‘‘(B) a statement from the Joint Committee on 
Taxation identifying the critical assumptions and the 
source of data underlying that estimate.’’. 
Subtitle C—Point of Order Against 
Tax Expenditures Unless They 
Sunset Within Ten Years 
SEC. 521. POINT OF ORDER REGARDING TAX EXPENDI-
TURES. 
(a) IN GENERAL.—Section 312 of the Congressional 
Budget Act of 1974 is amended by adding at the end the 
following new subsection: 
‘‘(g) TAX EXPENDITURES POINT
OF ORDER.—It 
shall not be in order in the House of Representatives or 
the Senate to consider any bill or joint resolution, or 
amendment thereto or conference report thereon, or mo-
tion— 
‘‘(1) establishing a new tax expenditure unless 
that tax expenditure terminates within ten years; or 
‘‘(2) extending an existing tax expenditure for 
more than ten years.’’. 
(b) CONFORMING AMENDMENT.—Subsections (c)(1) 
and (d)(2) of section 904 of the Congressional Budget Act 
of 1974 are each amended by inserting ‘‘312(g),’’ after 
‘‘310(d)(2),’’. 
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Subtitle D—Tax Expenditure 
Performance Reviews 
SEC. 531. TAX EXPENDITURE PERFORMANCE REVIEWS. 
(a) PERFORMANCE REVIEW SCHEDULE
AND RE-
PORTS.—(1) The Secretary of the Treasury (hereinafter 
in this section referred to as the ‘‘Secretary’’), in conjunc-
tion with the Director of the Office of Management and 
Budget (hereinafter in this section referred to as the ‘‘Di-
rector’’), shall conduct performance reviews of tax expend-
itures, as identified by the Joint Committee on Taxation, 
on an ongoing basis. The Secretary shall develop the 
schedule for these reviews, such that each tax expenditure 
is reviewed at least once in every four-year period. A four- 
year schedule shall be submitted by the Secretary to Con-
gress and to the Director during January of each calendar 
year. 
(2) Within three months after the enactment of any 
new tax expenditure, the Secretary shall revise the most 
recent four-year schedule of tax expenditure performance 
reviews and submit them to Congress and to the Director. 
(3) Not later than one year after the enactment of 
this Act, the Secretary shall have submitted to Congress 
and to the Director the first four-year schedule and begin 
the first performance reviews under paragraph (1). 
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(4) The Secretary shall endeavor to develop a four- 
year schedule that provides for the simultaneous review 
of tax expenditures that have similar policy objectives. 
(b) REPORTS.— 
(1) The Secretary shall report each of its per-
formance reviews of tax expenditures to Congress 
and to the Director in quarterly reports and con-
taining all of the performance reviews conducted 
since the preceding report. 
(2) The Secretary may conduct expedited per-
formance reviews for any tax expenditure that has 
an estimated annual fiscal impact of less than $1 
billion, annually adjusted for inflation, unless the 
Director requests or the chairs and ranking minority 
members of the Committees on the Budget of the 
House of Representatives and the Senate jointly re-
quest, in writing, a full review. 
(3) Each performance review, except for expe-
dited performance reviews, shall include the fol-
lowing explanations, descriptions, estimates, anal-
yses, and recommendations: 
(A) An explanation of the tax expenditure 
and any relevant economic, social, or other con-
text under which it was first enacted. 
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(B) A description of the intended purpose 
of the tax expenditure. 
(C) An analysis of the overall success of 
the tax expenditure in achieving such purpose, 
and evidence supporting such analysis. 
(D) An analysis of the extent to which fur-
ther extending the tax expenditure, or making 
it permanent, would contribute to achieving 
such purpose. 
(E) A description of the direct and indirect 
beneficiaries of the tax expenditure, also speci-
fying— 
(i) any unintended beneficiaries of the 
tax expenditure; 
(ii) the classes of individuals, types of 
organizations, or types of industries whose 
Federal tax liabilities are directly affected 
by the tax expenditure; 
(iii) the extent to which terminating 
the tax expenditure may have negative ef-
fects on the category of taxpayers that cur-
rently benefit from the tax preference and 
on the economy; and 
(iv) the extent to which the termi-
nation of the tax expenditure would affect 
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the distribution of liability for payments of 
Federal taxes. 
