In the nature of a substitute.

SA 6847. Mr. CRAPO (for himself and Mr. Wyden) proposed an amendment
to the bill H.R. 5349, to improve services provided to taxpayers by the
Internal Revenue Service; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; ETC.

(a) Short Title.--This Act may be cited as the ``Taxpayer
Assistance and Service Act'' or the ``TAS Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment is expressed in
terms of an amendment to 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) References to Secretary.--For purposes of this Act, the
term ``Secretary'' means the Secretary of the Treasury or the
Secretary's delegate.
(d) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; etc.

TITLE I--TAX ADMINISTRATION AND CUSTOMER SERVICE

Sec. 101. Digitization of tax returns and correspondence.
Sec. 102. Establishment of dashboard to inform taxpayers of backlogs
and wait times.
Sec. 103. Expansion of electronic access to information about returns
and refunds.
Sec. 104. Expansion of callback technology.
Sec. 105. Expansion of online accounts.
Sec. 106. Automation of refund offset bypass.
Sec. 107. Installment agreement fees eliminated for certain
individuals.
Sec. 108. Individuals facing economic hardships informed of collection
alternatives.
Sec. 109. Quarterly notices to certain taxpayers with delinquencies.
Sec. 110. Low-income taxpayer clinic funding unlocked.
Sec. 111. Chief Counsel reviews of offers-in-compromise streamlined.
Sec. 112. Modification of procedural requirements for penalties and
disallowance periods.
Sec. 113. Return of amounts collected by IRS in excess of accepted
offer-in-compromise amount.
Sec. 114. Extension of period for return of amounts subject to wrongful
levy.
Sec. 115. Reports to Congress.

TITLE II--AMERICAN CITIZENS ABROAD

Sec. 201. Report on combined tax and foreign bank and financial account
reporting.
Sec. 202. Study and reports on simplification.
Sec. 203. Extension of time for persons outside of the United States to
request abatement of math error.
Sec. 204. Clarification of assessment authority; pre-assessment appeals
of foreign information return penalties.
Sec. 205. Repeal of due date requirements for certain information
returns relating to foreign gifts and trusts.

TITLE III--JUDICIAL REVIEW

Sec. 301. Authorization of subpoenas before hearings to facilitate
settlements.
Sec. 302. Clarification of Tax Court authority to order relief from a
judgment or order.
Sec. 303. Authorization of special trial judges to hear additional
cases and address contempt.
Sec. 304. Disqualification of judges and special trial judges.
Sec. 305. Notice and review with respect to multi-year bans on claiming
credits.
Sec. 306. Authorization of de novo review of innocent spouse relief by
the Tax Court and other courts.
Sec. 307. Clarification of certain court filing deadlines.
Sec. 308. Clarification of Tax Court jurisdiction to determine tax
liability in collection due process appeals.
Sec. 309. Authorization of the Tax Court to issue refunds in collection
due process cases.
Sec. 310. Authorization of the Tax Court to hear suits for refunds or
credits.
Sec. 311. Authorization to allow claims for refund in certain cases
where full tax not paid.
Sec. 312. Adjustment of threshold for small disputes.

[[Page S5277]]

TITLE IV--OFFICE OF THE TAXPAYER ADVOCATE

Sec. 401. NTA authorization to direct hire attorneys.
Sec. 402. NTA authorization to make personnel decisions.
Sec. 403. Access to Internal Revenue Service information, legal advice,
and meetings.
Sec. 404. Repeal of limitation period suspension for taxpayers seeking
assistance from TAS.
Sec. 405. Operations to assist taxpayers experiencing hardships during
lapse in appropriations.

TITLE V--TAX RETURN PREPARERS

Sec. 501. Penalties for tax return preparers who improperly alter
returns.
Sec. 502. Ensuring the use of valid preparer identification numbers and
electronic filing identification numbers.
Sec. 503. Penalties for improper tax preparation or misappropriation of
refunds.
Sec. 504. Authority to deny, revoke, or suspend preparer tax
identification numbers.

TITLE VI--APPEALS

Sec. 601. Authorization for Office of Appeals to hire attorneys.
Sec. 602. Authorization for Office of Appeals to direct hire certain
individuals.
Sec. 603. Responses to claims for refund required; appeal of claims for
refund authorized.
Sec. 604. Appeals of returned offers.
Sec. 605. Purposes and duties of Independent Office of Appeals; right
of appeal clarified.

