I 
112TH CONGRESS 
2D SESSION 
H. R. 4375 
To provide a taxpayer bill of rights for small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 17, 2012 
Mr. SAM JOHNSON of Texas introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To provide a taxpayer bill of rights for small businesses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Taxpayer Bill of Rights Act of 2012’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Modification of standards for awarding of costs and certain fees. 
Sec. 3. Civil damages allowed for reckless or intentional disregard of internal 
revenue laws. 
Sec. 4. Modifications relating to certain offenses by officers and employees in 
connection with revenue laws. 
Sec. 5. Modifications relating to civil damages for unauthorized inspection or 
disclosure of returns and return information. 
Sec. 6. Interest abatement reviews. 
Sec. 7. Ban on ex parte discussions. 
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Sec. 8. Alternative dispute resolution procedures. 
Sec. 9. Extension of time for contesting IRS levy. 
Sec. 10. Waiver of installment agreement fee. 
Sec. 11. Suspension of running of period for filing petition of spousal relief and 
collection cases. 
Sec. 12. Venue for appeal of spousal relief and collection cases. 
Sec. 13. Increase in monetary penalties for certain unauthorized disclosures of 
information. 
Sec. 14. De novo tax court review of claims for equitable innocent spouse relief. 
Sec. 15. Ban on raising new issues on appeal. 
SEC. 2. MODIFICATION OF STANDARDS FOR AWARDING OF 
COSTS AND CERTAIN FEES. 
(a) SMALL BUSINESSES ELIGIBLE WITHOUT RE-
GARD TO NET WORTH.—Subparagraph (D) of section 
7430(c)(4) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ at the end of clause (i), by 
striking the period at the end of clause (ii) and inserting 
‘‘and’’, and by adding at the end the following new clause: 
‘‘(iii) in the case of an eligible small 
business, the net worth limitation in clause 
(ii) of such section shall not apply.’’. 
(b) ELIGIBLE SMALL BUSINESS.—Paragraph (4) of 
section 7430(c) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(F) ELIGIBLE
SMALL
BUSINESS.—For 
purposes of subparagraph (D)(iii), the term ‘eli-
gible small business’ means, with respect to any 
proceeding commenced in a taxable year— 
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‘‘(i) a corporation the stock of which 
is not publicly traded, 
‘‘(ii) a partnership, or 
‘‘(iii) a sole proprietorship, 
if the average annual gross receipts of such cor-
poration, partnership, or sole proprietorship for 
the 3-taxable-year period preceding such taxable 
year does not exceed $50,000,000. For pur-
poses of applying the test under the preceding 
sentence, rules similar to the rules of para-
graphs (2) and (3) of section 448(c) shall 
apply.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to proceedings commenced after 
the date of the enactment of this Act. 
SEC. 3. CIVIL DAMAGES ALLOWED FOR RECKLESS OR IN-
TENTIONAL DISREGARD OF INTERNAL REV-
ENUE LAWS. 
(a) INCREASE IN AMOUNT OF DAMAGES.—Section 
7433(b) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘$1,000,000 ($100,000, in the case of neg-
ligence)’’ and inserting ‘‘$3,000,000 ($300,000, in the 
case of negligence)’’. 
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(b) EXTENSION OF TIME TO BRING ACTION.—Sec-
tion 7433(d)(3) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘2 years’’ and inserting ‘‘5 years’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to actions of employees of the In-
ternal Revenue Service after the date of the enactment 
of this Act. 
SEC. 4. MODIFICATIONS RELATING TO CERTAIN OFFENSES 
BY OFFICERS AND EMPLOYEES IN CONNEC-
TION WITH REVENUE LAWS. 
(a) INCREASE IN PENALTY.—Section 7214 of the In-
ternal Revenue Code of 1986 is amended— 
(1) by striking ‘‘$10,000’’ in subsection (a) and 
inserting ‘‘$25,000’’, and 
(2) by striking ‘‘$5,000’’ in subsection (b) and 
inserting ‘‘$10,000’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 5. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR 
UNAUTHORIZED 
INSPECTION 
OR 
DISCLO-
SURE OF RETURNS AND RETURN INFORMA-
TION. 
(a) INCREASE IN AMOUNT OF DAMAGES.—Subpara-
graph (A) of section 7431(c)(1) of the Internal Revenue 
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Code of 1986 is amended by striking ‘‘$1,000’’ and insert-
ing ‘‘$10,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to inspections and disclosure occur-
ring on and after the date of the enactment of this Act. 
SEC. 6. INTEREST ABATEMENT REVIEWS. 
(a) FILING PERIOD
FOR INTEREST ABATEMENT 
CASES.— 
(1) IN
GENERAL.—Subsection (h) of section 
6404 of the Internal Revenue Code of 1986 is 
amended— 
(A) by striking ‘‘REVIEW OF DENIAL’’ in 
the heading and inserting ‘‘JUDICIAL REVIEW’’, 
and 
(B) by striking ‘‘ ‘if such action is 
brought’ ’’ and all that follows in paragraph (1) 
and inserting ‘‘if such action is brought— 
‘‘(A) at any time after the earlier of— 
‘‘(i) the date of the mailing of the 
Secretary’s final determination not to 
abate such interest, or 
‘‘(ii) the date which is 180 days after 
the date of the filing with the Secretary (in 
such form as the Secretary may prescribe) 
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