‘‘(B) an organization exempt from tax
under section 501(c) which satisfies the require-
ments of paragraph (1) through representation
of taxpayers or referral of taxpayers to qualified
representatives.
‘‘(3) QUALIFIED REPRESENTATIVE.—The term
‘qualified representative’ means any individual
(whether or not an attorney) who is authorized to
practice before the Internal Revenue Service or the
applicable court.
‘‘(c) SPECIAL RULES AND LIMITATIONS.—
‘‘(1) AGGREGATE
LIMITATION.—Unless other-
wise provided by specific appropriation, the Sec-
retary shall not allocate more than $3,000,000 per
year (exclusive of costs of administering the pro-
gram) to grants under this section.
‘‘(2) LIMITATION ON INDIVIDUAL GRANTS.—A
grant under this section shall not exceed $100,000
per year.
‘‘(3) MULTI-YEAR GRANTS.—Upon application
of a qualified low income taxpayer clinic, the Sec-
retary is authorized to award a multi-year grant not
to exceed 3 years.
‘‘(4) CRITERIA FOR AWARDS.—In determining
whether to make a grant under this section, the Sec-
retary shall consider—
‘‘(A) the numbers of taxpayers who will be
served by the clinic, including the number of
taxpayers in the geographical area for whom
English is a second language,
‘‘(B) the existence of other low income tax-
payer clinics serving the same population,
‘‘(C) the quality of the program offered by
the low income taxpayer clinic, including the
qualifications of its administrators and qualified
representatives, and its track record, if any, in
providing service to low income taxpayers, and
‘‘(D) alternative funding sources available
to the clinic, including amounts received from
other grants and contributions, and the endow-
ment and resources of the educational institu-
tion sponsoring the clinic.
‘‘(5) REQUIREMENT OF MATCHING FUNDS.—A
low income taxpayer clinic must provide matching
funds on a dollar for dollar basis for all grants pro-
vided under this section. Matching funds may in-
clude—
‘‘(A) the salary (including fringe benefits)
of a faculty member at an educational institu-
tion who is teaching in the clinic;
‘‘(B) the salaries of administrative person-
nel employed in the clinic; and
‘‘(C) the cost of equipment used in the
clinic.
Indirect expenses, including general overhead of the
educational institution sponsoring the clinic, shall
not be counted as matching funds.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 77 is amended by adding at the end the follow-
ing new section:
‘‘Sec. 7525. Low income taxpayer clinics.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 314. JURISDICTION OF THE TAX COURT.
(a) INTEREST DETERMINATIONS.—Subsection (c) of
section 7481 (relating to the date when Tax Court deci-
sions become final) is amended—
(1) by inserting ‘‘or underpayment’’ after
‘‘overpayment’’ each place it appears, and
(2) by striking ‘‘petition’’ in paragraph (3) and
inserting ‘‘motion’’.
(b) EXTENSION OF TIME FOR PAYMENT OF ESTATE
TAX.—Section 6166 (relating to the extension of time for
payment of estate tax) is amended—
(1) by redesignating subsection (k) as sub-
section (l), and
(2) by inserting after subsection (j) the follow-
ing new subsection:
‘‘(k) JUDICIAL REVIEW.—The Tax Court shall have
jurisdiction to review disputes regarding initial or continu-
ing eligibility for extensions of time for payment under
this section, including disputes regarding the proper
amount of installment payments required herein.’’
(c) SMALL CASE CALENDAR.—
(1) Subsection (a) of section 7463 (relating to
disputes involving $10,000 or less) is amended by
striking ‘‘$10,000’’ each place it appears and insert-
ing ‘‘$25,000’’.
(2) The section heading for section 7463 is
amended by striking ‘‘$10,000’’ and inserting
‘‘$25,000’’.
(3) The item relating to section 7463 in the
table of sections for part II of subchapter C of chap-
ter 76 is amended by striking ‘‘$10,000’’ and insert-
ing ‘‘$25,000’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to proceedings commencing after
the date of the enactment of this Act.
