or may have been an unauthorized use of the identity 
of an individual to obtain employment, the Secretary 
shall review any information— 
‘‘(A) obtained from a statement described in 
section 6051 or an information return relating 
to compensation for services rendered other than 
as an employee, or 
‘‘(B) provided to the Internal Revenue Serv-
ice by the Social Security Administration re-
garding any statement described in section 6051, 
which indicates that the social security account num-
ber provided on such statement or information return 
does not correspond with the name provided on such 
statement or information return or the name on the 
tax return reporting the income which is included on 
such statement or information return.’’. 
(b) ADDITIONAL MEASURES.— 
(1) EXAMINATION OF BOTH PAPER AND ELEC-
TRONIC STATEMENTS AND RETURNS.—The Secretary 
of the Treasury (or the Secretary’s delegate) shall ex-
amine the statements, information returns, and tax 
returns described in section 7529(b)(2) of the Internal 
Revenue Code of 1986 (as added by subsection (a)) for 
any evidence of employment-related identity theft, re-
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gardless of whether such statements or returns are 
submitted electronically or on paper. 
(2) IMPROVEMENT OF EFFECTIVE RETURN PROC-
ESSING PROGRAM WITH SOCIAL SECURITY ADMINIS-
TRATION.—Section 232 of the Social Security Act (42 
U.S.C. 432) is amended by inserting after the third 
sentence the following: ‘‘For purposes of carrying out 
the return processing program described in the pre-
ceding sentence, the Commissioner of Social Security 
shall request, not less than annually, such informa-
tion described in section 7529(b)(2) of the Internal 
Revenue Code of 1986 as may be necessary to ensure 
the accuracy of the records maintained by the Com-
missioner of Social Security related to the amounts of 
wages paid to, and the amounts of self-employment 
income derived by, individuals.’’. 
(3) UNDERREPORTING
OF
INCOME.—The Sec-
retary of the Treasury (or the Secretary’s delegate) 
shall establish procedures to ensure that income re-
ported in connection with the unauthorized use of a 
taxpayer’s identity is not taken into account in deter-
mining any penalty for underreporting of income by 
the victim of identity theft. 
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(c) CLERICAL AMENDMENT.—The table of sections for 
chapter 77 is amended by adding at the end the following 
new item: 
‘‘Sec. 7529. Notification of suspected identity theft.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to determinations made after the date 
that is 6 months after the date of the enactment of this Act. 
SEC. 2009. GUIDELINES FOR STOLEN IDENTITY REFUND 
FRAUD CASES. 
(a) IN GENERAL.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of the Treasury 
(or the Secretary’s delegate), in consultation with the Na-
tional Taxpayer Advocate, shall develop and implement 
publicly available guidelines for management of cases in-
volving stolen identity refund fraud in a manner that re-
duces the administrative burden on taxpayers who are vic-
tims of such fraud. 
(b) STANDARDS AND PROCEDURES TO BE CONSID-
ERED.—The guidelines described in subsection (a) may in-
clude— 
(1) standards for— 
(A) the average length of time in which a 
case involving stolen identity refund fraud 
should be resolved; 
(B) the maximum length of time, on aver-
age, a taxpayer who is a victim of stolen iden-
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tity refund fraud and is entitled to a tax refund 
which has been stolen should have to wait to re-
ceive such refund; and 
(C) the maximum number of offices and em-
ployees within the Internal Revenue Service with 
whom a taxpayer who is a victim of stolen iden-
tity refund fraud should be required to interact 
in order to resolve a case; 
(2) standards for opening, assigning, reas-
signing, or closing a case involving stolen identity re-
fund fraud; and 
(3) procedures for implementing and accom-
plishing the standards described in paragraphs (1) 
and (2), and measures for evaluating such procedures 
and determining whether such standards have been 
successfully implemented. 
SEC. 2010. INCREASED PENALTY FOR IMPROPER DISCLO-
SURE OR USE OF INFORMATION BY PRE-
PARERS OF RETURNS. 
