US Codex
Pub. L.
Notes

Title I — Putting Taxpayers First

116th Congress · Approved Jul 1, 2019 · 133 Stat. 981 · Lineage

TITLE I Putting Taxpayers First

Subtitle A Independent Appeals Process

SEC. 1001. Establishment of Internal Revenue Service Independent Office of Appeals.

(a)
In General.— Section 7803 is amended by adding at the end the following new subsection:

“(e) Independent Office of Appeals.—

“(1) Establishment.—There is established in the Internal Revenue Service an office to be known as the ‘Internal Revenue Service Independent Office of Appeals’.

“(2) Chief of appeals.—

“(A) In general.—The Internal Revenue Service Independent Office of Appeals shall be under the supervision and direction of an official to be known as the ‘Chief of Appeals’. The Chief of Appeals shall report directly to the Commissioner of Internal Revenue and shall be entitled to compensation at the same rate as the highest rate of basic pay established for the Senior Executive Service under section 5382 of title 5, United States Code.

“(B) Appointment.—The Chief of Appeals shall be appointed by the Commissioner of Internal Revenue without regard to the provisions of title 5, United States Code, relating to appointments in the competitive service or the Senior Executive Service.

“(C) Qualifications.—An individual appointed under subparagraph (B) shall have experience and expertise in—

“(i) administration of, and compliance with, Federal tax laws,

“(ii) a broad range of compliance cases, and

“(iii) management of large service organizations.

“(3) Purposes and duties of office.—It shall be the function of the Internal Revenue Service Independent Office of Appeals to resolve Federal tax controversies without litigation on a basis which—

“(A) is fair and impartial to both the Government and the taxpayer,

“(B) promotes a consistent application and interpretation of, and voluntary compliance with, the Federal tax laws, and

“(C) enhances public confidence in the integrity and efficiency of the Internal Revenue Service.

“(4) Right of appeal.—The resolution process described in paragraph (3) shall be generally available to all taxpayers.

“(5) Limitation on designation of cases as not eligible for referral to independent office of appeals.—

“(A) In general.—If any taxpayer which is in receipt of a notice of deficiency authorized under section 6212 requests referral to the Internal Revenue Service Independent Office of Appeals and such request is denied, the Commissioner of Internal Revenue shall provide such taxpayer a written notice which—

“(i) provides a detailed description of the facts involved, the basis for the decision to deny the request, and a detailed explanation of how the basis of such decision applies to such facts, and

“(ii) describes the procedures prescribed under subparagraph (C) for protesting the decision to deny the request.

“(B) Report to congress.—The Commissioner of Internal Revenue shall submit a written report to Congress on an annual basis which includes the number of requests described in subparagraph (A) which were denied and the reasons (described by category) that such requests were denied.

“(C) Procedures for protesting denial of request.—The Commissioner of Internal Revenue shall prescribe procedures for protesting to the Commissioner of Internal Revenue a denial of a request described in subparagraph (A).

“(D) Not applicable to frivolous positions.—This paragraph shall not apply to a request for referral to the Internal Revenue Service Independent Office of Appeals which is denied on the basis that the issue involved is a frivolous position (within the meaning of section 6702(c)).

“(6) Staff.—

“(A) In general.—All personnel in the Internal Revenue Service Independent Office of Appeals shall report to the Chief of Appeals.

“(B) Access to staff of office of the chief counsel.—The Chief of Appeals shall have authority to obtain legal assistance and advice from the staff of the Office of the Chief Counsel. The Chief Counsel shall ensure, to the extent practicable, that such assistance and advice is provided by staff of the Office of the Chief Counsel who were not involved in the case with respect to which such assistance and advice is sought and who are not involved in preparing such case for litigation.

“(7) Access to case files.—

“(A) In general.—In any case in which a conference with the Internal Revenue Service Independent Office of Appeals has been scheduled upon request of a specified taxpayer, the Chief of Appeals shall ensure that such taxpayer is provided access to the nonprivileged portions of the case file on record regarding the disputed issues (other than documents provided by the taxpayer to the Internal Revenue Service) not later than 10 days before the date of such conference.

“(B) Taxpayer election to expedite conference.—If the taxpayer so elects, subparagraph (A) shall be applied by substituting ‘the date of such conference’ for ‘10 days before the date of such conference’.

“(C) Specified taxpayer.—For purposes of this paragraph—

“(i) In general.—The term ‘specified taxpayer’ means—

“(I) in the case of any taxpayer who is a natural person, a taxpayer whose adjusted gross income does not exceed $400,000 for the taxable year to which the dispute relates, and

“(II) in the case of any other taxpayer, a taxpayer whose gross receipts do not exceed $5 million for the taxable year to which the dispute relates.

