IIB
106TH CONGRESS
2D SESSION
H. R. 4163
IN THE SENATE OF THE UNITED STATES
APRIL 12, 2000
Received, read twice and referred to the Committee on Finance
AN ACT
To amend the Internal Revenue Code of 1986 to provide
for increased fairness to taxpayers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Taxpayer Bill of Rights 2000’’.
(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—PENALTIES AND INTEREST
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. Reductions of penalty for failure to pay tax.
Sec. 104. Abatement of interest.
Sec. 105. Deposits made to stop the running of interest on potential underpay-
ments.
Sec. 106. Expansion of interest netting for individuals.
TITLE II—CONFIDENTIALITY AND DISCLOSURE
Sec. 201. Disclosure and privacy rules relating to returns and return informa-
tion.
Sec. 202. Expansion of type of advice available for public inspection.
Sec. 203. Collection activities with respect to joint return disclosable to either
spouse based on oral request.
Sec. 204. Taxpayer representatives not subject to examination on sole basis of
representation of taxpayers.
Sec. 205. Disclosure in judicial or administrative tax proceedings of return and
return information of persons who are not party to such pro-
ceedings.
Sec. 206. Prohibition of disclosure of taxpayer identification information with
respect to disclosure of accepted offers-in-compromise.
Sec. 207. Compliance by State contractors with confidentiality safeguards.
Sec. 208. Higher standards for requests for and consents to disclosure.
Sec. 209. Notice to taxpayer concerning administrative determination of brows-
ing; annual report.
Sec. 210. Disclosure of taxpayer identity for tax refund purposes.
TITLE III—OTHER REQUIREMENTS
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Sec. 301. Clarification of definition of church tax inquiry.
Sec. 302. Expansion of declaratory judgment remedy to tax-exempt organiza-
tions.
Sec. 303. Employee misconduct report to include summary of complaints by
category.
Sec. 304. Increase in threshold for Joint Committee reports on refunds and
credits.
Sec. 305. Annual report on awards of costs and certain fees in administrative
and court proceedings.
Sec. 306. Annual report on abatement of penalties.
Sec. 307. Better means of communicating with taxpayers.
Sec. 308. Explanation of statute of limitations and consequences of failure to
file.
TITLE I—PENALTIES AND
INTEREST
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
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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
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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-
stallment, the 15th day of the 4th month fol-
lowing the close of a taxable year).
‘‘(C) DAILY RATE.—The rate determined
under subparagraph (A) shall be applied on a
daily basis and shall be based on the assump-
tion of 365 days in a calendar year.
‘‘(3) TERMINATION OF ESTIMATED TAX INTER-
EST.—No day after the end of the installment un-
derpayment period for the 4th required installment
specified in paragraph (2)(B) for a taxable year
shall be treated as a day of underpayment with re-
spect to such taxable year.’’.
(c) INCREASE
IN SAFE HARBOR WHERE TAX
IS
SMALL.—
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section
6641(d)(1)(B) (as so redesignated) is amended to
read as follows:
‘‘(i) the lesser of—
‘‘(I) 90 percent of the tax shown
on the return for the taxable year (or,
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if no return is filed, 90 percent of the
tax for such year), or
‘‘(II) the tax shown on the return
for the taxable year (or, if no return
is filed, the tax for such year) reduced
(but not below zero) by $2,000, or’’.
(2) CONFORMING AMENDMENT.—Subsection (e)
of section 6641 (as so redesignated) is amended by
striking paragraph (1) and redesignating paragraphs
(2) and (3) as paragraphs (1) and (2), respectively.
(d) CONFORMING AMENDMENTS.—
(1) Paragraphs (1) and (2) of subsection (e)
(as redesignated by subsection (c)(2)) and sub-
section (h) of section 6641 (as so designated) are
each amended by striking ‘‘addition to tax’’ each
place it occurs and inserting ‘‘interest’’.
(2) Section 167(g)(5)(D) is amended by strik-
ing ‘‘6654’’ and inserting ‘‘6641’’.
(3) Section 460(b)(1) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(4) Section 3510(b) is amended—
(A) by striking ‘‘section 6654’’ in para-
graph (1) and inserting ‘‘section 6641’’;
(B) by amending paragraph (2)(B) to read
as follows:
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‘‘(B) no interest would be required to be
paid (but for this section) under 6641 for such
taxable year by reason of the $2,000 amount
specified in section 6641(d)(1)(B)(i)(II).’’;
(C) by striking ‘‘section 6654(d)(2)’’ in
paragraph 
(3) 
and 
inserting 
‘‘section
6641(d)(2)’’; and
(D) by striking paragraph (4).
(5) Section 6201(b)(1) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(6) Section 6601(h) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(7) Section 6621(b)(2)(B) is amended by strik-
ing ‘‘addition to tax under section 6654’’ and insert-
ing ‘‘interest required to be paid under section
6641’’.
(8) Section 6622(b) is amended—
(A) by striking ‘‘PENALTY
FOR’’ in the
heading; and
(B) by striking ‘‘addition to tax under sec-
tion 6654 or 6655’’ and inserting ‘‘interest re-
quired to be paid under section 6641 or addi-
tion to tax under section 6655’’.
(9) Section 6658(a) is amended—
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(A) by striking ‘‘6654, or 6655’’ and in-
serting ‘‘or 6655, and no interest shall be re-
quired to be paid under section 6641,’’; and
(B) by inserting ‘‘or paying interest’’ after
‘‘the tax’’ in paragraph (2)(B)(ii).
(10) Section 6665(b) is amended—
(A) in the matter preceding paragraph (1)
by striking ‘‘, 6654,’’; and
(B) in paragraph (2) by striking ‘‘6654
or’’.
(11) Section 7203 is amended by striking ‘‘sec-
tion 6654 or 6655’’ and inserting ‘‘section 6655 or
interest required to be paid under section 6641’’.
