II 

110TH CONGRESS 

1ST SESSION S. 1219 

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 

APRIL 25, 2007 

Mr. BINGAMAN (for himself, Mr. SMITH, Mr. KERRY, Mr. AKAKA, Mr. DURBIN, and Mr. LIEBERMAN) 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; AMENDMENT OF 1986 CODE. 

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

5 ‘‘Taxpayer Protection and Assistance Act of 2007’’. 

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 SEC. 2. LOW-INCOME TAXPAYER CLINICS. 

4 (a) GRANTS FOR RETURN PREPARATION CLINICS.— 

5 (1) IN GENERAL.—Chapter 77 (relating to mis6 cellaneous provisions) is amended by inserting after 

7 section 7526 the following new section: 

8 ‘‘SEC. 7526A. RETURN PREPARATION CLINICS FOR LOW-IN9 COME TAXPAYERS. 

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 clinics. 

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

15 ‘‘(1) QUALIFIED RETURN PREPARATION CLIN16 IC.— 

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

18 return preparation clinic’ means a clinic 

19 which— 

20 ‘‘(i) does not charge more than a 

21 nominal fee for its services (except for re22 imbursement of actual costs incurred), and 

23 ‘‘(ii) operates programs which assist 

24 low-income taxpayers, including individuals 

25 for 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. 

4 ‘‘(B) ASSISTANCE TO LOW-INCOME TAX5 PAYERS.—A clinic is treated as assisting low-in6 come taxpayers under subparagraph (A)(ii) if 

7 at least 90 percent of the taxpayers assisted by 

8 the clinic have incomes which do not exceed 250 

9 percent of the poverty level, as determined in 

10 accordance with criteria established by the Di11 rector of the Office of Management and Budg12 et. 

13 ‘‘(2) CLINIC.—The term ‘clinic’ includes— 

14 ‘‘(A) a clinical program at an eligible edu15 cational institution (as defined in section 

16 529(e)(5)) which satisfies the requirements of 

17 paragraph (1) through student assistance of 

18 taxpayers in return preparation and filing, and 

19 ‘‘(B) an organization described in section 

20 501(c) and exempt from tax under section 

21 501(a) which satisfies the requirements of para22 graph (1). 

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

24 ‘‘(1) AGGREGATE LIMITATION.—Unless other25 wise provided by specific appropriation, the SecVerDate Aug 31 2005 00:53 Apr 27, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1219.IS S1219

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1 retary shall not allocate more than $10,000,000 per 

2 year (exclusive of costs of administering the pro3 gram) to grants under this section. 

4 ‘‘(2) OTHER APPLICABLE RULES.—Rules simi5 lar to the rules under paragraphs (2) through (7) of 

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

7 awarding of grants to qualified return preparation 

8 clinics.’’. 

9 (2) CLERICAL AMENDMENT.—The table of sec10 tions for chapter 77 is amended by inserting after 

11 the item relating to section 7526 the following new 

12 item: 

‘‘Sec. 7526A. Return preparation clinics for low-income taxpayers.’’. 

13 (b) GRANTS FOR TAXPAYER REPRESENTATION AND

14 ASSISTANCE CLINICS.— 

15 (1) INCREASE IN AUTHORIZED GRANTS.—Sec16 tion 7526(c)(1) (relating to aggregate limitation) is 

17 amended by striking ‘‘$6,000,000’’ and inserting 

18 ‘‘$10,000,000’’. 

19 (2) USE OF GRANTS FOR OVERHEAD EXPENSES

20 PROHIBITED.— 

21 (A) IN GENERAL.—Section 7526(c) (relat22 ing to special rules and limitations) is amended 

23 by adding at the end the following new para24 graph: 


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1 ‘‘(6) USE OF GRANTS FOR OVERHEAD EX2 PENSES PROHIBITED.—No grant made under this 

3 section may be used for the overhead expenses of 

4 any clinic or of any institution sponsoring such clin5 ic.’’. 