“(ii) Aggregation rule.—Rules similar to the rules of section 448(c)(2) shall apply for purposes of clause (i)(II).”

(b)
Conforming Amendments.—
(1)
The following provisions are each amended by striking “ Internal Revenue Service Office of Appeals” and inserting “ Internal Revenue Service Independent Office of Appeals”:
(A)
Section 6015(c)(4)(B)(ii)(I).
(B)
Section 6320(b)(1).
(C)
Subsections (b)(1) and (d)(3) of section 6330.
(D)
Section 6603(d)(3)(B).
(E)
Section 6621(c)(2)(A)(i).
(F)
Section 7122(e)(2).
(G)
Subsections (a), (b)(1), (b)(2), and (c)(1) of section 7123.
(H)
Subsections (c)(7)(B)(i) and (g)(2)(A) of section 7430.
(I)
Section 7522(b)(3).
(J)
Section 7612(c)(2)(A).
(2)
Section 7430(c)(2) is amended by striking “ Internal Revenue Service Office of Appeals” each place it appears and inserting “ Internal Revenue Service Independent Office of Appeals”.
(3)
The heading of section 6330(d)(3) is amended by inserting “ independent” after “ irs”.
(c)
Other References.— Any reference in any provision of law, or regulation or other guidance, to the Internal Revenue Service Office of Appeals shall be treated as a reference to the Internal Revenue Service Independent Office of Appeals.
(d)
Savings Provisions.— Rules similar to the rules of paragraphs (2) through (6) of section 1001(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 shall apply for purposes of this section (and the amendments made by this section).
(e)
Effective Date.—
(1)
In general.— Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.
(2)
Access to case files.— Section 7803(e)(7) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to conferences occurring after the date which is 1 year after the date of the enactment of this Act.

Subtitle B Improved Service

SEC. 1101. Comprehensive Customer Service Strategy.

(a)
In General.— Not later than the date which is 1 year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall submit to Congress a written comprehensive customer service strategy for the Internal Revenue Service. Such strategy shall include—
(1)
a plan to provide assistance to taxpayers that is secure, designed to meet reasonable taxpayer expectations, and adopts appropriate best practices of customer service provided in the private sector, including online services, telephone call back services, and training of employees providing customer services;
(2)
a thorough assessment of the services that the Internal Revenue Service can co-locate with other Federal services or offer as self-service options;
(3)
proposals to improve Internal Revenue Service customer service in the short term (the current and following fiscal year), medium term (approximately 3 to 5 fiscal years), and long term (approximately 10 fiscal years);
(4)
a plan to update guidance and training materials for customer service employees of the Internal Revenue Service, including the Internal Revenue Manual, to reflect such strategy; and
(5)
identified metrics and benchmarks for quantitatively measuring the progress of the Internal Revenue Service in implementing such strategy.
(b)
Updated Guidance and Training Materials.— Not later than 2 years after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall make available the updated guidance and training materials described in subsection (a)(4) (including the Internal Revenue Manual). Such updated guidance and training materials (including the Internal Revenue Manual) shall be written in a manner so as to be easily understood by customer service employees of the Internal Revenue Service and shall provide clear instructions.

SEC. 1102. Low-Income Exception for Payments Otherwise Required in Connection with a Submission of an Offer-In-Compromise.

(a)
In General.— Section 7122(c) is amended by adding at the end the following new paragraph:

“(3) Exception for low-income taxpayers.—Paragraph (1), and any user fee otherwise required in connection with the submission of an offer-in-compromise, shall not apply to any offer-in-compromise with respect to a taxpayer who is an individual with adjusted gross income, as determined for the most recent taxable year for which such information is available, which does not exceed 250 percent of the applicable poverty level (as determined by the Secretary).”

(b)
Effective Date.— The amendment made by this section shall apply to offers-in-compromise submitted after the date of the enactment of this Act.

Subtitle C Sensible Enforcement

SEC. 1201. Internal Revenue Service Seizure Requirements with Respect to Structuring Transactions.

Section 5317(c)(2) of title 31, United States Code, is amended—
(1)
by striking “ Any property” and inserting the following:

“(A) In general.—Any property”

; and

(2)
by adding at the end the following:

“(B) Internal revenue service seizure requirements with respect to structuring transactions.—

“(i) Property derived from an illegal source.—Property may only be seized by the Internal Revenue Service pursuant to subparagraph (A) by reason of a claimed violation of section 5324 if the property to be seized was derived from an illegal source or the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than section 5324.