(a) IN GENERAL.—Section 6713 is amended— 
(1) by redesignating subsections (b) and (c) as 
subsections (c) and (d), respectively; and 
(2) by inserting after subsection (a) the following 
new subsection: 
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‘‘(b) ENHANCED PENALTY FOR IMPROPER USE OR 
DISCLOSURE RELATING TO IDENTITY THEFT.— 
‘‘(1) IN GENERAL.—In the case of a disclosure or 
use described in subsection (a) that is made in con-
nection with a crime relating to the misappropriation 
of another person’s taxpayer identity (as defined in 
section 6103(b)(6)), whether or not such crime in-
volves any tax filing, subsection (a) shall be ap-
plied— 
‘‘(A) by substituting ‘$1,000’ for ‘$250’, and 
‘‘(B) by substituting ‘$50,000’ for ‘$10,000’. 
‘‘(2) SEPARATE APPLICATION OF TOTAL PENALTY 
LIMITATION.—The limitation on the total amount of 
the penalty under subsection (a) shall be applied sep-
arately with respect to disclosures or uses to which 
this subsection applies and to which it does not 
apply.’’. 
(b) CRIMINAL PENALTY.—Section 7216(a) is amended 
by striking ‘‘$1,000’’ and inserting ‘‘$1,000 ($100,000 in 
the case of a disclosure or use to which section 6713(b) ap-
plies)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to disclosures or uses on or after the 
date of the enactment of this Act. 
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Subtitle B—Development of 
Information Technology 
SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE 
INFORMATION TECHNOLOGY. 
(a) DUTIES
AND RESPONSIBILITIES
OF INTERNAL 
REVENUE SERVICE CHIEF INFORMATION OFFICER.—Sec-
tion 7803, as amended by section 1001, is amended by add-
ing at the end the following new subsection: 
‘‘(f) INTERNAL REVENUE SERVICE CHIEF INFORMA-
TION OFFICER.— 
‘‘(1) IN GENERAL.—There shall be in the Inter-
nal Revenue Service an Internal Revenue Service 
Chief Information Officer (hereafter referred to in this 
subsection as the ‘IRS CIO’) who shall be appointed 
by the Commissioner of Internal Revenue. 
‘‘(2) CENTRALIZED RESPONSIBILITY FOR INTER-
NAL REVENUE SERVICE INFORMATION TECHNOLOGY.— 
The Commissioner of Internal Revenue (and the Sec-
retary) shall act through the IRS CIO with respect to 
all development, implementation, and maintenance of 
information technology for the Internal Revenue Serv-
ice. Any reference in this subsection to the IRS CIO 
which directs the IRS CIO to take any action, or to 
assume any responsibility, shall be treated as a ref-
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erence to the Commissioner of Internal Revenue act-
ing through the IRS CIO. 
‘‘(3) 
GENERAL
DUTIES
AND
RESPONSIBIL-
ITIES.—The IRS CIO shall— 
‘‘(A) be responsible for the development, im-
plementation, and maintenance of information 
technology for the Internal Revenue Service, 
‘‘(B) ensure that the information technology 
of the Internal Revenue Service is secure and in-
tegrated, 
‘‘(C) maintain operational control of all in-
formation technology for the Internal Revenue 
Service, 
‘‘(D) be the principal advocate for the infor-
mation technology needs of the Internal Revenue 
Service, and 
‘‘(E) consult with the Chief Procurement 
Officer of the Internal Revenue Service to ensure 
that the information technology acquired for the 
Internal Revenue Service is consistent with— 
‘‘(i) the goals and requirements speci-
fied in subparagraphs (A) through (D), and 
‘‘(ii) the strategic plan developed under 
paragraph (4). 