6 (B) CONFORMING AMENDMENTS.—Section 

7 7526(c)(5) is amended— 

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

9 ‘‘low-income’’, and 

10 (ii) by striking the last sentence. 

11 (3) PROMOTION OF CLINICS.—Section 7526(c), 

12 as amended by paragraph (2), is amended by adding 

13 at the end the following new paragraph: 

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

15 is authorized to promote the benefits of and encour16 age the use of low-income taxpayer clinics through 

17 the use of mass communications, referrals, and other 

18 means.’’. 

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

20 this section shall apply to grants made after the date of 

21 the enactment of this Act. 

22 SEC. 3. CLARIFICATION OF ENROLLED AGENT CREDEN23 TIALS. 

24 Section 330 of title 31, United States Code, is 

25 amended— 


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1 (1) by redesignating subsections (b) and (c) as 

2 subsections (c) and (d), respectively, and 

3 (2) by inserting after subsection (a) the fol4 lowing new subsection: 

5 ‘‘(b) Any enrolled agents properly licensed to practice 

6 as required under rules promulgated under subsection (a) 

7 shall be allowed to use the credentials or designation as 

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

9 SEC. 4. REGULATION OF FEDERAL TAX RETURN PRE10 PARERS. 

11 (a) AUTHORIZATION.—Section 330(a)(1) of title 31, 

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

13 compensated preparers of Federal tax returns, documents, 

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

15 (b) REQUIREMENT.— 

16 (1) IN GENERAL.—Not later than 1 year after 

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

18 of the Treasury shall prescribe regulations under 

19 section 330 of title 31, United States Code— 

20 (A) to regulate those compensated pre21 parers not otherwise regulated under regula22 tions promulgated under such section on the 

23 date of the enactment of this Act, and 

24 (B) to carry out the provisions of, and 

25 amendments made by, this section. 


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1 (2) EXAMINATION.— 

2 (A) IN GENERAL.—In promulgating the 

3 regulations under paragraph (1), the Secretary 

4 shall develop (or approve) and administer an 

5 eligibility examination designed to test— 

6 (i) the technical knowledge and com7 petency of each preparer described in para8 graph (1)(A)— 

9 (I) to prepare Federal tax re10 turns, including individual and busi11 ness income tax returns, and 

12 (II) to properly claim the earned 

13 income tax credit under section 32 of 

14 the Internal Revenue Code of 1986 

15 with respect to such individual re16 turns, and 

17 (ii) the knowledge of each such pre18 parer regarding such ethical standards for 

19 the preparation of such returns as deter20 mined appropriate by the Secretary. 

21 (B) STATE LICENSING OR REGISTRATION

22 PROGRAMS.—The Secretary is authorized to ac23 cept an individual as meeting the eligibility ex24 amination requirement of this section if, in lieu 


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1 of the eligibility examination under this section, 

2 the individual passed— 

3 (i) a State licensing or State registra4 tion program eligibility examination that is 

5 comparable to the eligibility examination 

6 established by the Secretary, or 

7 (ii) an eligibility examination adminis8 tered by an existing organization for tax 

9 return preparers that is comparable to the 

10 eligibility examination established by the 

11 Secretary if such test was administered 

12 prior to the issuance of the regulations 

13 under this section. 

14 (3) CONTINUING ELIGIBILITY.— 

15 (A) IN GENERAL.—The regulations under 

16 paragraph (1) shall require a renewal of eligi17 bility every 3 years and shall set forth the man18 ner in which a preparer described in paragraph 

19 (1)(A) must renew such eligibility. 

20 (B) CONTINUING EDUCATION REQUIRE21 MENTS.—As part of the renewal of eligibility, 

22 such regulations shall require that each such 

23 preparer show evidence of completion of such 

24 continuing education requirements as specified 

25 by the Secretary. 


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1 (C) NONMONETARY SANCTIONS.—The reg2 ulations under paragraph (1) shall provide for 

3 the suspension or termination of such eligibility 

4 in the event of any failure to comply with the 

5 requirements for such eligibility. 

