I 

111TH CONGRESS 

2D SESSION H. R. 5047 

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

and assistance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2010 

Mr. BECERRA introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

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 2010’’. 

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. Individualized lien determination required before filing notice of lien. 

Sec. 302. Ban on audit insurance. 

Sec. 303. Public awareness. 

Sec. 304. Clarification of taxpayer assistance order authority. 

Sec. 305. Taxpayer advocate directives. 

Sec. 306. Improved services for taxpayers. 

Sec. 307. Taxpayer access to financial institutions. 

Sec. 308. Additional studies. 

5 TITLE I—TAXPAYER RIGHTS AND 

6 OBLIGATIONS 

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

9 (a) IN GENERAL.—Chapter 77 (relating to miscella10 neous provisions) is amended by adding at the end the 

11 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 (relating to miscellaneous provisions) is 

7 amended by inserting after section 7526 the following new 

8 section: 

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

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

11 the availability of appropriated funds, make grants to pro12 vide matching funds for the development, expansion, or 

13 continuation of qualified return preparation programs. 

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

15 ‘‘(1) QUALIFIED RETURN PREPARATION PRO16 GRAM.— 

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

18 return preparation program’ means a pro19 gram— 

20 ‘‘(i) which does not charge taxpayers 

21 for its return preparation services, 

22 ‘‘(ii) which operates programs which 

23 assist low-income taxpayers, including 

24 those programs that serve taxpayers for 

25 whom English is a second language, in 


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1 preparing and filing their Federal income 

2 tax returns, including schedules reporting 

3 sole proprietorship or farm income, and 

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

5 who assist in the preparation of Federal 

6 income tax returns meet the training re7 quirements prescribed by the Secretary. 

8 ‘‘(B) ASSISTANCE TO LOW-INCOME TAX9 PAYERS.—For purposes of subparagraph (A), a 

10 program is treated as assisting low-income tax11 payers if at least 90 percent of the taxpayers 

12 assisted by the program have incomes which do 

13 not exceed 250 percent of the poverty level, as 

14 determined in accordance with criteria estab15 lished by the Director of the Office of Manage16 ment and Budget. 

17 ‘‘(2) PROGRAM.—The term ‘program’ in18 cludes— 

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

20 education which— 

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

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

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

24 1088), as in effect on the date of the en25 actment of this section, and which has not 


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1 been disqualified from participating in a 

2 program under title IV of such Act, and 

3 ‘‘(ii) satisfies the requirements of 

4 paragraph (1) through student assistance 

5 of taxpayers in return preparation and fil6 ing; 

7 ‘‘(B) an organization described in section 

8 501(c) and exempt from tax under section 

9 501(a) which satisfies the requirements of para10 graph (1); 

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

12 (with one lead organization, which meets the 

13 eligibility requirements, acting as the applicant 

14 organization); 

15 ‘‘(D) a county or municipal government 

16 agency; 

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

18 4(12) of the Native American Housing Assist19 ance and Self-Determination Act of 1996 (25 

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

21 designated housing entity (as defined in section 

22 4(21) of such Act (25 U.S.C. 4103(21)), tribal 

23 subsidiary, subdivision, or other wholly owned 

24 tribal entity; 

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


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

2 other eligible organization is available to assist 

3 the targeted population or community; 

4 ‘‘(H) a Cooperative Extension Service of5 fice if no other eligible organization is available 

6 to assist the targeted population or community; 

7 and 

8 ‘‘(I) a nonprofit Community Development 

9 Financial Institution (CDFI) and federally- and 

10 State-chartered credit union that qualifies for a 

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

12 501(c)(14), respectively. 

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

14 ‘‘(1) AGGREGATE LIMITATION.—Unless other15 wise provided by specific appropriation, the Sec16 retary shall not allocate more than $35,000,000 per 

17 year (exclusive of costs of administering the pro18 gram) to grants under this section. 

19 ‘‘(2) USE OF GRANTS FOR OVERHEAD EX20 PENSES PROHIBITED.—No grant made under this 

21 section may be used for overhead expenses that are 

22 not directly related to any program or that are in23 curred by any institution sponsoring such program. 

24 ‘‘(3) OTHER APPLICABLE RULES.—Rules simi25 lar to the rules under paragraphs (2) through (6) of 


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

2 awarding of grants to qualified return preparation 

3 programs. 

4 ‘‘(4) PROMOTION OF PROGRAMS.—The Sec5 retary is authorized to promote the benefits of and 

6 encourage the use of qualified VITA Plus through 

7 the use of mass communications, referrals, and other 

8 means.’’. 

9 (b) LOW-INCOME TAXPAYER CLINICS.— 

10 (1) INCREASE IN AUTHORIZED GRANTS.—Para11 graph (1) of section 7526(c) (relating to aggregate 

12 limitation) is amended by striking ‘‘$6,000,000’’ and 

13 inserting ‘‘$20,000,000’’. 

