Tax Administration Good Government Act

Bill: 108-hr-1528
Sponsor: Rep. Portman, Rob [R-OH-2]
Introduced: 2003-04-01 in the House
Policy area: Taxation
Subjects: Administrative fees
Administrative procedure
Administrative remedies
Annuities
Assassination
Assault
Attorney-client privilege
Auctions
Bank accounts
Bankruptcy
Checks
Chief executive officers
Churches
Civil Rights and Liberties, Minority Issues
Commerce
Confidential communications
Congress
Congressional reporting requirements
Consumer credit
Corporate finance
Corporate governance
Corporate mergers
Corporate reorganizations
Corporation taxes
Crime and Law Enforcement
Criminal investigation
Criminal justice information
Department of the Treasury
Disaster relief
Dismissal of employees
Divorce
Due process of law
Earned income tax credit
Economics and Public Finance
Education
Electronic data interchange
Electronic government information
Emergency Management
Energy
Excise tax
Families
Family enterprises
Federal advisory bodies
Federal employees
Federal law enforcement officers
Federal officials
Finance and Financial Sector
Financial services
Fines (Penalties)
Foreign Trade and International Finance
Foreign banks and banking
Foreign corporations
Fraud
Gasoline
Government Operations and Politics
Government attorneys
Government contractors
Government employees' life insurance
Government paperwork
Government publications
Government publicity
Government securities
Governmental investigations
Grants-in-aid
Health
Health insurance
Higher education
Income tax
Individual retirement accounts
Injunctions
Insurance premiums
Interest
Internal Revenue Service (IRS)
International Affairs
Judges
Judicial compensation
Labor and Employment
Law
Leave of absence
Legal education
Legal ethics
Legal fees
Legal services
Liability (Law)
Life care communities
Limitation of actions
Loans
Long-term care
Magistrates
Married people
Mass media
Medical economics
Misconduct in office
Native Americans
Performance measurement
Poverty
Punitive damages
Religion
Residence requirements
Right of privacy
Salaries
Science, Technology, Communications
Sentences (Criminal procedure)
Small business
Social Welfare
State taxation
Survivors' benefits
Tax administration
Tax auditing
Tax courts
Tax credits
Tax deductions
Tax evasion
Tax exclusion
Tax exemption
Tax liens
Tax penalties
Tax preparers
Tax refunds
Tax returns
Tax shelters
Tax-deferred compensation plans
Tax-exempt organizations
Taxation of foreign income
Taxpayers
Teacher salaries
Telephone
Terrorism
Unemployment insurance
Unrelated business income tax
User charges

Summary:
action_date: 2003-04-01
text: Taxpayer Protection and IRS Accountability Act of 2003 - Amends the Internal Revenue Code (IRC) provisions concerning penalties and interest to provide for, among other things: (1) converting the penalty for failure to pay estimated tax into an interest provision; (2) the exclusion from gross income for interest on overpayments of income tax by individuals; (3) the abatement of interest on all erroneous refunds (currently, abated only in specified instances); and (4) revising and increasing the penalty for filing a frivolous tax return.
Revises collection procedures provisions to, among other things: (1) require the review of installment agreements for partial collection at least once every two years; (2) extend from nine months to two years the time allowed to return property wrongfully levied; and (3) provide for a study of liens and levies.
Revises tax administration provisions to, among other things: (1) provide disciplinary guidelines governing the misconduct of IRS employees; and (2) consolidate all judicial review of collection due process hearings to the United States Tax Court.
Provides for the suspension of the tax exempt status of terrorist organizations.
Revises confidentiality provisions to, among other things: (1) permit an individual no longer married to the individual with whom a joint return was filed to ask orally, as opposed to in writing, whether collection activities were attempted on the nonrequesting individual; (2) require compliance by contractors with confidentiality standards; and (3) notify a taxpayer if the Treasury Inspector General for Tax Administration determines a return was unlawfully inspected.
Makes additional miscellaneous amendments to the IRC, including authorizing regulations regulating the conduct of enrolled agents.
Increases the annual allocation for low-income taxpayer clinics.
Amends the Job Creation and Worker Assistance Act of 2002 to provide for uniform applicability among states.
action_date: 2003-04-08
text: Taxpayer Protection and IRS Accountability Act of 2003 - 
Title I: Penalty And Interest Reforms
 - (Sec. 101) Amends the Internal Revenue Code to raise the figure of adjusted income below which no penalty is incurred for underpayment of estimated taxes. Includes equally-paid estimated tax in calculus of adjusted income as well as tax withheld, thus including in the "safe harbor" individuals who pay throughout the year only through estimated tax.
Establishes that the underpayment interest rate in effect on the first day of the quarter in which a pertinent estimated payment due date arises is the interest rate that will apply during the entire underpayment period. Determines that a 365-day year will be used for calculation of all individual, estate, and trust estimated tax interest calculations.
(Sec. 102) Excludes from gross income for tax purposes interest paid on overpayments of income tax. Disqualifies a taxpayer from benefitting if the Secretary of the Treasury determines the taxpayer purposely overpaid to earn interest.
(Sec. 103) Eliminates the $50,000 threshold for abatement of interest on erroneous refunds. Requires the Secretary to abate interest on underpayments in which the reason for the underpayment is erroneous information supplied in written form by the Internal Revenue Service (IRS).
(Sec. 104) Creates a system whereby a taxpayer can deposit sums with the IRS that may subsequently be used to pay an underpayment of income or other specified taxes. Establishes that no underpayment interest will be charged on the portion of an underpayment paid in this manner for the period the funds are on deposit. Allows withdrawals unless the amount has been used to pay tax or the Secretary believes that withdrawal will jeopardize tax payment. Specifies that interest will only be paid on withdrawals from deposits attributable to a disputable tax.
(Sec. 105) Applies, for individual taxpayers, interest netting rules without regard to the 45-day period in which the Secretary may refund an overpayment of tax without the payment of interest.
(Sec. 106) Permits the IRS to waive certain penalties for unintentional minor errors that are committed by a taxpayer with a history of tax compliance and the penalty for which would be grossly disproportionate to the action.
(Sec. 107) Increases from $500 to $5,000 the penalty the IRS will impose for filing a frivolous income tax return, unless the Secretary deems it appropriate to lessen the penalty. Applies the penalty to all taxpayers and to all types of Federal taxes.
(Sec. 108) Establishes that the 10 percent penalty on required Federal tax deposits applies only to cases where an individual has failed to deposit for more than 15 days.

