Taxpayer Rights Act of 2015

Bill: 114-s-2333
Sponsor: full_name: Sen. Cardin, Benjamin L. [D-MD]
Introduced: 2015-11-30
Policy area: Taxation
Subjects: Administrative law and regulatory procedures

Administrative remedies

Appropriations

Congressional oversight

Consumer credit

Debt collection

Department of the Treasury

Employee benefits and pensions

Executive agency funding and structure

Fraud offenses and financial crimes

Government employee pay, benefits, personnel management

Government ethics and transparency, public corruption

Government studies and investigations

Internal Revenue Service (IRS)

Judicial review and appeals

Lawyers and legal services

Poverty and welfare assistance

Right of privacy

Social work, volunteer service, charitable organizations

Specialized courts

Tax administration and collection, taxpayers
Latest action: action_date: 2015-11-30
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2015-11-30
action_desc: Introduced in Senate
text: <p><strong>Taxpayer Rights Act of 2015</strong></p> <p>TITLE I--TAXPAYER RIGHTS </p> <p>This title amends the Internal Revenue Code to: (1) require the Department of the Treasury, in consultation with the National Taxpayer Advocate, to publish a summary statement of primary taxpayer rights; and (2) in consultation with the Internal Revenue Service (IRS), ensure that IRS employees are familiar with and act in accordance with such rights. Taxpayer rights include the right to be informed, the right to quality service, the right to pay no more than the correct amount of tax, the right to challenge the position of the IRS and to be heard, the right to appeal an IRS decision in an independent forum, the right to finality, the right to privacy, the right to confidentiality, the right to retain representation, and the right to a fair and just tax system, including access to the National Taxpayer Advocate. </p> <p>TITLE II--PREPARATION OF TAX RETURNS</p> <p>The IRS must establish a Community Volunteer Income Tax Assistance Matching Grant Program (VITA grant program) for the development, expansion, or continuation of qualified return preparation programs assisting low-income taxpayers and members of underserved populations.</p> <p>The National Center to Promote Quality, Excellence, and Evaluation in Volunteer Income Tax Assistance is established to: (1) promote the adoption of a universally accessible volunteer training platform for the preparation of federal income tax returns, (2) provide technical assistance to tax return preparation program managers, (3) identify and disseminate best practices related to tax site management, (4) support outreach and marketing efforts, and (5) provide for the evaluation of programs and activities funded under this title.</p> <p>This title: (1) grants Treasury the authority to regulate paid tax return preparers and to sanction them for incompetence or misconduct; (2) imposes or increases penalties on tax return preparers for understating taxpayer liability, gross misconduct, and other violations; (3) permits enrolled agents who represent taxpayers before the IRS to use the designation &quot;enrolled agent,&quot; &quot;EA,&quot; or &quot;E.A.&quot;; and (4) limits the disclosure of taxpayer information to the express purpose for which the taxpayer granted consent.</p> <p>TITLE III--IMPROVING IRS PROCEDURES </p> <p>This title revises IRS procedures for filing a notice of lien to: (1) require the IRS to consider the compliance history of the taxpayer and the economic impact of a tax lien on the taxpayer, and (2) limit IRS authority to attach retirement accounts. </p> <p>This title amends the Fair Credit Reporting Act to reduce from seven years to two years the period that a tax lien may appear on a taxpayer's credit report. </p> <p>This title provides for de novo review by the Tax Court of IRS innocent spouse relief determinations. </p> <p>The IRS must: (1) develop annual training for all IRS officers and employees regarding taxpayer rights, the Office of the Taxpayer Advocate's case criteria and mission, and Taxpayer Assistance Order procedures; (2) provide taxpayers with notice and an opportunity to be heard if the IRS Office of Appeals issues a notice of deficiency; and (3) assign one appeals officer and one settlement agent from the Office of Appeals to each state.</p> <p>TITLE IV--NATIONAL TAXPAYER ADVOCATE</p> <p>This title grants the National Taxpayer Advocate the authority to: (1) appeal a modification or rescission of a Taxpayer Assistance Order by an IRS Deputy Commissioner to the IRS Commissioner for a final determination; (2) inspect taxpayer administrative files in the performance of its duties; (3) issue a Taxpayer Advocate Directive to improve IRS operations and to protect the rights of groups of taxpayers (or all taxpayers); and (4) designate essential employees to assist taxpayers during any lapse in appropriations for the IRS.</p>

tv_txt: II 114th CONGRESS 1st Session S. 2333 IN THE SENATE OF THE UNITED STATES November 30, 2015 Mr. Cardin introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide taxpayer protection and assistance, and for other purposes.

