108TH CONGRESS
1ST SESSION
H. R. 1528
AN ACT
To amend the Internal Revenue Code of 1986 to
protect taxpayers and ensure accountability of
the Internal Revenue Service.
108TH CONGRESS
1ST SESSION
H. R. 1528
AN ACT
To amend the Internal Revenue Code of 1986 to protect
taxpayers and ensure accountability of the Internal Rev-
enue Service.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Taxpayer Protection and IRS Accountability Act of
2003’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment 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 provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; etc.
TITLE I—PENALTY AND INTEREST REFORMS
Sec. 101. Failure to pay estimated tax penalty converted to interest charge on
accumulated unpaid balance.
Sec. 102. Exclusion from gross income for interest on overpayments of income
tax by individuals.
Sec. 103. Abatement of interest.
Sec. 104. Deposits made to suspend running of interest on potential underpay-
ments.
Sec. 105. Expansion of interest netting for individuals.
Sec. 106. Waiver of certain penalties for first-time unintentional minor errors.
Sec. 107. Frivolous tax submissions.
Sec. 108. Clarification of application of Federal tax deposit penalty.
TITLE II—FAIRNESS OF COLLECTION PROCEDURES
Sec. 201. Partial payment of tax liability in installment agreements.
Sec. 202. Extension of time for return of property.
Sec. 203. Individuals held harmless on wrongful levy, etc., on individual retire-
ment plan.
Sec. 204. Seven-day threshold on tolling of statute of limitations during tax re-
view.
Sec. 205. Study of liens and levies.
TITLE III—TAX ADMINISTRATION REFORMS
Sec. 301. Revisions relating to termination of employment of Internal Revenue
Service employees for misconduct.
Sec. 302. Confirmation of authority of tax court to apply doctrine of equitable
recoupment.
Sec. 303. Jurisdiction of tax court over collection due process cases.
Sec. 304. Office of Chief Counsel review of offers in compromise.
Sec. 305. 15-day delay in due date for electronically filed individual income tax
returns.
Sec. 306. Access of National Taxpayer Advocate to independent legal counsel.
Sec. 307. Payment of motor fuel excise tax refunds by direct deposit.
Sec. 308. Family business tax simplification.
Sec. 309. Health insurance costs of eligible individuals.
Sec. 310. Suspension of tax-exempt status of terrorist organizations.
Sec. 311. Extension of joint review of strategic plans and budget for the Inter-
nal Revenue Service.
TITLE IV—CONFIDENTIALITY AND DISCLOSURE
Sec. 401. Collection activities with respect to joint return disclosable to either
spouse based on oral request.
Sec. 402. Taxpayer representatives not subject to examination on sole basis of
representation of taxpayers.
Sec. 403. Disclosure in judicial or administrative tax proceedings of return and
return information of persons who are not party to such pro-
ceedings.
Sec. 404. Prohibition of disclosure of taxpayer identification information with
respect to disclosure of accepted offers-in-compromise.
Sec. 405. Compliance by contractors with confidentiality safeguards.
Sec. 406. Higher standards for requests for and consents to disclosure.
Sec. 407. Notice to taxpayer concerning administrative determination of brows-
ing; annual report.
Sec. 408. Expanded disclosure in emergency circumstances.
Sec. 409. Disclosure of taxpayer identity for tax refund purposes.
Sec. 410. Disclosure to State officials of proposed actions related to section
501(c)(3) organizations.
Sec. 411. Confidentiality of taxpayer communications with the Office of the
Taxpayer Advocate.
TITLE V—MISCELLANEOUS
Sec. 501. Clarification of definition of church tax inquiry.
Sec. 502. Expansion of declaratory judgment remedy to tax-exempt organiza-
tions.
Sec. 503. Employee misconduct report to include summary of complaints by
category.
Sec. 504. Annual report on awards of costs and certain fees in administrative
and court proceedings.
Sec. 505. Annual report on abatement of penalties.
Sec. 506. Better means of communicating with taxpayers.
Sec. 507. Explanation of statute of limitations and consequences of failure to
file.
Sec. 508. Amendment to treasury auction reforms.
Sec. 509. Enrolled agents.
Sec. 510. Financial management service fees.
Sec. 511. Extension of Internal Revenue Service user fees.
TITLE VI—LOW-INCOME TAXPAYER CLINICS
Sec. 601. Low-income taxpayer clinics.
TITLE VII—FEDERAL-STATE UNEMPLOYMENT ASSISTANCE
AGREEMENTS
Sec. 701. Applicability of certain Federal-State agreements relating to unem-
ployment assistance.
TITLE I—PENALTY AND
INTEREST REFORMS
SEC. 101. FAILURE TO PAY ESTIMATED TAX PENALTY CON-
VERTED TO INTEREST CHARGE ON ACCUMU-
LATED UNPAID BALANCE.
(a) PENALTY MOVED TO INTEREST CHAPTER OF
CODE.—The Internal Revenue Code of 1986 is amended
by redesignating section 6654 as section 6641 and by
moving section 6641 (as so redesignated) from part I of
subchapter A of chapter 68 to the end of subchapter E
of chapter 67 (as added by subsection (e)(1) of this sec-
tion).
(b) PENALTY CONVERTED TO INTEREST CHARGE.—
The heading and subsections (a) and (b) of section 6641
(as so redesignated) are amended to read as follows:
‘‘SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY
ESTIMATED INCOME TAX.
‘‘(a) IN GENERAL.—Interest shall be paid on any un-
derpayment of estimated tax by an individual for a taxable
year for each day of such underpayment. The amount of
such interest for any day shall be the product of the un-
derpayment rate established under subsection (b)(2) mul-
tiplied by the amount of the underpayment.
‘‘(b) AMOUNT
OF
UNDERPAYMENT; INTEREST
RATE.—For purposes of subsection (a)—
‘‘(1) AMOUNT.—The amount of the under-
payment on any day shall be the excess of—
‘‘(A) the sum of the required installments
for the taxable year the due dates for which are
on or before such day, over
‘‘(B) the sum of the amounts (if any) of
estimated tax payments made on or before such
day on such required installments.
‘‘(2) DETERMINATION OF INTEREST RATE.—
‘‘(A) IN
GENERAL.—The underpayment
rate with respect to any day in an installment
underpayment period shall be the under-
payment rate established under section 6621
for the first day of the calendar quarter in
which such installment underpayment period
begins.
‘‘(B) INSTALLMENT
UNDERPAYMENT
PE-
RIOD.—For purposes of subparagraph (A), the
term ‘installment underpayment period’ means
the period beginning on the day after the due
date for a required installment and ending on
the due date for the subsequent required in-
stallment (or in the case of the 4th required in-