I 
110TH CONGRESS 
2D SESSION 
H. R. 5719 
To amend the Internal Revenue Code of 1986 to conform return preparer 
penalty standards, delay implementation of withholding taxes on govern-
ment contractors, enhance taxpayer protections, assist low-income tax-
payers, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 8, 2008 
Mr. RANGEL (for himself, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr. POM-
EROY, Mr. EMANUEL, Mr. BLUMENAUER, Mr. KIND, Ms. BERKLEY, Mr. 
CROWLEY, Mr. MEEK of Florida, Mr. ELLISON, Ms. GIFFORDS, Mr. 
HALL of New York, Mr. MAHONEY of Florida, Mr. WALZ of Minnesota, 
Mr. WELCH of Vermont, and Mrs. JONES of Ohio) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to conform 
return preparer penalty standards, delay implementation 
of withholding taxes on government contractors, enhance 
taxpayer protections, assist low-income taxpayers, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Taxpayer Assistance and Simplification Act of 2008’’. 
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(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.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Modification of penalty on understatement of taxpayer’s liability by tax 
return preparer. 
Sec. 3. Removal of cellular telephones (or similar telecommunications equip-
ment) from listed property. 
Sec. 4. Delay of application of withholding requirement on certain governmental 
payments for goods and services. 
Sec. 5. Elderly and disabled individuals receiving in-home care under certain 
government programs not subject to employment tax provi-
sions. 
Sec. 6. Referrals to low-income taxpayer clinics permitted. 
Sec. 7. Programs for the benefit of low-income taxpayers. 
Sec. 8. EITC outreach. 
Sec. 9. Prohibition on IRS debt indicators for predatory refund anticipation 
loans. 
Sec. 10. Study on delivery of tax refunds. 
Sec. 11. Extension of time for return of property for wrongful levy. 
Sec. 12. Individuals held harmless on wrongful levy, etc., on individual retire-
ment plan. 
Sec. 13. Taxpayer notification of suspected identity theft. 
Sec. 14. Repeal of authority to enter into private debt collection contracts. 
Sec. 15. Clarification of IRS unclaimed refund authority. 
Sec. 16. Prohibition on misuse of Department of the Treasury names and sym-
bols. 
Sec. 17. Substantiation of amounts paid or distributed out of health savings ac-
count. 
Sec. 18. Increase in information return penalties. 
Sec. 19. Increase in penalty for failure to file partnership returns. 
Sec. 20. Increase in penalty for failure to file S corporation return. 
Sec. 21. Time for payment of corporate estimated tax. 
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SEC. 2. MODIFICATION OF PENALTY ON UNDERSTATEMENT 
OF TAXPAYER’S LIABILITY BY TAX RETURN 
PREPARER. 
(a) IN GENERAL.—Subsection (a) of section 6694 
(relating to understatement due to unreasonable positions) 
is amended to read as follows: 
‘‘(a) UNDERSTATEMENT DUE
TO UNREASONABLE 
POSITIONS.— 
‘‘(1) IN GENERAL.—If a tax return preparer— 
‘‘(A) prepares any return or claim of re-
fund with respect to which any part of an un-
derstatement of liability is due to a position de-
scribed in paragraph (2), and 
‘‘(B) knew (or reasonably should have 
known) of the position, 
such tax return preparer shall pay a penalty with re-
spect to each such return or claim in an amount 
equal to the greater of $1,000 or 50 percent of the 
income derived (or to be derived) by the tax return 
preparer with respect to the return or claim. 
‘‘(2) UNREASONABLE POSITION.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in this paragraph, a position is de-
scribed in this paragraph unless there is or was 
substantial authority for the position. 
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‘‘(B) DISCLOSED POSITIONS.—If the posi-
tion was disclosed as provided in section 
6662(d)(2)(B)(ii)(I) and is not a position to 
which subparagraph (C) applies, the position is 
described in this paragraph unless there is a 
reasonable basis for the position. 
‘‘(C) TAX
SHELTERS
AND
REPORTABLE 
TRANSACTIONS.—If the position is with respect 
to a tax shelter (as defined in section 
6662(d)(2)(C)(ii)) or a reportable transaction 
to which section 6662A applies, the position is 
described in this paragraph unless it is reason-
able to believe that the position would more 
likely than not be sustained on its merits. 
‘‘(3) REASONABLE
CAUSE
EXCEPTION.—No 
penalty shall be imposed under this subsection if it 
is shown that there is reasonable cause for the un-
derstatement and the tax return preparer acted in 
good faith.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply— 
(1) in the case of a position described in sub-
paragraph (A) or (B) of section 6694(a)(2) of the 
Internal Revenue Code of 1986 (as amended by this 
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section), to returns prepared after May 25, 2007, 
and 
(2) in the case of a position described in sub-
paragraph (C) of such section (as amended by this 
section), to returns prepared for taxable years end-
ing after the date of the enactment of this Act. 
SEC. 3. REMOVAL OF CELLULAR TELEPHONES (OR SIMILAR 
TELECOMMUNICATIONS EQUIPMENT) FROM 
LISTED PROPERTY. 
(a) IN GENERAL.—Subparagraph (A) of section 
280F(d)(4) (defining listed property) is amended by in-
serting ‘‘and’’ at the end of clause (iv), by striking clause 
(v), and by redesignating clause (vi) as clause (v). 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 4. DELAY OF APPLICATION OF WITHHOLDING RE-
QUIREMENT ON CERTAIN GOVERNMENTAL 
PAYMENTS FOR GOODS AND SERVICES. 
(a) IN GENERAL.—Subsection (b) of section 511 of 
the Tax Increase Prevention and Reconciliation Act of 
2005 is amended by striking ‘‘December 31, 2010’’ and 
inserting ‘‘December 31, 2011’’. 
(b) REPORT
TO
CONGRESS.—Not later than 6 
months after the date of the enactment of this Act, the 
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