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ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; amendment of the 1986 Code; table of contents.
Sec. 2. Findings and purposes.
TITLE I—IMPROVEMENTS IN IRS MANAGEMENT AND OVERSIGHT
Sec. 101. Five-year term for IRS Commissioner.
Sec. 102. Institutionalized executive branch oversight of the IRS; outside advice
for the Secretary of the Treasury.
Sec. 103. Assistant Commissioner (Customer Service).
Sec. 104. Additional duties for the Taxpayer Advocate.
TITLE II—IMPROVING THE EFFICIENCY OF TAX
ADMINISTRATION
Sec. 201. Promotion of electronic tax administration.
Sec. 202. Cooperative agreements with State tax authorities.
TITLE III—PROVIDING FLEXIBILITY FOR IRS MANAGEMENT
Sec. 301. Improvements in personnel flexibilities.
Sec. 302. Authorization for appropriations.
Sec. 303. Internal Revenue Service funding.
SEC. 2. FINDINGS AND PURPOSES.
(a) The Congress finds that:
(1) The taxpayer would benefit from greater
continuity in IRS leadership and oversight.
(2) The enhanced oversight of the IRS by the
Secretary of the Treasury needs to be institutional-
ized.
(3) While the IRS has made considerable im-
provement in recent years, customer service at the
IRS continues to lag behind the level of service the
American people receive from the best private sector
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organizations. The IRS should adopt the best cus-
tomer service practices of the private sector, consist-
ent with the IRS’s overall mission of collecting the
tax revenues which are due.
(4) The taxpayer needs IRS to continue to im-
prove its use of technology for the benefit of Amer-
ican taxpayers and the IRS.
(5) The Secretary of the Treasury, the IRS and
the taxpayer would benefit from increased private
sector advice regarding technology, customer service,
and modern management techniques.
(6) The IRS Taxpayer Advocate should be
given additional responsibilities and independence to
represent American taxpayers within the IRS.
(7) There should be increased use of electronic
filing for income tax returns and information report-
ing.
(8) The taxpayer needs IRS to have greater
flexibility to attract and retain high caliber person-
nel and to manage its human resources in ways that
fit its organizational needs.
(9) The taxpayer needs IRS to have adequate
and stable funding and budgeting to ensure continu-
ity in its effort to improve its performance.
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(10) Improved cooperation between the IRS
and State tax authorities can reduce overall taxpayer
burden and improve the efficiency of tax collection.
(b) The purposes of this Act are:
(1) To provide greater continuity in Internal
Revenue Service leadership.
(2) To enhance and institutionalize the over-
sight of the IRS by the Secretary of the Treasury.
(3) To ensure that taxpayers receive fair, im-
partial, timely, and courteous treatment from the In-
ternal Revenue Service, consistent with the overall
IRS mission of collecting taxes that are due.
(4) To ensure that the Secretary of the Treas-
ury and the IRS have the benefit of private sector
advice regarding technology, customer service, and
modern management techniques.
(5) To provide additional independence to the
IRS Taxpayer Advocate to represent American tax-
payers within the IRS.
(6) To establish the goal of paperless filing as
the preferred and most convenient means of filing
tax returns for the vast majority of taxpayers.
(7) To enable the Internal Revenue Service to
recruit and retain a first-class workforce that will be
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rewarded for performance and held accountable for
working with taxpayers to solve problems.
(8) To improve cooperation between the Inter-
nal Revenue Service and State taxing authorities to
reduce overall taxpayer burdens and improve the ef-
ficiency of tax collection.
TITLE I—IMPROVEMENTS IN IRS
MANAGEMENT AND OVERSIGHT
SEC. 101. FIVE-YEAR TERM FOR IRS COMMISSIONER.
(a) IN GENERAL.—Section 7802(a) is amended to
read as follows:
‘‘(a) COMMISSIONER
OF
INTERNAL
REVENUE.—
There shall be in the Department of the Treasury a Com-
missioner of Internal Revenue, who shall be appointed by
the President, by and with the advice and consent of the
Senate, for a term of five years. The Commissioner of In-
ternal Revenue shall have such duties and powers as may
be prescribed by the Secretary of the Treasury.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to individuals appointed after
the date of the enactment of this Act.
