(2) Subparagraph (A) of section 6230(c)(5) is
amended by striking ‘‘section 6013(e)’’ and inserting
‘‘section 6015’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart B of part II of subchapter A of chapter 61
is amended by inserting after the item relating to section
6014 the following new item:
‘‘Sec. 6015. Innocent spouse relief; petition to Tax Court.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to understatements for taxable
years beginning after the date of the enactment of this
Act.
SEC. 322. SUSPENSION OF STATUTE OF LIMITATIONS ON
FILING REFUND CLAIMS DURING PERIODS
OF DISABILITY.
(a) IN GENERAL.—Section 6511 (relating to limita-
tions on credit or refund) is amended by redesignating
subsection (h) as subsection (i) and by inserting after sub-
section (g) the following new subsection:
‘‘(h) RUNNING OF PERIODS OF LIMITATION SUS-
PENDED WHILE TAXPAYER IS UNABLE TO MANAGE FI-
NANCIAL AFFAIRS DUE TO DISABILITY.—
‘‘(1) IN GENERAL.—In the case of an individ-
ual, the running of the periods specified in sub-
sections (a), (b), and (c) shall be suspended during
any period of such individual’s life that such individ-
ual is financially disabled.
‘‘(2) FINANCIALLY DISABLED.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), an individual is financially disabled
if such individual is unable to manage his fi-
nancial affairs by reason of his medically deter-
minable physical or mental impairment which
can be expected to result in death or which has
lasted or can be expected to last for a continu-
ous period of not less than 12 months. An indi-
vidual shall not be considered to have such an
impairment unless proof of the existence thereof
is furnished in such form and manner as the
Secretary may require.
‘‘(B) EXCEPTION WHERE INDIVIDUAL HAS
GUARDIAN, ETC.—An individual shall not be
treated as financially disabled during any pe-
riod that such individual’s spouse or any other
person is authorized to act on behalf of such in-
dividual in financial matters.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to periods of disability before,
on, or after the date of the enactment of this Act but shall
not apply to any claim for credit or refund which (without
regard to such amendment) is barred by the operation of
any law or rule of law (including res judicata) as of Janu-
ary 1, 1998.
Subtitle D—Provisions Relating to
Interest
SEC. 331. ELIMINATION OF INTEREST RATE DIFFERENTIAL
ON OVERLAPPING PERIODS OF INTEREST ON
INCOME TAX OVERPAYMENTS AND UNDER-
PAYMENTS.
(a) IN GENERAL.—Section 6621 (relating to deter-
mination of rate of interest) is amended by adding at the
end the following new subsection:
‘‘(d) ELIMINATION OF INTEREST ON OVERLAPPING
PERIODS OF INCOME TAX OVERPAYMENTS AND UNDER-
PAYMENTS.—To the extent that, for any period, interest
is payable under subchapter A and allowable under sub-
chapter B on equivalent underpayments and overpayments
by the same taxpayer of tax imposed by chapters 1 and
2, the net rate of interest under this section on such
amounts shall be zero for such period.’’.
(b) CONFORMING AMENDMENT.—Subsection (f) of
section 6601 (relating to satisfaction by credits) is amend-
ed by adding at the end the following new sentence: ‘‘The
preceding sentence shall not apply to the extent that sec-
tion 6621(d) applies.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to interest for calendar quarters
beginning after the date of the enactment of this Act.
SEC. 332. INCREASE IN OVERPAYMENT RATE PAYABLE TO
TAXPAYERS OTHER THAN CORPORATIONS.
(a) IN GENERAL.—Subparagraph (B) of section
6621(a)(1) (defining overpayment rate) is amended to
read as follows:
‘‘(B) 3 percentage points (2 percentage
points in the case of a corporation).’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to interest for calendar quarters
beginning after the date of the enactment of this Act.
Subtitle E—Protections for Tax-
payers Subject to Audit or Col-
lection Activities
SEC. 341. PRIVILEGE OF CONFIDENTIALITY EXTENDED TO
TAXPAYER’S DEALINGS WITH NON-ATTOR-
NEYS AUTHORIZED TO PRACTICE BEFORE IN-
TERNAL REVENUE SERVICE.
