IB
Union Calendar No. 311
106TH CONGRESS
2D SESSION
H. R. 4163
[Report No. 106–566]
To amend the Internal Revenue Code of 1986 to provide for increased
fairness to taxpayers.
IN THE HOUSE OF REPRESENTATIVES
APRIL 4, 2000
Mr. HOUGHTON (for himself, Mr. PORTMAN, Mr. HAYWORTH, Mr. COYNE,
Mr. RANGEL, Mr. CRANE, Mr. THOMAS, Mr. SHAW, Mrs. JOHNSON of
Connecticut, Mr. HERGER, Mr. MCCRERY, Mr. CAMP, Mr. RAMSTAD, Mr.
NUSSLE, Mr. SAM JOHNSON of Texas, Ms. DUNN, Mr. COLLINS, Mr.
ENGLISH, Mr. WATKINS, Mr. WELLER, Mr. HULSHOF, Mr. MCINNIS,
Mr. LEWIS of Kentucky, Mr. FOLEY, Mr. MATSUI, and Mr. BECERRA)
introduced the following bill; which was referred to the Committee on
Ways and Means
APRIL 10, 2000
Additional sponsors: Mr. TANNER, Mr. MCNULTY, Mr. DOGGETT, Mr. TERRY,
and Mrs. BIGGERT
APRIL 10, 2000
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on April 4, 2000]
A BILL
To amend the Internal Revenue Code of 1986 to provide
for increased fairness to taxpayers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Taxpayer Bill of Rights 2000’’.
(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—
Sec. 1. Short title; etc.
TITLE I—PENALTIES AND INTEREST
Sec. 101. Failure to pay estimated tax penalty converted to interest charge on ac-
cumulated unpaid balance.
Sec. 102. Exclusion from gross income for interest on overpayments of income tax
by individuals.
Sec. 103. Reductions of penalty for failure to pay tax.
Sec. 104. Abatement of interest.
Sec. 105. Deposits made to stop the running of interest on potential underpay-
ments.
Sec. 106. Expansion of interest netting for individuals.
TITLE II—CONFIDENTIALITY AND DISCLOSURE
Sec. 201. Disclosure and privacy rules relating to returns and return informa-
tion.
Sec. 202. Expansion of type of advice available for public inspection.
Sec. 203. Collection activities with respect to joint return disclosable to either
spouse based on oral request.
Sec. 204. Taxpayer representatives not subject to examination on sole basis of
representation of taxpayers.
Sec. 205. Disclosure in judicial or administrative tax proceedings of return and
return information of persons who are not party to such pro-
ceedings.
Sec. 206. Prohibition of disclosure of taxpayer identification information with re-
spect to disclosure of accepted offers-in-compromise.
Sec. 207. Compliance by State contractors with confidentiality safeguards.
Sec. 208. Higher standards for requests for and consents to disclosure.
Sec. 209. Notice to taxpayer concerning administrative determination of brows-
ing; annual report.
Sec. 210. Disclosure of taxpayer identity for tax refund purposes.
TITLE III—OTHER REQUIREMENTS
Sec. 301. Clarification of definition of church tax inquiry.
Sec. 302. Expansion of declaratory judgment remedy to tax-exempt organizations.
Sec. 303. Employee misconduct report to include summary of complaints by cat-
egory.
Sec. 304. Increase in threshold for Joint Committee reports on refunds and cred-
its.
Sec. 305. Annual report on awards of costs and certain fees in administrative
and court proceedings.
Sec. 306. Annual report on abatement of penalties.
Sec. 307. Better means of communicating with taxpayers.
Sec. 308. Explanation of statute of limitations and consequences of failure to file.
TITLE I—PENALTIES AND
INTEREST
SEC. 101. FAILURE TO PAY ESTIMATED TAX PENALTY CON-
VERTED TO INTEREST CHARGE ON ACCUMU-
LATED UNPAID BALANCE.
(a) PENALTY MOVED
TO INTEREST CHAPTER
OF
CODE.—The Internal Revenue Code of 1986 is amended by
redesignating section 6654 as section 6641 and by moving
section 6641 (as so redesignated) from part I of subchapter
A of chapter 68 to the end of subchapter E of chapter 67
(as added by subsection (e)(1) of this section).
(b) PENALTY CONVERTED TO INTEREST CHARGE.—
The heading and subsections (a) and (b) of section 6641
(as so redesignated) are amended to read as follows:
‘‘SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY
ESTIMATED INCOME TAX.
‘‘(a) IN GENERAL.—Interest shall be paid on any un-
derpayment of estimated tax by an individual for a taxable
year for each day of such underpayment. The amount of
such interest for any day shall be the product of the under-
payment rate established under subsection (b)(2) multiplied
by the amount of the underpayment.
‘‘(b) AMOUNT OF UNDERPAYMENT; INTEREST RATE.—
For purposes of subsection (a)—
‘‘(1) AMOUNT.—The amount of the under-
payment on any day shall be the excess of—
‘‘(A) the sum of the required installments
for the taxable year the due dates for which are
on or before such day, over
‘‘(B) the sum of the amounts (if any) of es-
timated tax payments made on or before such
day on such required installments.
‘‘(2) DETERMINATION OF INTEREST RATE.—
‘‘(A) IN GENERAL.—The underpayment rate
with respect to any day in an installment under-
payment period shall be the underpayment rate
established under section 6621 for the first day
of the calendar quarter in which such install-
ment underpayment period begins.
‘‘(B) INSTALLMENT
UNDERPAYMENT
PE-
RIOD.—For purposes of subparagraph (A), the
term ‘installment underpayment period’ means
the period beginning on the day after the due
date for a required installment and ending on
the due date for the subsequent required install-
ment (or in the case of the 4th required install-
ment, the 15th day of the 4th month following
the close of a taxable year).
‘‘(C) DAILY
RATE.—The rate determined
under subparagraph (A) shall be applied on a
daily basis and shall be based on the assumption
of 365 days in a calendar year.
‘‘(3) TERMINATION OF ESTIMATED TAX INTER-
EST.—No day after the end of the installment under-
payment period for the 4th required installment spec-
ified in paragraph (2)(B) for a taxable year shall be
treated as a day of underpayment with respect to
such taxable year.’’.
