceding 

8 provisions of this subsection, is amended by adding 

9 at the end the following new paragraph: 

10 ‘‘(8) IRS REFERRALS.—Notwithstanding any 

11 other provision of law, the Secretary may refer tax12 payers to specific qualified low-income taxpayer clin13 ics receiving funding under this section.’’. 

14 (5) NOTICE OF AVAILABILITY OF CLINICS IN

15 NOTICE OF DEFICIENCY.—Subsection (a) of section 

16 6212 is amended by inserting ‘‘, as well as notice re17 garding the availability of low-income taxpayer clin18 ics and information about how to contact them’’ be19 fore the period at the end. 

20 (6) NOTICE OF AVAILABILITY OF CLINICS IN

21 NOTICE OF HEARING UPON FILING OF NOTICE OF

22 LIEN.—Subsection (a) of section 6320 is amended 

23 by adding at the end the following new sentence: 


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1 ‘‘Such notice shall include a notice to the taxpayer of the 

2 availability of low-income taxpayer clinics and information 

3 about how to contact them.’’. 

4 (7) NOTICE OF AVAILABILITY OF CLINICS IN

5 NOTICE AND OPPORTUNITY OF HEARING BEFORE

6 LEVY.—Paragraph (3) of section 6330(a) is amend7 ed by adding at the end the following flush sentence: 

8 ‘‘Such notice shall include a notice to the taxpayer 

9 of the availability of low-income taxpayer clinics and 

10 information about how to contact them.’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections 

12 for chapter 77 is amended by inserting after the item re13 lating to section 7526 the following new item: 

‘‘Sec. 7526A. Volunteer income tax assistance plus.’’. 

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

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

16 of this Act. 

17 SEC. 202. REGULATION OF FEDERAL INCOME TAX RETURN 

18 PREPARERS. 

19 (a) IN GENERAL.—Section 330(a)(1) of title 31, 

20 United States Code, is amended by inserting ‘‘(including 

21 tax return preparers of Federal tax returns, documents, 

22 and other submissions)’’ after ‘‘representatives’’. 

23 (b) PROMULGATION OF REGULATIONS.—The Sec24 retary of the Treasury shall prescribe regulations under 

25 section 330 of title 31, United States Code, to regulate 


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1 any tax return preparers not otherwise regulated by the 

2 Secretary. 

3 (c) PENALTY FOR UNAUTHORIZED PREPARATION OF

4 RETURNS.— 

5 (1) IN GENERAL.—In promulgating the regula6 tions pursuant to subsection (b), the Secretary shall 

7 impose a penalty of $1,000 for each Federal tax re8 turn, document, or other submission prepared by a 

9 tax return preparer who is not in compliance with 

10 the regulations promulgated under this section or 

11 who is suspended or disbarred from practice before 

12 the Department of the Treasury under such regula13 tions. Such penalty shall be in addition to any other 

14 penalty which may be imposed. 

15 (2) EXCEPTION.—No penalty may be imposed 

16 under paragraph (1) with respect to any failure if it 

17 is shown that such failure is due to reasonable 

18 cause. 

19 (d) DEFINITIONS.—For purposes of this section— 

20 (1) TAX RETURN PREPARER.—The term ‘‘tax 

21 return preparer’’ has the meaning given by section 

22 7701(a)(36) of the Internal Revenue Code of 1986, 

23 and includes any person requiring the purchase of 

24 services, a financial product or goods in lieu of or in 

25 addition to direct monetary payment. 


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1 (2) SECRETARY.—The terms ‘‘Secretary of the 

2 Treasury’’ and ‘‘Secretary’’ mean the Secretary of 

3 the Treasury or the delegate of the Secretary. 

4 (e) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

5 shall conduct a public information and consumer edu6 cation campaign, utilizing paid advertising— 

7 (1) to encourage taxpayers to use for Federal 

8 tax matters only professionals who establish their 

9 competency under the regulations promulgated 

10 under section 330 of title 31, United States Code, 

11 and 

12 (2) to inform the public of the requirements 

13 that any compensated preparer of tax returns, docu14 ments, and submissions subject to the requirements 

15 under the regulations promulgated under such sec16 tion must sign the return, document, or submission 

17 prepared for a fee and display notice of such pre18 parer’s compliance under such regulations. 

19 SEC. 203. REFUND DELIVERY PRODUCTS. 

20 (a) IN GENERAL.—Chapter 77, as amended by sec21 tion 101, is amended by adding at the end the following 

22 new section: 

23 ‘‘SEC. 7530. REFUND DELIVERY PRODUCTS. 

24 ‘‘(a) REGISTRATION.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall by reg2 ulation require each refund delivery product facilita3 tor to register annually with the Secretary. 

4 ‘‘(2) REGISTRATION REQUIREMENTS.—A reg5 istration shall under paragraph (1) shall include— 

6 ‘‘(A) the name, address, and TIN of the 

7 refund delivery product facilitator, and 

8 ‘‘(B) the fee schedule of the facilitator for 

9 the year. 

10 ‘‘(3) DISPLAY OF REGISTRATION CERTIFI11 CATE.—The certificate of registration under para12 graph (1) shall be displayed in the facility of the re13 fund delivery product facilitator in the manner re14 quired by the Secretary. 

15 ‘‘(b) DISCLOSURE REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—Each refund delivery prod17 uct facilitator registered with the Secretary shall be 

18 subject to the requirements of paragraphs (2) 

19 through (5). 

20 ‘‘(2) TAXPAYER EDUCATION.—The require21 ments of this paragraph are that the refund delivery 

22 product facilitator makes available to consumers an 

23 informational pamphlet that— 


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1 ‘‘(A) sets forth options available for receiv2 ing tax refunds, presented from least expensive 

3 to most expensive, and 

4 ‘‘(B) discusses short-term credit alter5 natives to utilizing refund delivery products. 