(e) CLERICAL AMENDMENTS.—
(1) Chapter 67 is amended by inserting after
subchapter D the following:
‘‘Subchapter E—Interest on Failure by
Individual to Pay Estimated Income Tax
‘‘Sec. 6641. Interest on failure by individual to pay estimated in-
come tax.’’.
(2) The table of subchapters for chapter 67 is
amended by adding at the end the following new
items:
‘‘Subchapter D. Notice requirements.
‘‘Subchapter E. Interest on failure by individual to pay estimated
income tax.’’.
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(3) The table of sections for part I of sub-
chapter A of chapter 68 is amended by striking the
item relating to section 6654.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to installment payments for taxable
years beginning after December 31, 2000.
SEC. 102. EXCLUSION FROM GROSS INCOME FOR INTEREST
ON OVERPAYMENTS OF INCOME TAX BY INDI-
VIDUALS.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 (relating to items specifically excluded from gross
income) is amended by redesignating section 139 as sec-
tion 139A and by inserting after section 138 the following
new section:
‘‘SEC. 139. EXCLUSION FROM GROSS INCOME FOR INTER-
EST ON OVERPAYMENTS OF INCOME TAX BY
INDIVIDUALS.
‘‘(a) IN GENERAL.—In the case of an individual,
gross income shall not include interest paid under section
6611 on any overpayment of tax imposed by this subtitle.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply in
the case of a failure to claim items resulting in the over-
payment on the original return if the Secretary determines
that the principal purpose of such failure is to take advan-
tage of subsection (a).
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‘‘(c) SPECIAL RULE FOR DETERMINING MODIFIED
ADJUSTED GROSS INCOME.—For purposes of this title,
interest not included in gross income under subsection (a)
shall not be treated as interest which is exempt from tax
for purposes of sections 32(i)(2)(B) and 6012(d) or any
computation in which interest exempt from tax under this
title is added to adjusted gross income.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for part III of subchapter B of chapter 1 is amended by
striking the item relating to section 139 and inserting the
following new items:
‘‘Sec. 139. Exclusion from gross income for interest on overpay-
ments of income tax by individuals.
‘‘Sec. 139A. Cross references to other Acts.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to interest received in calendar
years beginning after the date of the enactment of this
Act.
SEC. 103. REDUCTIONS OF PENALTY FOR FAILURE TO PAY
TAX.
(a) REDUCTIONS OF PENALTY FOR FAILURE TO PAY
TAX.—
(1) REDUCTION
OF
PENALTY
BY
PER-
CENT.—
(A) IN GENERAL.—Paragraphs (2) and (3)
of section 6651(a) are each amended by strik-
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ing ‘‘0.5’’ each place it appears and inserting
‘‘0.25’’.
(B) 
CONFORMING
AMENDMENT.—Para-
graph (1) of section 6651(d) is amended by
striking ‘‘by substituting ‘1 percent’ for ‘0.5
percent’ ’’ and inserting ‘‘by substituting ‘0.5
percent’ for ‘0.25 percent’ ’’.
(2) REDUCTION OF PENALTY TO ZERO DURING
PERIOD OF INSTALLMENT AGREEMENT.—Subsection
(h) of section 6651 is amended by striking ‘‘by sub-
stituting ‘0.25’ for ‘0.5’ ’’ and inserting ‘‘by sub-
stituting ‘zero’ for ‘0.25’ ’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply for purposes of deter-
mining additions to tax for months beginning after
December 31, 2000.
(b) PROHIBITION
OF
FEE
FOR
INSTALLMENT
AGREEMENTS USING AUTOMATED WITHDRAWALS.—
(1) IN
GENERAL.—Section 6159 (relating to
agreements for payment of tax liability in install-
ments) is amended by redesignating subsection (e)
as subsection (f) and by inserting after subsection
(d) the following new subsection:
‘‘(e) PROHIBITION
OF
FEE
FOR
INSTALLMENT
AGREEMENTS USING AUTOMATED WITHDRAWALS.—The
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Secretary may not charge a taxpayer a fee for entering
into an agreement with the Secretary under this section
only for so long as payments under such agreement are
made by means of electronic transfer or by similar auto-
mated means.’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to installment agree-
ments entered into more than 30 days after the date
of the enactment of this Act.
SEC. 104. ABATEMENT OF INTEREST.
(a) ABATEMENT OF INTEREST IF GROSS INJUSTICE
WOULD OTHERWISE RESULT.—Section 6404 is amended
by redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
‘‘(i) ABATEMENT OF INTEREST IF GROSS INJUSTICE
WOULD OTHERWISE RESULT.—The Secretary may abate
the assessment of all or any part of interest on any
amount of tax imposed by this title for any period if the
Secretary determines that—
‘‘(1) a gross injustice would otherwise result if
interest were to be charged, and
‘‘(2) no significant aspect of the events giving
rise to the accrual of the interest can be attributed
to the taxpayer involved.’’.
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(b) ABATEMENT OF INTEREST FOR PERIODS AT-
TRIBUTABLE TO ANY UNREASONABLE IRS ERROR OR
DELAY.—Subparagraphs 
(A) 
and 
(B) 
of 
section
6404(e)(1) are each amended by striking ‘‘in performing
a ministerial or managerial act’’.
(c) ABATEMENT OF INTEREST WITH RESPECT TO
ERRONEOUS REFUND CHECK WITHOUT REGARD TO SIZE
OF REFUND.—Paragraph (2) of section 6404(e) is amend-
ed by striking ‘‘unless—’’ and all that follows and insert-
ing ‘‘unless the taxpayer (or a related party) has in any
way caused such erroneous refund.’’.
(d) ABATEMENT OF INTEREST TO EXTENT INTER-
EST
IS ATTRIBUTABLE
TO TAXPAYER RELIANCE
ON
WRITTEN STATEMENTS OF THE IRS.—Subsection (f) of
section 6404 is amended—
(1) in the subsection heading, by striking
‘‘PENALTY OR ADDITION’’ and inserting ‘‘INTEREST,
PENALTY, OR ADDITION’’; and
(2) in paragraph (1) and in subparagraph (B)
of paragraph (2), by striking ‘‘penalty or addition’’
and inserting ‘‘interest, penalty, or addition’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to interest accruing
on or after the date of the enactment of this Act.
