I 

110TH CONGRESS 

1ST SESSION H. R. 1677 

To amend the Internal Revenue Code of 1986 to enhance taxpayer protections 

and outreach. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 26, 2007 

Mr. RANGEL (for himself and Mr. LEWIS of Georgia) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to enhance 

taxpayer protections and outreach. 

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

4 this Act is as follows: 

Sec. 1. Short title; etc. 

Sec. 2. Family business tax simplification. 

Sec. 3. Taxpayer notification of suspected identity theft. 

Sec. 4. Extension of time for return of property for wrongful levy. 

Sec. 5. Individuals held harmless on wrongful levy, etc., on individual retirement plan. 

Sec. 6. Clarification of IRS unclaimed refund authority. 

Sec. 7. Prohibition on IRS debt indicators for predatory refund anticipation 

loans. 

Sec. 8. Prohibition on misuse of Department of the Treasury names and symbols. 

Sec. 9. EITC outreach. 

5 SEC. 2. FAMILY BUSINESS TAX SIMPLIFICATION. 

6 (a) IN GENERAL.—Section 761 (defining terms for 

7 purposes of partnerships) is amended by redesignating 

8 subsection (f) as subsection (g) and by inserting after sub9 section (e) the following new subsection: 

10 ‘‘(f) QUALIFIED JOINT VENTURE.— 

11 ‘‘(1) IN GENERAL.—In the case of a qualified 

12 joint venture conducted by a husband and wife who 

13 file a joint return for the taxable year, for purposes 

14 of this title— 

15 ‘‘(A) such joint venture shall not be treat16 ed as a partnership, 

17 ‘‘(B) all items of income, gain, loss, deduc18 tion, and credit shall be divided between the 

19 spouses in accordance with their respective in20 terests in the venture, and 


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1 ‘‘(C) each spouse shall take into account 

2 such spouse’s respective share of such items as 

3 if they were attributable to a trade or business 

4 conducted by such spouse as a sole proprietor. 

5 ‘‘(2) QUALIFIED JOINT VENTURE.—For pur6 poses of paragraph (1), the term ‘qualified joint ven7 ture’ means any joint venture involving the conduct 

8 of a trade or business if— 

9 ‘‘(A) the only members of such joint ven10 ture are a husband and wife, 

11 ‘‘(B) both spouses materially participate 

12 (within the meaning of section 469(h) without 

13 regard to paragraph (5) thereof) in such trade 

14 or business, and 

15 ‘‘(C) both spouses elect the application of 

16 this subsection.’’. 

17 (b) NET EARNINGS FROM SELF-EMPLOYMENT.— 

18 (1) Subsection (a) of section 1402 (defining net 

19 earnings from self-employment) is amended by strik20 ing ‘‘, and’’ at the end of paragraph (15) and insert21 ing a semicolon, by striking the period at the end of 

22 paragraph (16) and inserting ‘‘; and’’, and by insert23 ing after paragraph (16) the following new para24 graph: 


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1 ‘‘(17) notwithstanding the preceding provisions 

2 of this subsection, each spouse’s share of income or 

3 loss from a qualified joint venture shall be taken 

4 into account as provided in section 761(f) in deter5 mining net earnings from self-employment of such 

6 spouse.’’. 

7 (2) Subsection (a) of section 211 of the Social 

8 Security Act (defining net earnings from self-em9 ployment) is amended by striking ‘‘and’’ at the end 

10 of paragraph (14), by striking the period at the end 

11 of paragraph (15) and inserting ‘‘; and’’, and by in12 serting after paragraph (15) the following new para13 graph: 

14 ‘‘(16) Notwithstanding the preceding provisions 

15 of this subsection, each spouse’s share of income or 

16 loss from a qualified joint venture shall be taken 

17 into account as provided in section 761(f) of the In18 ternal Revenue Code of 1986 in determining net 

19 earnings from self-employment of such spouse.’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2006. 