‘‘(4) STRATEGIC PLAN.— 
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‘‘(A) IN GENERAL.—The IRS CIO shall de-
velop and implement a multiyear strategic plan 
for the information technology needs of the Inter-
nal Revenue Service. Such plan shall— 
‘‘(i) include performance measurements 
of such technology and of the implementa-
tion of such plan, 
‘‘(ii) include a plan for an integrated 
enterprise architecture of the information 
technology of the Internal Revenue Service, 
‘‘(iii) include and take into account 
the resources needed to accomplish such 
plan, 
‘‘(iv) take into account planned major 
acquisitions of information technology by 
the Internal Revenue Service, and 
‘‘(v) align with the needs and strategic 
plan of the Internal Revenue Service. 
‘‘(B) PLAN UPDATES.—The IRS CIO shall, 
not less frequently than annually, review and 
update the strategic plan under subparagraph 
(A) (including the plan for an integrated enter-
prise architecture described in subparagraph 
(A)(ii)) to take into account the development of 
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new information technology and the needs of the 
Internal Revenue Service. 
‘‘(5) SCOPE OF AUTHORITY.— 
‘‘(A) 
INFORMATION
TECHNOLOGY.—For 
purposes of this subsection, the term ‘information 
technology’ has the meaning given such term by 
section 11101 of title 40, United States Code. 
‘‘(B) INTERNAL
REVENUE
SERVICE.—Any 
reference in this subsection to the Internal Rev-
enue Service includes a reference to all compo-
nents of the Internal Revenue Service, includ-
ing— 
‘‘(i) the Office of the Taxpayer Advo-
cate, 
‘‘(ii) the Criminal Investigation Divi-
sion of the Internal Revenue Service, and 
‘‘(iii) except as otherwise provided by 
the Secretary with respect to information 
technology related to matters described in 
subsection (b)(3)(B), the Office of the Chief 
Counsel.’’. 
(b) INDEPENDENT VERIFICATION AND VALIDATION OF 
THE CUSTOMER ACCOUNT DATA ENGINE 2 AND ENTER-
PRISE CASE MANAGEMENT SYSTEM.— 
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(1) IN GENERAL.—The Commissioner of Internal 
Revenue shall enter into a contract with an inde-
pendent reviewer to verify and validate the implemen-
tation plans (including the performance milestones 
and cost estimates included in such plans) developed 
for the Customer Account Data Engine 2 and the En-
terprise Case Management System. 
(2) DEADLINE FOR COMPLETION.—Such contract 
shall require that such verification and validation be 
completed not later than the date which is 1 year 
after the date of the enactment of this Act. 
(3) APPLICATION TO PHASES OF CADE 2.— 
(A) IN GENERAL.—Paragraphs (1) and (2) 
shall not apply to phase 1 of the Customer Ac-
count Data Engine 2 and shall apply separately 
to each other phase. 
(B) DEADLINE FOR COMPLETING PLANS.— 
Not later than 1 year after the date of the enact-
ment of this Act, the Commissioner of Internal 
Revenue shall complete the development of plans 
for all phases of the Customer Account Data En-
gine 2. 
(C) 
DEADLINE
FOR
COMPLETION
OF 
VERIFICATION AND VALIDATION OF PLANS.—In 
the case of any phase after phase 2 of the Cus-
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tomer Account Data Engine 2, paragraph (2) 
shall be applied by substituting ‘‘the date on 
which the plan for such phase was completed’’ 
for ‘‘the date of the enactment of this Act’’. 
(c) COORDINATION OF IRS CIO AND CHIEF PROCURE-
MENT OFFICER OF THE INTERNAL REVENUE SERVICE.— 
(1) IN GENERAL.—The Chief Procurement Offi-
cer of the Internal Revenue Service shall— 
(A) identify all significant IRS information 
technology acquisitions and provide written noti-
fication to the Internal Revenue Service Chief 
Information Officer (hereafter referred to in this 
subsection as the ‘‘IRS CIO’’) of each such acqui-
sition in advance of such acquisition, and 
(B) regularly consult with the IRS CIO re-
garding acquisitions of information technology 
for the Internal Revenue Service, including meet-
ing with the IRS CIO regarding such acquisi-
tions upon request. 