(c) INCREASE
IN SAFE HARBOR WHERE TAX
IS
SMALL.—
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section
6641(d)(1)(B) (as so redesignated) is amended to read
as follows:
‘‘(i) the lesser of—
‘‘(I) 90 percent of the tax shown
on the return for the taxable year (or,
if no return is filed, 90 percent of the
tax for such year), or
‘‘(II) the tax shown on the return
for the taxable year (or, if no return is
filed, the tax for such year) reduced
(but not below zero) by $2,000, or’’.
(2) CONFORMING
AMENDMENT.—Subsection (e)
of section 6641 (as so redesignated) is amended by
striking paragraph (1) and redesignating paragraphs
(2) and (3) as paragraphs (1) and (2), respectively.
(d) CONFORMING AMENDMENTS.—
(1) Paragraphs (1) and (2) of subsection (e) (as
redesignated by subsection (c)(2)) and subsection (h)
of section 6641 (as so designated) are each amended
by striking ‘‘addition to tax’’ each place it occurs and
inserting ‘‘interest’’.
(2) Section 167(g)(5)(D) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(3) Section 460(b)(1) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(4) Section 3510(b) is amended—
(A) by striking ‘‘section 6654’’ in para-
graph (1) and inserting ‘‘section 6641’’,
(B) by amending paragraph (2)(B) to read
as follows:
‘‘(B) no interest would be required to be
paid (but for this section) under 6641 for such
taxable year by reason of the $2,000 amount
specified in section 6641(d)(1)(B)(i)(II).’’,
(C) by striking ‘‘section 6654(d)(2)’’ in
paragraph 
(3) 
and 
inserting 
‘‘section
6641(d)(2)’’, and
(D) by striking paragraph (4).
(5) Section 6201(b)(1) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(6) Section 6601(h) is amended by striking
‘‘6654’’ and inserting ‘‘6641’’.
(7) Section 6621(b)(2)(B) is amended by striking
‘‘addition to tax under section 6654’’ and inserting
‘‘interest required to be paid under section 6641’’.
(8) Section 6622(b) is amended—
(A) by striking ‘‘PENALTY
FOR’’ in the
heading, and
(B) by striking ‘‘addition to tax under sec-
tion 6654 or 6655’’ and inserting ‘‘interest re-
quired to be paid under section 6641 or addition
to tax under section 6655’’.
(9) Section 6658(a) is amended—
(A) by striking ‘‘6654, or 6655’’ and insert-
ing ‘‘or 6655, and no interest shall be required
to be paid under section 6641,’’, and
(B) by inserting ‘‘or paying interest’’ after
‘‘the tax’’ in paragraph (2)(B)(ii).
(10) Section 6665(b) is amended—
(A) in the matter preceding paragraph (1)
by striking ‘‘, 6654,’’, and
(B) in paragraph (2) by striking ‘‘6654 or’’.
(11) Section 7203 is amended by striking ‘‘sec-
tion 6654 or 6655’’ and inserting ‘‘section 6655 or in-
terest required to be paid under section 6641’’.
(e) CLERICAL AMENDMENTS.—
(1) Chapter 67 is amended by inserting after
subchapter D the following:
‘‘Subchapter E—Interest on Failure by
Individual to Pay Estimated Income Tax
‘‘Sec. 6641. Interest on failure by individual to pay estimated in-
come tax.’’.
(2) The table of subchapters for chapter 67 is
amended by adding at the end the following new
items:
‘‘Subchapter D. Notice requirements.
‘‘Subchapter E. Interest on failure by individual to pay estimated
income tax.’’.
(3) The table of sections for part I of subchapter
A of chapter 68 is amended by striking the item relat-
ing to section 6654.
(f) EFFECTIVE DATE.—The amendments made by this
section shall apply to installment payments for taxable
years beginning after December 31, 2000.
SEC. 102. EXCLUSION FROM GROSS INCOME FOR INTEREST
ON OVERPAYMENTS OF INCOME TAX BY INDI-
VIDUALS.
(a) IN GENERAL.—Part III of subchapter B of chapter
1 (relating to items specifically excluded from gross income)
is amended by redesignating section 139 as section 139A
and by inserting after section 138 the following new section:
‘‘SEC. 139. EXCLUSION FROM GROSS INCOME FOR INTEREST
ON OVERPAYMENTS OF INCOME TAX BY INDI-
VIDUALS.
‘‘(a) IN GENERAL.—In the case of an individual, gross
income shall not include interest paid under section 6611
on any overpayment of tax imposed by this subtitle.
‘‘(b) EXCEPTION.—Subsection (a) shall not apply in
the case of a failure to claim items resulting in the overpay-
ment on the original return if the Secretary determines that
the principal purpose of such failure is to take advantage
of subsection (a).
‘‘(c) SPECIAL RULE FOR DETERMINING MODIFIED AD-
JUSTED GROSS INCOME.—For purposes of this title, interest
not included in gross income under subsection (a) shall not
be treated as interest which is exempt from tax for purposes
of sections 32(i)(2)(B) and 6012(d) or any computation in
which interest exempt from tax under this title is added
to adjusted gross income.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
part III of subchapter B of chapter 1 is amended by striking
the item relating to section 139 and inserting the following
new items:
‘‘Sec. 139. Exclusion from gross income for interest on overpay-
ments of income tax by individuals.
‘‘Sec. 139A. Cross references to other Acts.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to interest received in calendar years
beginning after the date of the enactment of this Act.
SEC. 103. REDUCTIONS OF PENALTY FOR FAILURE TO PAY
TAX.
(a) REDUCTIONS OF PENALTY FOR FAILURE TO PAY
TAX.—
(1) REDUCTION OF PENALTY BY 50 PERCENT.—
(A) IN GENERAL.—Paragraphs (2) and (3)
of section 6651(a) are each amended by striking
‘‘0.5’’ each place it appears and inserting
‘‘0.25’’.
as payments under such agreement are made by means of
electronic transfer or by similar automated means.’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to installment agree-
ments entered into more than 30 days after the date
of the enactment of this Act.
SEC. 104. ABATEMENT OF INTEREST.