6 (4) PENALTY FOR UNAUTHORIZED PREPARA7 TION OF RETURNS, ETC.—In promulgating the regu8 lations under paragraph (1), the Secretary shall im9 pose a penalty of $1,000 for each Federal tax re10 turn, document, or other submission prepared by a 

11 preparer described in paragraph (1)(A) who is not in 

12 compliance with the requirements of paragraph (2) 

13 or (3) or who is suspended or disbarred from prac14 tice before the Department of the Treasury under 

15 such regulations. Such penalty shall be in addition 

16 to any other penalty which may be imposed. 

17 (c) OFFICE OF PROFESSIONAL RESPONSIBILITY.— 

18 Section 330 of title 31, United States Code, is amended 

19 by adding at the end the following new subsection: 

20 ‘‘(e) OFFICE OF PROFESSIONAL RESPONSIBILITY.— 

21 ‘‘(1) IN GENERAL.—There shall be in the Inter22 nal Revenue Service an Office of Professional Re23 sponsibility the functions of which shall be as pre24 scribed by the Secretary of the Treasury, including 

25 the carrying out of the purposes of this section. 


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1 ‘‘(2) DIRECTOR.— 

2 ‘‘(A) IN GENERAL.—The Office of Profes3 sional Responsibility shall be under the super4 vision and direction of an official known as the 

5 ‘Director, Office of Professional Responsibility’. 

6 The Director, Office of Professional Responsi7 bility, shall report directly to the Commissioner 

8 of Internal Revenue and shall be entitled to 

9 compensation at the same rate as the highest 

10 rate of basic pay established for the Senior Ex11 ecutive Service under section 5382 of title 5, or, 

12 if the Secretary of the Treasury so determines, 

13 at a rate fixed under section 9503 of such title. 

14 ‘‘(B) APPOINTMENT.—The Director, Office 

15 of Professional Responsibility, shall be ap16 pointed by the Secretary of the Treasury with17 out regard to the provisions of title 5 relating 

18 to appointments in the competitive service or 

19 the Senior Executive Service. 

20 ‘‘(3) HEARING.—Any hearing on an action ini21 tiated by the Director, Office of Professional Re22 sponsibility, to impose a sanction under regulations 

23 promulgated under this section shall be conducted in 

24 accordance with sections 556 and 557 of title 5 by 

25 1 or more administrative law judges appointed by 


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1 the Secretary of the Treasury under section 3105 of 

2 title 5. 

3 ‘‘(4) COORDINATION WITH STATE SANCTION

4 PROGRAMS.—In carrying out the purposes of this 

5 section, the Director, Office of Professional Respon6 sibility shall coordinate with appropriate State offi7 cials in order to collect information regarding rep8 resentatives, employers, firms and other entities 

9 which have been disciplined or suspended under 

10 State or local rules. 

11 ‘‘(5) INFORMATION ON SANCTIONS TO BE

12 AVAILABLE TO THE PUBLIC.— 

13 ‘‘(A) SANCTIONS INITIATED BY ACTION.— 

14 When an action is initiated by the Director, Of15 fice of Professional Responsibility, to impose a 

16 sanction under regulations promulgated under 

17 this section, the pleadings, and the record of 

18 the proceeding and hearing shall be open to the 

19 public (subject to restrictions imposed under 

20 subparagraph (C)). 

21 ‘‘(B) SANCTION NOT INITIATED BY AC22 TION.—When a sanction under regulations pro23 mulgated under this section (other than a pri24 vate reprimand) is imposed without initiation of 

25 an action, the Director, Office of Professional 


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1 Responsibility, shall make available to the pub2 lic information identifying the representative, 

3 employer, firm, or other entity sanctioned, as 

4 well as information about the conduct which 

5 gave rise to the sanction (subject to restrictions 

6 imposed under subparagraph (C)). 