TITLE VII--WHISTLEBLOWERS

Sec. 701. Standard and scope of review of whistleblower award
determinations.
Sec. 702. Exemption from sequestration.
Sec. 703. Whistleblower privacy protections.
Sec. 704. Modification of IRS whistleblower report.
Sec. 705. Interest on whistleblower awards.
Sec. 706. Correction regarding deductions for attorney's fees.

TITLE VIII--HOSTAGES

Sec. 801. Postponement of tax deadlines for hostages and individuals
wrongfully detained abroad.
Sec. 802. Refund and abatement of penalties and fines paid by eligible
individuals.

TITLE IX--SMALL BUSINESSES

Sec. 901. Implementation of voluntary withholding agreements for
payments to independent contractors.
Sec. 902. Extension of mailbox rule to electronic submissions and
payments.
Sec. 903. Specificity of third-party contact notices.
Sec. 904. Modification of estimated tax rules for farmers and
fishermen.
Sec. 905. Business child care liaison.

TITLE X--MISCELLANEOUS

Sec. 1001. Authority for redisclosure of certain tax information
related to education loans to the Congressional Budget
Office.
Sec. 1002. Authorization to require large partnerships to file on
magnetic media.
Sec. 1003. Limitation period not extended for victims of preparer
fraud.
Sec. 1004. Technical amendment related to the Disaster Related
Extension of Deadlines Act.
Sec. 1005. Time for filing certain information returns.
Sec. 1006. Modifications to penalties for unauthorized disclosures of
taxpayer information.

TITLE I--TAX ADMINISTRATION AND CUSTOMER SERVICE

SEC. 101. DIGITIZATION OF TAX RETURNS AND CORRESPONDENCE.

(a) Returns Accepted Electronically.--Any Federal tax
return which any person is required to file with the
Secretary, as well as any amendments to such return--
(1) may be filed by such person electronically, and
(2) if such return or amendment is filed electronically,
shall be processed electronically by the Secretary.
(b) Digitization of Returns and Correspondence.--The
Internal Revenue Service shall use optical character
recognition technology (or any functionally similar
technology) to transcribe--
(1) any return which is received by the Internal Revenue
Service only in a paper form, or
(2) any correspondence which is received by the Internal
Revenue Service only in a paper form.
(c) Exceptions.--
(1) In general.--Subsection (b) shall not apply to any
technology to the extent that the Secretary determines such
technology is slower or less reliable than--
(A) the process of manually transcribing returns or
correspondence received in a paper form, or
(B) any other process that the Internal Revenue Service is
using or would otherwise use.
(2) Report to congress.--Any exception to the application
of a technology described in subsection (b) pursuant to
paragraph (1) shall not take effect unless the Secretary
provides a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate regarding the determination made by the Secretary
under such paragraph within 30 days of such determination.
(d) Effective Date.--This section shall apply to--
(1) any individual income tax return (as defined in section
6011(e)(3)(C) of the Internal Revenue Code of 1986) received
on or after January 1 of the first calendar year beginning
more than 180 days after the date of enactment of this Act,
(2) any estate tax return (as described in section 6018 of
such Code) or gift tax return (as described in section 6019
of such Code) received on or after January 1 of the first
calendar year beginning more than 24 months after the date of
enactment of this Act, and
(3) any other return or correspondence received on or after
January 1 of the first calendar year beginning more than 18
months after the date of enactment of this Act.

SEC. 102. ESTABLISHMENT OF DASHBOARD TO INFORM TAXPAYERS OF
BACKLOGS AND WAIT TIMES.