Section 7602 (relating to examination of books and
witnesses) is amended by adding at the end the following
new subsection:
‘‘(d) PRIVILEGE OF CONFIDENTIALITY EXTENDED
TO TAXPAYER’S DEALINGS WITH NON-ATTORNEYS AU-
THORIZED TO PRACTICE BEFORE INTERNAL REVENUE
SERVICE.—
‘‘(1) IN
GENERAL.—In any noncriminal pro-
ceeding before the Internal Revenue Service, the tax-
payer shall be entitled to the same common law pro-
tections of confidentiality with respect to tax advice
furnished by any qualified individual (in a manner
consistent with State law for such individual’s pro-
fession) as the taxpayer would have if such individ-
ual were an attorney.
‘‘(2) QUALIFIED INDIVIDUAL.—For purposes of
paragraph (1), the term ‘qualified individual’ means
any individual (other than an attorney) who is au-
thorized to practice before the Internal Revenue
Service.’’.
SEC. 342. EXPANSION OF AUTHORITY TO ISSUE TAXPAYER
ASSISTANCE ORDERS.
Section 7811(a) (relating to taxpayer assistance or-
ders) is amended—
(1) by striking ‘‘Upon application’’ and insert-
ing the following:
‘‘(1) IN GENERAL.—Upon application’’,
(2) by moving the text 2 ems to the right, and
(3) by adding at the end the following new
paragraphs:
‘‘(2) ISSUANCE OF TAXPAYER ASSISTANCE OR-
DERS.—For purposes of determining whether to
issue a taxpayer assistance order, the Taxpayer Ad-
vocate shall consider the following factors, among
others:
‘‘(A) Whether there is an immediate threat
of adverse action.
‘‘(B) Whether there has been an unreason-
able delay in resolving taxpayer account prob-
lems.
‘‘(C) Whether the taxpayer will have to pay
significant costs (including fees for professional
representation) if relief is not granted.
‘‘(D) Whether the taxpayer will suffer ir-
reparable injury, or a long-term adverse impact,
if relief is not granted.
‘‘(3) STANDARD WHERE ADMINISTRATIVE GUID-
ANCE NOT FOLLOWED.—In cases where any Internal
Revenue Service employee is not following applicable
published administrative guidance (including the In-
ternal Revenue Manual), the Taxpayer Advocate
shall construe the factors taken into account in de-
termining whether to issue a taxpayer assistance
order in the manner most favorable to the tax-
payer.’’.
SEC. 343. LIMITATION ON FINANCIAL STATUS AUDIT TECH-
NIQUES.
Section 7602 is amended by adding at the end the
following new subsection:
‘‘(e) LIMITATION ON EXAMINATION ON UNREPORTED
INCOME.—The Secretary shall not use financial status or
economic reality examination techniques to determine the
existence of unreported income of any taxpayer unless the
Secretary has a reasonable indication that there is a likeli-
hood of such unreported income.’’.
SEC. 344. LIMITATION ON AUTHORITY TO REQUIRE PRO-
DUCTION OF COMPUTER SOURCE CODE.
(a) IN GENERAL.—Section 7602 is amended by add-
ing at the end the following new subsection:
‘‘(f) LIMITATION ON AUTHORITY TO REQUIRE PRO-
DUCTION OF COMPUTER SOURCE CODE.—
‘‘(1) IN GENERAL.—No summons may be is-
sued under this title, and the Secretary may not
begin any action under section 7604 to enforce any
summons, to produce or examine any tax-related
computer source code.
‘‘(2) EXCEPTION
WHERE
INFORMATION
NOT
OTHERWISE
AVAILABLE
TO
VERIFY
CORRECTNESS
OF
ITEM
ON
RETURN.—Paragraph (1) shall not
apply to any portion of a tax-related computer
source code if—
‘‘(A) the Secretary is unable to otherwise
reasonably ascertain the correctness of any item
on a return from—
‘‘(i) the taxpayer’s books, papers,
records, or other data, or
‘‘(ii) the computer software program
and the associated data which, when exe-
cuted, produces the output to prepare the
return for the period involved, and
‘‘(B) the Secretary identifies with reason-
able specificity such portion as to be used to
verify the correctness of such item.
