185 
‘‘(2) CONSIDERATION OF COMMENTS.—In pre-
scribing any final regulation which supersedes a pro-
posed or temporary regulation which had been sub-
mitted under this subsection to the Chief Counsel 
for Advocacy of the Small Business Administration, 
the Secretary shall— 
‘‘(A) consider the comments of the Chief 
Counsel for Advocacy of the Small Business 
Administration on such proposed or temporary 
regulation, and 
‘‘(B) in promulgating such final regulation, 
include a narrative that describes the response 
to such comments. 
‘‘(3) SUBMISSION OF CERTAIN FINAL REGULA-
TION.—In the case of promulgation by the Secretary 
of any final regulations (other than a temporary reg-
ulation) which do not supersede a proposed regula-
tion, the requirements of paragraphs (1) and (2) 
shall apply, except that the submission under para-
graph (1) shall be made at least 30 days before the 
date of such promulgation, and the consideration 
and discussion required under paragraph (2) shall 
be made in connection with the promulgation of such 
final regulation. 
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‘‘(f) SMALL BUSINESS REGULATORY SAFEGUARDS.— 
The Small Business Regulatory Enforcement Fairness Act 
(Public Law 104–121; 110 Stat. 857 (‘SBREFA’)) and 
the Regulatory Flexibility Act (5 U.S.C. 601–612 
(‘RFA’)) shall apply to regulations promulgated under this 
subtitle. 
‘‘SEC. 407. JURISDICTION. 
‘‘(a) STATE JURISDICTION.—A sales tax admin-
istering authority shall have jurisdiction over any gross 
payments made which have a destination (as determined 
in accordance with section 405) within the State of said 
sales tax administering authority. This grant of jurisdic-
tion is not exclusive of any other jurisdiction that such 
sales tax administering authority may have. 
‘‘(b) FEDERAL JURISDICTION.—The grant of juris-
diction in subsection (a) shall not be in derogation of Fed-
eral jurisdiction over the same matter. The Federal Gov-
ernment shall have the right to exercise preemptive juris-
diction over matters relating to the taxes imposed by this 
subtitle. 
‘‘CHAPTER 5—OTHER ADMINISTRATIVE 
PROVISIONS 
‘‘Sec. 501. Monthly reports and payments. 
‘‘Sec. 502. Registration. 
‘‘Sec. 503. Accounting. 
‘‘Sec. 504. Penalties. 
‘‘Sec. 505. Burden of persuasion and burden of production. 
‘‘Sec. 506. Attorneys’ and accountancy fees. 
‘‘Sec. 507. Summons, examinations, audits, etc. 
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‘‘Sec. 508. Records. 
‘‘Sec. 509. Tax to be separately stated and charged. 
‘‘Sec. 510. Coordination with title 11. 
‘‘Sec. 511. Applicable interest rate. 
‘‘SEC. 501. MONTHLY REPORTS AND PAYMENTS. 
‘‘(a) TAX REPORTS AND FILING DATES.— 
‘‘(1) IN GENERAL.—On or before the 15th day 
of each month, each person who is— 
‘‘(A) liable to collect and remit the tax im-
posed by this subtitle by reason of section 
103(a), or 
‘‘(B) liable to pay tax imposed by this sub-
title which is not collected pursuant to section 
103(a), 
shall submit to the appropriate sales tax admin-
istering authority (in a form prescribed by the Sec-
retary) a report relating to the previous calendar 
month. 
‘‘(2) CONTENTS OF REPORT.—The report re-
quired under paragraph (1) shall set forth— 
‘‘(A) the gross payments referred to in sec-
tion 101, 
‘‘(B) the tax collected under chapter 4 in 
connection with such payments, 
‘‘(C) the amount and type of any credit 
claimed, and 
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‘‘(D) other information reasonably required 
by the Secretary or the sales tax administering 
authority for the administration, collection, and 
remittance of the tax imposed by this subtitle. 
‘‘(b) TAX PAYMENTS DATE.— 
‘‘(1) GENERAL RULE.—The tax imposed by this 
subtitle during any calendar month is due and shall 
be paid to the appropriate sales tax administering 
authority on or before the 15th day of the suc-
ceeding month. Both Federal tax imposed by this 
subtitle and conforming State sales tax (if any) shall 
be paid in 1 aggregate payment. 
‘‘(2) CROSS
REFERENCE.—See subsection (e) 
relating to remitting of separate segregated funds 
for sellers that are not small sellers. 
