H.R.3151
One Hundred Sixteenth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Thursday,
the third day of January, two thousand and nineteen
An Act
To amend the Internal Revenue Code of 1986 to modernize and improve the
Internal Revenue Service, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer First
Act''.
(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.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--PUTTING TAXPAYERS FIRST
Subtitle A--Independent Appeals Process
Sec. 1001. Establishment of Internal Revenue Service Independent Office
of Appeals.
Subtitle B--Improved Service
Sec. 1101. Comprehensive customer service strategy.
Sec. 1102. Low-income exception for payments otherwise required in
connection with a submission of an offer-in-compromise.
Subtitle C--Sensible Enforcement
Sec. 1201. Internal Revenue Service seizure requirements with respect to
structuring transactions.
Sec. 1202. Exclusion of interest received in action to recover property
seized by the Internal Revenue Service based on structuring
transaction.
Sec. 1203. Clarification of equitable relief from joint liability.
Sec. 1204. Modification of procedures for issuance of third-party
summons.
Sec. 1205. Private debt collection and special compliance personnel
program.
Sec. 1206. Reform of notice of contact of third parties.
Sec. 1207. Modification of authority to issue designated summons.
Sec. 1208. Limitation on access of non-Internal Revenue Service
employees to returns and return information.
Subtitle D--Organizational Modernization
Sec. 1301. Office of the National Taxpayer Advocate.
Sec. 1302. Modernization of Internal Revenue Service organizational
structure.
Subtitle E--Other Provisions
Sec. 1401. Return preparation programs for applicable taxpayers.
Sec. 1402. Provision of information regarding low-income taxpayer
clinics.
Sec. 1403. Notice from IRS regarding closure of taxpayer assistance
centers.
Sec. 1404. Rules for seizure and sale of perishable goods restricted to
only perishable goods.
Sec. 1405. Whistleblower reforms.
Sec. 1406. Customer service information.
Sec. 1407. Misdirected tax refund deposits.
TITLE II--21ST CENTURY IRS
Subtitle A--Cybersecurity and Identity Protection
Sec. 2001. Public-private partnership to address identity theft refund
fraud.
Sec. 2002. Recommendations of Electronic Tax Administration Advisory
Committee regarding identity theft refund fraud.
Sec. 2003. Information sharing and analysis center.
Sec. 2004. Compliance by contractors with confidentiality safeguards.
Sec. 2005. Identity protection personal identification numbers.
Sec. 2006. Single point of contact for tax-related identity theft
victims.
Sec. 2007. Notification of suspected identity theft.
Sec. 2008. Guidelines for stolen identity refund fraud cases.
Sec. 2009. Increased penalty for improper disclosure or use of
information by preparers of returns.
Subtitle B--Development of Information Technology
Sec. 2101. Management of Internal Revenue Service information
technology.
Sec. 2102. Internet platform for Form 1099 filings.
Sec. 2103. Streamlined critical pay authority for information technology
positions.
Subtitle C--Modernization of Consent-Based Income Verification System
Sec. 2201. Disclosure of taxpayer information for third-party income
verification.
Sec. 2202. Limit redisclosures and uses of consent-based disclosures of
tax return information.
Subtitle D--Expanded Use of Electronic Systems
Sec. 2301. Electronic filing of returns.
Sec. 2302. Uniform standards for the use of electronic signatures for
disclosure authorizations to, and other authorizations of,
practitioners.
Sec. 2303. Payment of taxes by debit and credit cards.
Sec. 2304. Authentication of users of electronic services accounts.
Subtitle E--Other Provisions
Sec. 2401. Repeal of provision regarding certain tax compliance
procedures and reports.
Sec. 2402. Comprehensive training strategy.
TITLE III--MISCELLANEOUS PROVISIONS
Subtitle A--Reform of Laws Governing Internal Revenue Service Employees
Sec. 3001. Prohibition on rehiring any employee of the Internal Revenue
Service who was involuntarily separated from service for
misconduct.
Sec. 3002. Notification of unauthorized inspection or disclosure of
returns and return information.
Subtitle B--Provisions Relating to Exempt Organizations
Sec. 3101. Mandatory e-filing by exempt organizations.
Sec. 3102. Notice required before revocation of tax-exempt status for
failure to file return.
Subtitle C--Revenue Provision
Sec. 3201. Increase in penalty for failure to file.
TITLE IV--BUDGETARY EFFECTS
Sec. 4001. Determination of budgetary effects.
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),
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 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 \1/3\ 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.
Nothing in the preceding sentence shall prevent the issuance of
notices to the same taxpayer with respect to the same tax liability
with periods specified therein that, in the aggregate, exceed 1
year. A notice shall not be issued under this paragraph unless
there is an intent at the time such notice is issued to contact
persons other than the taxpayer during the period specified in such
notice. The preceding sentence shall not prevent the issuance of a
notice if the requirement of such sentence is met on the basis of
the assumption that the information sought to be obtained by such
contact will not be obtained by other means before such contact.''.
(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.
Indirect expenses, including general overhead of any entity
administering the program, shall not be counted as matching funds.
``(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,
such program shall not be eligible for any additional grants under
this section unless such program provides sufficient documentation
of corrective measures established to address any such deficiencies
determined.
