I 
112TH CONGRESS 
2D SESSION 
H. R. 6050 
To amend the Internal Revenue Code of 1986 to provide taxpayer protection 
and assistance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 28, 2012 
Mr. BECERRA (for himself, Mr. RANGEL, Mr. STARK, Mr. MCDERMOTT, Mr. 
LEWIS of Georgia, Mr. BISHOP of New York, Mr. HONDA, Ms. NORTON, 
Ms. BROWN of Florida, and Mr. FILNER) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Financial Services, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
taxpayer protection and assistance, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Taxpayer Bill of Rights Act of 2012’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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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.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—TAXPAYER RIGHTS AND OBLIGATIONS 
Sec. 101. Statement of taxpayer rights and obligations. 
TITLE II—PREPARATION OF TAX RETURNS 
Sec. 201. Programs for the benefit of low-income taxpayers. 
Sec. 202. Regulation of Federal income tax return preparers. 
Sec. 203. Refund delivery products. 
Sec. 204. Preparer penalties with respect to preparation of returns and other 
submissions. 
Sec. 205. Clarification of enrolled agent credentials. 
TITLE III—IMPROVING TAXPAYER SERVICES 
Sec. 301. Modifications to lien notice filing procedures. 
Sec. 302. Modification of requirements relating to tax lien information con-
tained in consumer credit reports. 
Sec. 303. Ban on audit insurance. 
Sec. 304. Public awareness. 
Sec. 305. Clarification of taxpayer assistance order authority. 
Sec. 306. Taxpayer advocate directives. 
Sec. 307. Improved services for taxpayers. 
Sec. 308. Taxpayer access to financial institutions. 
Sec. 309. Additional studies. 
Sec. 310. De novo tax court review of innocent spouse relief determinations. 
TITLE I—TAXPAYER RIGHTS AND 
OBLIGATIONS 
SEC. 101. STATEMENT OF TAXPAYER RIGHTS AND OBLIGA-
TIONS. 
(a) IN GENERAL.—Chapter 77 is amended by adding 
at the end the following new section: 
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‘‘SEC. 7529. STATEMENT OF TAXPAYER RIGHTS AND OBLI-
GATIONS. 
‘‘(a) IN GENERAL.—The Secretary, in consultation 
with the National Taxpayer Advocate, shall publish a sum-
mary statement of rights and obligations arising under 
this title. Such statement shall provide citations to the 
main provisions of this title which provide for the right 
or obligation (as the case may be). This statement of 
rights and obligations does not create or confer any rights 
or obligations not otherwise provided for under this title. 
‘‘(b) STATEMENT OF RIGHTS AND OBLIGATIONS.— 
The statement of rights and obligations is as follows: 
‘‘(1) TAXPAYER RIGHTS.— 
‘‘(A) Right to be informed (including ade-
quate legal and procedural guidance and infor-
mation about taxpayer rights). 
‘‘(B) Right to be assisted. 
‘‘(C) Right to be heard. 
‘‘(D) Right to pay no more than the cor-
rect amount of tax. 
‘‘(E) Right of appeal (administrative and 
judicial). 
‘‘(F) Right to certainty (including guid-
ance, periods of limitation, no second exam, and 
closing agreements). 
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‘‘(G) Right to privacy (including due proc-
ess considerations, least intrusive enforcement 
action, and search and seizure protections). 
‘‘(H) Right to confidentiality. 
‘‘(I) Right to appoint a representative in 
matters before the Internal Revenue Service. 
‘‘(J) Right to fair and just tax system 
(offer in compromise, abatement, assistance 
from the Office of the Taxpayer Advocate under 
section 7803(c), apology, and other compensa-
tion payments). 
‘‘(2) TAXPAYER OBLIGATIONS.— 
‘‘(A) Obligation to be honest. 
‘‘(B) Obligation to be cooperative. 
‘‘(C) Obligation to provide accurate infor-
mation and documents on time. 
‘‘(D) Obligation to keep records. 
‘‘(E) Obligation to pay taxes on time.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 7529. Statement of taxpayer rights and obligations.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 180 days after the date of 
the enactment of this Act. 
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TITLE II—PREPARATION OF TAX 
RETURNS 
SEC. 201. PROGRAMS FOR THE BENEFIT OF LOW-INCOME 
TAXPAYERS. 
(a) VOLUNTEER INCOME TAX ASSISTANCE PLUS.— 
Chapter 77 is amended by inserting after section 7526 the 
following new section: 
‘‘SEC. 7526A. VOLUNTEER INCOME TAX ASSISTANCE PLUS. 