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1 SEC. 3. TAXPAYER NOTIFICATION OF SUSPECTED IDENTITY 

2 THEFT. 

3 (a) IN GENERAL.—Chapter 77 (relating to miscella4 neous provisions) is amended by adding at the end the 

5 following new section: 

6 ‘‘SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY 

7 THEFT. 

8 ‘‘If, in the course of an investigation under section 

9 7206 (relating to fraud and false statements) or 7207 (re10 lating to fraudulent returns, statements, or other docu11 ments), the Secretary determines that there may have 

12 been an unauthorized use of the identity of the taxpayer 

13 or dependents, the Secretary shall— 

14 ‘‘(1) as soon as practicable and without jeop15 ardizing such investigation, notify the taxpayer of 

16 such determination, and 

17 ‘‘(2) if any person is criminally charged by in18 dictment or information under either of such sec19 tions, notify such taxpayer as soon as practicable of 

20 such charge.’’. 

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

22 for chapter 77 is amended by adding at the end the fol23 lowing new item: 

‘‘Sec. 7529. Notification of suspected identity theft.’’. 


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

2 this section shall apply to determinations made after the 

3 date of the enactment of this Act. 

4 SEC. 4. EXTENSION OF TIME FOR RETURN OF PROPERTY 

5 FOR WRONGFUL LEVY. 

6 (a) EXTENSION OF TIME FOR RETURN OF PROPERTY

7 SUBJECT TO LEVY.—Subsection (b) of section 6343 (re8 lating to return of property) is amended by striking ‘‘9 

9 months’’ and inserting ‘‘2 years’’. 

10 (b) PERIOD OF LIMITATION ON SUITS.—Subsection 

11 (c) of section 6532 (relating to suits by persons other than 

12 taxpayers) is amended— 

13 (1) in paragraph (1) by striking ‘‘9 months’’ 

14 and inserting ‘‘2 years’’, and 

15 (2) in paragraph (2) by striking ‘‘9-month’’ and 

16 inserting ‘‘2-year’’. 

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

18 this section shall apply to— 

19 (1) levies made after the date of the enactment 

20 of this Act, and 

21 (2) levies made on or before such date if the 9- 

22 month period has not expired under section 6343(b) 

23 of the Internal Revenue Code of 1986 (without re24 gard to this section) as of such date. 


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1 SEC. 5. INDIVIDUALS HELD HARMLESS ON WRONGFUL 

2 LEVY, ETC., ON INDIVIDUAL RETIREMENT 

3 PLAN. 

4 (a) IN GENERAL.—Section 6343 (relating to author5 ity to release levy and return property) is amended by add6 ing at the end the following new subsection: 

7 ‘‘(f) INDIVIDUALS HELD HARMLESS ON WRONGFUL

8 LEVY, ETC. ON INDIVIDUAL RETIREMENT PLAN.— 

9 ‘‘(1) IN GENERAL.—If the Secretary determines 

10 that an individual retirement plan has been levied 

11 upon in a case to which subsection (b) or (d)(2)(A) 

12 applies, an amount equal to the sum of— 

13 ‘‘(A) the amount of money returned by the 

14 Secretary on account of such levy, and 

15 ‘‘(B) interest paid under subsection (c) on 

16 such amount of money, 

17 may be deposited into such individual retirement 

18 plan or any other individual retirement plan (other 

19 than an endowment contract) to which a rollover 

20 from the plan levied upon is permitted. 

21 ‘‘(2) TREATMENT AS ROLLOVER.—If amounts 

22 are deposited into an individual retirement plan 

23 under paragraph (1) not later than the 60th day 

24 after the date on which the individual receives the 

25 amounts under paragraph (1)— 


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1 ‘‘(A) such deposit shall be treated as a 

2 rollover described in section 408(d)(3)(A)(i), 

3 ‘‘(B) to the extent the deposit includes in4 terest paid under subsection (c), such interest 

5 shall not be includible in gross income, and 

6 ‘‘(C) such deposit shall not be taken into 

7 account under section 408(d)(3)(B). 

8 For purposes of subparagraph (B), an amount shall 

9 be treated as interest only to the extent that the 

10 amount deposited exceeds the amount of the levy. 

11 ‘‘(3) REFUND, ETC., OF INCOME TAX ON

12 LEVY.—If any amount is includible in gross income 

13 for a taxable year by reason of a levy referred to in 

14 paragraph (1) and any portion of such amount is 

15 treated as a rollover under paragraph (2), any tax 

16 imposed by chapter 1 on such portion shall not be 

17 assessed, and if assessed shall be abated, and if col18 lected shall be credited or refunded as an overpay19 ment made on the due date for filing the return of 

20 tax for such taxable year. 