(a) In General.--The Secretary shall require the Internal
Revenue Service to provide in real time on its public
website, to the extent practical, the following:
(1) Separately with respect to each applicable phone number
extension--
(A) the number of callers connected to speak directly with
a representative of the Internal Revenue Service,
(B) the number of callers connected to speak with an
automated system,
(C) the number of callers who are waiting to be connected
to speak directly with a representative of the Internal
Revenue Service or an automated system,
(D) the longest amount of time that any caller has been
waiting to be connected to speak directly with a
representative of the Internal Revenue Service, and
(E) whether callback service is currently available, and if
not, when such service is scheduled to be available.
(2) An application or tool embedded on the website which--
(A) displays all of the information described in paragraph
(1), and
(B) estimates the approximate wait time to speak directly
with a representative of the Internal Revenue Service.
(3) An application programming interface which allows any
person to access the information described in subsection
(a)(1) using automation and to create an application or tool
embedded on a website to display such information.
(4) For each applicable phone number extension, a summary
of the information described in paragraph (1) with respect to
the prior month, including--
(A) the average and median length of calls,
(B) the average and median amount of time that callers were
speaking directly with a representative of the Internal
Revenue Service,
(C) the number and percent of calls that were directed to
an automated system,
(D) the number and percent of calls that were disconnected
or terminated by the Internal Revenue Service,
(E) the number of callers who were transferred to another
applicable phone number extension after the call was
initially answered by a representative of the Internal
Revenue Service,
(F) the average and median amount of time that callers
described in subparagraph (E) were on hold following the
transfer, and
(G) the number and percent of callers who indicated that
they received the answers or service for which they were
contacting the Internal Revenue Service.
(b) Detection of Automated Calls.--The Secretary shall
require the Internal Revenue Service to use technology to
detect and screen out automated calls.
(c) Information Regarding Delays.--For any week in which
there was a significant delay with respect to any applicable
item (referred to in this subsection as an ``applicable
week''), the Secretary shall require the Internal Revenue
Service to provide on its public website, during the week
subsequent to the applicable week, information with respect
to each such applicable item regarding the earliest date on
which any such applicable items that were processed during
the applicable week were received by the Internal Revenue
Service.
(d) Definitions.-- For purposes of this section--
(1) Applicable item.--The term ``applicable item'' means
each category of tax return, claim, statement, or other
document filed with the Internal Revenue Service.
(2) Applicable phone number extension.--The term
``applicable phone number extension'' means any extension or
application which may be reached by calling a phone number
which is listed by the Internal Revenue Service on any
website, publication, form, or instruction which is available
to the public and--
(A) operated by the Internal Revenue Service accounts
management function,
(B) operated by the Internal Revenue Service automated
collection function,
(C) managed by the Internal Revenue Service Joint
Operations Center,
(D) managed and staffed by a contractor on behalf of the
Internal Revenue Service, or
(E) received not less than 200,000 calls during the
preceding calendar year.

[[Page S5278]]

(3) Significant delay.--The term ``significant delay''
means, in the case of any applicable item for any week, the
failure to process all of such applicable items which were
received by the Internal Revenue Service at least 21 days
before the first day of the week.
(e) Effective Date.--The requirements of this section shall
apply to periods beginning after the date which is 12 months
after the date of enactment of this Act.

SEC. 103. EXPANSION OF ELECTRONIC ACCESS TO INFORMATION ABOUT
RETURNS AND REFUNDS.

Not later than January 1 of the first calendar year
beginning more than 12 months after the date of enactment of
this Act, through a website and mobile application, the
Secretary shall provide individualized, specific, and up-to-
date information to taxpayers regarding their tax returns and
amended returns, including information with respect to
whether the Internal Revenue Service has--
(1) received such return and entered such return into their
systems,
(2) completed processing such return, including--
(A) the date on which the Internal Revenue Service issued
any refund of any overpayment of tax,
(B) the estimated date on which the taxpayer can expect to
receive such refund, and
(C)(i) if the refund will be issued by electronic fund
transfer, the financial account to which such refund will be
deposited, including--
(I) the partial or full account number for such account,
and
(II) the name and routing number of the financial
institution, or
(ii) if the refund will be issued by paper check, the
address to which the check will be mailed, or
(3) suspended processing such return, including--
(A) the reason for the suspension, and
(B) in the case of any information which was requested by
the Internal Revenue Service--
(i) the information requested,
(ii) the form and manner for submission of such
information, and
(iii) the date on which such information is due to be
submitted to the Internal Revenue Service.

SEC. 104. EXPANSION OF CALLBACK TECHNOLOGY.