‘‘(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 programs. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
RETURN
PREPARATION
PRO-
GRAM.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
return preparation program’ means a pro-
gram— 
‘‘(i) which does not charge taxpayers 
for its return preparation services, 
‘‘(ii) which operates programs which 
assist 
low-income 
taxpayers, 
including 
those programs that serve taxpayers for 
whom English is a second language, in 
preparing and filing their Federal income 
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tax returns, including schedules reporting 
sole proprietorship or farm income, 
‘‘(iii) in which all of the volunteers 
who assist in the preparation of Federal 
income tax returns meet the training re-
quirements prescribed by the Secretary, 
and 
‘‘(iv) which may establish procedures 
to— 
‘‘(I) provide taxpayers with train-
ing on preparation of their own re-
turns, and 
‘‘(II) provide assistance from the 
volunteers for taxpayers who prepare 
and file their own tax returns using 
computer equipment and tax prepara-
tion software provided by the pro-
gram. 
‘‘(B) ASSISTANCE
TO
LOW-INCOME
TAX-
PAYERS.—For purposes of subparagraph (A), a 
program is treated as assisting low-income tax-
payers if at least 90 percent of the taxpayers 
assisted by the program have incomes which do 
not exceed 250 percent of the poverty level, as 
determined in accordance with criteria estab-
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lished by the Director of the Office of Manage-
ment and Budget. 
‘‘(2) 
PROGRAM.—The 
term 
‘program’ 
in-
cludes— 
‘‘(A) a program at an institution of higher 
education which— 
‘‘(i) is described in section 102 (other 
than subsection (a)(1)(C) thereof) of the 
Higher Education Act of 1965 (20 U.S.C. 
1088), as in effect on the date of the en-
actment of this section, and which has not 
been disqualified from participating in a 
program under title IV of such Act, and 
‘‘(ii) satisfies the requirements of 
paragraph (1) through student assistance 
of taxpayers in return preparation and fil-
ing; 
‘‘(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) a regional, State or local coalition 
(with one lead organization, which meets the 
eligibility requirements, acting as the applicant 
organization); 
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‘‘(D) a county or municipal government 
agency; 
‘‘(E) an Indian tribe, as defined in section 
4(12) of the Native American Housing Assist-
ance and Self-Determination Act of 1996 (25 
U.S.C. 4103(12)), and includes any tribally 
designated housing entity (as defined in section 
4(21) of such Act (25 U.S.C. 4103(21)), tribal 
subsidiary, subdivision, or other wholly owned 
tribal entity; 
‘‘(F) a section 501(c)(5) organization; 
‘‘(G) a State government agency if no 
other eligible organization is available to assist 
the targeted population or community; 
‘‘(H) a Cooperative Extension Service of-
fice if no other eligible organization is available 
to assist the targeted population or community; 
and 
‘‘(I) a nonprofit Community Development 
Financial Institution (CDFI) and federally and 
State-chartered credit union that qualifies for a 
tax exemption under sections 501(c)(1) and 
501(c)(14), respectively. 
‘‘(c) SPECIAL RULES AND LIMITATIONS.— 
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‘‘(1) AGGREGATE
LIMITATION.—Unless other-
wise provided by specific appropriation, the Sec-
retary shall not allocate more than $35,000,000 per 
year (exclusive of costs of administering the pro-
gram) to grants under this section. 
‘‘(2) USE
OF
GRANTS
FOR
OVERHEAD
EX-
PENSES PROHIBITED.—No grant made under this 
section may be used for overhead expenses that are 
not directly related to any program or that are in-
curred by any institution sponsoring such program. 
‘‘(3) OTHER APPLICABLE RULES.—Rules simi-
lar to the rules under paragraphs (2) through (6) of 
section 7526(c) shall apply with respect to the 
awarding of grants to qualified return preparation 
programs. 
‘‘(4) PROMOTION
OF
PROGRAMS.—The Sec-
retary is authorized to promote the benefits of and 
encourage the use of qualified VITA Plus through 
the use of mass communications, referrals, and other 
means. 
‘‘(5) SERVICES
RELATED
TO
TAX
RETURN 
PREPARATION.—A qualified return preparation pro-
gram receiving a grant under this section may use 
such grant to provide services related to financial lit-
eracy, asset development, and the establishment of 
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savings accounts in connection with tax return prep-
aration services performed through the program.’’. 
(b) LOW-INCOME TAXPAYER CLINICS.— 
(1) INCREASE IN AUTHORIZED GRANTS.—Para-
graph (1) of section 7526(c) is amended by striking 
‘‘$6,000,000’’ and inserting ‘‘$20,000,000’’. 