SEC. 102. INSTITUTIONALIZED EXECUTIVE BRANCH OVER-
SIGHT OF THE IRS; OUTSIDE ADVICE FOR
THE SECRETARY OF THE TREASURY.
Section 7801 is amended to read as follows:
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‘‘SEC. 7801. AUTHORITY OF THE DEPARTMENT OF THE
TREASURY.
‘‘(a) POWERS AND DUTIES OF THE SECRETARY.—
Except as otherwise expressly provided by law, the admin-
istration and enforcement of this title shall be performed
by or under the supervision of the Secretary of the Treas-
ury.
‘‘(b) INTERNAL REVENUE SERVICE MANAGEMENT
BOARD.—
‘‘(1) There shall be within the Department of
the Treasury an Internal Revenue Service Manage-
ment Board (Management Board) which shall con-
sist of career and non-career employees, including—
‘‘(A) the Deputy Secretary of the Treas-
ury, who shall serve as Chair of the Board;
‘‘(B) the Assistant Secretary of the Treas-
ury (Management), who shall serve as Vice-
Chair;
‘‘(C) the Commissioner of Internal Reve-
nue;
‘‘(D) the Deputy Commissioner of Internal
Revenue;
‘‘(E) the Assistant Secretary of the Treas-
ury (Tax Policy);
‘‘(F) the Chief Information Officer of the
Department of the Treasury;
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‘‘(G) the Chief Information Officer of the
Internal Revenue Service;
‘‘(H) the General Counsel of the Treasury;
‘‘(I) the Chief Counsel of the Internal Rev-
enue Service;
‘‘(J) the Taxpayer Advocate of the Internal
Revenue Service;
‘‘(K) a representative of the Office of Man-
agement and Budget designated by the Director
of such office;
‘‘(L) a representative of an organization
that represents a substantial number of Inter-
nal Revenue Service employees designated by
the Secretary;
‘‘(M) representatives of other government
agencies, with specific expertise relevant to the
issues faced by the Internal Revenue Service, as
may be determined from time to time by the
Secretary of the Treasury, designated by the
head of such agency;
‘‘(N) such other officers or employees of
the Department of the Treasury as may be des-
ignated by the Secretary; and
‘‘(O) such other individuals as may be des-
ignated by the Secretary.
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‘‘(2) A member of the Management Board de-
scribed in paragraph (1) may be removed by the
Secretary or the official who designated such mem-
ber.
‘‘(3) There shall be an Executive Committee of
the Management Board, the members of which shall
be appointed by the Secretary.
‘‘(4) The Management Board shall support di-
rectly the Secretary’s oversight of the management
and operation of the Internal Revenue Service pur-
suant to subsection (a), including—
‘‘(A) working through the Deputy Sec-
retary, assisting the Secretary on high-level
management issues and concerns affecting the
Internal Revenue Service, particularly those
that have a significant impact on taxpayer as-
sistance, communications and filings, customer
service, operations and modernization, and in
the review of performance plans and accom-
plishments of senior Internal Revenue Service
officials; and
‘‘(B) acting through the Executive Com-
mittee, serving as the primary review body for
strategic decisions concerning modernization of
the Internal Revenue Service and tax adminis-
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tration, 
including 
modernization 
direction,
strategy, recurring systemic problems affecting
taxpayers, significant reorganization plans, per-
formance metrics, budgetary issues, major cap-
ital investments, procurement of property and
services, and compensation of personnel.
The Secretary also may appoint committees com-
posed of Management Board members and others to
provide advice on particular issues.
‘‘(5) The Management Board shall meet at
least monthly and shall prescribe such by-laws or
procedures as the Management Board deems appro-
priate.
