I
103D CONGRESS
1ST SESSION
H. R. 22
To make certain changes to improve the administration of the medicare
program, to reform customs overtime pay practices, to prevent the pay-
ment of Federal benefits to deceased individuals, to require reports
on employers with underfunded pension plans, to provide for increased
taxpayer procedural protections, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. PICKLE (for himself, Mr. ROSTENKOWSKI, Mr. STARK, Mr. RANGEL, Mr.
JACOBS, Mr. FORD of Tennessee, Mr. THOMAS of California, Mr. SUND-
QUIST, and Mr. SHAW) introduced the following bill; which was referred
jointly to the Committees on Ways and Means, Energy and Commerce,
and Post Office and Civil Service
SEPTEMBER 14, 1993
Additional sponsors: Ms. EDDIE BERNICE JOHNSON of Texas, Mr. SWIFT, Mr.
BARLOW, Mr. CRAMER, Mr. RICHARDSON, Mrs. LLOYD, Mr. GORDON,
and Mr. STRICKLAND
A BILL
To make certain changes to improve the administration of
the medicare program, to reform customs overtime pay
practices, to prevent the payment of Federal benefits
to deceased individuals, to require reports on employers
with underfunded pension plans, to provide for increased
taxpayer procedural protections, 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.
This Act may be cited as the ‘‘Federal Program Im-
provement Act of 1993’’.
TITLE I—PROVISIONS RELATING
TO THE MEDICARE PROGRAM
SEC. 1000. REFERENCES IN TITLE.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
title an amendment is expressed in terms of an amend-
ment to or repeal of a section or other provision, the ref-
erence shall be considered to be made to that section or
other provision of the Social Security Act.
(b) REFERENCES TO OBRA.—In this Act, the terms
‘‘OBRA–1989’’ and ‘‘OBRA–1990’’ refer to the Omnibus
Budget Reconciliation Act of 1989 (Public Law 101–239)
and the Omnibus Budget Reconciliation Act of 1990 (Pub-
lic Law 101–508), respectively.
Subtitle A—Durable Medical
Equipment
SEC. 1001. CERTIFICATION OF SUPPLIERS.
(a) REQUIREMENTS.—
(1) IN
GENERAL.—Section 1834 (42 U.S.C.
1395m) is amended by adding at the end the follow-
ing new subsection:
‘‘(i) REQUIREMENTS FOR SUPPLIERS OF MEDICAL
EQUIPMENT AND SUPPLIES.—
‘‘(1) ISSUANCE
AND
RENEWAL
OF
SUPPLIER
NUMBER.—
‘‘(A) PAYMENT.—Except as provided in
subparagraph (C), no payment may be made
under this part after October 1, 1993, for items
furnished by a supplier of medical equipment
and supplies unless such supplier obtains (and
renews at such intervals as the Secretary may
require) a supplier number.
‘‘(B) STANDARDS FOR POSSESSING A SUP-
PLIER NUMBER.—A supplier may not obtain a
supplier number unless—
‘‘(i) for medical equipment and sup-
plies furnished on or after October 1,
1993, and on or before December 31,
1994, the supplier meets standards pre-
scribed by the Secretary; and
‘‘(ii) for medical equipment and sup-
plies furnished on or after January 1,
1995, the supplier meets revised standards
prescribed by the Secretary (in consulta-
tion with representatives of suppliers of
medical equipment and supplies, carriers,
and consumers) that shall include require-
ments that the supplier—
under section 1842) the responsibility to deter-
mine whether suppliers meet the standards nec-
essary to obtain a supplier number.
‘‘(2) CERTIFICATES OF MEDICAL NECESSITY.—
‘‘(A) STANDARDIZED CERTIFICATES.—Not
later than October 1, 1993, the Secretary shall,
in consultation with carriers under this part,
develop one or more standardized certificates of
medical necessity (as defined in subparagraph
(C)) for medical equipment and supplies for
which the Secretary determines that such a cer-
tificate is necessary.
‘‘(B) PROHIBITION AGAINST DISTRIBUTION
BY SUPPLIERS OF CERTIFICATES OF MEDICAL
NECESSITY.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a supplier of medical
equipment and supplies may not distribute
to physicians or to individuals entitled to
benefits under this part for commercial
purposes any completed or partially com-
pleted certificates of medical necessity on
or after October 1, 1993.
‘‘(ii) EXCEPTION FOR CERTAIN BILL-
ING
INFORMATION.—Clause (i) shall not
apply with respect to a certificate of medi-
cal necessity for any item that is not con-
tained on the list of potentially overused
items developed by the Secretary under
subsection (a)(15)(A) to the extent that
such certificate contains only information
completed by the supplier of medical equip-
ment and supplies identifying such supplier
and the beneficiary to whom such medical
equipment and supplies are furnished, a
description of such medical equipment and
supplies, any product code identifying such
medical equipment and supplies, and any
other administrative information (other
than information relating to the bene-
ficiary’s medical condition) identified by
the Secretary. In the event a supplier pro-
vides a certificate of medical necessity con-
taining information permitted under this
clause, such certificate shall also contain
the fee schedule amount and the supplier’s
charge for the medical equipment or sup-
plies being furnished prior to distribution
of such certificate to the physician.
‘‘(iii) PENALTY.—Any supplier of
medical equipment and supplies who know-
ingly and willfully distributes a certificate
of medical necessity in violation of clause
(i) is subject to a civil money penalty in an
amount not to exceed $1,000 for each such
certificate of medical necessity so distrib-
uted. The provisions of section 1128A
(other than subsections (a) and (b)) shall
apply to civil money penalties under this
subparagraph in the same manner as they
apply to a penalty or proceeding under sec-
tion 1128A(a).
‘‘(C) DEFINITION.—For purposes of this
paragraph, the term ‘certificate of medical ne-
cessity’ means a form or other document con-
taining information required by the Secretary to
be submitted to show that a covered item is
reasonable and necessary for the diagnosis or
treatment of illness or injury or to improve the
functioning of a malformed body member.
‘‘(3) COVERAGE AND REVIEW CRITERIA.—
‘‘(A) DEVELOPMENT
AND
ESTABLISH-
MENT.—Not later than January 1, 1995, the
Secretary, in consultation with representatives
of suppliers of medical equipment and supplies,
individuals enrolled under this part, and appro-
priate medical specialty societies, shall develop
and establish uniform national coverage and
utilization review criteria for 200 items of medi-
cal equipment and supplies selected in accord-
ance with the standards described in subpara-
graph (B). The Secretary shall publish the cri-
teria as part of the instructions provided to fis-
cal intermediaries and carriers under this part
and no further publication, including publica-
tion in the Federal Register, shall be required.
‘‘(B) STANDARDS FOR SELECTING ITEMS
SUBJECT TO CRITERIA.—The Secretary may se-
lect an item for coverage under the criteria de-
veloped and established under subparagraph
(A) if the Secretary finds that—
‘‘(i) the item is frequently purchased
or rented by beneficiaries;
‘‘(ii) the item is frequently subject to
a determination that such item is not
medically necessary; or
‘‘(iii) the coverage or utilization cri-
teria applied to the item (as of the date of
the enactment of this subsection) is not
consistent among carriers.
‘‘(C) ANNUAL REVIEW AND EXPANSION OF
ITEMS SUBJECT TO CRITERIA.—The Secretary
shall annually review the coverage and utiliza-
tion of items of medical equipment and supplies
to determine whether items not included among
the items selected under subparagraph (A)
should be made subject to uniform national cov-
erage and utilization review criteria, and, if ap-
propriate, shall develop and apply such criteria
to such additional items.
‘‘(4) DEFINITION.—The term ‘medical equip-
ment and supplies’’ means—
‘‘(A) durable medical equipment (as de-
fined in section 1861(n));
‘‘(B) prosthetic devices (as described in
section 1861(s)(8));
‘‘(C) orthotics and prosthetics (as de-
scribed in section 1861(s)(9));
‘‘(D) surgical dressings (as described in
section 1861(s)(5));
‘‘(E) such other items as the Secretary
may determine; and
‘‘(F) for purposes of paragraphs (1) and
(3)—
‘‘(i) home dialysis supplies and equip-
ment 
(as 
described 
in 
section
1861(s)(2)(F)), and
‘‘(ii) immunosuppressive drugs (as de-
scribed in section 1861(s)(2)(J)).’’.
(2) CONFORMING AMENDMENT.—Effective October
1, 1993, paragraph (16) of section 1834(a) (42 U.S.C.
1395m(a)) is repealed.
(b) REPORT ON EFFECT OF UNIFORM CRITERIA ON
UTILIZATION OF ITEMS.—Not later than July 1, 1995, the
Secretary shall submit a report to the Committee on Ways
and Means and the Committee on Energy and Commerce
of the House of Representatives and the Committee on
Finance of the Senate analyzing the impact of the uniform
criteria established under section 1834(i)(3)(A) of the So-
cial Security Act (as added by subsection (a)) on the utili-
zation of items of medical equipment and supplies by indi-
viduals enrolled under part B of the medicare program.
(c) USE OF COVERED ITEMS BY DISABLED BENE-
FICIARIES.—
(1) IN GENERAL.—The Secretary of Health and
Human Services, in consultation with representa-
tives of suppliers of durable medical equipment
for determining the amount of payment for such items
under such program.
SEC. 1002. PROHIBITION AGAINST CARRIER FORUM SHOP-
PING.
(a) IN GENERAL.—Section 1834(a)(12) (42 U.S.C.
1395m(a)(12)) is amended to read as follows:
‘‘(12) 
USE
OF
CARRIERS
TO
PROCESS
CLAIMS.—
‘‘(A) DESIGNATION
OF
REGIONAL
CAR-
RIERS.—The Secretary may designate, by regu-
lation under section 1842, one carrier for one
or more entire regions to process all claims
within the region for covered items under this
section.
‘‘(B) 
PROHIBITION
AGAINST
CARRIER
SHOPPING.—(i) No supplier of a covered item
may present or cause to be presented a claim
for payment under this part unless such claim
is presented to the appropriate regional carrier
(as designated by the Secretary).
‘‘(ii) For purposes of clause (i), the term
‘appropriate regional carrier’ means the carrier
having jurisdiction over the geographic area
that includes the permanent residence of the
patient to whom the item is furnished.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items furnished on or after
October 1, 1993.
(c) CLARIFICATION OF AUTHORITY TO DESIGNATE
CARRIERS FOR OTHER ITEMS AND SERVICES.—Nothing
in this subsection or the amendment made by this sub-
section may be construed to restrict the authority of the
Secretary of Health and Human Services to designate re-
gional carriers or modify claims jurisdiction rules with re-
spect to items or services under part B of the medicare
program that are not covered items under section 1834(a)
of the Social Security Act or prosthetic devices or orthotics
and prosthetics under section 1834(h) of such Act.
SEC. 1003. RESTRICTIONS ON CERTAIN MARKETING AND
SALES ACTIVITIES.
(a) PROHIBITING UNSOLICITED TELEPHONE CON-
TACTS FROM SUPPLIERS OF DURABLE MEDICAL EQUIP-
MENT TO MEDICARE BENEFICIARIES.—
(1) IN GENERAL.—Section 1834(a) (42 U.S.C.
1395m(a)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(17) PROHIBITION
AGAINST
UNSOLICITED
TELEPHONE CONTACTS BY SUPPLIERS.—
‘‘(A) IN GENERAL.—A supplier of a cov-
ered item under this subsection may not contact
an individual enrolled under this part by tele-
phone regarding the furnishing of a covered
item to the individual (other than a covered
item the supplier has already furnished to the
individual) unless—
‘‘(i) the individual gives permission to
the supplier to make contact by telephone
for such purpose; or
‘‘(ii) the supplier has furnished a cov-
ered item under this subsection to the indi-
vidual during the 15-month period preced-
ing the date on which the supplier contacts
the individual for such purpose.
‘‘(B) PROHIBITING PAYMENT FOR ITEMS
FURNISHED
SUBSEQUENT
TO
UNSOLICITED
CONTACTS.—If a supplier knowingly contacts
an individual in violation of subparagraph (A),
no payment may be made under this part for
any item subsequently furnished to the individ-
ual by the supplier.
‘‘(C) EXCLUSION
FROM
PROGRAM
FOR
SUPPLIERS ENGAGING IN PATTERN OF UNSO-
LICITED
CONTACTS.—If a supplier knowingly
contacts individuals in violation of subpara-
graph (A) to such an extent that the supplier’s
conduct establishes a pattern of contacts in vio-
lation of such subparagraph, the Secretary shall
exclude the supplier from participation in the
programs under this Act, in accordance with
the procedures set forth in subsections (c), (f),
and (g) of section 1128.’’.
(2) REQUIRING
REFUND
OF
AMOUNTS
COL-
LECTED FOR DISALLOWED ITEMS.—Section 1834(a)
(42 U.S.C. 1395m(a)), as amended by paragraph
(1), is amended by adding at the end the following
new paragraph:
‘‘(18) REFUND OF AMOUNTS COLLECTED FOR
CERTAIN DISALLOWED ITEMS.—
‘‘(A) IN GENERAL.—If a nonparticipating
supplier furnishes to an individual enrolled
under this part a covered item for which no
payment may be made under this part by rea-
son of paragraph (17)(B), the supplier shall re-
fund on a timely basis to the patient (and shall
be liable to the patient for) any amounts col-
lected from the patient for the item, unless—
‘‘(i) the supplier establishes that the
supplier did not know and could not rea-
sonably have been expected to know that
payment may not be made for the item by
reason of paragraph (17)(B), or
‘‘(ii) before the item was furnished,
the patient was informed that payment
under this part may not be made for that
item and the patient has agreed to pay for
that item.
‘‘(B) SANCTIONS.—If a supplier knowingly
and willfully fails to make refunds in violation
of subparagraph (A), the Secretary may apply
sanctions against the supplier in accordance
with section 1842(j)(2).
‘‘(C) NOTICE.—Each carrier with a con-
tract in effect under this part with respect to
suppliers of covered items shall send any notice
of denial of payment for covered items by rea-
son of paragraph (17)(B) and for which pay-
ment is not requested on an assignment-related
basis to the supplier and the patient involved.