‘‘(c) EXTENSIONS FOR FILING REPORTS.— 
‘‘(1) AUTOMATIC EXTENSIONS FOR NOT MORE 
THAN 30 DAYS.—On application, an extension of not 
more than 30 days to file reports under subsection 
(a) shall be automatically granted. 
‘‘(2) OTHER EXTENSIONS.—On application, ex-
tensions of 30 to 60 days to file such reports shall 
be liberally granted by the sales tax administering 
authority for reasonable cause. Extensions greater 
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than 60 days may be granted by the sales tax ad-
ministering authority to avoid hardship. 
‘‘(3) 
NO
EXTENSION
FOR
PAYMENT
OF 
TAXES.—Notwithstanding paragraphs (1) and (2), 
no extension shall be granted with respect to the 
time for paying or remitting the taxes under this 
subtitle. 
‘‘(d) TELEPHONE REPORTING OF VIOLATIONS.—The 
Secretary shall establish a system under which a violation 
of this subtitle can be brought to the attention of the sales 
tax administering authority for investigation through the 
use of a toll-free telephone number and otherwise. 
‘‘(e) SEPARATE SEGREGATED ACCOUNTS.— 
‘‘(1) IN GENERAL.—Any registered seller that 
is not a small seller shall deposit all sales taxes col-
lected pursuant to section 103 in a particular week 
in a separate segregated account maintained at a 
bank or other financial institution within 3 business 
days of the end of such week. Said registered seller 
shall also maintain in that account sufficient funds 
to meet the bank or financial institution minimum 
balance requirements, if any, and to pay account 
fees and costs. 
‘‘(2) SMALL
SELLER.—For purposes of this 
subsection, a small seller is any person that has not 
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collected $20,000 or more of the taxes imposed by 
this subtitle in any of the previous 12 months. 
‘‘(3) LARGE SELLERS.—Any seller that has col-
lected $100,000 or more of the taxes imposed by 
this subtitle in any of the previous 12 months is a 
large seller. A large seller shall remit to the sales tax 
administering authority the entire balance of depos-
ited taxes in its separate segregated account on the 
first business day following the end of the calendar 
week. The Secretary may by regulation require the 
electronic transfer of funds due from large sellers. 
‘‘(4) WEEK.—For purposes of this subsection, 
the term ‘week’ shall mean the 7-day period ending 
on a Friday. 
‘‘(f) DETERMINATION OF REPORT FILING DATE.— 
A report filed pursuant to subsection (a) shall be deemed 
filed when— 
‘‘(1) deposited in the United States mail, post-
age prepaid, addressed to the sales tax administering 
authority, 
‘‘(2) delivered and accepted at the offices of the 
sales tax administering authority, 
‘‘(3) provided to a designated commercial pri-
vate courier service for delivery within 2 days to the 
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sales tax administering authority at the address of 
the sales tax administering authority, or 
‘‘(4) by other means permitted by the Sec-
retary. 
‘‘(g) SECURITY
REQUIREMENTS.—A large seller 
(within the meaning of subsection (e)(3)) shall be required 
to provide security in an amount equal to the greater of 
$100,000 or one and one-half times the seller’s average 
monthly tax liability during the previous 6 calendar 
months. Security may be a cash bond, a bond from a sur-
ety company approved by the Secretary, a certificate of 
deposit, or a State or United States Treasury bond. A 
bond qualifying under this subsection must be a con-
tinuing instrument for each calendar year (or portion 
thereof) that the bond is in effect. The bond must remain 
in effect until the surety or sureties are released and dis-
charged. Failure to provide security in accordance with 
this section shall result in revocation of the seller’s section 
502 registration. If a person who has provided security 
pursuant to this subsection— 
‘‘(1) fails to pay an amount indicated in a final 
notice of amount due under this subtitle (within the 
meaning of section 605(d)), 
‘‘(2) no Taxpayer Assistance Order is in effect 
relating to the amount due, 
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‘‘(3) either the time for filing an appeal pursu-
ant to section 604 has passed or the appeal was de-
nied, and 
‘‘(4) the amount due is not being litigated in 
any judicial forum, 
then the security or part of the security, as the case may 
be, may be forfeited in favor of the Secretary to the extent 
of such tax due (plus interest if any). 
‘‘(h) REWARDS PROGRAM.—The Secretary is author-
ized to maintain a program of awards wherein individuals 
that assist the Secretary or sales tax administering au-
thorities in discovering or prosecuting tax fraud may be 
remunerated. 
‘‘(i) CROSS REFERENCE.—For interest due on taxes 
remitted late, see section 6601. 