The Secretary shall be treated as meeting the re-
quirements of subparagraphs (A) and (B) after the
90th day after the Secretary makes a formal request
to the taxpayer and the owner or developer of the
computer software program for the material de-
scribed in subparagraph (A)(ii) if such material is
not provided before the close of such 90th day.
‘‘(3) OTHER EXCEPTIONS.—Paragraph (1) shall
not apply to—
‘‘(A) any inquiry into any offense con-
nected with the administration or enforcement
of the internal revenue laws, and
‘‘(B) any tax-related computer source code
developed by (or primarily for the benefit of)
the taxpayer or a related person (within the
meaning of section 267 or 707(b)) for internal
use by the taxpayer or such person and not for
commercial distribution.
‘‘(4) 
TAX-RELATED
COMPUTER
SOURCE
CODE.—For purposes of this subsection, the term
‘tax-related computer source code’ means—
‘‘(A) the computer source code for any
computer software program for accounting, tax
return preparation or compliance, or tax plan-
ning, or
‘‘(B) design and development materials re-
lated to such a software program (including
program notes and memoranda).
‘‘(5) RIGHT TO CONTEST SUMMONS.—The de-
termination of whether the requirements of subpara-
graphs (A) and (B) of paragraph (2) are met or
whether any exception under paragraph (3) applies
may be contested in any proceeding under section
7604.
‘‘(6) PROTECTION
OF
TRADE
SECRETS
AND
OTHER CONFIDENTIAL INFORMATION.—In any court
proceeding to enforce a summons for any portion of
a tax-related computer source code, the court may
issue any order necessary to prevent the disclosure
of trade secrets or other confidential information
with respect to such source code, including providing
that any information be placed under seal to be
opened only as directed by the court.’’.
(b) APPLICATION
OF SPECIAL PROCEDURES
FOR
THIRD-PARTY SUMMONSES.—Paragraph (3) of section
7609(a) (defining third-party recordkeeper) is amended by
striking ‘‘and’’ at the end of subparagraph (H), by strik-
ing a period at the end of subparagraph (I) and inserting
‘‘, and’’, and by adding at the end the following:
‘‘(J) any owner or developer of a tax-relat-
ed computer source code (as defined in section
7602(f)(4)).
Subparagraph (J) shall apply only with respect to a
summons requiring the production of the source
code referred to in subparagraph (J) or the program
and data described in section 7602(f)(2)(A)(ii) to
which such source code relates.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to summonses issued more than
90 days after the date of the enactment of this Act.
SEC. 345. PROCEDURES RELATING TO EXTENSIONS OF
STATUTE OF LIMITATIONS BY AGREEMENT.
(a) IN GENERAL.—Paragraph (4) of section 6501(c)
(relating to the period for limitations on assessment and
collection) is amended—
(1) by striking ‘‘Where’’ and inserting the fol-
lowing:
‘‘(A) IN GENERAL.—Where’’,
(2) by moving the text 2 ems to the right, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) NOTICE TO TAXPAYER OF RIGHT TO
REFUSE OR LIMIT EXTENSION.—The Secretary
shall notify the taxpayer of the taxpayer’s right
to refuse to extend the period of limitations, or
to limit such extension to particular issues, on
each occasion when the taxpayer is requested to
provide such consent.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to requests to extend the period
of limitations made after the date of the enactment of this
Act.
SEC. 346. OFFERS-IN-COMPROMISE.
(a) ALLOWANCES FOR BASIC LIVING EXPENSES.—
Section 7122 (relating to offers-in-compromise) is amend-
ed by adding at the end the following new subsection:
‘‘(c) ALLOWANCES FOR BASIC LIVING EXPENSES.—
The Secretary shall develop and publish schedules of na-
tional and local allowances designed to provide that tax-
payers entering into a compromise have an adequate
means to provide for basic living expenses.’’.
(b) PREPARATION OF STATEMENT RELATING TO OF-
FERS-IN-COMPROMISE.—The Secretary of the Treasury
shall prepare a statement which sets forth in simple, non-
technical terms the rights of a taxpayer and the obliga-
tions of the Internal Revenue Service relating to offers-
in-compromise. Such statement shall—
(1) advise taxpayers who have entered into a
compromise agreement of the advantages of prompt-
ly notifying the Internal Revenue Service of any
change of address or marital status, and
(2) provide notice to taxpayers that in the case
of a compromise agreement terminated due to the
actions of 1 spouse or former spouse, the Internal
Revenue Service will, upon application, reinstate
such agreement with the spouse or former spouse
who remains in compliance with such agreement.