(a) ABATEMENT OF INTEREST IF GROSS INJUSTICE
WOULD OTHERWISE RESULT.—Section 6404 is amended
by redesignating subsection (i) as subsection (j) and by in-
serting after subsection (h) the following new subsection:
‘‘(i) ABATEMENT OF INTEREST IF GROSS INJUSTICE
WOULD OTHERWISE RESULT.—The Secretary may abate
the assessment of all or any part of interest on any amount
of tax imposed by this title for any period if the Secretary
determines that—
‘‘(1) a gross injustice would otherwise result if
interest were to be charged, and
‘‘(2) no significant aspect of the events giving
rise to the accrual of the interest can be attributed to
the taxpayer involved.’’.
(b) ABATEMENT OF INTEREST FOR PERIODS ATTRIB-
UTABLE TO ANY UNREASONABLE IRS ERROR OR DELAY.—
Subparagraphs (A) and (B) of section 6404(e)(1) are each
amended by striking ‘‘in performing a ministerial or mana-
gerial act’’.
(c) ABATEMENT OF INTEREST WITH RESPECT TO ER-
RONEOUS REFUND CHECK WITHOUT REGARD TO SIZE OF
REFUND.—Paragraph (2) of section 6404(e) is amended by
striking ‘‘unless—’’ and all that follows and inserting ‘‘un-
less the taxpayer (or a related party) has in any way
caused such erroneous refund.’’
(d) ABATEMENT OF INTEREST TO EXTENT INTEREST
IS ATTRIBUTABLE TO TAXPAYER RELIANCE ON WRITTEN
STATEMENTS OF THE IRS.—Subsection (f) of section 6404
is amended—
(1) in the subsection heading, by striking ‘‘PEN-
ALTY OR ADDITION’’ and inserting ‘‘INTEREST, PEN-
ALTY, OR ADDITION’’, and
(2) in paragraph (1) and in subparagraph (B)
of paragraph (2), by striking ‘‘penalty or addition’’
and inserting ‘‘interest, penalty, or addition’’.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to interest accruing on or
after the date of the enactment of this Act.
SEC. 105. DEPOSITS MADE TO STOP THE RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS.
(a) IN GENERAL.—Subchapter B of chapter 67 (relat-
ing to interest on overpayments) is amended by redesig-
nating section 6612 as section 6613 and by inserting after
section 6611 the following new section:
‘‘SEC. 6612. DEPOSITS MADE TO STOP THE RUNNING OF IN-
TEREST ON POTENTIAL UNDERPAYMENTS,
ETC.
‘‘(a) AUTHORITY TO MAKE DEPOSITS OTHER THAN
AS PAYMENT OF TAX.—Any taxpayer may make a cash
bond deposit with the Secretary to offset any potential un-
derpayment of tax imposed by this title for any taxable pe-
riod. Such a deposit shall be made in such manner as the
Secretary shall prescribe.
‘‘(b) DEPOSITS USED TO PAY UNDERPAYMENT ALSO
OFFSET RUNNING OF INTEREST ON UNDERPAYMENT.—Any
cash bond deposit used to pay tax under this title shall offset
interest under subchapter A during the period of such de-
posit on such tax under such procedures as the Secretary
shall prescribe.
‘‘(c) TAXPAYER MAY REQUEST RETURN
OF CASH
BOND DEPOSIT.—
‘‘(1) IN GENERAL.—On written request of a tax-
payer who made a cash bond deposit, the Secretary
shall return to the taxpayer any amount of such de-
posit specified by the taxpayer.
‘‘(2) NO INTEREST.—In the case of a deposit
which is so returned—
‘‘(A) the amount returned shall not offset
interest under subchapter A for any period, and
‘‘(B) except as provided in subsection (d),
no interest shall be allowed on such amount.
‘‘(3) EXCEPTIONS.—Paragraph (1) shall not
apply to any amount if—
‘‘(A) such amount has been treated by the
Secretary as a payment of tax after a final de-
termination of the disputed items to which such
amount relates,
‘‘(B) such amount has been designated by
the taxpayer as being a payment of tax,
‘‘(C) the Secretary determines that assess-
ment or collection of tax is in jeopardy, or
‘‘(D) the amount is applied in accordance
with section 6402.
Subparagraph (D) shall not apply to a payment to
a taxpayer if the taxpayer is entitled to be paid inter-
est under subsection (d) on such payment.
‘‘(d) INTEREST ON AMOUNTS RETURNED IN CERTAIN
CIRCUMSTANCES.—
‘‘(1) IN GENERAL.—Interest shall be allowed and
paid on the amount of any cash bond deposit for a
taxable period which is returned to the taxpayer only
if the deposit is attributable to a dispute reserve ac-
count for such period.
‘‘(2) ATTRIBUTION
TO
DISPUTE
RESERVE
AC-
COUNT.—For purposes of paragraph (1), an amount
is attributable to a dispute reserve account for any
taxable period only to the extent that the aggregate of
the cash bond deposits for such period (reduced by the
amount of such deposits which has been previously re-
turned to the taxpayer or treated as a payment of
tax) does not exceed the deposit limit for such period.
‘‘(3) DEPOSIT
LIMIT.—For purposes of para-
graph (2)—
‘‘(A) IN GENERAL.—The deposit limit for
any taxable period is the amount specified by the
taxpayer at the time of the deposit as the tax-
payer’s reasonable estimate of the potential un-
derpayment for such period with respect to dis-
putable items identified (at such time) by the
taxpayer with respect to such deposit.
‘‘(B) SAFE HARBOR BASED ON 30-DAY LET-
TER.—In the case of a taxpayer who is issued a
30-day letter for any taxable period, the deposit
limit for such period shall not be less than the
amount of the proposed deficiency specified in
such letter.
‘‘(4) DEFINITIONS.—For purposes of paragraph
(3)—
‘‘(A) DISPUTABLE ITEM.—The term ‘disput-
able item’ means any item if the taxpayer—
‘‘(i) has a reasonable basis for its
treatment of such item, and
‘‘(ii) reasonably believes that the Sec-
retary also has a reasonable basis for dis-
allowing the taxpayer’s treatment of such
item.
‘‘(B) 30-DAY
LETTER.—The term ‘30-day
letter’ means the first letter of proposed defi-
ciency which allows the taxpayer an opportunity
for administrative review in the Internal Rev-
enue Service Office of Appeals.