‘‘SEC. 502. REGISTRATION. 
‘‘(a) IN GENERAL.—Any person liable to collect and 
remit taxes pursuant to section 103(a) who is engaged in 
a trade or business shall register as a seller with the sales 
tax administering authority administering the taxes im-
posed by this subtitle. 
‘‘(b) AFFILIATED FIRMS.—Affiliated firms shall be 
treated as 1 person for purposes of this section. Affiliated 
firms may elect, upon giving notice to the Secretary in 
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a form prescribed by the Secretary, to treat separate firms 
as separate persons for purposes of this subtitle. 
‘‘(c) DESIGNATION
OF TAX MATTERS PERSON.— 
Every person registered pursuant to subsection (a) shall 
designate a tax matters person who shall be an individual 
whom the sales tax administering authority may contact 
regarding tax matters. Each person registered must pro-
vide notice of a change in the identity of the tax matters 
person within 30 days of said change. 
‘‘(d) EFFECT OF FAILURE TO REGISTER.—Any per-
son that is required to register and who fails to do so is 
prohibited from selling taxable property or services. The 
Secretary or a sales tax administering authority may bring 
an action seeking a temporary restraining order, an in-
junction, or such other order as may be appropriate to 
enforce this section. 
‘‘SEC. 503. ACCOUNTING. 
‘‘(a) CASH METHOD TO BE USED GENERALLY.— 
Registered sellers and other persons shall report trans-
actions using the cash method of accounting unless an 
election to use the accrual method of accounting is made 
pursuant to subsection (b). 
‘‘(b) ELECTION TO USE ACCRUAL METHOD.—A per-
son may elect with respect to a calender year to remit 
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taxes and report transactions with respect to the month 
where a sale was invoiced and accrued. 
‘‘(c) CROSS REFERENCE.—See section 205 for rules 
relating to bad debts for sellers electing the accrual meth-
od. 
‘‘SEC. 504. PENALTIES. 
‘‘(a) FAILURE TO REGISTER.—Each person who is 
required to register pursuant to section 502 but fails to 
do so prior to notification by the sales tax administering 
authority shall be liable for a penalty of $500. 
‘‘(b) RECKLESS OR WILLFUL FAILURE TO COLLECT 
TAX.— 
‘‘(1) CIVIL
PENALTY; FRAUD.—Each person 
who is required to and recklessly or willfully fails to 
collect taxes imposed by this subtitle shall be liable 
for a penalty equal to the greater of $500 or 20 per-
cent of tax not collected. 
‘‘(2) CRIMINAL PENALTY.—Each person who is 
required to and willfully fails as part of a trade or 
business to collect taxes imposed by this subtitle 
may be fined an amount up to the amount deter-
mined in accordance with paragraph (1) or impris-
oned for a period of not more than 1 year or both. 
‘‘(c) RECKLESS OR WILLFUL ASSERTION OF INVALID 
EXEMPTION.— 
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‘‘(1) CIVIL
PENALTY; FRAUD.—Each person 
who recklessly or willfully asserts an invalid inter-
mediate or export sales exemption from the taxes 
imposed by this subtitle shall be liable for a penalty 
equal to the greater of $500 or 20 percent of the tax 
not collected or remitted. 
‘‘(2) CRIMINAL
PENALTY.—Each person who 
willfully asserts an invalid intermediate or export 
sales exemption from the taxes imposed by this sub-
title may be fined an amount up to the amount de-
termined in accordance with paragraph (1) or im-
prisoned for a period of not more than 1 year or 
both. 
‘‘(d) RECKLESS OR WILLFUL FAILURE TO REMIT 
TAX COLLECTED.— 
‘‘(1) CIVIL
PENALTY; FRAUD.—Each person 
who is required to and recklessly or willfully fails to 
remit taxes imposed by this subtitle and collected 
from purchasers shall be liable for a penalty equal 
to the greater of $1,000 or 50 percent of the tax not 
remitted. 
‘‘(2) CRIMINAL
PENALTY.—Each person who 
willfully fails to remit taxes imposed by this subtitle 
and collected from purchasers may be fined an 
amount up to the amount determined in accordance 
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with paragraph (1) or imprisoned for a period of not 
more than 2 years or both. 
‘‘(e) RECKLESS
OR WILLFUL FAILURE TO PAY 
TAX.—Each person who is required to and recklessly or 
willfully fails to pay taxes imposed by this subtitle shall 
be liable for a penalty equal to the greater of $500 or 
20 percent of the tax not paid. 