``(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.
Clause (iii) shall not apply to any information if the
Secretary determines that disclosure of such information would
seriously impair Federal tax administration. Information
described in clauses (i), (ii), and (iii) may be disclosed to a
designee of the individual providing such information in
accordance with guidance provided by the Secretary.''.
(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.''.
TITLE II--21ST CENTURY IRS
Subtitle A--Cybersecurity and Identity Protection
SEC. 2001. PUBLIC-PRIVATE PARTNERSHIP TO ADDRESS IDENTITY THEFT REFUND
FRAUD.
The Secretary of the Treasury (or the Secretary's delegate) shall
work collaboratively with the public and private sectors to protect
taxpayers from identity theft refund fraud.
SEC. 2002. RECOMMENDATIONS OF ELECTRONIC TAX ADMINISTRATION ADVISORY
COMMITTEE REGARDING IDENTITY THEFT REFUND FRAUD.
The Secretary of the Treasury shall ensure that the advisory group
convened by the Secretary pursuant to section 2001(b)(2) of the
Internal Revenue Service Restructuring and Reform Act of 1998 (commonly
known as the Electronic Tax Administration Advisory Committee) studies
(including by providing organized public forums) and makes
recommendations to the Secretary regarding methods to prevent identity
theft and refund fraud.
SEC. 2003. INFORMATION SHARING AND ANALYSIS CENTER.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) may participate in an information sharing and analysis center
to centralize, standardize, and enhance data compilation and analysis
to facilitate sharing actionable data and information with respect to
identity theft tax refund fraud.
(b) Development of Performance Metrics.--The Secretary of the
Treasury (or the Secretary's delegate) shall develop metrics for
measuring the success of such center in detecting and preventing
identity theft tax refund fraud.
(c) Disclosure.--
(1) In general.--Section 6103(k), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(14) Disclosure of return information for purposes of
cybersecurity and the prevention of identity theft tax refund
fraud.--
``(A) In general.--Under such procedures and subject to
such conditions as the Secretary may prescribe, the Secretary
may disclose specified return information to specified ISAC
participants to the extent that the Secretary determines such
disclosure is in furtherance of effective Federal tax
administration relating to the detection or prevention of
identity theft tax refund fraud, validation of taxpayer
identity, authentication of taxpayer returns, or detection or
prevention of cybersecurity threats.
``(B) Specified isac participants.--For purposes of this
paragraph--
``(i) In general.--The term `specified ISAC
participant' means--
``(I) any person designated by the Secretary as
having primary responsibility for a function performed
with respect to the information sharing and analysis
center described in section 2003(a) of the Taxpayer
First Act, and
``(II) any person subject to the requirements of
section 7216 and which is a participant in such
information sharing and analysis center.
``(ii) Information sharing agreement.--Such term shall
not include any person unless such person has entered into
a written agreement with the Secretary setting forth the
terms and conditions for the disclosure of information to
such person under this paragraph, including requirements
regarding the protection and safeguarding of such
information by such person.
``(C) Specified return information.--For purposes of this
paragraph, the term `specified return information' means--
``(i) in the case of a return which is in connection
with a case of potential identity theft refund fraud--
``(I) in the case of such return filed
electronically, the internet protocol address, device
identification, email domain name, speed of completion,
method of authentication, refund method, and such other
return information related to the electronic filing
characteristics of such return as the Secretary may
identify for purposes of this subclause, and
``(II) in the case of such return prepared by a tax
return preparer, identifying information with respect
to such tax return preparer, including the preparer
taxpayer identification number and electronic filer
identification number of such preparer,
``(ii) in the case of a return which is in connection
with a case of a identity theft refund fraud which has been
confirmed by the Secretary (pursuant to such procedures as
the Secretary may provide), the information referred to in
subclauses (I) and (II) of clause (i), the name and
taxpayer identification number of the taxpayer as it
appears on the return, and any bank account and routing
information provided for making a refund in connection with
such return, and
``(iii) in the case of any cybersecurity threat to the
Internal Revenue Service, information similar to the
information described in subclauses (I) and (II) of clause
(i) with respect to such threat.
``(D) Restriction on use of disclosed information.--
``(i) Designated third parties.--Any return information
received by a person described in subparagraph (B)(i)(I)
shall be used only for the purposes of and to the extent
necessary in--
``(I) performing the function such person is
designated to perform under such subparagraph,
``(II) facilitating disclosures authorized under
subparagraph (A) to persons described in subparagraph
(B)(i)(II), and
``(III) facilitating disclosures authorized under
subsection (d) to participants in such information
sharing and analysis center.
``(ii) Return preparers.--Any return information
received by a person described in subparagraph (B)(i)(II)
shall be treated for purposes of section 7216 as
information furnished to such person for, or in connection
with, the preparation of a return of the tax imposed under
chapter 1.
``(E) Data protection and safeguards.--Return information
disclosed under this paragraph shall be subject to such
protections and safeguards as the Secretary may require in
regulations or other guidance or in the written agreement
referred to in subparagraph (B)(ii). Such written agreement
shall include a requirement that any unauthorized access to
information disclosed under this paragraph, and any breach of
any system in which such information is held, be reported to
the Treasury Inspector General for Tax Administration.''.