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SEC. 105. DEPOSITS MADE TO STOP THE RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS.
(a) IN GENERAL.—Subchapter B of chapter 67 (re-
lating to interest on overpayments) is amended by redesig-
nating section 6612 as section 6613 and by inserting after
section 6611 the following new section:
‘‘SEC. 6612. DEPOSITS MADE TO STOP THE RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS,
ETC.
‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER THAN
AS PAYMENT OF TAX.—Any taxpayer may make a cash
bond deposit with the Secretary to offset any potential un-
derpayment of tax imposed by this title for any taxable
period. Such a deposit shall be made in such manner as
the Secretary shall prescribe.
‘‘(b) DEPOSITS USED TO PAY UNDERPAYMENT ALSO
OFFSET RUNNING OF INTEREST ON UNDERPAYMENT.—
Any cash bond deposit used to pay tax under this title
shall offset interest under subchapter A during the period
of such deposit on such tax under such procedures as the
Secretary shall prescribe.
‘‘(c) TAXPAYER MAY REQUEST RETURN OF CASH
BOND DEPOSIT.—
‘‘(1) IN
GENERAL.—On written request of a
taxpayer who made a cash bond deposit, the Sec-
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retary shall return to the taxpayer any amount of
such deposit specified by the taxpayer.
‘‘(2) NO INTEREST.—In the case of a deposit
which is so returned—
‘‘(A) the amount returned shall not offset
interest under subchapter A for any period, and
‘‘(B) except as provided in subsection (d),
no interest shall be allowed on such amount.
‘‘(3) EXCEPTIONS.—Paragraph (1) shall not
apply to any amount if—
‘‘(A) such amount has been treated by the
Secretary as a payment of tax after a final de-
termination of the disputed items to which such
amount relates,
‘‘(B) such amount has been designated by
the taxpayer as being a payment of tax,
‘‘(C) the Secretary determines that assess-
ment or collection of tax is in jeopardy, or
‘‘(D) the amount is applied in accordance
with section 6402.
Subparagraph (D) shall not apply to a payment to
a taxpayer if the taxpayer is entitled to be paid in-
terest under subsection (d) on such payment.
‘‘(d) INTEREST ON AMOUNTS RETURNED IN CER-
TAIN CIRCUMSTANCES.—
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‘‘(1) IN GENERAL.—Interest shall be allowed
and paid on the amount of any cash bond deposit
for a taxable period which is returned to the tax-
payer only if the deposit is attributable to a dispute
reserve account for such period.
‘‘(2) ATTRIBUTION TO DISPUTE RESERVE AC-
COUNT.—For purposes of paragraph (1), an amount
is attributable to a dispute reserve account for any
taxable period only to the extent that the aggregate
of the cash bond deposits for such period (reduced
by the amount of such deposits which has been pre-
viously returned to the taxpayer or treated as a pay-
ment of tax) does not exceed the deposit limit for
such period.
‘‘(3) DEPOSIT LIMIT.—For purposes of para-
graph (2)—
‘‘(A) IN GENERAL.—The deposit limit for
any taxable period is the amount specified by
the taxpayer at the time of the deposit as the
taxpayer’s reasonable estimate of the potential
underpayment for such period with respect to
disputable items identified (at such time) by the
taxpayer with respect to such deposit.
‘‘(B) SAFE
HARBOR
BASED
ON
30-DAY
LETTER.—In the case of a taxpayer who is
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issued a 30-day letter for any taxable period,
the deposit limit for such period shall not be
less than the amount of the proposed deficiency
specified in such letter.
‘‘(4) DEFINITIONS.—For purposes of paragraph
(3)—
‘‘(A) DISPUTABLE ITEM.—The term ‘dis-
putable item’ means any item if the taxpayer—
‘‘(i) has a reasonable basis for its
treatment of such item, and
‘‘(ii) reasonably believes that the Sec-
retary also has a reasonable basis for dis-
allowing the taxpayer’s treatment of such
item.
‘‘(B) 30-DAY LETTER.—The term ‘30-day
letter’ means the first letter of proposed defi-
ciency which allows the taxpayer an opportunity
for administrative review in the Internal Rev-
enue Service Office of Appeals.
‘‘(5) RATE AND PERIOD OF INTEREST.—
‘‘(A) RATE.—The rate of interest allowable
under this subsection shall be the Federal
short-term 
rate 
determined 
under 
section
6621(b), compounded daily.
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‘‘(B) PERIOD.—Interest under this sub-
section on any payment to a taxpayer shall be
payable from the date of the deposit to which
such payment is attributable to a date (to be
determined by the Secretary) preceding the date
of the check making such payment by not more
than 30 days. For purposes of the preceding
sentence, cash bond deposits for any taxable pe-
riod shall be treated as used and returned on
a last-in first-out basis.
‘‘(e) CASH BOND DEPOSIT.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘cash bond de-
posit’ means any payment which is designated by
the taxpayer as being a cash bond deposit for a
specified taxable period.
‘‘(2) AMOUNTS DESIGNATED OR USED AS PAY-
MENT OF TAX.—A cash bond deposit shall cease to
be treated as such for purposes of this section begin-
ning on the date that the taxpayer designates such
deposit as a payment of tax for purposes of this
title, or, if earlier, on the date such deposit is so
used.
‘‘(f) CHANGE
IN PERIOD
FOR WHICH DEPOSIT
MADE.—Subject to the requirements of subsection (d), a
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taxpayer may change the taxable period to which a cash
bond deposit relates.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter B of chapter 67 is amended by striking
the last item and inserting the following new items:
‘‘Sec. 6612. Deposits made to stop the running of interest on po-
tential underpayments, etc.
‘‘Sec. 6613. Cross references.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to interest for periods after
the date of the enactment of this Act.