Title II: Fairness of Collection Procedures
 - (sec. 201) Stipulates that the IRS may enter into installment agreements with taxpayers that do not provide for full payment of liabilities. Requires the IRS to review partial payment installment agreements at least every two years.
(Sec. 202) Extends from nine months to two years the period in which proceeds errantly acquired by the IRS may be returned.
(Sec. 203) Authorizes a taxpayer to deposit money in an IRA without regard to the normally applicable limits on IRA contributions and rollovers if the IRS has sent back the money being deposited due to a wrongful levy and it originally came from an IRA. Requires the contribution to be to the same type of IRA from which the amounts were withdrawn. Stipulates that in such a scenario any tax on the withdrawal from the IRA is abated. Interest paid by the IRS to the taxpayer is considered part of the original payment and is not counted as gross income.
(Sec. 204) Modifies the suspension date of the statute of limitations for taxpayers suffering significant hardship by applying it only if the date of the decision by the National Taxpayer Advocate is at least seven days after the date of the taxpayer's application.
(Sec. 205) Directs the Secretary to study IRS practices concerning liens and levies.

Title III: Tax Administration Reforms
 - (Sec. 301) Requires the Commissioner of the IRS to issue guidelines for discipline, including for firing employees, and to take action for certain violations. Removes certain acts from the list of violations, and adds others. Declares that a ruling by the Commissioner is final, with no possibility of review.
(Sec. 302) Permits the Tax Court to apply the principle of equitable recoupment to the same extent that it may be applied in Federal civil tax cases by the U.S. District Courts or the U.S. Court of Claims.
(Sec. 303) Consolidates all judicial review of collection due process hearings by the IRS Office of Appeals to the United States Tax Court.
(Sec. 304) Establishes that written opinions by the Office of the Chief Counsel supporting offers-in-compromise are only required if the Secretary of the Treasury calls for them (previously all such offers of $50,000 or more required written opinions).
(Sec. 305) Extends the filing deadline to April 30 for a taxpayer who files an electronic return and pays the entire balance owed electronically. Terminates this provision December 31, 2007.
(Sec. 306) Permits the National Taxpayer Advocate to appoint a counsel in the Office of the Taxpayer Advocate to report solely to the National Taxpayer Advocate.
(Sec. 307) Requires payment of motor fuel excise tax refunds by electronic fund transfers if the payee makes an election and satisfies certain other requirements.
(Sec. 308) Provides that in the case of a qualified joint venture conducted by a husband and wife who file a joint return: (1) such joint venture shall not be treated as a partnership; (2) all items of income, gain, loss, deduction, and credit shall be divided between the spouses in accordance with their respective interests in the venture; (3) each spouse shall take into account such spouse's respective share of such items as if they were attributable to a trade or business conducted by such spouse as a sole proprietor.
(Sec. 309) Permits, through 2005, State-based coverage to meet the definition of qualified health insurance eligible for the refundable health insurance tax credit if the eligible individual elects to waive the requirements for State-based coverage.
(Sec. 310) Suspends the tax-exempt status of a designated terrorist organization (as defined by this Act). Denies: (1) deductions for contributions made to such an organization; and (2) administrative or judicial challenge to such suspension or denial. Provides for refund or credit in a case of erroneous designation.