1. Short title; etc (a) Short title This Act may be cited as the Taxpayer Rights Act of 2015 . (b) Amendment of 1986 Code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986, as amended. (c) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; etc. TITLE I—Taxpayer Rights Sec. 101. Statement of taxpayer rights. TITLE II—Preparation of Tax Returns Sec. 201. Programs for the benefit of low-income taxpayers. Sec. 202. Regulation of tax return preparers. Sec. 203. Preparer penalties with respect to preparation of returns and other submissions. Sec. 204. Clarification of enrolled agent credentials. Sec. 205. Limit redisclosures and uses of consent-based disclosures of tax return information. TITLE III—Improving IRS Procedures Sec. 301. Modifications to lien notice filing procedures. Sec. 302. Modification of requirements relating to tax lien information contained in consumer credit reports. Sec. 303. De novo tax court review of innocent spouse relief determinations. Sec. 304. Release of Federal tax levies which cause business hardship. Sec. 305. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness. Sec. 306. Special rules for levies that attach to a fixed and determinable right. Sec. 307. Rules related to levies on qualified retirement plans. Sec. 308. Taxpayer rights training. Sec. 309. Notice and opportunity for hearing by the Office of Appeals. TITLE IV—National Taxpayer Advocate Sec. 401. Modifications relating to taxpayer assistance orders. Sec. 402. Taxpayer advocate directives. Sec. 403. Office of the Taxpayer Advocate Access to Administrative Files. Sec. 404. Office of the Taxpayer Advocate operations during a lapse in appropriations. I Taxpayer Rights 101. Statement of taxpayer rights (a) In general Chapter 77 is amended by adding at the end the following new section: 7529. Statement of taxpayer rights (a) In general The Secretary shall— (1) in consultation with the National Taxpayer Advocate, publish a summary statement of primary taxpayer rights (as described in subsection (b)), and (2) in coordination with the Commissioner of the Internal Revenue Service, ensure that the employees of the Internal Revenue Service are familiar with and act in accordance with such rights. (b) Statement of rights The statement of rights is as follows: (1) Right to be informed. (2) Right to quality service. (3) Right to pay no more than the correct amount of tax. (4) Right to challenge the position of the Internal Revenue Service and be heard. (5) Right of appeal from a decision of the Internal Revenue Service in an independent forum. (6) Right to finality. (7) Right to privacy. (8) Right to confidentiality. (9) Right to retain representation. (10) Right to a fair and just tax system, including access to the Taxpayer Advocate Service. . (b) Clerical amendment The table of sections for chapter 77 is amended by adding at the end the following new item: Sec. 7529. Statement of taxpayer rights. . (c) Effective date The amendments made by this section shall take effect 180 days after the date of the enactment of this Act. II Preparation of Tax Returns 201. Programs for the benefit of low-income taxpayers (a) Grants To facilitate nationwide availability of volunteer income tax assistance for low-Income and underserved populations (1) In general The Secretary, through the Internal Revenue Service, shall establish a Community Volunteer Income Tax Assistance Matching Grant Program (hereinafter in this subsection referred to as the VITA grant program ). Except as otherwise provided in this subsection, the VITA grant program shall be administered in a manner which is substantially similar to the Community Volunteer Income Tax Assistance matching grants demonstration program established under title I of division D of the Consolidated Appropriations Act, 2008. (2) Matching grants (A) In general The Secretary shall make available grants under the VITA grant program to provide matching funds for the development, expansion, or continuation of qualified return preparation programs assisting low-income taxpayers and members of underserved populations. (B) Application In order to be eligible for a grant under this subsection, a qualified return preparation program shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require for each fiscal year. (C) Priority In awarding grants under this subsection, the Secretary shall give priority to applications— (i) demonstrating assistance to low-income taxpayers, with emphasis on outreach to and services for such taxpayers, (ii) demonstrating taxpayer outreach and education around available income supports and refundable credits such as the earned income tax credit under section 32 of the Internal Revenue Code of 1986, and (iii) demonstrating specific outreach and focus on one or more underserved populations. (D) Use of funds Qualified return preparation programs receiving a grant under this subsection may use the grant for— (i) ordinary and necessary costs associated with program operation in accordance with Cost Principles Circulars as set forth by the Office of Management and Budget, including— (I) for wages or salaries of persons coordinating the activities of the program, (II) to develop training materials, conduct training, and perform quality reviews of the returns, and (III) for equipment purchases and vehicle-related expenses associated with remote or rural tax preparation services, (ii) outreach and educational activities relating to eligibility and availability of income supports available through the Internal Revenue Code of 1986, such as the earned income tax credit, and (iii) services related to financial education and capability, asset development, and the establishment of savings accounts in connection with tax return preparation. (E) Duration of grants (i) In general Except as provided in clause (ii), a grant awarded under this subsection shall be for a period of 1 year and shall not be renewed other than through an application under subparagraph (B). (ii) Extended grants The Secretary may award a grant under this subsection for a period of not more than 3 years to any qualified return preparation program which— (I) received a grant under this subsection for the preceding year, and (II) received a score of 90 percent or better on a technical evaluation. (F) Use of grants for overhead expenses prohibited No grant made under this subsection may be used for overhead expenses that are not directly related to any qualified return preparation program. (3) Promotion and referral (A) Promotion The Secretary shall promote the benefits of, and encourage the use of, tax preparation through the Volunteer Income Tax Assistance program through the use of