136
‘‘(B) ISSUANCE
OF
GUIDANCE.—In con-
sultation with the Chief Counsel for the Inter-
nal Revenue Service and subject to the approval 
of the Commissioner of Internal Revenue, the 
National Taxpayer Advocate may issue guid-
ance regarding the circumstances (including 
with respect to litigation) under which, and the 
persons to whom, employees of the Office of the 
Taxpayer Advocate shall not disclose informa-
tion obtained from a taxpayer. To the extent to 
which any provision of the Internal Revenue 
Manual would require greater disclosure by em-
ployees of the Office of the Taxpayer Advocate 
than the disclosure required under such guid-
ance, such provision shall not apply. 
‘‘(C) EMPLOYEE
PROTECTION.—Section 
7214(a)(8) shall not apply to any failure to re-
port knowledge or information if—
‘‘(i) such failure to report is author-
ized under subparagraph (A), and 
‘‘(ii) such knowledge or information is 
not of fraud committed by a person 
against the United States under any rev-
enue law.’’.
137
(b) CONFORMING AMENDMENT.—Subparagraph (A) 
of section 7803(c)(4) is amended by inserting ‘‘and’’ at 
the end of clause (ii), by striking ‘‘; and’’ at the end of 
clause (iii) and inserting a period, and by striking clause 
(iv). 
Subtitle E—Miscellaneous 
SEC. 361. 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. 362. 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
138
(2) by amending subparagraph (C) to read as 
follows: 
‘‘(C) with respect to the initial qualifica-
tion or continuing qualification of an organiza-
tion as an organization described in subsection 
(c) (other than paragraph (3)) or (d) of section 
501 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) EFFECTIVE DATE.—The amendments made by 
this section shall apply to pleadings filed with respect to 
determinations (or requests for determinations) made 
after the date of the enactment of this Act.
139
SEC. 363. 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 semi-
colon 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 
subsection (a) shall apply with respect to reporting periods 
ending after the date of the enactment of this Act. 
SEC. 364. ANNUAL REPORT ON AWARDS OF COSTS AND 
CERTAIN 
FEES 
IN 
ADMINISTRATIVE 
AND 
COURT PROCEEDINGS. 
Not later than 3 months after the close of each Fed-
eral fiscal year after fiscal year 2003, the Treasury In-
spector General for Tax Administration shall submit a re-
port to Congress which specifies for such year—
(1) the number of payments made by the 
United States pursuant to section 7430 of the Inter-
nal Revenue 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
140
any) recommended by the Treasury Inspector Gen-
eral for Tax Administration as a result of such anal-
ysis. 
SEC. 365. ANNUAL REPORT ON ABATEMENT OF PENALTIES. 
Not later than 6 months after the close of each Fed-
eral fiscal year after fiscal year 2003, the Treasury In-
spector General for Tax Administration shall submit a re-
port to Congress on abatements of penalties under the In-
ternal Revenue Code of 1986 during such year, including 
information on the reasons and criteria for such abate-
ments. 
SEC. 366. 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 taxpayers. 
SEC. 367. EXPLANATION OF STATUTE OF LIMITATIONS AND 
CONSEQUENCES OF FAILURE TO FILE. 
The Secretary of the Treasury or the Secretary’s del-
egate shall, as soon as practicable but not later than 180 
days after the date of the enactment of this Act, revise
141
the statement required by section 6227 of the Omnibus 
Taxpayer Bill of Rights (Internal Revenue Service Publi-
cation No. 1), and any instructions booklet accompanying 
a general income tax return form for taxable years begin-
ning after 2002 (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 
refunds; and 
(2) the consequences under such section 6511 
of the failure to file a return of tax. 
SEC. 368. AMENDMENT TO TREASURY AUCTION REFORMS. 
(a) IN GENERAL.—Clause (i) of section 202(c)(4)(B) 
of the Government Securities Act Amendments of 1993 
(31 U.S.C. 3121 note) is amended by inserting before the 
semicolon ‘‘(or, if earlier, at the time the Secretary re-
leases the minutes of the meeting in accordance with para-
graph (2))’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to meetings held after the date 
of the enactment of this Act.
142
SEC. 369. ENROLLED AGENTS. 
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the 
following new section: 
‘‘SEC. 7528. ENROLLED AGENTS. 
‘‘(a) IN GENERAL.—The Secretary may prescribe 
such regulations as may be necessary to regulate the con-
duct of enrolled agents in regards to their practice before 
the Internal Revenue Service. 
‘‘(b) USE OF CREDENTIALS.—Any enrolled agents 
properly licensed to practice as required under rules pro-
mulgated under section (a) herein shall be allowed to use 
the credentials or designation as ‘enrolled agent’, ‘EA’, or 
‘E.A.’.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 7528. Enrolled agents.’’.
(c) PRIOR REGULATIONS.—Nothing in the amend-
ments made by this section shall be construed to have any 
effect on part 10 of title 31, Code of Federal Regulations, 
or any other Federal rule or regulation issued before the 
date of the enactment of this Act. 
SEC. 370. FINANCIAL MANAGEMENT SERVICE FEES. 