Title IV: Confidentiality and Disclosure
 - (Sec. 401) Eliminates the requirement for former spouses to make a written request for disclosure of collection activities with respect to a joint tax return.
(Sec. 402) Forbids an IRS employee conducting an examination of a taxpayer from conducting an examination of the taxpayer representative's return solely on the basis of the representative's relationship to the taxpayer.
(Sec. 403) Prohibits return or return information of a person not a party to a judicial or administrative proceeding from being disclosed until after the Secretary makes a reasonable effort to inform the person of the intended disclosure and of what parts of the return the person can withhold. Lists exceptions to the new procedure.
(Sec. 404) Prohibits the disclosure of the taxpayer's address and taxpayer identification number as part of the publicly available summaries of accepted offers in compromise.
(Sec. 405) Requires a State or Federal agency to conduct annual on-site reviews of all of its contractors receiving Federal returns and return information to assess their performance in safeguarding the confidentiality of such information. Requires the State or Federal agency to certify annually that its contractors are in compliance with requirements to safeguard such information.
(Sec. 406) Invalidates a taxpayer's consent to supply return information to a third party if the form turned in to the IRS does not designate a recipient or is not dated at the time of execution. Requires taxpayers, under penalty of perjury, to verify when submitting a request to the IRS that the form contains the above information.
(Sec. 407) Requires the IRS to notify a taxpayer upon the Treasury Inspector General for Tax Administration's determination that a taxpayer's return or return information has been disclosed or inspected without authorization.
(Sec. 408) Permits the IRS to disclose return information to local law enforcement authorities in response to imminent danger of death or physical injury (previously the IRS was allowed to disclose information only to Federal and State law enforcement).
(Sec. 409) Permits the IRS to disclose taxpayer identity information through any means of mass communication to notify persons entitled to tax refunds.
(Sec. 410) Permits the Secretary to disclose to an appropriate State officer information related to 501(c)(3) organizations, including: (1) a notice of proposed refusal to recognize an applicant as a 501(c)(3) organization; (2) a notice of proposed revocation of 501(c)(3) status; and (3) names, addresses, and taxpayer identification numbers of organizations applying for 501(c)(3) status. Allows return and return information to be disclosed in certain civil administrative and judicial proceedings pertaining to the enforcement of State laws regulating 501(c)(3) organizations in a manner prescribed by the Secretary.
(Sec. 411) Permits the Office of the Taxpayer Advocate, if authorized by the National Taxpayer Advocate, to withhold from the Internal Revenue Service and the Department of Justice any information provided by, or regarding contact with, any taxpayer.
Permits the National Taxpayer Advocate to issue guidelines under which employees of the Office of the Taxpayer Advocate shall not disclose information obtained from a taxpayer.

Title V: Miscellaneous Provisions
 - (Sec. 501) Specifies that the IRS may provide information to churches related to the standards for tax exemption and the requirements related to unrelated business taxable income.
(Sec. 502) Extends declaratory judgment procedures currently reserved to 501(c)(3) organizations to all organizations that apply for tax-exempt status. Limits jurisdiction over such cases to the United States Tax Court.
(Sec. 503) Modifies the semi-annual reporting requirement for the Treasury Inspector General for Tax Administration (TIGTA) to require that reports of complaints of serious IRS employee misconduct include a summary (by category) of the ten most common complaints made and the number of such common complaints.
(Sec. 504) Requires the TIGTA to submit an annual report to Congress on payments made by the IRS related to awarding of costs and certain fees.
(Sec. 505) Requires the TIGTA to submit an annual report to Congress on abatements of penalties.
(Sec. 506) Obligates the TIGTA to submit a report to Congress on technological advances, such as e-mail and faxes, that may allow alternative means for the IRS to communicate with taxpayers.
(Sec. 507) Directs the IRS to add an explanation of the consequences of failing to file a tax return on time to Publication 1 ("Your Rights as a Taxpayer"). Requires the IRS to add a similar warning to all Form 1040 packages.
(Sec. 508) Permits the Treasury Borrowing Advisory Committee to disclose sooner than is currently allowed material relating to the securities to be auctioned.
(Sec. 509) Permits the issuance of regulations as necessary to regulate the conduct of enrolled agents in regards to their practice before the IRS.
(Sec. 510) Permits the Financial Management Service (FMS) to charge the IRS fees and the IRS to pay fees to the FMS to cover the cost of implementing a continuous levy program.
(Sec. 511) Establishes Internal Revenue Service (IRS) service user fee authority through September 30, 2013. Sets forth program criteria and average fee requirements.

Title VI: Low-Income Taxpayer Clinics
 - (Sec. 601) Progressively increases the annual allocation for low-income taxpayer clinics up to the figure of $15 million in 2006 and each year thereafter. Authorizes the Secretary to promote the use of such clinics. Prohibits grants being used for the general overhead expenses of any institution sponsoring a clinic.

Title VII: Federal-State Unemployment Assistance Agreements
 - (Sec. 701) Amends the Temporary Extended Unemployment Compensation Act of 2002 to provide for its application to weeks of unemployment ending on June 1, 2003, (currently, May 31, 2003).
action_date: 2003-06-19
text: Taxpayer Protection and IRS Accountability Act of 2003 - 
Title I: Penalty And Interest Reforms
 - (Sec. 101) Amends the Internal Revenue Code to raise the figure of adjusted income below which no penalty is incurred for underpayment of estimated taxes. Includes equally-paid estimated tax in calculus of adjusted income as well as tax withheld, thus including in the "safe harbor" individuals who pay throughout the year only through estimated tax.
Establishes that the underpayment interest rate in effect on the first day of the quarter in which a pertinent estimated payment due date arises is the interest rate that will apply during the entire underpayment period. Determines that a 365-day year will be used for calculation of all individual, estate, and trust estimated tax interest calculations.
(Sec. 102) Excludes from gross income for tax purposes interest paid on overpayments of income tax. Disqualifies a taxpayer from benefitting if the Secretary of the Treasury determines the taxpayer purposely overpaid to earn interest.
(Sec. 103) Eliminates the $50,000 threshold for abatement of interest on erroneous refunds. Requires the Secretary to abate interest on underpayments in which the reason for the underpayment is erroneous information supplied in written form by the Internal Revenue Service (IRS).
(Sec. 104) Creates a system whereby a taxpayer can deposit sums with the IRS that may subsequently be used to pay an underpayment of income or other specified taxes. Establishes that no underpayment interest will be charged on the portion of an underpayment paid in this manner for the period the funds are on deposit. Allows withdrawals unless the amount has been used to pay tax or the Secretary believes that withdrawal will jeopardize tax payment. Specifies that interest will only be paid on withdrawals from deposits attributable to a disputable tax.
(Sec. 105) Applies, for individual taxpayers, interest netting rules without regard to the 45-day period in which the Secretary may refund an overpayment of tax without the payment of interest.
(Sec. 106) Permits the IRS to waive certain penalties for unintentional minor errors that are committed by a taxpayer with a history of tax compliance and the penalty for which would be grossly disproportionate to the action.
(Sec. 107) Increases from $500 to $5,000 the penalty the IRS will impose for filing a frivolous income tax return, unless the Secretary deems it appropriate to lessen the penalty. Applies the penalty to all taxpayers and to all types of Federal taxes.
(Sec. 108) Establishes that the 10 percent penalty on required Federal tax deposits applies only to cases where an individual has failed to deposit for more than 15 days.