6 ‘‘(3) NATURE OF THE TRANSACTION.—The re7 quirements of this paragraph are that, at the time 

8 of application for the refund delivery product, the re9 fund delivery product facilitator specifically state in 

10 writing— 

11 ‘‘(A) in the case of a refund delivery prod12 uct which is a refund loan— 

13 ‘‘(i) that the applicant is applying for 

14 a loan based on the applicant’s anticipated 

15 income tax refund, 

16 ‘‘(ii) the expected time within which 

17 the loan will be paid to the applicant if 

18 such loan is approved, and 

19 ‘‘(iii) that there is no guarantee that 

20 a refund will be paid in full or received 

21 within a specified time period, and that the 

22 applicant is responsible for the repayment 

23 of the loan even if the refund is not paid 

24 in full or has been delayed, 


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1 ‘‘(B) the time within which income tax re2 funds are typically paid based upon the dif3 ferent filing options available to the applicant, 

4 and 

5 ‘‘(C) that the applicant may file an elec6 tronic return without applying for a refund de7 livery product and the fee for filing such an 

8 electronic return. 

9 ‘‘(4) FEES, INTEREST AND AMOUNTS RE10 CEIVED.—The requirements of this paragraph are 

11 that, at the time of application for the refund deliv12 ery product, the refund delivery product facilitator 

13 discloses to the applicant all amounts to be received 

14 in connection with a refund delivery product. Such 

15 disclosure shall include— 

16 ‘‘(A) a copy of the fee schedule of the re17 fund delivery product facilitator, 

18 ‘‘(B) in the case of a refund delivery prod19 uct which is a refund loan— 

20 ‘‘(i) the typical fees and interest rates 

21 (using annual percentage rates as defined 

22 by section 107 of the Truth in Lending 

23 Act (15 U.S.C. 1606)) for several typical 

24 amounts of such loans and of other types 

25 of consumer credit, and 


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1 ‘‘(ii) that the loan may have substan2 tial fees and interest charges that may ex3 ceed those of other sources of credit, and 

4 the applicant should carefully consider— 

5 ‘‘(I) whether such a loan is ap6 propriate for the applicant, and 

7 ‘‘(II) other sources of credit, 

8 ‘‘(C) typical fees and interest charges if a 

9 refund is not paid or delayed, 

10 ‘‘(D) the amount of a fee (if any) that will 

11 be charged if the refund delivery product is not 

12 approved, and 

13 ‘‘(E) administrative costs and any other 

14 amounts. 

15 ‘‘(5) OTHER INFORMATION.—The requirements 

16 of this paragraph are that the refund delivery prod17 uct facilitator discloses any other information re18 quired to be disclosed by the Secretary. 

19 ‘‘(6) DISCLOSURE REQUIREMENT.—A disclosure 

20 under any of the preceding paragraphs of this sub21 section shall not be treated as meeting the require22 ments of the respective paragraph unless the disclo23 sure is written in a manner calculated to be under24 stood by the average consumer of refund delivery 

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1 termined in accordance with regulations prescribed 

2 by the Secretary) to allow the consumer to under3 stand such options and credit alternatives. 

4 ‘‘(c) PENALTY.— 

5 ‘‘(1) IN GENERAL.—There is hereby imposed a 

6 penalty on any refund delivery product facilitator 

7 who fails to register with the Secretary pursuant to 

8 subsection (a) or fails to meet a disclosure require9 ment under subsection (b). 

10 ‘‘(2) AMOUNT OF PENALTY.—The amount of 

11 the penalty imposed by paragraph (1) shall be the 

12 greater of— 

13 ‘‘(A) $1,000, and 

14 ‘‘(B) three times the amount of the refund 

15 loan, if applicable, and refund delivery product 

16 facilitator-determined fees charged with respect 

17 to each refund delivery product provided by the 

18 refund delivery product facilitator during the 

19 period in which the failure described in para20 graph (1) occurred. 

21 ‘‘(3) WAIVER BY SECRETARY.—In the case of a 

22 failure which is due to reasonable cause and not to 

23 willful neglect, the Secretary may waive part or all 

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1 cessive or otherwise inequitable relative to the failure 

2 involved. 

3 ‘‘(d) CONDUCT.— 

4 ‘‘(1) RULES OF CONDUCT.—The Secretary shall 

5 prescribe rules of conduct for refund delivery prod6 uct facilitators which are similar to the rules appli7 cable to federally authorized tax practitioners (as de8 fined by section 7525(a)(3)(A)) under part 10 of 

9 title 31, Code of Federal Regulations. 

10 ‘‘(2) LIMITATION ON APPROVAL AS REFUND DE11 LIVERY PRODUCT FACILITATOR.—For such period as 

12 the Secretary (in his discretion) determines reason13 able, the Secretary may not register any person as 

14 a refund delivery product facilitator under sub15 section (a) who the Secretary determines has en16 gaged in any conduct that would warrant discipli17 nary action under the rules of conduct prescribed 

18 under paragraph (1) or under part 10 of title 31, 

19 Code of Federal Regulations. 

20 ‘‘(e) OTHER LIMITATIONS RELATING TO REFUND

21 DELIVERY PRODUCTS.—In any case in which a taxpayer 

22 has consented to the release of the taxpayer’s refund indi23 cator to a refund delivery product facilitator, the Secretary 

24 may only provide information related to the refund indi25 cator to a refund delivery product facilitator who is regVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 istered under subsection (a). For purposes of the pre2 ceding sentence, the term ‘refund indicator’ means a noti3 fication provided through a tax return’s acknowledgment 

4 file regarding whether a refund will be paid. The Secretary 

5 may issue a refund indicator only after the Secretary de6 termines that the taxpayer’s refund would not be pre7 vented by any provision of this title, including any provi8 sion relating to refund offset to repay debts for delinquent 

9 Federal or State taxes, student loans, child support, or 

10 other Federal agency debt, whether the taxpayer is claim11 ing ineligible children for purposes of certain tax benefits, 

12 and whether the refund will be held pending a fraud inves13 tigation. 