“(ii) Notice.—Not later than 30 days after property is seized by the Internal Revenue Service pursuant to subparagraph (A), the Internal Revenue Service shall—

“(I) make a good faith effort to find all persons with an ownership interest in such property; and

“(II) provide each such person so found with a notice of the seizure and of the person’s rights under clause (iv).

“(iii) Extension of notice under certain circumstances.—The Internal Revenue Service may apply to a court of competent jurisdiction for one 30-day extension of the notice requirement under clause (ii) if the Internal Revenue Service can establish probable cause of an imminent threat to national security or personal safety necessitating such extension.

“(iv) Post-seizure hearing.—If a person with an ownership interest in property seized pursuant to subparagraph (A) by the Internal Revenue Service requests a hearing by a court of competent jurisdiction within 30 days after the date on which notice is provided under subclause (ii), such property shall be returned unless the court holds an adversarial hearing and finds within 30 days of such request (or such longer period as the court may provide, but only on request of an interested party) that there is probable cause to believe that there is a violation of section 5324 involving such property and probable cause to believe that the property to be seized was derived from an illegal source or the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than section 5324.”

SEC. 1202. Exclusion of Interest Received in Action to Recover Property Seized by the Internal Revenue Service Based on Structuring Transaction.

(a)
In General.— Part III of subchapter B of chapter 1 is amended by inserting before section 140 the following new section:

“SEC. 139H. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING TRANSACTION.

“Gross income shall not include any interest received from the Federal Government in connection with an action to recover property seized by the Internal Revenue Service pursuant to section 5317(c)(2) of title 31, United States Code, by reason of a claimed violation of section 5324 of such title.”

(b)
Clerical Amendment.— The table of sections for part III of subchapter B of chapter 1 is amended by inserting before the item relating to section 140 the following new item:

“Sec. 139H. Interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction.”.

(c)
Effective Date.— The amendments made by this section shall apply to interest received on or after the date of the enactment of this Act.

SEC. 1203. Clarification of Equitable Relief from Joint Liability.

(a)
In General.— Section 6015 is amended—
(1)
in subsection (e), by adding at the end the following new paragraph:

“(7) 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),

“(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 or after the date of the enactment of this Act.

SEC. 1204. Modification of Procedures for Issuance of Third-Party Summons.

(a)
In General.— Section 7609(f) is amended by adding at the end the following flush sentence: “The Secretary shall not issue any summons described in the preceding sentence unless the information sought to be obtained is narrowly tailored to information that pertains to the failure (or potential failure) of the person or group or class of persons referred to in paragraph (2) to comply with one or more provisions of the internal revenue law which have been identified for purposes of such paragraph.”.
(b)
Effective Date.— The amendments made by this section shall apply to summonses served after the date that is 45 days after the date of the enactment of this Act.

SEC. 1205. Private Debt Collection and Special Compliance Personnel Program.

(a)
Certain Tax Receivables Not Eligible for Collection Under Tax Collection Contracts.— Section 6306(d)(3) is amended by striking “ or” at the end of subparagraph (C) and by inserting after subparagraph (D) the following new subparagraphs:

“(E) a taxpayer substantially all of whose income consists of disability insurance benefits under section 223 of the Social Security Act or supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93–66), or

“(F) a taxpayer who is an individual with adjusted gross income, as determined for the most recent taxable year for which such information is available, which does not exceed 200 percent of the applicable poverty level (as determined by the Secretary),”

(b)
Determination of Inactive Tax Receivables Eligible for Collection Under Tax Collection Contracts.— Section 6306(c)(2)(A)(ii) is amended by striking “ more than ⅓ of the period of the applicable statute of limitation has lapsed” and inserting “ more than 2 years has passed since assessment”.
(c)
Maximum Length of Installment Agreements Offered Under Tax Collection Contracts.— Section 6306(b)(1)(B) is amended by striking “ 5 years” and inserting “ 7 years”.
(d)
Clarification That Special Compliance Personnel Program Account May Be Used for Program Costs.—
(1)
In general.— Section 6307(b) is amended—
(A)
in paragraph (2), by striking all that follows “ under such program” and inserting a period, and
(B)
in paragraph (3), by striking all that follows “ out of such account” and inserting “ for other than program costs.”.
(2)
Communications, software, and technology costs treated as program costs.— Section 6307(d)(2)(B) is amended by striking “ telecommunications” and inserting “ communications, software, technology”.
(3)
Conforming amendment.— Section 6307(d)(2) is amended by striking “ and” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “ , and”, and by inserting after subparagraph (B) the following new subparagraph:

“(C) reimbursement of the Internal Revenue Service or other government agencies for the cost of administering the qualified tax collection program under section 6306.”