‘‘(f) PENALTY FOR LATE FILING.— 
‘‘(1) IN GENERAL.—In the case of a failure by 
any person who is required to and fails to file a re-
port required by section 501 on or before the due 
date (determined with regard to any extension) for 
such report, such person shall pay a penalty for each 
month or fraction thereof that said report is late 
equal to the greater of— 
‘‘(A) $50, or 
‘‘(B) 0.5 percent of the gross payments re-
quired to be shown on the report. 
‘‘(2) INCREASED PENALTY ON RETURNS FILED 
AFTER WRITTEN INQUIRY.—The amount of the pen-
alty under paragraph (1) shall be doubled with re-
spect to any report filed after a written inquiry with 
respect to such report is received by the taxpayer 
from the sales tax administering authority. 
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‘‘(3) LIMITATION.—The penalty imposed under 
this subsection shall not exceed 12 percent. 
‘‘(4) EXCEPTIONS.— 
‘‘(A) REASONABLE
CAUSE.—No penalty 
shall be imposed under this subsection with re-
spect to any failure if it is shown that such fail-
ure is due to reasonable cause. 
‘‘(B) OTHER WAIVER AUTHORITY.—In ad-
dition to penalties not imposed by reason of 
subparagraph (A), the sales tax administering 
authority, on application, shall waive the pen-
alty imposed by paragraph (1) once per reg-
istered person per 24-month period. The pre-
ceding sentence shall not apply to a penalty de-
termined under paragraph (2). 
‘‘(g) PENALTY FOR WILLFULLY OR RECKLESSLY AC-
CEPTING A FALSE INTERMEDIATE OR EXPORT SALES 
CERTIFICATE.—A person who willingly or recklessly ac-
cepts a false intermediate or export sales certificate shall 
pay a penalty equal to 20 percent of the tax not collected 
by reason of said acceptance. 
‘‘(h) PENALTY FOR LATE REMITTANCE OF TAXES.— 
‘‘(1) IN GENERAL.—A person who is required 
to timely remit taxes imposed by this subtitle and 
remits taxes more than 1 month after such taxes are 
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due shall pay a penalty equal to 1 percent per month 
(or fraction thereof) from the due date. 
‘‘(2) LIMITATION.—The penalty imposed under 
this subsection shall not exceed 24 percent. 
‘‘(3) EXCEPTIONS FOR REASONABLE CAUSE.— 
No penalty shall be imposed under paragraph (1) 
with respect to any late remittance if it is shown 
that such late remittance is due to reasonable cause. 
‘‘(i) PENALTY FOR FILING FALSE REBATE CLAIM.— 
‘‘(1) CIVIL PENALTY; FRAUD.—A person who 
willingly or recklessly files a false claim for a family 
consumption allowance rebate (within the meaning 
of chapter 3) shall— 
‘‘(A) pay a penalty equal to the greater of 
$500 or 50 percent of the claimed annual re-
bate amount not actually due, and 
‘‘(B) repay any rebates received as a result 
of the false rebate claim (together with inter-
est). 
‘‘(2) CRIMINAL PENALTY.—A person who will-
ingly files a false claim for a family consumption al-
lowance rebate (within the meaning of chapter 3) 
may be fined an amount up to the amount deter-
mined in accordance with paragraph (1) or impris-
oned for a period not more than 1 year or both. 
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‘‘(j) PENALTY FOR BAD CHECK.—If any check or 
money order in payment of any amount receivable under 
this subtitle is not duly paid, in addition to other penalties 
provided by law, the person who tendered such check shall 
pay a penalty equal to the greater of— 
‘‘(1) $25, or 
‘‘(2) two percent of the amount of such check. 
‘‘(k) PENALTY FOR FAILURE TO MAINTAIN A SEPA-
RATE SEGREGATED ACCOUNT.—Any person required to 
maintain a separate segregated account pursuant to sec-
tion 501(e) that fails to maintain such a separate seg-
regated account shall pay a penalty of $1,000. 
‘‘(l) PENALTY
FOR FAILURE TO DEPOSIT COL-
LECTED
TAXES
IN
A
SEPARATE
SEGREGATED
AC-
COUNT.—Any person required to deposit collected taxes 
into a separate segregated account maintained pursuant 
to section 501(e) that fails to timely deposit said taxes 
into the separate segregated account shall pay a penalty 
equal to 1 percent of the amount required to be deposited. 
The penalty imposed by the previous sentence shall be tri-
pled unless said taxes have been deposited in the separate 
segregated account or remitted to the sales tax admin-
istering authority within 16 days of the date said deposit 
was due. 
