II 

111TH CONGRESS 

2D SESSION S. 3047 

To terminate the Internal Revenue Code of 1986, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 25, 2010 

Mr. ISAKSON (for himself, Mr. CHAMBLISS, Mr. GRAHAM, Mr. BROWNBACK, 

Mrs. HUTCHISON, and Mr. CRAPO) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To terminate the Internal Revenue Code of 1986, 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. 

4 This Act may be cited as the ‘‘Tax Code Termination 

5 Act’’. 

6 SEC. 2. PURPOSE. 

7 The purpose of this Act is to set a date certain for 

8 replacing the Internal Revenue Code of 1986 with a simple 

9 and fair alternative. 


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1 SEC. 3. TERMINATION OF INTERNAL REVENUE CODE OF 

2 1986. 

3 (a) IN GENERAL.—No tax shall be imposed by the 

4 Internal Revenue Code of 1986— 

5 (1) for any taxable year beginning after Decem6 ber 31, 2013; and 

7 (2) in the case of any tax not imposed on the 

8 basis of a taxable year, on any taxable event or for 

9 any period after December 31, 2013. 

10 (b) EXCEPTION.—Subsection (a) shall not apply to 

11 taxes imposed by— 

12 (1) chapter 2 of such Code (relating to tax on 

13 self-employment income); 

14 (2) chapter 21 of such Code (relating to Fed15 eral Insurance Contributions Act); and 

16 (3) chapter 22 of such Code (relating to Rail17 road Retirement Tax Act). 

18 SEC. 4. NATIONAL COMMISSION ON TAX REFORM AND SIM19 PLIFICATION. 

20 (a) FINDINGS.—The Congress finds the following: 

21 (1) The Internal Revenue Code of 1986 is over22 ly complex, imposes significant burdens on individ23 uals and businesses and the economy, is extremely 

24 difficult for the Internal Revenue Service to admin25 ister, and is in need of fundamental reform and sim26 plification. 


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1 (2) Many of the problems encountered by tax2 payers in dealing with the Internal Revenue Service 

3 could be eliminated or alleviated by fundamental re4 form and simplification. 

5 (3) Recent efforts to simplify or reform the tax 

6 laws have not been successful due in part to the dif7 ficulty of developing broad-based, nonpartisan sup8 port for proposals to make such changes. 

9 (4) Many of the problems with the Internal 

10 Revenue Service stem from the overly complex tax 

11 code the agency is asked to administer. 

12 (b) ESTABLISHMENT.— 

13 (1) IN GENERAL.—To carry out the purposes of 

14 this section, there is established within the legislative 

15 branch a National Commission on Tax Reform and 

16 Simplification (in this section referred to as the 

17 ‘‘Commission’’). 

18 (2) COMPOSITION.—The Commission shall be 

19 composed of 19 members (of which not less than 4 

20 members are from small businesses with less than 

21 50 employees), as follows: 

22 (A) Three members appointed by the 

23 President, two from the executive branch of the 

24 Government and one from the private sector. 


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1 (B) Four members appointed by the ma2 jority leader of the Senate, one from Members 

3 of the Senate and three from the private sector. 

4 (C) Four members appointed by the minor5 ity leader of the Senate, one from Members of 

6 the Senate and three from the private sector. 

7 (D) Four members appointed by the 

8 Speaker of the House of Representatives, one 

9 from Members of the House and three from the 

10 private sector. 

11 (E) Four members appointed by the mi12 nority leader of the House of Representatives, 

13 one from Members of the House and three from 

14 the private sector. 

15 (3) CHAIR.—The Commission shall elect a 

16 Chair (or two Co-Chairs) from among its members. 

17 (4) MEETINGS, QUORUMS, VACANCIES.—After 

18 its initial meeting, the Commission shall meet upon 

19 the call of the Chair (Co-Chairs, if elected) or a ma20 jority of its members. Eleven members of the Com21 mission shall constitute a quorum. Any vacancy in 

22 the Commission shall not affect its powers, but shall 

23 be filled in the same manner in which the original 

24 appointment was made. Any meeting of the Commis25 sion or any subcommittee thereof may be held in exVerDate Nov 24 2008 01:06 Feb 27, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3047.IS S3047

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1 ecutive session to the extent that the Chair (Co2 Chairs, if elected) or a majority of the members of 

3 the Commission or subcommittee determine appro4 priate. 

5 (5) CONTINUATION OF MEMBERSHIP.—If— 

6 (A) any individual who appointed a mem7 ber to the Commission by virtue of holding a 

8 position described in paragraph (2) ceases to 

9 hold such position before the report of the Com10 mission is submitted under subsection (g); or 

11 (B) a member was appointed to the Com12 mission as a Member of Congress and the mem13 ber ceases to be a Member of Congress, or was 

14 appointed to the Commission because the mem15 ber was not an officer or employee of any gov16 ernment and later becomes an officer or em17 ployee of a government, 

18 that member may continue as a member for not 

19 longer than the 30-day period beginning on the date 

20 that such individual ceases to hold such position or 

21 such member ceases to be a Member of Congress or 

22 becomes such an officer or employee, as the case 

23 may be. 