14 ‘‘(f) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) REFUND DELIVERY PRODUCT

16 FACILITATOR.— 

17 ‘‘(A) IN GENERAL.—The term ‘refund de18 livery product facilitator’ includes any electronic 

19 filing service provider who— 

20 ‘‘(i) solicits for, processes, receives, or 

21 accepts delivery of an application for a re22 fund delivery product, or 

23 ‘‘(ii) facilitates the making of a refund 

24 delivery product in any other manner. 


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1 ‘‘(B) ELECTRONIC FILING SERVICE PRO2 VIDER.—The term ‘electronic filing service pro3 vider’ includes any person who is an electronic 

4 return originator, intermediate service provider, 

5 or transmitter. 

6 ‘‘(C) ELECTRONIC RETURN ORIGINATOR.— 

7 The term ‘electronic return originator’ includes 

8 a person who originates the electronic submis9 sion of income tax returns for another person. 

10 ‘‘(D) INTERMEDIATE SERVICE PRO11 VIDER.—The term ‘intermediate service pro12 vider’ includes a person who assists with proc13 essing return information between an electronic 

14 return originator (or the taxpayer in the case of 

15 online filing) and a transmitter. 

16 ‘‘(E) TRANSMITTER.—The term ‘trans17 mitter’ includes a person who sends the elec18 tronic return data directly to the Internal Rev19 enue Service. 

20 ‘‘(2) REFUND DELIVERY PRODUCT.—The term 

21 ‘refund delivery product’ includes a refund loan and 

22 any other product sold to a taxpayer for a fee or any 

23 other thing of value for the purpose of receiving the 

24 taxpayer’s anticipated Federal tax refund. 


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1 ‘‘(3) REFUND LOAN.—The term ‘refund loan’ 

2 includes any loan of money or any other thing of 

3 value to a taxpayer in connection with the taxpayer’s 

4 anticipated receipt of a Federal tax refund. Such 

5 term includes a loan secured by the tax refund or an 

6 arrangement to repay a loan from the tax refund. 

7 ‘‘(g) REGULATIONS.— 

8 ‘‘(1) IN GENERAL.—The Secretary may pre9 scribe such regulations as necessary to carry out this 

10 subchapter. 

11 ‘‘(2) BURDEN OF REGISTRATION.—In promul12 gating such regulations, the Secretary shall minimize 

13 the burden and cost on the registrant.’’. 

14 (b) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

15 of the Treasury shall conduct a public information and 

16 consumer education campaign, utilizing paid advertising, 

17 to educate the public on making sound financial decisions 

18 with respect to refund delivery products (as defined by sec19 tion 7530 of the Internal Revenue Code of 1986), includ20 ing— 

21 (1) the need to compare the rates and fees of 

22 refund loans with the rates and fees of conventional 

23 loans, 

24 (2) the need to compare the amount of money 

25 received under a refund delivery product after taking 


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1 into consideration such costs and fees with the total 

2 amount of the refund, and 

3 (3) where and how taxpayers may lodge com4 plaints concerning refund delivery product facilita5 tors. 

6 (c) CLERICAL AMENDMENT.—The table of sections 

7 for chapter 77 is amended by adding at the end the fol8 lowing new item: 

‘‘Sec. 7530. Refund delivery products.’’. 

9 (d) EFFECTIVE DATES.— 

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

11 this section shall take effect on the date of the en12 actment of the Act. 

13 (2) REGULATIONS.—The regulations required 

14 by section 7530(g) of the Internal Revenue Code of 

15 1986 shall be prescribed not later than 2 years after 

16 the date of the enactment of this Act. 

17 (3) FULL IMPLEMENTATION.—The Secretary of 

18 the Treasury, taking into consideration the com19 plexity and magnitude of the requirements set forth 

20 under this Act, may delay full implementation of the 

21 regulations promulgated under such section not later 

22 than 5 years after the enactment of this Act. 


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1 SEC. 204. PREPARER PENALTIES WITH RESPECT TO PREPA2 RATION OF RETURNS AND OTHER SUBMIS3 SIONS. 

4 (a) INCLUSION OF OTHER SUBMISSIONS IN PENALTY

5 PROVISIONS.— 

6 (1) UNDERSTATEMENT OF TAXPAYER’S LIABIL7 ITY.— 

8 (A) IN GENERAL.—Section 6694 is amend9 ed by striking ‘‘return or claim of refund’’ each 

10 place it appears and inserting ‘‘return, claim of 

11 refund, or other submission’’. 

12 (B) CONFORMING AMENDMENTS.—Section 

13 6694, as amended by paragraph (1), is amend14 ed by striking ‘‘return or claim’’ each place it 

15 appears and inserting ‘‘return, claim, or other 

16 submission’’. 

17 (2) INCREASE IN PENALTY IN CASE OF GROSS

18 MISCONDUCT.—Subsection (b) of section 6694 is 

19 amended by adding at the end the following new 

20 paragraph: 

21 ‘‘(4) INCREASE IN PENALTY IN CASE OF GROSS

22 MISCONDUCT.—In the case of an understatement to 

23 which this section applies that is attributable to the 

24 tax return preparer’s making a false or fraudulent 

25 return or claim for refund without the taxpayer’s 

26 knowledge, subsection (a) shall be applied by subVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 stituting ‘100 percent of the amount of the under2 statement’ for ‘50 percent of the amount derived (or 

3 to be derived) by the tax return preparer with re4 spect to the return or claim’. This penalty shall be 

5 in addition to any other penalties provided by law.’’. 

6 (3) OTHER ASSESSABLE PENALTIES.— 

7 (A) IN GENERAL.—Section 6695 is amend8 ed by striking ‘‘return or claim of refund’’ each 

9 place it appears and inserting ‘‘return, claim of 

10 refund, or other submission’’. 

11 (B) CONFORMING AMENDMENTS.—Section 

12 6695, as amended by paragraph (1), is amend13 ed by striking ‘‘return or claim’’ each place it 

14 appears and inserting ‘‘return, claim, or other 

15 submission’’. 