14 (2) USE OF GRANTS FOR OVERHEAD EXPENSES

15 PROHIBITED.— 

16 (A) IN GENERAL.—Section 7526(c) (relat17 ing to special rules and limitations) is amended 

18 by adding at the end the following new para19 graph: 

20 ‘‘(6) USE OF GRANTS FOR OVERHEAD EX21 PENSES PROHIBITED.—No grant made under this 

22 section may be used for the overhead expenses that 

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

24 any institution sponsoring such clinic.’’. 


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1 (B) CONFORMING AMENDMENTS.—Section 

2 7526(c)(5) is amended— 

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

4 ‘‘low-income’’, and 

5 (ii) by striking the last sentence. 

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

7 section 7526 (relating to special rules and limita8 tions), as amended by paragraph (2), is amended by 

9 adding at the end the following new paragraph: 

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

11 is authorized to promote the benefits of and encour12 age the use of qualified low-income taxpayer clinics 

13 through the use of mass communications, referrals, 

14 and other means.’’. 

15 (4) IRS REFERRALS TO CLINICS.—Subsection 

16 (c) of section 7526 (relating to special rules and lim17 itations), as amended by the preceding provisions of 

18 this subsection, is amended by adding at the end the 

19 following new paragraph: 

20 ‘‘(8) IRS REFERRALS.—The Secretary may 

21 refer taxpayers to qualified low-income taxpayer clin22 ics receiving funding under this section.’’. 

23 (5) NOTICE OF AVAILABILITY OF CLINICS IN

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

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1 ciency) is amended by inserting ‘‘, as well as notice 

2 regarding the availability of low-income taxpayer 

3 clinics and information about how to contact them’’ 

4 before the period at the end. 

5 (6) NOTICE OF AVAILABILITY OF CLINICS IN

6 NOTICE OF HEARING UPON FILING OF NOTICE OF

7 LIEN.—Subsection (a) of section 6320 (relating to 

8 requirement of notice) is amended by adding at the 

9 end the following new sentence: ‘‘Such notice shall 

10 include a notice to the taxpayer of the availability of 

11 low-income taxpayer clinics and information about 

12 how to contact them.’’. 

13 (7) NOTICE OF AVAILABILITY OF CLINICS IN

14 NOTICE AND OPPORTUNITY OF HEARING BEFORE

15 LEVY.—Paragraph (3) of section 6330(a) is amend16 ed by adding at the end the following flush sentence: 

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

18 of the availability of low-income taxpayer clinics and 

19 information about how to contact them.’’. 

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

21 for chapter 77 is amended by inserting after the item re22 lating to section 7526 the following new item: 

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

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

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

25 of this Act. 


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1 SEC. 202. REGULATION OF FEDERAL INCOME TAX RETURN 

2 PREPARERS. 

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

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

5 tax return preparers of Federal tax returns, documents, 

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

7 (b) PROMULGATION OF REGULATIONS.—The Sec8 retary of the Treasury shall prescribe regulations under 

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

10 any tax return preparers not otherwise regulated by the 

11 Secretary. 

12 (c) REQUIREMENTS.—Such regulations shall provide 

13 guidance on the following: 

14 (1) EXAMINATION.— 

15 (A) IN GENERAL.—In promulgating the 

16 regulations under paragraph (1), the Secretary 

17 shall approve and oversee eligibility examina18 tions. 

19 (B) TWO EXAMINATIONS.—One such ex20 amination shall be designed to test technical 

21 knowledge and competency to prepare indi22 vidual returns, and the other examination shall 

23 be designed to test technical knowledge and 

24 competency to prepare business income tax re25 turns. 


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1 (C) EITC.—The examination relating to 

2 individual returns shall test knowledge and 

3 competency regarding properly claiming the 

4 earned income tax credit under section 32 of 

5 the Internal Revenue Code of 1986. 

6 (D) ETHICS.—Both examinations under 

7 subparagraph (B) shall test knowledge regard8 ing such ethical standards for the preparation 

9 of such returns as determined appropriate by 

10 the Secretary. 

11 (E) GRANDFATHER.—The Secretary is au12 thorized to accept an individual as meeting the 

13 eligibility examination requirement of this sec14 tion if, in lieu of the eligibility examination 

15 under this section, the individual passed a State 

16 licensing or State registration program eligi17 bility examination that the Secretary deter18 mines is comparable to either of the eligibility 

19 examinations described in subparagraph (B) if 

20 such exam is administered within 5 years after 

21 the date of the issuance of the regulations 

22 under this section. 

23 (2) SUITABILITY STANDARDS.—The Secretary 

24 shall provide suitability standards for practicing as 

25 a tax return preparer, including tax compliance with 


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1 the requirements of the Internal Revenue Code of 

2 1986. 

3 (3) CONTINUING ELIGIBILITY.— 

4 (A) IN GENERAL.—The regulations under 

5 paragraph (1) shall require a renewal of eligi6 bility every 3 years and shall set forth the man7 ner in which a tax return preparer must renew 

8 such eligibility. 

9 (B) CONTINUING PROFESSIONAL EDU10 CATION REQUIREMENTS.—As part of the re11 newal of eligibility, such regulations shall re12 quire that each such tax return preparer show 

13 evidence of completion of such continuing edu14 cation or testing requirements as specified by 

15 the Secretary. 