SEC. 347. NOTICE OF DEFICIENCY TO SPECIFY DEADLINES
FOR FILING TAX COURT PETITION.
(a) IN GENERAL.—The Secretary of the Treasury or
the Secretary’s delegate shall include on each notice of de-
ficiency under section 6212 of the Internal Revenue Code
of 1986 the date determined by such Secretary (or dele-
gate) as the last day on which the taxpayer may file a
petition with the Tax Court.
(b) LATER FILING DEADLINES SPECIFIED ON NO-
TICE OF DEFICIENCY TO BE BINDING.—Subsection (a)
of section 6213 (relating to restrictions applicable to defi-
ciencies; petition to Tax Court) is amended by adding at
the end the following new sentence: ‘‘Any petition filed
with the Tax Court on or before the last date specified
for filing such petition by the Secretary in the notice of
deficiency shall be treated as timely filed.’’.
(c) EFFECTIVE
DATE.—Subsection (a) and the
amendment made by subsection (b) shall apply to notices
mailed after December 31, 1998.
SEC. 348. REFUND OR CREDIT OF OVERPAYMENTS BEFORE
FINAL DETERMINATION.
(a) TAX COURT PROCEEDINGS.—Subsection (a) of
section 6213 is amended—
(1) by striking ‘‘, including the Tax Court.’’
and inserting ‘‘, including the Tax Court, and a re-
fund may be ordered by such court of any amount
collected within the period during which the Sec-
retary is prohibited from collecting by levy or
through a proceeding in court under the provisions
of this subsection.’’, and
(2) by striking ‘‘to enjoin any action or pro-
ceeding’’ and inserting ‘‘to enjoin any action or pro-
ceeding or order any refund’’.
(b) OTHER PROCEEDINGS.—Subsection (a) of section
6512 is amended by striking the period at the end of para-
graph (4) and inserting ‘‘, and’’, and by inserting after
paragraph (4) the following new paragraphs:
‘‘(5) As to any amount collected within the pe-
riod during which the Secretary is prohibited from
making the assessment or from collecting by levy or
through a proceeding in court under the provisions
of section 6213(a), and
‘‘(6) As to overpayments the Secretary is au-
thorized to refund or credit pending appeal as pro-
vided in subsection (b).’’.
(c) REFUND OR CREDIT PENDING APPEAL.—Para-
graph (1) of section 6512(b) is amended by adding at the
end the following new sentence: ‘‘If a notice of appeal in
respect of the decision of the Tax Court is filed under sec-
tion 7483, the Secretary is authorized to refund or credit
the overpayment determined by the Tax Court to the ex-
tent the overpayment is not contested on appeal.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 349. THREAT OF AUDIT PROHIBITED TO COERCE TIP
REPORTING 
ALTERNATIVE 
COMMITMENT
AGREEMENTS.
The Secretary of the Treasury or the Secretary’s del-
egate shall instruct employees of the Internal Revenue
Service that they may not threaten to audit any taxpayer
in an attempt to coerce the taxpayer into entering into
a Tip Reporting Alternative Commitment Agreement.
Subtitle F—Disclosures to
Taxpayers
SEC. 351. EXPLANATION OF JOINT AND SEVERAL LIABIL-
ITY.
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, establish
procedures to clearly alert married taxpayers of their joint
and several liabilities on all appropriate publications and
instructions.
SEC. 352. EXPLANATION OF TAXPAYERS’ RIGHTS IN INTER-
VIEWS WITH THE INTERNAL REVENUE SERV-
ICE.
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
the statement required by section 6227 of the Omnibus
Taxpayer Bill of Rights (Internal Revenue Service Publi-
cation No. 1) to more clearly inform taxpayers of their
rights—
(1) to be represented at interviews with the In-
ternal Revenue Service by any person authorized to
practice before the Internal Revenue Service, and
(2) to suspend an interview pursuant to section
7521(b)(2) of the Internal Revenue Code of 1986.
SEC. 353. DISCLOSURE OF CRITERIA FOR EXAMINATION SE-
LECTION.