(2) Application of civil and criminal penalties.--
(A) Section 6103(a)(3), as amended by this Act, is amended
by striking ``or (13)'' and inserting ``, (13), or (14)''.
(B) Section 7213(a)(2), as amended by this Act, is amended
by striking ``or (13)'' and inserting ``, (13), or (14)''.
SEC. 2004. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.
(a) In General.--Section 6103(p) is amended by adding at the end
the following new paragraph:
``(9) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no return or
return information shall be disclosed to any contractor or other
agent of a Federal, State, or local agency unless such agency, to
the satisfaction of the Secretary--
``(A) has requirements in effect which require each such
contractor or other agent which would have access to returns or
return information to provide safeguards (within the meaning of
paragraph (4)) to protect the confidentiality of such returns
or return information,
``(B) agrees to conduct an on-site review every 3 years (or
a mid-point review in the case of contracts or agreements of
less than 3 years in duration) of each contractor or other
agent to determine compliance with such requirements,
``(C) submits the findings of the most recent review
conducted under subparagraph (B) to the Secretary as part of
the report required by paragraph (4)(E), and
``(D) certifies to the Secretary for the most recent annual
period that such contractor or other agent is in compliance
with all such requirements.
The certification required by subparagraph (D) shall include the
name and address of each contractor or other agent, a description
of the contract or agreement with such contractor or other agent,
and the duration of such contract or agreement. The requirements of
this paragraph shall not apply to disclosures pursuant to
subsection (n) for purposes of Federal tax administration.''.
(b) Conforming Amendment.--Section 6103(p)(8)(B) is amended by
inserting ``or paragraph (9)'' after ``subparagraph (A)''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures made after December 31, 2022.
SEC. 2005. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBERS.
(a) In General.--Subject to subsection (b), the Secretary of the
Treasury or the Secretary's delegate (hereafter referred to in this
section as the ``Secretary'') shall establish a program to issue, upon
the request of any individual, a number which may be used in connection
with such individual's social security number (or other identifying
information with respect to such individual as determined by the
Secretary) to assist the Secretary in verifying such individual's
identity.
(b) Requirements.--
(1) Annual expansion.--For each calendar year beginning after
the date of the enactment of this Act, the Secretary shall provide
numbers through the program described in subsection (a) to
individuals residing in such States as the Secretary deems
appropriate, provided that the total number of States served by
such program during such year is greater than the total number of
States served by such program during the preceding year.
(2) Nationwide availability.--Not later than 5 years after the
date of the enactment of this Act, the Secretary shall ensure that
the program described in subsection (a) is made available to any
individual residing in the United States.
SEC. 2006. SINGLE POINT OF CONTACT FOR TAX-RELATED IDENTITY THEFT
VICTIMS.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall establish and implement procedures to ensure that any
taxpayer whose return has been delayed or otherwise adversely affected
due to tax-related identity theft has a single point of contact at the
Internal Revenue Service throughout the processing of the taxpayer's
case. The single point of contact shall track the taxpayer's case to
completion and coordinate with other Internal Revenue Service employees
to resolve case issues as quickly as possible.
(b) Single Point of Contact.--
(1) In general.--For purposes of subsection (a), the single
point of contact shall consist of a team or subset of specially
trained employees who--
(A) have the ability to work across functions to resolve
the issues involved in the taxpayer's case; and
(B) shall be accountable for handling the case until its
resolution.
(2) Team or subset.--The employees included within the team or
subset described in paragraph (1) may change as required to meet
the needs of the Internal Revenue Service, provided that procedures
have been established to--
(A) ensure continuity of records and case history; and
(B) notify the taxpayer when appropriate.
SEC. 2007. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
(a) In General.--Chapter 77 is amended by adding at the end the
following new section:
``SEC. 7529. NOTIFICATION OF SUSPECTED IDENTITY THEFT.
``(a) In General.--If the Secretary determines that there has been
or may have been an unauthorized use of the identity of any individual,
the Secretary shall, without jeopardizing an investigation relating to
tax administration--
``(1) as soon as practicable--
``(A) notify the individual of such determination,
``(B) provide instructions on how to file a report with law
enforcement regarding the unauthorized use,
``(C) identify any steps to be taken by the individual to
permit law enforcement to access personal information of the
individual during the investigation,
``(D) provide information regarding actions the individual
may take in order to protect the individual from harm relating
to the unauthorized use, and
``(E) offer identity protection measures to the individual,
such as the use of an identity protection personal
identification number, and
``(2) at the time the information described in paragraph (1) is
provided (or, if not available at such time, as soon as practicable
thereafter), issue additional notifications to such individual (or
such individual's designee) regarding--
``(A) whether an investigation has been initiated in
regards to such unauthorized use,
``(B) whether the investigation substantiated an
unauthorized use of the identity of the individual, and
``(C) whether--
``(i) any action has been taken against a person
relating to such unauthorized use, or
``(ii) any referral has been made for criminal
prosecution of such person and, to the extent such
information is available, whether such person has been
criminally charged by indictment or information.