(2) SIGNIFICANT IRS INFORMATION TECHNOLOGY 
ACQUISITIONS.—For purposes of this subsection, the 
term ‘‘significant IRS information technology acqui-
sitions’’ means— 
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(A) any acquisition of information tech-
nology for the Internal Revenue Service in excess 
of $1,000,000; and 
(B) such other acquisitions of information 
technology for the Internal Revenue Service (or 
categories of such acquisitions) as the IRS CIO, 
in consultation with the Chief Procurement Offi-
cer of the Internal Revenue Service, may iden-
tify. 
(3) SCOPE.—Terms used in this subsection which 
are also used in section 7803(f) of the Internal Rev-
enue Code of 1986 (as added by subsection (a)) shall 
have the same meaning as when used in such section. 
SEC. 2102. INTERNET PLATFORM FOR FORM 1099 FILINGS. 
(a) IN GENERAL.—Not later than January 1, 2023, 
the Secretary of the Treasury or the Secretary’s delegate 
(hereafter referred to in this section as the ‘‘Secretary’’) 
shall make available an Internet website or other electronic 
media, with a user interface and functionality similar to 
the Business Services Online Suite of Services provided by 
the Social Security Administration, that provides access to 
resources and guidance provided by the Internal Revenue 
Service and allows persons to— 
(1) prepare and file Forms 1099; 
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(2) prepare Forms 1099 for distribution to re-
cipients other than the Internal Revenue Service; and 
(3) maintain a record of completed, filed, and 
distributed Forms 1099. 
(b) ELECTRONIC SERVICES TREATED
AS SUPPLE-
MENTAL; APPLICATION
OF SECURITY STANDARDS.—The 
Secretary shall ensure that the services described in sub-
section (a)— 
(1) are a supplement to, and not a replacement 
for, other services provided by the Internal Revenue 
Service to taxpayers; and 
(2) comply with applicable security standards 
and guidelines. 
SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR 
INFORMATION TECHNOLOGY POSITIONS. 
(a) IN GENERAL.—Subchapter A of chapter 80 is 
amended by adding at the end the following new section: 
‘‘SEC. 7812. STREAMLINED CRITICAL PAY AUTHORITY FOR 
INFORMATION TECHNOLOGY POSITIONS. 
‘‘In the case of any position which is critical to the 
functionality of the information technology operations of 
the Internal Revenue Service— 
‘‘(1) section 9503 of title 5, United States Code, 
shall be applied— 
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‘‘(A) by substituting ‘during the period be-
ginning on the date of the enactment of section 
7812 of the Internal Revenue Code of 1986, and 
ending on September 30, 2025’ for ‘Before Sep-
tember 30, 2013 in subsection (a)’, 
‘‘(B) without regard to subparagraph (B) of 
subsection (a)(1), and 
‘‘(C) by substituting ‘the date of the enact-
ment of the Taxpayer First Act of 2019’ for 
‘June 1, 1998’ in subsection (a)(6), 
‘‘(2) section 9504 of such title 5 shall be applied 
by substituting ‘During the period beginning on the 
date of the enactment of section 7812 of the Internal 
Revenue Code of 1986, and ending on September 30, 
2025’ for ‘Before September 30, 2013’ each place it 
appears in subsections (a) and (b), and 
‘‘(3) section 9505 of such title shall be applied— 
‘‘(A) by substituting ‘During the period be-
ginning on the date of the enactment of section 
7812 of the Internal Revenue Code of 1986, and 
ending on September 30, 2025’ for ‘Before Sep-
tember 30, 2013’ in subsection (a), and 
‘‘(B) by substituting ‘the information tech-
nology operations’ for ‘significant functions’ in 
subsection (a).’’. 