‘‘(D) TIMELY BASIS DEFINED.—A refund
under subparagraph (A) is considered to be on
a timely basis only if—
‘‘(i) in the case of a supplier who does
not request reconsideration or seek appeal
on a timely basis, the refund is made with-
in 30 days after the date the supplier re-
ceives a denial notice under subparagraph
(C), or
‘‘(ii) in the case in which such a re-
consideration or appeal is taken, the re-
fund is made within 15 days after the date
the supplier receives notice of an adverse
determination on reconsideration or ap-
peal.’’.
(b) CONFORMING AMENDMENT.—Section 1834(h)(3)
(42 U.S.C. 1395m(h)(3)) is amended by striking ‘‘Para-
graph (12)’’ and inserting ‘‘Paragraphs (12) and (17)’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to items furnished after
the expiration of the 60-day period that begins on the date
of the enactment of this Act.
SEC. 1004. BENEFICIARY LIABILITY FOR NONCOVERED
SERVICES.
(a) IN GENERAL.—Section 1879 (42 U.S.C. 1395pp)
is amended by adding at the end the following new sub-
section:
‘‘(h) If a supplier of medical equipment and supplies
(as defined in section 1834(i)(4))—
‘‘(1) furnishes an item or service to a bene-
ficiary for which no payment may be made by reason
of section 1834(i)(1);
‘‘(2) furnishes an item or service to a bene-
ficiary for which payment is denied in advance under
section 1834(a)(15); or
‘‘(3) furnishes an item or service to a bene-
ficiary for which payment is denied under section
1862(a)(1);
any expenses incurred for items and services furnished to
an individual by such a supplier on an unassigned basis
shall be the responsibility of such supplier. The individual
shall have no financial responsibility for such expenses and
the supplier shall refund on a timely basis to the individual
(and shall be liable to the individual for) any amounts col-
lected from the individual for such items or services. The
provisions of section 1834(a)(18) shall apply to refunds
required under the previous sentence in the same manner
as such provisions apply to refunds under such section.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items or services furnished
on or after October 1, 1993.
SEC. 1005. ADJUSTMENTS FOR INHERENT REASONABLE-
NESS.
(a) ADJUSTMENTS
MADE
TO
FINAL
PAYMENT
AMOUNTS.—
(1) IN GENERAL.—Section 1834(a)(10)(B) (42
U.S.C. 1395m(a)(10)(B)) is amended by adding at
the end the following: ‘‘In applying such provisions
to payments for an item under this subsection, the
Secretary shall make adjustments to the payment
basis for the item described in paragraph (1)(B) if
the Secretary determines (in accordance with such
provisions and on the basis of prices and costs appli-
cable at the time the item is furnished) that such
payment basis is not inherently reasonable.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect on the date of the
enactment of this Act.
(b) ADJUSTMENT REQUIRED FOR CERTAIN ITEMS.—
(1) IN GENERAL.—In accordance with section
1834(a)(10)(B) of the Social Security Act (as
amended by subsection (a)), the Secretary of Health
and Human Services shall determine whether the
payment amounts for the items described in para-
graph (2) are not inherently reasonable, and shall
adjust such amounts in accordance with such section
if the amounts are not inherently reasonable.
(2) ITEMS DESCRIBED.—The items referred to
in paragraph (1) are decubitus care equipment,
transcutaneous electrical nerve stimulators, and any
other items considered appropriate by the Secretary.
SEC. 1006. PAYMENT FOR OSTOMY SUPPLIES, TRACHE-
OSTOMY SUPPLIES, UROLOGICALS, AND SUR-
GICAL DRESSINGS.
(a) OSTOMY SUPPLIES, TRACHEOSTOMY SUPPLIES,
AND UROLOGICALS.—
(1) IN
GENERAL.—Section 1834(h)(1) (42
U.S.C. 1395m(h)(1)) is amended by adding at the
end the following new subparagraph:
‘‘(E) EXCEPTION FOR CERTAIN ITEMS.—
Payment for ostomy supplies, tracheostomy
supplies, and urologicals shall be made in ac-
cordance with subparagraphs (B) and (C) of
section 1834(a)(2).’’.
(2) 
CONFORMING
AMENDMENT.—Section
1834(h)(1)(B) (42 U.S.C. 1395m(h)(1)(B)) is
amended by striking ‘‘subparagraph (C),’’ and in-
serting ‘‘subparagraphs (C) and (E),’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to items furnished on
or after January 1, 1994.
(b) SURGICAL DRESSINGS.—
(1) IN
GENERAL.—Section 1834 (42 U.S.C.
1395m), as amended by section 1001(a), is amended
by adding at the end the following new subsection:
‘‘(j) PAYMENT FOR SURGICAL DRESSINGS.—
‘‘(1) IN GENERAL.—Payment under this sub-
section for surgical dressings (described in section
1861(s)(5)) shall be made in a lump sum amount
for the purchase of the item in an amount equal to
80 percent of the lesser of—
‘‘(A) the actual charge for the item; or
‘‘(B) a payment amount determined in ac-
cordance with the methodology described in
subparagraphs (B) and (C) of subsection (a)(2)
(except that in applying such methodology, the
national limited payment amount referred to in
such subparagraphs shall be initially computed
based on local payment amounts using average
reasonable charges for the 12-month period
ending December 31, 1992, increased by the
covered item updates described in such sub-
section for 1993 and 1994)
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not
apply to surgical dressings that are—
‘‘(A) furnished as an incident to a physi-
cian’s professional service; or
‘‘(B) furnished by a home health agency.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended—
(A) by striking ‘‘and’’ before ‘‘(N)’’;
(B) with respect to the matter inserted by
section 4155(b)(2)(B) of OBRA–1990—
(i) by striking ‘‘(M)’’ and inserting ‘‘,
and (O)’’, and
(ii) by transferring and inserting it
(as amended) immediately before the semi-
colon at the end;
(C) by striking ‘‘and’’ before ‘‘(O)’’; and
(D) by inserting before the semicolon at
the end the following: ‘‘, and (P) with respect
to surgical dressings, the amounts paid shall be
the 
amounts 
determined 
under 
section
1834(j)’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to items furnished on
or after January 1, 1994.
SEC. 1007. PAYMENTS FOR TENS DEVICES.
(a) IN GENERAL.—Section 1834(a)(1)(D) (42 U.S.C.
1395m(a)(1)(D)) is amended by striking ‘‘15 percent’’ the
second place it appears and inserting ‘‘45 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items furnished on or after
January 1, 1994.
SEC. 1008. MISCELLANEOUS AND TECHNICAL CORREC-
TIONS.
(a) UPDATES
TO PAYMENT AMOUNTS.—Subpara-
graph 
(A) 
of 
section 
1834(a)(14) 
(42 
U.S.C.
1395m(a)(14)) is amended to read as follows:
‘‘(A) for 1991 and 1992, the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) for the 12-
month period ending with June of the previous
year reduced by 1 percentage point; and’’.
(b) TREATMENT OF POTENTIALLY OVERUSED ITEMS
AND ADVANCED DETERMINATIONS OF COVERAGE.—(1)
Effective on the date of the enactment of this Act, section
1834(a)(15) (42 U.S.C. 1395m(a)(15)) is amended to
read as follows:
‘‘(15) SPECIAL TREATMENT FOR POTENTIALLY
OVERUSED ITEMS.—
‘‘(A) DEVELOPMENT OF LIST OF ITEMS BY
SECRETARY.—The Secretary shall develop and
periodically update a list of items for which
payment may be made under this subsection
that are potentially overused, and shall include
in such list seat-lift mechanisms, transcutane-
ous electrical nerve stimulators, motorized
scooters, decubitus care mattresses, and any
such other item determined by the Secretary to
be potentially overused on the basis of any of
the following criteria—
‘‘(i) the item is marketed directly to
potential patients;
‘‘(ii) the item is marketed with an
offer to potential patients to waive the
costs of coinsurance associated with the
item or is marketed as being available at
no cost to policyholders of a medicare sup-
plemental policy (as defined in section
1882(g)(1));
‘‘(iii) the item has been subject to a
consistent pattern of overutilization; or
‘‘(iv) a high proportion of claims for
payment for such item under this part may
not be made because of the application of
section 1862(a)(1).
‘‘(B) ITEMS SUBJECT TO SPECIAL CARRIER
SCRUTINY.—Payment may not be made under
this part for any item contained in the list de-
veloped by the Secretary under subparagraph
(A) unless the carrier has subjected the claim
for payment for the item to special scrutiny or
has followed the procedures described in para-
graph (11)(C) with respect to the item.’’.
(2) Effective January 1, 1994, section 1834(a)(11)
(42 U.S.C. 1395m(a)) is amended by adding at the end
the following new subparagraph:
‘‘(C) CARRIER DETERMINATIONS FOR CER-
TAIN ITEMS IN ADVANCE.—A carrier shall de-
termine in advance whether payment for an
item may not be made under this subsection be-
cause of the application of section 1862(a)(1)
if—
‘‘(i) the item is a customized item
(other than inexpensive items specified by
the Secretary); or
‘‘(ii) the item is a specified covered
item under subparagraph (B).’’.
(3) Effective for standards applied for contract years
beginning after the date of the enactment of this Act, sec-
tion 1842(c) (42 U.S.C. 1395u(c)) is amended by adding
at the end the following new paragraph:
‘‘(4) Each contract under this section which provides
for the disbursement of funds, as described in subsection
(a)(1)(B), shall require the carrier to meet criteria devel-
oped by the Secretary to measure the timeliness of carrier
responses to requests for payment of items described in
section 1834(a)(11)(C).’’.
(4) Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is
amended by striking ‘‘paragraph (10) and paragraph
(11)’’ and inserting ‘‘paragraphs (10) and (11)’’.
(c) STUDY OF VARIATIONS IN DURABLE MEDICAL
EQUIPMENT SUPPLIER COSTS.—
(1) COLLECTION AND ANALYSIS OF SUPPLIER
COST
DATA.—The Administration of the Health
Care Financing Administration shall, in consultation
with appropriate organizations, collect data on sup-
plier costs of durable medical equipment for which
payment may be made under part B of the medicare
program, and shall analyze such data to determine
the proportions of such costs attributable to the
service and product components of furnishing such
equipment and the extent to which such proportions
vary by type of equipment and by the geographic re-
gion in which the supplier is located.
(2) DEVELOPMENT
OF
GEOGRAPHIC
ADJUST-
MENT INDEX; REPORTS.—Not later than January 1,
1995—
(A) the Administrator shall submit a re-
port to the Committees on Energy and Com-
merce and Ways and Means of the House of
Representatives and the Committee on Finance
of the Senate on the data collected and the
analysis conducted under paragraph (1), and
shall include in such report the Administrator’s
recommendations for a geographic cost adjust-
ment index for suppliers of durable medical
equipment under the medicare program and an
analysis of the impact of such proposed index
on payments under the medicare program; and
(B) the Comptroller General shall submit a
report to the Committees on Energy and Com-
merce and Ways and Means of the House of
Representatives and the Committee on Finance
of the Senate analyzing on a geographic basis
the supplier costs of durable medical equipment
under the medicare program.
(d) OXYGEN RETESTING.—Section 1834(a)(5)(E)
(42 U.S.C. 1395m(a)(5)(E)) is amended by striking ‘‘55’’
and inserting ‘‘56’’.
(e) 
OTHER
MISCELLANEOUS
AND
TECHNICAL
AMENDMENTS.—(1) Section 4152(a)(3) of OBRA–1990
is amended by striking ‘‘amendment made by subsection
(a)’’ and inserting ‘‘amendments made by this sub-
section’’.
(2) Section 4152(c)(2) of OBRA–1990 is amended
by 
striking 
‘‘1395m(a)(7)(A)’’ 
and 
inserting
‘‘1395m(a)(7)’’.
(3) 
Section 
1834(a)(7)(A)(iii)(II) 
(42 
U.S.C.
1395m(a)(7)(A)(iii)(II)) is amended by striking ‘‘clause
(v)’’ and inserting ‘‘clause (vi)’’.
(4) 
Section 
1834(a)(7)(C)(i) 
(42 
U.S.C.
1395m(a)(7)(C)(i)) is amended by striking ‘‘or paragraph
(3)’’.
(5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is
amended by striking subparagraph (D).
(6) Section 4153(c)(1) of OBRA–1990 is amended
by striking ‘‘1834(a)’’ and inserting ‘‘1834(h)’’.
(7) Section 4153(d)(2) of OBRA–1990 is amended
by striking ‘‘Reconiliation’’ and inserting ‘‘Reconcili-
ation’’.
(8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is
amended by striking paragraph (6).
(B) Section 1834(a) (42 U.S.C. 1395m(a)) is amend-
ed—
(i) in subparagraphs (A) and (B) of paragraph
(1), by striking ‘‘(2) through (7)’’ each place it ap-
pears and inserting ‘‘(2) through (5) and (7)’’;
(ii) in paragraph (7), by striking ‘‘(2) through
(6)’’ and inserting ‘‘(2) through (5)’’;
(iii) in paragraph (8), by striking ‘‘paragraphs
(6) and (7)’’ each place it appears in the matter pre-
ceding subparagraph (A) and in subparagraph (C)
and inserting ‘‘paragraph (7)’’; and
(iv) in paragraph (8)(A)(i), by striking ‘‘de-
scribed—’’ and all that follows and inserting ‘‘de-
scribed in paragraph (7) equal to the average of the
purchase prices on the claims submitted on an as-
signment-related basis for the unused item supplied
during the 6-month period ending with December
1986.’’.
(9) The amendments made by this subsection shall
take effect as if included in the enactment of OBRA–1990.
Subtitle B—Medicare Secondary
Payer
SEC. 1101. MEDICARE SECONDARY PAYER.
(a) SECONDARY PAYER EXEMPTION FOR MEMBERS
OF RELIGIOUS ORDERS.—Effective as if included in the
enactment of OBRA–1989, section 6202(e)(2) of such Act
is amended by adding at the end the following: ‘‘Such
amendment also shall apply to items and services fur-
nished before such date with respect to secondary payor
cases which the Secretary of Health and Human Services
had not identified as of such date.’’.