16 (C) NONMONETARY SANCTIONS.— 

17 (i) The regulations under this section 

18 shall provide for the denial, suspension or 

19 termination of such eligibility in the event 

20 of any failure to comply with the require21 ments promulgated hereunder. 

22 (ii) Under such regulations, the Sec23 retary shall establish procedures for the 

24 appeal of any determination under this 

25 paragraph. 


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1 (d) PENALTY FOR UNAUTHORIZED PREPARATION OF

2 RETURNS.— 

3 (1) IN GENERAL.—In promulgating the regula4 tions pursuant to subsection (b), the Secretary shall 

5 impose a penalty of $1,000 for each Federal tax re6 turn, document, or other submission prepared by a 

7 tax return preparer who is not in compliance with 

8 the regulations promulgated under this section or 

9 who is suspended or disbarred from practice before 

10 the Department of the Treasury under such regula11 tions. Such penalty shall be in addition to any other 

12 penalty which may be imposed. 

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

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

15 is shown that such failure is due to reasonable 

16 cause. 

17 (e) DEFINITIONS.—For purposes of this section— 

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

19 return preparer’’ has the meaning given by section 

20 7701(a)(36) of the Internal Revenue Code of 1986, 

21 and includes any person requiring the purchase of 

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

23 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 (f) 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 (g) EFFECTIVE DATES.— 

20 (1) IN GENERAL.—The amendment made by 

21 this section shall take effect on the date of the en22 actment of the Act. 

23 (2) REGULATIONS.—The regulations required 

24 by section 330(d) of title 31, United States Code, 


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1 shall be prescribed not later than 2 years after the 

2 date of the enactment of this Act. 

3 (3) FULL IMPLEMENTATION.—The Secretary, 

4 taking into consideration the complexity and mag5 nitude of the requirements set forth under this Act, 

6 may delay full implementation of the regulations 

7 promulgated herein not later than the fifth filing 

8 season after the enactment of this Act. 

9 SEC. 203. REFUND DELIVERY PRODUCTS. 

10 (a) IN GENERAL.—Chapter 77 (relating to miscella11 neous provisions), as amended by section 101, is amended 

12 by adding at the end the following new section: 

13 ‘‘SEC. 7530. REFUND DELIVERY PRODUCTS. 

14 ‘‘(a) REGISTRATION.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall by reg16 ulation require each refund delivery product 

17 facilitator to register annually with the Secretary. 

18 ‘‘(2) REGISTRATION REQUIREMENTS.—A reg19 istration shall under paragraph (1) shall include— 

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

21 refund delivery product facilitator, and 

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

23 the year. 

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1 graph (1) shall be displayed in the facility of the re2 fund delivery product facilitator in the manner re3 quired by the Secretary. 

4 ‘‘(b) DISCLOSURE REQUIREMENTS.— 

5 ‘‘(1) IN GENERAL.—Each refund delivery prod6 uct facilitator registered with the Secretary shall be 

7 subject to the requirements of paragraphs (2) 

8 through (5). 

9 ‘‘(2) TAXPAYER EDUCATION.—The require10 ments of this paragraph are that the refund delivery 

11 product facilitator makes available to consumers an 

12 informational pamphlet that— 

13 ‘‘(A) sets forth options available for receiv14 ing tax refunds, presented from least expensive 

15 to most expensive, and 

16 ‘‘(B) discusses short-term credit alter17 natives to utilizing refund delivery products. 

18 ‘‘(3) NATURE OF THE TRANSACTION.—The re19 quirements of this paragraph are that, at the time 

20 of application for the refund delivery product, the re21 fund delivery product facilitator specifically state in 

22 writing— 

23 ‘‘(A) in the case of a refund delivery prod24 uct which is a refund loan— 


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

2 a loan based on the applicant’s anticipated 

3 income tax refund, 

4 ‘‘(ii) the expected time within which 

5 the loan will be paid to the applicant if 

6 such loan is approved, and 

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

8 a refund will be paid in full or received 

9 within a specified time period, and that the 

10 applicant is responsible for the repayment 

11 of the loan even if the refund is not paid 

12 in full or has been delayed, 

13 ‘‘(B) the time within which income tax re14 funds are typically paid based upon the dif15 ferent filing options available to the applicant, 

16 and 

17 ‘‘(C) that the applicant may file an elec18 tronic return without applying for a refund de19 livery product and the fee for filing such an 

20 electronic return. 

21 ‘‘(4) FEES, INTEREST AND AMOUNTS RE22 CEIVED.—The requirements of this paragraph are 

23 that, at the time of application for the refund deliv24 ery product, the refund delivery product facilitator 

25 discloses to the applicant all amounts to be received 


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1 in connection with a refund delivery product. Such 

2 disclosure shall include— 

3 ‘‘(A) a copy of the fee schedule of the re4 fund delivery product facilitator, 

5 ‘‘(B) in the case of a refund delivery prod6 uct which is a refund loan— 

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

8 (using annual percentage rates as defined 

9 by section 107 of the Truth in Lending 

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

11 amounts of such loans and of other types 

12 of consumer credit, and 

13 ‘‘(ii) that the loan may have substan14 tial fees and interest charges that may ex15 ceed those of other sources of credit, and 

16 the applicant should carefully consider— 

17 ‘‘(I) whether such a loan is ap18 propriate for the applicant, and 

19 ‘‘(II) other sources of credit, 

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

21 refund is not paid or delayed, 

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

23 be charged if the refund delivery product is not 

24 approved, and 


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1 ‘‘(E) administrative costs and any other 

2 amounts. 

