I 
115TH CONGRESS 
1ST SESSION H. R. 3220 
To amend the Internal Revenue Code of 1986 to preserve taxpayers’ rights 
to administrative appeal of deficiency determinations, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 13, 2017 
Mr. SMITH of Missouri (for himself, Ms. SEWELL of Alabama, Ms. JUDY CHU 
of California, Mr. THOMPSON of California, Mr. CURBELO of Florida, and 
Mr. HOLDING) 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 preserve 
taxpayers’ rights to administrative appeal of deficiency 
determinations, 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, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Preserving Taxpayers’ Rights Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this bill is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Ensuring taxpayer right to appeal. 
Sec. 3. Appeals dispute resolution procedures. 
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Sec. 4. Restriction on Secretarial authority to designate cases for litigation. 
Sec. 5. Modification of authority to issue designated summons. 
Sec. 6. Limitation on access of non-Internal Revenue Service employees to re-
turns and return information. 
SEC. 2. ENSURING TAXPAYER RIGHT TO APPEAL. 
(a) IN GENERAL.—Subsection (a) of section 6212 of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘IN GENERAL.—If the Sec-
retary’’ and inserting ‘‘IN GENERAL.— 
‘‘(1) AUTHORIZATION.—If— 
‘‘(A) the Secretary’’; 
(2) by striking ‘‘44, he is authorized’’ and in-
serting ‘‘44, and 
‘‘(B) the requirements of paragraph (2) 
have been met with respect to such deficiency, 
the Secretary is authorized’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) OPPORTUNITY FOR ADMINISTRATIVE RE-
VIEW IN THE OFFICE OF APPEALS.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met with respect to a defi-
ciency if, prior to the issuance of the notice of 
deficiency under paragraph (1)— 
‘‘(i) the taxpayer has been issued a 
letter of proposed deficiency that explains 
the basis for the determination of defi-
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case of issues designated for litigation in ac-
cordance with section 7124, and the taxpayer’s 
right to administrative review in the Internal 
Revenue Service Office of Appeals as provided 
in this paragraph shall not otherwise be de-
nied.’’. 
(b) OPPORTUNITY FOR APPEAL IF FEWER THAN 60 
DAYS REMAIN ON STATUTE OF LIMITATIONS.—Section 
6212 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new subsection: 
‘‘(e) OPPORTUNITY FOR APPEAL IF FEWER THAN 60 
DAYS REMAIN ON STATUTE OF LIMITATIONS.—In the 
case of any issues relating to a potential deficiency with 
respect to which 60 days or fewer remain in the period 
applicable under section 6501, if the taxpayer agrees to 
the extension of such period by 12 months, the Secretary 
shall issue a letter of proposed deficiency described in sub-
section (a)(2)(A)(i) allowing the taxpayer an opportunity 
for administrative review of such issues in the Internal 
Revenue Service Office of Appeals before a notice of defi-
ciency is issued under this section. Rules similar to the 
rules of subsection (a)(2)(B) shall apply for purposes of 
this subsection.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to notices of deficiency issued after 
the date of the introduction of this Act. 
SEC. 3. APPEALS DISPUTE RESOLUTION PROCEDURES. 
Subsection (a) of section 7123 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘(a) REFERRAL
TO APPEALS PROCEDURES.—The 
Secretary shall prescribe procedures by which any tax-
payer may request— 
‘‘(1) early referral of one or more unresolved 
issues from the examination or collection division to 
the Internal Revenue Service Office of Appeals, or 
‘‘(2) consideration by such Office of Appeals of 
issues included in— 
‘‘(A) a letter of proposed deficiency de-
scribed in section 6212(a)(2)(A), 
‘‘(B) a notice of deficiency pursuant to sec-
tion 6212, whether or not the taxpayer has filed 
a petition with the Tax Court pursuant to sec-
tion 6213(a), or 
‘‘(C) a claim for refund, whether or not the 
taxpayer has filed suit in a district court or the 
United States Court of Federal Claims with re-
spect to the issues included in such claim or re-
fund. 
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Such regulations may limit such procedures in cases 
involving solely the failure or refusal to comply with 
the tax laws because of moral, religious, political, 
constitutional, conscientious, or similar grounds, or 
for other positions listed as frivolous under section 
6702(c). Such procedures shall not be available in 
the case of issues designated for litigation in accord-
ance with section 7124, and the taxpayer’s right to 
administrative review in the Internal Revenue Serv-
ice Office of Appeals as provided in section 
6212(a)(2) shall not otherwise be denied.’’. 