(b) IMPROVING IDENTIFICATION OF MEDICARE SEC-
ONDARY PAYER SITUATIONS.—
(1) SURVEY OF BENEFICIARIES.—
(A) IN GENERAL.—Section 1862(b)(5) (42
U.S.C. 1395y(b)(5)) is amended by adding at
the end the following new subparagraph:
‘‘(D) 
OBTAINING
INFORMATION
FROM
BENEFICIARIES.—Before an individual applies
for benefits under part A or enrolls under part
B, the Administrator shall mail the individual a
questionnaire to obtain information on whether
the individual is covered under a primary plan
and the nature of the coverage provided under
the plan, including the name, address, and iden-
tifying number of the plan.’’.
(B) DISTRIBUTION OF QUESTIONNAIRE BY
CONTRACTOR.—The Secretary of Health and
Human Services shall enter into an agreement
with an entity not later than November 1,
1993, to distribute the questionnaire described
in section 1862(b)(5)(D) of the Social Security
Act (as added by subparagraph (A)).
(C) NO MEDICARE SECONDARY PAYOR DE-
NIAL BASED ON FAILURE TO COMPLETE QUES-
TIONNAIRE.—Section 1862(b)(2) (42 U.S.C.
1395y(b)(2)) is amended by adding at the end
the following new subparagraph:
‘‘(C) TREATMENT OF QUESTIONNAIRES.—
The Secretary may not fail to make payment
under subparagraph (A) solely on the ground
that an individual failed to complete a question-
naire concerning the existence of a primary
plan.’’.
(2) MANDATORY
SCREENING
BY
PROVIDERS
AND SUPPLIERS UNDER PART B.—
(A) IN
GENERAL.—Section 1862(b) (42
U.S.C. 1395y(b)) is amended by adding at the
end the following new paragraph:
‘‘(6) SCREENING REQUIREMENTS FOR PROVID-
ERS AND SUPPLIERS.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of this title, no payment may be
made for any item or service furnished under
part B unless the entity furnishing such item or
service completes (to the best of its knowledge
and on the basis of information obtained from
the individual to whom the item or service is
furnished) the portion of the claim form relat-
ing to the availability of other health benefit
plans.
‘‘(B) PENALTIES.—An entity that know-
ingly, willfully, and repeatedly fails to complete
a claim form in accordance with subparagraph
(A) or provides inaccurate information relating
to the availability of other health benefit plans
on a claim form under such subparagraph shall
be subject to a civil money penalty of not to ex-
ceed $2,000 for each such incident. The provi-
sions of section 1128A (other than subsections
(a) and (b)) shall apply to a civil money penalty
under the previous sentence in the same man-
ner as such provisions apply to a penalty or
proceeding under section 1128A(a).’’.
(B) EFFECTIVE
DATE.—The amendment
made by subparagraph (A) shall apply with re-
spect to items and services furnished on or
after July 1, 1993.
(c) IMPROVEMENTS
IN RECOVERY
OF PAYMENTS
FROM PRIMARY PAYERS.—
(1) SUBMISSION OF REPORTS ON EFFORTS TO
RECOVER ERRONEOUS PAYMENTS.—
(A) FISCAL INTERMEDIARIES UNDER PART
A.—Section 1816 (42 U.S.C. 1396h) is amend-
ed by adding at the end the following new sub-
section:
‘‘(k) An agreement with an agency or organization
under this section shall require that such agency or orga-
nization submit an annual report to the Secretary describ-
ing the steps taken to recover payments made for items
or services for which payment has been or could be made
under 
a 
primary 
plan 
(as 
defined 
in 
section
1862(b)(2)(A)).’’.
(B) CARRIERS
UNDER
PART
B.—Section
1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amend-
ed—
(i) by striking ‘‘and’’ at the end of
subparagraphs (G) and (H); and
(ii) by inserting after subparagraph
(H) the following new subparagraph:
‘‘(I) will submit annual reports to the Secretary
describing the steps taken to recover payments made
under this part for items or services for which pay-
ment has been or could be made under a primary
plan (as defined in section 1862(b)(2)(A)).’’.
(2) REQUIREMENTS UNDER CARRIER PERFORM-
ANCE EVALUATION PROGRAM.—
(A) FISCAL INTERMEDIARIES UNDER PART
A.—Section 
1816(f)(1)(A) 
(42 
U.S.C.
1396h(f)(1)(A)) is amended by striking ‘‘proc-
essing’’ and inserting ‘‘processing (including the
agency’s or organization’s success in recovering
payments made under this title for services for
which payment has been or could be made
under a primary plan (as defined in section
1862(b)(2)(A)))’’.
(B) CARRIERS
UNDER
PART
B.—Section
1842(b)(2) (42 U.S.C. 1395u(b)(2)) is amended
by adding at the end the following new sub-
paragraph:
‘‘(D) In addition to any other standards and criteria
established by the Secretary for evaluating carrier per-
formance under this paragraph relating to avoiding erro-
neous payments, the Secretary shall establish standards
and criteria relating to the carrier’s success in recovering
payments made under this part for items or services for
which payment has been or could be made under a pri-
mary plan (as defined in section 1862(b)(2)(A)).’’.
(3) DEADLINE FOR REIMBURSEMENT BY PRI-
MARY PLANS.—
(A) 
IN
GENERAL.—Section
1862(b)(2)(B)(i) (42 U.S.C. 1395y(b)(2)(B)(i))
is amended by adding at the end the following
sentence: ‘‘If reimbursement is not made to the
appropriate Trust Fund before the expiration of
the 60-day period that begins on the date such
notice or other information is received, the Sec-
retary may charge interest (beginning with the
date on which the notice or other information
is received) on the amount of the reimburse-
ment until reimbursement is made (at a rate
determined by the Secretary in accordance with
regulations of the Secretary of the Treasury ap-
plicable to charges for late payments).’’.
(B) 
CONFORMING
AMENDMENT.—The
heading of clause (i) of section 1862(b)(2)(B) is
amended to read as follows: ‘‘REPAYMENT RE-
QUIRED.—’’.
(C) EFFECTIVE DATE.—The amendments
made by this paragraph shall apply to payments
for items and services furnished on or after the
date of the enactment of this Act.
(4) EFFECTIVE DATE.—The amendments made
by paragraphs (1) and (2) shall apply to contracts
with fiscal intermediaries and carriers under title
XVIII of the Social Security Act for years beginning
with 1993.
(d) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—
(1) The sentence in section 1862(b)(1)(C)
added by section 4203(c)(1)(B) of OBRA–1990 is
amended—
(A) by striking ‘‘on or before January 1,
1996,’’ and inserting ‘‘before January 1,
1996’’; and
(B) by striking ‘‘clauses (i) and (ii)’’ and
inserting ‘‘this subparagraph’’.
(2) Effective as if included in the enactment of
OBRA–1989, section 1862(b)(1) is amended—
(A) 
in 
subparagraphs 
(A)(v) 
and
(B)(iv)(II), by inserting ‘‘, without regard to
section 5000(d) of such Code’’ before the period
at the end of each subparagraph;
(B) in subparagraph (A)(iii), by striking
‘‘current calendar year or the preceding cal-
endar year’’ and inserting ‘‘current calendar
year and the preceding calendar year’’; and
(C) in the matter in subparagraph (C)
after clause (ii), by striking ‘‘taking into ac-
count that’’ and inserting ‘‘paying benefits sec-
ondary to this title when’’.
(3) Section 4203(c)(2) of OBRA–1990 is
amended—
(A) by striking ‘‘the application of clause
(iii)’’ and inserting ‘‘the second sentence’’;
(B) by striking ‘‘on individuals’’ and all
that follows through ‘‘section 226A of such
Act’’;
(C) in clause (ii), by striking ‘‘clause’’ and
inserting ‘‘sentence’’;
(D) in clause (v), by adding ‘‘and’’ at the
end; and
(E) in clause (vi)—
(i) by inserting ‘‘of such Act’’ after
‘‘1862(b)(1)(C)’’, and
(ii) by striking the period at the end
and inserting the following: ‘‘, without re-
gard to the number of employees covered
by such plans.’’.
(4) Section 4203(d) of OBRA–1990 is amended
by striking ‘‘this subsection’’ and inserting ‘‘this
section’’.
(5) Except as provided in paragraph (2), the
amendments made by this subsection shall be effec-
tive as if included in the enactment of OBRA–1990.
TITLE II—CUSTOMS OFFICER
PAY REFORM
SEC. 2001. OVERTIME AND PREMIUM PAY FOR CUSTOMS
OFFICERS.
(a) IN GENERAL.—Section 5 of the Act of February
13, 1911 (19 U.S.C. 261 and 267) is amended to read
as follows:
‘‘SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OF-
FICERS.
‘‘(a) OVERTIME PAY.—
‘‘(1) IN GENERAL.—Subject to paragraph (2)
and subsection (c), a customs officer who is officially
assigned to perform work in excess of 40 hours in
the administrative workweek of the officer or in ex-
cess of 8 hours in a day shall be compensated for
that work at an hourly rate of pay that is equal to
2 times the hourly rate of the basic pay of the offi-
cer. For purposes of this paragraph, the hourly rate
of basic pay for a customs officer does not include
any premium pay provided for under subsection (b).
‘‘(2) SPECIAL PROVISIONS RELATING TO OVER-
TIME WORK ON CALLBACK BASIS.—
‘‘(A) MINIMUM DURATION.—Any work for
which compensation is authorized under para-
graph (1) and for which the customs officer is
required to return to the officer’s place of work
shall be treated as being not less than 2 hours
in duration; but only if such work begins at
least 1 hour after the end of any previous regu-
larly scheduled work assignment and ends at
least 1 hour before the beginning of the follow-
ing regularly scheduled work assignment.
‘‘(B) COMPENSATION
FOR
COMMUTING
TIME.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), in addition to the com-
pensation authorized under paragraph (1)
for work to which subparagraph (A) ap-
plies, the customs officer is entitled to be
paid, as compensation for commuting time,
an amount equal to 3 times the hourly rate
of basic pay of the officer.
‘‘(ii) EXCEPTION.—Compensation for
commuting time is not payable under
clause (i) if the work for which compensa-
tion is authorized under paragraph (1)—
‘‘(I) does not commence within
16 hours of the customs officer’s last
regularly scheduled work assignment,
or
‘‘(II) commences within 2 hours
of the next regularly scheduled work
assignment of the customs officer.
‘‘(b) PREMIUM PAY FOR CUSTOMS OFFICERS.—
‘‘(1) NIGHT WORK DIFFERENTIAL.—
‘‘(A) 3 P.M. TO MIDNIGHT SHIFTWORK.—If
the majority of the hours of regularly scheduled
work of a customs officer occur during the pe-
riod beginning at 3 p.m. and ending at 12 a.m.,
the officer is entitled to pay for work during
such period (except for work to which para-
graph (2) or (3) applies) at the officer’s hourly
rate of basic pay plus premium pay amounting
to 15 percent of that basic rate.
‘‘(B) 11 P.M. TO 8 A.M. SHIFTWORK.—If
the majority of the hours of regularly scheduled
work of a customs officer occur during the pe-
riod beginning at 11 p.m. and ending at 8 a.m.,
the officer is entitled to pay for work during
such period (except for work to which para-
graph (2) or (3) applies) at the officer’s hourly
rate of basic pay plus premium pay amounting
to 20 percent of that basic rate.
‘‘(C) 7:30 P.M. TO 3:30 A.M. SHIFTWORK.—
If the regularly scheduled work assignment of a
customs officer is 7:30 p.m. to 3:30 a.m., the
officer is entitled to pay for work during such
period (except for work to which paragraph (2)
or (3) applies) at the officer’s hourly rate of
basic pay plus premium pay amounting to 15
percent of that basic rate for the period from
7:30 p.m. to 11:30 p.m. and at the officer’s
hourly rate of basic pay plus premium pay
amounting to 20 percent of that basic rate for
the period from 11:30 p.m. to 3:30 a.m.
‘‘(2) SUNDAY DIFFERENTIAL.—A customs offi-
cer who performs any regularly scheduled work on a
Sunday that is not a holiday is entitled to pay for
that work at the officer’s hourly rate of basic pay
plus premium pay amounting to 50 percent of that
basic rate.
‘‘(3) HOLIDAY DIFFERENTIAL.—A customs offi-
cer who performs any regularly scheduled work on a
holiday is entitled to pay for that work at the offi-
cer’s hourly rate of basic pay plus premium pay
amounting to 100 percent of that basic rate.
‘‘(4) TREATMENT OF PREMIUM PAY.—Premium
pay provided for under this subsection may not be
treated as being overtime pay or compensation for
any purpose.
‘‘(c) LIMITATIONS.—
‘‘(1) FISCAL
YEAR
CAP.—The aggregate of
overtime pay under subsection (a) (including com-
muting compensation under subsection (a)(2)(B))
and premium pay under subsection (b) that a cus-
toms officer may be paid in any fiscal year may not
exceed $25,000; except that the Commissioner of
Customs or his designee may waive this limitation in
individual cases in order to prevent excessive costs
or to meet emergency requirements of the Customs
Service.
‘‘(2) EXCLUSIVITY OF PAY UNDER THIS SEC-
TION.—A customs officer who receives overtime pay
under subsection (a) or premium pay under sub-
section (b) for time worked may not receive pay or
other compensation for that work under any other
provision of law.
‘‘(d) REGULATIONS.—The Secretary of the Treasury
shall prescribe such regulations as are necessary or appro-
priate to carry out this section, including regulations—
‘‘(1) to ensure that callback work assignments
are commensurate with the overtime pay authorized
for such work; and
‘‘(2) to prevent the disproportionate assignment
of overtime work to customs officers who are near
to retirement.
‘‘(e) DEFINITIONS.—As used in this section:
‘‘(1) The term ‘customs officer’ means an indi-
vidual performing those functions specified by regu-
lation by the Secretary of the Treasury for a cus-
toms inspector or canine enforcement officer. Such
functions shall be consistent with such applicable
standards as may be promulgated by the Office of
Personnel Management.
‘‘(2) The term ‘holiday’ means any day des-
ignated as a holiday under a Federal statute or Ex-
ecutive order.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 2 of the Act of June 3, 1944 (19
U.S.C. 1451a), is repealed.