mass communications, referrals, and other means. (B) Internal revenue service referrals The Secretary may refer taxpayers to qualified return preparation programs receiving funding under this subsection. (C) VITA grantee referral Qualified return preparation programs receiving a grant under this subsection are encouraged to refer, as appropriate, to local or regional Low Income Tax Clinics individuals who are eligible to receive services at such clinics. (4) Authorization of Appropriations (A) In general For each of fiscal years 2016, 2017, 2018, 2019, and 2020, there are authorized to be appropriated $30,000,000 to carry out the purposes of this subsection. (B) Reservation From the funds appropriated under subparagraph (A) for any fiscal year, the Secretary shall reserve not more than 3 percent for administration of the program. (C) Availability Amounts appropriated pursuant to the authority of subparagraph (A) shall remain available without fiscal year limitation until expended. (b) National center To promote quality, excellence, and evaluation in volunteer income tax assistance (1) National center to promote quality, excellence, and evaluation in volunteer income tax assistance (A) Establishment There is hereby established the National Center to Promote Quality, Excellence, and Evaluation in Volunteer Income Tax Assistance (hereinafter in this subsection referred to as the Center ). (B) Purpose The Center shall— (i) promote the adoption of a universally accessible volunteer training platform for the preparation of Federal income tax returns, (ii) provide capacity-building technical assistance to qualified return preparation program managers, (iii) identify and disseminate best practices related to tax site management emerging from States, community-based organizations, nonprofit providers, and local government entities, (iv) support outreach and marketing efforts to encourage the use of qualified return preparation programs receiving funding under subsection (a), and (v) provide evaluation of programs and activities funded under this section, including— (I) identification, both in aggregate and disaggregate, of gaps in services for low-income taxpayers and underserved populations, and (II) independent evaluation of progress toward program objectives, as defined by the Secretary. (C) Administration (i) In general The Secretary shall— (I) designate, through a competitive process, one qualified entity to be the lead national organization, and (II) provide an annual grant to the lead national organization designated under subclause (I). (ii) Duties of lead national organization The lead national organization shall use funds provided through the grant in clause (i)(II) to— (I) carry out the purposes of the Center, and (II) make subgrants as provided in paragraph (2). (2) Subgrants (A) In general The lead national organization shall make available subgrants to eligible organizations to facilitate specialized technical assistance in reaching one or more underserved populations. (B) Eligible organization For purposes of this paragraph, the term eligible organization means any organization which— (i) is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, (ii) has, to the satisfaction of the lead national organization, demonstrated expertise and evidenced-based practices in specialized outreach to, and service of, one or more underserved populations, and (iii) has, to the satisfaction of the lead national organization, demonstrated expertise in the provision of specialized technical assistance relating to qualified return preparation programs for one or more targeted underserved populations. (C) Application In order to be eligible for a subgrant under this paragraph, an eligible organization shall submit an application to the lead national organization at such time, in such manner, and containing such information as the lead national organization may reasonably require for each fiscal year. (D) Use of funds An eligible organization which receives a subgrant under this paragraph shall assist the Center by— (i) providing technical assistance to qualified return preparation programs with targeted outreach and assistance to one or more underserved populations, and (ii) including strategies for the provision of technical assistance targeting individuals and families with annual household earnings at or below 250 percent of the poverty line within the underserved populations served by the subgrant. (E) Subgrant amount (i) In general Each year, the lead national organization shall make available subgrants which, in the aggregate, do not exceed 40 percent of the grant received under paragraph (1). (ii) Underserved populations Of the amount of subgrants provided under clause (i)— (I) not less than 25 percent shall be dedicated to specialized technical assistance in serving taxpayers with disabilities, (II) not less than 25 percent shall be dedicated to specialized technical assistance in serving limited English speaking taxpayers, and (III) not less than 25 percent shall be dedicated to specialized technical assistance in serving Native American taxpayers. (F) Duration of subgrants A subgrant awarded under this paragraph shall be for a period of 1 year and shall not be renewed other than through an application under subparagraph (C). (3) Authorization of Appropriations (A) In general For each of fiscal years 2016, 2017, 2018, 2019, and 2020, there are authorized to be appropriated $5,000,000 to carry out the purposes of this subsection. (B) Availability Amounts appropriated pursuant to the authority of subparagraph (A) shall remain available without fiscal year limitation until expended. (c) Definitions As used in subsections (a) and (b): (1) Qualified return preparation program The term qualified return preparation program means any program— (A) which provides assistance to individuals, not less than 90 percent of whom are low-income taxpayers, in preparing and filing Federal income tax returns, including schedules reporting sole proprietorship or farm income, (B) which is administered by a qualified entity, (C) in which all of the volunteers who assist in the preparation of Federal income tax returns meet the training requirements prescribed by the Secretary, and (D) which uses a quality review process which reviews 100 percent of all returns. (2) Qualified entity (A) In general The term qualified entity means any entity which— (i) is described in subparagraph (B), (ii) is in compliance with Federal tax filing and payment requirements, (iii) is not debarred or suspended from Federal contracts, grants, or cooperative agreements, and (iv) agrees to provide documentation to substantiate any