``(b) Employment-Related Identity Theft.--
``(1) In general.--For purposes of this section, the
unauthorized use of the identity of an individual includes the
unauthorized use of the identity of the individual to obtain
employment.
``(2) Determination of employment-related identity theft.--For
purposes of this section, in making a determination as to whether
there has been or may have been an unauthorized use of the identity
of an individual to obtain employment, the Secretary shall review
any information--
``(A) obtained from a statement described in section 6051
or an information return relating to compensation for services
rendered other than as an employee, or
``(B) provided to the Internal Revenue Service by the
Social Security Administration regarding any statement
described in section 6051,
which indicates that the social security account number provided on
such statement or information return does not correspond with the
name provided on such statement or information return or the name
on the tax return reporting the income which is included on such
statement or information return.''.
(b) Additional Measures.--
(1) Examination of both paper and electronic statements and
returns.--The Secretary of the Treasury (or the Secretary's
delegate) shall examine the statements, information returns, and
tax returns described in section 7529(b)(2) of the Internal Revenue
Code of 1986 (as added by subsection (a)) for any evidence of
employment-related identity theft, regardless of whether such
statements or returns are submitted electronically or on paper.
(2) Improvement of effective return processing program with
social security administration.--Section 232 of the Social Security
Act (42 U.S.C. 432) is amended by inserting after the third
sentence the following: ``For purposes of carrying out the return
processing program described in the preceding sentence, the
Commissioner of Social Security shall request, not less than
annually, such information described in section 7529(b)(2) of the
Internal Revenue Code of 1986 as may be necessary to ensure the
accuracy of the records maintained by the Commissioner of Social
Security related to the amounts of wages paid to, and the amounts
of self-employment income derived by, individuals.''.
(3) Underreporting of income.--The Secretary of the Treasury
(or the Secretary's delegate) shall establish procedures to ensure
that income reported in connection with the unauthorized use of a
taxpayer's identity is not taken into account in determining any
penalty for underreporting of income by the victim of identity
theft.
(c) Clerical Amendment.--The table of sections for chapter 77 is
amended by adding at the end the following new item:
``Sec. 7529. Notification of suspected identity theft.''.
(d) Effective Date.--The amendments made by this section shall
apply to determinations made after the date that is 6 months after the
date of the enactment of this Act.
SEC. 2008. GUIDELINES FOR STOLEN IDENTITY REFUND FRAUD CASES.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Secretary of the Treasury (or the
Secretary's delegate), in consultation with the National Taxpayer
Advocate, shall develop and implement publicly available guidelines for
management of cases involving stolen identity refund fraud in a manner
that reduces the administrative burden on taxpayers who are victims of
such fraud.
(b) Standards and Procedures To Be Considered.--The guidelines
described in subsection (a) may include--
(1) standards for--
(A) the average length of time in which a case involving
stolen identity refund fraud should be resolved;
(B) the maximum length of time, on average, a taxpayer who
is a victim of stolen identity refund fraud and is entitled to
a tax refund which has been stolen should have to wait to
receive such refund; and
(C) the maximum number of offices and employees within the
Internal Revenue Service with whom a taxpayer who is a victim
of stolen identity refund fraud should be required to interact
in order to resolve a case;
(2) standards for opening, assigning, reassigning, or closing a
case involving stolen identity refund fraud; and
(3) procedures for implementing and accomplishing the standards
described in paragraphs (1) and (2), and measures for evaluating
such procedures and determining whether such standards have been
successfully implemented.
SEC. 2009. INCREASED PENALTY FOR IMPROPER DISCLOSURE OR USE OF
INFORMATION BY PREPARERS OF RETURNS.
(a) In General.--Section 6713 is amended--
(1) by redesignating subsections (b) and (c) as subsections (c)
and (d), respectively; and
(2) by inserting after subsection (a) the following new
subsection:
``(b) Enhanced Penalty for Improper Use or Disclosure Relating to
Identity Theft.--
``(1) In general.--In the case of a disclosure or use described
in subsection (a) that is made in connection with a crime relating
to the misappropriation of another person's taxpayer identity (as
defined in section 6103(b)(6)), whether or not such crime involves
any tax filing, subsection (a) shall be applied--
``(A) by substituting `$1,000' for `$250', and
``(B) by substituting `$50,000' for `$10,000'.
``(2) Separate application of total penalty limitation.--The
limitation on the total amount of the penalty under subsection (a)
shall be applied separately with respect to disclosures or uses to
which this subsection applies and to which it does not apply.''.
(b) Criminal Penalty.--Section 7216(a) is amended by striking
``$1,000'' and inserting ``$1,000 ($100,000 in the case of a disclosure
or use to which section 6713(b) applies)''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures or uses on or after the date of the enactment of
this Act.
Subtitle B--Development of Information Technology
SEC. 2101. MANAGEMENT OF INTERNAL REVENUE SERVICE INFORMATION
TECHNOLOGY.
(a) Duties and Responsibilities of Internal Revenue Service Chief
Information Officer.--Section 7803, as amended by section 1001, is
amended by adding at the end the following new subsection:
``(f) Internal Revenue Service Chief Information Officer.--
``(1) In general.--There shall be in the Internal Revenue
Service an Internal Revenue Service Chief Information Officer
(hereafter referred to in this subsection as the `IRS CIO') who
shall be appointed by the Commissioner of Internal Revenue.