(2) Section 450 of the Tariff Act of 1930 (19
U.S.C. 1450) is amended—
(A) by striking out ‘‘at night’’ in the sec-
tion heading and inserting ‘‘during overtime
hours’’;
(B) by striking out ‘‘at night’’ and insert-
ing ‘‘during overtime hours’’; and
(C) by inserting ‘‘aircraft,’’ immediately
before ‘‘vessel’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) apply to customs inspectional serv-
ices provided on or after October 1, 1993.
SEC. 2002. FOREIGN LANGUAGE PROFICIENCY AWARDS
FOR CUSTOMS OFFICERS.
Cash awards for foreign language proficiency may,
under regulations prescribed by the Secretary of the
Treasury, be paid to customs officers (as referred to in
section 5(e)(1) of the Act of February 13, 1911) to the
same extent and in the same manner as would be allowable
under subchapter III of chapter 45 of title 5, United
States Code, with respect to law enforcement officers (as
defined by section 4521 of such title).
SEC. 
2003. APPROPRIATIONS 
REIMBURSEMENTS 
FROM
THE CUSTOMS USER FEE ACCOUNT.
Section 13031(f)(3) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3))
is amended—
(1) by amending clause (i) of subparagraph (A)
to read as follows: ‘‘(i) in—
‘‘(I) paying overtime compensation and
premium pay under section 5 (a) and (b) of the
Act of February 13, 1911,
‘‘(II) paying agency contributions to the
Civil Service Retirement and Disability Fund to
match deductions from the overtime compensa-
tion paid under subclause (I), and
‘‘(III) providing all preclearance services
for which the recipients of such services are not
required to reimburse the Secretary of the
Treasury, and’’; and
(2) by striking out ‘‘except for costs described
in subparagraph (A)(i) (I) and (II),’’ in subpara-
graph (B)(i).
SEC. 2004. TREATMENT OF CERTAIN PAY OF CUSTOMS OF-
FICERS FOR RETIREMENT PURPOSES.
(a) IN GENERAL.—Section 8331(3) of title 5, United
States Code, is amended—
(1) by striking out ‘‘and’’ at the end of sub-
paragraph (C);
(2) by striking out the semicolon at the end of
subparagraph (D) and inserting ‘‘; and’’;
(3) by adding after subparagraph (D) the fol-
lowing:
‘‘(E) with respect to a customs officer (re-
ferred to in subsection (e)(1) of section 5 of the
Act of February 13, 1911), compensation for
overtime inspectional services provided for
under subsection (a) of such section 5, but not
to exceed 50 percent of any statutory maximum
in overtime pay for customs officers which is in
effect for the year involved;’’; and
(4) by striking out ‘‘subparagraphs (B), (C),
and (D) of this paragraph,’’ and inserting ‘‘subpara-
graphs (B), (C), (D), and (E) of this paragraph’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on the date of the enactment
of this Act and apply only with respect to service per-
formed on or after such date.
SEC. 2005. REPORTS.
(a) CUSTOMS USER FEE ACCOUNT REPORTS.—Sub-
paragraph (D) of section 13031(f)(3) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C.
58c(f)(3)(D)) is amended to read as follows:
‘‘(D) At the close of each fiscal year, the
Secretary of the Treasury shall submit a report
to the Committee on Finance of the Senate and
the Committee on Ways and Means of the
House of Representatives—
‘‘(i) containing a detailed accounting
of all expenditures from the Customs User
Fee Account during such year, including a
summary of the expenditures, on a port-by-
port basis, for which reimbursement has
been provided under subparagraph (A)(ii);
‘‘(ii) containing a listing of all call-
back assignments of customs officers for
which overtime compensation was paid
under section 5(a) of the Act of February
13, 1911, and that were less than 1 hour
in duration; and
‘‘(iii) containing a listing of all cus-
toms officers who were paid $25,000 or
more under subsections 5(a) and 5(b) of
the Act of February 13, 1911, including a
listing of the total compensation paid to
each of those customs officers under all
other statutory authority.’’.
(b) OTHER REPORTS.—
(1) GAO REPORT.—The Comptroller General of
the United States shall undertake—
(A) an evaluation of the appropriateness
and efficiency of the customs user fee laws for
financing the provision of customs inspectional
services; and
(B) a study to determine whether cost sav-
ings in the provision of overtime inspectional
services could be realized by the United States
Customs Service through the use of additional
inspectors as opposed to continuing the current
practice of relying on overtime pay.
The Comptroller General shall submit a report on
the evaluation and study required under this sub-
section to the Committees by no later than the 1st
anniversary of the date of the enactment of this Act.
(2) TREASURY RECOMMENDATION.—On the day
that the President submits the budget for the Unit-
ed States Government for fiscal year 1995 to the
Congress under section 1105(a) of title 31, United
States Code, the Secretary of the Treasury shall
submit to the Committees recommended legislative
proposals for improving the operation of customs
user fee laws in financing the provision of customs
inspectional services.
(3) DEFINITION
OF
COMMITTEES.—For pur-
poses of this subsection, the term ‘‘Committees’’
means the Committee on Ways and Means of the
House of Representatives and the Committee on Fi-
nance of the Senate.
TITLE 
III—AVAILABILITY 
AND
USE OF DEATH INFORMATION
UNDER THE OLD-AGE, SURVI-
VORS, AND DISABILITY IN-
SURANCE PROGRAM
SEC. 3001. AVAILABILITY AND USE OF DEATH INFORMA-
TION UNDER THE OLD-AGE, SURVIVORS, AND
DISABILITY INSURANCE PROGRAM.
(a) IMPROVEMENTS
IN PROGRAM
FOR USE
OF
DEATH CERTIFICATES TO CORRECT PROGRAM INFORMA-
TION.—
(1) ELIMINATION OF STATE RESTRICTIONS ON
USE OF INFORMATION.—Section 205(r)(1) of the So-
cial Security Act (42 U.S.C. 405(r)(1)) is amended
by adding at the end, after and below subparagraph
(B), the following new sentence:
‘‘Any contract entered into pursuant to subparagraph (A)
shall not include any restriction on the use of information
obtained by the Secretary pursuant to such contract, ex-
cept to the extent that such use may be restricted under
paragraph (6).’’.
(2) INFORMATION PROVIDED TO STATE AGEN-
CIES FREE OF CHARGE.—
(A) IN
GENERAL.—Section 205(r)(4) of
such Act (42 U.S.C. 405(r)(4)) is amended to
read as follows:
‘‘(4)(A) In the case of individuals with respect to
whom federally funded benefits are provided by (or
through) a State agency other than under this Act, the
Secretary shall to the extent feasible provide such informa-
tion free of charge through a cooperative arrangement
with such agency, for ensuring proper payment of those
benefits with respect to such individuals, if such arrange-
ment does not conflict with the duties of the Secretary
under paragraph (1).
‘‘(B) The Secretary may enter into similar agree-
ments with States to provide information free of charge
for their use in programs wholly funded by the States if
such arrangement does not conflict with the duties of the
Secretary under paragraph (1).’’.
(B) CONFORMING
AMENDMENT.—Section
205(r)(3) of such Act (42 U.S.C. 405(r)(3)) is
amended by striking ‘‘or State’’.
(3) USE BY STATES OF SOCIAL SECURITY AC-
COUNT NUMBERS CONTINGENT UPON PARTICIPATION
IN PROGRAM.—Section 205(r)(2) of such Act (42
U.S.C. 405(r)(2)) is amended—
(A) by inserting ‘‘(A)’’ after ‘‘(2)’’; and
(B) by adding at the end the following new
subparagraph:
‘‘(B) Notwithstanding section 7(a)(2)(B) of the Pri-
vacy Act of 1974 and clauses (i) and (v) of subsection
(c)(2)(C) of this section, any State which is not a party
to a contract with the Secretary meeting the requirements
of paragraph (1) (and any political subdivision thereof)
may not utilize an individual’s social security account
number in the administration of any driver’s license or
motor vehicle registration law.’’.
(b) STUDY REGARDING IMPROVEMENTS IN GATHER-
ING AND REPORTING OF DEATH INFORMATION.
(1) IN GENERAL.—As soon as practicable after
the date of the enactment of this Act, the Secretary
of Health and Human Services shall conduct a study
of possible improvements in the current methods of
gathering and reporting death information by the
Federal, State, and local governments which would
result in more efficient and expeditious handling of
such information.
(2) SPECIFIC MATTERS TO BE STUDIED.—In
carrying out the study required under this sub-
section, the Secretary shall—
(A) ascertain the delays in the receipt of
death information which are currently encoun-
tered by the Social Security Administration and
other agencies in need of such information on
a regular basis,
(B) analyze the causes of such delays,
(C) develop alternative options for improv-
ing Federal, State, and local agency cooperation
in reducing such delays, and
(D) evaluate the costs and benefits associ-
ated with the options referred to in subpara-
graph (C).
(3) REPORT.—Not later than June 1, 1994, the
Secretary shall submit a written report to the Com-
mittee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the
Senate setting forth the results of the study con-
ducted pursuant to this subsection, together with
such administrative and legislative recommendations
as the Secretary may consider appropriate.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
subsection (a) shall take effect 1 year after the date
of the enactment of this Act.
(2) PROMOTION
OF
ENTRY
INTO
NEW
CON-
TRACTS.—As soon as practicable after the date of
the enactment of this Act, the Secretary of Health
and Human Services shall take such actions as are
necessary and appropriate to promote entry into
contracts under section 205(r) of the Social Security
Act which are in compliance with the requirements
of the amendments made by subsection (a).
TITLE IV—PBGC REPORT ON EM-
PLOYERS 
WITH 
UNDER-
FUNDED PLANS
SEC. 4001. REPORT ON EMPLOYERS WITH UNDERFUNDED
PLANS.
(a) GENERAL RULE.—The Pension Benefit Guaranty
Corporation shall, on January 31 of each calendar year
after 1993, submit a report to the Congress setting
forth—
(1) the name of each contributing sponsor of 1
or more applicable plans having unfunded liabilities
aggregating $25,000,000 or more, and
(2) the name of each contributing sponsor with
an applicable plan which has an unfunded liability in
excess of $5,000,000 and with respect to which a
minimum funding waiver in excess of $1,000,000
has been granted.
Information may be included in such report only if such
information may be publicly disclosed by the Pension Ben-
efit Guaranty Corporation.
(b) DETERMINATIONS OF UNFUNDED LIABILITY.—
For purposes of subsection (a), determinations of the un-
funded liability of any plan shall be made by the Pension
Benefit Guaranty Corporation on the basis of the most
recent information available to it.
(c) APPLICABLE PLAN.—For purposes of subsection
(a), the term ‘‘applicable plan’’ means any employee pen-
sion benefit plan (as defined in paragraph (2) of section
3 of the Employee Retirement Income Security Act of
1974) covered under subtitle B of title IV of such Act;
except that such term shall not include a multiemployer
plan (as defined in section 4001(a)(3) of such Act).
(d) CONTRIBUTING SPONSOR.—For purposes of this
section, the term ‘‘contributing sponsor’’ has the meaning
given to such term by section 4001(a)(13) of such Act.
TITLE V—TAXPAYER BILL OF
RIGHTS 2
SEC. 5000. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE.—This title may be cited as the
‘‘Taxpayer Bill of Rights 2’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this title or title VI
an amendment 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 provision of the Internal Revenue Code of 1986.
Subtitle A—Taxpayer Advocate
SEC. 5001. ESTABLISHMENT OF POSITION OF TAXPAYER
ADVOCATE 
WITHIN 
INTERNAL 
REVENUE
SERVICE.
(a) GENERAL RULE.—Section 7802 (relating to
Commissioner of Internal Revenue; Assistant Commis-
sioner (Employee Plans and Exempt Organizations)) is
amended by adding at the end thereof the following new
subsection:
‘‘(d) OFFICE OF TAXPAYER ADVOCATE.—
‘‘(1) IN GENERAL.—There is established in the
Internal Revenue Service an office to be known as
the ‘Office of the Taxpayer Advocate’. Such office,
including all problem resolution officers, shall be
under the supervision and direction of an official to
be known as the ‘Taxpayer Advocate’ who shall be
appointed by the President by and with the advice
and consent of the Senate, and who shall report di-
rectly to the Commissioner of Internal Revenue. The
Taxpayer Advocate shall be entitled to compensation
at the same rate as the Chief Counsel for the Inter-
nal Revenue Service.
‘‘(2) FUNCTIONS OF OFFICE.—
‘‘(A) IN GENERAL.—It shall be the func-
tion 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 Oc-
tober 31 of each calendar year after 1993,
the Taxpayer Advocate shall report to the
Committee on Ways and Means of the
House of Representatives and the Commit-
tee on Finance of the Senate on the objec-
tives of the Taxpayer Advocate for the fol-
lowing calendar year. Any such report shall
contain full and substantive analysis, in
addition to statistical information.
‘‘(ii) ACTIVITIES.—Not later than
June 30 of each calendar year after 1993,
the Taxpayer Advocate shall report to the
Committee on Ways and Means of the
House of Representatives and the Commit-
tee on Finance of the Senate on the activi-
ties 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 information, 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 (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),
‘‘(VIII) contain recommendations
for such administrative and legislative
action as may be appropriate to re-
solve problems encountered by tax-
payers, and
‘‘(IX) include such other infor-
mation as the Taxpayer Advocate may
deem advisable.
‘‘(iii) REPORT TO BE SUBMITTED DI-
RECTLY.—Each report required under this
subparagraph shall be provided directly to
the Committees referred to in clauses (i)
and (ii) without any prior review or com-
ment from the Commissioner of the Inter-
nal Revenue Service, the Secretary of the
Treasury, any other officer or employee of
the Department of the Treasury, or the
Office of Management and Budget.
‘‘(3) RESPONSIBILITIES OF COMMISSIONER OF
INTERNAL REVENUE SERVICE.—The Commissioner
of Internal Revenue shall establish procedures re-
quiring a formal response to all recommendations
submitted to the Commissioner by the Taxpayer Ad-
vocate.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 7811 (relating to taxpayer assist-
ance orders) is amended—
(A) by striking ‘‘the Office of Ombuds-
man’’ in subsection (a) and inserting ‘‘the Of-
fice of the Taxpayer Advocate’’, and
(B) by striking ‘‘Ombudsman’’ each place
it appears (including in the headings of sub-
sections (e) and (f)) and inserting ‘‘Taxpayer
Advocate’’.