21 ‘‘(4) INTEREST.—Notwithstanding subsection 

22 (d), interest shall be allowed under subsection (c) in 

23 a case in which the Secretary makes a determination 

24 described in subsection (d)(2)(A) with respect to a 

25 levy upon an individual retirement plan.’’. 


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

2 this section shall apply to amounts paid under subsections 

3 (b), (c), and (d)(2)(A) of section 6343 of the Internal Rev4 enue Code of 1986 after the date of the enactment of this 

5 Act. 

6 SEC. 6. CLARIFICATION OF IRS UNCLAIMED REFUND AU7 THORITY. 

8 Section 6103(m)(1) (relating to tax refunds) is 

9 amended by inserting after ‘‘media’’ and ‘‘, and through 

10 any other means of mass communication,’’. 

11 SEC. 7. PROHIBITION ON IRS DEBT INDICATORS FOR PRED12 ATORY REFUND ANTICIPATION LOANS. 

13 (a) IN GENERAL.—Subsection (f) of section 6011 (re14 lating to promotion of electronic filing) is amended by add15 ing at the end the following new paragraph: 

16 ‘‘(3) PROHIBITION ON IRS DEBT INDICATORS

17 FOR PREDATORY REFUND ANTICIPATION LOANS.— 

18 ‘‘(A) IN GENERAL.—In carrying out any 

19 program under this subsection, the Secretary 

20 shall not provide a debt indicator to any person 

21 with respect to any refund anticipation loan if 

22 the Secretary determines that the business 

23 practices of such person involve refund anticipa24 tions loans and related charges and fees that 

25 are predatory. 


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1 ‘‘(B) REFUND ANTICIPATION LOAN.—For 

2 purposes of this paragraph, the term ‘refund 

3 anticipation loan’ means a loan of money or of 

4 any other thing of value to a taxpayer secured 

5 by the taxpayer’s anticipated receipt of a Fed6 eral tax refund. 

7 ‘‘(C) IRS DEBT INDICATOR.—For purposes 

8 of this paragraph, the term ‘debt indicator’ 

9 means a notification provided through a tax re10 turn’s acknowledgment file that a refund will be 

11 offset to repay debts for delinquent Federal or 

12 State taxes, student loans, child support, or 

13 other Federal agency debt.’’. 

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

15 this section shall apply with respect to returns filed after 

16 the date of the enactment of this Act. 

17 SEC. 8. PROHIBITION ON MISUSE OF DEPARTMENT OF THE 

18 TREASURY NAMES AND SYMBOLS. 

19 (a) IN GENERAL.—Subsection (a) of section 333 of 

20 title 31, United States Code, is amended by inserting 

21 ‘‘internet domain address,’’ after ‘‘solicitation,’’ both 

22 places it appears. 

23 (b) PENALTY FOR MISUSE BY ELECTRONIC

24 MEANS.—Subsections (c)(2) and (d)(1) of section 333 of 

25 such Code are each amended by inserting ‘‘or any other 


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1 mass communications by electronic means,’’ after ‘‘tele2 cast,’’. 

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

4 this section shall apply with respect to violations occurring 

5 after the date of the enactment of this Act. 

6 SEC. 9. EITC OUTREACH. 

7 (a) IN GENERAL.—Section 32 (relating to earned in8 come) is amended by adding at the end the following new 

9 subsection: 

10 ‘‘(n) NOTIFICATION OF POTENTIAL ELIGIBILITY FOR

11 CREDIT AND REFUND.— 

12 ‘‘(1) IN GENERAL.—To the extent possible and 

13 on an annual basis, the Secretary shall provide to 

14 each taxpayer who— 

15 ‘‘(A) for any preceding taxable year for 

16 which credit or refund is not precluded by sec17 tion 6511, and 

18 ‘‘(B) did not claim the credit under sub19 section (a) but may be allowed such credit for 

20 any such taxable year based on return or return 

21 information (as defined in section 6103(b)) 

22 available to the Secretary, 

23 notice that such taxpayer may be eligible to claim 

24 such credit and a refund for such taxable year. 


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1 ‘‘(2) NOTICE.—Notice provided under para2 graph (1) shall be in writing and sent to the last 

3 known address of the taxpayer.’’. 

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

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

6 of this Act. 

Æ 


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