matching funds provided under the VITA grant program. (B) Entity described An entity is described in this subparagraph if such entity is— (i) an institution of higher education which is described in section 102 (other than subsection (a)(1)(C) thereof) of the Higher Education Act of 1965 ( 20 U.S.C. 1088 ), as in effect on the date of the enactment of this section, and which has not been disqualified from participating in a program under title IV of such Act, (ii) an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, (iii) a State or local government agency, including— (I) a county or municipal government agency, (II) an Indian tribe, as defined in section 4(12) of the Native American Housing Assistance and Self-Determination Act of 1996 ( 25 U.S.C. 4103(12) ), including any tribally designated housing entity (as defined in section 4(21) of such Act ( 25 U.S.C. 4103(21) )), tribal subsidiary, subdivision, or other wholly owned tribal entity, and (III) a State government agency, but only if no other eligible organization is available to assist the targeted population or community, (iv) a local, State, regional, or national coalition (with one lead organization which meets the eligibility requirements of clause (i), (ii), or (iii) acting as the applicant organization), or (v) a Cooperative Extension Service office, but only if no other eligible organization is available to assist the targeted population or community. (3) Low-income taxpayers The term low-income taxpayer means a taxpayer who has an income which does not exceed 250 percent of the poverty line (as defined in section 2110(c)(5) of the Social Security Act ( 42 U.S.C. 1397jj(c)(5) )). (4) Underserved population The term underserved population includes populations of persons with disabilities, persons with limited English proficiency, Native Americans, individuals living in rural areas, and the elderly. (5) Lead national organization The term lead national organization means an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code which has demonstrated, to the satisfaction of the Secretary— (A) capacity in a minimum of 15 States, territories, or tribal areas, (B) expertise in the provision of tax preparation services to low-income taxpayers and underserved populations, (C) an ability to train program leadership and staff, (D) capacity to disseminate information throughout the United States, and (E) capacity to— (i) maintain a Web site through which information is disseminated in an easily accessible manner, and (ii) provide technical assistance and training through Web-based technologies. (6) Secretary The term Secretary means the Secretary of the Treasury or the Secretary’s delegate. (d) Low-Income taxpayer clinics (1) Increase in authorized grants Paragraph (1) of section 7526(c) is amended by striking $6,000,000 and inserting $20,000,000 . (2) Use of grants for overhead expenses prohibited (A) In general Section 7526(c) is amended by adding at the end the following new paragraph: (6) Use of grants for overhead expenses prohibited No grant made under this section may be used for overhead expenses that are not directly related to the clinic. . (B) Conforming amendments Section 7526(c)(5) is amended— (i) by inserting qualified before low-income , and (ii) by striking the last sentence. (3) Promotion of clinics Section 7526 is amended by adding at the end the following new subsection: (d) Promotion of clinics The Secretary is authorized to promote the benefits of and encourage the use of qualified low-income taxpayer clinics through the use of mass communications, referrals, and other means. . (4) IRS referrals to clinics Subsection (c) of section 7526 , as amended by paragraph (2)(A), is amended by adding at the end the following new paragraph: (7) IRS referrals Notwithstanding any other provision of law, the Secretary may refer taxpayers to specific qualified low-income taxpayer clinics receiving funding under this section. . (5) Poverty line Section 7526(b)(1)(B)(i) is amended by striking poverty level, as determined in accordance with criteria established by the Director of the Office of Management and Budget and inserting poverty line (as defined in section 2110(c)(5) of the Social Security Act ( 42 U.S.C. 1397jj(c)(5) )) . (6) Notice of availability of clinics in notice of deficiency Subsection (a) of section 6212 is amended by inserting , as well as notice regarding the availability of low-income taxpayer clinics and information about how to contact them before the period at the end. (7) Notice of availability of clinics in notice of hearing upon filing of notice of lien Subsection (a) of section 6320 is amended by adding at the end the following new sentence: Such notice shall include a notice to the taxpayer of the availability of low-income taxpayer clinics and information about how to contact them. . (8) Notice of availability of clinics in notice and opportunity of hearing before levy Paragraph (3) of section 6330(a) is amended by adding at the end the following flush sentence: Such notice shall include a notice to the taxpayer of the availability of low-income taxpayer clinics and information about how to contact them. . (e) Effective Date The amendments made by this section shall take effect on the date of the enactment of this Act. 202. Regulation of tax return preparers (a) In general Subsection (a) of section 330 of title 31, United States Code, is amended— (1) by striking paragraph (1) and inserting the following: (1) regulate— (A) the practice of representatives of persons before the Department of the Treasury; and (B) the practice of tax return preparers; and , and (2) in paragraph (2)— (A) by inserting or tax return preparer after representative each place it appears, and (B) by inserting or in preparing their tax returns, claims for refund, or documents in connection with tax returns or claims for refund after cases in subparagraph (D). (b) Authority To sanction regulated tax return preparers Subsection (b) of section 330 of title 31, United States Code, is amended— (1) by striking before the Department , (2) by inserting or tax return preparer after representative each place it appears, and (3) in paragraph (4), by striking misleads or threatens and all that follows and inserting misleads or threatens— (A) any person being represented or any prospective person being represented; or (B) any person or prospective person whose tax return, claim for refund, or document in connection with a tax return or claim for refund, is being or may be prepared. . (c) Tax return preparer defined Section 330 of title 31, United States Code, is amended by adding at the end the following new subsection: (e) Tax return preparer For purposes of this section— (1) In general The term tax return preparer has the meaning given such term under section 7701(a)(36) of the Internal Revenue Code of 1986. (2) Tax return The term tax return has the meaning given to the term return under section 6696(e)(1) of the Internal Revenue Code of 1986. (3) Claim for refund The term claim for refund has the meaning given such term under section 6696(e)(2) of such Code. . 