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(b) CLERICAL AMENDMENT.—The table of sections for 
subchapter A of chapter 80 is amended by adding at the 
end the following new item: 
‘‘Sec. 7812. Streamlined critical pay authority for information technology posi-
tions.’’. 
Subtitle C—Modernization of Con-
sent-Based Income Verification 
System 
SEC. 2201. DISCLOSURE OF TAXPAYER INFORMATION FOR 
THIRD-PARTY INCOME VERIFICATION. 
(a) IN GENERAL.—Not later than 1 year after the close 
of the 2-year period described in subsection (d)(1), the Sec-
retary of the Treasury or the Secretary’s delegate (hereafter 
referred to in this section as the ‘‘Secretary’’) shall imple-
ment a program to ensure that any qualified disclosure— 
(1) is fully automated and accomplished through 
the Internet; and 
(2) is accomplished in as close to real-time as is 
practicable. 
(b) QUALIFIED DISCLOSURE.—For purposes of this 
section, the term ‘‘qualified disclosure’’ means a disclosure 
under section 6103(c) of the Internal Revenue Code of 1986 
of returns or return information by the Secretary to a per-
son seeking to verify the income or creditworthiness of a 
taxpayer who is a borrower in the process of a loan applica-
tion. 
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(c) APPLICATION OF SECURITY STANDARDS.—The Sec-
retary shall ensure that the program described in subsection 
(a) complies with applicable security standards and guide-
lines. 
(d) USER FEE.— 
(1) IN GENERAL.—During the 2-year period be-
ginning on the first day of the 6th calendar month be-
ginning after the date of the enactment of this Act, 
the Secretary shall assess and collect a fee for quali-
fied disclosures (in addition to any other fee assessed 
and collected for such disclosures) at such rates as the 
Secretary determines are sufficient to cover the costs 
related to implementing the program described in 
subsection (a), including the costs of any necessary 
infrastructure or technology. 
(2) DEPOSIT
OF
COLLECTIONS.—Amounts re-
ceived from fees assessed and collected under para-
graph (1) shall be deposited in, and credited to, an 
account solely for the purpose of carrying out the ac-
tivities described in subsection (a). Such amounts 
shall be available to carry out such activities without 
need of further appropriation and without fiscal year 
limitation. 
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SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT- 
BASED DISCLOSURES OF TAX RETURN INFOR-
MATION. 
(a) IN GENERAL.—Section 6103(c) is amended by add-
ing at the end the following: ‘‘Persons designated by the tax-
payer under this subsection 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.’’. 
(b) APPLICATION OF PENALTIES.—Section 6103(a)(3) 
is amended by inserting ‘‘subsection (c),’’ after ‘‘return in-
formation under’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to disclosures made after the date which 
is 180 days after the date of the enactment of this Act. 
Subtitle D—Expanded Use of 
Electronic Systems 
SEC. 2301. ELECTRONIC FILING OF RETURNS. 
(a) IN GENERAL.—Section 6011(e)(2)(A) is amended 
by striking ‘‘250’’ and inserting ‘‘the applicable number of’’. 
(b) APPLICABLE NUMBER.—Section 6011(e) is amend-
ed by striking paragraph (5) and inserting the following 
new paragraphs: 
‘‘(5) APPLICABLE NUMBER.— 
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‘‘(A) IN GENERAL.—For purposes of para-
graph (2)(A), the applicable number shall be— 
‘‘(i) except as provided in subpara-
graph (B), in the case of calendar years be-
fore 2021, 250, 
‘‘(ii) in the case of calendar year 2021, 
100, and 
‘‘(iii) in the case of calendar years 
after 2021, 10. 
‘‘(B) SPECIAL
RULE
FOR
PARTNERSHIPS 
FOR 2018, 2019, 2020, AND 2021.—In the case of a 
partnership, for any calendar year before 2022, 
the applicable number shall be— 
‘‘(i) in the case of calendar year 2018, 
200, 
‘‘(ii) in the case of calendar year 2019, 
150, 
‘‘(iii) in the case of calendar year 
2020, 100, and 
‘‘(iv) in the case of calendar year 2021, 
50. 