(2) SPECIFICATION OF DISPUTED ITEMS.—In
the case of amounts held by the Secretary of the
Treasury on the date of the enactment of this Act
as a deposit in the nature of a cash bond pursuant
to Revenue Procedure 84–58, the date that the tax-
payer makes the identification under subsection
(d)(3)(A) of section 6612 of the Internal Revenue
Code of 1986, as added by this section, shall be
treated as the date such amounts were deposited for
purposes of such section 6612.
SEC. 106. EXPANSION OF INTEREST NETTING FOR INDIVID-
UALS.
(a) IN GENERAL.—Subsection (d) of section 6621
(relating to elimination of interest on overlapping periods
of tax overpayments and underpayments) is amended by
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adding at the end the following: ‘‘Solely for purposes of
the preceding sentence, section 6611(e) shall not apply in
the case of an individual.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to interest accrued after Decem-
ber 31, 2000.
TITLE II—CONFIDENTIALITY
AND DISCLOSURE
SEC. 201. DISCLOSURE AND PRIVACY RULES RELATING TO
RETURNS AND RETURN INFORMATION.
(a) IN GENERAL.—Subsection (a) of section 6103
(relating to general rule for confidentiality and disclosure
of returns and return information) is amended by striking
‘‘title—’’ and inserting ‘‘title and notwithstanding any
other provision of law—’’.
(b) PROCEDURAL AND JURISDICTIONAL RULES.—
Subsection (p) of section 6103 (relating to procedure and
recordkeeping) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(9) PROCEDURAL RULES APPLICABLE TO CER-
TAIN DISCLOSURES.—
‘‘(A) IN
GENERAL.—The Secretary shall
prescribe regulations for purposes of providing
for disclosures of return and return information
under subsections (c), (e), and (k)(1) and (2).
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Such regulations shall include a schedule of
fees, and waivers and reductions of such fees,
applicable to the processing of requests for such
disclosures.
‘‘(B) DETERMINATIONS OF WHETHER TO
COMPLY WITH DISCLOSURE REQUESTS.—
‘‘(i) INITIAL REQUESTS.—In response
to a request that reasonably describes the
return or return information sought and is
made in accordance with the published
rules, the Secretary shall—
‘‘(I) determine within 20 days
after the receipt of any request for
disclosure of return or return infor-
mation under subsections (c), (e), and
(k)(1) and (2) whether to comply with
such request, and
‘‘(II) immediately notify the per-
son making such request of such de-
termination and the reasons therefor,
and of the right of such person to ap-
peal to the Commissioner any adverse
determination.
‘‘(ii) 
APPEAL.—The 
Commissioner
shall—
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‘‘(I) make a determination with
respect to any appeal of any adverse
determination 
under 
clause 
(i)(I)
within 20 days after the receipt of
such appeal, and
‘‘(II) if on appeal the denial of
the request for disclosure of such re-
turn or return information is in whole
or in part upheld, the Commissioner
shall notify the person making such
request of the provisions for judicial
review of that determination under
subparagraph (D).
‘‘(iii) EXTENSION
OF
PERIODS
FOR
UNUSUAL CIRCUMSTANCES.—
‘‘(I) IN
GENERAL.—The time
limits prescribed in clause (i) and
clause (ii) (as the case may be) may
be extended for not more than 10
days in unusual circumstances by pro-
viding to the person making such re-
quest for disclosure written notice
which sets forth the unusual cir-
cumstances for such extension and the
date on which a determination is ex-
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pected to be dispatched. No such no-
tice shall specify a date that would re-
sult in an extension for more than 10
working days, except as provided in
subclause (II).
‘‘(II) 
MODIFICATION
OF
RE-
QUEST OR TIME PERIOD.—If, with re-
spect to a request for which the time
limits are extended under subclause
(I), the Secretary determines that the
request cannot be processed within
the time limit so specified, the Sec-
retary shall notify the person making
the request and shall provide the per-
son an opportunity to limit the scope
of the request so that it may be proc-
essed within that time limit or an op-
portunity to arrange with the agency
an alternative time frame for proc-
essing the request or a modified re-
quest. Refusal by the person to rea-
sonably modify the request or arrange
such an alternative time frame shall
be considered as a factor in deter-
mining 
whether 
exceptional 
cir-
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cumstances exist for purposes of sub-
paragraph (C).
‘‘(iv) UNUSUAL CIRCUMSTANCES DE-
FINED.—For purposes of clause (iii), the
term ‘unusual circumstances’ means, but
only to the extent reasonably necessary to
the proper processing of the particular
requests—
‘‘(I) the need to search for and
collect the requested records from
field facilities or other establishments
that are separate from the office proc-
essing the request,
‘‘(II) the need to search for, col-
lect, and appropriately examine a vo-
luminous amount of separate and dis-
tinct records which are demanded in a
single request, or
‘‘(III) the need for consultation,
which shall be conducted with all
practicable speed, with another agency
having a substantial interest in the
determination of the request or among
two or more components of the agency
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having substantial subject-matter in-
terest therein.
‘‘(v) 20-DAY PERIOD EXCLUDES CER-
TAIN DAYS.—The 20-day periods referred
to in clauses (i) and (ii) shall not include
Saturdays, Sundays, and legal public holi-
days.
‘‘(C) FAILURE TO MEET TIME LIMITS.—
‘‘(i) IN GENERAL.—Any person mak-
ing a request for the disclosure of return
or return information which is subject to
this paragraph shall be deemed to have ex-
hausted his administrative remedies with
respect to such request if the Secretary
fails to comply with the applicable time
limit provisions of this paragraph. If the
Secretary 
can 
show 
exceptional 
cir-
cumstances exist and that the agency is ex-
ercising due diligence in responding to the
request, the court may retain jurisdiction
and allow the agency additional time to
complete its review of the records. Upon
any determination by the Secretary to
comply with a request for records, the
records shall be made promptly available to
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such person making such request. Any no-
tification of denial of any request for
records under this subsection shall set
forth the names and titles or positions of
each person responsible for the denial of
such request.
