Title: Small Business Taxpayer Bill of Rights Act of 2018
Policy area: Taxation

Summary:
Small Business Taxpayer Bill of Rights Act of 2018
This bill modifies various tax enforcement procedures and requirements that affect small businesses and other taxpayers.
The bill modifies requirements regarding:
The bill also:

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2689 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 2689

       To provide a taxpayer bill of rights for small businesses.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 17, 2018

 Mr. Cornyn (for himself, Mr. Heller, and Mr. Roberts) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
       To provide a taxpayer bill of rights for small businesses.

    Be it enacted by the Senate and House of Representatives 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 2018''.
    (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. Ban on ex parte discussions.
Sec. 7. Right to independent conference.
Sec. 8. Alternative dispute resolution procedures.
Sec. 9. Increase in monetary penalties for certain unauthorized 
                            disclosures of information.
Sec. 10. Ban on raising new issues on appeal.
Sec. 11. Limitation on enforcement of liens against principal 
                            residences.
Sec. 12. Additional provisions relating to mandatory termination for 
                            misconduct.
Sec. 13. Review by the Treasury Inspector General for Tax 
                            Administration.
Sec. 14. Deduction for expenses relating to certain audits.
Sec. 15. Term limit for National Taxpayer Advocate.
Sec. 16. Release of IRS levy due to economic hardship for business 
                            taxpayers.
Sec. 17. Repeal of partial payment requirement on submissions of 
                            offers-in-compromise.

SEC. 2. MODIFICATION OF STANDARDS FOR AWARDING OF COSTS AND CERTAIN 
              FEES.

    (a) Small Businesses Eligible Without Regard 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)(II), 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 subparagraph:
                    ``(F) Eligible small business.--
                            ``(i) In general.--For purposes of 
                        subparagraph (D)(iii), the term `eligible small 
                        business' means, with respect to any proceeding 
                        commenced in a taxable year--
                                    ``(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 
                        corporation, partnership, or sole 
                        proprietorship for the 3-taxable-year period 
                        preceding such taxable year does not exceed 
                        $50,000,000. For purposes of applying the test 
                        under the preceding sentence, rules similar to 
                        the rules of paragraphs (2) and (3) of section 
                        448(c) shall apply.
                            ``(ii) Adjustment for inflation.--In the 
                        case of any calendar year after 2018, the 
                        $50,000,000 amount in clause (i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year, 
                                determined by substituting `calendar 
                                year 2017' for `calendar year 2016' in 
                                subparagraph (A)(ii) thereof.
                        If any amount as increased under the preceding 
                        sentence is not a multiple of $500, such amount 
                        shall be rounded to the next lowest multiple of 
                        $500.''.
    (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 INTENTIONAL DISREGARD OF 
              INTERNAL REVENUE LAWS.

    (a) Increase in Amount of Damages.--
            (1) In general.--Section 7433(b) of the Internal Revenue 
        Code of 1986 is amended by striking ``$1,000,000 ($100,000, in 
        the case of negligence)'' and inserting ``$5,000,000 ($500,000, 
        in the case of negligence)''.
            (2) Adjustment for inflation.--Section 7433 of such Code is 
        amended by adding at the end the following new subsection:
    ``(f) Adjustment for Inflation.--In the case of any calendar year 
after 2018, the $5,000,000 and $500,000 amounts in subsection (b) shall 
each be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year, determined by 
        substituting `calendar year 2017' for `calendar year 2016' in 
        subparagraph (A)(ii) thereof.
If any amount as increased under the preceding sentence is not a 
multiple of $500, such amount shall be rounded to the next lowest 
multiple of $500.''.
    (b) Extension of Time To Bring Action.--Section 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 Internal Revenue Service after the 
date of the enactment of this Act.

SEC. 4. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY OFFICERS AND 
              EMPLOYEES IN CONNECTION WITH REVENUE LAWS.

    (a) Increase in Penalty.--Section 7214 of the Internal 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) Adjustment for Inflation.--Section 7214 of the Internal Revenue 
Code of 1986, as amended by subsection (a), is amended by redesignating 
subsection (c) as subsection (d) and by inserting after subsection (b) 
the following new subsection:
    ``(c) Adjustment for Inflation.--In the case of any calendar year 
after 2018, the $25,000 amount in subsection (a) and the $10,000 amount 
in subsection (b) shall each be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year, determined by 
        substituting `calendar year 2017' for `calendar year 2016' in 
        subparagraph (A)(ii) thereof.
If any amount as increased under the preceding sentence is not a 
multiple of $100, such amount shall be rounded to the next lowest 
multiple of $100.''.
    (c) 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 DISCLOSURE OF RETURNS AND RETURN 
              INFORMATION.