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200 
‘‘(m) JOINT AND SEVERAL LIABILITY FOR TAX MAT-
TERS PERSON AND RESPONSIBLE OFFICERS.—The tax 
matters person (designated pursuant to section 502(c)) 
and responsible officers or partners of a firm shall be 
jointly and severally liable for the tax imposed by this sub-
title and penalties imposed by this subtitle. 
‘‘(n) RIGHT OF CONTRIBUTION.—If more than 1 per-
son is liable with respect to any tax or penalty imposed 
by this subtitle, each person who paid such tax or penalty 
shall be entitled to recover from other persons who are 
liable for such tax or penalty an amount equal to the ex-
cess of the amount paid by such person over such person’s 
proportionate share of the tax or penalty. 
‘‘(o) CIVIL PENALTIES AND CRIMINAL FINES NOT 
EXCLUSIVE.— 
‘‘(1) CIVIL
PENALTY.—The fact that a civil 
penalty has been imposed shall not prevent the im-
position of a criminal fine. 
‘‘(2) CRIMINAL FINE.—The fact that a criminal 
fine has been imposed shall not prevent the imposi-
tion of a civil penalty. 
‘‘(p) CONFIDENTIALITY.—Any person who violates 
the requirements relating to confidentiality of tax informa-
tion (as provided in section 605(e)) may be fined up to 
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201 
$10,000 or imprisoned for a period of not more than 1 
year, or both. 
‘‘(q) CROSS REFERENCE.—For interest due on late 
payments, see section 6601. 
‘‘SEC. 505. BURDEN OF PERSUASION AND BURDEN OF PRO-
DUCTION. 
‘‘In all disputes concerning taxes imposed by this sub-
title, the person engaged in a dispute with the sales tax 
administering authority or the Secretary, as the case may 
be, shall have the burden of production of documents and 
records but the sales tax administering authority or the 
Secretary shall have the burden of persuasion. In all dis-
putes concerning an exemption claimed by a purchaser, 
if the seller has on file an intermediate sale or export sale 
certificate from the purchaser and did not have reasonable 
cause to believe that the certificate was improperly pro-
vided by the purchaser with respect to such purchase 
(within the meaning of section 103), then the burden of 
production of documents and records relating to that ex-
emption shall rest with the purchaser and not with the 
seller. 
‘‘SEC. 506. ATTORNEYS’ AND ACCOUNTANCY FEES. 
‘‘In all disputes concerning taxes imposed by this sub-
title, the person engaged in a dispute with the sales tax 
administering authority or the Secretary, as the case may 
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be, shall be entitled to reasonable attorneys’ fees, account-
ancy fees, and other reasonable professional fees incurred 
in direct relation to the dispute unless the sales tax admin-
istering authority or the Secretary establishes that its po-
sition was substantially justified. 
‘‘SEC. 507. SUMMONS, EXAMINATIONS, AUDITS, ETC. 
‘‘(a) SUMMONS.—Persons are subject to administra-
tive summons by the sales tax administering authority for 
records, documents, and testimony required by the sales 
tax administering authority to accurately determine liabil-
ity for tax under this subtitle. A summons shall be served 
by the sales tax administering authority by an attested 
copy delivered in hand to the person to whom it is directed 
or left at his last known address. The summons shall de-
scribe with reasonable certainty what is sought. 
‘‘(b) EXAMINATIONS AND AUDITS.—The sales tax ad-
ministering authority has the authority to conduct at a 
reasonable time and place examinations and audits of per-
sons who are or may be liable to collect and remit tax 
imposed by this subtitle and to examine the books, papers, 
records, or other data of such persons which may be rel-
evant or material to the determination of tax due. 
‘‘(c) LIMITATION ON AUTHORITY IN CASE OF REFER-
RAL.—No administrative summons may be issued by the 
sales tax administering authority and no action be com-
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menced to enforce an administrative summons with re-
spect to any person if a Justice Department referral or 
referral to a State Attorney General’s Office is in effect 
with respect to such person relating to a tax imposed by 
this subtitle. Such referral is in effect with respect to any 
person if the sales tax administering authority or the Sec-
retary has recommended to the Justice Department or a 
State Attorney General’s Office a grand jury investigation 
of such person or a criminal prosecution of such person 
that contemplates criminal sanctions under this title. A 
referral shall be terminated when— 
‘‘(1) the Justice Department or a State Attor-
ney General’s Office notifies the sales tax admin-
istering authority or the Secretary that he will not— 
‘‘(A) prosecute such person for any offense 
connected with the internal revenue laws, 
‘‘(B) authorize a grand jury investigation 
of such person with respect to such offense, or 
‘‘(C) continue such a grand jury investiga-
tion, or 
‘‘(2) a final disposition has been made of any 
criminal proceeding connected with the internal rev-
enue laws, or conforming State sales tax, against 
such person. 