‘‘(6) PARTNERSHIPS REQUIRED TO FILE ON MAG-
NETIC
MEDIA.—Notwithstanding paragraph (2)(A), 
the Secretary shall require partnerships having more 
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than 100 partners to file returns on magnetic 
media.’’. 
(c) RETURNS FILED BY A TAX RETURN PREPARER.— 
Section 6011(e)(3) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) EXCEPTION FOR CERTAIN PREPARERS 
LOCATED
IN
AREAS
WITHOUT
INTERNET
AC-
CESS.—The Secretary may waive the require-
ment of subparagraph (A) if the Secretary deter-
mines, on the basis of an application by the tax 
return preparer, that the preparer cannot meet 
such requirement by reason of being located in a 
geographic area which does not have access to 
internet service (other than dial-up or satellite 
service).’’. 
(d) CONFORMING AMENDMENT.—Section 6724(c) is 
amended by striking ‘‘250 information returns (more than 
100 information returns in the case of a partnership having 
more than 100 partners)’’ and inserting ‘‘the applicable 
number (determined under section 6011(e)(5) with respect 
to the calendar year to which such returns relate) of infor-
mation returns’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
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SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELEC-
TRONIC SIGNATURES FOR DISCLOSURE AU-
THORIZATIONS TO, AND OTHER AUTHORIZA-
TIONS OF, PRACTITIONERS. 
Section 6061(b)(3) is amended to read as follows: 
‘‘(3) PUBLISHED GUIDANCE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
publish guidance as appropriate to define and 
implement any waiver of the signature require-
ments or any method adopted under paragraph 
(1). 
‘‘(B) ELECTRONIC
SIGNATURES
FOR
DIS-
CLOSURE AUTHORIZATIONS TO, AND OTHER AU-
THORIZATIONS
OF, PRACTITIONERS.—Not later 
than 6 months after the date of the enactment of 
this subparagraph, the Secretary shall publish 
guidance to establish uniform standards and 
procedures for the acceptance of taxpayers’ sig-
natures appearing in electronic form with re-
spect to any request for disclosure of a taxpayer’s 
return or return information under section 
6103(c) to a practitioner or any power of attor-
ney granted by a taxpayer to a practitioner. 
‘‘(C) PRACTITIONER.—For purposes of sub-
paragraph (B), the term ‘practitioner’ means 
any individual in good standing who is regu-
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lated under section 330 of title 31, United States 
Code.’’. 
SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT 
CARDS. 
Section 6311(d)(2) is amended by adding at the end 
the following: ‘‘The preceding sentence shall not apply to 
the extent that the Secretary ensures that any such fee or 
other consideration is fully recouped by the Secretary in 
the form of fees paid to the Secretary by persons paying 
taxes imposed under subtitle A with credit, debit, or charge 
cards pursuant to such contract. Notwithstanding the pre-
ceding sentence, the Secretary shall seek to minimize the 
amount of any fee or other consideration that the Secretary 
pays under any such contract.’’. 
SEC. 2304. AUTHENTICATION OF USERS OF ELECTRONIC 
SERVICES ACCOUNTS. 
Beginning 180 days after the date of the enactment 
of this Act, the Secretary of the Treasury (or the Secretary’s 
delegate) shall verify the identity of any individual opening 
an e-Services account with the Internal Revenue Service be-
fore such individual is able to use the e-Services tools. 
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Subtitle E—Other Provisions 
SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN 
TAX COMPLIANCE PROCEDURES AND RE-
PORTS. 
Section 2004 of the Internal Revenue Service Restruc-
turing and Reform Act of 1998 (26 U.S.C. 6012 note) is 
repealed. 