(2) The heading for section 7802 is amended to
read as follows:
‘‘SEC. 7802. COMMISSIONER OF INTERNAL REVENUE; AS-
SISTANT COMMISSIONERS; TAXPAYER ADVO-
CATE.’’
(3) The table of sections for subchapter A of
chapter 80 of subtitle F is amended by striking the
item relating to section 7802 and inserting the fol-
lowing new item:
‘‘Sec. 7802. Commissioner of Internal Revenue; Assistant Com-
missioners; Taxpayer Advocate.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 5002. EXPANSION OF AUTHORITY TO ISSUE TAX-
PAYER ASSISTANCE ORDERS.
(a) TERMS OF ORDERS.—Subsection (b) of section
7811 (relating to terms of taxpayer assistance orders) is
amended—
(1) by inserting ‘‘within a specified time pe-
riod’’ after ‘‘the Secretary’’, and
(2) by inserting ‘‘take any action as permitted
by law,’’ after ‘‘cease any action,’’.
(b) LIMITATION ON AUTHORITY TO MODIFY OR RE-
SCIND.—Section 7811(c) (relating to authority to modify
or rescind) is amended to read as follows:
‘‘(c) AUTHORITY TO MODIFY
OR RESCIND.—Any
Taxpayer Assistance Order issued by the Taxpayer Advo-
cate under this section may be modified or rescinded only
by the Taxpayer Advocate, the Commissioner, or any supe-
rior of either.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle B—Modifications to
Installment Agreement Provisions
SEC. 5101. NOTIFICATION OF REASONS FOR TERMINATION
OR DENIAL OF INSTALLMENT AGREEMENTS.
(a) TERMINATIONS.—Subsection (b) of section 6159
(relating to extent to which agreements remain in effect)
is amended by adding at the end thereof the following new
paragraph:
‘‘(5) NOTICE REQUIREMENTS.—The Secretary
may not take any action under paragraph (2), (3),
or (4) unless—
‘‘(A) a notice of such action is provided to
the taxpayer not later than the day 30 days be-
fore the date of such action, and
‘‘(B) such notice includes an explanation
why the Secretary intends to take such action.
The preceding sentence shall not apply in any case
in which the Secretary believes that collection of any
tax to which an agreement under this section relates
is in jeopardy.’’
(b) DENIALS.—Section 6159 (relating to agreements
for payment of tax liability in installments) is amended
by adding at the end thereof the following new subsection:
‘‘(c) NOTICE REQUIREMENTS FOR DENIALS.—The
Secretary may not deny any request for an installment
agreement under this section unless—
‘‘(1) a notice of the proposed denial is provided
to the taxpayer not later than the day 30 days be-
fore the date of such denial, and
‘‘(2) such notice includes an explanation why
the Secretary intends to deny such request.
The preceding sentence shall not apply in any case in
which the Secretary believes that collection of any tax to
which a request for an agreement under this section re-
lates is in jeopardy.’’
(c) CONFORMING AMENDMENT.—Paragraph (3) of
section 6159(b) is amended to read as follows:
‘‘(3) SUBSEQUENT CHANGE IN FINANCIAL CON-
DITIONS.—If the Secretary makes a determination
that the financial condition of a taxpayer with whom
the Secretary has entered into an agreement under
subsection (a) has significantly changed, the Sec-
retary may alter, modify, or terminate such agree-
ment.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date 6 months after
the date of the enactment of this Act.
SEC. 5102. ADMINISTRATIVE REVIEW OF DENIAL OF RE-
QUEST FOR, OR TERMINATION OF, INSTALL-
MENT AGREEMENT.
(a) GENERAL RULE.—Section 6159 (relating to
agreements for payment of tax liability in installments),
as amended by section 1101, is amended by adding at the
end thereof the following new subsection:
‘‘(d) ADMINISTRATIVE REVIEW.—The Secretary shall
establish procedures for an independent administrative re-
view of denials of requests for, or terminations of, install-
ment agreements under this section.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1994.
Subtitle C—Interest
SEC. 5201. EXPANSION OF AUTHORITY TO ABATE INTEREST.
(a) GENERAL RULE.—Paragraph (1) of section
6404(e) (relating to abatement of interest in certain cases)
is amended—
(1) by inserting ‘‘unreasonable’’ before ‘‘error’’
each place it appears in subparagraphs (A) and (B),
and
(2) by striking ‘‘ministerial act’’ each place it
appears and inserting ‘‘ministerial or managerial
act’’.
(b) CLERICAL AMENDMENT.—The subsection head-
ing for subsection (e) of section 6404 is amended by strik-
ing ‘‘Assessments’’ and inserting ‘‘Abatement’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to interest accruing with respect
to deficiencies or payments for taxable years beginning
after the date of the enactment of this Act.
SEC. 5202. EXTENSION OF INTEREST-FREE PERIOD FOR
PAYMENT OF TAX AFTER NOTICE AND DE-
MAND.
(a) GENERAL RULE.—Paragraph (3) of section
6601(e) (relating to payments made within 10 days after
notice and demand) is amended to read as follows:
‘‘(3) PAYMENTS MADE WITHIN SPECIFIED PE-
RIOD AFTER NOTICE AND DEMAND.—If notice and
demand is made for payment of any amount and if
such amount is paid within 21 days (10 days if the
amount for which such notice and demand is made
equals or exceeds $100,000) after the date of such
notice and demand, interest under this section on
the amount so paid shall not be imposed for the pe-
riod after the date of such notice and demand.’’
(b) CONFORMING AMENDMENT.—Paragraph (3) of
section 6651(a) (relating to addition to tax for failure to
file tax return or pay tax) is amended by striking ‘‘10
days’’ and inserting ‘‘21 days (10 days if the amount for
which such notice and demand is made equals or exceed
$100,000)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply in the case of any notice and de-
mand given after June 30, 1994.
Subtitle D—Joint Returns
SEC. 5301. DISCLOSURE OF COLLECTION ACTIVITIES.
(a) GENERAL RULE.—Subsection (e) of section 6103
(relating to disclosure to persons having material interest)
is amended by adding at the end thereof the following new
paragraph:
‘‘(8) DISCLOSURE OF COLLECTION ACTIVITIES
WITH
RESPECT
TO
JOINT
RETURN.—If any defi-
ciency of tax with respect to a joint return is as-
sessed and the individuals filing such return are no
longer married or no longer reside in the same
household, upon request in writing of either of such
individuals, the Secretary may disclose in writing to
the individual making the request whether the Sec-
retary has attempted to collect such deficiency from
such other individual, the general nature of such col-
lection activities, and the amount collected.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 5302. JOINT RETURN MAY BE MADE AFTER SEPARATE
RETURNS WITHOUT FULL PAYMENT OF TAX.
(a) GENERAL RULE.—Paragraph (2) of section
6013(b) (relating to limitations on filing of joint return
after filing separate returns) is amended by striking sub-
paragraph (A) and redesignating the following subpara-
graphs accordingly.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
the date of the enactment of this Act.
Subtitle E—Collection Activities
SEC. 5401. MODIFICATIONS TO LIEN AND LEVY PROVI-
SIONS.
(a) WITHDRAWAL OF CERTAIN NOTICES.—Section
6323 (relating to validity and priority against certain per-
sons) is amended by adding at the end thereof the follow-
ing new subsection:
‘‘(j) WITHDRAWAL
OF NOTICE
IN CERTAIN CIR-
CUMSTANCES.—
‘‘(1) IN GENERAL.—The Secretary may with-
draw a notice of a lien filed under this section and
this chapter shall be applied as if the withdrawn no-
tice had not been filed, if the Secretary determines
that—
‘‘(A) the filing of such notice was pre-
mature or otherwise not in accordance with ad-
ministrative procedures of the Secretary,
‘‘(B) the taxpayer has entered into an
agreement under section 6159 to satisfy the tax
liability for which the lien was imposed by
means of installment payments, unless such
agreement provides otherwise,
‘‘(C) the withdrawal of such notice will fa-
cilitate the collection of the tax liability, or
‘‘(D) with the consent of the taxpayer or
the Taxpayer Advocate, the withdrawal of such
notice would be in the best interests of the tax-
payer (as determined by the Taxpayer Advo-
cate) and the United States.
Any such withdrawal shall be made by filing notice
thereof at the same office as the withdrawn notice.
A copy of such notice of withdrawal shall be pro-
vided to the taxpayer.
‘‘(2) NOTICE
TO
CREDIT
AGENCIES, ETC.—
Upon written request by the taxpayer with respect
to whom a notice of a lien was withdrawn under
paragraph (1), the Secretary shall promptly make
reasonable efforts to notify credit reporting agencies,
and any financial institution or creditor whose name
and address is specified in such request, of the with-
drawal of such notice. Any such request shall be in
such form as the Secretary may prescribe.’’
(b) RETURN
OF LEVIED PROPERTY
IN CERTAIN
CASES.—Section 6343 (relating to authority to release
levy and return property) is amended by adding at the
end thereof the following new subsection:
‘‘(d) RETURN OF PROPERTY IN CERTAIN CASES.—
If—
‘‘(1) any property has been levied upon, and
‘‘(2) the Secretary determines that—
‘‘(A) the levy on such property was pre-
mature or otherwise not in accordance with ad-
ministrative procedures of the Secretary,
‘‘(B) the taxpayer has entered into an
agreement under section 6159 to satisfy the tax
liability for which the levy was imposed by
means of installment payments, unless such
agreement provides otherwise,
‘‘(C) the return of such property will facili-
tate the collection of the tax liability, or
‘‘(D) with the consent of the taxpayer or
the Taxpayer Advocate, the return of such
property would be in the best interests of the
taxpayer (as determined by the Taxpayer Advo-
cate) and the United States,
the provisions of subsection (b) shall apply in the same
manner as if such property had been wrongly levied upon,
except that no interest shall be allowed under subsection
(c).’’
(c) MODIFICATIONS IN CERTAIN LEVY EXEMPTION
AMOUNTS.—
(1) FUEL, ETC.—Paragraph (2) of section
6334(a) (relating to fuel, provisions, furniture, and
personal effects exempt from levy) is amended—
(A) by striking ‘‘If the taxpayer is the
head of a family, so’’ and inserting ‘‘So’’, and
(B) by striking ‘‘$1,650 ($1,550 in the
case of levies issued during 1989)’’ and insert-
ing ‘‘$1,700’’.
(2) BOOKS, ETC.—Paragraph (3) of section
6334(a) (relating to books and tools of a trade, busi-
ness, or profession exempt from levy) is amended by
striking ‘‘$1,100 ($1,050 in the case of levies issued
during 1989)’’ and inserting ‘‘$1,200’’.
(3) INDEXED FOR INFLATION.—Section 6334
(relating to property exempt from levy) is amended
by adding at the end thereof the following new sub-
section:
‘‘(f) INFLATION ADJUSTMENTS.—
‘‘(1) IN GENERAL.—In the case of any calendar
year beginning after 1994, each dollar amount re-
ferred to in paragraphs (2) and (3) of subsection (a)
shall be increased by an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year, by substituting ‘calendar year 1993’ for
‘calendar year 1989’ in subparagraph (B)
thereof.
‘‘(2) ROUNDING.—If any dollar amount after
being increased under paragraph (1) is not a mul-
tiple of $10, such dollar amount shall be rounded to
the nearest multiple of $10 (or, if such dollar
amount is a multiple of $5, such dollar amount shall
be increased to the next higher multiple of $10).’’
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall take effect on the date of the enactment of this
Act.
(2) 
EXEMPT
AMOUNTS.—The 
amendments
made by subsection (c) shall take effect with respect
to levies issued after December 31, 1993.
SEC. 5402. OFFERS-IN-COMPROMISE.
(a) GENERAL RULE.—Subsection (a) of section 7122
(relating to compromises) is amended by adding at the end
thereof the following new sentence: ‘‘The Secretary may
make such a compromise in any case where the Secretary
determines that such compromise would be in the best in-
terests of the United States.’’.
(b) REVIEW REQUIREMENTS.—Subsection (b) of sec-
tion 7122 (relating to records) is amended by striking
‘‘$500.’’ and inserting ‘‘$50,000. However, such com-
promise shall be subject to continuing quality review by
the Secretary.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 5403. NOTIFICATION OF EXAMINATION.
(a) IN GENERAL.—Section 7605 (relating to restric-
tions on examination of taxpayer) is amended by redesig-
nating subsection (c) as subsection (d) and by inserting
after subsection (b) the following new subsection:
‘‘(c) NOTIFICATION REQUIREMENT.—No examina-
tion described in subsection (a) shall be made unless the
Secretary notifies the taxpayer in writing by mail to an
address determined under section 6212(b) that the tax-
payer is under examination and provides the taxpayer with
an explanation of the process as described in section
7521(b)(1). The preceding sentence shall not apply in the
case of any examination if the Secretary determines
that—
‘‘(1) such examination is in connection with a
criminal investigation or is with respect to a tax the
collection of which is in jeopardy, or
‘‘(2) the application of the preceding sentence
would be inconsistent with national security needs or
would interfere with the effective conduct of a con-
fidential law enforcement or foreign counterintel-
ligence activity.’’
(b) CONFORMING AMENDMENT.—Paragraph (1) of
section 7521(b) (relating to safeguards) is amended by
striking ‘‘or at’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 5404. INCREASE IN LIMIT ON RECOVERY OF CIVIL
DAMAGES FOR UNAUTHORIZED COLLECTION
ACTIONS.
(a) GENERAL RULE.—Subsection (b) of section 7433
(relating to damages) is amended by striking ‘‘$100,000’’
and inserting ‘‘$1,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to actions by officers or employ-
ees of the Internal Revenue Service after the date of the
enactment of this Act.
SEC. 5405. SAFEGUARDS RELATING TO DESIGNATED SUM-
MONS.