16 (b) INCREASE IN CERTAIN OTHER ASSESSABLE PEN17 ALTY AMOUNTS.— 

18 (1) IN GENERAL.—Subsections (a), (b), and (c) 

19 of section 6695 are each amended by striking ‘‘$50’’ 

20 and inserting ‘‘$1,000’’. 

21 (2) REMOVAL OF ANNUAL LIMITATION.—Sub22 sections (a), (b), and (c) of section 6695 are each 

23 amended by striking the last sentence thereof. 

24 (c) REVIEW BY THE TREASURY INSPECTOR GEN25 ERAL FOR TAX ADMINISTRATION.—Subparagraph (A) of 


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1 section 7803(d)(2) is amended by striking ‘‘and’’ at the 

2 end of clause (iii), by striking the period at the end of 

3 clause (iv) and inserting ‘‘, and’’, and by adding at the 

4 end the following new clause: 

5 ‘‘(v) a summary of the penalties as6 sessed and collected during the reporting 

7 period under sections 6694 and 6695 and 

8 under the regulations promulgated under 

9 section 330 of title 31, United States 

10 Code, and a review of the procedures by 

11 which violations are identified and pen12 alties are assessed under those sections,’’. 

13 (d) ADDITIONAL CERTIFICATION ON DOCUMENTS

14 OTHER THAN RETURNS.— 

15 (1) IDENTIFYING NUMBER REQUIRED FOR ALL

16 SUBMISSIONS TO THE IRS BY TAX RETURN PRE17 PARERS.—The first sentence of paragraph (4) of 

18 section 6109(a) is amended by striking ‘‘return or 

19 claim for refund’’ and inserting ‘‘return, claim for 

20 refund, or other document’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by paragraph (1) shall apply to documents filed 

23 after the date of the enactment of this Act. 

24 (e) COORDINATION WITH SECTION 6060(a).—The 

25 Secretary of the Treasury shall coordinate the requireVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 ments under the regulations promulgated under section 

2 330 of title 31, United States Code, with the return re3 quirements of section 6060 of the Internal Revenue Code 

4 of 1986. 

5 (f) EFFECTIVE DATE.—The regulations required by 

6 this section shall be prescribed not later than one year 

7 after the date of the enactment of this Act. 

8 SEC. 205. CLARIFICATION OF ENROLLED AGENT CREDEN9 TIALS. 

10 (a) IN GENERAL.—Chapter 77, as amended by sec11 tions 101 and 203, is amended by adding at the end the 

12 following new section: 

13 ‘‘SEC. 7531. ENROLLED AGENTS. 

14 ‘‘(a) IN GENERAL.—The Secretary may prescribe 

15 such regulations as may be necessary to regulate the con16 duct of enrolled agents in regards to their practice before 

17 the Internal Revenue Service. 

18 ‘‘(b) USE OF CREDENTIALS.—Any enrolled agents 

19 properly licensed to practice as required under rules pro20 mulgated under subsection (a) shall be allowed to use the 

21 credentials or designation as ‘enrolled agent’, ‘EA’, or 

22 ‘E.A.’.’’. 

23 (b) CLERICAL AMENDMENT.—The table of sections 

24 for chapter 77 is amended by adding at the end the fol25 lowing new item: 

‘‘Sec. 7531. Enrolled agents.’’. 


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1 (c) PRIOR REGULATIONS.—The authorization to pre2 scribe regulations under the amendments made by this 

3 section may not be construed to have any effect on part 

4 10 of title 31, Code of Federal Regulations, or any other 

5 related Federal rule or regulation issued before the date 

6 of the enactment of this Act. 

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

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

9 of this Act. 

10 TITLE III—IMPROVING 

11 TAXPAYER SERVICES 

12 SEC. 301. MODIFICATIONS TO LIEN NOTICE FILING PROCE13 DURES. 

14 (a) IN GENERAL.—Section 6323 of the Internal Rev15 enue Code of 1986 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(k) REQUIRED PROCEDURES BEFORE FILING NO18 TICE OF LIEN.— 

19 ‘‘(1) SECRETARIAL DETERMINATION.— 

20 ‘‘(A) IN GENERAL.—The Secretary may 

21 not file a notice of lien with respect to any tax22 payer unless— 

23 ‘‘(i) the lien attaches to distrainable 

24 property, and 


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1 ‘‘(ii) weighing all facts and cir2 cumstances pertaining to the collection of 

3 a taxpayer’s delinquent tax assessment, the 

4 Secretary determines that— 

5 ‘‘(I) the benefit to the Federal 

6 Government of the filing outweighs 

7 the harm to the taxpayer, and 

8 ‘‘(II) the filing will not jeopardize 

9 the taxpayer’s prospective ability— 

10 ‘‘(aa) to comply with the in11 ternal revenue laws, and 

12 ‘‘(bb) if the taxpayer is an 

13 otherwise viable business tax14 payer, to continue to secure fund15 ing to maintain business oper16 ations. 

17 ‘‘(B) FACTORS TO CONSIDER.—In making 

18 the determination under subparagraph (A)(ii), 

19 the Secretary shall consider— 

20 ‘‘(i) the amount due, 

21 ‘‘(ii) the lien filing fee, 

22 ‘‘(iii) the value of the taxpayer’s eq23 uity in the property or rights to property, 

24 ‘‘(iv) the taxpayer’s tax compliance 

25 history, 


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1 ‘‘(v) extenuating circumstances, if 

2 any, that explain the delinquency, and 

3 ‘‘(vi) the effect of the filing on the 

4 taxpayer’s ability to obtain financing, gen5 erate future income, and pay current and 

6 future tax liabilities. 

7 ‘‘(2) TAXPAYER APPEAL PRIOR TO FILING.— 

8 ‘‘(A) IN GENERAL.—The Secretary may 

9 not file a notice of lien with respect to any tax10 payer unless— 

11 ‘‘(i) the Secretary notifies the tax12 payer that the Secretary has determined to 

13 file such a notice with respect to the tax14 payer, and 

15 ‘‘(ii) the taxpayer is afforded an op16 portunity to appeal such determination to 

17 the Internal Revenue Service Office of Ap18 peals. 