SEC. 2402. COMPREHENSIVE TRAINING STRATEGY. 
Not later than 1 year after the date of the enactment 
of this Act, the Commissioner of Internal Revenue shall sub-
mit to Congress a written report providing a comprehensive 
training strategy for employees of the Internal Revenue 
Service, including— 
(1) a plan to streamline current training proc-
esses, including an assessment of the utility of further 
consolidating internal training programs, technology, 
and funding; 
(2) a plan to develop annual training regarding 
taxpayer rights, including the role of the Office of the 
Taxpayer Advocate, for employees that interface with 
taxpayers and the direct managers of such employees; 
(3) a plan to improve technology-based training; 
(4) proposals to— 
(A) focus employee training on early, fair, 
and efficient resolution of taxpayer disputes for 
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employees that interface with taxpayers and the 
direct managers of such employees; and 
(B) ensure consistency of skill development 
and employee evaluation throughout the Internal 
Revenue Service; and 
(5) a thorough assessment of the funding nec-
essary to implement such strategy. 
TITLE III—MISCELLANEOUS 
PROVISIONS 
Subtitle A—Reform of Laws Gov-
erning Internal Revenue Service 
Employees 
SEC. 3001. PROHIBITION ON REHIRING ANY EMPLOYEE OF 
THE INTERNAL REVENUE SERVICE WHO WAS 
INVOLUNTARILY SEPARATED FROM SERVICE 
FOR MISCONDUCT. 
(a) IN GENERAL.—Section 7804 is amended by adding 
at the end the following new subsection: 
‘‘(d) PROHIBITION ON REHIRING EMPLOYEES INVOL-
UNTARILY SEPARATED.—The Commissioner may not hire 
any individual previously employed by the Commissioner 
who was removed for misconduct under this subchapter or 
chapter 43 or chapter 75 of title 5, United States Code, or 
whose employment was terminated under section 1203 of 
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the Internal Revenue Service Restructuring and Reform Act 
of 1998 (26 U.S.C. 7804 note).’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply with respect to the hiring of employ-
ees after the date of the enactment of this Act. 
SEC. 3002. NOTIFICATION OF UNAUTHORIZED INSPECTION 
OR DISCLOSURE OF RETURNS AND RETURN 
INFORMATION. 
(a) IN GENERAL.—Subsection (e) of section 7431 is 
amended by adding at the end the following new sentences: 
‘‘The Secretary shall also notify such taxpayer if the Inter-
nal Revenue Service or a Federal or State agency (upon 
notice to the Secretary by such Federal or State agency) 
proposes an administrative determination as to discipli-
nary or adverse action against an employee arising from 
the employee’s unauthorized inspection or disclosure of the 
taxpayer’s return or return information. The notice de-
scribed in this subsection shall include the date of the unau-
thorized inspection or disclosure and the rights of the tax-
payer under such administrative determination.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to determinations proposed after the 
date which is 180 days after the date of the enactment of 
this Act. 
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Subtitle B—Provisions Relating to 
Exempt Organizations 
SEC. 3101. MANDATORY E-FILING BY EXEMPT ORGANIZA-
TIONS. 
(a) IN GENERAL.—Section 6033 is amended by redes-
ignating subsection (n) as subsection (o) and by inserting 
after subsection (m) the following new subsection: 
‘‘(n) MANDATORY ELECTRONIC FILING.—Any organi-
zation required to file a return under this section shall file 
such return in electronic form.’’. 
(b) CONFORMING AMENDMENT.—Paragraph (7) of sec-
tion 527(j) is amended by striking ‘‘if the organization has’’ 
and all that follows through ‘‘such calendar year’’. 
(c) INSPECTION OF ELECTRONICALLY FILED ANNUAL 
RETURNS.—Subsection (b) of section 6104 is amended by 
adding at the end the following: ‘‘Any annual return re-
quired to be filed electronically under section 6033(n) shall 
be made available by the Secretary to the public as soon 
as practicable in a machine readable format.’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to taxable years beginning after the date of the 
enactment of this Act. 