‘‘(5) RATE AND PERIOD OF INTEREST.—
‘‘(A) RATE.—The rate of interest allowable
under this subsection shall be the Federal short-
term rate determined under section 6621(b),
compounded daily.
‘‘(B) PERIOD.—Interest under this sub-
section on any payment to a taxpayer shall be
payable from the date of the deposit to which
such payment is attributable to a date (to be de-
termined by the Secretary) preceding the date of
the check making such payment by not more
than 30 days. For purposes of the preceding sen-
tence, cash bond deposits for any taxable period
shall be treated as used and returned on a last-
in first-out basis.
‘‘(e) CASH BOND DEPOSIT.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘cash bond deposit’
means any payment which is designated by the tax-
payer as being a cash bond deposit for a specified
taxable period.
‘‘(2) AMOUNTS DESIGNATED OR USED AS PAY-
MENT OF TAX.—A cash bond deposit shall cease to be
treated as such for purposes of this section beginning
on the date that the taxpayer designates such deposit
as a payment of tax for purposes of this title, or, if
earlier, on the date such deposit is so used.
‘‘(f) CHANGE
IN
PERIOD
FOR
WHICH
DEPOSIT
MADE.—Subject to the requirements of subsection (d), a
taxpayer may change the taxable period to which a cash
bond deposit relates.’’
(b) CLERICAL AMENDMENT.—The table of sections for
subchapter B of chapter 67 is amended by striking the last
item and inserting the following new items:
‘‘Sec. 6612. Deposits made to stop the running of interest on poten-
tial underpayments, etc.
‘‘Sec. 6613. Cross references.’’
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to interest for periods after
the date of the enactment of this Act.
(2) SPECIFICATION OF DISPUTED ITEMS.—In the
case of amounts held by the Secretary of the Treasury
on the date of the enactment of this Act as a deposit
in the nature of a cash bond pursuant to Revenue
Procedure 84–58, the date that the taxpayer makes
the identification under subsection (d)(3)(A) of sec-
tion 6612 of the Internal Revenue Code of 1986, as
added by this section, shall be treated as the date such
amounts were deposited for purposes of such section
6612.
SEC. 106. EXPANSION OF INTEREST NETTING FOR INDIVID-
UALS.
(a) IN GENERAL.—Subsection (d) of section 6621 (re-
lating to elimination of interest on overlapping periods of
tax overpayments and underpayments) is amended by add-
ing at the end the following: ‘‘Solely for purposes of the pre-
ceding sentence, section 6611(e) shall not apply in the case
of an individual.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to interest accrued after December
31, 2000.
TITLE II—CONFIDENTIALITY
AND DISCLOSURE
SEC. 201. DISCLOSURE AND PRIVACY RULES RELATING TO
RETURNS AND RETURN INFORMATION.
(a) IN GENERAL.—Subsection (a) of section 6103 (re-
lating to general rule for confidentiality and disclosure of
returns and return information) is amended by striking
‘‘title—’’ and inserting ‘‘title and notwithstanding any
other provision of law—’’.
(b) PROCEDURAL AND JURISDICTIONAL RULES.—Sub-
section (p) of section 6103 (relating to procedure and rec-
ordkeeping) is amended by adding at the end the following
new paragraph:
‘‘(9) PROCEDURAL RULES APPLICABLE TO CER-
TAIN DISCLOSURES.—
‘‘(A) IN
GENERAL.—The Secretary shall
prescribe regulations for purposes of providing
for disclosures of return and return information
under subsections (c), (e), and (k) (1) and (2).
Such regulations shall include a schedule of fees,
and waivers and reductions of such fees, applica-
ble to the processing of requests for such disclo-
sures.
‘‘(B) DETERMINATIONS
OF
WHETHER
TO
COMPLY WITH DISCLOSURE REQUESTS.—
‘‘(i) INITIAL REQUESTS.—In response
to a request that reasonably describes the re-
turn or return information sought and is
made in accordance with the published
rules, the Secretary shall—
‘‘(I) determine within 20 days
after the receipt of any request for dis-
closure of return or return information
under subsections (c), (e), and (k) (1)
and (2) whether to comply with such
request, and
‘‘(II) immediately notify the per-
son making such request of such deter-
mination and the reasons therefor, and
of the right of such person to appeal to
the Commissioner any adverse deter-
mination.
‘‘(ii) 
APPEAL.—The 
Commissioner
shall—
‘‘(I) make a determination with
respect to any appeal of any adverse
determination under clause (i)(I) with-
in 20 days after the receipt of such ap-
peal, and
‘‘(II) if on appeal the denial of
the request for disclosure of such return
or return information is in whole or in
part upheld, the Commissioner shall
notify the person making such request
of the provisions for judicial review of
that determination under subpara-
graph (D).
‘‘(iii) EXTENSION OF PERIODS FOR UN-
USUAL CIRCUMSTANCES.—
‘‘(I) IN GENERAL.—The time lim-
its prescribed in clause (i) and clause
(ii) (as the case may be) may be ex-
tended for not more than 10 days in
unusual circumstances by providing to
the person making such request for dis-
closure written notice which sets forth
the unusual circumstances for such ex-
tension and the date on which a deter-
mination is expected to be dispatched.
No such notice shall specify a date that
would result in an extension for more
than 10 working days, except as pro-
vided in subclause (II).
‘‘(II) MODIFICATION OF REQUEST
OR TIME PERIOD.—If, with respect to a
request for which the time limits are
extended under subclause (I), the Sec-
retary determines that the request can-
not be processed within the time limit
so specified, the Secretary shall notify
the person making the request and
shall provide the person an oppor-
tunity to limit the scope of the request
so that it may be processed within that
time limit or an opportunity to ar-
range with the agency an alternative
time frame for processing the request
or a modified request. Refusal by the
person to reasonably modify the request
or arrange such an alternative time
frame shall be considered as a factor in
determining whether exceptional cir-
cumstances exist for purposes of sub-
paragraph (C).