SEC. 315. CATALOGING COMPLAINTS.
(a) IN GENERAL.—The Commissioner of Internal
Revenue shall, as soon as practicable, but not later than
180 days after the date of the enactment of this Act, de-
velop procedures to catalog and review taxpayer com-
plaints of misconduct by Internal Revenue Service employ-
ees. Such procedures should include guidelines for internal
review and discipline of employees, as warranted by the
scope of such complaints.
(b) HOTLINE.—The Commissioner of Internal Reve-
nue shall, as soon as practicable, but not later than 180
days after the date of the enactment of this Act, establish
a toll-free telephone number for taxpayers to register com-
plaints of misconduct by Internal Revenue Service employ-
ees, and shall publish such number in Publication 1.
SEC. 316. PROCEDURES INVOLVING TAXPAYER INTER-
VIEWS.
(a) IN GENERAL.—Paragraph (1) of section 7521(b)
(relating to procedures involving taxpayer interviews) is
amended to read as follows:
‘‘(1) EXPLANATIONS OF PROCESSES.—An offi-
cer or employee of the Internal Revenue Service
shall—
‘‘(A) before or at an initial interview, pro-
vide to the taxpayer—
‘‘(i) in the case of an in-person inter-
view with the taxpayer relating to the de-
termination of any tax, an explanation of
the audit process and the taxpayer’s rights
under such process, or
‘‘(ii) in the case of an in-person inter-
view with the taxpayer relating to the col-
lection of any tax, an explanation of the
collection process and the taxpayer’s rights
under such process, and
‘‘(B) before an in-person initial interview
with the taxpayer relating to the determination
of any tax—
‘‘(i) inquire whether the taxpayer is
represented by an individual described in
subsection (c),
‘‘(ii) explain that the taxpayer has the
right to have the interview take place in a
reasonable place and that such place does
not have to be the taxpayer’s home,
‘‘(iii) explain the reasons for the selec-
tion of the taxpayer’s return for examina-
tion, and
‘‘(iv) provide the taxpayer with a writ-
ten explanation of the applicable burdens
of proof on taxpayers and the Internal
Revenue Service.
If the taxpayer is represented by an individual de-
scribed in subsection (c), the interview may not pro-
ceed without the presence of such individual unless
the taxpayer consents.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to interviews and examinations
taking place after the date of the enactment of this Act.
SEC. 
317. 
EXPLANATION 
OF 
JOINT 
AND 
SEVERAL
LIABILITY.
(a) IN GENERAL.—The Secretary of the Treasury or
the Secretary’s delegate shall, as soon as practicable, but
not later than 180 days after the date of the enactment
of this Act, establish procedures to clearly alert taxpayers
of their joint and several liabilities on all tax forms, publi-
cations, and instructions. Such procedures shall include
explanations of the possible consequences of joint and sev-
eral liability.
(b) TRANSMISSION
TO
COMMITTEES
OF
CON-
GRESS.—Such Secretary shall transmit drafts of the pro-
cedures required under subsection (a) (or proposed revi-
sions to any such procedures) to the Committee on Ways
and Means of the House of Representatives, the Commit-
tee on Finance of the Senate, and the Joint Committee
on Taxation on the same day.
SEC. 318. PROCEDURES RELATING TO EXTENSIONS OF
STATUTE OF LIMITATIONS BY AGREEMENT.
(a) IN GENERAL.—Paragraph (4) of section 6501(c)
(relating to the period for limitations on assessment and
collection) is amended—
(1) by striking ‘‘Where’’ and inserting the fol-
lowing:
‘‘(A) IN GENERAL.—Where’’,
(2) by moving the text 2 ems to the right, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) NOTICE TO TAXPAYER OF RIGHT TO
REFUSE OR LIMIT EXTENSION.—The Secretary
shall notify the taxpayer of the taxpayer’s right
to refuse to extend the period of limitations, or
to limit such extension to particular issues, on
each occasion when the taxpayer is requested to
provide such consent.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to requests to extend the period
of limitations made after the date of the enactment of this
Act.