(a) STANDARD OF REVIEW.—Subparagraph (A) of
section 6503(k)(2) (defining designated summons) is
amended by redesignating clauses (i) and (ii) as clauses
(ii) and (iii), respectively, and by inserting before clause
(ii) (as so redesignated) the following new clause:
‘‘(i) the issuance of such summons is
preceded by a review of such issuance by
the regional counsel of the Office of Chief
Counsel for the region in which the exam-
ination of the corporation is being con-
ducted,’’.
(b) NOTICE REQUIREMENTS FOR ISSUANCE.—Sec-
tion 6503(k) is amended by adding at the end thereof the
following new paragraph:
‘‘(4) NOTICE REQUIREMENTS.—With respect to
any summons referred to in paragraph (1)(A) issued
to any person other than the corporation, the Sec-
retary shall promptly notify the corporation, in writ-
ing, that such summons has been issued with respect
to such corporation’s return of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to summons issued after the date
of the enactment of this Act.
Subtitle F—Information Returns
SEC. 5501. PHONE NUMBER OF PERSON PROVIDING PAYEE
STATEMENTS REQUIRED TO BE SHOWN ON
SUCH STATEMENT.
(a) GENERAL RULE.—The following provisions are
each amended by striking ‘‘name and address’’ and insert-
ing ‘‘name, address, and phone number of the information
contact’’:
(1) Section 6041(d)(1).
(2) Section 6041A(e)(1).
(3) Section 6042(c)(1).
(4) Section 6044(e)(1).
(5) Section 6045(b)(1).
(6) Section 6049(c)(1)(A).
(7) Section 6050B(b)(1).
(8) Section 6050H(d)(1).
(9) Section 6050I(e)(1).
(10) Section 6050J(e).
(11) Section 6050K(b)(1).
(12) Section 6050N(b)(1).
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to statements required to be fur-
nished after December 31, 1994 (determined without re-
gard to any extension).
SEC. 5502. CIVIL DAMAGES FOR FRAUDULENT FILING OF
INFORMATION RETURNS.
(a) GENERAL RULE.—Subchapter B of chapter 76
(relating to proceedings by taxpayers and third parties)
is amended by redesignating section 7434 as section 7435
and by inserting after section 7433 the following new sec-
tion:
‘‘SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF
INFORMATION RETURNS.
‘‘(a) IN GENERAL.—If any person willfully files a
false or fraudulent information return with respect to pay-
ments purported to be made to any other person, such
other person may bring a civil action for damages against
the person so filing such return.
‘‘(b) DAMAGES.—In any action brought under sub-
section (a), upon a finding of liability on the part of the
defendant, the defendant shall be liable to the plaintiff in
an amount equal to the greater of $5,000 or the sum of—
‘‘(1) any actual damages sustained by the plain-
tiff as a proximate result of the filing of the false
or fraudulent information return (including any
costs attributable to resolving deficiencies asserted
as a result of such filing), and
‘‘(2) the costs of the action.
‘‘(c) PERIOD
FOR
BRINGING
ACTION.—Notwith-
standing any other provision of law, an action to enforce
the liability created under this section may be brought
without regard to the amount in controversy and may be
brought only within the later of—
‘‘(1) 4 years after the date of the filing of the
false or fraudulent information return, or
‘‘(2) 1 year after the date such false or fraudu-
lent information return would have been discovered
by exercise of reasonable care.
‘‘(d) COPY OF COMPLAINT FILED WITH IRS.—Any
person bringing an action under subsection (a) shall pro-
vide a copy of the complaint to the Internal Revenue Serv-
ice upon the filing of such complaint with the court.
‘‘(e) FINDING
OF COURT TO INCLUDE CORRECT
AMOUNT OF PAYMENT.—The judgment of the court in an
action brought under subsection (a) shall include a finding
of the correct amount which should have been reported
in the information return.
‘‘(f) INFORMATION RETURN.—For purposes of this
section, the term ‘information return’ means any state-
ment described in section 6724(d)(1)(A).’’
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter B of chapter 76 is amended by striking
the item relating to section 7434 and inserting the follow-
ing:
‘‘Sec. 7434. Civil damages for fraudulent filing of information re-
turns.
‘‘Sec. 7435. Cross references.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to false or fraudulent information
returns filed after the date of the enactment of this Act.
SEC. 5503. REQUIREMENT TO VERIFY ACCURACY OF IN-
FORMATION RETURNS.
(a) GENERAL RULE.—Section 6201 (relating to as-
sessment authority) is amended by redesignating sub-
section (d) as subsection (e) and by inserting after sub-
section (c) the following new subsection:
‘‘(d) REQUIRED REASONABLE VERIFICATION OF IN-
FORMATION RETURNS.—In any court proceeding, if a tax-
payer asserts a reasonable dispute with respect to any
item of income reported on an information return filed
with the Secretary under subpart B of part III of sub-
chapter A of chapter 61 by a third party and the taxpayer
has fully cooperated with the Secretary (including provid-
ing, within a reasonable period of time, access to and in-
spection of all witnesses, information, and documents
within the control of the taxpayer as reasonably requested
by the Secretary), the Secretary shall present reasonable
and probative information concerning such deficiency in
addition to such information return.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
Subtitle G—Modifications to Pen-
alty for Failure to Collect and
Pay Over Tax
SEC. 5601. PRELIMINARY NOTICE REQUIREMENT.
(a) IN GENERAL.—Section 6672 (relating to failure
to collect and pay over tax, or attempt to evade or defeat
tax) is amended by redesignating subsection (b) as sub-
section (c) and by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b) PRELIMINARY NOTICE REQUIREMENT.—
‘‘(1) IN
GENERAL.—No penalty shall be im-
posed under subsection (a) unless the Secretary noti-
fies the taxpayer in writing by mail to an address as
determined under section 6212(b) that the taxpayer
shall be subject to an assessment of such penalty.
‘‘(2) TIMING OF NOTICE.—The mailing of the
notice described in paragraph (1) shall precede any
notice and demand of any penalty under subsection
(a) by at least 60 days.
‘‘(3) STATUTE
OF
LIMITATIONS.—If a notice
described in paragraph (1) with respect to any pen-
alty is mailed before the expiration of the period
provided by section 6501 for the assessment of such
penalty (determined without regard to this para-
graph), the period provided by such section for the
assessment of such penalty shall not expire before
the date 90 days after the date on which such notice
was mailed.
‘‘(4) EXCEPTION
FOR
JEOPARDY.—This sub-
section shall not apply if the Secretary finds that the
collection of the penalty is in jeopardy.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to assessments made after June
30, 1994.
SEC. 5602. NO PENALTY IF PROMPT NOTIFICATION OF THE
SECRETARY.
(a) IN GENERAL.—Section 6672 (relating to failure
to collect and pay over tax, or attempt to evade or defeat
tax) is amended by adding at the end thereof the following
new subsection:
‘‘(d) PENALTY NOT APPLICABLE WHERE PROMPT
NOTIFICATION OF FAILURE.—
‘‘(1) IN GENERAL.—A person shall not be liable
for any penalty under subsection (a) by reason of
any failure referred to in subsection (a) if—
‘‘(A) such person is not a significant
owner, or highly compensated employee, of the
trade or business with respect to which such
failure occurred,
‘‘(B) such person notifies the Secretary (in
such manner as he may prescribe) that such
failure has occurred within 10 days after the
date of such failure,
‘‘(C) such notification was before any no-
tice by the Secretary to any person with respect
to such failure, and
‘‘(D) such failure is not a part of a plan
to defraud the Federal Government.
‘‘(2) DEFINITIONS.—For purposes of paragraph
(1)—
‘‘(A) SIGNIFICANT
OWNER.—The term
‘significant owner’ means—
‘‘(i) any person holding an interest as
a proprietor in a trade or business carried
on as a proprietorship, and
‘‘(ii) in the case of a trade or business
conducted by a corporation or partnership,
any person who is a 5-percent owner (as
defined in section 416(i)(1)) in such cor-
poration or partnership, as the case may
be.
‘‘(B) 
HIGHLY
COMPENSATED
EM-
PLOYEE.—The term ‘highly compensated em-
ployee’ means any employee who receives com-
pensation from the employer at an annual rate
in excess of $75,000.
‘‘(3) SPECIAL RULES.—
‘‘(A) ONE-TIME RELIEF.—This subsection
shall apply only once with respect to—
‘‘(i) any person, and
‘‘(ii) any trade or business with re-
spect to which the failure described in sub-
section (a) occurred.
‘‘(B) APPLICATION OF SUBSECTION.—This
subsection shall not apply if it results in no per-
son being held liable for the penalty described
in subsection (a).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply in the case of failures after the
date of the enactment of this Act.
SEC. 
5603. DISCLOSURE 
OF 
CERTAIN 
INFORMATION
WHERE MORE THAN 1 PERSON SUBJECT TO
PENALTY.
(a) IN GENERAL.—Subsection (e) of section 6103
(relating to disclosure to persons having material interest),
as amended by section 5301, is amended by adding at the
end thereof the following new paragraph:
‘‘(9) DISCLOSURE
OF
CERTAIN
INFORMATION
WHERE MORE THAN 1 PERSON SUBJECT TO PEN-
ALTY UNDER SECTION 6672.—If the Secretary deter-
mines that a person is liable for a penalty under sec-
tion 6672(a) with respect to any failure, upon re-
quest in writing of such person, the Secretary shall
disclose in writing to such person—
‘‘(A) the name of any other person whom
the Secretary has determined to be liable for
such penalty with respect to such failure, and
‘‘(B) whether the Secretary has attempted
to collect such penalty from such other person,
the general nature of such collection activities,
and the amount collected.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 5604. PENALTIES UNDER SECTION 6672.
(a) PUBLIC INFORMATION REQUIREMENTS.—The
Secretary of the Treasury or the Secretary’s delegate
(hereafter in this section referred to as the ‘‘Secretary’’)
shall take such actions as may be appropriate to ensure
that employees are aware of their responsibilities under
the Federal tax depository system, the circumstances
under which employees may be liable for the penalty im-
posed by section 6672 of the Internal Revenue Code of
1986, and the responsibility to promptly report to the In-
ternal Revenue Service any failure referred to in sub-
section (a) of such section 6672. Such actions shall in-
clude—
(1) printing of a warning on deposit coupon
booklets and the appropriate tax returns that certain
employees may be liable for the penalty imposed by
such section 6672, and
(2) the development of a special information
packet.
(b) BOARD MEMBERS OF TAX-EXEMPT ORGANIZA-
TIONS.—
(1) VOLUNTARY BOARD MEMBERS.—
(A) IN GENERAL.—The penalty under sec-
tion 6672 of the Internal Revenue Code of 1986
shall not be imposed on unpaid, volunteer mem-
bers of any board of trustees or directors of an
organization referred to in section 501 of such
Code to the extent such members are solely
serving in an honorary capacity, do not partici-
pate in the day-to-day or financial operations of
the organization, and do not have actual knowl-
edge of the failure on which such penalty is im-
posed.
(B) APPLICATION
OF
PARAGRAPH.—This
paragraph shall not apply if it results in no per-
son being held liable for the penalty described
in section 6672(a) of the Internal Revenue
Code of 1986.
(2) DEVELOPMENT
OF
EXPLANATORY
MATE-
RIALS.—The Secretary shall develop materials ex-
plaining the circumstances under which board mem-
bers of tax-exempt organizations (including vol-
untary and honorary members) may be subject to
penalty under section 6672 of such Code. Such ma-
terials shall be made available to tax-exempt organi-
zations.
(3) IRS INSTRUCTIONS.—The Secretary shall
clarify the instructions to Internal Revenue Service
employees on the application of the penalty under
section 6672 of such Code with regard to voluntary
members of boards of trustees or directors of tax-ex-
empt organizations.
(c) PROMPT NOTIFICATION.—To the maximum ex-
tent practicable, the Secretary shall notify all persons who
have failed to make timely and complete deposit of any
taxes described in section 6672 of the Internal Revenue
Code of 1986 of such failure within 30 days after the re-
turn was filed reflecting such failure or after the date on
which the Secretary is first aware of such failure. If the
person failing to make the deposit is not an individual,
the Secretary shall notify the entity subject to such deposit
requirement and that entity shall notify, within 15 days
of the notification by the Secretary, all officers, general
partners, trustees, or other managers of the failure.
Subtitle H—Awarding of Costs and
Certain Fees
SEC. 5701. MOTION FOR DISCLOSURE OF INFORMATION.
Paragraph (4) of section 7430(c) (defining prevailing
party) is amended by adding at the end thereof the follow-
ing new subparagraph:
‘‘(C) MOTION FOR DISCLOSURE OF INFOR-
MATION.—Once a taxpayer substantially pre-
vails as described in subparagraph (A)(ii), the
taxpayer may file a motion for an order requir-
ing the disclosure (within a reasonable period of
time specified by the court) of all information
and copies of relevant records in the possession
of the Internal Revenue Service with respect to
such taxpayer’s case and the substantial jus-
tification for the position taken by the Internal
Revenue Service.’’
SEC. 5702. INCREASED LIMIT ON ATTORNEY FEES.
Paragraph (1) of section 7430(c) (defining reason-
able litigation costs) is amended—
(1) by striking ‘‘$75’’ in clause (iii) of subpara-
graph (B) and inserting ‘‘$110’’,
(2) by striking ‘‘an increase in the cost of living
or’’ in clause (iii) of subparagraph (B), and
(3) by adding after clause (iii) the following:
‘‘In the case of any calendar year beginning after
1993, the dollar amount referred to in clause (iii)
shall be increased by an amount equal to such dollar
amount multiplied by the cost-of-living adjustment
determined under section 1(f)(3) for such calendar
year, by substituting ‘calendar year 1992’ for ‘cal-
endar year 1989’ in subparagraph (B) thereof. If
any dollar amount after being increased under the
preceding sentence is not a multiple of $10, such
dollar amount shall be rounded to the nearest mul-
tiple of $10 (or, if such dollar amount is a multiple
of $5, such dollar amount shall be increased to the
next higher multiple of $10).’’
SEC. 5703. FAILURE TO AGREE TO EXTENSION NOT TAKEN
INTO ACCOUNT.