``(2) Centralized responsibility for internal revenue service
information technology.--The Commissioner of Internal Revenue (and
the Secretary) shall act through the IRS CIO with respect to all
development, implementation, and maintenance of information
technology for the Internal Revenue Service. Any reference in this
subsection to the IRS CIO which directs the IRS CIO to take any
action, or to assume any responsibility, shall be treated as a
reference to the Commissioner of Internal Revenue acting through
the IRS CIO.
``(3) General duties and responsibilities.--The IRS CIO shall--
``(A) be responsible for the development, implementation,
and maintenance of information technology for the Internal
Revenue Service,
``(B) ensure that the information technology of the
Internal Revenue Service is secure and integrated,
``(C) maintain operational control of all information
technology for the Internal Revenue Service,
``(D) be the principal advocate for the information
technology needs of the Internal Revenue Service, and
``(E) consult with the Chief Procurement Officer of the
Internal Revenue Service to ensure that the information
technology acquired for the Internal Revenue Service is
consistent with--
``(i) the goals and requirements specified in
subparagraphs (A) through (D), and
``(ii) the strategic plan developed under paragraph
(4).
``(4) Strategic plan.--
``(A) In general.--The IRS CIO shall develop and implement
a multiyear strategic plan for the information technology needs
of the Internal Revenue Service. Such plan shall--
``(i) include performance measurements of such
technology and of the implementation of such plan,
``(ii) include a plan for an integrated enterprise
architecture of the information technology of the Internal
Revenue Service,
``(iii) include and take into account the resources
needed to accomplish such plan,
``(iv) take into account planned major acquisitions of
information technology by the Internal Revenue Service, and
``(v) align with the needs and strategic plan of the
Internal Revenue Service.
``(B) Plan updates.--The IRS CIO shall, not less frequently
than annually, review and update the strategic plan under
subparagraph (A) (including the plan for an integrated
enterprise architecture described in subparagraph (A)(ii)) to
take into account the development of new information technology
and the needs of the Internal Revenue Service.
``(5) Scope of authority.--
``(A) Information technology.--For purposes of this
subsection, the term `information technology' has the meaning
given such term by section 11101 of title 40, United States
Code.
``(B) Internal revenue service.--Any reference in this
subsection to the Internal Revenue Service includes a reference
to all components of the Internal Revenue Service, including--
``(i) the Office of the Taxpayer Advocate,
``(ii) the Criminal Investigation Division of the
Internal Revenue Service, and
``(iii) except as otherwise provided by the Secretary
with respect to information technology related to matters
described in subsection (b)(3)(B), the Office of the Chief
Counsel.''.
(b) Independent Verification and Validation of the Customer Account
Data Engine 2 and Enterprise Case Management System.--
(1) In general.--The Commissioner of Internal Revenue shall
enter into a contract with an independent reviewer to verify and
validate the implementation plans (including the performance
milestones and cost estimates included in such plans) developed for
the Customer Account Data Engine 2 and the Enterprise Case
Management System.
(2) Deadline for completion.--Such contract shall require that
such verification and validation be completed not later than the
date which is 1 year after the date of the enactment of this Act.
(3) Application to phases of cade 2.--
(A) In general.--Paragraphs (1) and (2) shall not apply to
phase 1 of the Customer Account Data Engine 2 and shall apply
separately to each other phase.
(B) Deadline for completing plans.--Not later than 1 year
after the date of the enactment of this Act, the Commissioner
of Internal Revenue shall complete the development of plans for
all phases of the Customer Account Data Engine 2.
(C) Deadline for completion of verification and validation
of plans.--In the case of any phase after phase 2 of the
Customer Account Data Engine 2, paragraph (2) shall be applied
by substituting ``the date on which the plan for such phase was
completed'' for ``the date of the enactment of this Act''.
(c) Coordination of IRS CIO and Chief Procurement Officer of the
Internal Revenue Service.--
(1) In general.--The Chief Procurement Officer of the Internal
Revenue Service shall--
(A) identify all significant IRS information technology
acquisitions and provide written notification to the Internal
Revenue Service Chief Information Officer (hereafter referred
to in this subsection as the ``IRS CIO'') of each such
acquisition in advance of such acquisition, and
(B) regularly consult with the IRS CIO regarding
acquisitions of information technology for the Internal Revenue
Service, including meeting with the IRS CIO regarding such
acquisitions upon request.
(2) Significant irs information technology acquisitions.--For
purposes of this subsection, the term ``significant IRS information
technology acquisitions'' means--
(A) any acquisition of information technology for the
Internal Revenue Service in excess of $1 million; and
(B) such other acquisitions of information technology for
the Internal Revenue Service (or categories of such
acquisitions) as the IRS CIO, in consultation with the Chief
Procurement Officer of the Internal Revenue Service, may
identify.
(3) Scope.--Terms used in this subsection which are also used
in section 7803(f) of the Internal Revenue Code of 1986 (as added
by subsection (a)) shall have the same meaning as when used in such
section.
SEC. 2102. INTERNET PLATFORM FOR FORM 1099 FILINGS.