(a) IN GENERAL.—The Secretary of the Treasury or
the Secretary’s delegate shall, as soon as practicable, but
not later than 180 days after the date of the enactment
of this Act, incorporate into the statement required by sec-
tion 6227 of the Omnibus Taxpayer Bill of Rights (Inter-
nal Revenue Service Publication No. 1) a statement which
sets forth in simple and nontechnical terms the criteria
and procedures for selecting taxpayers for examination.
Such statement shall not include any information the dis-
closure of which would be detrimental to law enforcement,
but shall specify the general procedures used by the Inter-
nal Revenue Service, including whether taxpayers are se-
lected for examination on the basis of information avail-
able in the media or on the basis of information provided
to the Internal Revenue Service by informants.
(b) TRANSMISSION
TO
COMMITTEES
OF
CON-
GRESS.—The Secretary shall transmit drafts of the state-
ment required under subsection (a) (or proposed revisions
to any such statement) to the Committee on Ways and
Means of the House of Representatives, the Committee on
Finance of the Senate, and the Joint Committee on Tax-
ation on the same day.
SEC. 354. EXPLANATIONS OF APPEALS AND COLLECTION
PROCESS.
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, include
with any 1st letter of proposed deficiency which allows the
taxpayer an opportunity for administrative review in the
Internal Revenue Service Office of Appeals an explanation
of the appeals process and the collection process with re-
spect to such proposed deficiency.
Subtitle G—Low Income Taxpayer
Clinics
SEC. 361. LOW INCOME TAXPAYER CLINICS.
(a) IN GENERAL.—Chapter 77 (relating to mis-
cellaneous provisions) is amended by adding at the end
the following new section:
‘‘SEC. 7525. LOW INCOME TAXPAYER 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 low income taxpayer clinics.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED LOW INCOME TAXPAYER CLIN-
IC.—
‘‘(A) IN
GENERAL.—The term ‘qualified
low income taxpayer clinic’ means a clinic
that—
‘‘(i) does not charge more than a
nominal fee for its services (except for re-
imbursement of actual costs incurred), and
‘‘(ii)(I) represents low income tax-
payers in controversies with the Internal
Revenue Service, or
‘‘(II) operates programs to inform in-
dividuals for whom English is a second
language about their rights and respon-
sibilities under this title.
‘‘(B) REPRESENTATION OF LOW INCOME
TAXPAYERS.—A clinic meets the requirements
of subparagraph (A)(ii)(I) if—
‘‘(i) at least 90 percent of the tax-
payers represented by the clinic have in-
comes which do not exceed 250 percent of
the poverty level, as determined in accord-
ance with criteria established by the Direc-
tor of the Office of Management and
Budget, and
‘‘(ii) the amount in controversy for
any taxable year generally does not exceed
the amount specified in section 7463.
‘‘(2) CLINIC.—The term ‘clinic’ includes—
‘‘(A) a clinical program at an accredited
law school in which students represent low in-
come taxpayers in controversies arising under
this title, 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) through representation of taxpayers
or referral of taxpayers to qualified representa-
tives.
‘‘(3) QUALIFIED REPRESENTATIVE.—The term
‘qualified representative’ means any individual
(whether or not an attorney) who is authorized to
practice before the Internal Revenue Service or the
applicable court.
‘‘(c) SPECIAL RULES AND LIMITATIONS.—
‘‘(1) AGGREGATE
LIMITATION.—Unless other-
wise provided by specific appropriation, the Sec-
retary shall not allocate more than $3,000,000 per
year (exclusive of costs of administering the pro-
gram) to grants under this section.
‘‘(2) LIMITATION
ON
ANNUAL
GRANTS
TO
A
CLINIC.—The aggregate amount of grants which
may be made under this section to a clinic for a year
shall not exceed $100,000.
‘‘(3) MULTI-YEAR GRANTS.—Upon application
of a qualified low income taxpayer clinic, the Sec-
retary is authorized to award a multi-year grant not
to exceed 3 years.