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‘‘SEC. 508. RECORDS. 
‘‘Any person liable to remit taxes pursuant to this 
subtitle shall keep records (including a record of all section 
509 receipts provided, complete records of intermediate 
and export sales, including purchaser’s intermediate and 
export sales certificates and tax number and the net of 
tax amount of purchase) sufficient to determine the 
amounts reported, collected, and remitted for a period of 
6 years after the latter of the filing of the report for which 
the records formed the basis or when the report was due 
to be filed. Any purchaser who purchased taxable property 
or services but did not pay tax by reason of asserting an 
intermediate and export sales exemption shall keep records 
sufficient to determine whether said exemption was valid 
for a period of 7 years after the purchase of taxable prop-
erty or services. 
‘‘SEC. 509. TAX TO BE SEPARATELY STATED AND CHARGED. 
‘‘(a) IN GENERAL.—For each purchase of taxable 
property or services for which a tax is imposed by section 
101, the seller shall charge the tax imposed by section 101 
separately from the purchase. For purchase of taxable 
property or services for which a tax is imposed by section 
101, the seller shall provide to the purchaser a receipt for 
each transaction that includes— 
‘‘(1) the property or services price exclusive of 
tax, 
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‘‘(2) the amount of tax paid, 
‘‘(3) the property or service price inclusive of 
tax, 
‘‘(4) the tax rate (the amount of tax paid (per 
paragraph (2)) divided by the property or service 
price inclusive of tax (per paragraph (3)), 
‘‘(5) the date that the good or service was sold, 
‘‘(6) the name of the vendor, and 
‘‘(7) the vendor registration number. 
‘‘(b) VENDING MACHINE EXCEPTION.—The require-
ments of subsection (a) shall be inapplicable in the case 
of sales by vending machines. Vending machines for pur-
poses of this subsection are machines— 
‘‘(1) that dispense taxable property in exchange 
for coins or currency, and 
‘‘(2) that sell no single item exceeding $10 per 
unit in price. 
‘‘(c) FINANCIAL INTERMEDIATION SERVICES EXCEP-
TION.—The requirements of subsection (a) shall be inap-
plicable in the case of sales financial intermediation serv-
ice. Receipts shall be issued when the tax is imposed (in 
accordance with section 803 (relating to timing of tax on 
financial intermediation services)). 
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‘‘SEC. 510. COORDINATION WITH TITLE 11. 
‘‘No addition to tax shall be made under section 504 
with respect to a period during which a case is pending 
under title 11, United States Code— 
‘‘(1) if such tax was incurred by the estate and 
the failure occurred pursuant to an order of the 
court finding probable insufficiency of funds of the 
estate to pay administrative expenses, or 
‘‘(2) if— 
‘‘(A) such tax was incurred by the debtor 
before the earlier of the order for relief or (in 
the involuntary case) the appointment of a 
trustee, and 
‘‘(B) the petition was filed before the due 
date prescribed by law (including extensions) 
for filing a return of such tax, or the date for 
making the addition to tax occurs on or after 
the date the petition was filed. 
‘‘SEC. 511. APPLICABLE INTEREST RATE. 
‘‘(a) IN GENERAL.— 
‘‘(1) FEDERAL
SHORT-TERM
RATE.—In the 
case of a debt instrument, investment, financing 
lease, or account with a term of not over 3 years, 
the applicable interest rate is the Federal short-term 
rate. 
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207 
‘‘(2) FEDERAL MID-TERM RATE.—In the case 
of a debt instrument, investment, financing lease, or 
account with a term of over 3 years but not over 9 
years, the applicable interest rate is the Federal 
mid-term rate. 
‘‘(3) FEDERAL LONG-TERM RATE.—In the case 
of a debt instrument, investment, financing lease, or 
account with a term of over 9 years, the applicable 
interest rate is the Federal long-term rate. 
‘‘(b) FEDERAL SHORT-TERM RATE.—The Federal 
short-term rate shall be the rate determined by the Sec-
retary based on the average market yield (selected by the 
Secretary and ending in the calendar month in which the 
determination is made during any one month) on out-
standing marketable obligations of the United States with 
remaining periods to maturity of 3 years or fewer. 