‘‘(6) The Management Board shall prepare
semi-annual reports to the President and the Con-
gress describing the matters considered, and the
conclusions reached, by the Management Board,
which shall be transmitted by the Secretary of the
Treasury.
‘‘(7) The Secretary of the Treasury shall pro-
vide the Management Board with career staff whose
responsibility shall be to provide support to the Man-
agement Board, administrative services, facilities,
expert and consultative services, and such financial
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support as may be necessary for the performance of
its functions.
‘‘(8) The provisions of the Federal Advisory
Committee Act (5 U.S.C. App. 2) shall not apply to
the Management Board.
‘‘(c) 
INTERNAL
REVENUE
SERVICE
ADVISORY
BOARD.—
‘‘(1) The Secretary of the Treasury shall estab-
lish an advisory committee known as the ‘Internal
Revenue Service Advisory Board’ (Advisory Board).
‘‘(A) The Advisory Board shall be com-
posed of up to 14 members appointed by the
Secretary from the private sector, including in-
dividuals with expertise in: customer service,
taxpayer advocacy, technology, operating large
and small businesses, operating non-profit orga-
nizations, operating educational organizations,
the Internal Revenue Code, tax preparation,
and state tax administration. Appointments
shall be made without regard to political affili-
ation.
‘‘(B) The Secretary shall designate an Ad-
visory Board member as Chairperson of the Ad-
visory Board.
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‘‘(C) Advisory Board members shall be ap-
pointed for three-year terms. With respect to
the initial appointments, however, the Secretary
shall select, on a representative basis to the
maximum extent practicable, no more than five
of the members to serve three-year terms, no
more than five of the members to serve two-
year terms, and no more than four members to
serve one-year terms. The Secretary may re-
appoint an Advisory Board member whose term
has expired.
‘‘(D) Any vacancy on the Advisory Board
shall be filled by the Secretary for the remain-
der of the original term. Any Advisory Board
member whose term has expired may continue
to serve until a successor is appointed.
‘‘(E) Any Advisory Board member may be
removed at the discretion of the Secretary.
‘‘(2) The Advisory Board shall advise the Sec-
retary and the Management Board on the manage-
ment and operation of the Internal Revenue Service,
including ways to improve and modernize the Inter-
nal Revenue Service and enhance the fairness of the
administration of the Internal Revenue Code.
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‘‘(3) The Advisory Board shall meet at the call
of the Chair, but not less than four times per year,
and shall submit to the Secretary and the Manage-
ment Board a report regarding each such meeting.
‘‘(4) At the request of the Chair or Vice Chair
of the Management Board, the Advisory Board may
meet with and provide advice directly to the Man-
agement Board.
‘‘(5) The Advisory Board shall prepare an An-
nual Report to Taxpayers, which the Secretary shall
submit to Congress not later than June 30 of each
year.
‘‘(6) The provisions of the Federal Advisory
Committee Act (5 U.S.C. App. 2) shall apply to the
Advisory Board, except that—
‘‘(A) The Advisory Board shall function
for such period as may be necessary, and sec-
tion 14 of such Act (relating to termination of
advisory committees after two years) shall not
apply to the Advisory Board; and
‘‘(B) The requirements of sections 10(a)
and (b) and section 11 of such Act (relating to
open meetings, public notice, public participa-
tion, and public availability of documents) shall
not apply to the Advisory Board to the extent
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the Secretary determines that the disclosure of
the Advisory Board’s discussions would com-
promise the Advisory Board’s ability to provide
candid advice or otherwise would be inappropri-
ate.
‘‘(7) Members of the Advisory Board shall not
be paid for their time or services. While attending
Advisory Board meetings or otherwise engaging in
its business, Advisory Board members shall be reim-
bursed for their travel expenses as authorized by
section 5703 of title 5, United States Code. The
Secretary shall furnish the Advisory Board with nec-
essary staff and support services.
‘‘(d) REPORTING TO CONGRESS.—The Secretary and
the Deputy Secretary shall annually—
‘‘(1) submit a report to the Congress on their
stewardship of the Internal Revenue Service, and
‘‘(2) appear together before an appropriate
committee of the House of Representatives and an
appropriate committee of the Senate to report on
such stewardship.