It is the sense of Congress that--
(1) taxpayers contacting the Internal Revenue Service
should have the option to receive a callback, and
(2) not later than calendar year 2028, the Internal Revenue
Service should provide any taxpayer (including any taxpayer
residing outside of the United States) the option to receive
a callback for any call made by the taxpayer to an applicable
phone number extension (as defined in section 102(d)(2) of
this Act) which has not been answered within 5 minutes.

SEC. 105. EXPANSION OF ONLINE ACCOUNTS.

(a) In General.--Not later than January 1 of the first
calendar year beginning more than 18 months after the date of
enactment of this Act, the Secretary shall make available a
website or mobile application which allows any taxpayer
(including any taxpayer residing outside of the United
States) the ability to--
(1) in a manner consistent with any applicable limitations
under section 6103 of the Internal Revenue Code of 1986, view
any return (as defined in section 6103(b)(1) of the Internal
Revenue Code of 1986), document, notice, or letter (with the
exception of any educational item which has no legal effect)
which, during the applicable period (as defined in subsection
(d)), has been--
(A) sent by the Internal Revenue Service to such taxpayer,
or
(B) filed with (or, in the case of any document not
required to be filed, sent to) the Internal Revenue Service--
(i) by such taxpayer,
(ii) by a person described in subsection (c) of section
6103 of the Internal Revenue Code of 1986 with respect to
such taxpayer, or
(iii) with respect to such taxpayer in a manner described
in subsection (e) of such section,
(2) with respect to any document, notice, or letter sent to
such taxpayer by the Internal Revenue Service, respond to
such document, notice, or letter by uploading or otherwise
transmitting the taxpayer's response through the website or
mobile application, and
(3) in the case of--
(A) any representative of such taxpayer who is authorized
to practice before the Department of the Treasury pursuant to
section 330 of title 31, United States Code,
(B) any tax return preparer (as defined in section
7701(a)(36) of the Internal Revenue Code of 1986) with an
identifying number (as described in section 6109(a)(4) of
such Code), or
(C) any qualified reporting agent,
permit such representative, preparer, or agent, to the extent
authorized by the taxpayer, to access the information
described in paragraph (1) or transmit any information
described in paragraph (2).
(b) Availability for Viewing.--With respect to any return,
document, notice, or letter described in paragraph (1) of
subsection (a), such return, document, notice, or letter
shall be made available for viewing by the taxpayer (or,
pursuant to paragraph (3) of such subsection, any
representative, tax return preparer, or qualified reporting
agent authorized by the taxpayer) as soon as is practicable
and within such periods as are established pursuant to
regulations prescribed by the Secretary.
(c) Access to Multiple Accounts by Representative,
Preparer, or Agent.--For purposes of subsection (a)(3), the
website or mobile application shall allow a representative,
tax return preparer, or qualified reporting agent to be able
to access information for multiple taxpayers who have
provided permission under such subsection without any
requirement to individually and separately access the account
of each such taxpayer.
(d) Applicable Period.--
(1) In general.--Subject to paragraph (2), for purposes of
subsection (a)(1), the term ``applicable period'' means the
preceding 6-year period.
(2) Prospective application.--The term ``applicable
period'' shall not include any years ending before the date
of enactment of this Act.
(e) Qualified Reporting Agent.--
(1) In general.--For purposes of this section, the term
``qualified reporting agent'' means a person--
(A) which is properly authorized as an agent to sign and
file employment tax returns, make related payments and
deposits, and perform such other acts on behalf of a taxpayer
under procedures set forth by the Secretary,
(B) which has met such requirements as may be established
by the Secretary, and
(C) for which authorization has not been revoked or
suspended by the Secretary pursuant to procedures established
by the Secretary.
(2) Employment tax return.--For purposes of paragraph
(1)(A), the term ``employment tax return'' means--
(A) any return required to be filed by an employer to
report the obligations of the employer and its employees
under section 3101, 3111, 3301, or 3402 of the Internal
Revenue Code of 1986, and
(B) such other returns as designated by the Secretary.
(f) Preventing Unauthorized Disclosure of Return
Information by Persons Designated by Taxpayers.--Not later
than January 1 of the first calendar year beginning more than
18 months after the date of enactment of this Act, the
Secretary shall--
(1) establish a program to investigate and address--
(A) any access, use, or disclosure of return information
(as defined in section 6103(b) of the Internal Revenue Code
of 1986) by any person which is in excess of the
authorization permitted to such person pursuant to subsection
(a)(3), and
(B) any related misconduct, and
(2) annually publish, on the public website of the Internal
Revenue Service, the actions undertaken pursuant to the
program described in paragraph (1), such as the number of
complaints investigated, the number of persons whose access
was revoked, and other relevant statistical data.
(g) Focus Groups.--For purposes of subsection (a), prior to
the date that the website or mobile application described in
such subsection is made available, the Secretary shall
conduct focus groups with taxpayers and tax professionals to
ensure that any amounts appropriated or otherwise made
available for such purposes are expended in an appropriate
manner.