‘‘(c) FEDERAL MID-TERM RATE.—The Federal mid- 
term rate shall be the rate determined by the Secretary 
based on the average market yield (selected by the Sec-
retary and ending in the calendar month in which the de-
termination is made during any 1 month) on outstanding 
marketable obligations of the United States with remain-
ing periods to maturity of more than 3 years and not over 
9 years. 
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208 
‘‘(d) FEDERAL LONG-TERM RATE.—The Federal 
long-term rate shall be the rate determined by the Sec-
retary based on the average market yield (selected by the 
Secretary and ending in the calendar month in which the 
determination is made during any 1 month) on out-
standing marketable obligations of the United States with 
remaining periods to maturity of over 9 years. 
‘‘(e) DETERMINATION OF RATES.—During each cal-
endar month, the Secretary shall determine the Federal 
short-term rate, the Federal mid-term rate and the Fed-
eral long-term rate which shall apply during the following 
calendar month. 
‘‘CHAPTER 6—COLLECTIONS; APPEALS; 
TAXPAYER RIGHTS 
‘‘Sec. 601. Collections. 
‘‘Sec. 602. Power to levy, etc. 
‘‘Sec. 603. Problem resolution offices. 
‘‘Sec. 604. Appeals. 
‘‘Sec. 605. Taxpayer rights. 
‘‘Sec. 606. Installment agreements; compromises. 
‘‘SEC. 601. COLLECTIONS. 
‘‘The sales tax administering authority shall collect 
the taxes imposed by this subtitle, except as provided in 
section 404 (relating to Federal administration in certain 
States). 
‘‘SEC. 602. POWER TO LEVY, ETC. 
‘‘(a) IN GENERAL.—The sales tax administering au-
thority may levy and seize property, garnish wages or sal-
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209 
ary and file liens to collect amounts due under this sub-
title, pursuant to enforcement of— 
‘‘(1) a judgment duly rendered by a court of 
law, 
‘‘(2) an amount due if the taxpayer has failed 
to exercise his appeals rights under section 604, or 
‘‘(3) an amount due if the appeals process de-
termined that an amount remained due and the tax-
payer has failed to timely petition the Tax Court for 
relief. 
‘‘(b) EXEMPTION FROM LEVY, SEIZURE, AND GAR-
NISHMENTS.—There shall be exempt from levy, seizure, 
and garnishment or penalty in connection with any tax 
imposed by this subtitle— 
‘‘(1) wearing apparel, school books, fuel, provi-
sions, furniture, personal effects, tools of a trade or 
profession, livestock in a household up to an aggre-
gate value of $15,000, and 
‘‘(2) monthly money income equal to 150 per-
cent of the monthly poverty level (as defined in sec-
tion 303). 
‘‘(c) LIENS TO BE TIMELY RELEASED.—Subject to 
such reasonable regulations as the Secretary may provide, 
any lien imposed with respect to a tax imposed by this 
title shall be released not later than 30 days after— 
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‘‘(1) the liability was satisfied or became unen-
forceable, or 
‘‘(2) a bond was accepted as security. 
‘‘SEC. 603. PROBLEM RESOLUTION OFFICES. 
‘‘(a) PROBLEM RESOLUTION OFFICE TO BE ESTAB-
LISHED.—Each sales tax administering authority shall es-
tablish an independent Problem Resolution Office and ap-
point an adequate number of problem resolution officers. 
The head of the problem resolution office must be ap-
pointed by, and serve at the pleasure of either the State 
Governor (in the case of an administering State) or the 
President of the United States. 
‘‘(b) AUTHORITY OF PROBLEM RESOLUTION OFFI-
CERS.—Problem resolution officers shall have the author-
ity to investigate complaints and issue a Taxpayer Assist-
ance Order to administratively enjoin any collection activ-
ity if, in the opinion of the problem resolution officer, said 
collection activity is reasonably likely to not be in compli-
ance with law or to prevent hardship (other than by reason 
of having to pay taxes lawfully due). Problem resolution 
officers shall also have the authority to issue Taxpayer As-
sistance Orders releasing or returning property that has 
been levied upon or seized, ordering that a lien be released 
and that garnished wages be returned. A Taxpayer Assist-
ance Order may only be rescinded or modified by the prob-
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211 
lem resolution officer that issued it, by the highest official 
in the relevant sales tax administering authority or by its 
general counsel upon a finding that the collection activity 
is justified by clear and convincing evidence. The authority 
to reverse this Taxpayer Assistance Order may not be del-
egated. 