7 ‘‘(C) RESTRICTIONS ON RELEASE OF IN8 FORMATION.—Information about clients of the 

9 representative, employer, firm, or other entity 

10 and medical information with respect to the 

11 representative shall not be released to the pub12 lic or discussed in an open hearing, except to 

13 the extent necessary to understand the nature, 

14 scope, and impact of the conduct giving rise to 

15 the sanction or proposed sanction. Disagree16 ments regarding the application of this sub17 paragraph shall be resolved by the administra18 tive law judge or, when a sanction is imposed 

19 without initiation of an action, by the Director, 

20 Office of Professional Responsibility. 

21 ‘‘(6) FEES.—Any fees imposed under regula22 tions promulgated under this section shall be avail23 able without fiscal year limitation to the Office of 

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1 bursement of the costs of administering and enforc2 ing the requirements of such regulations.’’. 

3 (d) BAN ON AUDIT INSURANCE.—Section 330 of title 

4 31, United States Code, as amended by subsection (c), is 

5 amended by adding at the end the following new sub6 section: 

7 ‘‘(f) BAN ON AUDIT INSURANCE.—No person admit8 ted to practice before the Department of the Treasury may 

9 directly or indirectly offer or provide insurance to cover 

10 professional fees and other expenses incurred in respond11 ing to or defending an audit by the Internal Revenue Serv12 ice.’’. 

13 (e) PENALTIES.— 

14 (1) INCREASE IN CERTAIN PENALTIES.—Sub15 sections (a), (b), and (c) of section 6695 (relating to 

16 other assessable penalties with respect to the prepa17 ration of income tax returns for other persons) are 

18 each amended by striking ‘‘a penalty of $50’’ and all 

19 that follows and inserting ‘‘a penalty equal to— 

20 ‘‘(1) $1,000, or 

21 ‘‘(2) in the case of 3 or more such failures in 

22 a calendar year, $500 for each such failure. 

23 The preceding sentence shall not apply with respect to any 

24 failure if such failure is due to reasonable cause and not 

25 due to willful neglect.’’. 


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1 (2) USE OF PENALTIES.—Unless specifically 

2 appropriated otherwise, there is authorized to be ap3 propriated and is appropriated to the Office of Pro4 fessional Responsibility for each fiscal year for the 

5 administration of the public awareness campaign de6 scribed in subsection (g) an amount equal to the 

7 penalties collected during the preceding fiscal year 

8 under sections 6694 and 6695 of the Internal Rev9 enue Code of 1986 and under the regulations pro10 mulgated under section 330 of title 31, United 

11 States Code (by reason of subsection (b)(1)). 

12 (3) REVIEW BY THE TREASURY INSPECTOR

13 GENERAL FOR TAX ADMINISTRATION.—Section 

14 7803(d)(2)(A) is amended— 

15 (A) by striking ‘‘and’’ at the end of clause 

16 (iii), 

17 (B) by striking the period at the end of 

18 clause (iv) and inserting ‘‘, and’’, and 

19 (C) by adding at the end the following new 

20 clause: 

21 ‘‘(v) a summary of the penalties as22 sessed and collected during the reporting 

23 period under sections 6694 and 6695 and 

24 under the regulations promulgated under 

25 section 330 of title 31, United States 


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1 Code, and a review of the procedures by 

2 which violations are identified and pen3 alties are assessed under those sections,’’. 

4 (f) COORDINATION WITH SECTION 6060(a).—The 

5 Secretary of the Treasury shall coordinate the require6 ments under the regulations promulgated under section 

7 330 of title 31, United States Code, with the return re8 quirements of section 6060 of the Internal Revenue Code 

9 of 1986. 

10 (g) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

11 of the Treasury or the Secretary’s delegate shall conduct 

12 a public information and consumer education campaign, 

13 utilizing paid advertising— 

14 (1) to encourage taxpayers to use for Federal 

15 tax matters only professionals who establish their 

16 competency under the regulations promulgated 

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

18 and 

19 (2) to inform the public of the requirements 

20 that any compensated preparer of tax returns, docu21 ments, and submissions subject to the requirements 

22 under the regulations promulgated under such sec23 tion must sign the return, document, or submission 

24 prepared for a fee and display notice of such pre25 parer’s compliance under such regulations. 