(F) An analysis of whether the tax expend-
iture is the most cost-effective method for 
achieving the purpose for which it was intended, 
and a description of any more cost-effective 
methods through which such purpose could be 
accomplished, and in particular the extent to 
which a direct spending program might be pref-
erable to a tax expenditure, including— 
(i) whether an outlay program might 
achieve the same policy objectives as a tax 
expenditure; 
(ii) whether an outlay program might 
reduce deadweight losses and improve eco-
nomic efficiency in the national economy; 
and 
(iii) whether a direct spending pro-
gram might be more or less expense to ad-
minister. 
(G) A description of any unintended effects 
of the tax expenditure that is useful in under-
standing the tax expenditure’s overall value. 
(H) A description of any interactions (ac-
tual or potential) with other tax expenditures or 
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direct spending programs in the same or related 
budget function that should be studied further. 
(I) An estimate of the annual cost in for-
gone revenues of the tax expenditure, as well as 
a projection of the cost in foregone revenues for 
the ensuing ten fiscal years. 
(J) A description of any further informa-
tion needed to complete a more thorough exam-
ination and analysis of the tax expenditure, and 
what is necessary to make such information 
available. 
(K) A specific recommendation, based on 
analysis conducted in the performance review, 
as to whether the tax expenditure should be 
continued without modification, modified (in-
cluding converted fully or partly into a direct 
spending program), scheduled for sunset, re-
viewed at a later date, or terminated imme-
diately. The Secretary may decline to provide a 
specific recommendation, but in each such case 
shall provide an explanation of why a rec-
ommendation has not been given. 
(4) An expedited performance review shall in-
clude at least the explanations, descriptions, esti-
mates, analyses, and recommendations as listed in 
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Subtitle E—Studies To Improve the 
Use of IRS Data in Evaluating 
Tax Expenditures 
SEC. 541. GAO REPORT ON TAX EXPENDITURES. 
(a) REPORT REQUIRED.—Not later than one year 
after the date of the enactment of this Act, the Comp-
troller General shall submit to Congress and publish a 
written report that assesses improvements the Internal 
Revenue Service could make to facilitate the evaluation of 
tax expenditures, including a description of how the im-
provements could be implemented and the potential effects 
of such improvements on the Internal Revenue Service, 
taxpayers, and other relevant parties determined by the 
Comptroller General. 
(b) TAX EXPENDITURES DEFINED.—The term ‘‘tax 
expenditures’’ has the meaning given that term in section 
3(3) of the Congressional Budget and Impoundment Con-
trol Act of 1974 (2 U.S.C. 622(3)). 
Subtitle F—Executive Branch 
Reporting of Tax Expenditures 
SEC. 551. EXECUTIVE BRANCH REPORTING OF TAX EX-
PENDITURES. 
(a) OMB GUIDANCE REGARDING TAX EXPENDI-
TURES.—The Director of the Office of Management and 
Budget shall develop clear and consistent guidance to 
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agencies on how to incorporate tax expenditures in their 
strategic plans, annual performance plans, and perform-
ance and accountability reports, to provide a broader per-
spective and more cohesive plan of the Government’s goals 
and strategies. 
(b) REPORTING OF TAX EXPENDITURE DATA.—The 
Director of the Office of Management and Budget shall 
require agencies to report tax expenditure data related to 
their overall mission in their annual financial statements. 
(c) DEFINITIONS.—As used in this section— 
(1) the term ‘‘agency’’ has the meaning given to 
such term in paragraph (1) of section 551 of title 
5, United States Code; and 
(2) the term ‘‘tax expenditure’’ has the meaning 
given to such term in paragraph (3) of section 3 of 
the Congressional Budget and Impoundment Control 
Act of 1974. 
Æ 
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