    (a) Increase in Amount of Damages.--Subparagraph (A) of section 
7431(c)(1) of the Internal Revenue Code of 1986 is amended by striking 
``$1,000'' and inserting ``$10,000''.
    (b) Adjustment for Inflation.--Section 7431 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(i) Adjustment for Inflation.--In the case of any calendar year 
after 2018, the $10,000 amount in subsection (c)(1)(A) shall be 
increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year, determined by 
        substituting `calendar year 2017' for `calendar year 2016' in 
        subparagraph (A)(ii) thereof.
If any amount as increased under the preceding sentence is not a 
multiple of $100, such amount shall be rounded to the next lowest 
multiple of $100.''.
    (c) Period for Bringing Action.--Subsection (d) of section 7431 of 
the Internal Revenue Code of 1986 is amended by striking ``2 years'' 
and inserting ``5 years''.
    (d) Effective Date.--The amendment made by this section shall apply 
to inspections and disclosure occurring on and after the date of the 
enactment of this Act.

SEC. 6. BAN ON EX PARTE DISCUSSIONS.

    (a) In General.--Notwithstanding section 1001(a)(4) of the Internal 
Revenue Service Restructuring and Reform Act of 1998, the Internal 
Revenue Service shall prohibit any ex parte communications between 
officers in the Internal Revenue Service Office of Appeals and other 
Internal Revenue Service employees with respect to any matter pending 
before such officers.
    (b) Termination of Employment for Misconduct.--Subject to 
subsection (c), the Commissioner of Internal Revenue shall terminate 
the employment of any employee of the Internal Revenue Service if there 
is a final administrative or judicial determination that such employee 
committed any act or omission prohibited under subsection (a) in the 
performance of the employee's official duties. Such termination shall 
be a removal for cause on charges of misconduct.
    (c) Determination of Commissioner.--
            (1) In general.--The Commissioner of Internal Revenue may 
        take a personnel action other than termination for an act 
        prohibited under subsection (a).
            (2) Discretion.--The exercise of authority under paragraph 
        (1) shall be at the sole discretion of the Commissioner of 
        Internal Revenue and may not be delegated to any other officer. 
        At the sole discretion of the Commissioner of Internal Revenue, 
        such Commissioner may establish a procedure which will be used 
        to determine whether an individual should be referred to the 
        Commissioner of Internal Revenue for a determination by the 
        Commissioner under paragraph (1).
            (3) No appeal.--Any determination of the Commissioner of 
        Internal Revenue under this subsection may not be appealed in 
        any administrative or judicial proceeding.
    (d) TIGTA Reporting of Termination or Mitigation.--Section 
7803(d)(1)(E) of the Internal Revenue Code of 1986 is amended by 
inserting ``or section 6 of the Small Business Taxpayer Bill of Rights 
Act of 2018'' after ``1998''.

SEC. 7. RIGHT TO INDEPENDENT CONFERENCE.

    Section 1001 of the Internal Revenue Service Restructuring and 
Reform Act of 1998 is amended by redesignating subsection (c) as 
subsection (d) and by inserting after subsection (b) the following new 
subsection:
    ``(c) Right to Independent Conference.--Under the organization plan 
of the Internal Revenue Service, a taxpayer shall have the right to a 
conference with the Internal Revenue Service Office of Appeals which 
does not include personnel from the Office of Chief Counsel for the 
Internal Revenue Service or the compliance functions of the Internal 
Revenue Service unless the taxpayer specifically consents to the 
participation of such personnel.''.

SEC. 8. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.

