Union Calendar No. 210
105TH CONGRESS
1ST SESSION
H. R. 2676
[Report No. 105–364, Part I]
A BILL
To amend the Internal Revenue Code of 1986 to
restructure and reform the Internal Revenue
Service, and for other purposes.
OCTOBER 31, 1997
Reported from the Committee on Ways and Means with
an amendment
OCTOBER 31, 1997
Referral to the Committees on Government Reform and
Oversight and Rules extended for a period ending not
later than October 31, 1997
OCTOBER 31, 1997
The Committees on Government Reform and Oversight
and Rules discharged; committed to the Committee of
the Whole House on the State of the Union and or-
dered to be printed
IB
Union Calendar No. 210
105TH CONGRESS
1ST SESSION
H. R. 2676
[Report No. 105–364, Part I]
To amend the Internal Revenue Code of 1986 to restructure and reform
the Internal Revenue Service, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 21, 1997
Mr. ARCHER (for himself, Mr. PORTMAN, and Mr. CARDIN) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Government Reform and Oversight,
and Rules, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
OCTOBER 31, 1997
Additional sponsors: Mr. BLILEY, Mr. SHERMAN, Mr. HILL, Mr. PRICE of
North Carolina, Mr. GREEN, Mr. COOK, Mr. CANNON, Mr. SALMON, Mr.
BALDACCI, Mr. GOODLING, Mr. ETHERIDGE, Mr. GILCHREST, Mr. ADAM
SMITH of Washington, Mr. CALVERT, Mr. RIGGS, Mr. BENTSEN, Mr.
LOBIONDO, Mr. BARR of Georgia, Mr. TALENT, Mr. JOHN, Ms. HAR-
MAN, Mr. SAXTON, Ms. RIVERS, Mr. HALL of Texas, Mr. ROYCE, Mr.
FROST, Mrs. LINDA SMITH of Washington, Mr. BOSWELL, Mr. THUNE,
Ms. HOOLEY of Oregon, Mrs. CHENOWETH, Mr. SPRATT, Mr. EWING,
Mr. CLEMENT, Mr. NEY, Ms. ESHOO, Mr. ROTHMAN, Mr. KASICH, Mr.
CANADY of Florida, Mr. SOLOMON, and Mr. ADERHOLT
OCTOBER 31, 1997
Reported from the Committee on Ways and Means with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
OCTOBER 31, 1997
Referral to the Committees on Government Reform and Oversight and Rules
extended for a period ending not later than October 31, 1997
OCTOBER 31, 1997
The Committees on Government Reform and Oversight and Rules discharged;
committed to the Committee of the Whole House on the State of the
Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on October 21, 1997]
A BILL
To amend the Internal Revenue Code of 1986 to restructure
and reform the Internal Revenue Service, 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; AMENDMENT OF 1986 CODE;
TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘In-
ternal Revenue Service Restructuring and Reform Act of
1997’’.
(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I—EXECUTIVE BRANCH GOVERNANCE AND SENIOR
MANAGEMENT OF THE INTERNAL REVENUE SERVICE
Subtitle A—Executive Branch Governance and Senior Management
Sec. 101. Internal Revenue Service Oversight Board.
Sec. 102. Commissioner of Internal Revenue; other officials.
Sec. 103. Other personnel.
Sec. 104. Prohibition on executive branch influence over taxpayer audits and
other investigations.
Subtitle B—Personnel Flexibilities
Sec. 111. Personnel flexibilities.
TITLE II—ELECTRONIC FILING
Sec. 201. Electronic filing of tax and information returns.
Sec. 202. Due date for certain information returns filed electronically.
Sec. 203. Paperless electronic filing.
Sec. 204. Return-free tax system.
Sec. 205. Access to account information.
TITLE III—TAXPAYER PROTECTION AND RIGHTS
Sec. 300. Short title.
Subtitle A—Burden of Proof
Sec. 301. Burden of proof.
Subtitle B—Proceedings by Taxpayers
Sec. 311. Expansion of authority to award costs and certain fees.
Sec. 312. Civil damages for negligence in collection actions.
Sec. 313. Increase in size of cases permitted on small case calendar.
Subtitle C—Relief for Innocent Spouses and for Taxpayers Unable To Manage
Their Financial Affairs Due to Disabilities
Sec. 321. Spouse relieved in whole or in part of liability in certain cases.
Sec. 322. Suspension of statute of limitations on filing refund claims during peri-
ods of disability.