‘‘(iv) UNUSUAL
CIRCUMSTANCES
DE-
FINED.—For purposes of clause (iii), the
term ‘unusual circumstances’ means, but
only to the extent reasonably necessary to
the proper processing of the particular
requests—
‘‘(I) the need to search for and
collect the requested records from field
facilities or other establishments that
are separate from the office processing
the request,
‘‘(II) the need to search for, col-
lect, and appropriately examine a vo-
luminous amount of separate and dis-
tinct records which are demanded in a
single request, or
‘‘(III) the need for consultation,
which shall be conducted with all prac-
ticable speed, with another agency hav-
ing a substantial interest in the deter-
mination of the request or among two
or more components of the agency hav-
ing substantial subject-matter interest
therein.
‘‘(v) 20-DAY PERIOD EXCLUDES CER-
TAIN DAYS.—The 20-day periods referred to
in clauses (i) and (ii) shall not include Sat-
urdays, Sundays, and legal public holidays.
‘‘(C) FAILURE TO MEET TIME LIMITS.—
‘‘(i) IN GENERAL.—Any person making
a request for the disclosure of return or re-
turn information which is subject to this
paragraph shall be deemed to have ex-
hausted his administrative remedies with
respect to such request if the Secretary fails
to comply with the applicable time limit
provisions of this paragraph. If the Sec-
retary can show exceptional circumstances
exist and that the agency is exercising due
diligence in responding to the request, the
court may retain jurisdiction and allow the
agency additional time to complete its re-
view of the records. Upon any determina-
tion by the Secretary to comply with a re-
quest for records, the records shall be made
promptly available to such person making
such request. Any notification of denial of
any request for records under this sub-
section shall set forth the names and titles
or positions of each person responsible for
the denial of such request.
‘‘(ii) EXCEPTIONAL
CIRCUMSTANCES
DEFINED.—For purposes of clause (i), the
term ‘exceptional circumstances’ does not
include a delay that results from a predict-
able workload of the Secretary relating to
requests subject to this paragraph, unless
the 
Secretary 
demonstrates 
reasonable
progress in reducing its backlog of pending
requests.
‘‘(iii) REFUSAL TO MODIFY REQUEST
OR TIME FRAME.—Refusal by a person to
reasonably modify the scope of a request or
arrange an alternative time frame for proc-
essing a request (or a modified request)
under subparagraph (B)(ii) after being
given an opportunity to do so by the agency
to whom the person made the request shall
be considered as a factor in determining
whether exceptional circumstances exist for
purposes of this subparagraph.
‘‘(D) JUDICIAL PROCEEDINGS.—
‘‘(i) JURISDICTION OF THE DISTRICT
COURTS.—
‘‘(I) IN GENERAL.—On complaint,
the district courts of the United States
in the district in which the complain-
ant resides, or has his principal place
of business, or in which his return or
return information is situated, or in
the District of Columbia, shall have ju-
risdiction to enjoin the Secretary from
withholding return or return informa-
tion which is subject to disclosure
under subsection (c), (e), or (k) (1) or
(2), and to order the production of any
return or return information improp-
erly withheld from the complainant.
‘‘(II) EXPEDITED PROCESSING.—
No district court of the United States
shall have jurisdiction to review a de-
nial by the Secretary of expedited proc-
essing of a request for return or return
information after the Secretary has
provided a complete response to the re-
quest.
‘‘(ii) PROCEDURAL
MATTERS.—In a
case arising under clause (i), the court shall
determine the matter de novo (on the record
before the Secretary at the time of the deter-
mination in the case of a request for expe-
dited processing), and may examine the
contents of such return or return informa-
tion in camera to determine whether such
return or return information or any part
thereof shall be withheld under any of the
provisions of this title, and the burden shall
be on the Secretary to sustain its action. In
addition to any other matters to which a
court accords substantial weight, a court
shall accord substantial weight to an affi-
davit of the Secretary concerning the Sec-
retary’s determination as to technical feasi-
bility relating to, and reproducibility of,
such return and return information.
‘‘(E) DEADLINE
FOR SECRETARY
TO
AN-
SWER COMPLAINT.—Notwithstanding any other
provision of law, the Secretary shall serve an an-
swer or otherwise plead to any complaint made
under this paragraph within 30 days after serv-
ice upon the Secretary of the pleading in which
such complaint is made, unless the court other-
wise directs for good cause shown.’’.
(c) ATTORNEY FEES.—Subsection (a) of section 7430
(relating to general rule for awarding of costs and certain
fees) is amended by inserting after ‘‘title,’’ the following:
‘‘and in any court proceeding in connection with the disclo-
sure of return and return information under section
6103(p)(9),’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to requests made after the date of the
enactment of this Act.
SEC. 202. EXPANSION OF TYPE OF ADVICE AVAILABLE FOR
PUBLIC INSPECTION.
(a) IN
GENERAL.—Subparagraph (A) of section
6110(i)(1) is amended—
(1) by striking ‘‘national office component of the
Office of Chief Counsel’’ and inserting ‘‘component of
the Office of Chief Counsel or of the Service’’, and
(2) in clause (i) by striking ‘‘field or service cen-
ter employees of the Service or regional or district’’
and inserting ‘‘employees of the Service or’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 6110(i)(2) is amended by inserting
‘‘or the Service’’ after ‘‘Office of Chief Counsel’’.
(2) The following provisions of section 6110 are
amended by striking ‘‘Chief Counsel advice’’ each
place it appears and inserting ‘‘official advice’’:
(A) Paragraph (1) of subsection (b).
(B) Subparagraph (A) of subsection (i)(1).
(C) Paragraphs (3) and (4) of subsection
(i).
(3) Subparagraph (A) of section 6110(g)(5) is
amended by inserting ‘‘official advice and’’ before
‘‘technical advice’’.
(4) The heading for subsection (i) of section 6110
is amended by striking ‘‘CHIEF COUNSEL’’ and in-
serting ‘‘OFFICIAL’’.
(5) The heading for paragraph (1) of section
6110(i) is amended by striking ‘‘CHIEF COUNSEL’’
and inserting ‘‘OFFICIAL’’.
(6) The headings for paragraphs (2) and (3) of
section 6110(i), and for subparagraphs (A) and (B)
of paragraph (4) of such section, are each amended by
striking ‘‘CHIEF COUNSEL’’ and inserting ‘‘OFFICIAL’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to any official advice issued
more than 90 days after the date of the enactment of
this Act.