19 The Secretary shall make reasonable efforts to 

20 provide the notice under subparagraph (A) by 

21 telephone or direct personal contact. 

22 ‘‘(B) JEOPARDY NOTICE OF LIEN.—The 

23 Secretary may file a notice of lien without re24 gard to subparagraph (A)(ii) if the Secretary 

25 finds that the collection of the tax would be in 


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1 jeopardy if the notice of lien is not filed before 

2 the conclusion of such an appeal. 

3 ‘‘(3) SUPERVISORY APPROVAL REQUIRED FOR

4 LIENS IN CERTAIN CASES.— 

5 ‘‘(A) IN GENERAL.—In any case to which 

6 this paragraph applies, a notice of lien may not 

7 be filed unless the immediate supervisor (or 

8 such higher level official as the Secretary may 

9 designate) of the individual making the initial 

10 determination under paragraph (1) has individ11 ually reviewed and approved such determina12 tion. 

13 ‘‘(B) CASES TO WHICH PARAGRAPH AP14 PLIES.—This paragraph shall apply in any case 

15 in which— 

16 ‘‘(i) the collection of the liability 

17 would create an economic hardship within 

18 the meaning of section 6343(a)(1)(D), 

19 ‘‘(ii) the taxpayer has no equity in as20 sets, or 

21 ‘‘(iii) there has been no personal con22 tact with the taxpayer to discuss collection 

23 alternatives, including an offer in com24 promise and partial payment installment 

25 agreement.’’. 


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1 (b) JEOPARDY NOTICE OF LIEN.— 

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

3 7429(a)(1) of such Code is amended by inserting 

4 after ‘‘or 6862,’’ the following: ‘‘no notice of lien 

5 may be filed pursuant to section 6323(k)(2)(B),’’. 

6 (2) REDETERMINATION BY SECRETARY.—Para7 graph (3) of section 7429(a) of such Code is amend8 ed by striking ‘‘or’’ at the end of subparagraph (A), 

9 by redesignating subparagraph (B) as subparagraph 

10 (C), and by inserting after subparagraph (A) the fol11 lowing new subparagraph: 

12 ‘‘(B) whether or not the filing of the notice 

13 of lien pursuant to section 6323(k)(2)(B) is 

14 reasonable under the circumstances, or’’. 

15 (3) REDETERMINATION BY TAX COURT.—Para16 graph (3) of section 7429(b) of such Code is amend17 ed by striking ‘‘or’’ at the end of subparagraph (A), 

18 by redesignating subparagraph (B) as subparagraph 

19 (C), and by inserting after subparagraph (A) the fol20 lowing new subparagraph: 

21 ‘‘(B) whether or not the filing of the notice 

22 of lien pursuant to section 6323(k)(2)(B) is 

23 reasonable under the circumstances, or’’. 

24 (4) CONFORMING AMENDMENTS.— 


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1 (A) The heading for section 7429 of such 

2 Code is amended by inserting ‘‘, NOTICE OF

3 LIEN FILING,’’ after ‘‘LEVY’’. 

4 (B) Subparagraphs (A) and (B) of section 

5 7429(a)(1) of such Code are each amended by 

6 striking ‘‘assessment or levy’’ each place it ap7 pears and inserting ‘‘assessment, notice of lien 

8 filing, or levy’’. 

9 (C) Subparagraph (B) of section 

10 7429(b)(2) of such Code is amended by striking 

11 ‘‘assessment or levy’’ and inserting ‘‘assess12 ment, notice of lien filing, or levy’’. 

13 (D) Paragraph (4) of section 7429(b) of 

14 such Code is amended— 

15 (i) by inserting ‘‘that the filing of 

16 such notice of lien is unreasonable,’’ after 

17 ‘‘that the making of such levy is unreason18 able,’’, and 

19 (ii) by inserting ‘‘to withdraw such 

20 notice of lien,’’ after ‘‘to release such 

21 levy,’’. 

22 (E) Paragraph (1) of section 7429(g) of 

23 such Code is amended— 

24 (i) by inserting ‘‘, the filing of a no25 tice of lien pursuant to section 


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1 6323(k)(2)(B),’’ after ‘‘the making of a 

2 levy described in subsection (a)(1)’’, and 

3 (ii) by inserting ‘‘NOTICE OF LIEN

4 FILING’’ after ‘‘REASONABLENESS OF’’ in 

5 the heading thereof. 

6 (c) EFFECTIVE DATE.—The amendment made by 

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

8 of this Act. 

9 SEC. 302. MODIFICATION OF REQUIREMENTS RELATING TO 

10 TAX LIEN INFORMATION CONTAINED IN CON11 SUMER CREDIT REPORTS. 

12 (a) IN GENERAL.—Paragraph (3) of section 605(a) 

13 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(3)) 

14 is amended to read as follows: 

15 ‘‘(3) TAX LIENS.—The following tax liens: 

16 ‘‘(A) Any tax lien released pursuant to sec17 tion 6325(a) of the Internal Revenue Code of 

18 1986 not more than 2 years after the date that 

19 the notice of such lien was filed. 

20 ‘‘(B) Any tax lien released pursuant to sec21 tion 6325(a) of such Code— 

22 ‘‘(i) more than 2 years after the date 

23 that the notice of such lien was filed, and 

24 ‘‘(ii) more than 2 years before the re25 port. 


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1 ‘‘(C) Any tax lien if— 

2 ‘‘(i) the notice of such lien was not 

3 refiled during the required refiling period 

4 (as defined in section 6323(g)(3) of such 

5 Code), and 

6 ‘‘(ii) such period ends more than 6 

7 years before the report. 

8 ‘‘(D) Any tax lien the notice of which is 

9 withdrawn pursuant to section 6323(j)(1) of 

10 such Code. 