Subtitle D—Provisions Relating to Interest
Sec. 331. Elimination of interest rate differential on overlapping periods of inter-
est on income tax overpayments and underpayments.
Sec. 332. Increase in overpayment rate payable to taxpayers other than corpora-
tions.
Subtitle E—Protections for Taxpayers Subject to Audit or Collection Activities
Sec. 341. Privilege of confidentiality extended to taxpayer’s dealings with non-at-
torneys authorized to practice before Internal Revenue Service.
Sec. 342. Expansion of authority to issue taxpayer assistance orders.
Sec. 343. Limitation on financial status audit techniques.
Sec. 344. Limitation on authority to require production of computer source code.
Sec. 345. Procedures relating to extensions of statute of limitations by agreement.
Sec. 346. Offers-in-compromise.
Sec. 347. Notice of deficiency to specify deadlines for filing Tax Court petition.
Sec. 348. Refund or credit of overpayments before final determination.
Sec. 349. Threat of audit prohibited to coerce Tip Reporting Alternative Commit-
ment Agreements.
Subtitle F—Disclosures to Taxpayers
Sec. 351. Explanation of joint and several liability.
Sec. 352. Explanation of taxpayers’ rights in interviews with the Internal Reve-
nue Service.
Sec. 353. Disclosure of criteria for examination selection.
Sec. 354. Explanations of appeals and collection process.
Subtitle G—Low Income Taxpayer Clinics
Sec. 361. Low income taxpayer clinics.
Subtitle H—Other Matters
Sec. 371. Actions for refund with respect to certain estates which have elected the
installment method of payment.
Sec. 372. Cataloging complaints.
Sec. 373. Archive of records of Internal Revenue Service.
Sec. 374. Payment of taxes.
Sec. 375. Clarification of authority of Secretary relating to the making of elec-
tions.
Sec. 376. Limitation on penalty on individual’s failure to pay for months during
period of installment agreement.
Subtitle I—Studies
Sec. 381. Penalty administration.
Sec. 382. Confidentiality of tax return information.
TITLE IV—CONGRESSIONAL ACCOUNTABILITY FOR THE INTERNAL
REVENUE SERVICE
Subtitle A—Oversight
Sec. 401. Expansion of duties of the Joint Committee on Taxation.
Sec. 402. Coordinated oversight reports.
Subtitle B—Budget
Sec. 411. Funding for century date change.
Sec. 412. Financial Management Advisory Group.
Subtitle C—Tax Law Complexity
Sec. 421. Role of the Internal Revenue Service.
Sec. 422. Tax complexity analysis.
TITLE V—CLARIFICATION OF DEDUCTION FOR DEFERRED
COMPENSATION
Sec. 501. Clarification of deduction for deferred compensation.
TITLE 
I—EXECUTIVE 
BRANCH
GOVERNANCE 
AND 
SENIOR
MANAGEMENT OF THE INTER-
NAL REVENUE SERVICE
Subtitle A—Executive Branch Gov-
ernance and Senior Manage-
ment
SEC. 101. INTERNAL REVENUE SERVICE OVERSIGHT BOARD.
(a) IN GENERAL.—Section 7802 (relating to the Com-
missioner of Internal Revenue) is amended to read as fol-
lows:
‘‘SEC. 7802. INTERNAL REVENUE SERVICE OVERSIGHT
BOARD.
‘‘(a) ESTABLISHMENT.—There is established within
the Department of the Treasury the Internal Revenue Serv-
ice Oversight Board (hereafter in this subchapter referred
to as the ‘Oversight Board’).
‘‘(b) MEMBERSHIP.—
‘‘(1) COMPOSITION.—The Oversight Board shall
be composed of 11 members, as follows:
‘‘(A) 8 members shall be individuals who
are not Federal officers or employees and who
are appointed by the President, by and with the
advice and consent of the Senate.
‘‘(B) 1 member shall be the Secretary of the
Treasury or, if the Secretary so designates, the
Deputy Secretary of the Treasury.
‘‘(C) 1 member shall be the Commissioner of
Internal Revenue.
‘‘(D) 1 member shall be an individual who
is a representative of an organization that rep-
resents a substantial number of Internal Revenue
Service employees and who is appointed by the
President, by and with the advice and consent of
the Senate.