(2) USE OF GRANTS FOR OVERHEAD EXPENSES 
PROHIBITED.— 
(A) IN
GENERAL.—Section 7526(c) is 
amended by adding at the end the following 
new paragraph: 
‘‘(6) USE
OF
GRANTS
FOR
OVERHEAD
EX-
PENSES PROHIBITED.—No grant made under this 
section may be used for the overhead expenses that 
are not directly related to the clinic or that are of 
any institution sponsoring such clinic.’’. 
(B) CONFORMING AMENDMENTS.—Section 
7526(c)(5) is amended— 
(i) by inserting ‘‘qualified’’ before 
‘‘low-income’’, and 
(ii) by striking the last sentence. 
(3) PROMOTION OF CLINICS.—Subsection (c) of 
section 7526, as amended by paragraph (2), is 
amended by adding at the end the following new 
paragraph: 
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‘‘(7) PROMOTION OF CLINICS.—The Secretary 
is authorized to promote the benefits of and encour-
age the use of qualified low-income taxpayer clinics 
through the use of mass communications, referrals, 
and other means.’’. 
(4) IRS REFERRALS TO CLINICS.—Subsection 
(c) of section 7526, as amended by the preceding 
provisions of this subsection, is amended by adding 
at the end the following new paragraph: 
‘‘(8) IRS REFERRALS.—Notwithstanding any 
other provision of law, the Secretary may refer tax-
payers to specific qualified low-income taxpayer clin-
ics receiving funding under this section.’’. 
(5) NOTICE OF AVAILABILITY OF CLINICS IN 
NOTICE OF DEFICIENCY.—Subsection (a) of section 
6212 is amended by inserting ‘‘, as well as notice re-
garding the availability of low-income taxpayer clin-
ics and information about how to contact them’’ be-
fore the period at the end. 
(6) NOTICE OF AVAILABILITY OF CLINICS IN 
NOTICE OF HEARING UPON FILING OF NOTICE OF 
LIEN.—Subsection (a) of section 6320 is amended 
by adding at the end the following new sentence: 
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‘‘Such notice shall include a notice to the taxpayer of the 
availability of low-income taxpayer clinics and information 
about how to contact them.’’. 
(7) NOTICE OF AVAILABILITY OF CLINICS IN 
NOTICE
AND
OPPORTUNITY
OF
HEARING
BEFORE 
LEVY.—Paragraph (3) of section 6330(a) is amend-
ed by adding at the end the following flush sentence: 
‘‘Such notice shall include a notice to the taxpayer 
of the availability of low-income taxpayer clinics and 
information about how to contact them.’’. 
(c) 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. Volunteer income tax assistance plus.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 202. REGULATION OF FEDERAL INCOME TAX RETURN 
PREPARERS. 
(a) IN GENERAL.—Section 330(a)(1) of title 31, 
United States Code, is amended by inserting ‘‘(including 
tax return preparers of Federal tax returns, documents, 
and other submissions)’’ after ‘‘representatives’’. 
(b) PROMULGATION
OF REGULATIONS.—The Sec-
retary of the Treasury shall prescribe regulations under 
section 330 of title 31, United States Code, to regulate 
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any tax return preparers not otherwise regulated by the 
Secretary. 
(c) PENALTY FOR UNAUTHORIZED PREPARATION OF 
RETURNS.— 
(1) IN GENERAL.—In promulgating the regula-
tions pursuant to subsection (b), the Secretary shall 
impose a penalty of $1,000 for each Federal tax re-
turn, document, or other submission prepared by a 
tax return preparer who is not in compliance with 
the regulations promulgated under this section or 
who is suspended or disbarred from practice before 
the Department of the Treasury under such regula-
tions. Such penalty shall be in addition to any other 
penalty which may be imposed. 
(2) EXCEPTION.—No penalty may be imposed 
under paragraph (1) with respect to any failure if it 
is shown that such failure is due to reasonable 
cause. 
(d) DEFINITIONS.—For purposes of this section— 
(1) TAX RETURN PREPARER.—The term ‘‘tax 
return preparer’’ has the meaning given by section 
7701(a)(36) of the Internal Revenue Code of 1986, 
and includes any person requiring the purchase of 
services, a financial product or goods in lieu of or in 
addition to direct monetary payment. 
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(2) SECRETARY.—The terms ‘‘Secretary of the 
Treasury’’ and ‘‘Secretary’’ mean the Secretary of 
the Treasury or the delegate of the Secretary. 
(e) PUBLIC AWARENESS CAMPAIGN.—The Secretary 
shall conduct a public information and consumer edu-
cation campaign, utilizing paid advertising— 
(1) to encourage taxpayers to use for Federal 
tax matters only professionals who establish their 
competency under the regulations promulgated 
under section 330 of title 31, United States Code, 
and 
(2) to inform the public of the requirements 
that any compensated preparer of tax returns, docu-
ments, and submissions subject to the requirements 
under the regulations promulgated under such sec-
tion must sign the return, document, or submission 
prepared for a fee and display notice of such pre-
parer’s compliance under such regulations. 