Paragraph (1) of section 7430(b) (relating to require-
ment that administrative remedies be exhausted) is
amended by adding at the end thereof the following new
sentence: ‘‘Any failure to agree to an extension of the time
for the assessment of any tax shall not be taken into ac-
count for purposes of determining whether the prevailing
party meets the requirements of the preceding sentence.’’
SEC. 5704. EFFECTIVE DATE.
The amendments made by this subtitle shall apply in
the case of proceedings commenced after the date of the
enactment of this Act.
Subtitle I—Other Provisions
SEC. 5801. REQUIRED CONTENT OF CERTAIN NOTICES.
(a) GENERAL RULE.—Subsection (a) of section 7522
(relating to content of tax due, deficiency, and other no-
tices) is amended by striking ‘‘shall describe the basis for,
and identify’’ and inserting ‘‘shall set forth the adjust-
ments which are the basis for, and shall identify’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to notices sent after the date
6 months after the date of the enactment of this Act.
SEC. 5802. TREATMENT OF SUBSTITUTE RETURNS UNDER
SECTION 6651.
(a) GENERAL RULE.—Section 6651 (relating to fail-
ure to file tax return or to pay tax) is amended by adding
at the end thereof the following new subsection:
‘‘(h) TREATMENT OF RETURNS PREPARED BY SEC-
RETARY UNDER SECTION 6020(b).—In the case of any
return made by the Secretary under section 6020(b)—
‘‘(1) such return shall be disregarded for pur-
poses of determining the amount of the addition
under paragraph (1) of subsection (a), but
‘‘(2) such return shall be treated as the return
filed by the taxpayer for purposes of determining the
amount of the addition under paragraphs (2) and
(3) of subsection (a).’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply in the case of any return the
due date for which (determined without regard to exten-
sions) is after the date of the enactment of this Act.
SEC. 5803. RELIEF FROM RETROACTIVE APPLICATION OF
TREASURY DEPARTMENT REGULATIONS.
(a) IN GENERAL.—Subsection (b) of section 7805
(relating to rules and regulations) is amended to read as
follows:
‘‘(b) RETROACTIVITY OF REGULATIONS.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, no temporary, proposed, or
final regulation relating to the internal revenue laws
shall apply to any taxable period ending before the
earliest of the following dates:
‘‘(A) The date on which such regulation is
filed with the Federal Register.
‘‘(B) In the case of any final regulation,
the date on which any proposed or temporary
regulation to which such final regulation relates
was filed with the Federal Register.
‘‘(C) The date on which any notice sub-
stantially describing the expected contents of
any temporary, proposed, or final regulation is
issued to the public.
‘‘(2) EXCEPTION FOR PROMPTLY ISSUED REGU-
LATIONS.—Paragraph (1) shall not apply to regula-
tions issued within 12 months of the date of the en-
actment of the statutory provision to which the regu-
lation relates.
‘‘(3) PREVENTION OF ABUSE.—The Secretary
may provide that any regulation may take effect or
apply retroactively to prevent abuse of a statute to
which the regulation relates.
‘‘(4) 
CORRECTION
OF
PROCEDURAL
DE-
FECTS.—The Secretary may provide that any regu-
lation may apply retroactively to correct a proce-
dural defect in the issuance of any prior regulation.
‘‘(5) INTERNAL REGULATIONS.—The limitations
of paragraph (1) shall not apply to any regulation
relating to internal Treasury Department policies,
practices or procedures.
‘‘(6) CONGRESSIONAL
AUTHORIZATION.—The
limitation of paragraph (1) may be superseded by a
legislative grant from Congress authorizing the Sec-
retary to prescribe the effective date with respect to
any regulation.
‘‘(7) ELECTION TO APPLY RETROACTIVELY.—
The Secretary may provide for any taxpayer to elect
to apply any regulation before the dates specified in
paragraph (1).
‘‘(8) APPLICATION
TO
RULINGS.—The Sec-
retary may prescribe the extent, if any, to which any
ruling (including any judicial decision or any admin-
istrative determination other than by regulation) re-
lating to the internal revenue laws shall be applied
without retroactive effect.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendment made by sub-
section (a) shall apply with respect to—
(A) any temporary or proposed regulation
filed on or after January 5, 1993, and
(B) any temporary or proposed regulation
filed before January 5, 1993, and filed as a
final regulation after such date.
(2) SPECIAL RULE.—Section 7805(b)(2) of the
Internal Revenue Code of 1986 (as added by sub-
section (a)) shall apply only to statutes enacted on
or after the date of the enactment of this Act.
SEC. 5804. REQUIRED NOTICE OF CERTAIN PAYMENTS.
If any payment is received by the Secretary of the
Treasury or the Secretary’s delegate (hereafter in the sec-
tion referred to as the ‘‘Secretary’’) from any taxpayer
and the Secretary cannot associate such payment with any
outstanding tax liability of such taxpayer, the Secretary
shall make reasonable efforts to notify the taxpayer of
such inability within 60 days after the receipt of such pay-
ment.
SEC. 5805. UNAUTHORIZED ENTICEMENT OF INFORMATION
DISCLOSURE.
(a) IN GENERAL.—Subchapter B of chapter 76 (re-
lating to proceedings by taxpayers and third parties) is
amended by redesignating section 7434 as section 7435
and by inserting after section 7433 the following new sec-
tion:
‘‘SEC. 7434. CIVIL DAMAGES FOR UNAUTHORIZED ENTICE-
MENT OF INFORMATION DISCLOSURE.
‘‘(a) IN GENERAL.—If any officer or employee of the
United States intentionally compromises the determina-
tion or collection of any tax due from an attorney, certified
public accountant, or enrolled agent representing a tax-
payer in exchange for information conveyed by the tax-
payer to the attorney, certified public accountant, or en-
rolled agent for purposes of obtaining advice concerning
the taxpayer’s tax liability, such taxpayer may bring a civil
action for damages against the United States in a district
court of the United States. Such civil action shall be the
exclusive remedy for recovering damages resulting from
such actions.
‘‘(b) DAMAGES.—In any action brought under sub-
section (a), upon a finding of liability on the part of the
defendant, the defendant shall be liable to the plaintiff in
an amount equal to the lesser of $500,000 or the sum
of—
‘‘(1) actual, direct economic damages sustained
by the plaintiff as a proximate result of the informa-
tion disclosure, and
‘‘(2) the costs of the action.
Damages shall not include the taxpayer’s liability for any
civil or criminal penalties, or other losses attributable to
incarceration or the imposition of other criminal sanctions.
‘‘(c) PAYMENT AUTHORITY.—Claims pursuant to
this section shall be payable out of funds appropriated
under section 1304 of title 31, United States Code.
‘‘(d) PERIOD
FOR BRINGING ACTION.—Notwith-
standing any other provision of law, an action to enforce
liability created under this section may be brought without
regard to the amount in controversy and may be brought
only within 2 years after the date the actions creating such
liability would have been discovered by exercise of reason-
able care.
‘‘(e) MANDATORY STAY.—Upon a certification by the
Commissioner or the Commissioner’s delegate that there
is an ongoing investigation or prosecution of the taxpayer,
the district court before which an action under this section
is pending, shall stay all proceedings with respect to such
action pending the conclusion of the investigation or pros-
ecution.
‘‘(f) CRIME-FRAUD
EXCEPTION.—Subsection (a)
shall not apply to information conveyed to an attorney,
certified public accountant, or enrolled agent for the pur-
pose of perpetrating a fraud or crime.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter B of chapter 76 is amended by striking
the item relating to section 7434 and by adding at the
end thereof the following new items:
‘‘Sec. 7434. Civil damages for unauthorized enticement of infor-
mation disclosure.
‘‘Sec. 7435. Cross references.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to actions after the date of the
enactment of this Act.
Subtitle J—Form Modifications;
Studies
SEC. 5900. DEFINITIONS.
For purposes of this subtitle:
(1) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Treasury or his delegate.
(2) 1986 
CODE.—The term ‘‘1986 Code’’
means the Internal Revenue Code of 1986.
(3) TAX-WRITING
COMMITTEES.—The term
‘‘tax-writing Committees’’ means the Committee on
Ways and Means of the House of Representatives
and the Committee on Finance of the Senate.
PART I—FORM MODIFICATIONS
SEC. 5901. EXPLANATION OF CERTAIN PROVISIONS.
(a) GENERAL RULE.—The Secretary shall take such
actions as may be appropriate to ensure that taxpayers
are aware of the provisions of the 1986 Code permitting
payment of tax in installments, extensions of time for pay-
ment of tax, and compromises of tax liability. Such actions
shall include revising the instructions for filing income tax
returns so that such instructions include an explanation
of—
(1) the procedures for requesting the benefits of
such provisions, and
(2) the terms and conditions under which the
benefits of such provisions are available.
(b) COLLECTION NOTICES.—In any notice of an
underpayment of tax or proposed underpayment of tax
sent by the Secretary to any taxpayer, the Secretary shall
include a notification of the availability of the provisions
of sections 6159, 6161, and 7122 of the 1986 Code.
SEC. 5902. IMPROVED PROCEDURES FOR NOTIFYING SERV-
ICE OF CHANGE OF ADDRESS OR NAME.
The Secretary shall provide improved procedures for
taxpayers to notify the Secretary of changes in names and
addresses. Not later than June 30, 1994, the Secretary
shall institute procedures for timely updating all Internal
Revenue Service records with change-of-address informa-
tion provided to the Secretary by taxpayers.
SEC. 5903. RIGHTS AND RESPONSIBILITIES OF DIVORCED
INDIVIDUALS.
The Secretary shall include in the Internal Revenue
Service publication entitled ‘‘Your Rights As A Taxpayer’’
a section on the rights and responsibilities of divorced in-
dividuals.
PART II—STUDIES
SEC. 5911. PILOT PROGRAM FOR APPEAL OF ENFORCE-
MENT ACTIONS.
(a) GENERAL RULE.—The Secretary shall establish
a 1-year pilot program for appeals of enforcement actions
(including lien, levy, and seizure actions) to the Appeals
Division of the Internal Revenue Service—
(1) where the deficiency was assessed without
actual knowledge of the taxpayer,
(2) where the deficiency was assessed without
an opportunity for administrative appeal, and
(3) in other appropriate circumstances.
(b) REPORT.—Not later than June 30, 1994, the
Secretary shall submit to the tax-writing Committees a re-
port on the pilot program established under subsection (a),
together with such recommendations as he may deem ad-
visable.
SEC. 5912. STUDY ON TAXPAYERS WITH SPECIAL NEEDS.
(a) GENERAL RULE.—The Secretary shall conduct a
study on ways to assist the elderly, physically impaired,
foreign-language speaking, and other taxpayers with spe-
cial needs to comply with the internal revenue laws.
(b) REPORT.—Not later than June 30, 1994, the
Secretary shall submit to the tax-writing Committees a re-
port on the study conducted under subsection (a), together
with such recommendations as he may deem advisable.
SEC. 5913. REPORTS ON TAXPAYER-RIGHTS EDUCATION
PROGRAM.
Not later than April 1, 1994, the Secretary shall sub-
mit a report to the tax-writing Committees on the scope
and content of the Internal Revenue Service’s taxpayer-
rights education program for its officers and employees.
Not later than June 30, 1994, the Secretary shall submit
a report to the tax-writing Committees on the effectiveness
of the program referred to in the preceding sentence.
SEC. 5914. BIENNIAL REPORTS ON MISCONDUCT BY INTER-
NAL REVENUE SERVICE EMPLOYEES.
During June 30, 1994 and during June of each sec-
ond calendar year thereafter, the Secretary shall report
to the tax-writing Committees on all cases involving com-
plaints about misconduct of Internal Revenue Service em-
ployees and the disposition of such complaints.
SEC. 5915. STUDY OF NOTICES OF DEFICIENCY.
(a) GENERAL RULE.—The Comptroller General shall
conduct a study on—
(1) the effectiveness of current Internal Reve-
nue Service efforts to notify taxpayers with regard
to tax deficiencies under section 6212 of the 1986
Code,
(2) the number of registered or certified letters
and other notices returned to the Internal Revenue
Service as undeliverable,
(3) any follow-up action taken by the Internal
Revenue Service to locate taxpayers who did not re-
ceive actual notice,
(4) the effect that failures to receive notice of
such deficiencies have on taxpayers, and
(5) recommendations to improve Internal Reve-
nue Service notification of taxpayers.
(b) REPORT.—Not later than June 30, 1994, the
Comptroller General shall submit to the tax-writing Com-
mittees a report on the study conducted under subsection
(a), together with such recommendations as he may deem
advisable.
SEC. 5916. NOTICE AND FORM ACCURACY STUDY.
(a) GENERAL RULE.—The Comptroller General shall
conduct annual studies of the accuracy of 25 of the most
commonly used Internal Revenue Service forms, notices,
and publications. In conducting any such study, the Comp-
troller General shall examine the suitability and usefulness
of Internal Revenue Service telephone numbers on Inter-
nal Revenue Service notices and shall solicit and consider
the comments of organizations representing taxpayers,
employers, and tax professionals.
(b) REPORTS.—The Comptroller General shall sub-
mit to the tax-writing Committees a report on each study
conducted under subsection (a), together with such rec-
100
ommendations as he may deem advisable. The first such
report shall be submitted not later than June 30, 1994.
TITLE VI—OTHER INTERNAL
REVENUE CODE PROVISIONS
Subtitle A—Extension of Authority
for 
Undercover 
Operations;
Cash-Transaction Reports
SEC. 6001. EXTENSION OF AUTHORITY FOR UNDERCOVER
OPERATIONS.
(a) 3-YEAR EXTENSION.—
(1) IN
GENERAL.—Subsection (c) of section
7608 (relating to undercover operations) is amended
by adding at the end thereof the following new para-
graph:
‘‘(6) TERMINATION.—The provisions of this
subsection shall cease to apply on and after Septem-
ber 1, 1995; and all amounts expended pursuant to
this subsection shall be recovered to the extent pos-
sible, and deposited in the Treasury of the United
States as miscellaneous receipts, before such date.’’
(2) CONFORMING AMENDMENT.—Paragraph (3)
of section 7601(c) of the Anti-Drug Abuse Act of
1988 is amended by striking all that follows ‘‘this
Act’’ and inserting a period.