(e)
Effective Dates.—
(1)
In general.— Except as otherwise provided in this subsection, the amendments made by this section shall apply to tax receivables identified by the Secretary (or the Secretary’s delegate) after December 31, 2020.
(2)
Maximum length of installment agreements.— The amendment made by subsection (c) shall apply to contracts entered into after the date of the enactment of this Act.
(3)
Use of special compliance personnel program account.— The amendment made by subsection (d) shall apply to amounts expended from the special compliance personnel program account after the date of the enactment of this Act.

SEC. 1206. Reform of Notice of Contact of Third Parties.

(a)
In General.— Section 7602(c)(1) is amended to read as follows:

“(1) General notice.—An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer unless such contact occurs during a period (not greater than 1 year) which is specified in a notice which—

“(A) informs the taxpayer that contacts with persons other than the taxpayer are intended to be made during such period, and

“(B) except as otherwise provided by the Secretary, is provided to the taxpayer not later than 45 days before the beginning of such period.

(b)
Effective Date.— The amendment made by this section shall apply to notices provided, and contacts of persons made, after the date which is 45 days after the date of the enactment of this Act.

SEC. 1207. Modification of Authority to Issue Designated Summons.

(a)
In General.— Paragraph (1) of section 6503(j) is amended by striking “ coordinated examination program” and inserting “ coordinated industry case program”.
(b)
Requirements for Summons.— Clause (i) of section 6503(j)(2)(A) is amended to read as follows:

“(i) the issuance of such summons is preceded by a review and written approval of such issuance by the Commissioner of the relevant operating division of the Internal Revenue Service and the Chief Counsel which—

“(I) states facts clearly establishing that the Secretary has made reasonable requests for the information that is the subject of the summons, and

“(II) is attached to such summons,”

(c)
Establishment That Reasonable Requests for Information Were Made.— Subsection (j) of section 6503 is amended by adding at the end the following new paragraph:

“(4) Establishment that reasonable requests for information were made.—In any court proceeding described in paragraph (3), the Secretary shall establish that reasonable requests were made for the information that is the subject of the summons.”

(d)
Effective Date.— The amendments made by this section shall apply to summonses issued after the date which is 45 days after the date of the enactment of this Act.

SEC. 1208. Limitation on Access of Non-Internal Revenue Service Employees to Returns and Return Information.

(a)
In General.— Section 7602 is amended by adding at the end the following new subsection:

“(f) Limitation on Access of Persons Other Than Internal Revenue Service Officers and Employees.—The Secretary shall not, under the authority of section 6103(n), provide any books, papers, records, or other data obtained pursuant to this section to any person authorized under section 6103(n), except when such person requires such information for the sole purpose of providing expert evaluation and assistance to the Internal Revenue Service. No person other than an officer or employee of the Internal Revenue Service or the Office of Chief Counsel may, on behalf of the Secretary, question a witness under oath whose testimony was obtained pursuant to this section.”

(b)
Effective Date.— The amendment made by this section—
(1)
shall take effect on the date of the enactment of this Act; and
(2)
shall not fail to apply to a contract in effect under section 6103(n) of the Internal Revenue Code of 1986 merely because such contract was in effect before the date of the enactment of this Act.

Subtitle D Organizational Modernization

SEC. 1301. Office of the National Taxpayer Advocate.

(a)
Taxpayer Advocate Directives.—
(1)
In general.— Section 7803(c) is amended by adding at the end the following new paragraph:

“(5) Taxpayer advocate directives.—In the case of any Taxpayer Advocate Directive issued by the National Taxpayer Advocate pursuant to a delegation of authority from the Commissioner of Internal Revenue—

“(A) the Commissioner or a Deputy Commissioner shall modify, rescind, or ensure compliance with such directive not later than 90 days after the issuance of such directive, and

“(B) in the case of any directive which is modified or rescinded by a Deputy Commissioner, the National Taxpayer Advocate may (not later than 90 days after such modification or rescission) appeal to the Commissioner, and the Commissioner shall (not later than 90 days after such appeal is made) ensure compliance with such directive as issued by the National Taxpayer Advocate or provide the National Taxpayer Advocate with the reasons for any modification or rescission made or upheld by the Commissioner pursuant to such appeal.”