SEC. 203. REFUND DELIVERY PRODUCTS. 
(a) IN GENERAL.—Chapter 77, as amended by sec-
tion 101, is amended by adding at the end the following 
new section: 
‘‘SEC. 7530. REFUND DELIVERY PRODUCTS. 
‘‘(a) REGISTRATION.— 
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‘‘(1) IN GENERAL.—The Secretary shall by reg-
ulation require each refund delivery product facilita-
tor to register annually with the Secretary. 
‘‘(2) REGISTRATION
REQUIREMENTS.—A reg-
istration shall under paragraph (1) shall include— 
‘‘(A) the name, address, and TIN of the 
refund delivery product facilitator, and 
‘‘(B) the fee schedule of the facilitator for 
the year. 
‘‘(3) DISPLAY
OF
REGISTRATION
CERTIFI-
CATE.—The certificate of registration under para-
graph (1) shall be displayed in the facility of the re-
fund delivery product facilitator in the manner re-
quired by the Secretary. 
‘‘(b) DISCLOSURE REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Each refund delivery prod-
uct facilitator registered with the Secretary shall be 
subject to the requirements of paragraphs (2) 
through (5). 
‘‘(2) TAXPAYER
EDUCATION.—The require-
ments of this paragraph are that the refund delivery 
product facilitator makes available to consumers an 
informational pamphlet that— 
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‘‘(A) sets forth options available for receiv-
ing tax refunds, presented from least expensive 
to most expensive, and 
‘‘(B) discusses short-term credit alter-
natives to utilizing refund delivery products. 
‘‘(3) NATURE OF THE TRANSACTION.—The re-
quirements of this paragraph are that, at the time 
of application for the refund delivery product, the re-
fund delivery product facilitator specifically state in 
writing— 
‘‘(A) in the case of a refund delivery prod-
uct which is a refund loan— 
‘‘(i) that the applicant is applying for 
a loan based on the applicant’s anticipated 
income tax refund, 
‘‘(ii) the expected time within which 
the loan will be paid to the applicant if 
such loan is approved, and 
‘‘(iii) that there is no guarantee that 
a refund will be paid in full or received 
within a specified time period, and that the 
applicant is responsible for the repayment 
of the loan even if the refund is not paid 
in full or has been delayed, 
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‘‘(B) the time within which income tax re-
funds are typically paid based upon the dif-
ferent filing options available to the applicant, 
and 
‘‘(C) that the applicant may file an elec-
tronic return without applying for a refund de-
livery product and the fee for filing such an 
electronic return. 
‘‘(4) FEES, 
INTEREST
AND
AMOUNTS
RE-
CEIVED.—The requirements of this paragraph are 
that, at the time of application for the refund deliv-
ery product, the refund delivery product facilitator 
discloses to the applicant all amounts to be received 
in connection with a refund delivery product. Such 
disclosure shall include— 
‘‘(A) a copy of the fee schedule of the re-
fund delivery product facilitator, 
‘‘(B) in the case of a refund delivery prod-
uct which is a refund loan— 
‘‘(i) the typical fees and interest rates 
(using annual percentage rates as defined 
by section 107 of the Truth in Lending 
Act (15 U.S.C. 1606)) for several typical 
amounts of such loans and of other types 
of consumer credit, and 
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‘‘(ii) that the loan may have substan-
tial fees and interest charges that may ex-
ceed those of other sources of credit, and 
the applicant should carefully consider— 
‘‘(I) whether such a loan is ap-
propriate for the applicant, and 
‘‘(II) other sources of credit, 
‘‘(C) typical fees and interest charges if a 
refund is not paid or delayed, 
‘‘(D) the amount of a fee (if any) that will 
be charged if the refund delivery product is not 
approved, and 
‘‘(E) administrative costs and any other 
amounts. 
‘‘(5) OTHER INFORMATION.—The requirements 
of this paragraph are that the refund delivery prod-
uct facilitator discloses any other information re-
quired to be disclosed by the Secretary. 
‘‘(6) DISCLOSURE REQUIREMENT.—A disclosure 
under any of the preceding paragraphs of this sub-
section shall not be treated as meeting the require-
ments of the respective paragraph unless the disclo-
sure is written in a manner calculated to be under-
stood by the average consumer of refund delivery 
products and provides sufficient information (as de-
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termined in accordance with regulations prescribed 
by the Secretary) to allow the consumer to under-
stand such options and credit alternatives. 