SEC. 106. AUTOMATION OF REFUND OFFSET BYPASS.

(a) In General.--Section 6402(a) is amended--
(1) by striking ``In the case'' and inserting the
following:
``(1) Authority.--Except as provided in paragraph (2), in
the case'', and
(2) by adding at the end the following new paragraphs:
``(2) Special rule for certain individuals.--In the case of
an overpayment with respect to any taxable year for which a
credit is allowed to an applicable taxpayer under section 32,
the Secretary shall, subject to subsections (c), (d), (e),
and (f), refund such overpayment in an amount not to exceed
the amount of the credit allowed under such section for such
taxable year.
``(3) Applicable taxpayer.--For purposes of paragraph (2),
the term `applicable taxpayer' means a taxpayer who was
classified by the Secretary as currently not collectible
(within the meaning of section 6343(e)) prior to the date on
which the refund was requested by the taxpayer.''.
(b) Effective Date.--The amendments made by this section
shall apply to offsets made after the date which is 12 months
after the date of enactment of this Act.

SEC. 107. INSTALLMENT AGREEMENT FEES ELIMINATED FOR CERTAIN
INDIVIDUALS.

(a) In General.--Section 6159(f) is amended by striking
paragraph (2) and inserting the following:
``(2) Waiver.--No fee shall be imposed on an installment
agreement under this section in the case of any taxpayer with
an adjusted gross income, as determined for the most recent
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 installment agreements entered into after the
date which is 12 months after the date of enactment of this
Act.

[[Page S5279]]

SEC. 108. INDIVIDUALS FACING ECONOMIC HARDSHIPS INFORMED OF
COLLECTION ALTERNATIVES.

(a) In General.--Not later than 12 months after the date of
enactment of this Act, the Secretary shall--
(1) establish a program to identify taxpayers who--
(A) are reasonably likely to be experiencing an economic
hardship, and
(B) have an unpaid tax liability, and
(2) in the case of any taxpayer described in paragraph (1)
who requests to enter into an agreement described in section
6159(a) of the Internal Revenue Code of 1986, provide such
taxpayer with information regarding other options which the
Internal Revenue Service makes available to taxpayers who
have an unpaid tax liability and are experiencing an economic
hardship, including--
(A) an agreement described in such section for partial
collection of a tax liability,
(B) an offer-in-compromise (as described in section 7122 of
such Code), and
(C) classification as currently not collectible (within the
meaning of section 6343(e) of such Code).
(b) Economic Hardship.--For purposes of this section, in
determining whether a taxpayer is reasonably likely to be
experiencing an economic hardship, such determination shall
be made in the same manner as determined under section
6343(a)(1)(D) of the Internal Revenue Code of 1986 based on--
(1) the most recent income and asset data which the
Secretary has received from a return or a report from, or
with respect to, such taxpayer, and
(2) the schedules described in section 7122(d)(2)(A) of
such Code.
(c) Report.--Not later than 2 years after the date of
enactment of this Act, the Secretary, in consultation with
the National Taxpayer Advocate, shall submit a report to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate regarding--
(1) the accuracy of the Internal Revenue Service with
respect to identifying taxpayers who are reasonably likely to
be experiencing an economic hardship under subsection (a)(1),
(2) whether such identification procedures may be
appropriately applied for other purposes, and
(3)(A) the number of taxpayers with an unpaid tax liability
who were identified as reasonably likely to be experiencing
an economic hardship under subsection (a)(1),
(B) the options described in subsection (a)(2) that were
provided to such taxpayers, and
(C) the status of the tax liabilities of such taxpayers.