(2)
Report to certain committees of congress regarding directives.— Section 7803(c)(2)(B)(ii) is amended by redesignating subclauses (VIII) through (XI) as subclauses (IX) through (XII), respectively, and by inserting after subclause (VII) the following new subclause:

“(VIII) identify any Taxpayer Advocate Directive which was not honored by the Internal Revenue Service in a timely manner, as specified under paragraph (5);”

(b)
National Taxpayer Advocate Annual Reports to Congress.—
(1)
Inclusion of most serious taxpayer problems.— Section 7803(c)(2)(B)(ii)(III) is amended by striking “ at least 20 of the” and inserting “ the 10”.
(2)
Coordination with treasury inspector general for tax administration.— Section 7803(c)(2) is amended by adding at the end the following new subparagraph:

“(E) Coordination with treasury inspector general for tax administration.—Before beginning any research or study, the National Taxpayer Advocate shall coordinate with the Treasury Inspector General for Tax Administration to ensure that the National Taxpayer Advocate does not duplicate any action that the Treasury Inspector General for Tax Administration has already undertaken or has a plan to undertake.”

(3)
Statistical support.—
(A)
In general.— Section 6108 is amended by adding at the end the following new subsection:

“(d) Statistical Support for National Taxpayer Advocate.—Upon request of the National Taxpayer Advocate, the Secretary shall, to the extent practicable, provide the National Taxpayer Advocate with statistical support in connection with the preparation by the National Taxpayer Advocate of the annual report described in section 7803(c)(2)(B)(ii). Such statistical support shall include statistical studies, compilations, and the review of information provided by the National Taxpayer Advocate for statistical validity and sound statistical methodology.”

(B)
Disclosure of review.— Section 7803(c)(2)(B)(ii), as amended by subsection (a), is amended by striking “ and” at the end of subclause (XI), by redesignating subclause (XII) as subclause (XIII), and by inserting after subclause (XI) the following new subclause:

“(XII) with respect to any statistical information included in such report, include a statement of whether such statistical information was reviewed or provided by the Secretary under section 6108(d) and, if so, whether the Secretary determined such information to be statistically valid and based on sound statistical methodology; and”

(C)
Conforming amendment.— Section 7803(c)(2)(B)(iii) is amended by adding at the end the following: “ The preceding sentence shall not apply with respect to statistical information provided to the Secretary for review, or received from the Secretary, under section 6108(d).”.
(c)
Salary of National Taxpayer Advocate.— Section 7803(c)(1)(B)(i) is amended by striking “ , or, if the Secretary of the Treasury so determines, at a rate fixed under section 9503 of such title”.
(d)
Effective Date.—
(1)
In general.— Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.
(2)
Salary of national taxpayer advocate.— The amendment made by subsection (c) shall apply to compensation paid to individuals appointed as the National Taxpayer Advocate after March 31, 2019.

SEC. 1302. Modernization of Internal Revenue Service Organizational Structure.

(a)
In General.— Not later than September 30, 2020, the Secretary of the Treasury (or the Secretary’s delegate) shall submit to Congress a comprehensive written plan to redesign the organization of the Internal Revenue Service. Such plan shall—
(1)
ensure the successful implementation of the priorities specified by Congress in this Act;
(2)
prioritize taxpayer services to ensure that all taxpayers easily and readily receive the assistance that they need;
(3)
streamline the structure of the agency including minimizing the duplication of services and responsibilities within the agency;
(4)
best position the Internal Revenue Service to combat cybersecurity and other threats to the Internal Revenue Service; and
(5)
address whether the Criminal Investigation Division of the Internal Revenue Service should report directly to the Commissioner of Internal Revenue.
(b)
Repeal of Restriction on Organizational Structure of Internal Revenue Service.— Paragraph (3) of section 1001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998 shall cease to apply beginning 1 year after the date on which the plan described in subsection (a) is submitted to Congress.

Subtitle E Other Provisions

SEC. 1401. Return Preparation Programs for Applicable Taxpayers.

(a)
In General.— Chapter 77 is amended by inserting after section 7526 the following new section:

“SEC. 7526A. RETURN PREPARATION PROGRAMS FOR APPLICABLE TAXPAYERS.

“(a) Establishment of Volunteer Income Tax Assistance Matching Grant Program.—The Secretary shall establish a Community Volunteer Income Tax Assistance Matching Grant Program under which the Secretary may, subject to the availability of appropriated funds, make grants to provide matching funds for the development, expansion, or continuation of qualified return preparation programs assisting applicable taxpayers and members of underserved populations.