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1 (h) ADDITIONAL FUNDS AVAILABLE FOR COMPLI2 ANCE ACTIVITIES.—The Secretary of the Treasury may 

3 use any specifically appropriated funds for earned income 

4 tax credit compliance to improve and expand enforcement 

5 of the regulations promulgated under section 330 of title 

6 31, United States Code. 

7 (i) ADDITIONAL CERTIFICATION ON DOCUMENTS

8 OTHER THAN RETURNS.—The Secretary of the Treasury 

9 shall require that each document or other submission filed 

10 with the Internal Revenue Service (other than a return 

11 signed by the taxpayer) shall be signed under penalty of 

12 perjury and the identifying number of any paid preparer 

13 who prepared such document (if any) under rules similar 

14 to the rules under section 6109(a)(4). 

15 SEC. 5. CONTRACT AUTHORITY FOR EXAMINATIONS OF 

16 PREPARERS. 

17 The Secretary of the Treasury is authorized to con18 tract for the development or administration, or both, of 

19 any examinations under the regulations promulgated 

20 under section 330 of title 31, United States Code. 

21 SEC. 6. REGULATION OF REFUND ANTICIPATION LOAN 

22 FACILITATORS. 

23 (a) REGULATION OF REFUND ANTICIPATION LOAN

24 FACILITATORS.— 


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1 (1) IN GENERAL.—Chapter 77 (relating to mis2 cellaneous provisions) is amended by inserting at the 

3 end the following new section: 

4 ‘‘SEC. 7529. REFUND ANTICIPATION LOAN FACILITATORS. 

5 ‘‘(a) REGISTRATION.—Each refund loan facilitator 

6 shall register with the Secretary on an annual basis. As 

7 a part of such registration, each refund loan facilitator 

8 shall provide the Secretary with the name, address, and 

9 taxpayer identification number of such facilitator, and the 

10 fee schedule of such facilitator for the year of such reg11 istration. 

12 ‘‘(b) DISCLOSURE.—Each refund loan facilitator 

13 shall disclose to a taxpayer both orally and on a separate 

14 written form at the time such taxpayer applies for a re15 fund anticipation loan the following information: 

16 ‘‘(1) NATURE OF THE TRANSACTION.—The re17 fund loan facilitator shall disclose— 

18 ‘‘(A) that the taxpayer is applying for a 

19 loan that is based upon the taxpayer’s antici20 pated income tax refund, 

21 ‘‘(B) the expected time within which the 

22 loan will be paid to the taxpayer if such loan is 

23 approved, 


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1 ‘‘(C) the time frame in which income tax 

2 refunds are typically paid based upon the dif3 ferent filing options available to the taxpayer, 

4 ‘‘(D) that there is no guarantee that a re5 fund will be paid in full or received within a 

6 specified time period and that the taxpayer is 

7 responsible for the repayment of the loan even 

8 if the refund is not paid in full or has been de9 layed, 

10 ‘‘(E) if the refund loan facilitator has an 

11 agreement with another refund loan facilitator 

12 (or any lender working in conjunction with an13 other refund loan facilitator) to offset out14 standing liabilities for previous refund anticipa15 tion loans provided by such other refund loan 

16 facilitator, that any refund paid to the taxpayer 

17 may be so offset and the implication of any 

18 such offset, 

19 ‘‘(F) that the taxpayer may file an elec20 tronic return without applying for a refund an21 ticipation loan and the fee for filing such an 

22 electronic return, and 

23 ‘‘(G) that the loan may have substantial 

24 fees and interest charges that may exceed those 


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1 of other sources of credit and the taxpayer 

2 should carefully consider— 

3 ‘‘(i) whether such a loan is appro4 priate for the taxpayer, and 

5 ‘‘(ii) other sources of credit. 

6 ‘‘(2) FEES AND INTEREST.—The refund loan 

7 facilitator shall disclose all refund anticipation loan 

8 fees with respect to the refund anticipation loan. 