24 (6) APPOINTMENT; INITIAL MEETING.— 


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1 (A) APPOINTMENT.—It is the sense of the 

2 Congress that members of the Commission 

3 should be appointed not more than 60 days 

4 after the date of the enactment of this Act. 

5 (B) INITIAL MEETING.—If, after 60 days 

6 from the date of the enactment of this Act, 

7 eight or more members of the Commission have 

8 been appointed, members who have been ap9 pointed may meet and select the Chair (or Co10 Chairs) who thereafter shall have the authority 

11 to begin the operations of the Commission, in12 cluding the hiring of staff. 

13 (c) FUNCTIONS OF THE COMMISSION.— 

14 (1) IN GENERAL.—The functions of the Com15 mission shall be— 

16 (A) to conduct, for a period not to exceed 

17 18 months from the date of its first meeting, 

18 the review described in paragraph (2); and 

19 (B) to submit to the Congress a report of 

20 the results of such review, including rec21 ommendations for fundamental reform and sim22 plification of the Internal Revenue Code of 

23 1986, as described in subsection (g). 

24 (2) REVIEW.—The Commission shall review— 


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1 (A) the present structure and provisions of 

2 the Internal Revenue Code of 1986, especially 

3 with respect to— 

4 (i) its impact on the economy (includ5 ing the impact on savings, capital forma6 tion and capital investment); 

7 (ii) its impact on families and the 

8 workforce (including issues relating to dis9 tribution of tax burden); 

10 (iii) the compliance cost to taxpayers, 

11 including small businesses and corpora12 tions; and 

13 (iv) the ability of the Internal Rev14 enue Service to administer such provisions; 

15 (B) whether tax systems imposed under 

16 the laws of other countries could provide more 

17 efficient and fair methods of funding the rev18 enue requirements of the government; 

19 (C) whether the present income tax system 

20 should be replaced with a flat tax, a national 

21 sales tax, or any other specified tax system; 

22 (D) whether the Internal Revenue Code of 

23 1986 can be simplified, absent wholesale re24 structuring or replacement thereof; and 


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1 (E) the transition costs (including the 

2 length of time recommended for a smooth tran3 sition) associated with any changes to the 

4 present Federal tax system (both real and im5 plied) which would be imposed on citizens, busi6 nesses, and the Government. 

7 (d) POWERS OF THE COMMISSION.— 

8 (1) IN GENERAL.—The Commission or, on the 

9 authorization of the Commission, any subcommittee 

10 or member thereof, may, for the purpose of carrying 

11 out the provisions of this section, hold such hearings 

12 and sit and act at such times and places, take such 

13 testimony, receive such evidence, and administer 

14 such oaths, as the Commission or such designated 

15 subcommittee or designated member may deem ad16 visable. 

17 (2) CONTRACTING.—The Commission may, to 

18 such extent and in such amounts as are provided in 

19 appropriation Acts, enter into contracts to enable 

20 the Commission to discharge its duties under this 

21 section. 

22 (3) ASSISTANCE FROM FEDERAL AGENCIES AND

23 OFFICES.— 

24 (A) INFORMATION.—The Commission is 

25 authorized to secure directly from any executive 


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1 department, bureau, agency, board, commission, 

2 office, independent establishment, or instrumen3 tality of the Government, as well as from any 

4 committee or other office of the legislative 

5 branch, such information, suggestions, esti6 mates, and statistics as it requires for the pur7 poses of its review and report. Each such de8 partment, bureau, agency, board, commission, 

9 office, establishment, instrumentality, or com10 mittee shall, to the extent not prohibited by 

11 law, furnish such information, suggestions, esti12 mates, and statistics directly to the Commis13 sion, upon request made by the Chair (Co14 Chairs, if elected). 

15 (B) TREASURY DEPARTMENT.—The Sec16 retary of the Treasury is authorized on a nonre17 imbursable basis to provide the Commission 

18 with administrative services, funds, facilities, 

19 staff, and other support services for the per20 formance of the Commission’s functions. 

21 (C) GENERAL SERVICES ADMINISTRA22 TION.—The Administrator of General Services 

23 shall provide to the Commission on a nonreim24 bursable basis such administrative support serv25 ices as the Commission may request. 


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1 (D) JOINT COMMITTEE ON TAXATION.— 

2 The staff of the Joint Committee on Taxation 

3 is authorized on a nonreimbursable basis to 

4 provide the Commission with such legal, eco5 nomic, or policy analysis, including revenue esti6 mates, as the Commission may request. 