SEC. 4. RESTRICTION ON SECRETARIAL AUTHORITY TO 
DESIGNATE CASES FOR LITIGATION. 
(a) IN GENERAL.—Chapter 74 of the Internal Rev-
enue Code of 1986 is amended by redesignating section 
7124 as section 7125 and by inserting after section 7123 
the following new section: 
‘‘SEC. 7124. RESTRICTION ON SECRETARIAL AUTHORITY TO 
DESIGNATE CASES FOR LITIGATION. 
‘‘(a) IN GENERAL.—The Secretary may designate 
issues arising from the examination or collection division 
for litigation, and not permit the taxpayer to request con-
sideration of such issues by the Internal Revenue Service 
Office of Appeals under section 7123(a), only to the extent 
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such issues relate to listed transactions (as defined in sec-
tion 6707A(c)(2)). 
‘‘(b) SETTLEMENT.—In offering terms under a set-
tlement agreement for purposes of the resolution of any 
issues arising from the examination or collection division, 
the Secretary may offer terms that preclude the taxpayer 
from requesting consideration of such issues by the Office 
of Appeals under section 7123(a) only to the extent such 
issues relate to listed transactions (as defined in section 
6707A(c)(2)).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 74 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 7124 and 
inserting the following new items: 
‘‘Sec. 7124. Restriction on Secretarial authority to designate cases for litiga-
tion. 
‘‘Sec. 7125. Cross references.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to the designation of issues for liti-
gation, and offers of settlement terms, after the date of 
the introduction of this Act. 
SEC. 5. MODIFICATION OF AUTHORITY TO ISSUE DES-
IGNATED SUMMONS. 
(a) IN GENERAL.—Paragraph (1) of section 6503(j) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘coordinated examination program’’ and inserting ‘‘co-
ordinated industry case program’’. 
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(b) DESIGNATED SUMMONS.—Clause (i) of section 
6503(j)(2)(A) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(i) the issuance of such summons is 
preceded by a review and written approval 
of such issuance by the Large Business 
and International Division Commissioner 
and the Division Counsel of the Office of 
Chief Counsel (or their successors)— 
‘‘(I) which clearly establishes 
that the taxpayer did not reasonably 
cooperate with reasonable requests by 
the Secretary for witnesses, docu-
ments, meetings, and interviews, and 
‘‘(II) which is attached to such 
summons,’’. 
(c) BURDEN OF PROOF.—Subsection (j) of section 
6503 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new paragraph: 
‘‘(4) BURDEN OF PROOF.—In any court pro-
ceeding described in paragraph (3), the Secretary 
shall bear the burden of proving that the corporation 
described in paragraph (1) did not reasonably co-
operate with reasonable requests by the Secretary 
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for witnesses, documents, meetings, and inter-
views.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to summonses issued after the date 
of the introduction of this Act. 
SEC. 6. LIMITATION ON ACCESS OF NON-INTERNAL REV-
ENUE SERVICE EMPLOYEES TO RETURNS 
AND RETURN INFORMATION. 
(a) IN GENERAL.—Section 7602 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(f) LIMITATION ON ACCESS OF PERSONS OTHER 
THAN INTERNAL REVENUE SERVICE OFFICERS AND EM-
PLOYEES.—No person other than an officer or employee 
of the Internal Revenue Service shall be designated under 
section 6103(n) to receive any books, papers, records, or 
other data obtained pursuant to this section, other than 
for the sole purpose of serving as an expert, and no person 
other than an officer or employee of the Internal Revenue 
Service or the Office of Chief Counsel may question a wit-
ness under oath whose testimony was obtained pursuant 
to this section.’’. 
(b) EFFECTIVE DATE.— 
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(1) IN GENERAL.—Except as provided in para-
graph (2), the amendment made by this section shall 
take effect on the date of the enactment of this Act. 
(2) APPLICATION TO CONTRACTS IN EFFECT.— 
The amendment made by this section shall apply to 
any contract in effect under section 6103(n) of the 
Internal Revenue Code of 1986, pursuant to tem-
porary Treasury Regulation section 301.7602–1T 
proposed in Internal Revenue Bulletin 2014–28, 
Treasury Regulation section 301.7602–1(b)(3), or 
any similar or successor regulation, that is in effect 
on the date of the enactment of this Act. 
Æ 
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