101
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on January 1,
1992.
(b) ENHANCED OVERSIGHT.—
(1) ADDITIONAL
INFORMATION
REQUIRED
IN
REPORTS TO CONGRESS.—Subparagraph (B) of sec-
tion 7608(c)(4) is amended—
(A) by striking ‘‘preceding the period’’ in
clause (ii),
(B) by striking ‘‘and’’ at the end of clause
(ii), and
(C) by striking clause (iii) and inserting
the following:
‘‘(iii) the number, by programs, of un-
dercover investigative operations closed in
the 1-year period for which such report is
submitted, and
‘‘(iv) the following information with
respect to each undercover investigative op-
eration pending as of the end of the 1-year
period for which such report is submitted
or closed during such 1-year period—
‘‘(I) the date the operation began
and the date of the certification re-
102
ferred to in the last sentence of para-
graph (1),
‘‘(II) 
the 
total 
expenditures
under the operation and the amount
and use of the proceeds from the op-
eration,
‘‘(III) a detailed description of
the operation including the potential
violation 
being 
investigated 
and
whether the operation is being con-
ducted under grand jury auspices, and
‘‘(IV) the results of the operation
including the results of criminal pro-
ceedings.’’
(2) AUDITS REQUIRED WITHOUT REGARD TO
AMOUNTS INVOLVED.—Subparagraph (C) of section
7608(c)(5) is amended to read as follows:
‘‘(C) UNDERCOVER INVESTIGATIVE OPER-
ATION.—The term ‘undercover investigative op-
eration’ means any undercover investigative op-
eration of the Service; except that, for purposes
of subparagraphs (A) and (C) of paragraph (4),
such term only includes an operation which is
exempt from section 3302 or 9102 of title 31,
United States Code.’’
103
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect on the date of the
enactment of this Act.
SEC. 6002. DISCLOSURE OF RETURNS ON CASH TRANS-
ACTIONS.
(a) GENERAL RULE.—Subsection (l) of section 6103
(relating to disclosure of returns and return information
for purposes other than tax administration) is amended
by adding at the end thereof the following new paragraph:
‘‘(13) DISCLOSURE OF RETURNS FILED UNDER
SECTION 6050I.—The Secretary may, upon written
request, disclose to officers and employees of—
‘‘(A) any Federal agency,
‘‘(B) any agency of a State or local govern-
ment, or
‘‘(C) any agency of the government of a
foreign country,
information contained on returns filed under section
6050I. Any such disclosure shall be made on the
same basis, and subject to the same conditions, as
apply to disclosures of information on reports filed
under section 5313 of title 31, United States Code;
except that no disclosure under this paragraph shall
be made for purposes of the administration of any
tax law.’’
104
(b) CONFORMING AMENDMENTS.—
(1) Subsection (i) of section 6103 is amended
by striking paragraph (8).
(2) Subparagraph (A) of section 6103(p)(3) is
amended—
(A) by striking ‘‘(7)(A)(ii), or (8)’’ and in-
serting ‘‘or (7)(A)(ii)’’, and
(B) by striking ‘‘or (12)’’ and inserting
‘‘(12), or (13)’’.
(3) The material preceding subparagraph (A) of
section 6103(p)(4) is amended—
(A) by striking ‘‘(5), or (8)’’ and inserting
‘‘or (5)’’,
(B) by striking ‘‘(i)(3)(B)(i) or (8)’’ and
inserting ‘‘(i)(3)(B)(i)’’, and
(C) by striking ‘‘or (12)’’ and inserting
‘‘(12), or (13)’’.
(4) Clause (ii) of section 6103(p)(4)(F) is
amended—
(A) by striking ‘‘(5), or (8)’’ and inserting
‘‘or (5)’’, and
(B) by striking ‘‘or (12) and inserting
‘‘(12), or (13)’’.
105
(5) Paragraph (2) of section 7213(a) is amend-
ed by striking ‘‘or (12)’’ and inserting ‘‘(12), or
(13)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle B—Provisions Relating to
Exempt Organizations
SEC. 6101. CERTAIN ORGANIZATIONS REQUIRED TO DIS-
CLOSE NONEXEMPT STATUS.
(a) GENERAL RULE.—Subchapter B of chapter 61
(relating to miscellaneous provisions) is amended by redes-
ignating section 6115 as section 6116 and by inserting
after section 6114 the following new section:
‘‘SEC. 6115. CERTAIN ORGANIZATIONS REQUIRED TO DIS-
CLOSE NONEXEMPT STATUS.
‘‘(a) IN GENERAL.—If—
‘‘(1) in an advertisement or solicitation by (or
on behalf of) an organization, such organization is
referred to as being nonprofit, and
‘‘(2) such organization is not exempt from tax
under subtitle A,
such advertisement or solicitation shall contain an express
statement (in a conspicuous and easily recognizable for-
106
mat) that such organization is not exempt from Federal
income taxes.
‘‘(b) CROSS REFERENCE.—
‘‘For penalties for violation of subsection (a), see
section 6714.’’
(b) PENALTY.—Part I of subchapter B of chapter 68
is amended by adding at the end thereof the following new
section:
‘‘SEC. 6714. FAILURE TO DISCLOSE NONEXEMPT STATUS.
‘‘(a) IMPOSITION OF PENALTY.—If there is a failure
to meet the requirements of section 6115 with respect to
any advertisement or solicitation by (or on behalf of) an
organization, such organization shall pay a penalty of
$1,000 for each day on which such a failure occurred. The
maximum penalty imposed under this subsection on fail-
ures by any organization during any calendar year shall
not exceed $10,000.
‘‘(b) REASONABLE CAUSE EXEMPTION.—No penalty
shall be imposed under this section with respect to any
failure if it is shown that such failure is due to reasonable
cause.
‘‘(c) $10,000 LIMITATION NOT TO APPLY WHERE
INTENTIONAL DISREGARD.—If any failure to which sub-
section (a) applies is due to intentional disregard of the
requirements of section 6115—
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‘‘(1) the penalty under subsection (a) for the
day on which failure occurred shall be the greater
of—
‘‘(A) $1,000, or
‘‘(B) 50 percent of the aggregate cost of
the advertisements and solicitations which oc-
curred on such day and with respect to which
there was such failure,
‘‘(2) the $10,000 limitation of subsection (a)
shall not apply to any penalty under subsection (a)
for the day on which such failure occurred, and
‘‘(3) such penalty shall not be taken into ac-
count in applying such limitation to other penalties
under subsection (a).
‘‘(d) DAY ON WHICH FAILURE OCCURS.—For pur-
poses of this section, rules similar to the rules of section
6710(d) shall apply in determining the day on which any
failure occurs.’’
(c) CLERICAL AMENDMENTS.—
(1) The table of sections for subchapter B of
chapter 61 is amended by striking the item relating
to section 6115 and inserting the following:
‘‘Sec. 6115. Certain organizations required to disclose
nonexempt status.
‘‘Sec. 6116. Cross reference.’’
108
(2) The table of sections of part I of subchapter
B of chapter 68 is amended by adding at the end
thereof the following new item:
‘‘Sec. 6714. Failure to disclose nonexempt status.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1994.
SEC. 6102. EXEMPT ORGANIZATIONS REQUIRED TO PRO-
VIDE COPY OF RETURN.
(a) GENERAL RULE.—
(1) Subparagraph (A) of section 6104(e)(1) (re-
lating to public inspection of annual returns) is
amended to read as follows:
‘‘(A) IN GENERAL.—During the 3-year pe-
riod beginning on the filing date—
‘‘(i) a copy of the annual return filed
under section 6033 (relating to returns by
exempt organizations) by any organization
to which this paragraph applies shall be
made available by such organization for in-
spection during regular business hours by
any individual at the principal office of
such organization and, if such organization
regularly maintains 1 or more regional or
district offices having 3 or more employees,
at each such regional or district office, and
109
‘‘(ii) upon request of an individual
made at such principal office or such a re-
gional or district office, a copy of such an-
nual return shall be provided to such indi-
vidual without charge other than a reason-
able fee for the cost of reproduction.
If the request under clause (ii) is made in per-
son, such copy shall be provided immediately
and, if made other than in person, shall be pro-
vided within 30 days.’’
(2) Clause (ii) of section 6104(e)(2)(A) is
amended by inserting before the period at the end
thereof the following: ‘‘(and, upon request of an in-
dividual made at such principal office or such a re-
gional or district office, a copy of the material re-
quired to be available for inspection under this sub-
paragraph shall be provided (in accordance with the
last sentence of paragraph (1)(A)) to such individual
without charge other than a reasonable fee for the
cost of reproduction)’’.
(b) ADVERTISEMENTS ETC., REQUIRED
TO DIS-
CLOSE AVAILABILITY OF ANNUAL RETURN.—
(1) Paragraph (1) of section 6104(e) is amend-
ed by adding at the end thereof the following new
subparagraph:
110
‘‘(E) ADVERTISEMENTS
ETC., REQUIRED
TO
DISCLOSE
AVAILABILITY
OF
ANNUAL
RE-
TURN.—In the case of an organization required
by subparagraph (A) to provide a copy of its
annual return under section 6033 upon request
to individuals, each advertisement or solicitation
by (or on behalf of) such organization shall con-
tain an express statement (in a conspicuous and
easily recognizable format) that such return
shall be provided to individuals upon request.’’
(2) Section 6714 is amended—
(A) by striking ‘‘section 6115’’ each place
it appears and inserting ‘‘section 6115 or sec-
tion 6104(e)(1)(E)’’,
(B) by striking ‘‘$1,000’’ in subsection (a)
and inserting ‘‘$1,000 ($100 in the case of a
failure 
to 
meet 
the 
requirements 
of
6104(e)(1)(E))’’, and
(C) by inserting before the period at the
end of the section heading ‘‘; FAILURE
OF
CERTAIN EXEMPT ORGANIZATIONS TO DIS-
CLOSE
AVAILABILITY
OF
ANNUAL
RE-
TURN’’.
(3) Subparagraph (C) of section 6652(c)(1) is
amended by striking ‘‘(e)(1)’’ and inserting ‘‘(e)(1)
111
(other than subparagraph (E))’’, and by striking
‘‘$10’’ and inserting ‘‘$50’’.
(4) Subparagraph (D) of section 6652(c)(1) is
amended by striking ‘‘$10’’ and inserting ‘‘$50’’.
(5) The item relating to section 6714 in the
table of sections for part I of subchapter B of chap-
ter 68 is amended by inserting before the period ‘‘;
failure of certain exempt organizations to disclose
availability of annual return’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1994.
TITLE 
VII—PROHIBITION 
OF
MISUSE OF DEPARTMENT OF
THE TREASURY NAMES, SYM-
BOLS, ETC
SEC. 7001. PROHIBITION OF MISUSE OF DEPARTMENT OF
THE TREASURY NAMES, SYMBOLS, ETC.
(a) GENERAL RULE.—Subchapter II of chapter 3 of
title 31, United States Code, is amended by adding at the
end thereof the following new section:
‘‘§ 333. Prohibition of misuse of Department of the
Treasury names, symbols, etc.
‘‘(a) GENERAL RULE.—No person may use, in con-
nection with, or as a part of, any advertisement, solicita-
112
tion, business activity, or product, whether alone or with
other words, letters, symbols, or emblems—
‘‘(1) the words ‘Department of the Treasury’,
or the name of any service, bureau, office, or other
subdivision of the Department of the Treasury,
‘‘(2) the titles ‘Secretary of the Treasury’ or
‘Treasurer of the United States’ or the title of any
other officer or employee of the Department of the
Treasury,
‘‘(3) the abbreviations or initials of any entity
referred to in paragraph (1),
‘‘(4) the words ‘United States Savings Bond’ or
the name of any other obligation issued by the De-
partment of the Treasury,
‘‘(5) any symbol or emblem of an entity re-
ferred to in paragraph (1) (including the design of
any envelope or stationary used by such an entity),
and
‘‘(6) any colorable imitation of any such words,
titles, abbreviations, initials, symbols, or emblems,
in a manner which could reasonably be interpreted or con-
strued as conveying the false impression that such adver-
tisement, solicitation, business activity, or product is in
any manner approved, endorsed, sponsored, or authorized
by, or associated with, the Department of the Treasury
113
or any entity referred to in paragraph (1) or any officer
or employee thereof.
‘‘(b) TREATMENT OF WAIVERS.—Any determination
of whether a person has violated the provisions of sub-
section (a) shall be made without regard to any use of
a disclaimer of affiliation with the United States Govern-
ment or any particular agency or instrumentality thereof.
‘‘(c) CIVIL PENALTY.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury may impose a civil penalty on any person
who violates the provisions of subsection (a).
‘‘(2) AMOUNT OF PENALTY.—The amount of
the civil penalty imposed by paragraph (1) shall not
exceed $5,000 for each use of any material in viola-
tion of subsection (a). If such use is in a broadcast
or telecast, the preceding sentence shall be applied
by substituting ‘$25,000’ for ‘$5,000’.
‘‘(3) TIME LIMITATIONS.—
‘‘(A) ASSESSMENTS.—The Secretary of the
Treasury may assess any civil penalty under
paragraph (1) at any time before the end of the
3-year period beginning on the date of the vio-
lation with respect to which such penalty is im-
posed.
114
‘‘(B) CIVIL ACTION.—The Secretary of the
Treasury may commence a civil action to re-
cover any penalty imposed under this subsection
at any time before the end of the 2-year period
beginning on the date on which such penalty
was assessed.’’.
(b) CLERICAL AMENDMENT.—The analysis for chap-
ter 3 of title 31, United States Code, is amended by add-
ing after the item relating to section 332 the following
new item:
‘‘333. Prohibition of misuse of Department of the Treasury names, symbols,
etc.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
(d) REPORT.—Not later than May 1, 1995, the Sec-
retary of the Treasury shall submit a report to the Com-
mittee on Ways and Means of the House of Representa-
tives and the Committee on Finance of the Senate on the
implementation of the amendments made by this section.
Such report shall include the number of cases in which
the Secretary has notified persons of violations of section
333 of title 31, United States Code (as added by sub-
section (a)), the number and amount of civil penalties as-
sessed under such section, and the total amount of such
penalties collected.
115
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