‘‘(e) FUNCTIONS OF DEPARTMENT OF JUSTICE UN-
AFFECTED.—Nothing in this section or section 301(f) of
title 31 shall be considered to affect the duties, powers,
or functions imposed upon, or vested in, the Department
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of Justice, or any officer thereof, by law existing on May
10, 1934.’’.
SEC. 103. ASSISTANT COMMISSIONER (CUSTOMER SERV-
ICE).
(a) ASSISTANT COMMISSIONER (CUSTOMER SERV-
ICE).—Section 7802(c) is amended to read as follows:
‘‘(c) ASSISTANT COMMISSIONER (CUSTOMER SERV-
ICE).—There is established within the Internal Revenue
Service an office to be known as the ‘Office for Customer
Service’ to be under the supervision and direction of an
Assistant Commissioner of Internal Revenue. The Assist-
ant Commissioner shall be responsible for all taxpayer as-
sistance, information and education.’’.
(b) CONFORMING AMENDMENT.—Section 6235 of the
Technical and Miscellaneous Revenue Act of 1988 is
amended by deleting subsection (b) and redesignating sub-
section (c) as subsection (b).
SEC. 104. ADDITIONAL DUTIES FOR THE TAXPAYER ADVO-
CATE.
Section 7802(d) is amended to read as follows:
‘‘(d) OFFICE OF TAXPAYER ADVOCATE.—
‘‘(1) IN GENERAL.—
‘‘(A) There is established in the Internal
Revenue Service an office to be known as the
‘Office of the Taxpayer Advocate’. Such office
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shall be under the supervision and direction of
an official to be known as the Taxpayer Advo-
cate’ who shall be appointed by and report di-
rectly to the Commissioner of Internal Revenue.
The Taxpayer Advocate may be compensated at
a level up to the same rate as the highest level
official reporting directly to the Deputy Com-
missioner of Internal Revenue.
‘‘(B) As a qualification for appointment as
the Taxpayer Advocate, an individual must have
knowledge of the working of tax administration
systems, experience representing taxpayers be-
fore the Internal Revenue Service, or experience
with taxpayer rights issues.
‘‘(C) An individual who, before being ap-
pointed as the Taxpayer Advocate, was an offi-
cer or employee of the Internal Revenue Service
may be so appointed only if such individual
agrees not to accept any employment with the
Internal Revenue Service for a period of five
years after ceasing to be the Taxpayer Advo-
cate.
‘‘(2) FUNCTIONS OF OFFICE.—
‘‘(A) IN GENERAL.—It shall be the func-
tion of the Office of Taxpayer Advocate to—
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‘‘(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, proposed
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
June 30 of each calendar year, the Tax-
payer Advocate shall report to the Commit-
tee on Ways and Means of the House of
Representatives and the Committee on Fi-
nance of the Senate on the objectives of
the Taxpayer Advocate for the fiscal year
beginning in such calendar year. Any such
report shall contain full and substantive
analysis, in addition to statistical informa-
tion.
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‘‘(ii) ACTIVITIES.—Not later than De-
cember 31 of each calendar year, the Tax-
payer Advocate shall report to the Commit-
tee on Ways and Means of the House of
Representatives and the Committee on Fi-
nance of the Senate on the activities of the
Taxpayer Advocate during the fiscal year
ending during such calendar year. Any
such report shall contain full and sub-
stantive 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,
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‘‘(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 (I), (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),
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‘‘(VIII) contain recommendations
for such administrative and legislative
action as may be appropriate to re-
solve problems encountered by tax-
payers,
‘‘(IX) describe the extent to
which regional taxpayer advocates
participate in the selection and eval-
uation of local taxpayer advocates,
‘‘(X) identify areas of the tax law
that impose significant compliance
burdens on taxpayers or the Internal
Revenue Service, including specific
recommendations for remedying these
problems,
‘‘(XI) contain a list supplied by
the National Director of Appeals
which identifies the 10 most litigated
issues for various categories of tax-
payers (e.g., individuals, self-employed
individuals, and small businesses), in-
cluding recommendations for mitigat-
ing such disputes, and
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‘‘(XII) 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 by
the Committees described in clauses (i)
and (ii) without any prior review of com-
ment from the Commissioner, the Sec-
retary of the Treasury, any other office or
employee of the Department of the Treas-
ury, or the Office of Management and
Budget.