‘‘(2) QUALIFICATIONS AND TERMS.—
‘‘(A) QUALIFICATIONS.—Members of the
Oversight Board described in paragraph (1)(A)
shall be appointed solely on the basis of their
professional experience and expertise in 1 or
more of the following areas:
‘‘(i) Management of large service orga-
nizations.
‘‘(ii) Customer service.
‘‘(iii) Federal tax laws, including tax
administration and compliance.
‘‘(iv) Information technology.
‘‘(v) Organization development.
‘‘(vi) The needs and concerns of tax-
payers.
In the aggregate, the members of the Oversight
Board described in paragraph (1)(A) should col-
lectively bring to bear expertise in all of the
areas described in the preceding sentence.
‘‘(B) TERMS.—Each member who is de-
scribed in paragraph (1)(A) or (D) shall be ap-
pointed for a term of 5 years, except that of the
members 
first 
appointed 
under 
paragraph
(1)(A)—
‘‘(i) 1 member shall be appointed for a
term of 1 year,
‘‘(ii) 1 member shall be appointed for
a term of 2 years,
‘‘(iii) 2 members shall be appointed for
a term of 3 years, and
‘‘(iv) 2 members shall be appointed for
a term of 4 years.
Such terms shall begin on the date of appoint-
ment.
‘‘(C) REAPPOINTMENT.—An individual who
is described in paragraph (1)(A) may be ap-
pointed to no more than two 5-year terms on the
Oversight Board.
‘‘(D) VACANCY.—Any vacancy on the Over-
sight Board shall be filled in the same manner
as the original appointment. Any member ap-
pointed to fill a vacancy occurring before the ex-
piration of the term for which the member’s
predecessor was appointed shall be appointed for
the remainder of that term.
‘‘(E) SPECIAL GOVERNMENT EMPLOYEES.—
During the entire period that an individual ap-
pointed under paragraph (1)(A) is a member of
the Oversight Board, such individual shall be
treated as—
‘‘(i) serving as a special government
employee (as defined in section 202 of title
18, United States Code) and as described in
section 207(c)(2) of such title 18, and
‘‘(ii) serving as an officer or employee
referred to in section 101(f) of the Ethics in
Government Act of 1978 for purposes of title
I of such Act.
‘‘(3) QUORUM.—6 members of the Oversight
Board shall constitute a quorum. A majority of mem-
bers present and voting shall be required for the Over-
sight Board to take action.
‘‘(4) REMOVAL.—
‘‘(A) IN
GENERAL.—Any member of the
Oversight Board may be removed at the will of
the President.
‘‘(B) SECRETARY AND COMMISSIONER.—An
individual described in subparagraph (B) or (C)
of paragraph (1) shall be removed upon termi-
nation of employment.
‘‘(C) REPRESENTATIVE OF INTERNAL REVE-
NUE
SERVICE
EMPLOYEES.—The member de-
scribed in paragraph (1)(D) shall be removed
upon termination of employment, membership,
or other affiliation with the organization de-
scribed in such paragraph.
‘‘(5) CLAIMS.—
‘‘(A) IN GENERAL.—Members of the Over-
sight Board who are described in paragraph
(1)(A) or (D) shall have no personal liability
under Federal law with respect to any claim
arising out of or resulting from an act or omis-
sion by such member within the scope of service
as a member. The preceding sentence shall not be
construed to limit personal liability for criminal
acts or omissions, willful or malicious conduct,
acts or omissions for private gain, or any other
posed internal revenue laws, related statutes, and
tax conventions,
‘‘(B) law enforcement activities of the Inter-
nal Revenue Service, including compliance ac-
tivities such as criminal investigations, exami-
nations, and collection activities, or
‘‘(C) specific procurement activities of the
Internal Revenue Service.
‘‘(3) RESTRICTION ON DISCLOSURE OF RETURN
INFORMATION TO OVERSIGHT BOARD MEMBERS.—No
return, return information, or taxpayer return infor-
mation (as defined in section 6103(b)) may be dis-
closed to any member of the Oversight Board de-
scribed in subsection (b)(1)(A) or (D). Any request for
information not permitted to be disclosed under the
preceding sentence, and any contact relating to a spe-
cific taxpayer, made by a member of the Oversight
Board so described to an officer or employee of the In-
ternal Revenue Service shall be reported by such offi-
cer or employee to the Secretary and the Joint Com-
mittee on Taxation.