“(b) Use of Funds.—

“(1) In general.—Qualified return preparation programs may use grants received under this section for—

“(A) ordinary and necessary costs associated with program operation in accordance with cost principles under the applicable Office of Management and Budget circular, including—

“(i) wages or salaries of persons coordinating the activities of the program,

“(ii) developing training materials, conducting training, and performing quality reviews of the returns prepared under the program,

“(iii) equipment purchases, and

“(iv) vehicle-related expenses associated with remote or rural tax preparation services,

“(B) outreach and educational activities described in subsection (c)(2)(B), and

“(C) services related to financial education and capability, asset development, and the establishment of savings accounts in connection with tax return preparation.

“(2) Requirement of matching funds.—A qualified return preparation program must provide matching funds on a dollar-for-dollar basis for all grants provided under this section. Matching funds may include—

“(A) the salary (including fringe benefits) of individuals performing services for the program,

“(B) the cost of equipment used in the program, and

“(C) other ordinary and necessary costs associated with the program.

“(c) Application.—

“(1) In general.—Each applicant for a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.

“(2) Priority.—In awarding grants under this section, the Secretary shall give priority to applications which demonstrate—

“(A) assistance to applicable taxpayers, with emphasis on outreach to, and services for, such taxpayers,

“(B) taxpayer outreach and educational activities relating to eligibility and availability of income supports available through this title, including the earned income tax credit, and

“(C) specific outreach and focus on one or more underserved populations.

“(3) Amounts taken into account.—In determining matching grants under this section, the Secretary shall only take into account amounts provided by the qualified return preparation program for expenses described in subsection (b).

“(d) Program Adherence.—

“(1) In general.—The Secretary shall establish procedures for, and shall conduct not less frequently than once every 5 calendar years during which a qualified return preparation program is operating under a grant under this section, periodic site visits—

“(A) to ensure the program is carrying out the purposes of this section, and

“(B) to determine whether the program meets such program adherence standards as the Secretary shall by regulation or other guidance prescribe.

“(2) Additional requirements for grant recipients not meeting program adherence standards.—In the case of any qualified return preparation program which—

“(A) is awarded a grant under this section, and

“(B) is subsequently determined—

“(i) not to meet the program adherence standards described in paragraph (1)(B), or

“(ii) not to be otherwise carrying out the purposes of this section,

“(e) Definitions.—For purposes of this section—

“(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 applicable taxpayers, in preparing and filing Federal income tax returns,

“(B) which is administered by a qualified entity,

“(C) in which all 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 an eligible organization,

“(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 pursuant to the grant program under this section.

“(B) Eligible organization.—The term ‘eligible organization’ means—

“(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. 1002), 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) and exempt from tax under section 501(a),

“(iii) a local government agency, including—

“(I) a county or municipal government agency, and

“(II) an Indian tribe, as defined in section 4(13) of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103(13)), including any tribally designated housing entity (as defined in section 4(22) of such Act (25 U.S.C. 4103(22))), tribal subsidiary, subdivision, or other wholly owned tribal entity,

“(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) in the case of applicable taxpayers and members of underserved populations with respect to which no organizations described in the preceding clauses are available—

“(I) a State government agency, or

“(II) an office providing Cooperative Extension services (as established at the land-grant colleges and universities under the Smith-Lever Act of May 8, 1914).

“(3) Applicable taxpayers.—The term ‘applicable taxpayer’ means a taxpayer whose income for the taxable year does not exceed an amount equal to the completed phaseout amount under section 32(b) for a married couple filing a joint return with three or more qualifying children, as determined in a revenue procedure or other published guidance.

“(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, members of the Armed Forces and their spouses, and the elderly.

“(f) Special Rules and Limitations.—

“(1) Duration of grants.—Upon application of a qualified return preparation program, the Secretary is authorized to award a multi-year grant not to exceed 3 years.

“(2) Aggregate limitation.—Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $30 million per fiscal year (exclusive of costs of administering the program) to grants under this section.

“(g) Promotion of Programs.—

“(1) In general.—The Secretary shall promote tax preparation through qualified return preparation programs through the use of mass communications and other means.

“(2) Provision of information regarding qualified return preparation programs.—The Secretary may provide taxpayers information regarding qualified return preparation programs receiving grants under this section.