Title II: Fairness of Collection Procedures
 - (sec. 201) Stipulates that the IRS may enter into installment agreements with taxpayers that do not provide for full payment of liabilities. Requires the IRS to review partial payment installment agreements at least every two years.
(Sec. 202) Extends from nine months to two years the period in which proceeds errantly acquired by the IRS may be returned.
(Sec. 203) Authorizes a taxpayer to deposit money in an IRA without regard to the normally applicable limits on IRA contributions and rollovers if the IRS has sent back the money being deposited due to a wrongful levy and it originally came from an IRA. Requires the contribution to be to the same type of IRA from which the amounts were withdrawn. Stipulates that in such a scenario any tax on the withdrawal from the IRA is abated. Interest paid by the IRS to the taxpayer is considered part of the original payment and is not counted as gross income.
(Sec. 204) Modifies the suspension date of the statute of limitations for taxpayers suffering significant hardship by applying it only if the date of the decision by the National Taxpayer Advocate is at least seven days after the date of the taxpayer's application.
(Sec. 205) Directs the Secretary to study IRS practices concerning liens and levies.

Title III: Tax Administration Reforms
 - (Sec. 301) Requires the Commissioner of the IRS to issue guidelines for discipline, including for firing employees, and to take action for certain violations. Removes certain acts from the list of violations, and adds others. Declares that a ruling by the Commissioner is final, with no possibility of review.
(Sec. 302) Permits the Tax Court to apply the principle of equitable recoupment to the same extent that it may be applied in Federal civil tax cases by the U.S. District Courts or the U.S. Court of Claims.
(Sec. 303) Consolidates all judicial review of collection due process hearings by the IRS Office of Appeals to the United States Tax Court.
(Sec. 304) Establishes that written opinions by the Office of the Chief Counsel supporting offers-in-compromise are only required if the Secretary of the Treasury calls for them (previously all such offers of $50,000 or more required written opinions).
(Sec. 305) Extends the filing deadline to April 30 for a taxpayer who files an electronic return and pays the entire balance owed electronically. Terminates this provision December 31, 2005.
(Sec. 306) Permits the National Taxpayer Advocate to appoint a counsel in the Office of the Taxpayer Advocate to report solely to the National Taxpayer Advocate.
(Sec. 307) Requires payment of motor fuel excise tax refunds by electronic fund transfers if the payee makes an election and satisfies certain other requirements.
(Sec. 308) Provides that in the case of a qualified joint venture conducted by a husband and wife who file a joint return: (1) such joint venture shall not be treated as a partnership; (2) all items of income, gain, loss, deduction, and credit shall be divided between the spouses in accordance with their respective interests in the venture; (3) each spouse shall take into account such spouse's respective share of such items as if they were attributable to a trade or business conducted by such spouse as a sole proprietor.
(Sec. 309) Permits, through 2004, State-based coverage to meet the definition of qualified health insurance eligible for the refundable health insurance tax credit for certain eligible individuals electing to waive the guaranteed issue and preexisting condition requirements for State-based coverage.
(Sec. 310) Suspends the tax-exempt status of a designated terrorist organization (as defined by this Act). Denies: (1) deductions for contributions made to such an organization; and (2) administrative or judicial challenge to such suspension or denial. Provides for refund or credit in a case of erroneous designation.
(Sec. 311) Extends, for five years, the review of the strategic plans and budget by the Joint Committee on Taxation.