‘‘(d) SPECIFIC
RESPONSIBILITIES.—The Oversight
Board shall have the following specific responsibilities:
‘‘(1) STRATEGIC PLANS.—To review and approve
strategic plans of the Internal Revenue Service, in-
cluding the establishment of—
‘‘(A) mission and objectives, and standards
of performance relative to either, and
‘‘(B) annual and long-range strategic plans.
‘‘(2) OPERATIONAL PLANS.—To review the oper-
ational functions of the Internal Revenue Service, in-
cluding—
‘‘(A) plans for modernization of the tax sys-
tem,
‘‘(B) plans for outsourcing or managed
competition, and
‘‘(C) plans for training and education.
‘‘(3) MANAGEMENT.—To—
‘‘(A) recommend to the President candidates
for appointment as the Commissioner of Internal
Revenue and recommend to the President the re-
moval of the Commissioner,
‘‘(B) review the Commissioner’s selection,
evaluation, and compensation of senior man-
agers, and
‘‘(C) review and approve the Commis-
sioner’s plans for any major reorganization of
the Internal Revenue Service.
‘‘(4) BUDGET.—To—
‘‘(A) review and approve the budget request
of the Internal Revenue Service prepared by the
Commissioner,
‘‘(B) submit such budget request to the Sec-
retary of the Treasury, and
‘‘(C) ensure that the budget request supports
the annual and long-range strategic plans.
The Secretary shall submit the budget request referred to
in paragraph (4)(B) for any fiscal year to the President
who shall submit such request, without revision, to Congress
together with the President’s annual budget request for the
Internal Revenue Service for such fiscal year.
‘‘(e) BOARD PERSONNEL MATTERS.—
‘‘(1) COMPENSATION OF MEMBERS.—
‘‘(A) IN
GENERAL.—Each member of the
Oversight Board who is described in subsection
(b)(1)(A) shall be compensated at a rate of
$30,000 per year. All other members of the Over-
sight Board shall serve without compensation for
such service.
‘‘(B) CHAIRPERSON.—In lieu of the amount
specified in subparagraph (A), the Chairperson
of the Oversight Board shall be compensated at
a rate of $50,000.
‘‘(2) TRAVEL EXPENSES.—The members of the
Oversight Board shall be allowed travel expenses, in-
cluding per diem in lieu of subsistence, at rates au-
thorized for employees of agencies under subchapter I
of chapter 57 of title 5, United States Code, while
away from their homes or regular places of business
for purposes of attending meetings of the Oversight
Board.
‘‘(3) STAFF.—At the request of the Chairperson
of the Oversight Board, the Commissioner shall detail
to the Oversight Board such personnel as may be nec-
essary to enable the Oversight Board to perform its
duties. Such detail shall be without interruption or
loss of civil service status or privilege.
‘‘(4) PROCUREMENT OF TEMPORARY AND INTER-
MITTENT SERVICES.—The Chairperson of the Over-
sight Board may procure temporary and intermittent
services under section 3109(b) of title 5, United States
Code.
‘‘(f) ADMINISTRATIVE MATTERS.—
‘‘(1) CHAIR.—The members of the Oversight
Board shall elect for a 2-year term a chairperson
from among the members appointed under subsection
(b)(1)(A).
‘‘(2) COMMITTEES.—The Oversight Board may
establish such committees as the Oversight Board de-
termines appropriate.
‘‘(3) MEETINGS.—The Oversight Board shall
meet at least once each month and at such other times
as the Oversight Board determines appropriate.
‘‘(4) REPORTS.—The Oversight Board shall each
year report to the President and the Congress with re-
spect to the conduct of its responsibilities under this
title.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 4946(c) (relating to definitions and
special rules for chapter 42) is amended—
(A) by striking ‘‘or’’ at the end of para-
graph (5),
(B) by striking the period at the end of
paragraph (6) and inserting ‘‘, or’’, and
(C) by adding at the end the following new
paragraph:
‘‘(7) a member of the Internal Revenue Service
Oversight Board.’’.
(2) The table of sections for subchapter A of
chapter 80 is amended by striking the item relating
to section 7802 and inserting the following new item:
‘‘Sec. 7802. Internal Revenue Service Oversight Board.’’
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall take effect on the date of the enact-
ment of this Act.
(2) NOMINATIONS TO INTERNAL REVENUE SERV-
ICE OVERSIGHT BOARD.—The President shall submit
nominations under section 7802 of the Internal Reve-
nue Code of 1986, as added by this section, to the
Senate not later than 6 months after the date of the
enactment of this Act.