SEC. 109. QUARTERLY NOTICES TO CERTAIN TAXPAYERS WITH
DELINQUENCIES.

(a) In General.--Section 7524 is amended--
(1) in the heading, by striking ``annual notice'' and
inserting ``notice'',
(2) by striking ``Not less often than annually'' and
inserting the following:
``(a) In General.--Except as provided in subsection (c),
not less often than quarterly'', and
(3) by adding at the end the following:
``(b) Information on Penalties and Interest.--The notice
described in subsection (a) shall include--
``(1) an estimate of the amount of penalties and interest
that may accrue if the delinquent tax debt is not fully paid
within the period remaining under section 6502(a), and
``(2) programs and services that can provide assistance to
the taxpayer.
``(c) Exception.--The requirement under subsection (a)
shall not apply--
``(1) during any period in which an agreement described in
section 6159(a) or an accepted offer-in-compromise (as
described in section 7122) is in effect, or
``(2) in the case of a taxpayer for which the Secretary has
determined that the tax is not collectible (within the
meaning of section 6343(e)).''.
(b) Conforming Amendment.--The table of sections for
chapter 77 is amended by striking the item relating to
section 7524 and inserting the following new item:

``Sec. 7524. Notice of tax delinquency.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date which is 24 months after the
date of enactment of this Act.

SEC. 110. LOW-INCOME TAXPAYER CLINIC FUNDING UNLOCKED.

(a) Matching Funds.--Paragraph (5) of section 7526(c) is
amended to read as follows:
``(5) Requirement of matching funds.--
``(A) In general.--With respect to any grant provided to a
low-income taxpayer clinic under this section, such clinic
shall provide matching funds equal to the applicable
percentage of the amount of such grant.
``(B) Matching funds.--
``(i) In general.--For purposes of this paragraph, the term
`matching funds' may include--

``(I) the salary (including fringe benefits) of individuals
performing services for the low-income taxpayer clinic, and
``(II) the cost of equipment used in the low-income
taxpayer clinic.

``(ii) Exclusion.--For purposes of this paragraph, the term
`matching funds' shall not include any indirect expenses,
such as general overhead of the institution sponsoring the
low-income taxpayer clinic.
``(C) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage shall be 100 percent, except
that the Secretary may establish a lower percentage (not
below 25 percent) if the Secretary determines that such
percentage would expand the coverage of the low-income
taxpayer clinic to additional taxpayers.''.
(b) Technical Amendments.--Section 7526(c), as amended by
subsection (a), is further amended--
(1) by striking paragraphs (1) and (2), and
(2) by redesignating paragraphs (3) through (6) as
paragraphs (1) through (4).
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after the date of
enactment of this Act.

SEC. 111. CHIEF COUNSEL REVIEWS OF OFFERS-IN-COMPROMISE
STREAMLINED.

(a) In General.--Section 7122(b) is amended by striking
``in any case'' and all that follows through ``his delegate''
and inserting ``in any case which the Secretary determines
presents a significant legal issue, there shall be placed on
file in the office of the Secretary the opinion of the
General Counsel for the Department of the Treasury, or the
Counsel's delegate''.
(b) Conforming Amendments.--Section 7122(b) is amended by
striking the second and third sentences.
(c) Effective Date.--The amendments made by this section
shall apply to offers-in-compromise submitted or pending on
or after the date of the enactment of this Act.

SEC. 112. MODIFICATION OF PROCEDURAL REQUIREMENTS FOR
PENALTIES AND DISALLOWANCE PERIODS.