Title IV: Confidentiality and Disclosure
 - (Sec. 401) Eliminates the requirement for former spouses to make a written request for disclosure of collection activities with respect to a joint tax return.
(Sec. 402) Forbids an IRS employee conducting an examination of a taxpayer from conducting an examination of the taxpayer representative's return solely on the basis of the representative's relationship to the taxpayer.
(Sec. 403) Prohibits return or return information of a person not a party to a judicial or administrative proceeding from being disclosed until after the Secretary makes a reasonable effort to inform the person of the intended disclosure and of what parts of the return the person can withhold. Lists exceptions to the new procedure.
(Sec. 404) Prohibits the disclosure of the taxpayer's address and taxpayer identification number as part of the publicly available summaries of accepted offers in compromise.
(Sec. 405) Requires a State or Federal agency to conduct annual on-site reviews of all of its contractors receiving Federal returns and return information to assess their performance in safeguarding the confidentiality of such information. Requires the State or Federal agency to certify annually that its contractors are in compliance with requirements to safeguard such information.
(Sec. 406) Invalidates a taxpayer's consent to supply return information to a third party if the form turned in to the IRS does not designate a recipient or is not dated at the time of execution. Requires taxpayers, under penalty of perjury, to verify when submitting a request to the IRS that the form contains the above information.
(Sec. 407) Requires the IRS to notify a taxpayer upon the Treasury Inspector General for Tax Administration's determination that a taxpayer's return or return information has been disclosed or inspected without authorization.
(Sec. 408) Permits the IRS to disclose return information to local law enforcement authorities in response to imminent danger of death or physical injury (previously the IRS was allowed to disclose information only to Federal and State law enforcement).
(Sec. 409) Permits the IRS to disclose taxpayer identity information through any means of mass communication to notify persons entitled to tax refunds.
(Sec. 410) Permits the Secretary to disclose to an appropriate State officer information related to 501(c)(3) organizations, including: (1) a notice of proposed refusal to recognize an applicant as a 501(c)(3) organization; (2) a notice of proposed revocation of 501(c)(3) status; and (3) names, addresses, and taxpayer identification numbers of organizations applying for 501(c)(3) status. Allows return and return information to be disclosed in certain civil administrative and judicial proceedings pertaining to the enforcement of State laws regulating 501(c)(3) organizations in a manner prescribed by the Secretary.
(Sec. 411) Permits the Office of the Taxpayer Advocate, if authorized by the National Taxpayer Advocate, to withhold from the Internal Revenue Service and the Department of Justice any information provided by, or regarding contact with, any taxpayer.
Permits the National Taxpayer Advocate to issue guidelines under which employees of the Office of the Taxpayer Advocate shall not disclose information obtained from a taxpayer.

Title V: Miscellaneous Provisions
 - (Sec. 501) Specifies that the IRS may provide information to churches related to the standards for tax exemption and the requirements related to unrelated business taxable income.
(Sec. 502) Extends declaratory judgment procedures currently reserved to 501(c)(3) organizations to all organizations that apply for tax-exempt status. Limits jurisdiction over such cases to the United States Tax Court.
(Sec. 503) Modifies the semi-annual reporting requirement for the Treasury Inspector General for Tax Administration (TIGTA) to require that reports of complaints of serious IRS employee misconduct include a summary (by category) of the ten most common complaints made and the number of such common complaints.
(Sec. 504) Requires the TIGTA to submit an annual report to Congress on payments made by the IRS related to awarding of costs and certain fees.
(Sec. 505) Requires the TIGTA to submit an annual report to Congress on abatements of penalties.
(Sec. 506) Obligates the TIGTA to submit a report to Congress on technological advances, such as e-mail and faxes, that may allow alternative means for the IRS to communicate with taxpayers.
(Sec. 507) Directs the IRS to add an explanation of the consequences of failing to file a tax return on time to Publication 1 ("Your Rights as a Taxpayer"). Requires the IRS to add a similar warning to all Form 1040 packages.
(Sec. 508) Permits the Treasury Borrowing Advisory Committee to disclose sooner than is currently allowed material relating to the securities to be auctioned.
(Sec. 509) Permits the issuance of regulations as necessary to regulate the conduct of enrolled agents in regards to their practice before the IRS.
(Sec. 510) Permits the Financial Management Service (FMS) to charge the IRS fees and the IRS to pay fees to the FMS to cover the cost of implementing a continuous levy program.
(Sec. 511) Establishes Internal Revenue Service (IRS) service user fee authority through September 30, 2013. Sets forth program criteria and average fee requirements.

Title VI: Low-Income Taxpayer Clinics
 - (Sec. 601) Progressively increases the annual allocation for low-income taxpayer clinics up to the figure of $15 million in 2006 and each year thereafter. Authorizes the Secretary to promote the use of such clinics. Prohibits grants being used for the general overhead expenses of any institution sponsoring a clinic.

Title VII: Federal-State Unemployment Assistance Agreements
 - (Sec. 701) Amends the Temporary Extended Unemployment Compensation Act of 2002 to provide for its application to weeks of unemployment ending on June 1, 2003, (currently, May 31, 2003).
action_date: 2004-05-19
text: 
Tax Administration Good Government Act - 
Title I: Improvements in Tax Administration and Taxpayer Safeguards - Subtitle A: Improvements in Efficiency and Safeguards in Internal Revenue Service Collection
 - (Sec. 101) Amends the Internal Revenue Code to: (1) waive Internal Revenue Service (IRS) user fees for installment agreements that provide for automated payments; (2) allow installment agreements that provide for partial payment of tax liabilities (currently, full payment is required) with a review of such agreements every two years; (3) expand the grounds for termination of installment agreements to include failure to make timely tax deposits or file timely tax returns; (4) repeal the requirement that offers-in-compromise of $50,000 or more be supported by a written opinion of the General Counsel of the Department of the Treasury and grant the Secretary of the Treasury discretion to determine whether any written opinion should be placed on file in the Office of the Secretary; (5) expand the types of tax returns for which the IRS may require electronic filing and require taxpayers filing at least five (currently 250) returns to file electronically; (6) allow a suspension of the limitation period for collecting taxes during a hardship review by the National Taxpayer Advocate only if the Advocate's decision is issued more than seven days after the taxpayer applies for a review; (7) increase the penalty for bad checks or money orders; (8) extend from nine months to two years the limitation period for return by the IRS of property wrongfully levied and for contesting certain tax levies; and (9) allow taxpayers to reimburse their individual retirement plans for plan amounts wrongfully levied by the IRS.
 
(Sec. 110) Authorizes the Financial Management Service to deduct its fees for administering continuous taxpayer levies directly from amounts collected from a taxpayer.
 