SEC. 319. REVIEW OF PENALTY ADMINISTRATION.
The Taxpayer Advocate shall prepare a study and
provide an independent report to the Committee on Ways
and Means of the House of Representatives, the Commit-
tee on Finance of the Senate, and the Joint Committee
on Taxation, no later than July 30, 1998, reviewing the
administration and implementation by the Internal Reve-
nue Service of the penalty reform recommendations made
in the Omnibus Budget Reconciliation Act of 1989, includ-
ing legislative and administrative recommendations to sim-
plify penalty administration and reduce taxpayer burden.
SEC. 320. STUDY OF TREATMENT OF ALL TAXPAYERS AS
SEPARATE FILING UNITS.
The Secretary of the Treasury or his delegate and
the Comptroller General of the United States shall each
conduct separate studies on the feasibility of treating each
individual separately for purposes of the Internal Revenue
Code of 1986, including recommendations for eliminating
the marriage penalty, addressing community property is-
sues, and reducing burden for divorced and separated tax-
payers. The reports of each study shall be delivered to the
Committee on Ways and Means of the House of Rep-
resentatives, the Committee on Finance of the Senate, and
the Joint Committee on Taxation no later than 180 days
after the date of the enactment of this Act.
SEC. 321. STUDY OF BURDEN OF PROOF.
The Comptroller General of the United States shall
prepare a report on the burdens of proof for taxpayers
and the Internal Revenue Service for controversies arising
under the Internal Revenue Code of 1986, which shall be
delivered to the Committee on Ways and Means of the
House of Representatives, the Committee on Finance of
the Senate, and the Joint Committee on Taxation no later
than 180 days after the date of the enactment of this Act.
Such report shall highlight the differences between these
burdens and the burdens imposed in other disputes with
the Federal Government, and should comment on the im-
pact of changing these burdens on tax administration and
taxpayer rights.
TITLE IV—CONGRESSIONAL AC-
COUNTABILITY FOR THE IN-
TERNAL REVENUE SERVICE
Subtitle A—Oversight
SEC. 401. EXPANSION OF POWERS OF THE JOINT COMMIT-
TEE ON TAXATION.
(a) IN GENERAL.—Section 8021 (relating to the pow-
ers of the Joint Committee on Taxation) is amended by
adding at the end the following new subsections:
‘‘(e) CONSULTANT SERVICES.—The Joint Committee
is authorized to procure the services of experts and con-
sultants in accordance with section 3109(b) of title 5,
United States Code.
‘‘(f) INVESTIGATIONS.—The Joint Committee shall
review all requests (other than requests by a Committee
or Subcommittee) for investigations of the Internal Reve-
nue Service by the General Accounting Office, and approve
such requests when appropriate, with a view towards
eliminating overlapping investigations, ensuring that the
General Accounting Office has the capacity to handle the
investigation, and ensuring that investigations focus on
areas of primary importance to tax administration.
‘‘(g) RELATING TO JOINT HEARINGS.—
‘‘(1) IN
GENERAL.—The Chief of Staff, and
such other staff as are appointed pursuant to section
8004, shall provide such assistance as is required for
joint hearings described in paragraph (2).
‘‘(2) JOINT HEARINGS.—On or before April 1
of each calendar year after 1997, there shall be a
joint hearing of two members of the majority and
one member of the minority from each of the Com-
mittees on Finance, Appropriations, and Govern-
ment Affairs of the Senate, and the Committees on
Ways and Means, Appropriations, and Government
Reform and Oversight of the House of Representa-
tives, to review the strategic plans and budget for
the Internal Revenue Service. After the conclusion of
the annual filing season, there shall be a second an-
nual joint hearing to review other matters outlined
in section 8022(3)(C).’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 402. COORDINATED OVERSIGHT REPORTS.