(2) TRANSITIONAL RELIEF.— 
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(A) SMALL ORGANIZATIONS.— 
(i) IN GENERAL.—In the case of any 
small organizations, or any other organiza-
tions for which the Secretary of the Treas-
ury or the Secretary’s delegate (hereafter re-
ferred to in this paragraph as the ‘‘Sec-
retary’’) determines the application of the 
amendments made by this section would 
cause undue burden without a delay, the 
Secretary may delay the application of such 
amendments, but such delay shall not apply 
to any taxable year beginning on or after 
the date 2 years after of the enactment of 
this Act. 
(ii) SMALL ORGANIZATION.—For pur-
poses of clause (i), the term ‘‘small organi-
zation’’ means any organization— 
(I) the gross receipts of which for 
the 
taxable 
year 
are 
less 
than 
$200,000; and 
(II) the aggregate gross assets of 
which at the end of the taxable year 
are less than $500,000. 
(B) ORGANIZATIONS FILING FORM 990–T.— 
In the case of any organization described in sec-
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tion 511(a)(2) of the Internal Revenue Code of 
1986 which is subject to the tax imposed by sec-
tion 511(a)(1) of such Code on its unrelated 
business taxable income, or any organization re-
quired to file a return under section 6033 of such 
Code and include information under subsection 
(e) thereof, the Secretary may delay the applica-
tion of the amendments made by this section, but 
such delay shall not apply to any taxable year 
beginning on or after the date 2 years after of 
the enactment of this Act. 
SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF 
TAX-EXEMPT STATUS FOR FAILURE TO FILE 
RETURN. 
(a) IN GENERAL.—Section 6033(j)(1) is amended by 
striking ‘‘If an organization’’ and inserting the following: 
‘‘(A) NOTICE.—If an organization described 
in subsection (a)(1) or (i) fails to file the annual 
return or notice required under either subsection 
for 2 consecutive years, the Secretary shall notify 
the organization— 
‘‘(i) that the Internal Revenue Service 
has no record of such a return or notice 
from such organization for 2 consecutive 
years, and 
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‘‘(ii) about the revocation that will 
occur under subparagraph (B) if the orga-
nization fails to file such a return or notice 
by the due date for the next such return or 
notice required to be filed. 
The notification under the preceding sentence 
shall include information about how to comply 
with the filing requirements under subsections 
(a)(1) and (i). 
‘‘(B) REVOCATION.—If an organization’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to failures to file returns or notices for 
2 consecutive years if the return or notice for the second 
year is required to be filed after December 31, 2019. 
Subtitle C—Revenue Provision 
SEC. 3201. INCREASE IN PENALTY FOR FAILURE TO FILE. 
(a) IN GENERAL.—The second sentence of subsection 
(a) of section 6651 is amended by striking ‘‘$205’’ and in-
serting ‘‘$330’’. 
(b) INFLATION ADJUSTMENT.—Section 6651(j)(1) is 
amended— 
(1) by striking ‘‘2014’’ and inserting ‘‘2020’’, 
(2) by striking ‘‘$205’’ and inserting ‘‘$330’’, 
and 
(3) by striking ‘‘2013’’ and inserting ‘‘2019’’. 
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(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to returns required to be filed after De-
cember 31, 2019. 
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Union Calendar No. 19 
116TH CONGRESS 
1ST SESSION 
H. R. 1957 
[Report No. 116–39, Part I] 
A BILL 
To amend the Internal Revenue Code of 1986 to 
modernize and improve the Internal Revenue 
Service, and for other purposes. 
APRIL 9, 2019 
Reported from the Committee on Ways and Means with 
an amendment 
APRIL 9, 2019 
Committee on Financial Services discharged; committed 
to the Committee of the Whole House on the State of 
the Union and ordered to be printed 
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