    (a) In General.--Section 7123 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(d) Availability of Dispute Resolutions.--
            ``(1) In general.--The procedures prescribed under 
        subsection (b)(1) and the pilot program established under 
        subsection (b)(2) shall provide that a taxpayer may request 
        mediation or arbitration in any case unless the Secretary has 
        specifically excluded the type of issue involved in such case 
        or the class of cases to which such case belongs as not 
        appropriate for resolution under such subsection. The Secretary 
        shall make any determination that excludes a type of issue or a 
        class of cases public within 5 working days and provide an 
        explanation for each determination.
            ``(2) Independent mediators.--
                    ``(A) In general.--The procedures prescribed under 
                subsection (b)(1) shall provide the taxpayer an 
                opportunity to elect to have the mediation conducted by 
                an independent, neutral individual not employed by the 
                Internal Revenue Service Office of Appeals.
                    ``(B) Cost and selection.--
                            ``(i) In general.--Any taxpayer making an 
                        election under subparagraph (A) shall be 
                        required--
                                    ``(I) to share the costs of such 
                                independent mediator equally with the 
                                Internal Revenue Service Office of 
                                Appeals, and
                                    ``(II) to limit the selection of 
                                the mediator to a roster of recognized 
                                national or local neutral mediators.
                            ``(ii) Exception.--Clause (i)(I) shall not 
                        apply to any taxpayer who is an individual or 
                        who was a small business in the preceding 
                        calendar year if such taxpayer had an adjusted 
                        gross income that did not exceed 250 percent of 
                        the poverty level, as determined in accordance 
                        with criteria established by the Director of 
                        the Office of Management and Budget, in the 
                        taxable year preceding the request.
                            ``(iii) Small business.--For purposes of 
                        clause (ii), the term `small business' has the 
                        meaning given such term under section 
                        41(b)(3)(D)(iii).
            ``(3) Availability of process.--The procedures prescribed 
        under subsection (b)(1) and the pilot program established under 
        subsection (b)(2) shall provide the opportunity to elect 
        mediation or arbitration at the time when the case is first 
        filed with the Office of Appeals and at any time before 
        deliberations in the appeal commence.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 9. INCREASE IN MONETARY PENALTIES FOR CERTAIN UNAUTHORIZED 
              DISCLOSURES OF INFORMATION.

    (a) In General.--Paragraphs (1), (2), (3), and (4) of section 
7213(a) of the Internal Revenue Code of 1986 are each amended by 
striking ``$5,000'' and inserting ``$10,000''.
    (b) Adjustment for Inflation.--Subsection (a) of section 7213 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(6) Adjustment for inflation.--In the case of any 
        calendar year after 2018, the $10,000 amounts in paragraphs 
        (1), (2), (3), and (4) shall each be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year, 
                determined by substituting `calendar year 2017' for 
                `calendar year 2016' in subparagraph (A)(ii) thereof.
        If any amount as increased under the preceding sentence is not 
        a multiple of $100, such amount shall be rounded to the next 
        lowest multiple of $100.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures made after the date of the enactment of this Act.

SEC. 10. BAN ON RAISING NEW ISSUES ON APPEAL.

    (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new section:

``SEC. 7529. PROHIBITION ON INTERNAL REVENUE SERVICE RAISING NEW ISSUES 
              IN AN INTERNAL APPEAL.

    ``(a) In General.--In reviewing an appeal of any determination 
initially made by the Internal Revenue Service, the Internal Revenue 
Service Office of Appeals may not consider or decide any issue that is 
not within the scope of the initial determination.
    ``(b) Certain Issues Deemed Outside of Scope of Determination.--For 
purposes of subsection (a), the following matters shall be considered 
to be not within the scope of a determination:
            ``(1) Any issue that was not raised in a notice of 
        deficiency or an examiner's report which is the subject of the 
        appeal.
            ``(2) Any deficiency in tax which was not included in the 
        initial determination.
            ``(3) Any theory or justification for a tax deficiency 
        which was not considered in the initial determination.
    ``(c) No Inference With Respect to Issues Raised by Taxpayers.--
Nothing in this section shall be construed to provide any limitation in 
addition to any limitations in effect on the date of the enactment of 
this section on the right of a taxpayer to raise an issue, theory, or 
justification on an appeal from a determination initially made by the 
Internal Revenue Service that was not within the scope of the initial 
determination.''.
    (b) Clerical Amendment.--The table of sections for chapter 77 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

``Sec. 7529. Prohibition on Internal Revenue Service raising new issues 
                            in an internal appeal.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to matters filed or pending with the Internal Revenue Service 
Office of Appeals on or after the date of the enactment of this Act.

SEC. 11. LIMITATION ON ENFORCEMENT OF LIENS AGAINST PRINCIPAL 
              RESIDENCES.