‘‘(c) PENALTY.— 
‘‘(1) IN GENERAL.—There is hereby imposed a 
penalty on any refund delivery product facilitator 
who fails to register with the Secretary pursuant to 
subsection (a) or fails to meet a disclosure require-
ment under subsection (b). 
‘‘(2) AMOUNT OF PENALTY.—The amount of 
the penalty imposed by paragraph (1) shall be the 
greater of— 
‘‘(A) $1,000, and 
‘‘(B) three times the amount of the refund 
loan, if applicable, and refund delivery product 
facilitator-determined fees charged with respect 
to each refund delivery product provided by the 
refund delivery product facilitator during the 
period in which the failure described in para-
graph (1) occurred. 
‘‘(3) WAIVER BY SECRETARY.—In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary may waive part or all 
of the penalty imposed by paragraph (1) to the ex-
tent that the payment of such penalty would be ex-
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cessive or otherwise inequitable relative to the failure 
involved. 
‘‘(d) CONDUCT.— 
‘‘(1) RULES OF CONDUCT.—The Secretary shall 
prescribe rules of conduct for refund delivery prod-
uct facilitators which are similar to the rules appli-
cable to federally authorized tax practitioners (as de-
fined by section 7525(a)(3)(A)) under part 10 of 
title 31, Code of Federal Regulations. 
‘‘(2) LIMITATION ON APPROVAL AS REFUND DE-
LIVERY PRODUCT FACILITATOR.—For such period as 
the Secretary (in his discretion) determines reason-
able, the Secretary may not register any person as 
a refund delivery product facilitator under sub-
section (a) who the Secretary determines has en-
gaged in any conduct that would warrant discipli-
nary action under the rules of conduct prescribed 
under paragraph (1) or under part 10 of title 31, 
Code of Federal Regulations. 
‘‘(e) OTHER LIMITATIONS RELATING TO REFUND 
DELIVERY PRODUCTS.—In any case in which a taxpayer 
has consented to the release of the taxpayer’s refund indi-
cator to a refund delivery product facilitator, the Secretary 
may only provide information related to the refund indi-
cator to a refund delivery product facilitator who is reg-
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istered under subsection (a). For purposes of the pre-
ceding sentence, the term ‘refund indicator’ means a noti-
fication provided through a tax return’s acknowledgment 
file regarding whether a refund will be paid. The Secretary 
may issue a refund indicator only after the Secretary de-
termines that the taxpayer’s refund would not be pre-
vented by any provision of this title, including any provi-
sion relating to refund offset to repay debts for delinquent 
Federal or State taxes, student loans, child support, or 
other Federal agency debt, whether the taxpayer is claim-
ing ineligible children for purposes of certain tax benefits, 
and whether the refund will be held pending a fraud inves-
tigation. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
REFUND
DELIVERY
PRODUCT 
FACILITATOR.— 
‘‘(A) IN GENERAL.—The term ‘refund de-
livery product facilitator’ includes any electronic 
filing service provider who— 
‘‘(i) solicits for, processes, receives, or 
accepts delivery of an application for a re-
fund delivery product, or 
‘‘(ii) facilitates the making of a refund 
delivery product in any other manner. 
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‘‘(B) ELECTRONIC FILING SERVICE PRO-
VIDER.—The term ‘electronic filing service pro-
vider’ includes any person who is an electronic 
return originator, intermediate service provider, 
or transmitter. 
‘‘(C) ELECTRONIC RETURN ORIGINATOR.— 
The term ‘electronic return originator’ includes 
a person who originates the electronic submis-
sion of income tax returns for another person. 
‘‘(D) 
INTERMEDIATE
SERVICE
PRO-
VIDER.—The term ‘intermediate service pro-
vider’ includes a person who assists with proc-
essing return information between an electronic 
return originator (or the taxpayer in the case of 
online filing) and a transmitter. 
‘‘(E) TRANSMITTER.—The term ‘trans-
mitter’ includes a person who sends the elec-
tronic return data directly to the Internal Rev-
enue Service. 
‘‘(2) REFUND DELIVERY PRODUCT.—The term 
‘refund delivery product’ includes a refund loan and 
any other product sold to a taxpayer for a fee or any 
other thing of value for the purpose of receiving the 
taxpayer’s anticipated Federal tax refund. 
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‘‘(3) REFUND LOAN.—The term ‘refund loan’ 
includes any loan of money or any other thing of 
value to a taxpayer in connection with the taxpayer’s 
anticipated receipt of a Federal tax refund. Such 
term includes a loan secured by the tax refund or an 
arrangement to repay a loan from the tax refund. 
‘‘(g) REGULATIONS.— 
‘‘(1) IN
GENERAL.—The Secretary may pre-
scribe such regulations as necessary to carry out this 
subchapter. 