(2) DOCUMENTS
TREATED
AS
OFFICIAL
AD-
VICE.—If the Secretary of the Treasury by regulation
provides pursuant to section 6110(i)(2) of the Inter-
nal Revenue Code of 1986, that any additional advice
or instruction issued by the Office of Chief Counsel
shall be treated as official advice, such additional ad-
vice or instruction shall be made available for public
inspection pursuant to section 6110 of such Code, as
amended by this section, only in accordance with the
effective date set forth in such regulation.
(3) OFFICIAL ADVICE TO BE AVAILABLE ELEC-
TRONICALLY.—The Internal Revenue Service shall
make any official advice issued more than 90 days
after the date of the enactment of this Act and made
available for public inspection pursuant to section
6110 of the Internal Revenue Code of 1986, as amend-
ed by this section, also available by computer tele-
communications within 1 year after issuance.
SEC. 203. COLLECTION ACTIVITIES WITH RESPECT TO
JOINT RETURN DISCLOSABLE TO EITHER
SPOUSE BASED ON ORAL REQUEST.
(a) IN GENERAL.—Paragraph (8) of section 6103(e)
(relating to disclosure of collection activities with respect
to joint return) is amended by striking ‘‘in writing’’ the
first place it appears.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to requests made after the date of the
enactment of this Act.
SEC. 204. TAXPAYER REPRESENTATIVES NOT SUBJECT TO
EXAMINATION ON SOLE BASIS OF REPRESEN-
TATION OF TAXPAYERS.
(a) IN GENERAL.—Subsection (h) of section 6103 (re-
lating to disclosure to certain Federal officers and employ-
ees for purposes of tax administration, etc.) is amended by
adding at the end the following new paragraph:
‘‘(7) TAXPAYER
REPRESENTATIVES.—Notwith-
standing paragraph (1), the return of the representa-
tive of a taxpayer whose return is being examined by
an officer or employee of the Department of the Treas-
ury shall not be open to inspection by such officer or
employee on the sole basis of the representative’s rela-
tionship to the taxpayer unless a supervisor of such
officer or employee has approved the inspection of the
return of such representative on a basis other than by
reason of such relationship.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 205. DISCLOSURE IN JUDICIAL OR ADMINISTRATIVE
TAX PROCEEDINGS OF RETURN AND RETURN
INFORMATION OF PERSONS WHO ARE NOT
PARTY TO SUCH PROCEEDINGS.
(a) IN GENERAL.—Paragraph (4) of section 6103(h)
(relating to disclosure to certain Federal officers and em-
ployees for purposes of tax administration, etc.) is amended
by adding at the end the following new subparagraph:
‘‘(B) DISCLOSURE IN JUDICIAL OR ADMINIS-
TRATIVE TAX PROCEEDINGS OF RETURN AND RE-
TURN INFORMATION OF PERSONS NOT PARTY TO
SUCH PROCEEDINGS.—
‘‘(i) NOTICE.—Return or return infor-
mation of any person who is not a party to
a judicial or administrative proceeding de-
scribed in paragraph (4) shall not be dis-
closed under clause (ii) or (iii) of subpara-
graph (A) until after the Secretary makes a
reasonable effort to give notice to such per-
son and an opportunity for such person to
request the deletion of matter from such re-
turn or return information, including any
of the items referred to in paragraphs (1)
through (7) of section 6110(c). Such notice
shall include a statement of the issue or
issues the resolution of which is the reason
such return or return information is sought.
In the case of S corporations, partnerships,
estates, and trusts, such notice shall be
made at the entity level.
‘‘(ii) DISCLOSURE LIMITED TO PERTI-
NENT PORTION.—The only portion of a re-
turn or return information described in
clause (i) which may be disclosed under
subparagraph (A) is that portion of such re-
turn or return information that directly re-
lates to the resolution of an issue in such
proceeding.
‘‘(iii) EXCEPTIONS.—Clause (i) shall
not apply to—
‘‘(I) any ex parte proceeding for
obtaining a search warrant, order for
entry on premises or safe deposit boxes,
or similar ex parte proceeding,
‘‘(II) disclosure of third party re-
turn information by indictment or
criminal information, or
‘‘(III) if the Secretary determines
that the application of such clause
would seriously impair a criminal tax
investigation.’’.
(b) CONFORMING AMENDMENTS.—Paragraph (4) of
section 6103(h) is amended by—
(1) by striking ‘‘PROCEEDINGS.—A return’’ and
inserting ‘‘PROCEEDINGS.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), a return’’,
(2) by redesignating subparagraphs (A), (B),
(C), and (D) clauses (i), (ii), (iii), and (iv), respec-
tively, and
(3) in the matter following clause (iv) (as so re-
designated), by striking ‘‘subparagraph (A), (B), or
(C)’’ and inserting ‘‘clause (i), (ii) or (iii)’’ and by
moving such matter two ems to the right.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to proceedings commenced after the date
of the enactment of this Act.
SEC. 206. PROHIBITION OF DISCLOSURE OF TAXPAYER
IDENTIFICATION 
INFORMATION
WITH RESPECT TO DISCLOSURE OF ACCEPT-
ED OFFERS-IN-COMPROMISE.
(a) IN GENERAL.—Paragraph (1) of section 6103(k)
(relating to disclosure of certain returns and return infor-
mation for tax administrative purposes) is amended by in-
serting ‘‘(other than address and TIN)’’ after ‘‘Return infor-
mation’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to disclosures made after the date of the
enactment of this Act.
SEC. 207. COMPLIANCE BY STATE CONTRACTORS WITH
CONFIDENTIALITY SAFEGUARDS.
(a) IN GENERAL.—Paragraph (8) of section 6103(p)
(relating to State law requirements) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and by in-
serting after subparagraph (A) the following new subpara-
graph:
‘‘(B) DISCLOSURE TO CONTRACTORS.—Not-
withstanding any other provision of this section,
no return or return information shall be dis-
closed by any officer or employee of any State to
any contractor of the State unless such State—
‘‘(i) has requirements in effect which
require each contractor of the State which
would have access to returns or return in-
formation to provide safeguards (within the
meaning of paragraph (4)) to protect the
confidentiality of such returns or return in-
formation,
‘‘(ii) agrees to conduct an annual, on-
site review (mid-point review in the case of
contracts of less than 1 year in duration) of
each contractor to determine compliance
with such requirements,
‘‘(iii) submits the findings of the most
recent review conducted under clause (ii) to
the Secretary as part of the report required
by paragraph (4)(E), and
‘‘(iv) certifies to the Secretary for the
most recent annual period that all contrac-
tors are in compliance with all such re-
quirements.