9 Such disclosure shall include— 

10 ‘‘(A) a copy of the fee schedule of the re11 fund loan facilitator, 

12 ‘‘(B) the typical fees and interest rates 

13 (using annual percentage rates as defined by 

14 section 107 of the Truth in Lending Act (15 

15 U.S.C. 1606)) for several typical amounts of 

16 such loans and of other types of consumer cred17 it, 

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

19 refund is not paid or delayed, and 

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

21 be charged if the loan is not approved. 

22 ‘‘(3) OTHER INFORMATION.—The refund loan 

23 facilitator shall disclose any other information re24 quired to be disclosed by the Secretary. 

25 ‘‘(c) FINES AND SANCTIONS.— 


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1 ‘‘(1) IN GENERAL.—The Secretary may impose 

2 a monetary penalty on any refund loan facilitator 

3 who— 

4 ‘‘(A) fails to register under subsection (a), 

5 or 

6 ‘‘(B) fails to disclose any information re7 quired under subsection (b). 

8 ‘‘(2) MAXIMUM MONETARY PENALTY.—Any 

9 monetary penalty imposed under paragraph (1) shall 

10 not exceed— 

11 ‘‘(A) in the case of a failure to register, 

12 the gross income derived from all refund antici13 pation loans made during the period the refund 

14 loan facilitator was not registered, and 

15 ‘‘(B) in the case of a failure to disclose in16 formation, the gross income derived from all re17 fund anticipation loans with respect to which 

18 such failure applied. 

19 ‘‘(3) REASONABLE CAUSE EXCEPTIONS.—No 

20 penalty may be imposed under this subsection with 

21 respect to any failure if it is shown that such failure 

22 is due to reasonable cause. 

23 ‘‘(d) DEFINITIONS.—For purposes of this section— 

24 ‘‘(1) REFUND LOAN FACILITATOR.— 


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1 ‘‘(A) IN GENERAL.—The term ‘refund loan 

2 facilitator’ means any electronic return origi3 nator who— 

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

5 accepts delivery of an application for a re6 fund anticipation loan, or 

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

8 anticipation loan in any other manner. 

9 ‘‘(B) ELECTRONIC RETURN ORIGINATOR.— 

10 For purposes of subparagraph (A), the term 

11 ‘electronic return originator’ means a person 

12 who originates the electronic submission of in13 come tax returns for another person. 

14 ‘‘(2) REFUND ANTICIPATION LOAN.—The term 

15 ‘refund anticipation loan’ means any loan of money 

16 or any other thing of value to a taxpayer in connec17 tion with the taxpayer’s anticipated receipt of a Fed18 eral tax refund. Such term includes a loan secured 

19 by the tax refund or an arrangement to repay a loan 

20 from the tax refund. 

21 ‘‘(3) REFUND ANTICIPATION LOAN FEES.—The 

22 term ‘refund anticipation loan fees’ means the fees, 

23 charges, interest, and other consideration charged or 

24 imposed by the lender or facilitator for the making 

25 of a refund anticipation loan. 


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1 ‘‘(e) REGULATIONS.—The Secretary may prescribe 

2 such regulations as necessary to implement the require3 ments of this section.’’. 

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions for chapter 77, as amended by this Act, is 

6 amended by adding at the end the following new 

7 item: 

‘‘Sec. 7529. Refund anticipation loan facilitators.’’. 

8 (b) DISCLOSURE OF PENALTY.—Section 6103(k) (re9 lating to disclosure of certain returns and return informa10 tion for tax administration purposes) is amended by add11 ing at the end the following new paragraph: 

12 ‘‘(10) DISCLOSURE OF PENALTIES ON REFUND

13 ANTICIPATION LOAN FACILITATORS.—The Secretary 

14 may disclose the name and employer (including the 

15 employer’s address) of any person with respect to 

16 whom a penalty has been imposed under section 

17 7529 and the amount of any such penalty.’’. 

18 (c) USE OF PENALTIES.—Unless specifically appro19 priated otherwise, there is authorized to be appropriated 

20 and is appropriated to the Internal Revenue Service for 

21 each fiscal year for the administration of the public aware22 ness campaign described in subsection (d) an amount 

23 equal to the penalties collected during the preceding fiscal 

24 year under section 7529 of the Internal Revenue Code of 

25 1986. 