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

4 of this paragraph are that the refund delivery prod5 uct facilitator discloses any other information re6 quired to be disclosed by the Secretary. 

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

8 under any of the preceding paragraphs of this sub9 section shall not be treated as meeting the require10 ments of the respective paragraph unless the disclo11 sure is written in a manner calculated to be under12 stood by the average consumer of refund delivery 

13 products and provides sufficient information (as de14 termined in accordance with regulations prescribed 

15 by the Secretary) to allow the consumer to under16 stand such options and credit alternatives. 

17 ‘‘(c) PENALTY.— 

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

19 penalty on any refund delivery product facilitator 

20 who fails to register with the Secretary pursuant to 

21 subsection (a) or fails to meet a disclosure require22 ment under subsection (b). 

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

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

25 greater of— 


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1 ‘‘(A) $1,000, and 

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

3 loan, if applicable, and refund delivery product 

4 facilitator-determined fees charged with respect 

5 to each refund delivery product provided by the 

6 refund delivery product facilitator during the 

7 period in which the failure described in para8 graph (1) occurred. 

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

10 failure which is due to reasonable cause and not to 

11 willful neglect, the Secretary may waive part or all 

12 of the penalty imposed by paragraph (1) to the ex13 tent that the payment of such penalty would be ex14 cessive or otherwise inequitable relative to the failure 

15 involved. 

16 ‘‘(d) CONDUCT.— 

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

18 prescribe rules of conduct for refund delivery prod19 uct facilitators which are similar to the rules appli20 cable to federally authorized tax practitioners (as de21 fined by section 7525(a)(3)(A)) under part 10 of 

22 title 31, Code of Federal Regulations. 

23 ‘‘(2) LIMITATION ON APPROVAL AS REFUND DE24 LIVERY PRODUCT FACILITATOR.—For such period as 

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1 able, the Secretary may not register any person as 

2 a refund delivery product facilitator under sub3 section (a) who the Secretary determines has en4 gaged in any conduct that would warrant discipli5 nary action under the rules of conduct prescribed 

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

7 Code of Federal Regulations. 

8 ‘‘(e) OTHER LIMITATIONS RELATING TO REFUND

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

10 has consented to the release of the taxpayer’s refund indi11 cator to a refund delivery product facilitator, the Secretary 

12 may only provide information related to the refund indi13 cator to a refund delivery product facilitator who is reg14 istered under subsection (a). For purposes of the pre15 ceding sentence, the term ‘refund indicator’ means a noti16 fication provided through a tax return’s acknowledgement 

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

18 may issue a refund indicator only after the Secretary de19 termines that the taxpayer’s refund would not be pre20 vented by any provision of this title, including any provi21 sion relating to refund offset to repay debts for delinquent 

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

23 other Federal agency debt, whether the taxpayer is claim24 ing ineligible children for purposes of certain tax benefits, 


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1 and whether the refund will be held pending a fraud inves2 tigation. 

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

4 ‘‘(1) REFUND DELIVERY PRODUCT

5 FACILITATOR.— 

6 ‘‘(A) IN GENERAL.—The term ‘refund de7 livery product facilitator’ includes any electronic 

8 filing service provider who— 

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

10 accepts delivery of an application for a re11 fund delivery product, or 

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

13 delivery product in any other manner. 

14 ‘‘(B) ELECTRONIC FILING SERVICE PRO15 VIDER.—The term ‘electronic filing service pro16 vider’ includes any person who is an electronic 

17 return originator, intermediate service provider, 

18 or transmitter. 

19 ‘‘(C) ELECTRONIC RETURN ORIGINATOR.— 

20 The term ‘electronic return originator’ includes 

21 a person who originates the electronic submis22 sion of income tax returns for another person. 

23 ‘‘(D) INTERMEDIATE SERVICE PRO24 VIDER.—The term ‘intermediate service pro25 vider’ includes a person who assists with procVerDate Nov 24 2008 21:46 Apr 19, 2010 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H5047.IH H5047

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1 essing return information between an electronic 

2 return originator (or the taxpayer in the case of 

3 online filing) and a transmitter. 

4 ‘‘(E) TRANSMITTER.—The term ‘trans5 mitter’ includes a person who sends the elec6 tronic return data directly to the Internal Rev7 enue Service. 

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

9 ‘refund delivery product’ includes a refund loan and 

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

11 other thing of value for the purpose of receiving the 

12 taxpayer’s anticipated federal tax refund. 

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

14 includes any loan of money or any other thing of 

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

16 anticipated receipt of a Federal tax refund. Such 

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

18 arrangement to repay a loan from the tax refund. 

19 ‘‘(g) REGULATIONS.— 

20 ‘‘(1) IN GENERAL.—The Secretary may pre21 scribe such regulations as necessary to carry out this 

22 subchapter. 