    (a) In General.--Section 7403(a) of the Internal Revenue Code of 
1986 is amended--
            (1) by striking ``In any case'' and inserting the 
        following:
            ``(1) In general.--In any case''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Limitation with respect to principal residence.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any property used as the principal residence of the 
                taxpayer (within the meaning of section 121) unless the 
                Secretary of the Treasury makes a written determination 
                that--
                            ``(i) all other property of the taxpayer, 
                        if sold, is insufficient to pay the tax or 
                        discharge the liability, and
                            ``(ii) such action will not create an 
                        economic hardship for the taxpayer.
                    ``(B) Delegation.--For purposes of this paragraph, 
                the Secretary of the Treasury may not delegate any 
                responsibilities under subparagraph (A) to any person 
                other than--
                            ``(i) the Commissioner of Internal Revenue, 
                        or
                            ``(ii) a district director or assistant 
                        district director of the Internal Revenue 
                        Service.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to actions filed after the date of the enactment of this Act.

SEC. 12. ADDITIONAL PROVISIONS RELATING TO MANDATORY TERMINATION FOR 
              MISCONDUCT.

    (a) Termination of Unemployment for Inappropriate Review of Tax-
Exempt Status.--Section 1203(b) of the Internal Revenue Service 
Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note) is amended 
by striking ``and'' at the end of paragraph (9), by striking the period 
at the end of paragraph (10) and inserting ``; and'', and by adding at 
the end the following new paragraph:
            ``(11) in the case of any review of an application for tax-
        exempt status by an organization described in section 501(c) of 
        the Internal Revenue Code of 1986, developing or using any 
        methodology that applies disproportionate scrutiny to any 
        applicant based on the ideology expressed in the name or 
        purpose of the organization.''.
    (b) Mandatory Unpaid Administrative Leave for Misconduct.--
Paragraph (1) of section 1203(c) of the Internal Revenue Service 
Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note) is amended 
by adding at the end the following new sentence: ``Notwithstanding the 
preceding sentence, if the Commissioner of Internal Revenue takes a 
personnel action other than termination for an act or omission 
described in subsection (b), the Commissioner shall place the employee 
on unpaid administrative leave for a period of not less than 90 
days.''.
    (c) Limitation on Alternative Punishment.--Paragraph (1) of section 
1203(c) of the Internal Revenue Service Restructuring and Reform Act of 
1998 (26 U.S.C. 7804 note) is amended by striking ``The Commissioner'' 
and inserting ``Except in the case of an act or omission described in 
subsection (b)(3)(A), the Commissioner''.

SEC. 13. REVIEW BY THE TREASURY INSPECTOR GENERAL FOR TAX 
              ADMINISTRATION.

    (a) Review.--Subsection (k)(1) of section 8D of the Inspector 
General Act of 1978 (5 U.S.C. App.) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) by redesignating subparagraph (D) as subparagraph (E);
            (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) shall--
                            ``(i) review any criteria employed by the 
                        Internal Revenue Service to select tax returns 
                        (including applications for recognition of tax-
                        exempt status) for examination or audit, 
                        assessment or collection of deficiencies, 
                        criminal investigation or referral, refunds for 
                        amounts paid, or any heightened scrutiny or 
                        review in order to determine whether the 
                        criteria discriminates against taxpayers on the 
                        basis of race, religion, or political ideology; 
                        and
                            ``(ii) consult with the Internal Revenue 
                        Service on recommended amendments to such 
                        criteria in order to eliminate any 
                        discrimination identified pursuant to the 
                        review described in clause (i); and''; and
            (4) in subparagraph (E), as so redesignated, by striking 
        ``and (C)'' and inserting ``(C), and (D)''.
    (b) Semiannual Report.--Subsection (g) of section 8D of the 
Inspector General Act of 1978 (5 U.S.C. App.) is amended by adding at 
the end the following new paragraph:
            ``(3) Any semiannual report made by the Treasury Inspector 
        General for Tax Administration that is required pursuant to 
        section 5(a) shall include--
                    ``(A) a statement affirming that the Treasury 
                Inspector General for Tax Administration has reviewed 
                the criteria described in subsection (k)(1)(D) and 
                consulted with the Internal Revenue Service regarding 
                such criteria; and
                    ``(B) a description and explanation of any such 
                criteria that was identified as discriminatory by the 
                Treasury Inspector General for Tax Administration.''.

SEC. 14. DEDUCTION FOR EXPENSES RELATING TO CERTAIN AUDITS.