‘‘(ii) EXCEPTIONAL
CIRCUMSTANCES
DEFINED.—For purposes of clause (i), the
term ‘exceptional circumstances’ does not
include a delay that results from a predict-
able workload of the Secretary relating to
requests subject to this paragraph, unless
the Secretary demonstrates reasonable
progress in reducing its backlog of pending
requests.
‘‘(iii) REFUSAL TO MODIFY REQUEST
OR TIME FRAME.—Refusal by a person to
reasonably modify the scope of a request
or arrange an alternative time frame for
processing a request (or a modified re-
quest) under subparagraph (B)(ii) after
being given an opportunity to do so by the
agency to whom the person made the re-
quest shall be considered as a factor in de-
termining 
whether 
exceptional 
cir-
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cumstances exist for purposes of this sub-
paragraph.
‘‘(D) JUDICIAL PROCEEDINGS.—
‘‘(i) JURISDICTION OF THE DISTRICT
COURTS.—
‘‘(I) IN
GENERAL.—On com-
plaint, the district courts of the
United States in the district in which
the complainant resides, or has his
principal place of business, or in
which his return or return informa-
tion is situated, or in the District of
Columbia, shall have jurisdiction to
enjoin the Secretary from withholding
return or return information which is
subject to disclosure under subsection
(c), (e), or (k)(1) or (2), and to order
the production of any return or return
information improperly withheld from
the complainant.
‘‘(II) EXPEDITED PROCESSING.—
No district court of the United States
shall have jurisdiction to review a de-
nial by the Secretary of expedited
processing of a request for return or
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return information after the Secretary
has provided a complete response to
the request.
‘‘(ii) PROCEDURAL
MATTERS.—In a
case arising under clause (i), the court
shall determine the matter de novo (on the
record before the Secretary at the time of
the determination in the case of a request
for expedited processing), and may exam-
ine the contents of such return or return
information in camera to determine wheth-
er such return or return information or
any part thereof shall be withheld under
any of the provisions of this title, and the
burden shall be on the Secretary to sustain
its action. In addition to any other matters
to which a court accords substantial
weight, a court shall accord substantial
weight to an affidavit of the Secretary con-
cerning the Secretary’s determination as to
technical feasibility relating to, and repro-
ducibility of, such return and return infor-
mation.
‘‘(E) DEADLINE FOR SECRETARY TO AN-
SWER COMPLAINT.—Notwithstanding any other
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provision of law, the Secretary shall serve an
answer or otherwise plead to any complaint
made under this paragraph within 30 days after
service upon the Secretary of the pleading in
which such complaint is made, unless the court
otherwise directs for good cause shown.’’.
(c) ATTORNEY FEES.—Subsection (a) of section
7430 (relating to general rule for awarding of costs and
certain fees) is amended by inserting after ‘‘title,’’ the fol-
lowing: ‘‘and in any court proceeding in connection with
the disclosure of return and return information under sec-
tion 6103(p)(9),’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to requests made after the date
of the enactment of this Act.
SEC. 202. EXPANSION OF TYPE OF ADVICE AVAILABLE FOR
PUBLIC INSPECTION.
(a) IN GENERAL.—Subparagraph (A) of section
6110(i)(1) is amended—
(1) by striking ‘‘national office component of
the Office of Chief Counsel’’ and inserting ‘‘compo-
nent of the Office of Chief Counsel or of the Serv-
ice’’; and
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(2) in clause (i) by striking ‘‘field or service
center employees of the Service or regional or dis-
trict’’ and inserting ‘‘employees of the Service or’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 6110(i)(2) is amended by inserting
‘‘or the Service’’ after ‘‘Office of Chief Counsel’’.
(2) The following provisions of section 6110 are
amended by striking ‘‘Chief Counsel advice’’ each
place it appears and inserting ‘‘official advice’’:
(A) Paragraph (1) of subsection (b).
(B) Subparagraph (A) of subsection (i)(1).
(C) Paragraphs (3) and (4) of subsection
(i).
(3) Subparagraph (A) of section 6110(g)(5) is
amended by inserting ‘‘official advice and’’ before
‘‘technical advice’’.
(4) The heading for subsection (i) of section
6110 is amended by striking ‘‘CHIEF COUNSEL’’ and
inserting ‘‘OFFICIAL’’.
(5) The heading for paragraph (1) of section
6110(i) is amended by striking ‘‘CHIEF COUNSEL’’
and inserting ‘‘OFFICIAL’’.
(6) The headings for paragraphs (2) and (3) of
section 6110(i), and for subparagraphs (A) and (B)
of paragraph (4) of such section, are each amended
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by striking ‘‘CHIEF COUNSEL’’ and inserting ‘‘OFFI-
CIAL’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to any official advice issued
more than 90 days after the date of the enactment
of this Act.
(2) DOCUMENTS
TREATED
AS
OFFICIAL
AD-
VICE.—If the Secretary of the Treasury by regula-
tion provides pursuant to section 6110(i)(2) of the
Internal Revenue Code of 1986, that any additional
advice or instruction issued by the Office of Chief
Counsel shall be treated as official advice, such addi-
tional advice or instruction shall be made available
for public inspection pursuant to section 6110 of
such Code, as amended by this section, only in ac-
cordance with the effective date set forth in such
regulation.
(3) OFFICIAL ADVICE TO BE AVAILABLE ELEC-
TRONICALLY.—The Internal Revenue Service shall
make any official advice issued more than 90 days
after the date of the enactment of this Act and made
available for public inspection pursuant to section
6110 of the Internal Revenue Code of 1986, as
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amended by this section, also available by computer
telecommunications within 1 year after issuance.
SEC. 203. COLLECTION ACTIVITIES WITH RESPECT TO
JOINT RETURN DISCLOSABLE TO EITHER
SPOUSE BASED ON ORAL REQUEST.