203. Preparer penalties with respect to preparation of returns and other submissions (a) Inclusion of other submissions in penalty provisions (1) Understatement of taxpayer’s liability by tax return preparer (A) In general Section 6694 is amended by striking return or claim of refund each place it appears and inserting return, claim of refund, or other submission to the Secretary . (B) Conforming amendments Section 6694 , as amended by paragraph (1), is amended by striking return or claim each place it appears and inserting return, claim, or other submission to the Secretary . (2) Increase in penalty in case of gross misconduct Subsection (b) of section 6694 is amended by adding at the end the following new paragraph: (4) Increase in penalty in case of gross misconduct In the case of an understatement to which this section applies that is attributable to the tax return preparer’s making a false or fraudulent return or claim for refund without the taxpayer’s knowledge, subsection (a) shall be applied by substituting 100 percent of the amount of the understatement for 50 percent of the amount derived (or to be derived) by the tax return preparer with respect to the return or claim . This penalty shall be in addition to any other penalties provided by law. . (3) Other assessable penalties (A) In general Section 6695 is amended by striking return or claim of refund each place it appears and inserting return, claim of refund, or other submission . (B) Conforming amendments Section 6695 , as amended by paragraph (1), is amended by striking return or claim each place it appears and inserting return, claim, or other submission . (b) Increase in certain other assessable penalty amounts (1) In general Subsections (a), (b), and (c) of section 6695 are each amended by striking $50 and inserting $1,000 . (2) Removal of annual limitation Subsections (a), (b), and (c) of section 6695 are each amended by striking the last sentence thereof. (c) Review by the Treasury Inspector General for Tax Administration Subparagraph (A) of section 7803(d)(2) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and , and by adding at the end the following new clause: (v) a summary of the penalties assessed and collected during the reporting period under sections 6694 and 6695 and under the regulations promulgated under section 330 of title 31, United States Code, and a review of the procedures by which violations are identified and penalties are assessed under those sections, . (d) Additional certification on documents other than returns (1) Identifying number required for all submissions to the IRS by tax return preparers The first sentence of paragraph (4) of section 6109(a) is amended by striking return or claim for refund and inserting return, claim for refund, statement, or other document . (2) Effective date The amendment made by paragraph (1) shall apply to any return, claim for refund, or submission to the Secretary that is filed after the date of the enactment of this Act. (e) Coordination with section 6060 (a) The Secretary of the Treasury shall coordinate the requirements under the regulations promulgated under sections 330 and 330A of title 31, United States Code, with the return requirements of section 6060 of the Internal Revenue Code of 1986. (f) Effective date The regulations required by this section shall be prescribed not later than one year after the date of the enactment of this Act. 204. Clarification of enrolled agent credentials Section 330 of title 31, United States Code, is amended— (1) by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively, and (2) by inserting after subsection (a) the following new subsection: (b) Any enrolled agents properly licensed to practice as required under rules promulgated under subsection (a) shall be allowed to use the credentials or designation of enrolled agent , EA , or E.A. . . 205. Limit redisclosures and uses of consent-based disclosures of tax return information (a) In general Subsection (c) of section 6103 is amended by striking However, return and inserting the following: Persons designated by the taxpayer to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of, or request by, the taxpayer. Return . (b) Effective date The amendment made by this section shall apply to disclosures after the date of the enactment of this Act. III Improving IRS Procedures 301. Modifications to lien notice filing procedures (a) In general Section 6323 is amended by adding at the end the following new subsection: (k) Required procedures before filing notice of lien (1) Secretarial determination (A) In general The Secretary may not file a notice of lien with respect to any taxpayer unless— (i) the lien attaches to distrainable property, and (ii) weighing all facts and circumstances pertaining to the collection of a taxpayer’s delinquent tax assessment, the Secretary determines that— (I) the benefit to the Federal Government of the filing outweighs the harm to the taxpayer, and (II) the filing will not jeopardize the taxpayer’s prospective ability— (aa) to comply with the internal revenue laws, and (bb) if the taxpayer is an otherwise viable business taxpayer, to continue to secure funding to maintain business operations. (B) Factors to consider In making the determination under subparagraph (A)(ii), the Secretary shall consider— (i) the amount due, (ii) the lien filing fee, (iii) the value of the taxpayer’s equity in the property or rights to property, (iv) the taxpayer’s tax compliance history, (v) extenuating circumstances, if any, that explain the delinquency, and (vi) the effect of the filing on the taxpayer’s ability to obtain financing, generate future income, and pay current and future tax liabilities. (2) Taxpayer appeal prior to filing (A) In general The Secretary may not file a notice of lien with respect to any taxpayer unless— (i) the Secretary notifies the taxpayer that the Secretary has determined to file such a notice with respect to the taxpayer, and (ii) the taxpayer is afforded an opportunity to appeal such determination to the Internal Revenue Service Office of Appeals. The Secretary shall provide the notice under subparagraph (A) in writing and make reasonable efforts to provide such notice by telephone