7 (E) OTHER ASSISTANCE.—In addition to 

8 the assistance set forth in subparagraphs (A), 

9 (B), (C), and (D), departments and agencies of 

10 the United States are authorized to provide to 

11 the Commission such services, funds, facilities, 

12 staff, and other support services as they may 

13 deem advisable and as may be authorized by 

14 law. 

15 (4) POSTAL SERVICES.—The Commission may 

16 use the United States mails in the same manner and 

17 under the same conditions as departments and agen18 cies of the United States. 

19 (e) STAFF OF THE COMMISSION.— 

20 (1) IN GENERAL.—The Chair (Co-Chairs, if 

21 elected), in accordance with rules agreed upon by the 

22 Commission, may appoint and fix the compensation 

23 of a staff director and such other personnel as may 

24 be necessary to enable the Commission to carry out 

25 its functions without regard to the provisions of title 


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1 5, United States Code, governing appointments in 

2 the competitive service, and without regard to the 

3 provisions of chapter 51 and subchapter III or chap4 ter 53 of such title relating to classification and 

5 General Schedule pay rates, except that no rate of 

6 pay fixed under this subsection may exceed the 

7 equivalent of that payable to a person occupying a 

8 position at level V of the Executive Schedule under 

9 section 5316 of title 5, United States Code. Any 

10 Federal Government employee may be detailed to 

11 the Commission without reimbursement from the 

12 Commission, and such detailee shall retain the 

13 rights, status, and privileges of his or her regular 

14 employment without interruption. 

15 (2) CONSULTANT SERVICES.—The Commission 

16 is authorized to procure the services of experts and 

17 consultants in accordance with section 3109 of title 

18 5, United States Code, but at rates not to exceed the 

19 daily rate paid a person occupying a position at level 

20 IV of the Executive Schedule under section 5315 of 

21 title 5, United States Code. 

22 (f) COMPENSATION AND TRAVEL EXPENSES.— 

23 (1) COMPENSATION.— 

24 (A) IN GENERAL.—Except as provided in 

25 subparagraph (B), each member of the ComVerDate Nov 24 2008 01:06 Feb 27, 2010 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3047.IS S3047

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1 mission may be compensated at not to exceed 

2 the daily equivalent of the annual rate of basic 

3 pay in effect for a position at level IV of the 

4 Executive Schedule under section 5315 of title 

5 5, United States Code, for each day during 

6 which that member is engaged in the actual 

7 performance of the duties of the Commission. 

8 (B) EXCEPTION.—Members of the Com9 mission who are officers or employees of the 

10 United States or Members of Congress shall re11 ceive no additional pay on account of their serv12 ice on the Commission. 

13 (2) TRAVEL EXPENSES.—While away from 

14 their homes or regular places of business in the per15 formance of services for the Commission, members 

16 of the Commission shall be allowed travel expenses, 

17 including per diem in lieu of subsistence, in the 

18 same manner as persons employed intermittently in 

19 the Government service are allowed expenses under 

20 section 5703(b) of title 5, United States Code. 

21 (g) REPORT OF THE COMMISSION; TERMINATION.— 

22 (1) REPORT.—Not later than 18 months after 

23 the date of the first meeting of the Commission, the 

24 Commission shall submit a report to the Committee 

25 on Ways and Means of the House of Representatives 


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1 and the Committee on Finance of the Senate. The 

2 report of the Commission shall describe the results 

3 of its review (as described in subsection (c)(2)), shall 

4 make such recommendations for fundamental reform 

5 and simplification of the Internal Revenue Code of 

6 1986 as the Commission considers appropriate, and 

7 shall describe the expected impact of such rec8 ommendations on the economy. The measurement of 

9 such impact shall be made using both static and dy10 namic scoring models. 

11 (2) TERMINATION.— 

12 (A) IN GENERAL.—The Commission, and 

13 all the authorities of this section, shall termi14 nate on the date which is 90 days after the date 

15 on which the report is required to be submitted 

16 under paragraph (1). 

17 (B) CONCLUDING ACTIVITIES.—The Com18 mission may use the 90-day period referred to 

19 in subparagraph (A) for the purposes of con20 cluding its activities, including providing testi21 mony to committees of Congress concerning its 

22 report and disseminating that report. 

23 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

24 authorized to be appropriated such sums as may be nec25 essary for the activities of the Commission. Until such 


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1 time as funds are specifically appropriated for such activi2 ties, $2,000,000 shall be available from fiscal year 2011 

3 funds appropriated to the Treasury Department, ‘‘Depart4 mental Offices’’ account, for the activities of the Commis5 sion, to remain available until expended. 

6 SEC. 5. TIMING OF IMPLEMENTATION. 

7 In order to ensure an easy transition and effective 

8 implementation, the Congress hereby declares that any 

9 new Federal tax system shall be approved by Congress in 

10 its final form no later than July 4, 2013. If a new Federal 

11 tax system is not so approved by July 4, 2013, then Con12 gress shall be required to vote to reauthorize the Internal 

13 Revenue Code of 1986. 

Æ 


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