S.Amdt. 3149

SA 3149. Mr. CORNYN submitted an amendment intended to be proposed to
amendment SA 3060 proposed by Mr. Wyden to the bill H.R. 3474, to amend
the Internal Revenue Code of 1986 to allow employers to exempt
employees with health coverage under TRICARE or the Veterans
Administration from being taken into account for purposes of the
employer mandate under the Patient Protection and Affordable Care Act;
which was ordered to lie on the table; as follows:

At the end, add the following:

TITLE _--ELIMINATING IMPROPER AND ABUSIVE AUDITS

SEC. _01. SHORT TITLE.

This title may be cited as the ``Eliminating Improper and
Abusive IRS Audits Act of 2014''.

SEC. _02. CIVIL DAMAGES ALLOWED FOR RECKLESS OR INTENTIONAL
DISREGARD OF INTERNAL REVENUE LAWS.

(a) Increase in Amount of Damages.--Section 7433(b) is
amended by striking ``$1,000,000 ($100,000, in the case of
negligence)'' and inserting ``$3,000,000 ($300,000, in the
case of negligence)''.
(b) Extension of Time To Bring Action.--Section 7433(d)(3)
is amended by striking ``2 years'' and inserting ``5 years''.
(c) Effective Date.--The amendments made by this section
shall apply to actions of employees of the Internal Revenue
Service after the date of the enactment of this Act.

SEC. _03. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY
OFFICERS AND EMPLOYEES IN CONNECTION WITH
REVENUE LAWS.

(a) Increase in Penalty.--Section 7214 is amended--
(1) by striking ``$10,000'' in subsection (a) and inserting
``$25,000'', and
(2) by striking ``$5,000'' in subsection (b) and inserting
``$10,000''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.

SEC. _04. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR
UNAUTHORIZED INSPECTION OR DISCLOSURE OF
RETURNS AND RETURN INFORMATION.

(a) Increase in Amount of Damages.--Subparagraph (A) of
section 7431(c)(1) is amended by striking ``$1,000'' and
inserting ``$10,000''.
(b) Effective Date.--The amendment made by this section
shall apply to inspections and disclosure occurring on and
after the date of the enactment of this Act.

SEC. _05. EXTENSION OF TIME FOR CONTESTING IRS LEVY.

(a) Extension of Time for Return of Property Subject to
Levy.--Subsection (b) of section 6343 is amended by striking
``9 months'' and inserting ``3 years''.
(b) Period of Limitation on Suits.--Subsection (c) of
section 6532 is amended--
(1) in paragraph (1) by striking ``9 months'' and inserting
``3 years'', and
(2) in paragraph (2) by striking ``9-month'' and inserting
``3-year''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) levies made after the date of the enactment of this
Act, and
(2) levies made on or before such date if the 9-month
period has not expired under section 6343(b) of the Internal
Revenue Code of 1986 (without regard to this section) as of
such date.

SEC. _06. INCREASE IN MONETARY PENALTIES FOR CERTAIN
UNAUTHORIZED DISCLOSURES OF INFORMATION.

(a) In General.--Paragraphs (1), (2), (3), and (4) of
section 7213(a) are each amended by striking ``$5,000'' and
inserting ``$10,000''.
(b) Effective Date.--The amendments made by this section
shall apply to disclosures made after the date of the
enactment of this Act.

SEC. _07. BAN ON RAISING NEW ISSUES ON APPEAL.

(a) In General.--Chapter 77 is amended by adding at the end
the following new section:

``SEC. 7529. PROHIBITION ON INTERNAL REVENUE SERVICE RAISING
NEW ISSUES IN AN INTERNAL APPEAL.

``(a) In General.--In reviewing an appeal of any
determination initially made by the Internal Revenue Service,
the Internal Revenue Service Office of Appeals may not
consider or decide any issue that is not within the scope of
the initial determination.
``(b) Certain Issues Deemed Outside of Scope of
Determination.--For purposes of subsection (a), the following
matters shall be considered to be not within the scope of a
determination:
``(1) Any issue that was not raised in a notice of
deficiency or an examiner's report which is the subject of
the appeal.
``(2) Any deficiency in tax which was not included in the
initial determination.
``(3) Any theory or justification for a tax deficiency
which was not considered in the initial determination.
``(c) No Inference With Respect to Issues Raised by
Taxpayers.--Nothing in this section shall be construed to
provide any limitation in addition to any limitations in
effect on the date of the enactment of this section on the
right of a taxpayer to raise an issue, theory, or
justification on an appeal from a determination initially
made by the Internal Revenue Service that was not within the
scope of the initial determination.''.
(b) Clerical Amendment.--The table of sections for chapter
77 is amended by adding at the end the following new item:

``Sec. 7529. Prohibition on Internal Revenue Service raising new issues
in an internal appeal.''.
(c) Effective Date.--The amendments made by this section
shall apply to matters filed or pending with the Internal
Revenue Service Office of Appeals on or after the date of the
enactment of this Act.