The certification required by clause (iv) shall in-
clude the name and address of each contractor,
a description of the contract of the contractor
with the State, and the duration of such con-
tract.’’.
(b) CONFORMING AMENDMENT.—Subparagraph (C) of
section 6103(p)(8), as amended by subsection (a), is amend-
ed by striking ‘‘subparagraph (A)’’ and inserting ‘‘subpara-
graphs (A) and (B)’’.
(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to disclosures made after De-
cember 31, 2001.
(2) 
The 
first 
certification 
under 
section
6103(p)(8)(B)(iv) of the Internal Revenue Code of
1986, as added by subsection (a), shall be made with
respect to calendar year 2002.
SEC. 208. HIGHER STANDARDS FOR REQUESTS FOR AND
CONSENTS TO DISCLOSURE.
(a) IN GENERAL.—Subsection (c) of section 6103 (re-
lating to disclosure of returns and return information to
designee of taxpayer) is amended by adding at the end the
following new paragraphs:
‘‘(2) REQUIREMENTS FOR VALID REQUESTS AND
CONSENTS.—A request for or consent to disclosure
under paragraph (1) shall only be valid for purposes
of this section or sections 7213, 7213A, or 7431 if—
‘‘(A) at the time of execution, such request
or consent designates a recipient of such disclo-
sure and is dated, and
‘‘(B) at the time such request or consent is
submitted to the Secretary, the submitter of such
request or consent certifies, under penalty of per-
jury, that such request or consent complied with
subparagraph (A).
‘‘(3) RESTRICTIONS ON PERSONS OBTAINING IN-
FORMATION.—Any person shall, as a condition for re-
ceiving return or return information under para-
graph (1)—
‘‘(A) ensure that such return and return in-
formation is kept confidential,
‘‘(B) use such return and return informa-
tion only for the purpose for which it was re-
quested, and
‘‘(C) not disclose such return and return in-
formation except to accomplish the purpose for
which it was requested, unless a separate consent
from the taxpayer is obtained.
‘‘(4) REQUIREMENTS FOR FORM PRESCRIBED BY
SECRETARY.—For purposes of this subsection, the Sec-
retary shall prescribe a form for requests and consents
which shall—
‘‘(A) contain a warning, prominently dis-
played, informing the taxpayer that the form
should not be signed unless it is completed,
‘‘(B) state that if the taxpayer believes there
is an attempt to coerce him to sign an incom-
plete or blank form, the taxpayer should report
the matter to the Treasury Inspector General for
Tax Administration, and
‘‘(C) contain the address and telephone
number of the Treasury Inspector General for
Tax Administration.’’.
(b) REPORT.—Not later than 18 months after the date
of the enactment of this Act, the Treasury Inspector General
for Tax Administration shall submit a report to the Con-
gress on compliance with the designation and certification
requirements applicable to requests for or consent to disclo-
sure of returns and return information under section
6103(c) of the Internal Revenue Code of 1986, as amended
by subsection (a). Such report shall—
(1) evaluate (on the basis of random sampling)
whether—
(A) the amendments made by subsection (a)
are achieving the purposes of this section,
(B) requesters and submitters for such dis-
closure are continuing to evade the purposes of
this section and, if so, how, and
(C) the sanctions for violations of such re-
quirements are adequate, and
(2) include such recommendations that the
Treasury Inspector General for Tax Administration
considers necessary or appropriate to better achieve
the purposes of this section.
(c) CONFORMING AMENDMENT.—Section 6103(c) is
amended by striking ‘‘TAXPAYER.—The Secretary’’ and in-
serting ‘‘TAXPAYER.—
‘‘(1) IN GENERAL.—The Secretary’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to requests and consents made after 3
months after the date of the enactment of this Act.
SEC. 209. NOTICE TO TAXPAYER CONCERNING ADMINISTRA-
TIVE 
DETERMINATION 
OF 
BROWSING;
ANNUAL REPORT.
(a) NOTICE TO TAXPAYER.—Subsection (e) of section
7431 (relating to notification of unlawful inspection and
disclosure) is amended by adding at the end the following:
‘‘The Secretary shall also notify such taxpayer if the Treas-
ury Inspector General for Tax Administration determines
that such taxpayer’s return or return information was in-
spected or disclosed in violation of any of the provisions
specified in paragraph (1), (2), or (3).’’.
(b) REPORTS.—Subsection (p) of section 6103 (relat-
ing to procedure and recordkeeping), as amended by section
201(b), is further amended by adding at the end the fol-
lowing new paragraph:
‘‘(10) REPORT ON UNAUTHORIZED DISCLOSURE
AND INSPECTION.—As part of the report required by
paragraph (3)(C) for each calendar year, the Sec-
retary shall furnish information regarding the unau-
thorized disclosure and inspection of returns and re-
turn information, including the number, status, and
results of—
‘‘(A) administrative investigations,
‘‘(B) civil lawsuits brought under section
7431 (including the amounts for which such law-
suits were settled and the amounts of damages
awarded), and
‘‘(C) criminal prosecutions.’’.
(c) EFFECTIVE DATE.—
(1) NOTICE.—The amendment made by sub-
section (a) shall apply to determinations made after
the date of the enactment of this Act.
(2) REPORTS.—The amendment made by sub-
section (b) shall apply to calendar years ending after
the date of the enactment of this Act.
SEC. 210. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX
REFUND PURPOSES.
Paragraph (1) of section 6103(m) (relating to disclo-
sure of taxpayer identity information for tax refunds) is
amended by inserting ‘‘, and through any other means of
mass communication,’’ after ‘‘media’’.
TITLE III—OTHER
REQUIREMENTS
SEC. 301. CLARIFICATION OF DEFINITION OF CHURCH TAX
INQUIRY.
