I 
107TH CONGRESS 
2D SESSION 
H. R. 5548
To amend the Internal Revenue Code of 1986 to provide fairness in tax 
collection procedures. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 3, 2002
Mr. HOUGHTON 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 
fairness in tax collection procedures.
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 
‘‘Fairness in Tax Collections Act of 2002’’. 
(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. 
Sec. 2. Partial payment of tax liability in installment agreements. 
Sec. 3. Extension of time for return of property. 
Sec. 4. Individuals held harmless on wrongful levy, etc. on individual retirement 
plan. 
Sec. 5. Seven-day threshold on tolling of statute of limitations during tax re-
view. 
Sec. 6. Study of liens and levies. 
Sec. 7. Low-income taxpayer clinics.
SEC. 2. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALL-
MENT AGREEMENTS. 
(a) IN GENERAL.—
(1) Section 6159(a) (relating to authorization 
of agreements) is amended—
(A) by striking ‘‘satisfy liability for pay-
ment of’’ and inserting ‘‘make payment on’’, 
and 
(B) by inserting ‘‘full or partial’’ after ‘‘fa-
cilitate’’. 
(2) Section 6159(c) (relating to Secretary re-
quired to enter into installment agreements in cer-
tain cases) is amended in the matter preceding para-
graph (1) by inserting ‘‘full’’ before ‘‘payment’’. 
(b) REQUIREMENT TO REVIEW PARTIAL PAYMENT 
AGREEMENTS EVERY TWO YEARS.—Section 6159 is 
amended by redesignating subsections (d) and (e) as sub-
sections (e) and (f), respectively, and inserting after sub-
section (c) the following new subsection: 
‘‘(d) SECRETARY REQUIRED TO REVIEW INSTALL-
MENT AGREEMENTS FOR PARTIAL COLLECTION EVERY 
TWO YEARS.—In the case of an agreement entered into 
by the Secretary under subsection (a) for partial collection 
of a tax liability, the Secretary shall review the agreement 
at least once every 2 years.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to agreements entered into on or 
after the date of the enactment of this Act. 
SEC. 3. EXTENSION OF TIME FOR RETURN OF PROPERTY. 
(a) EXTENSION OF TIME FOR RETURN OF PROPERTY 
SUBJECT TO LEVY.—Subsection (b) of section 6343 (re-
lating to return of property) is amended by striking ‘‘9 
months’’ and inserting ‘‘2 years’’. 
(b) PERIOD OF LIMITATION ON SUITS.—Subsection 
(c) of section 6532 (relating to suits by persons other than 
taxpayers) is amended—
(1) in paragraph (1) by striking ‘‘9 months’’ 
and inserting ‘‘2 years’’, and 
(2) in paragraph (2) by striking ‘‘9-month’’ and 
inserting ‘‘2-year’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to—
(1) levies made after the date of the enactment 
of this Act, and 
(2) levies made on or before such date if the 9-
month period has not expired under section 6343(b) 
of the Internal Revenue Code of 1986 (without re-
gard to this section) as of such date.
SEC. 4. INDIVIDUALS HELD HARMLESS ON WRONGFUL 
LEVY, ETC., ON INDIVIDUAL RETIREMENT 
PLAN. 
(a) IN GENERAL.—Section 6343 (relating to author-
ity to release levy and return property) is amended by add-
ing at the end the following new subsection: 
‘‘(f) INDIVIDUALS HELD HARMLESS ON WRONGFUL 
LEVY, ETC., ON INDIVIDUAL RETIREMENT PLAN.—
‘‘(1) IN GENERAL.—If the Secretary determines 
that an individual retirement plan has been levied 
upon in a case to which subsection (b) or (d)(2)(A) 
applies, an amount equal to the sum of—
‘‘(A) the amount of money returned by the 
Secretary on account of such levy, and 
‘‘(B) interest paid under subsection (c) on 
such amount of money,
may be deposited into an individual retirement plan 
(other than an endowment contract) to which a roll-
over from the plan levied upon is permitted.
ment made on the due date for filing the return of 
tax for such taxable year. 
‘‘(4) INTEREST.—Notwithstanding subsection 
(d), interest shall be allowed under subsection (c) in 
a case in which the Secretary makes a determination 
described in subsection (d)(2)(A) with respect to a 
levy upon an individual retirement plan.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid under subsections 
(b), (c), and (d)(2)(A) of section 6343 of the Internal Rev-
enue Code of 1986 after December 31, 2002. 
SEC. 5. SEVEN-DAY THRESHOLD ON TOLLING OF STATUTE 
OF LIMITATIONS DURING TAX REVIEW. 
(a) IN GENERAL.—Section 7811(d)(1) (relating to 
suspension of running of period of limitation) is amended 
by inserting after ‘‘application,’’ the following: ‘‘but only 
if the date of such decision is at least 7 days after the 
date of the taxpayer’s application’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to applications filed after the date 
of the enactment of this Act. 
SEC. 6. STUDY OF LIENS AND LEVIES. 
The Secretary of the Treasury, or the Secretary’s del-
egate, shall conduct a study of the practices of the Inter-
nal Revenue Service concerning liens and levies. The study 
shall examine—
(1) the declining use of liens and levies by the 
Internal Revenue Service, and 
(2) the practicality of recording liens and lev-
ying against property in cases in which the cost of 
such actions exceeds the amount to be realized from 
such property. 
Not later than 1 year after the date of the enactment of 
this Act, the Secretary shall submit such study to the 
Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate. 
SEC. 7. LOW-INCOME TAXPAYER CLINICS. 
(a) LIMITATION ON AMOUNT OF GRANTS.—Para-
graph (1) of section 7526(c) (relating to special rules and 
limitations) is amended by striking ‘‘$6,000,000 per year’’ 
and inserting ‘‘$9,000,000 for 2002, $12,000,000 for 
2003, and $15,000,000 for each year thereafter’’. 
(b) LIMITATION ON USE OF CLINICS FOR TAX RE-
TURN
PREPARATION.—Subparagraph (A) of section 
7526(b)(1) is amended by adding at the end the following 
flush language: 
‘‘The term does not include a clinic that pro-
vides routine tax return preparation. The pre-
ceding sentence shall not apply to return prepa-
ration in connection with a controversy with the 
Internal Revenue Service.’’. 
(c) PROMOTION
OF CLINICS.—Section 7526(c) is 
amended by adding at the end the following new para-
graph: 
‘‘(7) PROMOTION OF CLINICS.—The Secretary 
is authorized to promote the benefits of and encour-
age the use of low-income taxpayer clinics through 
the use of mass communications, referrals, and other 
means.’’.
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