‘‘(C) 
OTHER
RESPONSIBILITIES.—The
Taxpayer Advocate also shall—
‘‘(i) monitor the coverage and geo-
graphic allocation of taxpayer advocates,
‘‘(ii) develop guidance to be distributed to
all Internal Revenue Service officers and em-
ployees outlining the criteria for referral of tax-
payer inquiries to taxpayer advocates,
‘‘(iii) ensure that taxpayers have direct ac-
cess to the problem resolution program through
a dedicated telephone number, and
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‘‘(iv) in conjunction with the Commis-
sioner, develop career paths for taxpayer advo-
cates choosing to make a career in the Office of
the Taxpayer Advocate.
‘‘(3) RESPONSIBILITIES
OF
COMMISSIONER.—
The Commissioner of Internal Revenue shall estab-
lish procedures requiring a formal response to all
recommendations submitted to the Commissioner by
the Taxpayer Advocate within three months after
submission to the Commissioner.’’.
TITLE II—IMPROVING THE EFFI-
CIENCY OF TAX ADMINISTRA-
TION
SEC. 201. PROMOTION OF ELECTRONIC TAX ADMINISTRA-
TION.
(a) PROMOTION OF ELECTRONIC FILING; FACILITAT-
ING
THE FILING
OF ELECTRONIC RETURNS.—Section
6011 is amended by adding the following new subsections:
‘‘(g) PROMOTION
OF ELECTRONIC FILING.—Not-
withstanding any other law, the Secretary is authorized
to promote the benefits of and encourage the use of elec-
tronic tax administration programs, as they become avail-
able, through the use of mass communications and other
means.
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‘‘(h) INCENTIVE PAYMENTS.—Notwithstanding any
other provision of law, amounts appropriated to the Inter-
nal Revenue Service may be used by the Secretary to en-
courage the expanded use of electronic means to file re-
turns and other documents.
‘‘(i) ALTERNATIVES TO ATTACHING DOCUMENTS TO
RETURNS.—If any section of this title requires a state-
ment or information supporting a return, the Secretary
may prescribe the method of submitting the statement or
information.’’.
(b) AUTHORITY TO WAIVE SIGNATURE REQUIRE-
MENTS OR PRESCRIBE ALTERNATIVE METHODS OF VERI-
FYING RETURNS.—
(1) IN GENERAL.—Part IV of subchapter A of
chapter 61 is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 6066. AUTHORITY TO WAIVE SIGNATURE REQUIRE-
MENTS OR PRESCRIBE ALTERNATIVE METH-
ODS OF VERIFYING RETURNS.
‘‘(a) AUTHORITY.—The Secretary may waive the re-
quirement of a signature for all returns or classes of re-
turns, or may provide for alternative methods of subscrib-
ing all returns, declarations, statements, or other docu-
ments required or permitted to be made or written under
internal revenue laws and regulations.
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‘‘(b) TREATMENT OF ALTERNATIVE METHODS.—Not-
withstanding any other provision of law, any return, dec-
laration, statement or other document filed without signa-
ture under the authority of this section or verified, signed
or subscribed under any method adopted under subsection
(a) shall be treated for all purposes (both civil and crimi-
nal, including penalties for perjury) in the same manner
as though signed and subscribed. Any such return, dec-
laration, statement or other document shall be presumed
to have been actually submitted and subscribed by the per-
son on whose behalf it was submitted.
‘‘(c) PUBLISHED GUIDANCE.—The Secretary shall
publish guidance as appropriate to define and implement
any waiver of the signature requirements.’’