(a) IN GENERAL.—Paragraph (3) of section 8022
(relating to the duties of the Joint Committee on Tax-
ation) is amended to read as follows:
‘‘(3) REPORTS.—
‘‘(A) To report, from time to time, to the
Committee on Finance and the Committee on
Ways and Means, and, in its discretion, to the
Senate or House of Representatives, or both,
the results of its investigations, together with
such recommendations as it may deem advis-
able.
‘‘(B) To report, annually, to the Commit-
tee on Finance and the Committee on Ways
and Means on the overall state of the Federal
tax system, together with recommendations
with respect to possible simplification proposals
and other matters relating to the administra-
tion of the Federal tax system as it may deem
advisable.
‘‘(C) To report, annually, to the Commit-
tees on Finance, Appropriations, and Govern-
ment Affairs of the Senate, and to the Commit-
tees on Ways and Means, Appropriations, and
Government Reform and Oversight of the
House of Representatives, with respect to—
‘‘(i) strategic and business plans for
the Internal Revenue Service;
‘‘(ii) progress of the Internal Revenue
Service in meeting its objectives;
‘‘(iii) the budget for the Internal Rev-
enue Service and whether it supports its
objectives;
‘‘(iv) progress of the Internal Revenue
Service in improving taxpayer service and
compliance;
‘‘(v) progress of the Internal Revenue
Service on technology modernization; and
‘‘(vi) the annual filing season.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle B—Budget
SEC. 411. BUDGET DISCRETION.
(a) IN GENERAL.—
(1) ADJUSTMENTS.—For purposes of the Con-
gressional Budget Act of 1974 and the Balanced
Budget and Emergency Deficit Control Act of
1985—
(A) the discretionary spending limits under
section 601(a)(2) of the Congressional Budget
Act of 1974 (and those limits as cumulatively
adjusted) for the current fiscal year and each
outyear;
(B) the allocations to the Committees on
Appropriations under sections 302(a) and
602(a) of the Congressional Budget Act of
1974; and
(C) the levels for major functional category
800 (General Government) and the appropriate
budgetary aggregates in the most recently
agreed to concurrent resolution on the budget,
shall be adjusted to reflect the amounts of additional
new budget authority or additional outlays reported
by the Committee on Appropriations in appropria-
tions legislation (or by the committee of conference
on such legislation) for the Internal Revenue Serv-
ice.
(2) LIMITATION.—Any adjustments made pur-
suant to paragraph (1) may be made for new initia-
tives on an annual basis only for—
(A) improvements in taxpayer services, in-
cluding building an integrated database of tax-
payer information accessible to front-line Inter-
nal Revenue Service personnel; or
(B) other improvements that the Director
of the Congressional Budget Office certifies to
the Chairpersons of the Committees on Budget
of the Senate and the House of Representatives
that such budget authority will not increase the
Federal budget deficit,
except that funding for ongoing programs shall be
provided through the normal appropriations process.
(b) REVISED LIMITS, ALLOCATIONS, LEVELS, AND
AGGREGATES.—Upon the reporting of legislation pursu-
ant to subsection (a), and again upon the submission of
a conference report on such legislation in either House (if
a conference report is submitted), the Chairpersons of the
Committees on the Budget of the Senate and the House
of Representatives shall file with their respective Houses
appropriately revised—
(1) discretionary spending limits under section
601(a)(2) of the Congressional Budget Act of 1974
(and those limits as cumulatively adjusted) for the
current fiscal year and each outyear;
(2) allocations to the Committee on Appropria-
tions under sections 302(a) and 602(a) of that Act;
and
(3) levels for major functional category 800
(General Government) and the appropriate budg-
etary aggregates in the most recently agreed to con-
current resolution on the budget, to carry out this
subsection.
These revised discretionary spending limits, allocations,
functional levels, and aggregates shall be considered for
purposes of congressional enforcement of that Act as the
discretionary spending limits, allocations, functional levels,
and aggregates.
(c) REPORTING REVISED ALLOCATIONS.—The Com-
mittees on Appropriations of the Senate and the House
of Representatives may report appropriately revised allo-
cations pursuant to sections 302(b) and 602(b) of the
Congressional Budget Act of 1974 to carry out this sec-
tion.