(Sec. 111) Eliminates the residency restriction on offsetting Federal tax refunds for State income tax obligations.
 

Subtitle B: Processing and Personnel
 - (Sec. 121) Requires the Secretary to revise certain IRS publications to provide an explanation of the time limitations for filing claims for credits or refunds of an overpayment of tax. 
 
(Sec. 122) Amends the Internal Revenue Code to: (1) require an annual report on IRS performance measures; (2) make permanent the combined Federal and State employment tax reporting program; (3) extend eligibility for declaratory judgment relief to certain noncharitable tax-exempt organizations seeking approval of tax-exempt status; (4) revise and codify the grounds for termination of the employment of an IRS employee for misconduct; (5) provide for the appointment of a Director of the IRS Oversight Board and grant the Board authority to approve the selection, evaluation, and compensation of IRS senior executives and to review and approve IRS use of critical pay authority; (6) authorize the Secretary to make matching grants for return preparation clinics for low-income taxpayers; (7) authorize the Secretary to regulate the conduct of enrolled agents before the IRS; (8) establish a permanent disaster response team in the IRS national office to assist taxpayers with tax matters during a presidentially declared disaster; (9) revise or repeal certain reporting requirements for the National Taxpayer Advocate and the Treasury Inspector General for Tax Administration; and (10) require the registration and regulation of tax return preparers, refund anticipation loan providers, and payroll agents.
 
(Sec. 125) Amends the Government Securities Act Amendments of 1993 to allow certain advance disclosures by the Treasury Borrowing Advisory Committee relating to securities auctions.
 
(Sec. 130) Authorizes the Secretary to award demonstration grant projects for providing individuals without bank accounts access to bank account services. 
 
Directs the Secretary to study: (1) the implementation of an accelerated refund program for certain taxpayers; (2) current taxpayer recordkeeping responsibilities; (3) IRS collection procedures and accounts receivable inventories; and (4) certain modifications to tax schedules L and M-1 to include additional information.
 
(Sec. 136) Requires the IRS to obtain consent from taxpayers participating in the Free File Program before such taxpayers may receive solicitations for products or services from Program providers.
 
(Sec. 139) Amend the Internal Revenue Service Restructuring and Reform Act of 1998 to require the Electronic Commerce Advisory Group established by the IRS to include at least two representatives from the consumer advocate community.
 
(Sec. 142) Directs the Secretary to establish a joint task force to review IRS policy and practice with respect to offers-in-compromise. Requires the National Taxpayer Advocate to include specified information on offers-in-compromise in the Advocate's annual report. 
 

Subtitle C: Other Provisions
 - (Sec. 151) Imposes a new penalty for failure to report interests in foreign financial accounts.
 
 (Sec. 152) Repeals the application of below-market loan tax rules to certain continuing care facilities.
 
(Sec. 153) Treats an Indian Tribal Government as a State for purposes of public support requirements relating to qualification of tax-exempt status.
 
 (Sec. 154) Includes payroll agents under the penalty for failure to collect and pay over tax. Denies a discharge in bankruptcy for such penalty. 
 

Title II: Reform of Penalty and Interest
 - 

 (Sec. 201) Amends the Internal Revenue Code to: (1) revise rules for the computation of the addition to tax for failure of individuals to pay estimated tax and to increase the small tax exemption for failure of individuals to pay estimated tax from $1,000 to $2,000; (2) increase the small tax exemption for failure of corporations to pay estimated tax from $500 to $1,000; (3) increase, in yearly increments, the threshold amount for corporate liability for estimated tax payments; (4) revise rules for the abatement of interest on tax deficiencies due to unreasonable IRS error or delay or erroneous advice provided by the IRS; (5) allow cash deposits with the IRS to suspend running of interest on potential underpayments of tax; (6) make permanent the 18-month period for IRS notification of tax liabilities before interest and penalties can be assessed (renders such notification requirement inapplicable to interest, penalty, or addition to tax that is attributable to a gross misstatement by the taxpayer or to certain tax shelter transactions); and (7) increase penalties for the filing of a frivolous tax return and expand the penalty to include certain frivolous submissions to the IRS (e.g., requests for hearings, installment agreements, or offers in compromise).
 
(Sec. 207) Applies the ten percent penalty for failure to make a timely tax deposit only to cases in which the failure has continued for more than 15 days. 
 
(Sec. 209) Amends the Internal Revenue Service Restructuring and Reform Act of 1998 to extend until July 1, 2006, the requirement that IRS include in notices sent to taxpayers a telephone number for information on interest and penalty calculations.
 

Title III: United States Tax Court Modernization - Subtitle A: Tax Court Procedure
 - (Sec. 301) Amends the Internal Revenue Code to: (1) grant exclusive jurisdiction over collection due process case appeals to the U.S. Tax Court; (2) permit the assignment of cases involving small employment tax disputes ($50,000 or less) to U.S. Tax Court special trial judges; (3) confirm that the Tax Court may apply the doctrine of equitable recoupment to the same extent that it is available in civil tax cases before the U.S. District Courts and the U.S. Court of Federal Claims; (4) apply the filing fee for U.S. Tax Court petitions to all petitions filed in such court; (5) permit the U.S. Tax Court to establish its own personnel management system, including merit system and nondiscrimination requirements; and (6) require a portion of Tax Court practitioner fees to be used for services to pro se taxpayers. 
 