SEC. 102. COMMISSIONER OF INTERNAL REVENUE; OTHER
OFFICIALS.
(a) IN GENERAL.—Section 7803 (relating to other per-
sonnel) is amended to read as follows:
‘‘SEC. 7803. COMMISSIONER OF INTERNAL REVENUE; OTHER
OFFICIALS.
‘‘(a) COMMISSIONER OF INTERNAL REVENUE.—
‘‘(1) APPOINTMENT.—
‘‘(A) IN GENERAL.—There shall be in the
Department of the Treasury a Commissioner of
Internal Revenue who shall be appointed by the
President, by and with the advice and consent of
the Senate, to a 5-year term. The appointment
shall be made without regard to political affili-
ation or activity.
‘‘(B) VACANCY.—Any individual appointed
to fill a vacancy in the position of Commissioner
occurring before the expiration of the term for
which such individual’s predecessor was ap-
pointed shall be appointed only for the remain-
der of that term.
‘‘(C) REMOVAL.—The Commissioner may be
removed at the will of the President.
‘‘(2) DUTIES.—The Commissioner shall have
such duties and powers as the Secretary may pre-
scribe, including the power to—
‘‘(A) administer, manage, conduct, direct,
and supervise the execution and application of
the internal revenue laws or related statutes and
tax conventions to which the United States is a
party; and
‘‘(B) recommend to the President a can-
didate for appointment as Chief Counsel for the
Internal Revenue Service when a vacancy occurs,
and recommend to the President the removal of
such Chief Counsel.
If the Secretary determines not to delegate a power
specified in subparagraph (A) or (B), such deter-
mination may not take effect until 30 days after the
Secretary notifies the Committees on Ways and
Means, Government Reform and Oversight, and Ap-
propriations of the House of Representatives, the
Committees on Finance, Government Operations, and
Appropriations of the Senate, and the Joint Commit-
tee on Taxation.
‘‘(3) CONSULTATION
WITH
BOARD.—The Com-
missioner shall consult with the Oversight Board on
all matters set forth in paragraphs (2) and (3) (other
than paragraph (3)(A)) of section 7802(d).
‘‘(b) ASSISTANT
COMMISSIONER
FOR
EMPLOYEE
PLANS AND EXEMPT ORGANIZATIONS.—There is established
within the Internal Revenue Service an office to be known
as the ‘Office of Employee Plans and Exempt Organiza-
tions’ to be under the supervision and direction of an As-
sistant Commissioner of Internal Revenue. As head of the
Office, the Assistant Commissioner shall be responsible for
carrying out such functions as the Secretary may prescribe
with respect to organizations exempt from tax under section
501(a) and with respect to plans to which part I of sub-
chapter D of chapter 1 applies (and with respect to organi-
zations designed to be exempt under such section and plans
designed to be plans to which such part applies) and other
nonqualified deferred compensation arrangements. The As-
sistant Commissioner shall report annually to the Commis-
sioner with respect to the Assistant Commissioner’s respon-
sibilities under this section.
‘‘(c) OFFICE OF TAXPAYER ADVOCATE.—
‘‘(1) IN GENERAL.—
‘‘(A) ESTABLISHMENT.—There is estab-
lished in the Internal Revenue Service an office
to be known as the ‘Office of the Taxpayer Advo-
cate’. Such office shall be under the supervision
and direction of an official to be known as the
‘Taxpayer Advocate’ who shall be appointed with
the approval of the Oversight Board by the Com-
missioner of Internal Revenue and shall report
directly to the Commissioner. The Taxpayer Ad-
vocate shall be entitled to compensation at the
same rate as the highest level official reporting
directly to the Commissioner of Internal Reve-
nue.
‘‘(B) RESTRICTION
ON
SUBSEQUENT
EM-
PLOYMENT.—An individual who is an officer or
employee of the Internal Revenue Service may be
appointed as Taxpayer Advocate only if such in-
dividual agrees not to accept any employment
with the Internal Revenue Service for at least 5
years after ceasing to be the Taxpayer Advocate.
‘‘(2) FUNCTIONS OF OFFICE.—
‘‘(A) IN GENERAL.—It shall be the function
of the Office of Taxpayer Advocate to—
‘‘(i) assist taxpayers in resolving prob-
lems with the Internal Revenue Service,
‘‘(ii) identify areas in which taxpayers
have problems in dealings with the Internal
Revenue Service,
‘‘(iii) to the extent possible, propose
changes in the administrative practices of
the Internal Revenue Service to mitigate
problems identified under clause (ii), and
‘‘(iv) 
identify 
potential 
legislative
changes which may be appropriate to miti-
gate such problems.