‘‘(2) BURDEN OF REGISTRATION.—In promul-
gating such regulations, the Secretary shall minimize 
the burden and cost on the registrant.’’. 
(b) PUBLIC AWARENESS CAMPAIGN.—The Secretary 
of the Treasury shall conduct a public information and 
consumer education campaign, utilizing paid advertising, 
to educate the public on making sound financial decisions 
with respect to refund delivery products (as defined by sec-
tion 7530 of the Internal Revenue Code of 1986), includ-
ing— 
(1) the need to compare the rates and fees of 
refund loans with the rates and fees of conventional 
loans, 
(2) the need to compare the amount of money 
received under a refund delivery product after taking 
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into consideration such costs and fees with the total 
amount of the refund, and 
(3) where and how taxpayers may lodge com-
plaints concerning refund delivery product facilita-
tors. 
(c) CLERICAL AMENDMENT.—The table of sections 
for chapter 77 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 7530. Refund delivery products.’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendments made by 
this section shall take effect on the date of the en-
actment of the Act. 
(2) REGULATIONS.—The regulations required 
by section 7530(g) of the Internal Revenue Code of 
1986 shall be prescribed not later than 2 years after 
the date of the enactment of this Act. 
(3) FULL IMPLEMENTATION.—The Secretary of 
the Treasury, taking into consideration the com-
plexity and magnitude of the requirements set forth 
under this Act, may delay full implementation of the 
regulations promulgated under such section not later 
than 5 years after the enactment of this Act. 
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SEC. 204. PREPARER PENALTIES WITH RESPECT TO PREPA-
RATION OF RETURNS AND OTHER SUBMIS-
SIONS. 
(a) INCLUSION OF OTHER SUBMISSIONS IN PENALTY 
PROVISIONS.— 
(1) UNDERSTATEMENT OF TAXPAYER’S LIABIL-
ITY.— 
(A) IN GENERAL.—Section 6694 is amend-
ed by striking ‘‘return or claim of refund’’ each 
place it appears and inserting ‘‘return, claim of 
refund, or other submission’’. 
(B) CONFORMING AMENDMENTS.—Section 
6694, as amended by paragraph (1), is amend-
ed by striking ‘‘return or claim’’ each place it 
appears and inserting ‘‘return, claim, or other 
submission’’. 
(2) INCREASE IN PENALTY IN CASE OF GROSS 
MISCONDUCT.—Subsection (b) of section 6694 is 
amended by adding at the end the following new 
paragraph: 
‘‘(4) INCREASE IN PENALTY IN CASE OF GROSS 
MISCONDUCT.—In the case of an understatement to 
which this section applies that is attributable to the 
tax return preparer’s making a false or fraudulent 
return or claim for refund without the taxpayer’s 
knowledge, subsection (a) shall be applied by sub-
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stituting ‘100 percent of the amount of the under-
statement’ for ‘50 percent of the amount derived (or 
to be derived) by the tax return preparer with re-
spect to the return or claim’. This penalty shall be 
in addition to any other penalties provided by law.’’. 
(3) OTHER ASSESSABLE PENALTIES.— 
(A) IN GENERAL.—Section 6695 is amend-
ed by striking ‘‘return or claim of refund’’ each 
place it appears and inserting ‘‘return, claim of 
refund, or other submission’’. 
(B) CONFORMING AMENDMENTS.—Section 
6695, as amended by paragraph (1), is amend-
ed by striking ‘‘return or claim’’ each place it 
appears and inserting ‘‘return, claim, or other 
submission’’. 
(b) INCREASE IN CERTAIN OTHER ASSESSABLE PEN-
ALTY AMOUNTS.— 
(1) IN GENERAL.—Subsections (a), (b), and (c) 
of section 6695 are each amended by striking ‘‘$50’’ 
and inserting ‘‘$1,000’’. 
(2) REMOVAL OF ANNUAL LIMITATION.—Sub-
sections (a), (b), and (c) of section 6695 are each 
amended by striking the last sentence thereof. 
(c) REVIEW BY THE TREASURY INSPECTOR GEN-
ERAL FOR TAX ADMINISTRATION.—Subparagraph (A) of 
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section 7803(d)(2) is amended by striking ‘‘and’’ at the 
end of clause (iii), by striking the period at the end of 
clause (iv) and inserting ‘‘, and’’, and by adding at the 
end the following new clause: 
‘‘(v) a summary of the penalties as-
sessed and collected during the reporting 
period under sections 6694 and 6695 and 
under the regulations promulgated under 
section 330 of title 31, United States 
Code, and a review of the procedures by 
which violations are identified and pen-
alties are assessed under those sections,’’. 