    (a) In General.--Subsection (a) of section 62 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(22) Expenses relating to certain audits.--The deduction 
        allowed by section 224.''.
    (b) Deduction for Expenses Relating to Certain Audits.--Part VII of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by redesignating section 224 as section 225 and by inserting 
after section 223 the following new section:

``SEC. 224. EXPENSES RELATING TO CERTAIN AUDITS.

    ``(a) Allowance of Deduction.--In the case of an individual, there 
shall be allowed as a deduction for the taxable year an amount equal to 
so much of the qualified NRP expenses paid or incurred during the 
taxable year as does not exceed $5,000.
    ``(b) Qualified NRP Expenses.--For purposes of this section, the 
term `qualified NRP expenses' means amounts which but for subsection 
(d) would be allowed as a deduction under section 162 or 212(3) in 
connection with an audit of the taxpayer's return of the tax imposed by 
this chapter for any taxable year under the National Research Program, 
but only if such audit results in no increase in the tax liability of 
the taxpayer for such taxable year.
    ``(c) Denial of Double Benefit.--No deduction shall be allowed 
under any other provision of this chapter for any amount for which a 
deduction is allowed under this section.''.
    (c) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 224 and by inserting 
after the item relating to section 223 the following new items:

``Sec. 224. Expenses relating to certain audits.
``Sec. 225. Cross reference.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 15. TERM LIMIT FOR NATIONAL TAXPAYER ADVOCATE.

    (a) In General.--Subparagraph (B) of section 7803(c)(1) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new clause:
                            ``(v) Term.--The term of the National 
                        Taxpayer Advocate shall be a 10-year term, 
                        beginning with a term to commence on the date 
                        which is 18 months after the date of the 
                        enactment of the Small Business Taxpayer Bill 
                        of Rights Act of 2018. Each subsequent term 
                        shall begin on the day after the date on which 
                        the previous term expires. The National 
                        Taxpayer Advocate may be appointed to serve 
                        more than 1 term.''.
    (b) Effective Date.--The term of any individual serving as the 
National Taxpayer Advocate under section 7803(c) of the Internal 
Revenue Code of 1986 as of the date of the enactment of this Act shall 
end as of the day before the date which is 18 months after such date of 
enactment, unless such individual is reappointed as the National 
Taxpayer Advocate for a subsequent term pursuant to section 
7803(c)(1)(B)(v) of such Code.

SEC. 16. RELEASE OF IRS LEVY DUE TO ECONOMIC HARDSHIP FOR BUSINESS 
              TAXPAYERS.

    (a) In General.--Subparagraph (D) of section 6343(a)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``or'' and 
inserting ``including the financial condition of the taxpayer's viable 
trade or business, or''.
    (b) Determination of Economic Hardship.--Subsection (a) of section 
6343 of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
            ``(4) Determination of economic hardship to business 
        taxpayer.--In determining whether to release any levy under 
        paragraph (1)(D), the Secretary shall consider--
                    ``(A) the economic viability of the business,
                    ``(B) the nature and extent of the hardship created 
                by the levy (including whether the taxpayer has 
                exercised ordinary business care and prudence), and
                    ``(C) the potential harm to individuals if the 
                business is liquidated.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to levies made after the date of the enactment of this Act.

SEC. 17. REPEAL OF PARTIAL PAYMENT REQUIREMENT ON SUBMISSIONS OF 
              OFFERS-IN-COMPROMISE.

    (a) In General.--Section 7122 of the Internal Revenue Code of 1986 
is amended by striking subsection (c) and by redesignating subsections 
(d), (e), (f), and (g) as subsections (c), (d), (e), and (f), 
respectively.
    (b) Conforming Amendments.--
            (1) Paragraph (3) of section 7122(c) of the Internal 
        Revenue Code of 1986, as redesignated by subsection (a), is 
        amended by inserting ``and'' at the end of subparagraph (A), by 
        striking ``, and'' at the end of subparagraph (B) and inserting 
        a period, and by striking subparagraph (C).
            (2) Section 7122 of such Code, as amended by this section, 
        is amended by adding at the end the following new subsection:
    ``(g) Application of User Fee.--In the case of any assessed tax or 
other amounts imposed under this title with respect to such tax which 
is the subject of an offer-in-compromise, such tax or other amounts 
shall be reduced by any user fee imposed under this title with respect 
to such offer-in-compromise.''.
            (3) Section 6159(g) of such Code is amended by striking 
        ``section 7122(e)'' and inserting ``section 7122(d)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to offers-in-compromise submitted after the date of the enactment 
of this Act.
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