(d) CONTINGENCIES.—This section shall not apply to
any additional new budget authority or additional outlays
unless the Director of the Congressional Budget Office
certifies to the Chairpersons of the Committees on Appro-
priation of the Senate and the House of Representatives
that the Director or any other outside authority has veri-
fied that—
(1) the Internal Revenue Service has provided
them with reasonably accurate cost and revenue in-
formation;
(2) the Internal Revenue Service has imple-
mented adequate quality service measures consistent
with taxpayer rights;
100
(3) the Internal Revenue Service has obtained
a clean opinion on its financial audit of appropriated
accounts; and
(4) the Internal Revenue Service has made sig-
nificant progress towards receiving a clean opinion
on its financial audit of custodial accounts.
SEC. 412. FUNDING FOR CENTURY DATE CHANGE.
It is the sense of Congress that funding for the Inter-
nal Revenue Service efforts to resolve the century date
change computing problems should be funded fully to pro-
vide for certain resolution of such problems.
SEC. 413. FINANCIAL MANAGEMENT ADVISORY GROUP.
The Commissioner shall convene a financial manage-
ment advisory group consisting of individuals with exper-
tise in governmental accounting and auditing from both
the private sector and the Government to advise the Com-
missioner on financial management issues, including—
(1) the continued partnership between the In-
ternal Revenue Service and the General Accounting
Office;
(2) the financial accounting aspects of the In-
ternal Revenue Service’s system modernization;
(3) the necessity and utility of year-round au-
diting; and
101
(4) the Commissioner’s plans for improving its
financial management system.
Subtitle C—Tax Law Complexity
SEC. 421. ROLE OF THE INTERNAL REVENUE SERVICE.
It is the sense of Congress that the Internal Revenue
Service should provide the Congress with an independent
view of tax administration, and that during the legislative
process, the tax writing committees of the Congress should
hear from front-line technical experts at the Internal Rev-
enue Service with respect to the administrability of pend-
ing amendments to the Internal Revenue Code of 1986.
SEC. 422. TAX COMPLEXITY ANALYSIS.
(a) IN GENERAL.—Chapter 92 (relating to powers
and duties of the Joint Committee on Taxation) is amend-
ed by adding at the end the following new section:
‘‘SEC. 8024. TAX COMPLEXITY ANALYSIS.
‘‘(a) IN GENERAL.—
‘‘(1) REPORTED
BILLS
AND
RESOLUTIONS.—
When a committee of the Senate or House of Rep-
resentatives reports a bill or joint resolution that in-
cludes any provision amending the Internal Revenue
Code of 1986, the report for such bill or joint resolu-
tion shall contain a Tax Complexity Analysis pre-
pared by the Joint Committee on Taxation for each
provision therein.
102
‘‘(2) AMENDED
BILLS
AND
JOINT
RESOLU-
TIONS; CONFERENCE REPORTS.—If a bill or joint
resolution is passed in an amended form (including
if passed by one House as an amendment in the na-
ture of a substitute for the text of a bill or joint res-
olution from the other House) or is reported by a
committee of conference in amended form, and the
amended form contains an amendment to the Inter-
nal Revenue Code of 1986 not previously considered
by either House, then the committee of conference
shall ensure that the Joint Committee on Taxation
prepares a Tax Complexity Analysis for each provi-
sion therein.