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part IV of subchapter A of chapter 61 is
amended by inserting after the item relating to sec-
tion 6065 the following new item:
‘‘Sec. 6066. Authority to waive signature requirements or prescribe
alternative methods of verifying returns.’’.
(c) ACKNOWLEDGMENT OF ELECTRONIC FILING.—
Section 7502(c) is amended to read as follows:
‘‘(c) REGISTERED AND CERTIFIED MAILING; ELEC-
TRONIC FILING.—
‘‘(1) REGISTERED MAIL.—For purposes of this
section, if any return, claim, statement, or other
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document, or payment, is sent by United States reg-
istered mail—
‘‘(A) such registration shall be prima facie
evidence that the return, claim, statement, or
other document was delivered to the agency, of-
ficer, or office to which addressed; and
‘‘(B) the date of registration shall be
deemed the postmark date.
‘‘(2) CERTIFIED MAIL; ELECTRONIC FILING.—
The Secretary is authorized to provide by regula-
tions the extent to which the provisions of paragraph
(1) of this subsection with respect to prima facie evi-
dence of delivery and the date shall apply to certified
mail and electronic filing.’’.
SEC. 202. COOPERATIVE AGREEMENTS WITH STATE TAX
AUTHORITIES.
(A) IN GENERAL.—Chapter 77 (relating to mis-
cellaneous provisions) is amended by adding after section
7524 the following new section:
‘‘SEC. 7525. TAX ADMINISTRATION AGREEMENTS.
‘‘(a) IN GENERAL.—To the extent provided in regula-
tions, the Secretary is authorized to enter into tax admin-
istration agreements with any State agency, body, or com-
mission described in section 6103(d)(1). Under such
agreements, the Secretary may delegate powers relating
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to the administration of this title to officers and employees
of such State agency, body, or commission, only if such
officers and employees in exercising such powers are under
the supervision of the Secretary.
‘‘(b) 
TAX
ADMINISTRATION
AGREEMENT
DE-
FINED.—A tax administration agreement is a written
agreement entered into by the Secretary and a State agen-
cy, body, or commission described in section 6103(d)(1)
that provides for a delegation of tax administration powers
or a payment of reasonable compensation for activities
conducted by either party to the agreement. Each Federal
or State tax administration power to be exercised pursuant
to a tax administration agreement shall be performed in
accordance with the terms of the agreement to the extent
such terms do not conflict with the Federal or State laws
that otherwise authorize the respective tax administration
function.
‘‘(c) JUDICIAL PROCEEDINGS.—
‘‘(1) 
REVIEW
BY
THE
UNITED
STATES
COURTS.—Nothing in this subchapter shall give any
court of the United States any additional jurisdic-
tion nor diminish its jurisdiction.
‘‘(2) PROHIBITION OF REVIEW BY THE STATE
COURTS.—No court or other tribunal of any State
shall have jurisdiction to adjudicate in any action,
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legal or equitable, the validity or scope of an assess-
ment of an internal revenue tax that is the subject
of a tax administration agreement.
‘‘(3) LIMITATION
ON
PERSONAL
JURISDIC-
TION.—No court or other tribunal of any State shall
have jurisdiction over an individual who exercises
Federal tax administration powers pursuant to a tax
administration agreement for actions relating to the
exercise of those powers.
‘‘(d) PAYMENT FOR SERVICES.—The Secretary is au-
thorized to pay reasonable compensation for activities con-
ducted by a State pursuant to a tax administration agree-
ment. The Secretary is authorized to collect reasonable
compensation for activities conducted by the United States
pursuant to a tax administration agreement.
‘‘(e) AVAILABILITY OF FUNDS.—Any funds appro-
priated for purposes of the administration of this title
shall be available for purposes of carrying out the Sec-
retary’s responsibilities under a tax administration agree-
ment. Any reasonable compensation received pursuant to
a tax administration agreement shall be credited to the
amounts so appropriated and shall remain available to the
Internal Revenue Service until expended to supplement
appropriations made available to the appropriations ac-
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counts in the fiscal year during which this provision is en-
acted and all fiscal years thereafter.