‘‘(4) CRITERIA FOR AWARDS.—In determining
whether to make a grant under this section, the Sec-
retary shall consider—
‘‘(A) the numbers of taxpayers who will be
served by the clinic, including the number of
taxpayers in the geographical area for whom
English is a second language,
‘‘(B) the existence of other low income tax-
payer clinics serving the same population,
‘‘(C) the quality of the program offered by
the low income taxpayer clinic, including the
qualifications of its administrators and qualified
representatives, and its record, if any, in pro-
viding service to low income taxpayers, and
‘‘(D) alternative funding sources available
to the clinic, including amounts received from
other grants and contributions, and the endow-
ment and resources of the institution sponsor-
ing the clinic.
‘‘(5) REQUIREMENT OF MATCHING FUNDS.—A
low income taxpayer clinic must provide matching
funds on a dollar for dollar basis for all grants pro-
vided under this section. Matching funds may in-
clude—
‘‘(A) the salary (including fringe benefits)
of individuals performing services for the clinic,
and
‘‘(B) the cost of equipment used in the
clinic.
Indirect expenses, including general overhead of the
institution sponsoring the clinic, shall not be counted
as matching funds.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 77 is amended by adding at the end the follow-
ing new section:
‘‘Sec. 7525. Low income taxpayer clinics.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle H—Other Matters
SEC. 371. ACTIONS FOR REFUND WITH RESPECT TO CER-
TAIN ESTATES WHICH HAVE ELECTED THE
INSTALLMENT METHOD OF PAYMENT.
(a) IN GENERAL.—Section 7422 is amended by re-
designating subsection (j) as subsection (k) and by insert-
ing after subsection (i) the following new subsection:
‘‘(j) SPECIAL RULE FOR ACTIONS WITH RESPECT TO
ESTATES FOR WHICH AN ELECTION UNDER SECTION
6166 IS MADE.—
‘‘(1) IN GENERAL.—The district courts of the
United States and the United States Court of Fed-
eral Claims shall have jurisdiction over any action
brought by the representative of an estate to which
this subsection applies to determine the correct
amount of the estate tax liability of such estate (or
for any refund with respect thereto) even if the full
amount of such liability has not been paid.
‘‘(2) ESTATES
TO
WHICH
SUBSECTION
AP-
PLIES.—This subsection shall apply to any estate if,
as of the date the action is filed—
‘‘(A) an election under section 6166 is in
effect with respect to such estate,
‘‘(B) no portion of the installments payable
under such section have been accelerated, and
‘‘(C) all installments the due date for
which is on or before the date the action is filed
have been paid.
‘‘(3) PROHIBITION
ON
COLLECTION
OF
DIS-
ALLOWED
LIABILITY.—If the court redetermines
under paragraph (1) the estate tax liability of an es-
tate, no part of such liability which is disallowed by
a decision of such court which has become final may
be collected by the Secretary, and amounts paid in
excess of the installments determined by the court as
currently due and payable shall be refunded.’’.
(b) EXTENSION OF TIME TO FILE REFUND SUIT.—
Section 7479 (relating to declaratory judgments relating
to eligibility of estate with respect to installment payments
under section 6166) is amended by adding at the end the
following new subsection:
‘‘(c) EXTENSION OF TIME TO FILE REFUND SUIT.—
The 2-year period in section 6532(a)(1) for filing suit for
refund after disallowance of a claim shall be suspended
during the 90-day period after the mailing of the notice
referred to in subsection (b)(3) and, if a pleading has been
filed with the Tax Court under this section, until the deci-
sion of the Tax Court has become final.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to any claim for refund filed after
the date of the enactment of this Act.
SEC. 372. CATALOGING COMPLAINTS.
In collecting data for the report required under sec-
tion 1211 of Taxpayer Bill of Rights 2 (Public Law 104–
168), the Secretary of the Treasury or the Secretary’s del-
egate shall maintain records of taxpayer complaints of
misconduct by Internal Revenue Service employees on an
individual employee basis.
SEC. 373. ARCHIVE OF RECORDS OF INTERNAL REVENUE
SERVICE.