(a) In General.--Not later than January 1, 2023, the Secretary of
the Treasury or the Secretary's delegate (hereafter referred to in this
section as the ``Secretary'') shall make available an internet website
or other electronic media, with a user interface and functionality
similar to the Business Services Online Suite of Services provided by
the Social Security Administration, that provides access to resources
and guidance provided by the Internal Revenue Service and allows
persons to--
(1) prepare and file Forms 1099;
(2) prepare Forms 1099 for distribution to recipients other
than the Internal Revenue Service; and
(3) maintain a record of completed, filed, and distributed
Forms 1099.
(b) Electronic Services Treated as Supplemental; Application of
Security Standards.--The Secretary shall ensure that the services
described in subsection (a)--
(1) are a supplement to, and not a replacement for, other
services provided by the Internal Revenue Service to taxpayers; and
(2) comply with applicable security standards and guidelines.
SEC. 2103. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION
TECHNOLOGY POSITIONS.
(a) In General.--Subchapter A of chapter 80 is amended by adding at
the end the following new section:
``SEC. 7812. STREAMLINED CRITICAL PAY AUTHORITY FOR INFORMATION
TECHNOLOGY POSITIONS.
``In the case of any position which is critical to the
functionality of the information technology operations of the Internal
Revenue Service--
``(1) section 9503 of title 5, United States Code, shall be
applied--
``(A) by substituting `during the period beginning on the
date of the enactment of section 7812 of the Internal Revenue
Code of 1986, and ending on September 30, 2025' for `Before
September 30, 2013 in subsection (a)',
``(B) without regard to subparagraph (B) of subsection
(a)(1), and
``(C) by substituting `the date of the enactment of the
Taxpayer First Act' for `June 1, 1998' in subsection (a)(6),
``(2) section 9504 of such title 5 shall be applied by
substituting `During the period beginning on the date of the
enactment of section 7812 of the Internal Revenue Code of 1986, and
ending on September 30, 2025' for `Before September 30, 2013' each
place it appears in subsections (a) and (b), and
``(3) section 9505 of such title shall be applied--
``(A) by substituting `During the period beginning on the
date of the enactment of section 7812 of the Internal Revenue
Code of 1986, and ending on September 30, 2025' for `Before
September 30, 2013' in subsection (a), and
``(B) by substituting `the information technology
operations' for `significant functions' in subsection (a).''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 80 is amended by adding at the end the following new item:
``Sec. 7812. Streamlined critical pay authority for information
technology positions.''.
Subtitle C--Modernization of Consent-Based Income Verification System
SEC. 2201. DISCLOSURE OF TAXPAYER INFORMATION FOR THIRD-PARTY INCOME
VERIFICATION.
(a) In General.--Not later than 1 year after the close of the 2-
year period described in subsection (d)(1), the Secretary of the
Treasury or the Secretary's delegate (hereafter referred to in this
section as the ``Secretary'') shall implement a program to ensure that
any qualified disclosure--
(1) is fully automated and accomplished through the internet;
and
(2) is accomplished in as close to real-time as is practicable.
(b) Qualified Disclosure.--For purposes of this section, the term
``qualified disclosure'' means a disclosure under section 6103(c) of
the Internal Revenue Code of 1986 of returns or return information by
the Secretary to a person seeking to verify the income or
creditworthiness of a taxpayer who is a borrower in the process of a
loan application.
(c) Application of Security Standards.--The Secretary shall ensure
that the program described in subsection (a) complies with applicable
security standards and guidelines.
(d) User Fee.--
(1) In general.--During the 2-year period beginning on the
first day of the sixth calendar month beginning after the date of
the enactment of this Act, the Secretary shall assess and collect a
fee for qualified disclosures (in addition to any other fee
assessed and collected for such disclosures) at such rates as the
Secretary determines are sufficient to cover the costs related to
implementing the program described in subsection (a), including the
costs of any necessary infrastructure or technology.
(2) Deposit of collections.--Amounts received from fees
assessed and collected under paragraph (1) shall be deposited in,
and credited to, an account solely for the purpose of carrying out
the activities described in subsection (a). Such amounts shall be
available to carry out such activities without need of further
appropriation and without fiscal year limitation.
SEC. 2202. LIMIT REDISCLOSURES AND USES OF CONSENT-BASED DISCLOSURES OF
TAX RETURN INFORMATION.
(a) In General.--Section 6103(c) is amended by adding at the end
the following: ``Persons designated by the taxpayer under this
subsection 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.''.
(b) Application of Penalties.--Section 6103(a)(3) is amended by
inserting ``subsection (c),'' after ``return information under''.
(c) Effective Date.--The amendments made by this section shall
apply to disclosures made after the date which is 180 days after the
date of the enactment of this Act.
Subtitle D--Expanded Use of Electronic Systems
SEC. 2301. ELECTRONIC FILING OF RETURNS.
(a) In General.--Section 6011(e)(2)(A) is amended by striking
``250'' and inserting ``the applicable number of''.