Subtitle B: Tax Court Pension and Compensation 
- (Sec. 311) Amends the Internal Revenue Code to: (1) revise provisions on annuities for survivors of Tax Court judges, adding indexed payments for survivors of assassinated judges with less than five years of service; (2) include active and retired Tax Court judges in the Federal employees group life insurance program (FEGLI); (3) authorize the Tax Court to pay increases in the cost of FEGLI coverage for judges age 65 or over; (4) entitle an executive branch judge appointed to the Tax Court to a lump-sum payment of accrued annual leave upon appointment to the Court; (5) permit Tax Court judges to participate in the Thrift Savings Plan (but prohibits agency contributions); (6) exempt from limitations on the outside earned income of retired judges compensation for certain teaching activities approved under the Ethics in Government Act of 1978; (7) revise provisions relating to appointment, removal, salary, and leave of magistrate judges (currently named special trial judges) and authorizes the Chief Judge of the U.S. Tax Court to appoint and reappoint magistrate judges for eight year terms; (8) permit magistrate judges to elect to participate in the Tax Court survivor annuity plan; (9) establish a retirement and annuity program for magistrate judges; (10) provide for special annuity provisions for incumbent magistrate judges; and (11) establish rules for the recall of retired magistrate judges. 
 

Title IV: Confidentiality and Disclosure
 - (Sec. 401) Amends the Internal Revenue Code to: (1) exempt from restrictions on church tax inquiries and examinations IRS efforts to provide information to churches on standards for tax-exempt status and on unrelated business taxable income; (2) permit a former spouse to make an oral, rather than written, request for collection information relating to a joint tax return and to repeal the reporting requirement of the Treasury Inspector General for Tax Administration with respect to Treasury Department compliance with disclosure requirements to requesting spouses; (3) prohibit the examination of a taxpayer representative's tax return solely on the basis of the representative's relationship to the taxpayer; (4) prohibit the disclosure of a taxpayer identification number in publicly available summaries of accepted offers-in-compromise; (5) require State, local, or Federal agencies to review periodically the efforts of their contractors to safeguard tax return information; (6) revise rules for disclosure of tax return information to third parties; (7) revise the civil penalties for unauthorized disclosure or inspection of tax return information by IRS employees; (8) permit disclosure of tax return information to local law enforcement authorities (currently restricted to Federal and State agencies) to inform them of cases involving imminent danger of death or physical injury; (9) permit disclosure of taxpayer identity to any means of mass communication for tax refund purposes; (10) permit the Secretary to disclose to State agencies proposed actions with respect to certain tax-exempt organizations; (11) provide that tax return information is not considered confidential if it has been disclosed in any judicial or administrative proceeding or has been properly made part of the public record; (12) allow Treasury Department Agents to identify themselves, their affiliation, and the nature of an investigation when contacting third parties in writing or in person; (13) permit the IRS to verify that a taxpayer identification number matches a number provided by a party requesting verification; (14) repeal certain duplicative requirements for reporting cash transactions over $10,000; and (15) confirm that a taxpayer's identity is not treated as taxpayer return information for purposes of disclosures to law enforcement agencies investigating terrorist activities. 
 

Title V: Simplification - Subtitle A: Uniform Definition of Child - 
(Sec. 501) Revises the definition of &quot;dependent&quot; to mean a &quot;qualifying child&quot; or &quot;qualifying relative.&quot; Establishes a uniform definition of &quot;qualifying child&quot; for purposes of the dependency exemption, the child credit, the earned income credit, the dependent care credit, and head of household filing status. Bases the definition of qualifying child on: (1) residence; (2) age; and (3) relationship to the taxpayer. 
 

Subtitle B: Simplification Through Elimination of Inoperative Provisions 
- (Sec. 511) Eliminates certain inoperative provisions of the Internal Revenue Code. 
 

Title VI: Revenue Provisions - Subtitle A: Provisions Designed to Curtail Tax Shelters
 - (Sec. 601) Amends the Internal Revenue Code to: (1) impose a new penalty for failure to report a transaction that has a potential for tax avoidance or evasion (reportable transaction) or has been specifically identified as a tax avoidance transaction (listed transaction) and to double the penalty for noncompliance by a large entity (gross receipts in excess of $10 million) or a high net worth individual; (2) impose a 20 percent penalty for understatements of tax resulting from certain tax shelter transactions and an increased penalty (30 percent) for failure to adequately disclose such transactions; (3) revise the definition of substantial understatement of tax for corporations to mean the lesser of ten percent of the tax required to be shown or $10 million; (4) expand the denial of privilege for communications between a tax practitioner and a corporate client to include any individual involved in tax shelter activity; (5) revise disclosure requirements for tax shelter material advisors to require disclosure of certain reportable transactions and the potential tax benefits expected from the transactions; (6) increase penalties for failure to register tax shelters or maintain lists of tax shelter investors; (7) expand the scope of injunctive relief available to the Secretary to combat tax shelter activities; (8) revise the standards for determining tax return preparer liability for understatements of tax and increase the penalties for such understatements; (9) authorize the Secretary to censure and fine an incompetent or disreputable tax advisor who practices before the Department of the Treasury; (10) impose an additional penalty on promoters of tax shelters for knowingly false statements; (11) extend the limitation period for assessing tax on underpayments due to undisclosed tax shelter transactions; and (12) deny a tax deduction for interest on underpayments of tax attributable to an undisclosed tax shelter transaction. 
 
(Sec. 614) Authorizes appropriations for tax law enforcement activities. 
 