‘‘(B) ANNUAL REPORTS.—
‘‘(i) 
OBJECTIVES.—Not 
later 
than
June 30 of each calendar year, the Tax-
payer Advocate shall report to the Commit-
tee on Ways and Means of the House of
Representatives and the Committee on Fi-
nance of the Senate on the objectives of the
Taxpayer Advocate for the fiscal year begin-
ning in such calendar year. Any such re-
port shall contain full and substantive anal-
ysis, in addition to statistical information.
‘‘(ii) ACTIVITIES.—Not later than De-
cember 31 of each calendar year, the Tax-
payer Advocate shall report to the Commit-
tee on Ways and Means of the House of
Representatives and the Committee on Fi-
nance of the Senate on the activities of the
Taxpayer Advocate during the fiscal year
ending during such calendar year. Any such
report shall contain full and substantive
analysis, in addition to statistical informa-
tion, and shall—
‘‘(I) identify the initiatives the
Taxpayer Advocate has taken on im-
proving taxpayer services and Internal
Revenue Service responsiveness,
‘‘(II) contain recommendations
received from individuals with the au-
thority to issue Taxpayer Assistance
Orders under section 7811,
‘‘(III) contain a summary of at
least 20 of the most serious problems
encountered by taxpayers, including a
description of the nature of such prob-
lems,
‘‘(IV) contain an inventory of the
items described in subclauses (I), (II),
and (III) for which action has been
taken and the result of such action,
‘‘(V) contain an inventory of the
items described in subclauses (I), (II),
and (III) for which action remains to
be completed and the period during
which each item has remained on such
inventory,
‘‘(VI) contain an inventory of the
items described in subclauses (I), (II),
and (III) for which no action has been
taken, the period during which each
item has remained on such inventory,
the reasons for the inaction, and iden-
tify any Internal Revenue Service offi-
cial who is responsible for such inac-
tion,
‘‘(VII) identify any Taxpayer As-
sistance Order which was not honored
by the Internal Revenue Service in a
timely manner, as specified under sec-
tion 7811(b),
from the Oversight Board, the Secretary of
the Treasury, any other officer or employee
of the Department of the Treasury, or the
Office of Management and Budget.
‘‘(C) OTHER RESPONSIBILITIES.—The Tax-
payer Advocate shall—
‘‘(i) monitor the coverage and geo-
graphic allocation of problem resolution of-
ficers, and
‘‘(ii) develop guidance to be distributed
to all Internal Revenue Service officers and
employees outlining the criteria for referral
of taxpayer inquiries to problem resolution
officers.
‘‘(3) RESPONSIBILITIES OF COMMISSIONER.—The
Commissioner shall establish procedures requiring a
formal response to all recommendations submitted to
the Commissioner by the Taxpayer Advocate within 3
months after submission to the Commissioner.’’.
(b) CONFORMING AMENDMENTS.—
(1) The table of sections for subchapter A of
chapter 80 is amended by striking the item relating
to section 7803 and inserting the following new item:
‘‘Sec. 7803. Commissioner of Internal Revenue; other officials.’’
(2) Subsection (b) of section 5109 of title 5,
United States Code, is amended by striking ‘‘7802(b)’’
and inserting ‘‘7803(b)’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall take effect on the date of the enact-
ment of this Act.
(2) CURRENT OFFICERS.—
(A) In the case of an individual serving as
Commissioner of Internal Revenue on the date of
the enactment of this Act who was appointed to
such position before such date, the 5-year term
required by section 7803(a)(1) of the Internal
Revenue Code of 1986, as added by this section,
shall begin as of the date of such appointment.
(B) Section 7803(c)(1)(B) of such Code, as
added by this section, shall not apply to the in-
dividual serving as Taxpayer Advocate on the
date of the enactment of this Act.
SEC. 103. OTHER PERSONNEL.
(a) IN GENERAL.—Section 7804 (relating to the effect
of reorganization plans) is amended to read as follows:
‘‘SEC. 7804. OTHER PERSONNEL.