‘‘(c) FORM OF REQUEST FOR TAXPAYER ASSISTANCE 
ORDER.—The Secretary shall establish a form and proce-
dure to aid persons requesting the assistance of the Prob-
lem Resolution Office and to aid the Problem Resolution 
Office in understanding the needs of the person seeking 
assistance. The use of this form, however, shall not be a 
prerequisite to a problem resolution officer taking action, 
including issuing a Taxpayer Assistance Order. 
‘‘(d) CONTENT OF TAXPAYER ASSISTANCE ORDER.— 
A Taxpayer Assistance Order shall contain the name of 
the problem resolution officer, any provision relating to 
the running of any applicable period of limitation, the 
name of the person that the Taxpayer Assistance Order 
assists, the government office (or employee or officer of 
said government office) to whom it is directed and the ac-
tion or cessation of action that the Taxpayer Assistance 
Order requires of said government officer (or employee or 
officer of said government office). The Taxpayer Assist-
ance Order need not contain findings of fact or its legal 
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basis; however, the problem resolution officer must provide 
findings of fact and the legal basis for the issuance of the 
Taxpayer Assistance Order to the sales tax administering 
authority upon the request of an officer of said authority 
within 2 weeks of the receipt of such request. 
‘‘(e) INDEPENDENCE PROTECTED.—Problem resolu-
tion officers shall not be disciplined or adversely affected 
for the issuance of administrative injunctions unless a pat-
tern of issuing injunctions that are manifestly unreason-
able is proven in an administrative hearing by a prepon-
derance of the evidence. 
‘‘(f) OTHER RIGHTS NOT LIMITED.—Nothing in this 
section shall limit the authority of the sales tax admin-
istering authority, the registered person or other person 
from pursuing any legal remedy in any court with jurisdic-
tion over the dispute at issue. 
‘‘(g) LIMITATIONS.—The running of any applicable 
period of limitation shall be suspended for a period of 8 
weeks following the issuance of a Taxpayer Assistance 
Order or, if specified, for a longer period set forth in the 
Taxpayer Assistance Order provided the suspension does 
not exceed 6 months. 
‘‘SEC. 604. APPEALS. 
‘‘(a) ADMINISTRATIVE APPEALS.—The sales tax ad-
ministering authority shall establish an administrative ap-
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225 
‘‘(3) MIXED
USE
PROPERTY
OR
SERVICES 
CREDIT.—A person registered pursuant to section 
502 is entitled to a business use conversion credit 
(pursuant to section 202) equal to the product of— 
‘‘(A) the mixed use property amount, 
‘‘(B) the business use ratio, and 
‘‘(C) the rate of tax imposed by section 
101. 
‘‘(4) MIXED
USE
PROPERTY
AMOUNT.—The 
mixed use property amount for each month (or frac-
tion thereof) in which the property was owned shall 
be— 
‘‘(A) 
one-three-hundred-sixtieth 
of 
the 
gross payments for real property for 360 
months or until the property is sold, 
‘‘(B) one-eighty-fourth of the gross pay-
ments for tangible personal property for 84 
months or until the property is sold, 
‘‘(C) one-sixtieth of the gross payments for 
vehicles for 60 months or until the property is 
sold, or 
‘‘(D) for other types of taxable property or 
services, a reasonable amount or in accordance 
with regulations prescribed by the Secretary. 
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(34) Section 7701(a)(29) of such Code is 
amended by striking ‘‘1986’’ and inserting ‘‘2019’’. 
(35) Section 7809(c) of such Code is amended 
by striking paragraphs (1) and (4) and by redesig-
nating paragraphs (2) and (3) as paragraphs (1) 
and (2), respectively. 
(36) Section 7871(a) of such Code is amended 
by striking paragraphs (1) and (3) through (6) and 
by redesignating paragraphs (2) and (7) as para-
graphs (1) and (2), respectively. 
(37) Section 7871 of such Code is amended by 
striking subsection (c) and by redesignating sub-
sections (d) and (e) as subsections (c) and (d), re-
spectively. 
(38) Section 8021 of such Code is amended by 
striking subsection (a) and by redesignating sub-
sections (b) through (f) as subsections (a) through 
(e), respectively. 
(39) Section 8022(2)(A) of such Code is 
amended by striking ‘‘, particularly the income tax’’. 
(40) Section 8023 of such Code is amended by 
striking ‘‘Internal Revenue Service’’ each place it ap-
pears and inserting ‘‘Department of the Treasury’’. 
(41) Section 9501(b)(2) of such Code is amend-
ed by striking subparagraph (C). 
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