23 ‘‘(2) BURDEN OF REGISTRATION.—In promul24 gating such regulations, the Secretary shall minimize 

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


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1 (b) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

2 of the Treasury shall conduct a public information and 

3 consumer education campaign, utilizing paid advertising, 

4 to educate the public on making sound financial decisions 

5 with respect to refund delivery products (as defined by sec6 tion 7530 of the Internal Revenue Code of 1986), includ7 ing— 

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

9 refund loans with the rates and fees of conventional 

10 loans, 

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

12 received under a refund delivery product after taking 

13 into consideration such costs and fees with the total 

14 amount of the refund, and 

15 (3) where and how taxpayers may lodge com16 plaints concerning refund delivery product 

17 facilitators. 

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

19 for chapter 77 is amended by adding at the end the fol20 lowing new item: 

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

21 (d) EFFECTIVE DATES.— 

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

23 this section shall take effect on the date of the en24 actment of the Act. 


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1 (2) REGULATIONS.—The regulations required 

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

3 1986 shall be prescribed not later than 2 years after 

4 the date of the enactment of this Act. 

5 (3) FULL IMPLEMENTATION.—The Secretary of 

6 the Treasury, taking into consideration the com7 plexity and magnitude of the requirements set forth 

8 under this Act, may delay full implementation of the 

9 regulations promulgated under such section not later 

10 than 5 years after the enactment of this Act. 

11 SEC. 204. PREPARER PENALTIES WITH RESPECT TO PREPA12 RATION OF RETURNS AND OTHER SUBMIS13 SIONS. 

14 (a) INCLUSION OF OTHER SUBMISSIONS IN PENALTY

15 PROVISIONS.— 

16 (1) UNDERSTATEMENT OF TAXPAYER’S LIABIL17 ITY.— 

18 (A) IN GENERAL.—Section 6694 (relating 

19 to understatement of taxpayer’s liability by tax 

20 return preparer) is amended by striking ‘‘return 

21 or claim of refund’’ each place it appears and 

22 inserting ‘‘return, claim of refund, or other sub23 mission’’. 

24 (B) CONFORMING AMENDMENTS.—Section 

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1 ed by striking ‘‘return or claim’’ each place it 

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

3 submission’’. 

4 (2) OTHER ASSESSABLE PENALTIES.— 

5 (A) IN GENERAL.—Section 6695 (relating 

6 to other assessable penalties with respect to the 

7 preparation of tax returns for other persons) is 

8 amended by striking ‘‘return or claim of re9 fund’’ each place it appears and inserting ‘‘re10 turn, claim of 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 (relating to other assessable pen20 alties with respect to the preparation of income tax 

21 returns for other persons) are each amended by 

22 striking ‘‘$50’’ and inserting ‘‘$1,000’’. 

23 (2) REMOVAL OF ANNUAL LIMITATION.—Sub24 sections (a), (b), and (c) of section 6695 are each 

25 amended by striking the last sentence thereof. 


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1 (c) REVIEW BY THE TREASURY INSPECTOR GEN2 ERAL FOR TAX ADMINISTRATION.—Subparagraph (A) of 

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

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

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

6 end the following new clause: 

7 ‘‘(v) a summary of the penalties as8 sessed and collected during the reporting 

9 period under sections 6694 and 6695 and 

10 under the regulations promulgated under 

11 section 330 of title 31, United States 

12 Code, and a review of the procedures by 

13 which violations are identified and pen14 alties are assessed under those sections,’’. 

15 (d) ADDITIONAL CERTIFICATION ON DOCUMENTS

16 OTHER THAN RETURNS.— 

17 (1) IDENTIFYING NUMBER REQUIRED FOR ALL

18 SUBMISSIONS TO THE IRS BY TAX RETURN PRE19 PARERS.—The first sentence of paragraph (4) of 

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

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

22 refund, or other document’’. 

23 (2) EFFECTIVE DATE.—The amendment made 

24 by paragraph (1) shall apply to documents filed 

25 after the date of the enactment of this Act. 


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

2 Secretary of the Treasury shall coordinate the require3 ments under the regulations promulgated under section 

4 330 of title 31, United States Code, with the return re5 quirements of section 6060 of the Internal Revenue Code 

6 of 1986. 

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

8 this section shall be prescribed not later than one year 

9 after the date of the enactment of this Act. 

10 SEC. 205. CLARIFICATION OF ENROLLED AGENT CREDEN11 TIALS. 

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

13 amended by section 202, is amended— 

14 (1) by redesignating subsection (e) as sub15 section (f), and 

16 (2) by inserting after subsection (d) the fol17 lowing new subsection: 

18 ‘‘(e) Any enrolled agents properly licensed to practice 

19 as required under rules promulgated under subsection (a) 

20 shall be allowed to use the credentials or designation as 

21 ‘enrolled agent’, ‘EA’, or ‘E.A.’.’’. 