(a) IN GENERAL.—Subsection (l) of section 6103 (re-
lating to confidentiality and disclosure of returns and re-
turn information) is amended by adding at the end the
following new paragraph:
‘‘(17) DISCLOSURE
TO
NATIONAL
ARCHIVES
AND
RECORDS
ADMINISTRATION.—The Secretary
shall, upon written request from the Archivist of the
United States, disclose or authorize the disclosure of
returns and return information to officers and em-
ployees of the National Archives and Records Ad-
ministration for purposes of, and only to the extent
necessary in, the appraisal of records for destruction
or retention. No such officer or employee shall, ex-
cept to the extent authorized by subsections (f),
(i)(7), or (p), disclose any return or return informa-
tion disclosed under the preceding sentence to any
person other than to the Secretary, or to another of-
ficer or employee of the National Archives and
Records Administration whose official duties require
such disclosure for purposes of such appraisal.’’.
(b) CONFORMING AMENDMENTS.—Section 6103(p) is
amended—
(1) in paragraph (3)(A), by striking ‘‘or (16)’’
and inserting ‘‘(16), or (17)’’,
(2) in paragraph (4), by striking ‘‘or (14)’’ and
inserting ‘‘, (14), or (17)’’ in the matter preceding
subparagraph (A), and
(3) in paragraph (4)(F)(ii), by striking ‘‘or
(15)’’ and inserting ‘‘, (15), or (17)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to requests made by the Archivist
of the United States after the date of the enactment of
this Act.
SEC. 374. PAYMENT OF TAXES.
The Secretary of the Treasury or the Secretary’s del-
egate shall establish such rules, regulations, and proce-
dures as are necessary to allow payment of taxes by check
or money order made payable to the United States Treas-
ury.
SEC. 375. CLARIFICATION OF AUTHORITY OF SECRETARY
RELATING TO THE MAKING OF ELECTIONS.
Subsection (d) of section 7805 is amended by striking
‘‘by regulations or forms’’.
SEC. 376. LIMITATION ON PENALTY ON INDIVIDUAL’S FAIL-
URE TO PAY FOR MONTHS DURING PERIOD
OF INSTALLMENT AGREEMENT.
(a) IN GENERAL.—Section 6651 (relating to failure
to file tax return or to pay tax) is amended by adding
at the end the following new subsection:
‘‘(h) LIMITATION
ON PENALTY
ON INDIVIDUAL’S
FAILURE TO PAY FOR MONTHS DURING PERIOD OF IN-
STALLMENT AGREEMENT.—No addition to the tax shall
be imposed under paragraph (2) or (3) of subsection (a)
with respect to the tax liability of an individual for any
month during which an installment agreement under sec-
tion 6159 is in effect for the payment of such tax to the
extent that imposing an addition to the tax under such
paragraph for such month would result in the aggregate
number of percentage points of such addition to the tax
exceeding 9.5.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply for purposes of determining addi-
tions to the tax for months beginning after the date of
the enactment of this Act.
Subtitle I—Studies
SEC. 381. PENALTY ADMINISTRATION.
The Joint Committee on Taxation shall conduct a
study—
(1) reviewing the administration and implemen-
tation by the Internal Revenue Service of the pen-
alty reform provisions of the Omnibus Budget Rec-
onciliation Act of 1989, and
(2) making any legislative and administrative
recommendations it deems appropriate to simplify
penalty administration and reduce taxpayer burden.
Such study shall be submitted to the Committee on Ways
and Means of the House of Representatives and the Com-
mittee on Finance of the Senate not later than 9 months
after the date of enactment of this Act.
SEC. 382. CONFIDENTIALITY OF TAX RETURN INFORMA-
TION.
The Joint Committee on Taxation shall conduct a
study of the scope and use of provisions regarding tax-
payer confidentiality, and shall report the findings of such
study, together with such recommendations as it deems
appropriate, to the Congress not later than one year after
the date of the enactment of this Act. Such study shall
examine the present protections for taxpayer privacy, the
need for third parties to use tax return information, and
the ability to achieve greater levels of voluntary compli-
ance by allowing the public to know who is legally required
to file tax returns, but does not file tax returns.
TITLE IV—CONGRESSIONAL AC-
COUNTABILITY FOR THE IN-
TERNAL REVENUE SERVICE
Subtitle A—Oversight
SEC. 401. EXPANSION OF DUTIES OF THE JOINT COMMIT-
TEE ON TAXATION.