(a) IN GENERAL.—Paragraph (8) of section 6103(e)
(relating to disclosure of collection activities with respect
to joint return) is amended by striking ‘‘in writing’’ the
first place it appears.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to requests made after the date
of the enactment of this Act.
SEC. 204. TAXPAYER REPRESENTATIVES NOT SUBJECT TO
EXAMINATION ON SOLE BASIS OF REPRESEN-
TATION OF TAXPAYERS.
(a) IN GENERAL.—Subsection (h) of section 6103
(relating to disclosure to certain Federal officers and em-
ployees for purposes of tax administration, etc.) is amend-
ed by adding at the end the following new paragraph:
‘‘(7) TAXPAYER REPRESENTATIVES.—Notwith-
standing paragraph (1), the return of the represent-
ative of a taxpayer whose return is being examined
by an officer or employee of the Department of the
Treasury shall not be open to inspection by such of-
ficer or employee on the sole basis of the representa-
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tive’s relationship to the taxpayer unless a super-
visor of such officer or employee has approved the
inspection of the return of such representative on a
basis other than by reason of such relationship.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 205. DISCLOSURE IN JUDICIAL OR ADMINISTRATIVE
TAX PROCEEDINGS OF RETURN AND RETURN
INFORMATION OF PERSONS WHO ARE NOT
PARTY TO SUCH PROCEEDINGS.
(a) IN GENERAL.—Paragraph (4) of section 6103(h)
(relating to disclosure to certain Federal officers and em-
ployees for purposes of tax administration, etc.) is amend-
ed by adding at the end the following new subparagraph:
‘‘(B) DISCLOSURE IN JUDICIAL OR ADMIN-
ISTRATIVE TAX PROCEEDINGS OF RETURN AND
RETURN INFORMATION OF PERSONS NOT PARTY
TO SUCH PROCEEDINGS.—
‘‘(i) NOTICE.—Return or return infor-
mation of any person who is not a party to
a judicial or administrative proceeding de-
scribed in paragraph (4) shall not be dis-
closed under clause (ii) or (iii) of subpara-
graph (A) until after the Secretary makes
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a reasonable effort to give notice to such
person and an opportunity for such person
to request the deletion of matter from such
return or return information, including any
of the items referred to in paragraphs (1)
through (7) of section 6110(c). Such notice
shall include a statement of the issue or
issues the resolution of which is the reason
such return or return information is
sought. In the case of S corporations, part-
nerships, estates, and trusts, such notice
shall be made at the entity level.
‘‘(ii) DISCLOSURE LIMITED TO PERTI-
NENT PORTION.—The only portion of a re-
turn or return information described in
clause (i) which may be disclosed under
subparagraph (A) is that portion of such
return or return information that directly
relates to the resolution of an issue in such
proceeding.
‘‘(iii) EXCEPTIONS.—Clause (i) shall
not apply to—
‘‘(I) any ex parte proceeding for
obtaining a search warrant, order for
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entry on premises or safe deposit
boxes, or similar ex parte proceeding,
‘‘(II) disclosure of third party re-
turn information by indictment or
criminal information, or
‘‘(III) if the Secretary determines
that the application of such clause
would seriously impair a criminal tax
investigation.’’.
(b) CONFORMING AMENDMENTS.—Paragraph (4) of
section 6103(h) is amended by—
(1) by striking ‘‘PROCEEDINGS.—A return’’ and
inserting ‘‘PROCEEDINGS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a return’’;
(2) by redesignating subparagraphs (A), (B),
(C), and (D) clauses (i), (ii), (iii), and (iv), respec-
tively; and
(3) in the matter following clause (iv) (as so re-
designated), by striking ‘‘subparagraph (A), (B), or
(C)’’ and inserting ‘‘clause (i), (ii), or (iii)’’ and by
moving such matter 2 ems to the right.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to proceedings commenced after
the date of the enactment of this Act.
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SEC. 206. PROHIBITION OF DISCLOSURE OF TAXPAYER
IDENTIFICATION 
INFORMATION 
WITH 
RE-
SPECT TO DISCLOSURE OF ACCEPTED OF-
FERS-IN-COMPROMISE.
(a) IN GENERAL.—Paragraph (1) of section 6103(k)
(relating to disclosure of certain returns and return infor-
mation for tax administrative purposes) is amended by in-
serting ‘‘(other than address and TIN)’’ after ‘‘Return in-
formation’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to disclosures made after the date
of the enactment of this Act.
SEC. 207. COMPLIANCE BY STATE CONTRACTORS WITH
CONFIDENTIALITY SAFEGUARDS.
(a) IN GENERAL.—Paragraph (8) of section 6103(p)
(relating to State law requirements) is amended by redes-
ignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new sub-
paragraph:
‘‘(B) DISCLOSURE
TO
CONTRACTORS.—
Notwithstanding any other provision of this sec-
tion, no return or return information shall be
disclosed by any officer or employee of any
State to any contractor of the State unless such
State—
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‘‘(i) has requirements in effect which
require each contractor of the State which
would have access to returns or return in-
formation to provide safeguards (within
the meaning of paragraph (4)) to protect
the confidentiality of such returns or re-
turn information,
‘‘(ii) agrees to conduct an annual, on-
site review (mid-point review in the case of
contracts of less than 1 year in duration)
of each contractor to determine compliance
with such requirements,
‘‘(iii) submits the findings of the most
recent review conducted under clause (ii)
to the Secretary as part of the report re-
quired by paragraph (4)(E), and
‘‘(iv) certifies to the Secretary for the
most recent annual period that all contrac-
tors are in compliance with all such re-
quirements.
The certification required by clause (iv) shall
include the name and address of each con-
tractor, a description of the contract of the con-
tractor with the State, and the duration of such
contract.’’.
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(b) CONFORMING AMENDMENT.—Subparagraph (C)
of section 6103(p)(8), as amended by subsection (a), is
amended by striking ‘‘subparagraph (A)’’ and inserting
‘‘subparagraphs (A) and (B)’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to disclosures made after De-
cember 31, 2001.