Notwithstanding any other provision of law, the Fi-
nancial Management Service may charge the Internal Rev-
143
enue Service, and the Internal Revenue Service may pay 
the Financial Management Service, a fee sufficient to 
cover the full cost of implementing a continuous levy pro-
gram under subsection (h) of section 6331 of the Internal 
Revenue Code of 1986. Any such fee shall be based on 
actual levies made and shall be collected by the Financial 
Management Service by the retention of a portion of 
amounts collected by levy pursuant to that subsection. 
Amounts received by the Financial Management Service 
as fees under that subsection shall be deposited into the 
account of the Department of the Treasury under section 
3711(g)(7) of title 31, United States Code, and shall be 
collected and accounted for in accordance with the provi-
sions of that section. The amount credited against the tax-
payer’s liability on account of the continuous levy shall 
be the amount levied, without reduction for the amount 
paid to the Financial Management Service as a fee.
SEC. 371. EXTENSION OF INTERNAL REVENUE SERVICE 
USER FEES. 
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the 
following new section: 
‘‘SEC. 7529. INTERNAL REVENUE SERVICE USER FEES. 
‘‘(a) GENERAL RULE.—The Secretary shall establish 
a program requiring the payment of user fees for—
144
‘‘(1) requests to the Internal Revenue Service 
for ruling letters, opinion letters, and determination 
letters, and 
‘‘(2) other similar requests. 
‘‘(b) PROGRAM CRITERIA.—
‘‘(1) IN GENERAL.—The fees charged under the 
program required by subsection (a)—
‘‘(A) shall vary according to categories (or 
subcategories) established by the Secretary, 
‘‘(B) shall be determined after taking into 
account the average time for (and difficulty of) 
complying with requests in each category (and 
subcategory), and 
‘‘(C) shall be payable in advance. 
‘‘(2) EXEMPTIONS, ETC.—
‘‘(A) IN
GENERAL.—The Secretary shall 
provide for such exemptions (and reduced fees) 
under such program as the Secretary deter-
mines to be appropriate. 
‘‘(B) EXEMPTION FOR CERTAIN REQUESTS 
REGARDING
PENSION
PLANS.—The Secretary 
shall not require payment of user fees under 
such program for requests for determination 
letters with respect to the qualified status of a 
pension benefit plan maintained solely by 1 or
145
more eligible employers or any trust which is 
part of the plan. The preceding sentence shall 
not apply to any request—
‘‘(i) made after the later of—
‘‘(I) the fifth plan year the pen-
sion benefit plan is in existence, or 
‘‘(II) the end of any remedial 
amendment period with respect to the 
plan beginning within the first 5 plan 
years, or 
‘‘(ii) made by the sponsor of any pro-
totype or similar plan which the sponsor 
intends to market to participating employ-
ers. 
‘‘(C) DEFINITIONS AND SPECIAL RULES.—
For purposes of subparagraph (B)—
‘‘(i) PENSION
BENEFIT
PLAN.—The 
term ‘pension benefit plan’ means a pen-
sion, profit-sharing, stock bonus, annuity, 
or employee stock ownership plan. 
‘‘(ii) 
ELIGIBLE
EMPLOYER.—The 
term ‘eligible employer’ means an eligible 
employer 
(as 
defined 
in 
section 
408(p)(2)(C)(i)(I)) which has at least 1 
employee who is not a highly compensated
146
employee (as defined in section 414(q)) 
and is participating in the plan. The deter-
mination of whether an employer is an eli-
gible employer under subparagraph (B) 
shall be made as of the date of the request 
described in such subparagraph. 
‘‘(iii) DETERMINATION
OF
AVERAGE 
FEES CHARGED.—For purposes of any de-
termination of average fees charged, any 
request to which subparagraph (B) applies 
shall not be taken into account. 
‘‘(3) AVERAGE FEE REQUIREMENT.—The aver-
age fee charged under the program required by sub-
section (a) shall not be less than the amount deter-
mined under the following table:
Average 
‘‘Category 
Fee 
Employee plan ruling and opinion ...........................................
$250
Exempt organization ruling .....................................................
$350
Employee plan determination ..................................................
$300
Exempt organization determination ........................................
$275
Chief counsel ruling .................................................................
$200.
‘‘(c) TERMINATION.—No fee shall be imposed under 
this section with respect to requests made after September 
30, 2013.’’. 
(b) CONFORMING AMENDMENTS.—
147
(1) The table of sections for chapter 77 is 
amended by adding at the end the following new 
item:
‘‘Sec. 7529. Internal Revenue Service user fees.’’.
(2) Section 10511 of the Revenue Act of 1987 
is repealed. 
(3) Section 620 of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 is repealed. 
(c) LIMITATIONS.—Notwithstanding any other provi-
sion of law, any fees collected pursuant to section 7527 
of the Internal Revenue Code of 1986, as added by sub-
section (a), shall not be expended by the Internal Revenue 
Service unless provided by an appropriations Act. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to requests made after the date 
of the enactment of this Act. 
Subtitle F—Low-Income Taxpayer 
Clinics 
SEC. 381. LOW-INCOME TAXPAYER CLINICS. 