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1 TITLE III—IMPROVING 

2 TAXPAYER SERVICES 

3 SEC. 301. INDIVIDUALIZED LIEN DETERMINATION RE4 QUIRED BEFORE FILING NOTICE OF LIEN. 

5 (a) IN GENERAL.—Section 6323 is amended by add6 ing at the end the following new subsection: 

7 ‘‘(k) LIEN DETERMINATION BEFORE FILING.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall not file 

9 a notice of lien before making an individualized lien 

10 determination. 

11 ‘‘(2) LIEN DETERMINATION.—In making an in12 dividualized lien determination with respect to a tax13 payer, the Secretary shall consider factors, includ14 ing— 

15 ‘‘(A) the amount due, 

16 ‘‘(B) the lien filing fee, 

17 ‘‘(C) the value of the taxpayer’s equity in 

18 the property or right to property, 

19 ‘‘(D) the taxpayer’s tax compliance history, 

20 ‘‘(E) extenuating circumstances, if any, 

21 that explain the delinquency, and 

22 ‘‘(F) the effect of the filing on the tax23 payer’s ability to obtain financing, generate fu24 ture income, and pay current and future tax li25 abilities. 


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1 ‘‘(3) SUPERVISORY REVIEW.—In any case in 

2 which— 

3 ‘‘(A) collecting a liability through a lien 

4 imposed under section 6321 would create an 

5 economic hardship (within the meaning of sec6 tion 6343(a)(1)(D)), or 

7 ‘‘(B) the taxpayer does not have significant 

8 equity in property or right to property, 

9 the Secretary shall not file a notice of lien unless the 

10 supervisor of the employee making the lien deter11 mination referenced in paragraph (2) also deter12 mines that the filing is necessary. 

13 ‘‘(4) WITHDRAWAL OF LIEN.—A lien filed in 

14 violation of this subsection shall be withdrawn under 

15 subsection (j).’’. 

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

17 subsection (a) shall apply with respect to liens filed after 

18 the date of the enactment of this Act. 

19 SEC. 302. BAN ON AUDIT INSURANCE. 

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

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

22 at the end the following new subsection: 

23 ‘‘(g) BAN ON AUDIT INSURANCE.—No person admit24 ted to practice before the Department of the Treasury may 

25 directly or indirectly offer or provide insurance or other 


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1 form of indemnification or reimbursement to cover a tax2 payer’s assessment of federal tax, penalties, or interest.’’. 

3 SEC. 303. PUBLIC AWARENESS. 

4 (a) IN GENERAL.—Section 6103(k) (relating to dis5 closure of certain returns and return information for tax 

6 administration purposes) is amended by adding at the end 

7 the following new paragraph: 

8 ‘‘(10) DISCLOSURE OF RECOGNIZED, CER9 TIFIED, OR REGISTERED PERSONS; REVOCATION OF

10 REGISTRATION.—The Secretary shall furnish to the 

11 public— 

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

13 ‘‘(i) is an enrolled agent or is an at14 torney or certified public accountant who 

15 either has a power of attorney on file with 

16 the Internal Revenue Service or notifies 

17 the Internal Revenue Service of their sta18 tus as a preparer of Federal tax returns, 

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

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

21 return preparer, or 

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

23 product facilitator pursuant to section 

24 7530, and 


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

2 person who is otherwise suspended or disbarred 

3 is no longer so recognized, certified, or reg4 istered (as the case may be).’’. 

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

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

7 after the date of enactment of this Act. 

8 SEC. 304. CLARIFICATION OF TAXPAYER ASSISTANCE 

9 ORDER AUTHORITY. 

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

11 is amended— 

12 (1) by redesignating subparagraphs (C) and 

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

14 (2) by inserting after subparagraph (B) the fol15 lowing new subparagraph: 

16 ‘‘(C) chapter 74 (relating to closing agree17 ments and compromises),’’. 

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

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

20 the enactment of this Act. 

21 SEC. 305. TAXPAYER ADVOCATE DIRECTIVES. 

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

23 amended by inserting after section 7811 the following new 

24 section: 


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1 ‘‘SEC. 7811A. TAXPAYER ADVOCATE DIRECTIVES. 

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

3 Advocate may issue a Taxpayer Advocate Directive to 

4 mandate administrative or procedural changes to improve 

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

6 groups of taxpayers (or all taxpayers) if its implementa7 tion will protect the rights of taxpayers, prevent undue 

8 burden, ensure equitable treatment, or provide an essen9 tial service to taxpayers. A Taxpayer Advocate Directive 

10 may only be issued by the National Taxpayer Advocate. 

11 The terms of a Taxpayer Advocate Directive may require 

12 the Commissioner to implement it within a specified period 

13 of time. 

14 ‘‘(b) AUTHORITY TO MODIFY OR RESCIND.—Any 

15 Taxpayer Advocate Directive may be modified or re16 scinded— 

17 ‘‘(1) only by the National Taxpayer Advocate, 

18 the Commissioner of Internal Revenue, or the Dep19 uty Commissioner of Internal Revenue, and 

20 ‘‘(2) only if a written explanation of the reasons 

21 for the modification or rescission is provided to the 

22 National Taxpayer Advocate.’’. 

23 (b) ANNUAL REPORT.— 

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

25 7803(c)(2)(B) is amended by redesignating sub26 clauses (III) through (XI) as subclauses (IV) 


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

2 subclause (II) the following new subclause: 

3 ‘‘(III) contain Taxpayer Advocate 

4 Directives issued under section 

5 7811A;’’. 