11 ‘‘(E) Any tax lien released pursuant to sec12 tion 6326(b) of such Code if the notice of such 

13 lien was erroneously filed.’’. 

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

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

16 of this Act. 

17 SEC. 303. BAN ON AUDIT INSURANCE. 

18 Section 330 of title 31, United States Code, as 

19 amended by sections 202 and 205, is amended by adding 

20 at the end the following new subsection: 

21 ‘‘(g) BAN ON AUDIT INSURANCE.—No person admit22 ted to practice before the Department of the Treasury may 

23 directly or indirectly offer or provide insurance or other 

24 form of indemnification or reimbursement to cover a tax25 payer’s assessment of Federal tax, penalties, or interest.’’. 


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1 SEC. 304. PUBLIC AWARENESS. 

2 (a) IN GENERAL.—Section 6103(k) is amended by 

3 adding at the end the following new paragraph: 

4 ‘‘(10) DISCLOSURE OF RECOGNIZED, CER5 TIFIED, OR REGISTERED PERSONS; REVOCATION OF

6 REGISTRATION.—The Secretary shall furnish to the 

7 public— 

8 ‘‘(A) the identity of any person who— 

9 ‘‘(i) is an enrolled agent or is an at10 torney or certified public accountant who 

11 either has a power of attorney on file with 

12 the Internal Revenue Service or notifies 

13 the Internal Revenue Service of their sta14 tus as a preparer of Federal tax returns, 

15 ‘‘(ii) is certified under section 330(d) 

16 of title 31, United States Code, as a tax 

17 return preparer, or 

18 ‘‘(iii) is registered as a refund delivery 

19 product facilitator pursuant to section 

20 7530, and 

21 ‘‘(B) information as to whether or not any 

22 person who is otherwise suspended or disbarred 

23 is no longer so recognized, certified, or reg24 istered (as the case may be).’’. 


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

2 subsection (a) shall take effect not later than two years 

3 after the date of enactment of this Act. 

4 SEC. 305. CLARIFICATION OF TAXPAYER ASSISTANCE 

5 ORDER AUTHORITY. 

6 (a) IN GENERAL.—Paragraph (2) of section 7811(b) 

7 is amended— 

8 (1) by redesignating subparagraphs (C) and 

9 (D) as subparagraphs (D) and (E), respectively, and 

10 (2) by inserting after subparagraph (B) the fol11 lowing new subparagraph: 

12 ‘‘(C) chapter 74 (relating to closing agree13 ments and compromises),’’. 

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

15 this section shall apply to orders issued after the date of 

16 the enactment of this Act. 

17 SEC. 306. TAXPAYER ADVOCATE DIRECTIVES. 

18 (a) IN GENERAL.—Subchapter A of chapter 80 is 

19 amended by adding at the end the following new section: 

20 ‘‘SEC. 7812. TAXPAYER ADVOCATE DIRECTIVES. 

21 ‘‘(a) AUTHORITY TO ISSUE.—The National Taxpayer 

22 Advocate (but not a delegate thereof) may issue a Tax23 payer Advocate Directive to mandate changes to improve 

24 the operation of a functional process or to grant relief to 

25 groups of taxpayers (or all taxpayers) if, as a result of 


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1 the manner in which the internal revenue laws are being 

2 administered by the Secretary, its implementation will 

3 protect the rights of taxpayers, prevent undue burden, en4 sure equitable treatment, or provide an essential service 

5 to taxpayers. The terms of a Taxpayer Advocate Directive 

6 may require the Internal Revenue Service to implement 

7 it within a specified period of time. 

8 ‘‘(b) AUTHORITY TO MODIFY OR RESCIND.— 

9 ‘‘(1) APPEAL.—An Internal Revenue Service di10 vision or other function may appeal a Taxpayer Ad11 vocate Directive by delivering a written explanation 

12 that facilitates a full and fair consideration of the 

13 issues to the National Taxpayer Advocate and Dep14 uty Commissioner of Internal Revenue, either of 

15 whom may modify or repeal such Taxpayer Advocate 

16 Directive. Except as provided in paragraph (2), any 

17 decision of the Deputy Commissioner with respect to 

18 such Taxpayer Advocate Directive shall take prece19 dence. 

20 ‘‘(2) FINAL DETERMINATION.—If any such de21 cision of the Deputy Commissioner modifies or re22 peals a Taxpayer Advocate Directive, the National 

23 Taxpayer Advocate may appeal such decision to the 

24 Commissioner of Internal Revenue for a final deter25 mination. The Commissioner shall make a final deVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 termination with respect to the Taxpayer Advocate 

2 Directive, and provide a written explanation of such 

3 determination and the reasons therefore, not later 

4 than 90 days after the submission of such appeal.’’. 

5 (b) ANNUAL REPORT.— 

6 (1) IN GENERAL.—Clause (ii) of section 

7 7803(c)(2)(B) is amended by redesignating sub8 clauses (III) through (XI) as subclauses (IV) 

9 through (XII), respectively, and by inserting after 

10 subclause (II) the following new subclause: 

11 ‘‘(III) contain Taxpayer Advocate 

12 Directives issued under section 

13 7812;’’. 

14 (2) CONFORMING AMENDMENTS.—Clause (ii) of 

15 section 7803(c)(2)(B), as amended by paragraph 

16 (1), is amended— 

17 (A) by striking ‘‘subclauses (I), (II), and 

18 (III)’’ in subclauses (V), (VI), and (VII) thereof 

19 and inserting ‘‘subclauses (I), (II), (III), and 

20 (IV)’’, and 

21 (B) in subclause (VIII)— 

22 (i) by inserting ‘‘or Taxpayer Advo23 cate Directive’’ after ‘‘Taxpayer Assistance 

24 Order’’, and 


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1 (ii) by inserting ‘‘or 7812(a)’’ after 

2 ‘‘section 7811(b)’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subchapter A of chapter 80 is amended by inserting 

5 after the item relating to section 7811 the following new 

6 item: 

‘‘Sec. 7812. Taxpayer advocate directives.’’. 