(a) IN GENERAL.—Section 8021 (relating to the pow-
ers of the Joint Committee on Taxation) is amended by
adding at the end the following new subsections:
‘‘(e) INVESTIGATIONS.—The Joint Committee shall
review all requests (other than requests by the chairman
or ranking member of a Committee or Subcommittee) for
investigations of the Internal Revenue Service by the Gen-
eral Accounting Office, and approve such requests when
appropriate, with a view towards eliminating overlapping
investigations, ensuring that the General Accounting Of-
fice has the capacity to handle the investigation, and en-
suring that investigations focus on areas of primary im-
portance to tax administration.
‘‘(f) RELATING TO JOINT HEARINGS.—
‘‘(1) IN
GENERAL.—The Chief of Staff, and
such other staff as are appointed pursuant to section
8004, shall provide such assistance as is required for
joint hearings described in paragraph (2).
‘‘(2) JOINT HEARINGS.—On or before April 1
of each calendar year after 1997, there shall be a
joint hearing of two members of the majority and
one member of the minority from each of the Com-
mittees on Finance, Appropriations, and Govern-
ment Affairs of the Senate, and the Committees on
Ways and Means, Appropriations, and Government
Reform and Oversight of the House of Representa-
tives, to review the strategic plans and budget for
the Internal Revenue Service. After the conclusion of
the annual filing season, there shall be a second an-
nual joint hearing to review the other matters out-
lined in section 8022(3)(C).’’.
(b) EFFECTIVE DATES.—
(1) Subsection (e) of section 8021 of the Inter-
nal Revenue Code of 1986, as added by subsection
(a) of this section, shall apply to requests made after
the date of enactment of this Act.
(2) Subsection (f) of section 8021 of the Inter-
nal Revenue Code of 1986, as added by subsection
(a) of this section, shall take effect on the date of
the enactment of this Act.
SEC. 402. COORDINATED OVERSIGHT REPORTS.
(a) IN GENERAL.—Paragraph (3) of section 8022
(relating to the duties of the Joint Committee on Tax-
ation) is amended to read as follows:
‘‘(3) REPORTS.—
‘‘(A) To report, from time to time, to the
Committee on Finance and the Committee on
Ways and Means, and, in its discretion, to the
Senate or House of Representatives, or both,
the results of its investigations, together with
such recommendations as it may deem advis-
able.
‘‘(B) To report, annually, to the Commit-
tee on Finance and the Committee on Ways
and Means on the overall state of the Federal
tax system, together with recommendations
with respect to possible simplification proposals
and other matters relating to the administra-
tion of the Federal tax system as it may deem
advisable.
‘‘(C) To report, annually, to the Commit-
tees on Finance, Appropriations, and Govern-
ment Affairs of the Senate, and to the Commit-
tees on Ways and Means, Appropriations, and
Government Reform and Oversight of the
House of Representatives, with respect to—
‘‘(i) strategic and business plans for
the Internal Revenue Service;
‘‘(ii) progress of the Internal Revenue
Service in meeting its objectives;
‘‘(iii) the budget for the Internal Rev-
enue Service and whether it supports its
objectives;
‘‘(iv) progress of the Internal Revenue
Service in improving taxpayer service and
compliance;
‘‘(v) progress of the Internal Revenue
Service on technology modernization; and
‘‘(vi) the annual filing season.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle B—Budget
SEC. 411. FUNDING FOR CENTURY DATE CHANGE.
It is the sense of Congress that the Internal Revenue
Service efforts to resolve the century date change comput-
ing problems should be funded fully to provide for certain
resolution of such problems.
SEC. 412. FINANCIAL MANAGEMENT ADVISORY GROUP.
The Commissioner shall convene a financial manage-
ment advisory group consisting of individuals with exper-
tise in governmental accounting and auditing from both
the private sector and the Government to advise the Com-
missioner on financial management issues, including—
(1) the continued partnership between the In-
ternal Revenue Service and the General Accounting
Office;
(2) the financial accounting aspects of the In-
ternal Revenue Service’s system modernization;
(3) the necessity and utility of year-round au-
diting; and
(4) the Commissioner’s plans for improving its
financial management system.
Subtitle C—Tax Law Complexity
SEC. 421. ROLE OF THE INTERNAL REVENUE SERVICE.
It is the sense of Congress that the Internal Revenue
Service should provide the Congress with an independent