‘‘(a) APPOINTMENT AND SUPERVISION.—Unless other-
wise prescribed by the Secretary, the Commissioner of Inter-
nal Revenue is authorized to employ such number of persons
as the Commissioner deems proper for the administration
and enforcement of the internal revenue laws, and the Com-
missioner shall issue all necessary directions, instructions,
orders, and rules applicable to such persons.
‘‘(b) POSTS OF DUTY OF EMPLOYEES IN FIELD SERV-
ICE OR TRAVELING.—Unless otherwise prescribed by the
Secretary—
‘‘(1) DESIGNATION
OF
POST
OF
DUTY.—The
Commissioner shall determine and designate the posts
of duty of all such persons engaged in field work or
traveling on official business outside of the District of
Columbia.
‘‘(2) DETAIL OF PERSONNEL FROM FIELD SERV-
ICE.—The Commissioner may order any such person
engaged in field work to duty in the District of Co-
lumbia, for such periods as the Commissioner may
prescribe, and to any designated post of duty outside
the District of Columbia upon the completion of such
duty.
‘‘(c) DELINQUENT INTERNAL REVENUE OFFICERS AND
EMPLOYEES.—If any officer or employee of the Treasury
Department acting in connection with the internal revenue
laws fails to account for and pay over any amount of money
or property collected or received by him in connection with
the internal revenue laws, the Secretary shall issue notice
and demand to such officer or employee for payment of the
amount which he failed to account for and pay over, and,
upon failure to pay the amount demanded within the time
specified in such notice, the amount so demanded shall be
deemed imposed upon such officer or employee and assessed
upon the date of such notice and demand, and the provi-
sions of chapter 64 and all other provisions of law relating
to the collection of assessed taxes shall be applicable in re-
spect of such amount.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (b) of section 6344 is amended by
striking ‘‘section 7803(d)’’ and inserting ‘‘section
7804(c)’’.
(2) The table of sections for subchapter A of
chapter 80 is amended by striking the item relating
to section 7804 and inserting the following new item:
‘‘Sec. 7804. Other personnel.’’
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 104. PROHIBITION ON EXECUTIVE BRANCH INFLU-
ENCE OVER TAXPAYER AUDITS AND OTHER
INVESTIGATIONS.
(a) IN GENERAL.—Part I of subchapter A of chapter
75 (relating to crimes, other offenses, and forfeitures) is
amended by adding after section 7216 the following new
section:
‘‘SEC. 7217. PROHIBITION ON EXECUTIVE BRANCH INFLU-
ENCE OVER TAXPAYER AUDITS AND OTHER
INVESTIGATIONS.
‘‘(a) PROHIBITION.—It shall be unlawful for any ap-
plicable person to request any officer or employee of the In-
ternal Revenue Service to conduct or terminate an audit
or other investigation of any particular taxpayer with re-
spect to the tax liability of such taxpayer.
‘‘(b) REPORTING REQUIREMENT.—Any officer or em-
ployee of the Internal Revenue Service receiving any request
prohibited by subsection (a) shall report the receipt of such
request to the Chief Inspector of the Internal Revenue Serv-
ice.
‘‘(c) EXCEPTIONS.—Subsection (a) shall not apply
to—
‘‘(1) any request made to an applicable person
by the taxpayer or a representative of the taxpayer
and forwarded by such applicable person to the Inter-
nal Revenue Service,
‘‘(2) any request by an applicable person for dis-
closure of return or return information under section
6103 if such request is made in accordance with the
requirements of such section, or
‘‘(3) any request by the Secretary of the Treas-
ury as a consequence of the implementation of a
change in tax policy.
‘‘(d) PENALTY.—Any person who willfully violates
subsection (a) or fails to report under subsection (b) shall
be punished upon conviction by a fine in any amount not
exceeding $5,000, or imprisonment of not more than 5
years, or both, together with the costs of prosecution.
‘‘(e) APPLICABLE PERSON.—For purposes of this sec-
tion, the term ‘applicable person’ means—
‘‘(1) the President, the Vice President, any em-
ployee of the executive office of the President, and any
employee of the executive office of the Vice President,
and
‘‘(2) any individual (other than the Attorney
General of the United States) serving in a position
specified in section 5312 of title 5, United States
Code.’’
(b) CLERICAL AMENDMENT.—The table of sections for
part I of subchapter A of chapter 75 is amended by adding
after the item relating to section 7216 the following new
item:
‘‘Sec. 7217. Prohibition on executive branch influence over taxpayer
audits and other investigations.’’