(b) Applicable Number.--Section 6011(e) is amended by striking
paragraph (5) and inserting the following new paragraphs:
``(5) Applicable number.--
``(A) In general.--For purposes of paragraph (2)(A), the
applicable number shall be--
``(i) except as provided in subparagraph (B), in the
case of calendar years before 2021, 250,
``(ii) in the case of calendar year 2021, 100, and
``(iii) in the case of calendar years after 2021, 10.
``(B) Special rule for partnerships for 2018, 2019, 2020,
and 2021.--In the case of a partnership, for any calendar year
before 2022, the applicable number shall be--
``(i) in the case of calendar year 2018, 200,
``(ii) in the case of calendar year 2019, 150,
``(iii) in the case of calendar year 2020, 100, and
``(iv) in the case of calendar year 2021, 50.
``(6) Partnerships required to file on magnetic media.--
Notwithstanding paragraph (2)(A), the Secretary shall require
partnerships having more than 100 partners to file returns on
magnetic media.''.
(c) Returns Filed by a Tax Return Preparer.--Section 6011(e)(3) is
amended by adding at the end the following new subparagraph:
``(D) Exception for certain preparers located in areas
without internet access.--The Secretary may waive the
requirement of subparagraph (A) if the Secretary determines, on
the basis of an application by the tax return preparer, that
the preparer cannot meet such requirement by reason of being
located in a geographic area which does not have access to
internet service (other than dial-up or satellite service).''.
(d) Conforming Amendment.--Section 6724(c) is amended by striking
``250 information returns (more than 100 information returns in the
case of a partnership having more than 100 partners)'' and inserting
``the applicable number (determined under section 6011(e)(5) with
respect to the calendar year to which such returns relate) of
information returns''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 2302. UNIFORM STANDARDS FOR THE USE OF ELECTRONIC SIGNATURES FOR
DISCLOSURE AUTHORIZATIONS TO, AND OTHER AUTHORIZATIONS OF,
PRACTITIONERS.
Section 6061(b)(3) is amended to read as follows:
``(3) Published guidance.--
``(A) In general.--The Secretary shall publish guidance as
appropriate to define and implement any waiver of the signature
requirements or any method adopted under paragraph (1).
``(B) Electronic signatures for disclosure authorizations
to, and other authorizations of, practitioners.--Not later than
6 months after the date of the enactment of this subparagraph,
the Secretary shall publish guidance to establish uniform
standards and procedures for the acceptance of taxpayers'
signatures appearing in electronic form with respect to any
request for disclosure of a taxpayer's return or return
information under section 6103(c) to a practitioner or any
power of attorney granted by a taxpayer to a practitioner.
``(C) Practitioner.--For purposes of subparagraph (B), the
term `practitioner' means any individual in good standing who
is regulated under section 330 of title 31, United States
Code.''.
SEC. 2303. PAYMENT OF TAXES BY DEBIT AND CREDIT CARDS.
Section 6311(d)(2) is amended by adding at the end the following:
``The preceding sentence shall not apply to the extent that the
Secretary ensures that any such fee or other consideration is fully
recouped by the Secretary in the form of fees paid to the Secretary by
persons paying taxes imposed under subtitle A with credit, debit, or
charge cards pursuant to such contract. Notwithstanding the preceding
sentence, the Secretary shall seek to minimize the amount of any fee or
other consideration that the Secretary pays under any such contract.''.
SEC. 2304. AUTHENTICATION OF USERS OF ELECTRONIC SERVICES ACCOUNTS.
Beginning 180 days after the date of the enactment of this Act, the
Secretary of the Treasury (or the Secretary's delegate) shall verify
the identity of any individual opening an e-Services account with the
Internal Revenue Service before such individual is able to use the e-
Services tools.
Subtitle E--Other Provisions
SEC. 2401. REPEAL OF PROVISION REGARDING CERTAIN TAX COMPLIANCE
PROCEDURES AND REPORTS.
Section 2004 of the Internal Revenue Service Restructuring and
Reform Act of 1998 (26 U.S.C. 6012 note) is repealed.
SEC. 2402. COMPREHENSIVE TRAINING STRATEGY.
Not later than 1 year after the date of the enactment of this Act,
the Commissioner of Internal Revenue shall submit to Congress a written
report providing a comprehensive training strategy for employees of the
Internal Revenue Service, including--
(1) a plan to streamline current training processes, including
an assessment of the utility of further consolidating internal
training programs, technology, and funding;
(2) a plan to develop annual training regarding taxpayer
rights, including the role of the Office of the Taxpayer Advocate,
for employees that interface with taxpayers and the direct managers
of such employees;
(3) a plan to improve technology-based training;
(4) proposals to--
(A) focus employee training on early, fair, and efficient
resolution of taxpayer disputes for employees that interface
with taxpayers and the direct managers of such employees; and
(B) ensure consistency of skill development and employee
evaluation throughout the Internal Revenue Service; and
(5) a thorough assessment of the funding necessary to implement
such strategy.
TITLE III--MISCELLANEOUS PROVISIONS
Subtitle A--Reform of Laws Governing Internal Revenue Service Employees
SEC. 3001. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE INTERNAL REVENUE
SERVICE WHO WAS INVOLUNTARILY SEPARATED FROM SERVICE FOR MISCONDUCT.