“(3) Referrals to low-income taxpayer clinics.—Qualified return preparation programs receiving a grant under this section are encouraged, in appropriate cases, to—

“(A) advise taxpayers of the availability of, and eligibility requirements for receiving, advice and assistance from qualified low-income taxpayer clinics receiving funding under section 7526, and

“(B) provide information regarding the location of, and contact information for, such clinics.”

(b)
Clerical Amendment.— The table of sections for chapter 77 is amended by inserting after the item relating to section 7526 the following new item:

“Sec. 7526A. Return preparation programs for applicable taxpayers.”.

SEC. 1402. Provision of Information Regarding Low-Income Taxpayer Clinics.

(a)
In General.— Section 7526(c) is amended by adding at the end the following new paragraph:

“(6) Provision of information regarding qualified low-income taxpayer clinics.—Notwithstanding any other provision of law, officers and employees of the Department of the Treasury may—

“(A) advise taxpayers of the availability of, and eligibility requirements for receiving, advice and assistance from one or more specific qualified low-income taxpayer clinics receiving funding under this section, and

“(B) provide information regarding the location of, and contact information for, such clinics.”

(b)
Effective Date.— The amendment made by this section shall take effect on the date of the enactment of this Act.

SEC. 1403. Notice from Irs Regarding Closure of Taxpayer Assistance Centers.

Not later than 90 days before the date that a proposed closure of a Taxpayer Assistance Center would take effect, the Secretary of the Treasury (or the Secretary’s delegate) shall—
(1)
make publicly available (including by non-electronic means) a notice which—
(A)
identifies the Taxpayer Assistance Center proposed for closure and the date of such proposed closure; and
(B)
identifies the relevant alternative sources of taxpayer assistance which may be utilized by taxpayers affected by such proposed closure; and
(2)
submit to Congress a written report that includes—
(A)
the information included in the notice described in paragraph (1);
(B)
the reasons for such proposed closure; and
(C)
such other information as the Secretary may determine appropriate.

SEC. 1404. Rules for Seizure and Sale of Perishable Goods Restricted to Only Perishable Goods.

(a)
In General.— Section 6336 is amended by striking “ or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense”.
(b)
Effective Date.— The amendment made by this section shall apply to property seized after the date of the enactment of this Act.

SEC. 1405. Whistleblower Reforms.

(a)
Modifications to Disclosure Rules for Whistleblowers.—
(1)
In general.— Section 6103(k) is amended by adding at the end the following new paragraph:

“(13) Disclosure to whistleblowers.—

“(A) In general.—The Secretary may disclose, to any individual providing information relating to any purpose described in paragraph (1) or (2) of section 7623(a), return information related to the investigation of any taxpayer with respect to whom the individual has provided such information, but only to the extent that such disclosure is necessary in obtaining information, which is not otherwise reasonably available, with respect to the correct determination of tax liability for tax, or the amount to be collected with respect to the enforcement of any other provision of this title.

“(B) Updates on whistleblower investigations.—The Secretary shall disclose to an individual providing information relating to any purpose described in paragraph (1) or (2) of section 7623(a) the following:

“(i) Not later than 60 days after a case for which the individual has provided information has been referred for an audit or examination, a notice with respect to such referral.

“(ii) Not later than 60 days after a taxpayer with respect to whom the individual has provided information has made a payment of tax with respect to tax liability to which such information relates, a notice with respect to such payment.

“(iii) Subject to such requirements and conditions as are prescribed by the Secretary, upon a written request by such individual—

“(I) information on the status and stage of any investigation or action related to such information, and

“(II) in the case of a determination of the amount of any award under section 7623(b), the reasons for such determination.

(2)
Conforming amendments.—
(A)
Confidentiality of information.— Section 6103(a)(3) is amended by striking “ subsection (k)(10)” and inserting “ paragraph (10) or (13) of subsection (k)”.
(B)
Penalty for unauthorized disclosure.— Section 7213(a)(2) is amended by striking “ (k)(10)” and inserting “ (k)(10) or (13)”.
(C)
Coordination with authority to disclose for investigative purposes.— Section 6103(k)(6) is amended by adding at the end the following new sentence: “ This paragraph shall not apply to any disclosure to an individual providing information relating to any purpose described in paragraph (1) or (2) of section 7623(a) which is made under paragraph (13)(A).”.
(b)
Protection Against Retaliation.— Section 7623 is amended by adding at the end the following new subsection:

“(d) Civil Action To Protect Against Retaliation Cases.—

“(1) Anti-retaliation whistleblower protection for employees.—No employer, or any officer, employee, contractor, subcontractor, or agent of such employer, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment (including through an act in the ordinary course of such employee’s duties) in reprisal for any lawful act done by the employee—