(a) In General.--Section 6751(b) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) In general.--No penalty under this title shall be
assessed, and no disallowance period shall take effect,
unless--
``(A) the decision (as defined by the Secretary in
regulations) to apply such penalty or disallowance period, as
applicable, is personally approved (in writing on an
electronic form) by--
``(i) the immediate supervisor of the individual making
such decision, or
``(ii) the Internal Revenue Service Office of Servicewide
Penalties (or any successor organization), and
``(B) the approval described in subparagraph (A) is
obtained on or before the date any appealable notice is sent
to the taxpayer regarding the application of such penalty or
disallowance period.'', and
(2) by adding at the end the following:
``(3) Appealable notice.--For purposes of this subsection,
the term `appealable notice' means the first written notice
issued to a taxpayer that provides the taxpayer an
opportunity to--
``(A) appeal the decision to the Internal Revenue Service
Independent Office of Appeals, or
``(B) petition a Federal court for review of the
decision.''.
(b) Disallowance Period.--Section 6751 is amended by adding
at the end the following new subsection:
``(d) Disallowance Period.--
``(1) In general.--For purposes of this section, the term
`disallowance period' means--
``(A) with respect to any credit under section 24, the
period determined under section 24(g)(1),
``(B) with respect to any credit under section 25A, the
period determined under section 25A(b)(4)(A), and
``(C) with respect to any credit under section 32, the
period determined under section 32(k)(1).
``(2) Approval required for disallowance period
automatically calculated through electronic means.--With
respect to the application of any disallowance period,
subsection (b)(2)(B) shall not apply.''.
(c) Effective Date.--The amendments made by this section
shall apply to notices sent after the date which is 12 months
after the date of the enactment of this Act.
(d) Report.--Not later than 24 months after the date of
enactment of this Act, and annually thereafter, the Secretary
shall make publicly available a report regarding all
penalties assessed by the Internal Revenue Service pursuant
to the Internal Revenue Code of 1986 during the preceding
calendar year, with all relevant data regarding such
penalties to be collected and reported with respect to--
(1) every organizational unit of the Internal Revenue
Service that has power to assess, abate, or otherwise enforce
any penalty imposed by the Internal Revenue Service under the
Internal Revenue Code of 1986, and
(2) the progression of such penalties at each step of the
determination, assessment, and review processes, as well as
the final result with respect to such penalties.

SEC. 113. RETURN OF AMOUNTS COLLECTED BY IRS IN EXCESS OF
ACCEPTED OFFER-IN-COMPROMISE AMOUNT.

(a) In General.--Section 7122 is amended by adding at the
end the following:
``(h) Return Amounts Collected in Excess of Payment Amount
of Accepted Offer-in-compromise.--
``(1) In general.--Subject to paragraph (2), in the case of
any taxpayer for which an offer-in-compromise has been
accepted under this section, any proceeds collected with
respect to the Federal income tax liability that is the
subject of the accepted offer-in-compromise which are in
excess of any remaining payments scheduled under such
compromise shall be transferred to the taxpayer.
``(2) Exception.--Paragraph (1) shall not apply if--
``(A) the taxpayer and the Secretary have specifically
agreed otherwise, or

[[Page S5280]]

``(B) the Secretary has--
``(i) determined that, under the terms of the compromise,
such compromise is in default, and
``(ii) elected to terminate such compromise.''.
(b) Authority to Release Levy and Return Property.--Section
6343 is amended--
(1) in subsection (a)(1)--
(A) in subparagraph (D), by striking ``or'' at the end,
(B) in subparagraph (E), by striking the period at the end
and inserting ``, or'', and
(C) by adding at the end the following subparagraph:
``(F) subject to subsection (h)(2) of section 7122, an
offer-in-compromise is accepted under such section with
respect to the liability for which the levy was imposed.'',
and
(2) in subsection (d)(2)--
(A) in subparagraph (C), by striking ``or'' at the end,
(B) in subparagraph (D), by striking the comma at the end
and inserting ``, or'', and
(C) by adding at the end the following subparagraph:
``(E) subject to subsection (h)(2) of section 7122, an
offer-in-compromise is accepted under such section with
respect to the liability for which the levy was imposed,''.
(c) Effective Date.--The amendments made by this section
shall apply to any compromise made under section 7122 of the
Internal Revenue Code of 1986 which is accepted by the
Secretary after the date of enactment of this Act.

SEC. 114. EXTENSION OF PERIOD FOR RETURN OF AMOUNTS SUBJECT
TO WRONGFUL LEVY.

(a) In General.--Section 6343(b) is amended, in the flush
text following paragraph (3), by striking ``the date of such
levy'' and inserting ``the date that the Secretary received
any such amount''.
(b) Effective Date.--The amendments made by this section
shall apply to any money levied upon or any amount of money
received from the sale of property after the date which is 12
months after the date of enactment of this Act.

SEC. 115. REPORTS TO CONGRESS.