(a) In General.--Section 7804 is amended by adding at the end the
following new subsection:
``(d) Prohibition on Rehiring Employees Involuntarily Separated.--
The Commissioner may not hire any individual previously employed by the
Commissioner who was removed for misconduct under this subchapter or
chapter 43 or chapter 75 of title 5, United States Code, or whose
employment was terminated under section 1203 of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to the hiring of employees after the date of the
enactment of this Act.
SEC. 3002. NOTIFICATION OF UNAUTHORIZED INSPECTION OR DISCLOSURE OF
RETURNS AND RETURN INFORMATION.
(a) In General.--Subsection (e) of section 7431 is amended by
adding at the end the following new sentences: ``The Secretary shall
also notify such taxpayer if the Internal Revenue Service or a Federal
or State agency (upon notice to the Secretary by such Federal or State
agency) proposes an administrative determination as to disciplinary or
adverse action against an employee arising from the employee's
unauthorized inspection or disclosure of the taxpayer's return or
return information. The notice described in this subsection shall
include the date of the unauthorized inspection or disclosure and the
rights of the taxpayer under such administrative determination.''.
(b) Effective Date.--The amendment made by this section shall apply
to determinations proposed after the date which is 180 days after the
date of the enactment of this Act.
Subtitle B--Provisions Relating to Exempt Organizations
SEC. 3101. MANDATORY E-FILING BY EXEMPT ORGANIZATIONS.
(a) In General.--Section 6033 is amended by redesignating
subsection (n) as subsection (o) and by inserting after subsection (m)
the following new subsection:
``(n) Mandatory Electronic Filing.--Any organization required to
file a return under this section shall file such return in electronic
form.''.
(b) Other Reports and Returns.--
(1) Political organizations.--Section 527(j)(7) is amended by
striking ``if the organization has'' and all that follows through
``such calendar year''.
(2) Unrelated business income tax returns.--Section 6011 is
amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Mandatory E-Filing of Unrelated Business Income Tax Return.--
Any organization required to file an annual return under this section
which relates to any tax imposed by section 511 shall file such return
in electronic form.''.
(c) Inspection of Electronically Filed Annual Returns.--Section
6104(b) is amended by adding at the end the following: ``Any annual
return required to be filed electronically under section 6033(n) shall
be made available by the Secretary to the public as soon as practicable
in a machine readable format.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after the date of the enactment of this Act.
(2) Transitional relief.--
(A) Small organizations.--
(i) In general.--In the case of any small
organizations, or any other organizations for which the
Secretary of the Treasury or the Secretary's delegate
(hereafter referred to in this paragraph as the
``Secretary'') determines the application of the amendments
made by this section would cause undue burden without a
delay, the Secretary may delay the application of such
amendments, but such delay shall not apply to any taxable
year beginning on or after the date that is 2 years after
the enactment of this Act.
(ii) Small organization.--For purposes of clause (i),
the term ``small organization'' means any organization--
(I) the gross receipts of which for the taxable
year are less than $200,000; and
(II) the aggregate gross assets of which at the end
of the taxable year are less than $500,000.
(B) Organizations filing form 990-t.--In the case of any
organization described in section 511(a)(2) of the Internal
Revenue Code of 1986 which is subject to the tax imposed by
section 511(a)(1) of such Code on its unrelated business
taxable income, or any organization required to file a return
under section 6033 of such Code and include information under
subsection (e) thereof, the Secretary may delay the application
of the amendments made by this section, but such delay shall
not apply to any taxable year beginning on or after the date
that is 2 years after the enactment of this Act.
SEC. 3102. NOTICE REQUIRED BEFORE REVOCATION OF TAX-EXEMPT STATUS FOR
FAILURE TO FILE RETURN.
(a) In General.--Section 6033(j)(1) is amended by striking ``If an
organization'' and inserting the following:
``(A) Notice.--If an organization described in subsection
(a)(1) or (i) fails to file the annual return or notice
required under either subsection for 2 consecutive years, the
Secretary shall notify the organization--
``(i) that the Internal Revenue Service has no record
of such a return or notice from such organization for 2
consecutive years, and
``(ii) about the revocation that will occur under
subparagraph (B) if the organization fails to file such a
return or notice by the due date for the next such return
or notice required to be filed.
The notification under the preceding sentence shall include
information about how to comply with the filing requirements
under subsections (a)(1) and (i).
``(B) Revocation.--If an organization''.
(b) Effective Date.--The amendment made by this section shall apply
to failures to file returns or notices for 2 consecutive years if the
return or notice for the second year is required to be filed after
December 31, 2019.
Subtitle C--Revenue Provision
SEC. 3201. INCREASE IN PENALTY FOR FAILURE TO FILE.
(a) In General.--The second sentence of subsection (a) of section
6651 is amended by striking ``$205'' and inserting ``$330''.
(b) Inflation Adjustment.--Section 6651(j)(1) is amended--
(1) by striking ``2014'' and inserting ``2020'',
(2) by striking ``$205'' and inserting ``$330'', and
(3) by striking ``2013'' and inserting ``2019''.
(c) Effective Date.--The amendments made by this section shall
apply to returns required to be filed after December 31, 2019.
TITLE IV--BUDGETARY EFFECTS
SEC. 4001. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the House Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
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