(2) 
The 
first 
certification 
under 
section
6103(p)(8)(B)(iv) of the Internal Revenue Code of
1986, as added by subsection (a), shall be made with
respect to calendar year 2002.
SEC. 208. HIGHER STANDARDS FOR REQUESTS FOR AND
CONSENTS TO DISCLOSURE.
(a) IN GENERAL.—Subsection (c) of section 6103
(relating to disclosure of returns and return information
to designee of taxpayer) is amended by adding at the end
the following new paragraphs:
‘‘(2) REQUIREMENTS
FOR
VALID
REQUESTS
AND CONSENTS.—A request for or consent to disclo-
sure under paragraph (1) shall only be valid for pur-
poses of this section or sections 7213, 7213A, or
7431 if—
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‘‘(A) at the time of execution, such request
or consent designates a recipient of such disclo-
sure and is dated, and
‘‘(B) at the time such request or consent
is submitted to the Secretary, the submitter of
such request or consent certifies, under penalty
of perjury, that such request or consent com-
plied with subparagraph (A).
‘‘(3) RESTRICTIONS
ON
PERSONS
OBTAINING
INFORMATION.—Any person shall, as a condition for
receiving return or return information under para-
graph (1)—
‘‘(A) ensure that such return and return
information is kept confidential,
‘‘(B) use such return and return informa-
tion only for the purpose for which it was re-
quested, and
‘‘(C) not disclose such return and return
information except to accomplish the purpose
for which it was requested, unless a separate
consent from the taxpayer is obtained.
‘‘(4) REQUIREMENTS
FOR
FORM
PRESCRIBED
BY SECRETARY.—For purposes of this subsection,
the Secretary shall prescribe a form for requests and
consents which shall—
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‘‘(A) contain a warning, prominently dis-
played, informing the taxpayer that the form
should not be signed unless it is completed,
‘‘(B) state that if the taxpayer believes
there is an attempt to coerce him to sign an in-
complete or blank form, the taxpayer should re-
port the matter to the Treasury Inspector Gen-
eral for Tax Administration, and
‘‘(C) contain the address and telephone
number of the Treasury Inspector General for
Tax Administration.’’.
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Treasury Inspector
General for Tax Administration shall submit a report to
the Congress on compliance with the designation and cer-
tification requirements applicable to requests for or con-
sent to disclosure of returns and return information under
section 6103(c) of the Internal Revenue Code of 1986, as
amended by subsection (a). Such report shall—
(1) evaluate (on the basis of random sampling)
whether—
(A) the amendments made by subsection
(a) are achieving the purposes of this section;
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(B) requesters and submitters for such dis-
closure are continuing to evade the purposes of
this section and, if so, how; and
(C) the sanctions for violations of such re-
quirements are adequate; and
(2) include such recommendations that the
Treasury Inspector General for Tax Administration
considers necessary or appropriate to better achieve
the purposes of this section.
(c) CONFORMING AMENDMENT.—Section 6103(c) is
amended by striking ‘‘TAXPAYER.—The Secretary’’ and
inserting ‘‘TAXPAYER.—
‘‘(1) IN GENERAL.—The Secretary’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to requests and consents made
after 3 months after the date of the enactment of this
Act.
SEC. 209. NOTICE TO TAXPAYER CONCERNING ADMINIS-
TRATIVE DETERMINATION OF BROWSING; AN-
NUAL REPORT.
(a) NOTICE TO TAXPAYER.—Subsection (e) of section
7431 (relating to notification of unlawful inspection and
disclosure) is amended by adding at the end the following:
‘‘The Secretary shall also notify such taxpayer if the
Treasury Inspector General for Tax Administration deter-
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mines that such taxpayer’s return or return information
was inspected or disclosed in violation of any of the provi-
sions specified in paragraph (1), (2), or (3).’’.
(b) REPORTS.—Subsection (p) of section 6103 (relat-
ing to procedure and recordkeeping), as amended by sec-
tion 201(b), is further amended by adding at the end the
following new paragraph:
‘‘(10) REPORT ON UNAUTHORIZED DISCLOSURE
AND INSPECTION.—As part of the report required by
paragraph (3)(C) for each calendar year, the Sec-
retary shall furnish information regarding the unau-
thorized disclosure and inspection of returns and re-
turn information, including the number, status, and
results of—
‘‘(A) administrative investigations,
‘‘(B) civil lawsuits brought under section
7431 (including the amounts for which such
lawsuits were settled and the amounts of dam-
ages awarded), and
‘‘(C) criminal prosecutions.’’.
(c) EFFECTIVE DATE.—
(1) NOTICE.—The amendment made by sub-
section (a) shall apply to determinations made after
the date of the enactment of this Act.
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(2) REPORTS.—The amendment made by sub-
section (b) shall apply to calendar years ending after
the date of the enactment of this Act.
SEC. 210. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX
REFUND PURPOSES.
Paragraph (1) of section 6103(m) (relating to disclo-
sure of taxpayer identity information for tax refunds) is
amended by inserting ‘‘, and through any other means of
mass communication,’’ after ‘‘media’’.
TITLE III—OTHER
REQUIREMENTS
SEC. 301. CLARIFICATION OF DEFINITION OF CHURCH TAX
INQUIRY.
Subsection (i) of section 7611 (relating to section not
to apply to criminal investigations, etc.) is amended by
striking ‘‘or’’ at the end of paragraph (4), by striking the
period at the end of paragraph (5) and inserting ‘‘, or’’,
and by inserting after paragraph (5) the following:
‘‘(6) information provided by the Secretary re-
lated to the standards for exemption from tax under
this title and the requirements under this title relat-
ing to unrelated business taxable income.’’.
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SEC. 302. EXPANSION OF DECLARATORY JUDGMENT REM-
EDY TO TAX-EXEMPT ORGANIZATIONS.