SEC. _08. LIMITATION ON ENFORCEMENT OF LIENS AGAINST
PRINCIPAL RESIDENCES.

(a) In General.--Section 7403(a) is amended--
(1) by striking ``In any case'' and inserting the
following:
``(1) In general.--In any case'', and
(2) by adding at the end the following new paragraph:
``(2) Limitation with respect to principal residence.--
``(A) In general.--Paragraph (1) shall not apply to any
property used as the principal residence of the taxpayer
(within the meaning of section 121) unless the Secretary of
the Treasury makes a written determination that--
``(i) all other property of the taxpayer, if sold, is
insufficient to pay the tax or discharge the liability, and
``(ii) such action will not create an economic hardship for
the taxpayer.
``(B) Delegation.--For purposes of this paragraph, the
Secretary of the Treasury may not delegate any
responsibilities under subparagraph (A) to any person other
than--
``(i) the Commissioner of Internal Revenue, or
``(ii) a district director or assistant district director
of the Internal Revenue Service.''.
(b) Effective Date.--The amendments made by this section
shall apply to actions filed after the date of the enactment
of this Act.

SEC. _09. ADDITIONAL PROVISIONS RELATING TO MANDATORY
TERMINATION FOR MISCONDUCT.

(a) Termination of Unemployment for Inappropriate Review of
Tax-Exempt Status.--Section 1203(b) of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804
note) is amended by striking ``and'' at the end of paragraph
(9), by striking the period at the end of paragraph (10) and
inserting ``; and'', and by adding at the end the following
new paragraph:
``(11) in the case of any review of an application for tax-
exempt status by an organization described in section 501(c)
of the Internal Revenue Code of 1986, developing or using any
methodology that applies disproportionate scrutiny to any
applicant based on the ideology expressed in the name or
purpose of the organization.''.
(b) Mandatory Unpaid Administrative Leave for Misconduct.--
Paragraph (1) of Section 1203(c) of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804
note) is amended by adding at the end the following new
sentence: ``Notwithstanding the preceding sentence, if the
Commissioner of Internal Revenue takes a personnel action
other than termination for an act or omission described in
subsection (b), the Commissioner shall place the employee on
unpaid administrative leave for a period of not less than 30
days.''.
(c) Limitation on Alternative Punishment.--Paragraph (1) of
section 1203(c) of the Internal Revenue Service Restructuring
and Reform Act of 1998 (26 U.S.C. 7804 note) is amended by
striking ``The Commissioner'' and inserting ``Except in the
case of an act or omission described in subsection (b)(3)(A),
the Commissioner''.

SEC. _10. EXTENSION OF DECLARATORY JUDGMENT PROCEDURES TO
SOCIAL WELFARE ORGANIZATIONS.

(a) In General.--Section 7428(a)(1) is amended by striking
``or'' at the end of subparagraph (C) and by adding at the
end the following new subparagraph:
``(E) with respect to the initial classification or
continuing classification of an organization described in
section 501(c)(4) which is exempt from tax under section
501(a), or''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to pleading filed after the date of
the enactment of this Act.

SEC. _11. REVIEW BY THE TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION.

(a) Review.--Subsection (k)(1) of section 8D of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) by redesignating subparagraph (D) as subparagraph (E);
(3) by inserting after subparagraph (C) the following new
subparagraph:
``(D) shall--
``(i) review any criteria employed by the Internal Revenue
Service to select tax returns (including applications for
recognition of tax-exempt status) for examination or audit,
assessment or collection of deficiencies, criminal
investigation or referral, refunds for amounts paid, or any
heightened scrutiny or review in order to determine whether
the criteria discriminates against taxpayers on the basis of
race, religion, or political ideology; and
``(ii) consult with the Internal Revenue Service on
recommended amendments to such criteria in order to eliminate
any discrimination identified pursuant to the review
described in clause (i); and''; and
(4) in subparagraph (E), as so redesignated, by striking
``and (C)'' and inserting ``(C), and (D)''.

[[Page S3105]]

(b) Semiannual Report.--Subsection (g) of such section is
amended by adding at the end the following new paragraph:
``(3) Any semiannual report made by the Treasury Inspector
General for Tax Administration that is required pursuant to
section 5(a) shall include--
``(A) a statement affirming that the Treasury Inspector
General for Tax Administration has reviewed the criteria
described in subsection (k)(1)(D) and consulted with the
Internal Revenue Service regarding such criteria; and
``(B) a description and explanation of any such criteria
that was identified as discriminatory by the Treasury
Inspector General for Tax Administration.''.
______