Biased IRS Audit Systems Prevention Act

Bill: 114-s-2581
Sponsor: full_name: Sen. Burr, Richard [R-NC]
Introduced: 2016-02-25
Policy area: Taxation
Subjects: Computer security and identity theft

Department of the Treasury

Fraud offenses and financial crimes

Government studies and investigations

Internal Revenue Service (IRS)

Tax administration and collection, taxpayers
Latest action: action_date: 2016-02-25
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2016-02-25
action_desc: Introduced in Senate
text: <p><strong>Biased IRS Audit Systems Prevention Act </strong></p> <p>This bill directs the Internal Revenue Service (IRS) to: (1)&nbsp; provide a&nbsp;taxpayer who&nbsp;is selected for an audit sufficient information regarding the reason the taxpayer's return was selected for an audit and to preserve such information for review; (2) document and record how many returns are selected for audit based on randomized selection, scoring under the Discriminant Index Function System, a determination by an IRS examiner, and other methodologies; and (3) repurpose resources for the National Research Program (taxpayer data collection program)&nbsp;to combat tax refund fraud and identity theft. </p> <p>The bill prohibits the IRS from conducting&nbsp;any audit, investigation, or examination of a taxpayer that is primarily for research purposes. </p>

tv_txt: II 114th CONGRESS 2d Session S. 2581 IN THE SENATE OF THE UNITED STATES February 25, 2016 Mr. Burr introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To ensure that enforcement of Federal tax law by the Internal Revenue Service is not influenced by political bias, inaccurate sources of information, or bias at the individual examiner or department level, and for other purposes.

1. Short title This Act may be cited as the Biased IRS Audit Systems Prevention Act . 2. Ensuring Audit Transparency and Fairness (a) Audit transparency (1) In general The Secretary shall— (A) not later than the time a taxpayer is notified a tax return has been selected for an audit by the Internal Revenue Service, provide to the taxpayer sufficient information regarding the reason the tax return was selected for an audit, and (B) preserve, in accordance with paragraph (3), and make available for review by an applicable oversight entity, any information or criteria used by the Internal Revenue Service in selecting a tax return for auditing. (2) Information required to be disclosed to the taxpayer For purposes of paragraph (1)(A): (A) Returns selected based on computer modeling In the case of any tax return selected for auditing based in whole or in part upon computer modeling, the information disclosed to the taxpayer shall include a description of any data used in such modeling which was— (i) provided by the taxpayer, including whether such information was filed electronically by the taxpayer or transcribed from a return which was printed and filed on paper, and (ii) provided from information obtained by the Internal Revenue Service from sources other than the taxpayer. (B) Returns selected other than by computer modeling In the case of any tax return selected for auditing based in whole or in part upon a method other than computer modeling, the information disclosed to the taxpayer shall include the method employed and any data sources used by the examiner, including the methodology employed by the examiner for determining the validity of such sources. (C) No requirement to disclose identity of another taxpayer The Secretary is not required to disclose the return information (as defined in section 6103(b) of the Internal Revenue Code of 1986) of any person other than the taxpayer whose return has been selected for audit. (3) Methodology for preserving information for oversight For purposes of paragraph (1)(B)— (A) In general The Secretary shall document and record how many returns are selected for auditing based on— (i) randomized selection, (ii) scoring under the Discriminant Index Function System, (iii) a determination by an Internal Revenue Service examiner, (iv) any methodology not described in clauses (i) through (iii), and (v) any combination of methodologies described in clauses (i) through (iv). (B) Internally obtained information In the case of any tax return which is selected for audit in whole or in part based on information obtained by the Internal Revenue Service from sources other than the taxpayer, the Secretary shall document and record the source of such information. (4) Definitions For purposes of this subsection: (A) Applicable entity The term applicable oversight entity means any entity with responsibility for oversight of the activities of the Internal Revenue Service, including Congress, the Treasury Inspector General for Tax Administration, the Comptroller General, the National Taxpayer Advocate, and the Internal Revenue Service Oversight Board (as described in section 7802 of the Internal Revenue Code of 1986). (B) Secretary The term Secretary means the Secretary of the Treasury or such Secretary's delegate. (5) Effective date This subsection shall apply to tax returns selected for audit after the date of the enactment of this Act. (b) Termination of research audits (1) In general The Internal Revenue Service may not conduct any audit, investigation, or examination of a taxpayer that is primarily for the purpose of research. (2) Transfer of resources to prevent tax identity theft (A) In general To the maximum extent possible, the Commissioner of Internal Revenue shall repurpose resources for the National Research Program to combating tax refund fraud and identity theft. (B) Report Not later than 6 months after the date of the enactment of this Act, the Commissioner of Internal Revenue shall submit to Congress a report on the resources that have been repurposed pursuant to subparagraph (A).