(d) ADDITIONAL CERTIFICATION
ON DOCUMENTS 
OTHER THAN RETURNS.— 
(1) IDENTIFYING NUMBER REQUIRED FOR ALL 
SUBMISSIONS
TO
THE
IRS
BY
TAX
RETURN
PRE-
PARERS.—The first sentence of paragraph (4) of 
section 6109(a) is amended by striking ‘‘return or 
claim for refund’’ and inserting ‘‘return, claim for 
refund, or other document’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to documents filed 
after the date of the enactment of this Act. 
(e) COORDINATION WITH SECTION 6060(a).—The 
Secretary of the Treasury shall coordinate the require-
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ments under the regulations promulgated under section 
330 of title 31, United States Code, with the return re-
quirements of section 6060 of the Internal Revenue Code 
of 1986. 
(f) EFFECTIVE DATE.—The regulations required by 
this section shall be prescribed not later than one year 
after the date of the enactment of this Act. 
SEC. 205. CLARIFICATION OF ENROLLED AGENT CREDEN-
TIALS. 
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the 
following new section: 
‘‘SEC. 7529. 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 subsection (a) 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. 7529. Enrolled agents.’’. 
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(c) PRIOR REGULATIONS.—The authorization to pre-
scribe regulations under the amendments made by this 
section may not be construed to have any effect on part 
10 of title 31, Code of Federal Regulations, or any other 
related Federal rule or regulation issued before the date 
of the enactment of this Act. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
TITLE III—IMPROVING 
TAXPAYER SERVICES 
SEC. 301. MODIFICATIONS TO LIEN NOTICE FILING PROCE-
DURES. 
(a) IN GENERAL.—Section 6323 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(k) REQUIRED PROCEDURES BEFORE FILING NO-
TICE OF LIEN.— 
‘‘(1) SECRETARIAL DETERMINATION.— 
‘‘(A) IN
GENERAL.—The Secretary may 
not file a notice of lien with respect to any tax-
payer unless— 
‘‘(i) the lien attaches to distrainable 
property, and 
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‘‘(ii) weighing all facts and cir-
cumstances pertaining to the collection of 
a taxpayer’s delinquent tax assessment, the 
Secretary determines that— 
‘‘(I) the benefit to the Federal 
Government of the filing outweighs 
the harm to the taxpayer, and 
‘‘(II) the filing will not jeopardize 
the taxpayer’s prospective ability— 
‘‘(aa) to comply with the in-
ternal revenue laws, and 
‘‘(bb) if the taxpayer is an 
otherwise viable business tax-
payer, to continue to secure fund-
ing to maintain business oper-
ations. 
‘‘(B) FACTORS TO CONSIDER.—In making 
the determination under subparagraph (A)(ii), 
the Secretary shall consider— 
‘‘(i) the amount due, 
‘‘(ii) the lien filing fee, 
‘‘(iii) the value of the taxpayer’s eq-
uity in the property or rights to property, 
‘‘(iv) the taxpayer’s tax compliance 
history, 
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‘‘(v) extenuating circumstances, if 
any, that explain the delinquency, and 
‘‘(vi) the effect of the filing on the 
taxpayer’s ability to obtain financing, gen-
erate future income, and pay current and 
future tax liabilities. 
‘‘(2) TAXPAYER APPEAL PRIOR TO FILING.— 
‘‘(A) IN
GENERAL.—The Secretary may 
not file a notice of lien with respect to any tax-
payer unless— 
‘‘(i) the Secretary notifies the tax-
payer that the Secretary has determined to 
file such a notice with respect to the tax-
payer, and 
‘‘(ii) the taxpayer is afforded an op-
portunity to appeal such determination to 
the Internal Revenue Service Office of Ap-
peals. 
The Secretary shall make reasonable efforts to 
provide the notice under subparagraph (A) by 
telephone or direct personal contact. 
‘‘(B) JEOPARDY
NOTICE
OF
LIEN.—The 
Secretary may file a notice of lien without re-
gard to subparagraph (A)(ii) if the Secretary 
finds that the collection of the tax would be in 
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jeopardy if the notice of lien is not filed before 
the conclusion of such an appeal. 
‘‘(3) SUPERVISORY APPROVAL REQUIRED FOR 
LIENS IN CERTAIN CASES.— 
‘‘(A) IN GENERAL.—In any case to which 
this paragraph applies, a notice of lien may not 
be filed unless the immediate supervisor (or 
such higher level official as the Secretary may 
designate) of the individual making the initial 
determination under paragraph (1) has individ-
ually reviewed and approved such determina-
tion. 