“(A) to provide information, cause information to be provided, or otherwise assist in an investigation regarding underpayment of tax or any conduct which the employee reasonably believes constitutes a violation of the internal revenue laws or any provision of Federal law relating to tax fraud, when the information or assistance is provided to the Internal Revenue Service, the Secretary of the Treasury, the Treasury Inspector General for Tax Administration, the Comptroller General of the United States, the Department of Justice, the United States Congress, a person with supervisory authority over the employee, or any other person working for the employer who has the authority to investigate, discover, or terminate misconduct, or

“(B) to testify, participate in, or otherwise assist in any administrative or judicial action taken by the Internal Revenue Service relating to an alleged underpayment of tax or any violation of the internal revenue laws or any provision of Federal law relating to tax fraud.

“(2) Enforcement action.—

“(A) In general.—A person who alleges discharge or other reprisal by any person in violation of paragraph (1) may seek relief under paragraph (3) by—

“(i) filing a complaint with the Secretary of Labor, or

“(ii) if the Secretary of Labor has not issued a final decision within 180 days of the filing of the complaint and there is no showing that such delay is due to the bad faith of the claimant, bringing an action at law or equity for de novo review in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy.

“(B) Procedure.—

“(i) In general.—An action under subparagraph (A)(i) shall be governed under the rules and procedures set forth in section 42121(b) of title 49, United States Code.

“(ii) Exception.—Notification made under section 42121(b)(1) of title 49, United States Code, shall be made to the person named in the complaint and to the employer.

“(iii) Burdens of proof.—An action brought under subparagraph (A)(ii) shall be governed by the legal burdens of proof set forth in section 42121(b) of title 49, United States Code, except that in applying such section—

“(I) ‘behavior described in paragraph (1)’ shall be substituted for ‘behavior described in paragraphs (1) through (4) of subsection (a)’ each place it appears in paragraph (2)(B) thereof, and

“(II) ‘a violation of paragraph (1)’ shall be substituted for ‘a violation of subsection (a)’ each place it appears.

“(iv) Statute of limitations.—A complaint under subparagraph (A)(i) shall be filed not later than 180 days after the date on which the violation occurs.

“(v) Jury trial.—A party to an action brought under subparagraph (A)(ii) shall be entitled to trial by jury.

“(3) Remedies.—

“(A) In general.—An employee prevailing in any action under paragraph (2)(A) shall be entitled to all relief necessary to make the employee whole.

“(B) Compensatory damages.—Relief for any action under subparagraph (A) shall include—

“(i) reinstatement with the same seniority status that the employee would have had, but for the reprisal,

“(ii) the sum of 200 percent of the amount of back pay and 100 percent of all lost benefits, with interest, and

“(iii) compensation for any special damages sustained as a result of the reprisal, including litigation costs, expert witness fees, and reasonable attorney fees.

“(4) Rights retained by employee.—Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law, or under any collective bargaining agreement.

“(5) Nonenforceability of certain provisions waiving rights and remedies or requiring arbitration of disputes.—

“(A) Waiver of rights and remedies.—The rights and remedies provided for in this subsection may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement.

“(B) Predispute arbitration agreements.—No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this subsection.”

(c)
Effective Date.—
(1)
In general.— The amendments made by subsection (a) shall apply to disclosures made after the date of the enactment of this Act.
(2)
Civil protection.— The amendment made by subsection (b) shall take effect on the date of the enactment of this Act.

SEC. 1406. Customer Service Information.

The Secretary of the Treasury (or the Secretary’s delegate) shall provide helpful information to taxpayers placed on hold during a telephone call to any Internal Revenue Service help line, including the following:
(1)
Information about common tax scams.
(2)
Information on where and how to report tax scams.
(3)
Additional advice on how taxpayers can protect themselves from identity theft and tax scams.

SEC. 1407. Misdirected Tax Refund Deposits.

Section 6402 is amended by adding at the end the following new subsection:

“(n) Misdirected Direct Deposit Refund.—Not later than the date which is 6 months after the date of the enactment of the Taxpayer First Act, the Secretary shall prescribe regulations to establish procedures to allow for—

“(1) taxpayers to report instances in which a refund made by the Secretary by electronic funds transfer was not transferred to the account of the taxpayer;

“(2) coordination with financial institutions for the purpose of—

“(A) identifying the accounts to which transfers described in paragraph (1) were made; and

“(B) recovery of the amounts so transferred; and

“(3) the refund to be delivered to the correct account of the taxpayer.”