I
105TH CONGRESS
1ST SESSION
H. R. 2598
To amend the Internal Revenue Code of 1986 to provide for improved tax-
payer access to the Internal Revenue Service, increased equity for tax-
payers, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 1, 1997
Mr. MORAN of Kansas 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 provide
for improved taxpayer access to the Internal Revenue
Service, increased equity for taxpayers, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘IRS Customer Service
Improvement Act’’.
SEC. 2. DEVELOPMENT AND IMPLEMENTATION OF PER-
SONAL SERVICE PLAN.
Not later than 1 year after the date of the enactment
of this Act, the Director of the Internal Revenue Service
shall develop and implement a plan to ensure that—
(1) each voice call to service telephone numbers
of the Internal Revenue Service is answered person-
ally and in a timely manner by an employee of the
Internal Revenue Service; and
(2) each letter and notification sent to a tax-
payer by the Internal Revenue Service is signed by
the Internal Revenue Service employee who can be
contacted for additional information regarding such
letter or notification.
SEC. 3. INTEREST RATE FOR OVERPAYMENTS TO EQUAL
RATE FOR UNDERPAYMENTS.
(a) IN GENERAL.—Section 6621(a) of the Internal
Revenue Code of 1986 (relating to determination of rate
of interest) is amended to read as follows:
‘‘(a) GENERAL RULE.—The overpayment rate and
the underpayment rate established under this section shall
be the Federal short-term rate determined under sub-
section (b).’’
(b) CONFORMING AMENDMENT.—Section 6621 of
such Code (relating to determination of rate of interest)
is amended by striking subsection (c).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply for purposes of determining inter-
est to periods after the date of the enactment of this Act.
SEC. 4. NOTICE OF ASSESSMENT ARISING OUT OF MATHE-
MATICAL OR CLERICAL ERRORS.
(a) IN GENERAL.—Paragraph (1) of section 6213(b)
of the Internal Revenue Code of 1986 (relating to assess-
ments arising out of mathematical or clerical errors) is
amended to read as follows:
‘‘(1) ASSESSMENTS ARISING OUT OF MATHE-
MATICAL OR CLERICAL ERRORS.—
‘‘(A) NOTICE
TO
TAXPAYER.—Not later
than 6 months after the due date of a return
(or, if applicable, the last day of any extension
relating thereto), the Secretary shall notify the
taxpayer by certified mail or registered mail if,
on account of a mathematical or clerical error
appearing on the return, an amount of tax in
excess of that shown on the return is due, and
an assessment of the tax has been or will be
made on the basis of what would have been the
correct amount of tax but for the mathematical
or clerical error.
‘‘(B) REQUIRED CONTENTS.—Each notice
under this paragraph shall set forth the error
alleged and an explanation thereof.
‘‘(C) NOT TREATED AS NOTICE OF DEFI-
CIENCY.—A notice under this paragraph shall
not be considered as a notice of deficiency for
the purposes of subsection (a) (prohibiting as-
sessment and collection until notice of the defi-
ciency 
has 
been 
mailed), 
or 
of 
section
6212(c)(1) (restricting further deficiency let-
ters), or of section 6512(a) (prohibiting credits
or refunds after petition to the Tax Court), and
the taxpayer shall have no right to file a peti-
tion with the Tax Court based on such notice,
nor shall such assessment or collection be pro-
hibited by the provisions of subsection (a) of
this section.
‘‘(D) FAILURE TO PROVIDE TIMELY NO-
TICE.—In the case of a failure by the Secretary
to provide timely notice under this paragraph,
see section 6404(d)(2) for waiver of certain in-
terest amounts and penalties.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to returns filed after the date
of the enactment of this Act.
SEC. 5. FAIRNESS WHEN COLLECTING A TAX DUE TO MATH-
EMATICAL AND CLERICAL ERRORS.