Part II: Other Corporate Governance Provisions 
- (Sec. 621) Amends the Internal Revenue Code to: (1) authorize the Secretary to issue consolidated return regulations that treat corporations filing consolidated returns differently than corporations filing separate returns; (2) revise rules for determining the tax deductibility (or nondeductibility) of certain fines or penalties (confirms that restitution payments, court-ordered payments to nongovernmental entities, and tax payments are not treated as nondeductible fines or penalties); (3) deny a tax deduction for punitive damages and include in the gross income of a taxpayer payment of punitive damages by an insurer or other source; and (4) increase the criminal penalties for attempts to evade or defeat tax, willful failure to file tax returns or pay tax, and for fraud and making false statements on tax returns; 
 
(Sec. 622) Requires that the Federal annual tax return of a corporation contain a sworn statement by its Chief Executive Officer (CEO) that the corporation has in place processes and procedures to ensure that its tax returns comply with Federal tax law and that the CEO has been provided with reasonable assurances of their accuracy.
 
(Sec. 626) Doubles civil penalties and interest for taxpayers who were eligible for either the Department of the Treasury's Offshore Voluntary Compliance Initiative (OVCI) or the voluntary disclosure program for reporting underpayment of tax from certain offshore financial arrangements, but who did not participate in either program. 
 

Part III: Extension of IRS User Fees 
- Extends the authorization for certain IRS user fees until September 30, 2013.
 

Part IV: Other Revenue Provisions
 - (Sec. 641) Imposes certain reporting requirements on an acquiring corporation in a taxable acquisition and imposes a penalty for failure to report required information.
 
 (Sec. 642) Modifies the definition of a &quot;brother-sister controlled group&quot; of corporations. 


Legislative actions:
action_date: 2004-05-20
text: Message on Senate action sent to the House.
action_date: 2004-05-19
text: See also S.882.
action_date: 2004-05-19
text: Passed Senate in lieu of S.882 with an amendment by Unanimous Consent. (text as passed Senate: CR 5/20/2004 S6018-6044)
action_date: 2004-05-19
text: Passed/agreed to in Senate: Passed Senate in lieu of S.882 with an amendment by Unanimous Consent.(text as passed Senate: CR 5/20/2004 S6018-6044)
action_date: 2004-05-19
text: Senate struck all after the Enacting Clause and substituted the language of S.882 amended.
action_date: 2004-05-19
text: Measure laid before Senate by unanimous consent. (consideration: CR S5848-5891; text of measure as reported in Senate: CR S5848-5890)
action_date: 2004-05-19
text: Senate Committee on Finance discharged by Unanimous Consent.
action_date: 2004-05-19
text: Senate Committee on Finance discharged by Unanimous Consent.
action_date: 2003-06-20
text: Received in the Senate and Read twice and referred to the Committee on Finance.
action_date: 2003-06-19
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2003-06-19
text: On passage Passed by recorded vote: 252 - 170 (Roll no. 293). (text: CR 6/18/2003 H5514-5530)
action_date: 2003-06-19
text: Passed/agreed to in House: On passage Passed by recorded vote: 252 - 170 (Roll no. 293).(text: CR 6/18/2003 H5514-5530)
action_date: 2003-06-19
text: On motion to recommit with instructions Failed by recorded vote: 199 - 226 (Roll no. 292).
action_date: 2003-06-19
text: The previous question on the motion to recommit with instructions was ordered without objection.
action_date: 2003-06-19
text: Mr. Visclosky moved to recommit with instructions to Ways and Means. (consideration: CR H5595-5597; text: CR     H5595)
action_date: 2003-06-19
text: DEBATE - Pursuant to the provsions of H. Res. 282, the House proceeded with one hour of debate on the McDermott amendment in the nature of a substitute.
action_date: 2003-06-19
text: CONTINUATION OF PROCEEDINGS - At the conclusion of consideration on Wednesday, June 18, 2003, all time for general debate had expired.
action_date: 2003-06-19
text: Considered as unfinished business. (consideration: CR H5562-5597)
action_date: 2003-06-18
text: POSTPONED PROCEEDINGS - At the conclusion of General Debate, the Chair postponed further proceedings on H.R. 1528 until Thursday, June 19, 2003.
action_date: 2003-06-18
text: GENERAL DEBATE - Pursuant to the provisions of H. Res. 282, the House proceeded with one hour of general debate on H.R. 1528.
action_date: 2003-06-18
text: Rule provides for consideration of H.R. 1528 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. A specified amendment is in order.
action_date: 2003-06-18
text: Considered under the provisions of rule H. Res. 282. (consideration: CR H5514-5535)
action_date: 2003-06-18
text: Rule H. Res. 282 passed House.
action_date: 2003-06-17
text: Rules Committee Resolution H. Res. 282 Reported to House. Rule provides for consideration of H.R. 1528 with 1 hour of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. Measure will be considered read. A specified amendment is in order.
action_date: 2003-04-08
text: Placed on the Union Calendar, Calendar No. 39.
action_date: 2003-04-08
text: Reported (Amended) by the Committee on Ways and Means. H. Rept. 108-61.
action_date: 2003-04-08
text: Reported (Amended) by the Committee on Ways and Means. H. Rept. 108-61.
action_date: 2003-04-03
text: Ordered to be Reported (Amended) by Voice Vote.
action_date: 2003-04-03
text: Committee Consideration and Mark-up Session Held.
action_date: 2003-04-01
text: Referred to the House Committee on Ways and Means.
action_date: 2003-04-01
text: Introduced in House
action_date: 2003-04-01
text: Introduced in House