Strengthening Taxpayer Rights Act of 2017

To amend the Internal Revenue Code of 1986 to provide taxpayer protection and assistance, and for other purposes. 1. Short title; etc (a) Short title This Act may be cited as the Strengthening Taxpayer Rights Act of 2017 (b) Amendment of 1986 Code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986, as amended. (c) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; etc. Title I—Preparation of Tax Returns Sec. 101. Preparer penalties with respect to preparation of returns and other submissions. Sec. 102. Limit redisclosures and uses of consent-based disclosures of tax return information. Title II—Improving IRS Procedures Sec. 201. Modification of requirements relating to tax lien information contained in consumer credit reports. Sec. 202. De novo tax court review of innocent spouse relief determinations. Sec. 203. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness. Sec. 204. Special rules for levies that attach to a fixed and determinable right. I Preparation of Tax Returns 101. Preparer penalties with respect to preparation of returns and other submissions (a) Inclusion of other submissions in penalty provisions (1) Understatement of taxpayer’s liability by tax return preparer (A) In general Section 6694 return or claim of refund return, claim of refund, or other submission to the Secretary (B) Conforming amendments Section 6694 return or claim return, claim, or other submission to the Secretary (2) Increase in penalty in case of gross misconduct Subsection (b) of section 6694 (4) Increase in penalty in case of gross misconduct In the case of an understatement to which this section applies that is attributable to the tax return preparer’s making a false or fraudulent return or claim for refund without the taxpayer’s knowledge, subsection (a) shall be applied by substituting 100 percent of the amount of the understatement 50 percent of the amount derived (or to be derived) by the tax return preparer with respect to the return or claim . (3) Other assessable penalties (A) In general Section 6695 return or claim for refund return, claim for refund, or other submission (B) Conforming amendments Section 6695 return or claim return, claim, or other submission (b) Increase in certain other assessable penalty amounts (1) In general Subsections (a), (b), and (c) of section 6695 are each amended by striking $50 $1,000 (2) Removal of annual limitation Subsections (a), (b), and (c) of section 6695 are each amended by striking the last sentence thereof. (c) Review by the Treasury Inspector General for Tax Administration Subparagraph (A) of section 7803(d)(2) and , and (v) a summary of the penalties assessed and collected during the reporting period under sections 6694 and 6695 and under the regulations promulgated under section 330 of title 31, United States Code, and a review of the procedures by which violations are identified and penalties are assessed under those sections, . (d) Additional certification on documents other than returns (1) Identifying number required for all submissions to the IRS by tax return preparers The first sentence of paragraph (4) of section 6109(a) return or claim for refund return, claim for refund, statement, or other document (2) Effective date The amendment made by paragraph (1) shall apply to any return, claim for refund, or submission to the Secretary that is filed after the date of the enactment of this Act. (e) Coordination with section 6060 (a) The Secretary of the Treasury shall coordinate the requirements under the regulations promulgated under sections 330 and 330A of title 31, United States Code, with the return requirements of section 6060 (f) Effective date The regulations required by this section shall be prescribed not later than one year after the date of the enactment of this Act. 102. Limit redisclosures and uses of consent-based disclosures of tax return information (a) In general Subsection (c) of section 6103 However, return Persons designated by the taxpayer to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of, or request by, the taxpayer. Return (b) Effective date The amendment made by this section shall apply to disclosures after the date of the enactment of this Act. II Improving IRS Procedures 201. Modification of requirements relating to tax lien information contained in consumer credit reports (a) In general Paragraph (3) of section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a)(3) (3) Tax liens The following tax liens: (A) Any tax lien released pursuant to section 6325(a) (B) Any tax lien released pursuant to section 6325(a) of such Code— (i) more than 2 years after the date that the notice of such lien was filed, and (ii) more than 2 years before the report. (C) Any tax lien if— (i) the notice of such lien was not refiled during the required refiling period (as defined in section 6323(g)(3) of such Code), and (ii) such period ends more than 6 years before the report. (D) Any tax lien the notice of which is withdrawn pursuant to section 6323(j)(1) of such Code. (E) Any tax lien released pursuant to section 6326(b) of such Code if the notice of such lien was erroneously filed. . (b) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act. 202. De novo tax court review of innocent spouse relief determinations (a) In general Section 6015 (1) in subsection (e), by adding at the end the following new paragraph: (6) Standard and scope of review Any review of a determination made under this section shall be reviewed de novo by the Tax Court and shall be based upon— (A) the administrative record established at the time of the determination, and (B) any additional newly discovered or previously unavailable evidence. ; and (2) by amending subsection (f) to read as follows: (f) Equitable relief (1) In general Under procedures prescribed by the Secretary, if— (A) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either), and (B) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability. (2) Limitation A request for equitable relief under this subsection may be made with respect to any portion of any liability that— (A) has not been paid, provided that such request is made before the expiration of the applicable period of limitation under section 6502, or (B) has been paid, provided that such request is made during the period in which the individual could submit a timely claim for refund or credit of such payment. . (b) Effective date The amendments made by this section shall apply to petitions or requests filed or pending on and after the date of the enactment of this Act. 203. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness (a) In general Subsection (c) of section 6050P (4) Determining date of discharge Whether an entity has discharged the indebtedness of any person shall not be determined based solely on the passage of a specified period of time during which the entity has not received payment on such indebtedness. . (b) Effective date The amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this Act. 204. Special rules for levies that attach to a fixed and determinable right (a) In general Section 6331 (l) Limitation on levy after expiration of collection period (1) Penalties and interest In the case of a levy that attaches to a fixed and determinable right to payments or other property, penalties, additions to tax, and interest shall not accrue after the expiration of the period of limitations provided in section 6502. (2) Retirement and disability payments In the case of a levy on benefits under title II of the Social Security Act, benefits under a plan on account of a disability, or retirement benefits or amounts held in a retirement plan, such levy is not enforceable with respect to such benefits or amounts after the expiration of the period of limitations provided in section 6502 unless the taxpayer has committed a flagrant act (as defined in section 6334(f)(2)). . (b) Effective date The amendments made by this section shall apply to levies served after the date of the enactment of this Act.

Summary: Strengthening Taxpayer Rights Act of 2017 This bill modifies requirements for the preparation of tax returns and Internal Revenue Service (IRS) procedures for the collection of taxes. The bill amends the Internal Revenue Code to: apply tax preparer penalties for the understatement of a taxpayer's liability and other violations to other submissions to the IRS, in addition to tax returns or refund claims; increase tax preparer penalties for gross misconduct and other violations; require identifying numbers to be included for all submissions to the IRS by tax return preparers (limited to tax returns or refund claims under current law); limit the disclosure of taxpayer information to the express purpose for which the taxpayer granted consent; provide for de novo review by the Tax Court of IRS innocent spouse relief determinations; specify that the determination of whether or not a debt has been discharged may not be based solely on a nonpayment period; and restrict the authority of the IRS to use a levy after the collection period has expired. The bill amends the Fair Credit Reporting Act to reduce from seven years to two years the period that a tax lien may appear on a taxpayer's credit report.