(a) LIMITATION ON AMOUNT OF GRANTS.—Para-
graph (1) of section 7526(c) (relating to special rules and 
limitations) is amended by striking ‘‘$6,000,000 per year’’ 
and inserting ‘‘$9,000,000 for 2004, $12,000,000 for 
2005, and $15,000,000 for each year thereafter’’.
148
(b) PROMOTION
OF CLINICS.—Section 7526(c) is 
amended by adding at the end the following new para-
graph: 
‘‘(6) PROMOTION OF CLINICS.—The Secretary 
is authorized to promote the benefits of and encour-
age the use of low-income taxpayer clinics through 
the use of mass communications, referrals, and other 
means.’’. 
(c) USE
OF GRANTS
FOR OVERHEAD EXPENSES 
PROHIBITED.—Section 7526(c), as amended by sub-
section (b), is further amended by adding at the end the 
following new paragraph: 
‘‘(7) USE
OF
GRANTS
FOR
OVERHEAD
EX-
PENSES PROHIBITED.—No grant made under this 
section may be used for the general overhead ex-
penses of any institution sponsoring a qualified low-
income taxpayer clinic.’’. 
(d) ELIGIBLE CLINICS.—
(1) IN
GENERAL.—Paragraph (2) of section 
7526(b) is amended to read as follows: 
‘‘(2) ELIGIBLE CLINIC.—The term ‘eligible clin-
ic’ means— 
‘‘(A) any clinical program at an accredited 
law, business, or accounting school in which
149
students represent low-income taxpayers in con-
troversies arising under this title; and 
‘‘(B) any organization described in section 
501(c) and exempt from tax under section 
501(a) which satisfies the requirements of para-
graph (1) through representation of taxpayers 
or referral of taxpayers to qualified representa-
tives.’’. 
(2) CONFORMING AMENDMENT.—Subparagraph 
(A) of section 7526(b)(1) is amended by striking 
‘‘means a clinic’’ and inserting ‘‘means an eligible 
clinic’’.
SEC. 382. MATCHING GRANTS TO LOW INCOME RETURN 
PREPARATION CLINICS. 
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by inserting after section 
7526 the following new section: 
‘‘SEC. 7526A. LOW INCOME RETURN PREPARATION CLINICS. 
‘‘(a) IN GENERAL.—The Secretary may, subject to 
the availability of appropriated funds, make grants to pro-
vide matching funds for the development, expansion, or 
continuation of qualified return preparation clinics. 
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED RETURN PREPARATION CLIN-
IC.—
150
‘‘(A) IN
GENERAL.—The term ‘qualified 
return preparation clinic’ means an eligible clin-
ic which—
‘‘(i) does not charge more than a 
nominal fee for its services (except for re-
imbursement of actual costs incurred), and 
‘‘(ii) operates programs which assist 
low-income taxpayers in preparing and fil-
ing their Federal income tax returns, in-
cluding schedules reporting sole proprietor-
ship or farm income. 
‘‘(B) ASSISTANCE
TO
LOW-INCOME
TAX-
PAYERS.—A clinic is treated as assisting low-in-
come taxpayers under subparagraph (A)(ii) if 
at least 90 percent of the taxpayers assisted by 
the clinic have incomes which do not exceed 250 
percent of the poverty level, as determined in 
accordance with criteria established by the Di-
rector of the Office of Management and Budg-
et. 
‘‘(2) ELIGIBLE CLINIC.—The term ‘eligible clin-
ic’ includes—
‘‘(A) a clinical program at an eligible edu-
cational institution (as defined in section 
529(e)(5)) which satisfies the requirements of
151
paragraph (1) through student assistance of 
taxpayers in return preparation and filing, and 
‘‘(B) an organization described in section 
501(c) and exempt from tax under section 
501(a) which satisfies the requirements of para-
graph (1). 
‘‘(c) SPECIAL RULES AND LIMITATIONS.—
‘‘(1) AGGREGATE
LIMITATION.—Unless other-
wise provided by specific appropriation, the Sec-
retary shall not allocate more than $10,000,000 per 
year (exclusive of costs of administering the pro-
gram) to grants under this section. 
‘‘(2) OTHER APPLICABLE RULES.—Rules simi-
lar to the rules under paragraphs (2) through (7) of 
section 7526(c) shall apply with respect to the 
awarding of grants to qualified return preparation 
clinics.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by inserting after the item re-
lating to section 7526 the following new item:
‘‘Sec. 7526A. Low income return preparation clinics.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to grants made after the date of 
the enactment of this Act.
152
Subtitle 
G—Federal-state 
unem-
ployment assistance agreements 
SEC. 391. APPLICABILITY OF CERTAIN FEDERAL-STATE 
AGREEMENTS 
RELATING 
TO 
UNEMPLOY-
MENT ASSISTANCE. 
Effective as of May 25, 2003, section 208 of Public 
Law 107–147 is amended—
(1) in subsection (a)(2), by inserting ‘‘on or’’ 
after ‘‘ending’’; and 
(2) in subsection (b), by striking ‘‘May 31’’ 
each place it appears and inserting ‘‘June 1’’.
Æ