7 SEC. 307. IMPROVED SERVICES FOR TAXPAYERS. 

8 (a) IN GENERAL.—It is the sense of Congress that 

9 the Internal Revenue Service should within 2 years— 

10 (1) reduce the time between receipt of an elec11 tronically filed return and issuance of a refund, 

12 (2) expand assistance to low-income taxpayers, 

13 (3) allocate resources to assist low-income tax14 payers in establishing accounts at financial institu15 tions that receive direct deposits from the United 

16 States Treasury, 

17 (4) deliver tax refunds on debit cards, prepaid 

18 cards, and other electronic means to assist individ19 uals that do not have access to financial accounts or 

20 institutions, 

21 (5) establish a pilot program for satellite walk22 in centers to be located in rural underserved commu23 nities without easy access to Internal Revenue Serv24 ice Taxpayer Assistance Centers by using office fa25 cilities currently occupied by the Federal GovernVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 ment, including United States Postal Service and 

2 Social Security Administration facilities; such sat3 ellite walk-in centers should have the capability to 

4 provide video-conferencing services and scanning or 

5 other digitizing functions to deliver, in an interactive 

6 manner, all service and compliance functions cur7 rently available in Internal Revenue Service Tax8 payer Assistance Centers, and 

9 (6) establish a pilot program for mobile tax re10 turn preparation offices. 

11 (b) LOCATION OF SERVICE.— 

12 (1) IN GENERAL.—The mobile tax return filing 

13 offices should be located in communities that the 

14 Secretary determines have a high incidence of tax15 payers claiming the earned income tax credit, par16 ticularly in locations with few community volunteer 

17 tax preparation clinics. 

18 (2) INDIAN RESERVATION.—At least one mobile 

19 tax return filing office should be on or near an In20 dian reservation (as defined in section 168(j)(6) of 

21 the Internal Revenue Code of 1986). 

22 SEC. 308. TAXPAYER ACCESS TO FINANCIAL INSTITUTIONS. 

23 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

24 of the Treasury may award demonstration project grants 

25 (including multiyear awards) to eligible entities to provide 


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•S 3355 IS

1 accounts to individuals who currently do not have an ac2 count with a financial institution. The account would be 

3 held in a federally insured depository institution. 

4 (b) PRIORITY.—Priority shall be given to demonstra5 tion project proposals that provide accounts at low or no 

6 cost and— 

7 (1) that utilize new technologies such as the 

8 prepaid product to expand access to financial serv9 ices, in particular for persons without bank ac10 counts, with low access to financial services, or low 

11 utilization of mainstream financial services, 

12 (2) that promote the development of new finan13 cial products and services that are adequate to im14 prove access to wealth building financial services, 

15 which help integrate more Americans into the finan16 cial mainstream, 

17 (3) that promote education for these persons 

18 and depository institutions concerning the avail19 ability and use of financial services for and by such 

20 persons, and 

21 (4) that include other such activities and 

22 projects as the Secretary may determine are con23 sistent with the purpose of this section. 

24 (c) ELIGIBLE ENTITIES.— 


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1 (1) IN GENERAL.—An entity is eligible to re2 ceive a grant under this section if such an entity 

3 is— 

4 (A) an organization described in section 

5 501(c)(3) of the Internal Revenue Code of 1986 

6 and exempt from tax under section 501(a) of 

7 such Code, 

8 (B) a federally insured depository institu9 tion, 

10 (C) an agency of a State or local govern11 ment, 

12 (D) a community development financial in13 stitution, 

14 (E) an Indian tribal organization, 

15 (F) an Alaska Native Corporation, 

16 (G) a Native Hawaiian organization, 

17 (H) an organization described in 

18 501(c)(5), and exempt from tax under section 

19 501(a), of such Code, 

20 (I) a nonbank financial service provider, or 

21 (J) a partnership comprised of 1 or more 

22 of the entities described in the preceding sub23 paragraphs. 

24 (2) DEFINITIONS.—For purposes of this sec25 tion— 


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1 (A) FEDERALLY INSURED DEPOSITORY IN2 STITUTION.—The term ‘‘federally insured de3 pository institution’’ means any insured deposi4 tory institution (as defined in section 3 of the 

5 Federal Deposit Insurance Act (12 U.S.C. 

6 1813)) and any insured credit union (as defined 

7 in section 101 of the Federal Credit Union Act 

8 (12 U.S.C. 1752)). 

9 (B) COMMUNITY DEVELOPMENT FINAN10 CIAL INSTITUTION.—The term ‘‘community de11 velopment financial institution’’ means any or12 ganization that has been certified as such pur13 suant to section 1805.201 of title 12, Code of 

14 Federal Regulations. 

15 (C) ALASKA NATIVE CORPORATION.—The 

16 term ‘‘Alaska Native Corporation’’ has the 

17 same meaning as the term ‘‘Native Corpora18 tion’’ under section 3(m) of the Alaska Native 

19 Claims Settlement Act (43 U.S.C. 1602(m)). 

20 (D) NATIVE HAWAIIAN ORGANIZATION.— 

21 The term ‘‘Native Hawaiian organization’’ 

22 means any organization that— 

23 (i) serves and represents the interests 

24 of Native Hawaiians, and 


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1 (ii) has as a primary and stated pur2 pose the provision of services to Native 

3 Hawaiians. 

4 (E) LABOR ORGANIZATION.—The term 

5 ‘‘labor organization’’ means an organization— 

6 (i) in which employees participate, 

7 (ii) which exists for the purpose, in 

8 whole or in part, of dealing with employers 

9 concerning grievances, labor disputes, 

10 wages, rates of pay, hours of employment, 

11 or conditions of work, and 

12 (iii) which is described in section 

13 501(c)(5) of the Internal Revenue Code of 

14 1986. 