‘‘(b) CONTENT OF COMPLEXITY ANALYSIS.—Each
Tax Complexity Analysis must address—
‘‘(1) whether the provision is new, modifies or
replaces existing law, and whether hearings were
held to discuss the proposal and whether the Inter-
nal Revenue Service provided input as to its admin-
istrability;
‘‘(2) when the provision becomes effective, and
corresponding compliance requirements on taxpayers
(e.g., effective on date of enactment, phased in, or
retroactive);
103
‘‘(3) whether new Internal Revenue Service
forms or worksheets are needed, whether existing
forms or worksheets must be modified, and whether
the effective date allows sufficient time for the Inter-
nal Revenue Service to prepare such forms and edu-
cate taxpayers;
‘‘(4) necessity of additional interpretive guid-
ance (e.g., regulations, rulings, and notices);
‘‘(5) the extent to which the proposal relies on
concepts contained in existing law, including defini-
tions;
‘‘(6) effect on existing record keeping require-
ments and the activities of taxpayers, complexity of
calculations and likely behavioral responses, and
standard business practices and resource require-
ments;
‘‘(7) number, type, and sophistication of af-
fected taxpayers; and
‘‘(8) whether the proposal requires the Internal
Revenue Service to assume responsibilities not di-
rectly related to raising revenue which could be han-
dled through another Federal agency.
‘‘(c) LEGISLATION SUBJECT TO POINT OF ORDER.—
‘‘(1) IN GENERAL.—It shall not be in order in
the Senate or the House of Representatives to con-
104
sider any bill, joint resolution, amendment, motion,
or conference report that is not accompanied by a
Tax Complexity Analysis for each provision therein.
‘‘(2) IN THE SENATE.—Upon a point of order
being made by any Senator against any provision
under this section, and the point of order being sus-
tained by the Chair, such specific provision shall be
deemed stricken from the bill, resolution, amend-
ment, amendment in disagreement, or conference re-
port, and may not be offered as an amendment from
the floor.
‘‘(3) IN THE HOUSE OF REPRESENTATIVES.—
‘‘(A) It shall not be in order in the House
of Representatives to consider a rule or order
that waives the application of paragraph (1).
‘‘(B) In order to be cognizable by the
Chair, a point of order under this section must
specify the precise language on which it is pre-
mised.
‘‘(C) As disposition of points of order
under this section, the Chair shall put the ques-
tion of consideration with respect to the propo-
sition that is the subject of the points of order.
‘‘(D) A question of consideration under
this section shall be debatable for 10 minutes
105
by each Member initiating a point of order and
for 10 minutes by an opponent on each point
of order, but shall otherwise be decided without
intervening motion except one that the House
adjourn or that the Committee of the Whole
rise, as the case may be.
‘‘(E) The disposition of the question of
consideration under this subsection with respect
to a bill or joint resolution shall be considered
also to determine the question of consideration
under this subsection with respect to an amend-
ment made in order as original text.
‘‘(d) RESPONSIBILITIES OF THE COMMISSIONER.—
The Commissioner shall provide the Joint Committee on
Taxation with such information as is necessary to prepare
a Tax Complexity Analysis on each instance in which such
an analysis is required.’’
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 92 is amended by adding at the end the follow-
ing new item:
‘‘Sec. 8024. Tax complexity analysis.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to legislation considered on or after
the earlier of January 1, 1998, or the 90th day after the
date of the enactment of an additional appropriation to
106
carry out section 8024 of the Internal Revenue Code of
1986, as added by this section.
SEC. 423. SIMPLIFIED TAX AND WAGE REPORTING SYSTEM.
(a) POLICY.—It is the policy of the Congress that em-
ployers should have a single point of filing tax and wage
reporting information.
(b) ELECTRONIC
FILING
OF
INFORMATION
RE-
TURNS.—The Social Security Administration shall estab-
lish procedures no later than December 31, 1998, to ac-
cept electronic submissions of tax and wage reporting in-
formation from employers, and to forward such informa-
tion to the Internal Revenue Service, and to the tax ad-
ministrators of the States, upon request and reimburse-
ment of expenses. For purposes of this paragraph, recipi-
ents of tax and wage reporting information from the Social
Security Administration shall reimburse the Social Secu-
rity Administration for its incremental expenses associated
with accepting and furnishing such information.
SEC. 424. COMPLIANCE BURDEN ESTIMATES.
The Joint Committee on Taxation shall prepare a
study of the feasibility of developing a baseline estimate
of taxpayers’ compliance burdens against which future leg-
islative proposals could be measured.
Æ