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1 (d) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

2 of the Treasury or the Secretary’s delegate shall conduct 

3 a public information and consumer education campaign, 

4 utilizing paid advertising, to educate the public on making 

5 sound financial decisions with respect to refund anticipa6 tion loans (as defined under section 7529 of the Internal 

7 Revenue Code of 1986), including the need to compare— 

8 (1) the rates and fees of such loans with the 

9 rates and fees of conventional loans; and 

10 (2) the amount of money received under the 

11 loan after taking into consideration such costs and 

12 fees with the total amount of the refund. 

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

14 this section shall take effect on the date that is 1 year 

15 after the date of the enactment of this Act. 

16 (f) TERMINATION OF DEBT INDICATOR PROGRAM.— 

17 The Secretary of the Treasury shall terminate the Debt 

18 Indicator program announced in Internal Revenue Service 

19 Notice 9958 and may not implement any similar program. 

20 SEC. 7. TAXPAYER ACCESS TO FINANCIAL INSTITUTIONS. 

21 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

22 of the Treasury is authorized to award demonstration 

23 project grants (including multi-year grants) to eligible en24 tities which partner with volunteer and low-income prepa25 ration organizations to provide tax preparation services 


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1 and assistance in connection with establishing an account 

2 in a federally insured depository institution for individuals 

3 that currently do not have such an account. 

4 (b) ELIGIBLE ENTITIES.— 

5 (1) IN GENERAL.—An entity is eligible to re6 ceive a grant under this section if such an entity 

7 is— 

8 (A) an organization described in section 

9 501(c)(3) of the Internal Revenue Code of 1986 

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

11 such Code, 

12 (B) a federally insured depository institu13 tion, 

14 (C) an agency of a State or local govern15 ment, 

16 (D) a community development financial in17 stitution, 

18 (E) an Indian tribal organization, 

19 (F) an Alaska Native Corporation, 

20 (G) a Native Hawaiian organization, 

21 (H) a labor organization, or 

22 (I) a partnership comprised of 1 or more 

23 of the entities described in the preceding sub24 paragraphs. 


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1 (2) DEFINITIONS.—For purposes of this sec2 tion— 

3 (A) FEDERALLY INSURED DEPOSITORY IN4 STITUTION.—The term ‘‘federally insured de5 pository institution’’ means any insured deposi6 tory institution (as defined in section 3 of the 

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

8 1813)) and any insured credit union (as defined 

9 in section 101 of the Federal Credit Union Act 

10 (12 U.S.C. 1752)). 

11 (B) COMMUNITY DEVELOPMENT FINAN12 CIAL INSTITUTION.—The term ‘‘community de13 velopment financial institution’’ means any or14 ganization that has been certified as such pur15 suant to section 1805.201 of title 12, Code of 

16 Federal Regulations. 

17 (C) ALASKA NATIVE CORPORATION.—The 

18 term ‘‘Alaska Native Corporation’’ has the 

19 same meaning as the term ‘‘Native Corpora20 tion’’ under section 3(m) of the Alaska Native 

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

22 (D) NATIVE HAWAIIAN ORGANIZATION.— 

23 The term ‘‘Native Hawaiian organization’’ 

24 means any organization that— 


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•S 1219 IS

1 (i) serves and represents the interests 

2 of Native Hawaiians, and 

3 (ii) has as a primary and stated pur4 pose the provision of services to Native 

5 Hawaiians. 

6 (E) LABOR ORGANIZATION.—The term 

7 ‘‘labor organization’’ means an organization— 

8 (i) in which employees participate, 

9 (ii) which exists for the purpose, in 

10 whole or in part, of dealing with employers 

11 concerning grievances, labor disputes, 

12 wages, rates of pay, hours of employment, 

13 or conditions of work, and 

14 (iii) which is described in section 

15 501(c)(5) of the Internal Revenue Code of 

16 1986. 