15 (F) NONBANK FINANCIAL SERVICE PRO16 VIDER.—The term ‘‘nonbank financial service 

17 provider’’ means an entity that engages in fi18 nancial services activities, as authorized under 

19 the Federal Reserve Board, 12 Code of Federal 

20 Regulations Part 225, Regulation Y. 

21 (d) APPLICATION.—An eligible entity shall submit an 

22 application to the Secretary of the Treasury in such form 

23 and containing such information as the Secretary may re24 quire. 


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1 (e) EVALUATION AND REPORT.—For each fiscal year 

2 in which a grant is awarded under this section, the Sec3 retary of the Treasury shall submit a report to Congress 

4 containing a description of the activities funded, amounts 

5 distributed, and measurable results, as appropriate and 

6 available. 

7 (f) POWER AND AUTHORITY OF THE SECRETARY.— 

8 (1) ASSISTANCE.—Subject to appropriations, 

9 the Secretary of the Treasury may provide financial 

10 and technical assistance to awardees for expanding 

11 the distribution of financial services, including 

12 through financial services electronic networks. 

13 (2) RESEARCH AND DEVELOPMENT.—The Sec14 retary of the Treasury may conduct or support such 

15 research and development as the Secretary considers 

16 appropriate in order to further the purpose of this 

17 section, including the collection of information about 

18 access to financial services. 

19 (3) REGULATIONS.—The Secretary of the 

20 Treasury is authorized to promulgate regulations to 

21 implement and administer the program under this 

22 section. 

23 (g) STUDY ON DELIVERY OF TAX REFUNDS.— 

24 (1) IN GENERAL.—The Secretary of the Treas25 ury, in consultation with the National Taxpayer AdVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 vocate, shall conduct a study on the feasibility of de2 livering tax refunds on debit cards, prepaid cards, 

3 and other electronic means to assist individuals that 

4 do not have access to financial accounts or institu5 tions. This study shall evaluate the methodology and 

6 results of the pilot program conducted by the Sec7 retary during the 2011 filing season. 

8 (2) PILOT PROGRAM.—The Secretary shall es9 tablish a pilot program for delivering tax refunds on 

10 debit cards, prepaid cards, or other electronic means 

11 and shall consult with the National Taxpayer Advo12 cate in the design and implementation of, and eval13 uation of the results of, any such pilot program. In 

14 designing this program the Secretary must take into 

15 consideration the findings of the study conducted 

16 under paragraph (1). 

17 (3) REPORT.—Not later than 1 year after the 

18 date of enactment of this Act, the Secretary of the 

19 Treasury shall submit a report to Congress con20 taining the results of the study conducted under 

21 paragraph (1). 

22 SEC. 309. ADDITIONAL STUDIES. 

23 (a) STUDY ON ACCELERATED PROCESSING OF IN24 FORMATION RETURNS.— 

25 (1) FINDINGS.—Congress finds the following: 


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1 (A) Under current procedures, the Internal 

2 Revenue Service processes income tax returns 

3 before it processes most information returns, 

4 including Forms W–2, which report wages and 

5 tax withholding, and Forms 1099, which report 

6 interest, dividends, and other payments. 

7 (B) The sequence described in subpara8 graph (A) makes little logical sense. 

9 (C) From a taxpayer perspective, the se10 quence leads to millions of cases where tax11 payers inadvertently make overclaims that the 

12 Internal Revenue Service does not identify until 

13 months later, exposing the taxpayer not only to 

14 a tax liability but to penalties and interest 

15 charges as well. 

16 (D) From the Federal Government’s per17 spective, this sequence creates opportunities for 

18 fraud and requires the Internal Revenue Service 

19 to devote resources to recovering refunds that 

20 should not have been paid and that it often 

21 cannot recover. 

22 (2) STUDY.—The Secretary of the Treasury, in 

23 consultation with the National Taxpayer Advocate, 

24 shall conduct a study to identify and recommend leg25 islative and administrative changes that would enVerDate Mar 15 2010 03:28 Jul 06, 2012 Jkt 019200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S3355.IS S3355

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1 able the Internal Revenue Service to receive and 

2 process information reporting documents before it 

3 processes tax returns. In conducting the study, the 

4 Secretary shall consider, among other factors, the 

5 issues identified in the National Taxpayer Advo6 cate’s 2011 Annual Report to Congress. 

7 (3) REPORT.—Not later than 1 year after the 

8 date of enactment of this Act, the Secretary of the 

9 Treasury shall submit a report to Congress describ10 ing the results of the study conducted under para11 graph (2). 

12 (b) STUDY ON THE EFFECTIVENESS OF COLLECTION

13 ALTERNATIVES.— 

14 (1) IN GENERAL.—The Secretary of the Treas15 ury, in consultation with the National Taxpayer Ad16 vocate, shall conduct a study to assess the effective17 ness of collection alternatives, especially offers in 

18 compromise, on long-term tax compliance. Such a 

19 study shall analyze a group of taxpayers who applied 

20 for offers in compromise 5 or more years ago and 

21 compare the amount of revenue collected from the 

22 taxpayers whose offers were accepted with the 

23 amount of revenue collected from the taxpayers 

24 whose offers were rejected, and compare, among the 


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1 taxpayers whose offers were rejected, the amount 

2 they offered with the amounts collected. 

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

4 date of enactment of this Act, the Secretary of the 

5 Treasury shall submit a report to Congress con6 taining the results of the study conducted under 

7 paragraph (1). 

8 SEC. 310. DE NOVO TAX COURT REVIEW OF INNOCENT 

9 SPOUSE RELIEF DETERMINATIONS. 

10 (a) IN GENERAL.—Section 6015 is amended by re11 designating subsection (h) as subsection (i) and by insert12 ing after subsection (g) the following new subsection: 

13 ‘‘(h) DE NOVO REVIEW OF DETERMINATIONS.—Any 

14 review of a determination made under this section shall 

15 be reviewed de novo by the Tax Court.’’. 

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

17 this section shall apply to petitions filed or pending before 

18 the Tax Court on and after the date of the enactment of 

19 this Act. 

Æ 


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