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

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

8 (1), is amended— 

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

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

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

12 (IV)’’, and 

13 (B) in subclause (VIII)— 

14 (i) by inserting ‘‘or Taxpayer Advo15 cate Directive’’ after ‘‘Taxpayer Assistance 

16 Order’’, and 

17 (ii) by inserting ‘‘or 7811A(a)’’ after 

18 ‘‘section 7811(b)’’. 

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

20 for subchapter A of chapter 80 is amended by inserting 

21 after the item relating to section 7811 the following new 

22 item: 

‘‘Sec. 7811A. Taxpayer advocate directives.’’. 

23 SEC. 306. IMPROVED SERVICES FOR TAXPAYERS. 

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

25 the Internal Revenue Service should within 2 years— 


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1 (1) reduce the time between receipt of an elec2 tronically filed return and issuance of a refund, 

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

4 (3) allocate resources to assist low-income tax5 payers in establishing accounts at financial institu6 tions that receive direct deposits from the United 

7 States Treasury, 

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

9 cards, and other electronic means to assist individ10 uals that do not have access to financial accounts or 

11 institutions, 

12 (5) establish a pilot program for satellite walk13 in centers to be located in rural underserved commu14 nities without easy access to Internal Revenue Serv15 ice Taxpayer Assistance Centers by using office fa16 cilities currently occupied by the Federal Govern17 ment, including United States Postal Service and 

18 Social Security Administration facilities; such sat19 ellite walk-in centers should have the capability to 

20 provide video-conferencing services and scanning or 

21 other digitizing functions to deliver, in an interactive 

22 manner, all service and compliance functions cur23 rently available in Internal Revenue Service Tax24 payer Assistance Centers, and 


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1 (6) establish a pilot program for mobile tax re2 turn preparation offices. 

3 (b) LOCATION OF SERVICE.— 

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

5 offices should be located in communities that the 

6 Secretary determines have a high incidence of tax7 payers claiming the earned income tax credit, par8 ticularly in locations with few community volunteer 

9 tax preparation clinics. 

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

11 tax return filing office should be on or near an In12 dian reservation (as defined in section 168(j)(6) of 

13 the Internal Revenue Code of 1986). 

14 SEC. 307. TAXPAYER ACCESS TO FINANCIAL INSTITUTIONS. 

15 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

16 of the Treasury may award demonstration project grants 

17 (including multiyear awards) to eligible entities to provide 

18 accounts to individuals who currently do not have an ac19 count with a financial institution. The account would be 

20 held in a federally insured depository institution. 

21 (b) PRIORITY.—Priority shall be given to demonstra22 tion project proposals that provide accounts at low or no 

23 cost and— 

24 (1) that utilize new technologies such as the 

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1 ices, in particular for persons without bank ac2 counts, with low access to financial services, or low 

3 utilization of mainstream financial services, 

4 (2) that promote the development of new finan5 cial products and services that are adequate to im6 prove access to wealth building financial services, 

7 which help integrate more Americans into the finan8 cial mainstream, 

9 (3) that promote education for these persons 

10 and depository institutions concerning the avail11 ability and use of financial services for and by such 

12 persons, and 

13 (4) that include other such activities and 

14 projects as the Secretary may determine are con15 sistent with the purpose of this section. 

16 (c) ELIGIBLE ENTITIES.— 

17 (1) IN GENERAL.—An entity is eligible to re18 ceive a grant under this section if such an entity 

19 is— 

20 (A) an organization described in section 

21 501(c)(3) of the Internal Revenue Code of 1986 

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

23 such Code, 

24 (B) a federally insured depository institu25 tion, 


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1 (C) an agency of a State or local govern2 ment, 

3 (D) a community development financial in4 stitution, 

5 (E) an Indian tribal organization, 

6 (F) an Alaska Native Corporation, 

7 (G) a Native Hawaiian organization, 

8 (H) an organization described in 

9 501(c)(5), and exempt from tax under section 

10 501(a), of such Code, 

11 (I) a nonbank financial service provider, or 

12 (J) a partnership comprised of 1 or more 

13 of the entities described in the preceding sub14 paragraphs. 

15 (2) DEFINITIONS.—For purposes of this sec16 tion— 

17 (A) FEDERALLY INSURED DEPOSITORY IN18 STITUTION.—The term ‘‘federally insured de19 pository institution’’ means any insured deposi20 tory institution (as defined in section 3 of the 

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

22 1813)) and any insured credit union (as defined 

23 in section 101 of the Federal Credit Union Act 

24 (12 U.S.C. 1752)). 