(a) IN GENERAL.—Paragraph (1) of section 7428(a)
(relating to creation of remedy) is amended—
(1) in subparagraph (B) by inserting after
‘‘509(a))’’ the following: ‘‘or as a private operating
foundation (as defined in section 4942(j)(3))’’; and
(2) by amending subparagraph (C) to read as
follows:
‘‘(C) with respect to the initial qualifica-
tion or continuing qualification of an organiza-
tion as an organization described in section
501(c) (other than paragraph (3)) which is ex-
empt from tax under section 501(a), or’’.
(b) COURT JURISDICTION.—Subsection (a) of section
7428 is amended in the material following paragraph (2)
by striking ‘‘United States Tax Court, the United States
Claims Court, or the district court of the United States
for the District of Columbia’’ and inserting the following:
‘‘United States Tax Court (in the case of any such deter-
mination or failure) or the United States Claims Court
or the district court of the United States for the District
of Columbia (in the case of a determination or failure with
respect to an issue referred to in subparagraph (A) or (B)
of paragraph (1)),’’.
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(c) FAILURE OF SERVICE TO ACT ON DETERMINA-
TIONS TREATED AS EXHAUSTION OF REMEDIES.—The
second sentence of paragraph (2) of section 7428(b) (re-
lating to exhaustion of administrative remedies) is amend-
ed to read as follows: ‘‘An organization requesting the de-
termination of an issue referred to in subsection (a)(1)
shall be deemed to have exhausted its administrative rem-
edies with respect to—
‘‘(A) a failure by the Secretary to make a
determination with respect to such issue at the
expiration of 270 days after the date on which
the request for such determination was made if
the organization has taken, in a timely manner,
all reasonable steps to secure such determina-
tion, and
‘‘(B) a failure by any office of the Service
(other than the office which is responsible for
initial determinations with respect to such issue
(hereinafter in this subparagraph referred to as
the ‘initial office’), to make a determination
with respect to such issue at the expiration of
180 days after the date on which any request
for such determination was made by the initial
office if the organization has taken, in a timely
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manner, all reasonable steps to secure such de-
termination.’’.
(d) EFFECTIVE DATES.—
(1) DECLARATORY
JUDGMENT.—The amend-
ments made by subsections (a) and (b) shall apply
to pleadings filed with respect to determinations (or
requests for determinations) made after the date of
the enactment of this Act.
(2) FAILURE
OF
SERVICE
TO
ACT.—The
amendments made by subsection (c) shall apply to
applications received in the national office of the In-
ternal Revenue Service after the date of the enact-
ment of this Act.
SEC. 303. EMPLOYEE MISCONDUCT REPORT TO INCLUDE
SUMMARY OF COMPLAINTS BY CATEGORY.
(a) 
IN
GENERAL.—Clause 
(ii) 
of 
section
7803(d)(2)(A) is amended by inserting before the semi-
colon at the end the following: ‘‘, including a summary
(by category) of the 10 most common complaints made
and the number of such common complaints’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to reporting periods
ending after the date of the enactment of this Act.
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SEC. 304. INCREASE IN THRESHOLD FOR JOINT COM-
MITTEE REPORTS ON REFUNDS AND CRED-
ITS.
(a) GENERAL RULE.—Subsections (a) and (b) of sec-
tion 6405 are each amended by striking ‘‘$1,000,000’’ and
inserting ‘‘$2,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act, except that such amendment shall not
apply with respect to any refund or credit with respect
to a report that has been made before such date of the
enactment under section 6405 of the Internal Revenue
Code of 1986.
SEC. 305. ANNUAL REPORT ON AWARDS OF COSTS AND
CERTAIN 
FEES 
IN 
ADMINISTRATIVE 
AND
COURT PROCEEDINGS.
Not later than 3 months after the close of each Fed-
eral fiscal year after fiscal year 1999, the Treasury In-
spector General for Tax Administration shall submit a re-
port to Congress which specifies for such year—
(1) the number of payments made by the
United States pursuant to section 7430 of the Inter-
nal Revenue Code of 1986 (relating to awarding of
costs and certain fees);
(2) the amount of each such payment;
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(3) an analysis of any administrative issue giv-
ing rise to such payments; and
(4) changes (if any) which will be implemented
as a result of such analysis and other changes (if
any) recommended by the Treasury Inspector Gen-
eral for Tax Administration as a result of such anal-
ysis.
SEC. 306. ANNUAL REPORT ON ABATEMENT OF PENALTIES.
Not later than 6 months after the close of each Fed-
eral fiscal year after fiscal year 1999, the Treasury In-
spector General for Tax Administration shall submit a re-
port to Congress on abatements of penalties under the In-
ternal Revenue Code of 1986 during such year, including
information on the reasons and criteria for such abate-
ments.
SEC. 307. BETTER MEANS OF COMMUNICATING WITH TAX-
PAYERS.
Not later than 18 months after the date of the enact-
ment of this Act, the Treasury Inspector General for Tax
Administration shall submit a report to Congress evalu-
ating whether technological advances, such as e-mail and
facsimile transmission, permit the use of alternative
means for the Internal Revenue Service to communicate
with taxpayers.
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SEC. 308. EXPLANATION OF STATUTE OF LIMITATIONS AND
CONSEQUENCES OF FAILURE TO FILE.
The Secretary of the Treasury or the Secretary’s del-
egate shall, as soon as practicable but not later than 180
days after the date of the enactment of this Act, revise
the statement required by section 6227 of the Omnibus
Taxpayer Bill of Rights (Internal Revenue Service Publi-
cation No. 1), and any instructions booklet accompanying
a general income tax return form for taxable years begin-
ning in 2000 and later (including forms 1040, 1040A,
1040EZ, and any similar or successor forms relating
thereto), to provide for an explanation of—
(1) the limitations imposed by section 6511 of
the Internal Revenue Code of 1986 on credits and
refunds; and
(2) the consequences under such section 6511
of the failure to file a return of tax.
Passed the House of Representatives April 11, 2000.
Attest:
JEFF TRANDAHL,
Clerk.