‘‘(B) CASES
TO
WHICH
PARAGRAPH
AP-
PLIES.—This paragraph shall apply in any case 
in which— 
‘‘(i) the collection of the liability 
would create an economic hardship within 
the meaning of section 6343(a)(1)(D), 
‘‘(ii) the taxpayer has no equity in as-
sets, or 
‘‘(iii) there has been no personal con-
tact with the taxpayer to discuss collection 
alternatives, including an offer in com-
promise and partial payment installment 
agreement.’’. 
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(b) JEOPARDY NOTICE OF LIEN.— 
(1) IN GENERAL.—Subparagraph (A) of section 
7429(a)(1) of such Code is amended by inserting 
after ‘‘or 6862,’’ the following: ‘‘no notice of lien 
may be filed pursuant to section 6323(k)(2)(B),’’. 
(2) REDETERMINATION BY SECRETARY.—Para-
graph (3) of section 7429(a) of such Code is amend-
ed by striking ‘‘or’’ at the end of subparagraph (A), 
by redesignating subparagraph (B) as subparagraph 
(C), and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) whether or not the filing of the notice 
of lien pursuant to section 6323(k)(2)(B) is 
reasonable under the circumstances, or’’. 
(3) REDETERMINATION BY TAX COURT.—Para-
graph (3) of section 7429(b) of such Code is amend-
ed by striking ‘‘or’’ at the end of subparagraph (A), 
by redesignating subparagraph (B) as subparagraph 
(C), and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) whether or not the filing of the notice 
of lien pursuant to section 6323(k)(2)(B) is 
reasonable under the circumstances, or’’. 
(4) CONFORMING AMENDMENTS.— 
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(A) The heading for section 7429 of such 
Code is amended by inserting ‘‘, NOTICE OF 
LIEN FILING,’’ after ‘‘LEVY’’. 
(B) Subparagraphs (A) and (B) of section 
7429(a)(1) of such Code are each amended by 
striking ‘‘assessment or levy’’ each place it ap-
pears and inserting ‘‘assessment, notice of lien 
filing, or levy’’. 
(C) 
Subparagraph 
(B) 
of 
section 
7429(b)(2) of such Code is amended by striking 
‘‘assessment or levy’’ and inserting ‘‘assess-
ment, notice of lien filing, or levy’’. 
(D) Paragraph (4) of section 7429(b) of 
such Code is amended— 
(i) by inserting ‘‘that the filing of 
such notice of lien is unreasonable,’’ after 
‘‘that the making of such levy is unreason-
able,’’, and 
(ii) by inserting ‘‘to withdraw such 
notice of lien,’’ after ‘‘to release such 
levy,’’. 
(E) Paragraph (1) of section 7429(g) of 
such Code is amended— 
(i) by inserting ‘‘, the filing of a no-
tice 
of 
lien 
pursuant 
to 
section 
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6323(k)(2)(B),’’ after ‘‘the making of a 
levy described in subsection (a)(1)’’, and 
(ii) by inserting ‘‘NOTICE
OF
LIEN 
FILING’’ after ‘‘REASONABLENESS OF’’ in 
the heading thereof. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 302. MODIFICATION OF REQUIREMENTS RELATING TO 
TAX LIEN INFORMATION CONTAINED IN CON-
SUMER CREDIT REPORTS. 
(a) IN GENERAL.—Paragraph (3) of section 605(a) 
of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(3)) 
is amended to read as follows: 
‘‘(3) TAX LIENS.—The following tax liens: 
‘‘(A) Any tax lien released pursuant to sec-
tion 6325(a) of the Internal Revenue Code of 
1986 not more than 2 years after the date that 
the notice of such lien was filed. 
‘‘(B) Any tax lien released pursuant to sec-
tion 6325(a) of such Code— 
‘‘(i) more than 2 years after the date 
that the notice of such lien was filed, and 
‘‘(ii) more than 2 years before the re-
port. 
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‘‘(C) Any tax lien if— 
‘‘(i) the notice of such lien was not 
refiled during the required refiling period 
(as defined in section 6323(g)(3) of such 
Code), and 
‘‘(ii) such period ends more than 6 
years before the report. 
‘‘(D) Any tax lien the notice of which is 
withdrawn pursuant to section 6323(j)(1) of 
such Code. 
‘‘(E) Any tax lien released pursuant to sec-
tion 6326(b) of such Code if the notice of such 
lien was erroneously filed.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 303. BAN ON AUDIT INSURANCE. 
Section 330 of title 31, United States Code, as 
amended by sections 202 and 205, is amended by adding 
at the end the following new subsection: 
‘‘(g) BAN ON AUDIT INSURANCE.—No person admit-
ted to practice before the Department of the Treasury may 
directly or indirectly offer or provide insurance or other 
form of indemnification or reimbursement to cover a tax-
payer’s assessment of Federal tax, penalties, or interest.’’. 
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