‘‘(f) TAX TREATIES AND OTHER INTERNATIONAL
AGREEMENTS.—To the extent the provisions of this sub-
chapter or a tax administration agreement may conflict
with the terms of any tax treaty, or other international
agreement of the United States containing provisions re-
lating to taxation or the administration of tax laws, the
terms of the treaty or international agreement shall con-
trol.
‘‘(g) EMPLOYEE STATUS.—Any officer or employee
of the United States acting pursuant to a tax administra-
tion agreement shall be deemed to remain a Federal em-
ployee. Except as otherwise expressly provided by the laws
of the United States, any officer or employee of a State
acting pursuant to a tax administration agreement shall
be deemed to remain a State employee.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 6103(d) is amended—
(A) by amending paragraph (1) to read as
follows:
‘‘(1)(A) IN GENERAL.—Returns and return in-
formation with respect to taxes imposed by chapters
1, 2, 6, 11, 12, 21, 23, 24, 31, 32, 44, 51, and 52
and subchapter D of chapter 36 shall be open to in-
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‘‘(C) PERMISSIBLE
RECIPIENTS.—The rep-
resentatives of such agency, body, or commission to
whom disclosure is permitted under this paragraph
shall include only employees or legal representatives
of such agency, body, or commission, or a person de-
scribed in subsection (n) of this section. However,
notwithstanding the foregoing, disclosure shall not
be permitted to any individual who is the chief exec-
utive officer of such State.
‘‘(D) CONFIDENTIAL
INFORMANTS; 
IMPAIR-
MENT
OF
INVESTIGATIONS.—Return information
shall not be disclosed under this paragraph to the
extent that the Secretary determines that such dis-
closure would identify a confidential informant or se-
riously impair any civil or criminal tax investiga-
tion.’’; and
(B) by adding at the end the following new
paragraph (5):
‘‘(5) JOINT RETURN FILING PROGRAMS.—
‘‘(A) IN GENERAL.—Upon written request
by the head of any agency, body, or commission
described in paragraph (1), the Secretary may
disclose common data to such agency, body or
commission for the purpose of carrying out a
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joint return filing program entered into under
section 7525.
‘‘(B) COMMON DATA DEFINED.—For pur-
poses of this paragraph, ‘common data’ means
any item of information that is required by both
Federal and State law to be attached to or in-
cluded on the respective Federal and State re-
turns.
‘‘(C) PROCEDURES
FOR
STATE
AGEN-
CIES.—Subsections (a)(2) and (p)(4) of this
section shall not apply with respect to any dis-
closures made pursuant to this paragraph.
However, common data disclosed pursuant to
this paragraph is subject to subsection (p)(8) of
this section.’’.
(2) Section 6103(p)(3) is amended—
(A) in subparagraph (A) by inserting
‘‘(d),’’ after ‘‘subsections (c),’’; and
(B) in subparagraph (C)(i) by striking
‘‘(d),’’.
(3) Section 7212(a) is amended by inserting
‘‘or any State officer or employee who is authorized
to administer Federal tax laws pursuant to an
agreement authorized by section 7525’’ after ‘‘any
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officer or employee of the United States’’ in both
places it appears.
(4) Section 7213(a)(2) is amended by deleting
‘‘(d),’’ and inserting instead ‘‘(d)(1), (2), (3), or
(4),’’.
(5) Section 7214 is amended—
(A) in subsection (a), by inserting ‘‘or any
State officer or employee who is authorized to
administer Federal tax laws pursuant to an
agreement authorized by section 7525’’ after
‘‘Any officer or employee of the United States’’;
and
(B) in subsection (b), by inserting ‘‘or any
State employee who is authorized to administer
Federal tax laws pursuant to an agreement au-
thorized by section 7525’’ after ‘‘Any internal
revenue officer or employee’’.