Subsection (i) of section 7611 (relating to section not
to apply to criminal investigations, etc.) is amended by
striking ‘‘or’’ at the end of paragraph (4), by striking the
period at the end of paragraph (5) and inserting ‘‘, or’’,
and by inserting after paragraph (5) the following:
‘‘(6) information provided by the Secretary re-
lated to the standards for exemption from tax under
this title and the requirements under this title relat-
ing to unrelated business taxable income.’’.
SEC. 302. EXPANSION OF DECLARATORY JUDGMENT REM-
EDY TO TAX-EXEMPT ORGANIZATIONS.
(a) IN GENERAL.—Paragraph (1) of section 7428(a)
(relating to creation of remedy) is amended—
(1) in subparagraph (B) by inserting after
‘‘509(a))’’ the following: ‘‘or as a private operating
foundation (as defined in section 4942(j)(3))’’, and
(2) by amending subparagraph (C) to read as
follows:
‘‘(C) with respect to the initial qualification
or continuing qualification of an organization as
an organization described in section 501(c)
(other than paragraph (3)) which is exempt from
tax under section 501(a), or’’.
(b) COURT JURISDICTION.—Subsection (a) of section
7428 is amended in the material following paragraph (2)
by striking ‘‘United States Tax Court, the United States
Claims Court, or the district court of the United States for
the District of Columbia’’ and inserting the following:
‘‘United States Tax Court (in the case of any such deter-
mination or failure) or the United States Claims Court or
the district court of the United States for the District of
Columbia (in the case of a determination or failure with
respect to an issue referred to in subparagraph (A) or (B)
of paragraph (1)),’’.
(c) FAILURE OF SERVICE TO ACT ON DETERMINA-
TIONS TREATED AS EXHAUSTION OF REMEDIES.—The sec-
ond sentence of paragraph (2) of section 7428(b) (relating
to exhaustion of administrative remedies) is amended to
read as follows: ‘‘An organization requesting the determina-
tion of an issue referred to in subsection (a)(1) shall be
deemed to have exhausted its administrative remedies with
respect to—
‘‘(A) a failure by the Secretary to make a
determination with respect to such issue at the
expiration of 270 days after the date on which
the request for such determination was made if
the organization has taken, in a timely manner,
all reasonable steps to secure such determination,
and
‘‘(B) a failure by any office of the Service
(other than the office which is responsible for ini-
tial determinations with respect to such issue
(hereinafter in this subparagraph referred to as
the ‘initial office’), to make a determination with
respect to such issue at the expiration of 180
days after the date on which any request for such
determination was made by the initial office if
the organization has taken, in a timely manner,
all reasonable steps to secure such determina-
tion.’’.
(d) EFFECTIVE DATES.—
(1) DECLARATORY
JUDGMENT.—The amend-
ments made by subsections (a) and (b) shall apply to
pleadings filed with respect to determinations (or re-
quests for determinations) made after the date of the
enactment of this Act.
(2) FAILURE OF SERVICE TO ACT.—The amend-
ments made by subsection (c) shall apply to applica-
tions received in the national office of the Internal
Revenue Service after the date of the enactment of this
Act.
SEC. 303. EMPLOYEE MISCONDUCT REPORT TO INCLUDE
SUMMARY OF COMPLAINTS BY CATEGORY.
(a) IN GENERAL.—Clause (ii) of section 7803(d)(2)(A)
is amended by inserting before the semicolon at the end the
following: ‘‘, including a summary (by category) of the 10
most common complaints made and the number of such
common complaints’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply with respect to reporting periods
ending after the date of the enactment of this Act.
SEC. 304. INCREASE IN THRESHOLD FOR JOINT COMMITTEE
REPORTS ON REFUNDS AND CREDITS.
(a) GENERAL RULE.—Subsections (a) and (b) of sec-
tion 6405 are each amended by striking ‘‘$1,000,000’’ and
inserting ‘‘$2,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on the date of the enactment
of this Act, except that such amendment shall not apply
with respect to any refund or credit with respect to a report
that has been made before such date of the enactment under
section 6405 of the Internal Revenue Code of 1986.
SEC. 305. ANNUAL REPORT ON AWARDS OF COSTS AND CER-
TAIN FEES IN ADMINISTRATIVE AND COURT
PROCEEDINGS.
Not later than 3 months after the close of each Federal
fiscal year after fiscal year 1999, the Treasury Inspector
General for Tax Administration shall submit a report to
Congress which specifies for such year—
(1) the number of payments made by the United
States pursuant to section 7430 of the Internal Rev-
enue Code of 1986 (relating to awarding of costs and
certain fees),
(2) the amount of each such payment,
(3) an analysis of any administrative issue giv-
ing rise to such payments, and
(4) changes (if any) which will be implemented
as a result of such analysis and other changes (if
any) recommended by the Treasury Inspector General
for Tax Administration as a result of such analysis.
SEC. 306. ANNUAL REPORT ON ABATEMENT OF PENALTIES.
Not later than 6 months after the close of each Federal
fiscal year after fiscal year 1999, the Treasury Inspector
General for Tax Administration shall submit a report to
Congress on abatements of penalties under the Internal Rev-
enue Code of 1986 during such year, including information
on the reasons and criteria for such abatements.
SEC. 307. BETTER MEANS OF COMMUNICATING WITH TAX-
PAYERS.
Not later than 18 months after the date of the enact-
ment of this Act, the Treasury Inspector General for Tax
Administration shall submit a report to Congress evalu-
ating whether technological advances, such as e-mail and
facsimile transmission, permit the use of alternative means
for the Internal Revenue Service to communicate with tax-
payers.
SEC. 308. EXPLANATION OF STATUTE OF LIMITATIONS AND
CONSEQUENCES OF FAILURE TO FILE.
The Secretary of the Treasury or the Secretary’s dele-
gate shall, as soon as practicable but not later than 180
days after the date of the enactment of this Act, revise the
statement required by section 6227 of the Omnibus Tax-
payer Bill of Rights (Internal Revenue Service Publication
No. 1), and any instructions booklet accompanying a gen-
eral income tax return form for taxable years beginning in
2000 and later (including forms 1040, 1040A, 1040EZ, and
any similar or successor forms relating thereto), to provide
for an explanation of—
(1) the limitations imposed by section 6511 of
the Internal Revenue Code of 1986 on credits and re-
funds, and
(2) the consequences under such section 6511 of
the failure to file a return of tax.