17 (c) APPLICATION.—An eligible entity desiring a grant 

18 under this section shall submit an application to the Sec19 retary of the Treasury in such form and containing such 

20 information as the Secretary may require. 

21 (d) LIMITATION ON ADMINISTRATIVE COSTS.—A re22 cipient of a grant under this section may not use more 

23 than 6 percent of the total amount of such grant in any 

24 fiscal year for the administrative costs of carrying out the 

25 programs funded by such grant in such fiscal year. 


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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) AUTHORIZATION OF APPROPRIATIONS.—There is 

8 authorized to be appropriated to the Secretary of the 

9 Treasury, for the grant program described in this section, 

10 $10,000,000, or such additional amounts as deemed nec11 essary, to remain available until expended. 

12 (g) REGULATIONS.—The Secretary of the Treasury 

13 is authorized to promulgate regulations to implement and 

14 administer the grant program under this section. 

15 (h) STUDY ON DELIVERY OF TAX REFUNDS.— 

16 (1) IN GENERAL.—The Secretary of the Treas17 ury, in consultation with the National Taxpayer Ad18 vocate, shall conduct a study on the payment of tax 

19 refunds through Treasury debit cards or other elec20 tronic means to assist individuals that do not have 

21 access to financial accounts or institutions. 

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

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

24 the Treasury shall submit a report to Congress conVerDate Aug 31 2005 00:53 Apr 27, 2007 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1219.IS S1219

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•S 1219 IS

1 taining the result of the study conducted under sub2 section (a). 

3 SEC. 8. CLARIFICATION OF TAXPAYER ASSISTANCE ORDER 

4 AUTHORITY. 

5 (a) IN GENERAL.—Section 7811(b)(2) is amended— 

6 (1) by redesignating subparagraphs (C) and 

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

8 (2) by inserting after subparagraph (B) the fol9 lowing new subparagraph: 

10 ‘‘(C) chapter 74 (relating to closing agree11 ments and compromises),’’. 

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

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

14 the enactment of this Act. 

15 SEC. 9. CLARIFICATION OF STANDARDS FOR EVALUATION 

16 OF COMPROMISE OFFERS. 

17 Section 7122(d)(1) is amended— 

18 (1) by inserting ‘‘based on doubt as to liability, 

19 doubt as to collectibility, or equitable consideration’’ 

20 after ‘‘dispute’’, and 

21 (2) by inserting at the end the following new 

22 paragraph: 

23 ‘‘(4) EQUITABLE CONSIDERATION.—In pre24 scribing guidelines under paragraph (1), the Sec25 retary shall compromise a liability to promote effecVerDate Aug 31 2005 00:53 Apr 27, 2007 Jkt 059200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S1219.IS S1219

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1 tive tax administration when it is inequitable to col2 lect any unpaid tax (or any portion thereof, includ3 ing penalties and interest) based on all of the facts 

4 and circumstances, including— 

5 ‘‘(A) whether the taxpayer acted reason6 ably, responsibly, and in good faith under the 

7 circumstances, such as, by taking reasonable 

8 actions to avoid or mitigate the tax liability or 

9 delayed resolution of such liability, 

10 ‘‘(B) whether the taxpayer is a victim of a 

11 bad act by a third party or any other unex12 pected event that significantly contributed to 

13 the tax liability or delayed resolution of such li14 ability, 

15 ‘‘(C) whether the taxpayer has a recent 

16 history of compliance with tax filing and pay17 ment obligations (before and after the situation 

18 that led to the current tax liability) or has a 

19 reasonable explanation for previous noncompli20 ance, 

21 ‘‘(D) whether any Internal Revenue Serv22 ice processing errors, systemic or employee-re23 lated, led to or significantly contributed to the 

24 tax liability, 


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1 ‘‘(E) whether the Internal Revenue Service 

2 action or inaction has unreasonably delayed res3 olution of the tax liability, and 

4 ‘‘(F) any other fact or circumstance that 

5 would lead a reasonable person to conclude that 

6 a compromise would be fair, equitable, and in 

7 the best interest of tax administration.’’. 

Æ 


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