or direct personal contact. (B) Jeopardy notice of lien The Secretary may file a notice of lien without regard to subparagraph (A)(ii) if the Secretary finds that the collection of the tax would be in jeopardy if the notice of lien is not filed before the conclusion of such an appeal. (3) Supervisory approval required for liens in certain cases (A) In general In any case to which this paragraph applies, a notice of lien may not be filed unless the immediate supervisor (or such higher level official as the Secretary may designate) of the individual making the initial determination under paragraph (1) has individually reviewed and approved such determination. (B) Cases to which paragraph applies This paragraph shall apply in any case in which— (i) the collection of the liability would create an economic hardship within the meaning of section 6343(a)(1)(D), (ii) the taxpayer has no equity in assets, or (iii) there has been no personal contact with the taxpayer to discuss collection alternatives, including an offer in compromise and partial payment installment agreement. . (b) Jeopardy notice of lien (1) In general Subparagraph (A) of section 7429(a)(1) is amended by inserting after or 6862, the following: no notice of lien may be filed pursuant to section 6323(k)(2)(B), . (2) Redetermination by Secretary Paragraph (3) of section 7429(a) is amended by striking or at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: (B) whether or not the filing of the notice of lien pursuant to section 6323(k)(2)(B) is reasonable under the circumstances, or . (3) Redetermination by Tax Court Paragraph (3) of section 7429(b) is amended by striking or at the end of subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph: (B) whether or not the filing of the notice of lien pursuant to section 6323(k)(2)(B) is reasonable under the circumstances, or . (4) Conforming amendments (A) The heading for section 7429 is amended by inserting , notice of lien filing, after levy . (B) Subparagraphs (A) and (B) of section 7429(a)(1) are each amended by striking assessment or levy each place it appears and inserting assessment, notice of lien filing, or levy . (C) Subparagraph (B) of section 7429(b)(2) is amended by striking assessment or levy and inserting assessment, notice of lien filing, or levy . (D) Paragraph (4) of section 7429(b) is amended— (i) by inserting that the filing of such notice of lien is unreasonable, after that the making of such levy is unreasonable, , and (ii) by inserting to withdraw such notice of lien, after to release such levy, . (E) Paragraph (1) of section 7429(g) is amended— (i) by inserting , the filing of a notice of lien pursuant to section 6323(k)(2)(B), after the making of a levy described in subsection (a)(1) , and (ii) by inserting notice of lien filing after Reasonableness of in the heading thereof. (c) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act. 302. Modification of requirements relating to tax lien information contained in consumer credit reports (a) In general Paragraph (3) of section 605(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a)(3) ) is amended to read as follows: (3) Tax liens The following tax liens: (A) Any tax lien released pursuant to section 6325(a) of the Internal Revenue Code of 1986 not more than 2 years after the date that the notice of such lien was filed. (B) Any tax lien released pursuant to section 6325(a) of such Code— (i) more than 2 years after the date that the notice of such lien was filed, and (ii) more than 2 years before the report. (C) Any tax lien if— (i) the notice of such lien was not refiled during the required refiling period (as defined in section 6323(g)(3) of such Code), and (ii) such period ends more than 6 years before the report. (D) Any tax lien the notice of which is withdrawn pursuant to section 6323(j)(1) of such Code. (E) Any tax lien released pursuant to section 6326(b) of such Code if the notice of such lien was erroneously filed. . (b) Effective date The amendment made by this section shall take effect on the date of the enactment of this Act. 303. De novo tax court review of innocent spouse relief determinations (a) In general Section 6015 is amended— (1) in subsection (e), by adding at the end the following new paragraph: (6) Standard and scope of review Any review of a determination made under this section shall be reviewed de novo by the Tax Court and shall be based upon— (A) the administrative record established at the time of the determination, and (B) any additional newly discovered or previously unavailable evidence. , and (2) by amending subsection (f) to read as follows: (f) Equitable relief (1) In general Under procedures prescribed by the Secretary, if— (A) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either), and (B) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability. (2) Limitation A request for equitable relief under this subsection may be made with respect to any portion of any liability that— (A) has not been paid, provided that such request is made before the expiration of the applicable period of limitation under section 6502, or (B) has been paid, provided that such request is made during the period in which the individual could submit a timely claim for refund or credit of such payment. . (b) Effective date The amendments made by this section shall apply to petitions or requests filed or pending on and after the date of the enactment of this Act. 304. Release of Federal tax levies which cause business hardship (a) In general Subparagraph (D) of section 6343(a)(1) is amended by inserting or any trade or business of the taxpayer before , or . (b) Criteria for determining business hardship Subsection (a) of section 6343 is amended by adding at the end the following new paragraph: (4) Criteria for determining business hardship For purposes of making a determination under paragraph (1)(D), with respect to a trade or business of the taxpayer, the Secretary shall take into consideration— (A) the economic viability of such trade or business, (B) the nature and extent of the hardship, including the extent to which the taxpayer exercised ordinary business care and prudence, and (C) any hardships which would be caused to other individuals or businesses if such trade or business were liquidated. . (c) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 305. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness (a) In general Subsection (c) of section 6050P is amended by adding at the end the following new paragraph: (4) Determining date of discharge Whether an entity has discharged the indebtedness of any person shall not be determined based solely on the passage of a specified period of time during which the entity has not received payment on such indebtedness. . (b) Effective date The amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this Act. 306. Special rules for levies that attach to a fixed and determinable right (a) In general Section 6331 is amended by redesignating subsection (l) as subsection (m) and by inserting after subsection (k) the following new subsection: (l) Limitation on levy after expiration of collection period (1) Penalties and interest In the case of a levy that attaches to a fixed and determinable right to payments or other property, penalties, additions to tax, and interest shall not accrue after the expiration of the period of limitations provided in section 6502. (2) Retirement and disability payments In the case of a levy on benefits under title II of the Social Security Act, benefits under a plan on account of a disability, or retirement benefits or amounts held in a retirement plan, such levy is not enforceable with respect to such benefits or amounts after the expiration of the period of limitations provided in section 6502 unless the taxpayer has committed a flagrant act (as defined in section 6334(f)(2)). . (b) Effective date The amendments made by this section shall apply to levies served after the date of the enactment of this Act. 307. Rules related to levies on qualified retirement plans (a) Levy allowed on qualified retirement plans in certain circumstances Section 6334 is amended— (1) by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, (2) by inserting after subsection (e) the following new subsection: (f) Levy allowed on certain retirement plans (1) In general Amounts in a qualified retirement plan (as defined in section 4974(c)) or amounts in a taxpayer's account in the Thrift Savings Fund (as described in section 8439(a)(2) of title 5, United States Code) shall be exempt from levy unless— (A) the amount of tax (excluding interest and penalties) owed by the taxpayer exceeds $10,000, (B) the Secretary determines that the taxpayer has committed a flagrant act, and (C) the Secretary determines that such levy will not create an economic hardship due to the financial condition of the taxpayer (as described in section 6343(a)(1)(D)). (2) Flagrant act For purposes of this subsection, the term flagrant act means— (A) the filing of a fraudulent return by the taxpayer, or (B) that the taxpayer acted with the intent to evade or defeat any tax imposed by this title or the collection or payment thereof. , and (3) in subsection (h), as redesignated by paragraph (1)— (A) by redesignating paragraph (2) as paragraph (3), (B) in paragraph (3), as redesignated by subparagraph (A), by inserting or (2) after paragraph (1) , and (C) by inserting after paragraph (1) the following new paragraph: (2) Other amounts In the case of any calendar year beginning after 2015, the dollar amount referred to in subsection (f)(1)(A) shall be increased by an amount equal to— (A) $10,000, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, by substituting calendar year 2014 for calendar year 1992 in subparagraph (B) thereof. . (b) Authority To release levy and return property Section 6343 is amended by adding at the end the following new subsection: (f) Individual held harmless for wrongful levy on certain retirement plans (1) In general If the Secretary determines that a qualified retirement plan (as defined in section 4974(c)) or a taxpayer's account in the Thrift Savings Fund (as described in section 8439(a)(2) of title 5, United States Code) has been levied upon in a manner described in section 7433 or subsection (b) or (d) of this section, the applicable amount (as determined under paragraph (2)) may be deposited into— (A) if permissible, the plan or account levied upon, or (B) an individual retirement plan (other than an endowment contract) to which a rollover from the plan or account levied upon is permitted. (2) Applicable amount For purposes of paragraph (1), the applicable amount is an amount equal to the sum of— (A) the amount of money or damages returned by the Secretary on account of a levy described in paragraph (1), and (B) any interest paid pursuant to subsection (c) on such amount. (3) Treatment as rollover For purposes of this title, the distribution on account of the levy and any deposit under paragraph (1) with respect to such distribution shall be treated as if such distribution and deposit were a rollover contribution described in section 408(d)(3)(A)(i), except that— (A) any interest paid pursuant to subsection (c) shall be treated as a part of such distribution and not included in gross income, (B) the 60-day requirement under such section shall be deemed to have been met if the deposit is made not later than the 60th day after the day on which the taxpayer receives an amount described in paragraph (1) from the Secretary, and (C) such deposit shall not be taken into account for purposes of section 408(d)(3)(B). (4) Treatment of income tax on levy If any amount is includible in gross income for a taxable year by reason of a levy described in paragraph (1) and any portion of such amount is treated as a rollover pursuant to paragraph (3), any tax imposed by chapter 1 on such portion shall not be assessed, and if assessed shall be abated, and if collected shall be credited or refunded as an overpayment made on the due date for filing the return of tax for such taxable year. (5) Interest Notwithstanding subsection (d), interest shall be allowed under subsection (c) in any case in which the Secretary makes a determination described under section 7433 or paragraph (2) of subsection (d) with respect to a levy upon a qualified retirement plan or an account in the Thrift Savings Fund. . (c) Effective date The amendments made by this section shall apply to levies served after the date of the enactment of this Act. 308. Taxpayer rights training (a) In general (1) Taxpayer Advocate Subparagraph (C) of section 7803(c)(2) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ; and , and by adding at the end the following new clause: (v) develop annual training for all Internal Revenue Service officers and employees regarding taxpayer rights, the Office of the Taxpayer Advocate’s case criteria and mission, and Taxpayer Assistance Order procedures. . (2) Commissioner Paragraph (3) of section 7803(c) is amended— (A) by striking the period at the end and inserting ; and , and (B) by striking shall establish procedures requiring and inserting the following: shall establish procedures— (A) requiring , and (C) by adding at the end the following new subparagraph: (B) for providing annually the training described in subsection (c)(2)(C)(v) . (b) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act. 309. Notice and opportunity for hearing by the Office of Appeals (a) In general Section 6212 is amended by adding at the end the following new subsection: (e) Requirement of preliminary notice and opportunity for hearing (1) Right to a hearing Subject to paragraph (3), any taxpayer which receives a notice of deficiency under this section shall be entitled to a hearing held by the Internal Revenue Service Office of Appeals with respect to the proposed deficiency. (2) Requirement of preliminary notice Subject to paragraph (3), any notice of deficiency sent to a taxpayer under this section shall include notice of their right to a hearing (as described in paragraph (1)). (3) Regulatory authority The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including establishing procedures and exceptions with respect to the right to a hearing established under paragraph (1) and notice of such right under paragraph (2). . (b) Effective date The amendments made by subsection (a) shall take effect on the date of the enactment of the Act. (c) Ensuring nationwide access to Appeals Officers and Settlement Agents The Secretary of the Treasury shall ensure that not less than 1 Appeals Officer and 1 Settlement Agent from the Office of Appeals of the Internal Revenue Service are assigned to each State and made available to the residents of each such State. IV National Taxpayer Advocate 401. Modifications relating to taxpayer assistance orders (a) Clarification of authority with respect to closing agreements and compromises Paragraph (2) of section 7811(b) is amended— (1) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, and (2) by inserting after subparagraph (B) the following new subparagraph: (C) chapter 74 (relating to closing agreements and compromises), . (b) Appeal of certain modified or rescinded orders Subsection (c) of section 7811 is amended by adding at the end the following new sentence: If the Deputy Commissioner of Internal Revenue modifies or rescinds a Taxpayer Assistance Order, the National Taxpayer Advocate may appeal the decision to the Commissioner of Internal Revenue for a final determination. . (c) Effective date The amendments made by this section shall apply to orders issued after the date of the enactment of this Act. 402. Taxpayer advocate directives (a) In general Subchapter A of chapter 80 is amended by adding at the end the following new section: 7812. Taxpayer advocate directives (a) Authority To issue The National Taxpayer Advocate (but not a delegate thereof) may issue a Taxpayer Advocate Directive to mandate changes to improve the operation of a functional process or to grant relief to groups of taxpayers (or all taxpayers) if, as a result of the manner in which the internal revenue laws are being administered by the Secretary, its implementation will protect the rights of taxpayers, prevent undue burden, ensure equitable treatment, or provide an essential service to taxpayers. The terms of a Taxpayer Advocate Directive may require the Internal Revenue Service to implement it within a specified period of time. (b) Authority To modify or rescind (1) Appeal An Internal Revenue Service division or other function may appeal a Taxpayer Advocate Directive by delivering a written explanation that facilitates a full and fair consideration of the issues to the National Taxpayer Advocate and Deputy Commissioner of Internal Revenue, either of whom may modify or rescind such Taxpayer Advocate Directive. If the Deputy Commissioner of Internal Revenue modifies or rescinds a Taxpayer Advocate Directive, the Deputy Commissioner (or a delegate chosen by the Deputy Commissioner) shall provide a detailed written explanation of the reasons for the modification or rescission. (2) Final determination The National Taxpayer Advocate may appeal such decision to the Commissioner of Internal Revenue for a final determination. If the Commissioner does not affirm the Taxpayer Advocate Directive in full, then the Commissioner shall provide a written explanation of such determination, and the reasons therefor, not later than 90 days after the submission of such appeal. Such explanation shall address in detail each issue raised in the Taxpayer Advocate Directive. . (b) Annual report (1) In general Clause (ii) of section 7803(c)(2)(B) is amended by redesignating subclauses (III) through (XI) as subclauses (IV) through (XII), respectively, and by inserting after subclause (II) the following new subclause: (III) contain Taxpayer Advocate Directives issued under section 7812; . (2) Conforming amendments Clause (ii) of section 7803(c)(2)(B), as amended by paragraph (1), is amended— (A) by striking subclauses (I), (II), and (III) in subclauses (V), (VI), and (VII) thereof and inserting subclauses (I), (II), (III), and (IV) , and (B) in subclause (VIII)— (i) by inserting or Taxpayer Advocate Directive after Taxpayer Assistance Order , and (ii) by inserting or 7812(a) after section 7811(b) . (c) Clerical amendment The table of sections for subchapter A of chapter 80 is amended by inserting after the item relating to section 7811 the following new item: Sec. 7812. Taxpayer advocate directives. . 403. Office of the Taxpayer Advocate Access to Administrative Files Section 7803(c) is amended by adding at the end the following new paragraph: (5) Access to taxpayer administrative files (A) In general In furtherance of the functions, responsibilities, and authorities described in this subsection, and in addition to the authority provided under section 6103(h)(1), taxpayer administrative files shall, upon request, be open to inspection by or disclosure to officers and employees of the Office of the Taxpayer Advocate whose duties require such inspection or disclosure. (B) Meetings with IRS In the case of a taxpayer seeking the assistance of the Office of the Taxpayer Advocate, any officer or employee of such Office may, at the request of the taxpayer, attend any meeting between the Internal Revenue Service and such taxpayer. . 404. Office of the Taxpayer Advocate operations during a lapse in appropriations Paragraph (2) of section 7803(c) is amended by adding at the end the following new subparagraph: (E) Operations during a lapse in appropriations During any lapse in appropriations for the Internal Revenue Service, the Commissioner of Internal Revenue, in consultation with the National Taxpayer Advocate, shall designate as essential employees a sufficient number of employees of the Office of the Taxpayer Advocate to provide assistance to taxpayers relating to enforcement actions carried out during the lapse in appropriations. .