(6) Section 7431(a)(1) is amended by inserting
‘‘or any State employee who is authorized to admin-
ister Federal tax laws pursuant to an agreement au-
thorized by section 7525’’ after ‘‘If any officer or
employee of the United States’’.
(7) Section 7432(a) is amended by inserting
‘‘or any State employee who is authorized to release
liens under section 6325 pursuant to an agreement
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authorized by section 7525’’ after ‘‘If any officer or
employee of the Internal Revenue Service’’.
(8) Section 7433(a) is amended by inserting
‘‘or any State employee who is authorized to collect
Federal taxes pursuant to an agreement authorized
by section 7525’’ after ‘‘If, in connection with any
collection of Federal tax with respect to a taxpayer,
any officer or employee of the Internal Revenue
Service’’.
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 77 is amended by adding at the end the follow-
ing:
‘‘Sec. 7525.
Tax administration agreements.’’.
TITLE III—PROVIDING FLEXIBIL-
ITY FOR IRS MANAGEMENT
SEC. 301. IMPROVEMENTS IN PERSONNEL FLEXIBILITIES.
(a) IN GENERAL.—Part III of title 5, United States
Code, is amended by adding at the end the following new
subpart:
‘‘Subpart I—Miscellaneous
‘‘CHAPTER 
95—PERSONNEL 
FLEXIBILI-
TIES RELATING TO THE INTERNAL
REVENUE SERVICE
‘‘Sec.
‘‘9501. Internal Revenue Service personnel flexibilities.
‘‘9502. Pay authority for critical positions.
‘‘9503. Streamlined critical pay authority.
‘‘9504. Recruitment, retention, and relocation incentives.
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‘‘9505. Performance awards for senior executives.
‘‘9506. Limited appointments to career reserved Senior Executive Service posi-
tions.
‘‘9507. Streamlined demonstration project authority.
‘‘9508. General workforce performance management system.
‘‘9509. General workforce classification and pay.
‘‘9510. General workforce staffing.
‘‘§ 9501. Internal Revenue Service personnel flexibili-
ties
‘‘(a) Any flexibilities provided by sections 9502
through 9510 of this chapter shall be exercised in a man-
ner consistent with the following provisions of this title:
‘‘(1) chapter 23 (relating to merit system prin-
ciples and prohibited personnel practices);
‘‘(2) provisions relating to preference eligibles;
‘‘(3) except as otherwise specifically provided,
section 5307 (relating to the aggregate limitation on
pay);
‘‘(4) except as otherwise specifically provided,
chapter 71 (relating to labor-management relations);
and
‘‘(5) subject to sections 1104(b) and (c), as
though such authorities were delegated to the Sec-
retary of the Treasury under section 1104(a)(2).
‘‘(b) The Secretary of the Treasury shall provide the
Office of Personnel Management with any information
that Office requires in carrying out its responsibilities
under this section.
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‘‘(c) Employees within a unit to which a labor organi-
zation is accorded exclusive recognition under chapter 71
shall not be subject to any flexibility provided by sections
9507 through 9510 of this chapter unless the exclusive
representative and the Internal Revenue Service have en-
tered into a written agreement which specifically provides
for the exercise of that flexibility. Such written agreement
may not be imposed by the Federal Services Impasses
Panel under section 7119.
‘‘(d) For purposes of this chapter, the total annual
compensation payable at the Office of the Comptroller of
the Currency shall, for any year, be determined taking into
account only those forms of compensation that are taken
into account under section 5307(a) for purposes of such
year.
‘‘§ 9502. Pay authority for critical positions
‘‘When the Secretary of the Treasury seeks a grant
of authority pursuant to section 5377 for critical pay for
one or more positions at the Internal Revenue Service, the
Office of Management and Budget may fix the rate of
basic pay, notwithstanding section 5377(d)(2) and section
5307, at any rate up to the highest total annual compensa-
tion payable at the Office of the Comptroller of the Cur-
rency, provided that total annual compensation for individ-
uals appointed to such positions not exceed the highest