(a) IN GENERAL.—Section 6404(d) of the Internal
Revenue Code of 1986 (relating to abatements) is amend-
ed to read as follows:
‘‘(d) ABATEMENT OF INTEREST, PENALTY, ADDI-
TIONAL AMOUNT, AND ADDITION TO TAX ATTRIBUTABLE
TO CERTAIN MATHEMATICAL OR CLERICAL ERRORS.—
‘‘(1) PROMPT PAYMENT.—In the case of an as-
sessment of additional tax attributable to a mathe-
matical or clerical error (as defined in section
6213(g)(2)), the Secretary shall abate any interest,
penalty, additional amount, and addition to tax with
respect to such assessment if, within 60 days after
notice of such assessment is sent under section
6213(b)(1), the taxpayer pays, or files a request for
an abatement of, such assessment.
‘‘(2) FAILURE OF SECRETARY TO NOTIFY WITH-
IN 6 MONTHS.—In the case of an assessment of ad-
ditional tax attributable to a mathematical or cleri-
cal error (as defined in section 6213(g)(2)) with re-
spect to which the Secretary failed to notify the tax-
payer within the 6-month period specified in section
6213(b)(1), the Secretary shall abate any interest,
penalty, and additional amount with respect to such
assessment.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to notices filed after the date
of the enactment of this Act.
SEC. 6. 1-YEAR PERIOD OF LIMITATION ON CERTAIN ADDI-
TIONAL ASSESSMENTS RELATING TO CER-
TAIN RETURNS.
(a) IN GENERAL.—Subsection (c) of section 6501 of
the Internal Revenue Code of 1986 (relating to exceptions
to limitations on assessment and collection) is amended
by adding at the end the following new paragraph:
‘‘(10) 1-YEAR PERIOD FOR CERTAIN INDIVID-
UAL INCOME TAX TAXPAYERS.—
‘‘(A) IN GENERAL.—Except as otherwise
provided by this subsection, in the case of a re-
turn described in subparagraph (B), subsection
(a) shall be applied by substituting ‘1 year’ for
‘3 years’ both places it appears.
‘‘(B) RETURN
DESCRIBED.—A return is
described in this subparagraph if the return is
a return of tax imposed under section 1 for a
taxable year of a taxpayer and if—
‘‘(i) the amount of taxable income
shown on such return is equal to or ex-
ceeds the lowest amount of taxable income
to which the 39.6 percent rate of tax ap-
plies, and
‘‘(ii) the understatement of tax (if
any) on such return is 25 percent or less
of the tax required to be shown on the re-
turn for such taxable year.
For purposes of clause (ii), the term ‘under-
statement’ has the meaning given such term by
section 6662(d)(2)(A).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1997.
SEC. 7. EXCEPTION FOR SMALL BUSINESSES FROM RE-
QUIRED USE OF ELECTRONIC FUND TRANS-
FER SYSTEM.
(a) IN GENERAL.—Subsection (h) of section 6302 of
the Internal Revenue Code of 1986 (relating to use of elec-
tronic fund transfer system for collection of certain taxes)
is amended by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively, and by inserting
after paragraph (2) the following new paragraph:
‘‘(3) EXCEPTION FOR SMALL DEPOSITORS.—
‘‘(A) IN GENERAL.—A taxpayer who is a
small depositor for any calendar year shall not
be required to make deposits by electronic fund
transfer for taxes attributable to payments
made during the following calendar year.
‘‘(B) SMALL DEPOSITOR.—A taxpayer is a
small depositor for any calendar year if the
amount of employment taxes attributable to
payments made by such taxpayer during such
year is $50,000 or less.’’
(b) REQUIRED PERCENTAGES OF DEPOSITS FROZEN
AT 1996 LEVEL.—
(1) Subparagraph (B) of section 6302(h)(2) of
such Code is amended—
(A) by striking ‘‘the applicable required
percentage’’ in clause (i) and inserting ‘‘20.1
percent’’, and
(B) by striking ‘‘the applicable required
percentage’’ in clause (ii) and inserting ‘‘30
percent’’.
(2) Paragraph (2) of section 6302(h) of such
Code is amended by striking subparagraph (C).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts otherwise required to
be deposited after June 30, 1998.
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