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1 (B) COMMUNITY DEVELOPMENT FINAN2 CIAL INSTITUTION.—The term ‘‘community de3 velopment financial institution’’ means any or4 ganization that has been certified as such pur5 suant to section 1805.201 of title 12, Code of 

6 Federal Regulations. 

7 (C) ALASKA NATIVE CORPORATION.—The 

8 term ‘‘Alaska Native Corporation’’ has the 

9 same meaning as the term ‘‘Native Corpora10 tion’’ under section 3(m) of the Alaska Native 

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

12 (D) NATIVE HAWAIIAN ORGANIZATION.— 

13 The term ‘‘Native Hawaiian organization’’ 

14 means any organization that— 

15 (i) serves and represents the interests 

16 of Native Hawaiians, and 

17 (ii) has as a primary and stated pur18 pose the provision of services to Native 

19 Hawaiians. 

20 (E) LABOR ORGANIZATION.—The term 

21 ‘‘labor organization’’ means an organization— 

22 (i) in which employees participate, 

23 (ii) which exists for the purpose, in 

24 whole or in part, of dealing with employers 

25 concerning grievances, labor disputes, 


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1 wages, rates of pay, hours of employment, 

2 or conditions of work, and 

3 (iii) which is described in section 

4 501(c)(5) of the Internal Revenue Code of 

5 1986. 

6 (F) NONBANK FINANCIAL SERVICE PRO7 VIDER.—The term ‘‘nonbank financial service 

8 provider’’ mean an entity that engages in finan9 cial services activities, as authorized under the 

10 Federal Reserve Board, 12 Code of Federal 

11 Regulations Part 225, Regulation Y. 

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

13 application to the Secretary of the Treasury in such form 

14 and containing such information as the Secretary may re15 quire. 

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

17 in which a grant is awarded under this section, the Sec18 retary of the Treasury shall submit a report to Congress 

19 containing a description of the activities funded, amounts 

20 distributed, and measurable results, as appropriate and 

21 available. 

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

23 (1) ASSISTANCE.—Subject to appropriations, 

24 the Secretary of the Treasury may provide financial 

25 and technical assistance to awardees for expanding 


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1 the distribution of financial services, including 

2 through financial services electronic networks. 

3 (2) RESEARCH AND DEVELOPMENT.—The Sec4 retary of the Treasury may conduct or support such 

5 research and development as the Secretary considers 

6 appropriate in order to further the purpose of this 

7 section, including the collection of information about 

8 access to financial services. 

9 (3) REGULATIONS.—The Secretary of the 

10 Treasury is authorized to promulgate regulations to 

11 implement and administer the program under this 

12 section. 

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

14 (1) IN GENERAL.—The Secretary of the Treas15 ury, in consultation with the National Taxpayer Ad16 vocate, shall conduct a study on the feasibility of de17 livering tax refunds on debit cards, prepaid cards, 

18 and other electronic means to assist individuals that 

19 do not have access to financial accounts or institu20 tions. 

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

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

23 Treasury shall submit a report to Congress con24 taining the results of the study conducted under 

25 paragraph (1). 


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1 SEC. 308. ADDITIONAL STUDIES. 

2 (a) STUDY ON ACCELERATED PROCESSING OF IN3 FORMATION RETURNS.— 

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

5 (A) Under current procedures, the Internal 

6 Revenue Service processes income tax returns 

7 before it processes most information returns, 

8 including Forms W–2, which report wages and 

9 tax withholding, and Forms 1099, which report 

10 interest, dividends, and other payments. 

11 (B) The sequence described in subpara12 graph (A) makes little logical sense. 

13 (C) From a taxpayer perspective, the se14 quence leads to millions of cases where tax15 payers inadvertently make overclaims that the 

16 Internal Revenue Service does not identify until 

17 months later, exposing the taxpayer not only to 

18 a tax liability but to penalties and interest 

19 charges as well. 

20 (D) From the Federal Government’s per21 spective, this sequence creates opportunities for 

22 fraud and requires the Internal Revenue Service 

23 to devote resources to recovering refunds that 

24 should not have been paid and that it often 

25 cannot recover. 


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

2 consultation with the National Taxpayer Advocate, 

3 shall conduct a study to identify and recommend leg4 islative and administrative changes that would en5 able the Internal Revenue Service to receive and 

6 process information reporting documents before it 

7 processes tax returns. In conducting the study, the 

8 Secretary shall consider, among other factors, the 

9 issues identified in the National Taxpayer Advo10 cate’s 2009 Annual Report to Congress. 

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

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

13 Treasury shall submit a report to Congress describ14 ing the results of the study conducted under para15 graph (2). 

16 (b) STUDY ON THE EFFECTIVENESS OF COLLECTION

17 ALTERNATIVES.— 

18 (1) IN GENERAL.—The Secretary of the Treas19 ury, in consultation with the National Taxpayer Ad20 vocate, shall conduct a study to assess the effective21 ness of collection alternatives, especially offers in 

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

23 study shall analyze a group of taxpayers who applied 

24 for offers in compromise 5 or more years ago and 

25 compare the amount of revenue collected from the 


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1 taxpayers whose offers were accepted with the 

2 amount of revenue collected from the taxpayers 

3 whose offers were rejected, and compare, among the 

4 taxpayers whose offers were rejected, the amount 

5 they offered with the amounts collected. 

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

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

8 Treasury shall submit a report to Congress con9 taining the results of the study conducted under 

10 paragraph (1). 

Æ 


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