(a) Implementation.--Not later than the date which is 2
years after the date of enactment of this Act, the Secretary
(following consultation with the National Taxpayer Advocate,
the Treasury Inspector General for Tax Administration, and
the Comptroller General of the United States) shall provide a
report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate
regarding the actions taken by the Internal Revenue Service
to implement this title and the amendments made by this
title, including--
(1) an analysis of successes and challenges with respect to
implementation of such title, and
(2) any recommendations to Congress with respect to the
implementation or administration of such title.
(b) Fraud.--
(1) In general.--Not later than the date which is 12 months
after the date of enactment of this Act, and annually
thereafter, the Secretary shall provide a report to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate regarding efforts
made by the Internal Revenue Service to identify, prevent,
and resolve each type of tax fraud, including first-person
fraud and stolen identity refund fraud.
(2) Information included in report.--The report described
in paragraph (1) shall include--
(A) a detailed description, timeline, and analysis of any
efforts undertaken by the Internal Revenue Service and any of
the other members of the Security Summit during the most
recent tax filing season to address and prevent each type of
tax fraud, including--
(i) any specific information or guidelines provided by the
Internal Revenue Service to any of the other members of the
Security Summit (and vice versa) with respect to tax fraud,
including--

(I) any ``be on the lookout'' alerts or other warnings,
(II) updated guidelines or restrictions,
(III) potential threat analyses,
(IV) specific data or analytics, and
(V) any other actionable threat information, and

(ii) any specific recommendations provided by the Internal
Revenue Service to any of the other members of the Security
Summit (and vice versa) with respect to identifying,
preventing, and resolving tax fraud, including any potential
improvements to data, analytics, information sharing, and
collaboration between the Internal Revenue Service and other
members of the Security Summit,
(B) a detailed description and timeline of any interactions
between the Internal Revenue Service and any provider of tax
filing options which does not participate in the Security
Summit, including--
(i) any specific information or guidelines provided by the
Internal Revenue Service to such provider (and vice versa)
with respect to each type of tax fraud, including any items
described in subclauses (I) through (V) of subparagraph
(A)(i), and
(ii) any specific recommendations provided by the Internal
Revenue Service to such provider (and vice versa) with
respect to identifying, preventing, and resolving tax fraud,
including any potential improvements to data, analytics,
information sharing, and collaboration between the Internal
Revenue Service and such provider,
(C) with respect to the most recently completed tax filing
season--
(i) with respect to each specific type or form of tax fraud
that has been identified by the Internal Revenue Service, any
relevant data and analysis regarding the amount of such fraud
during such tax filing season, including detailed numerical
data regarding such fraud in relation to each separate
Federal tax return form (including any amended returns) and
the manner in which such returns were filed, and
(ii) the total dollar amount of fraudulent claims for
refund--

(I) for which any disbursement was erroneously made, and
(II) which were identified and disallowed prior to any
disbursement being made.

(3) Publicly available.--Data included in the report
described in paragraph (1) shall be made available on the
public website of the Internal Revenue Service, provided that
such data is appropriately redacted by the Secretary.
(c) Complexity Report.--For purposes of section 4022 of the
Internal Revenue Service Restructuring and Reform Act of 1998
(26 U.S.C. 7801 note), the submission of the report required
under section 7803(c)(2)(B) of the Internal Revenue Code of
1986 shall not satisfy the requirement under subsection (a)
of section 4022 of such Act to conduct an analysis of the
sources of complexity in administration of the Federal tax
laws and report the results of such analysis.
(d) Document Management to Avoid Duplicative Requests to
Constituents.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, and annually thereafter for the
following 5 years, the Secretary shall submit to the
Committee on Finance of the Senate a report describing the
systems and practices for tracking documents submitted to the
Internal Revenue Service by taxpayers, Congressional offices,
and authorized third-party representatives.
(2) Matters included.--The report described in paragraph
(1) shall include the following:
(A) A description of how the Internal Revenue Service
catalogues, tracks, and retains documents and communications,
including procedures for internal document sharing and for
avoiding lost documents and duplicative requests to
taxpayers.
(B) A description of the status and future plans for
managing electronic and paper submissions through online
accounts, new document submission tools, and paper-retention
processes.
(C) A discussion of any modernization efforts aimed at
reducing duplicative document requests and any barriers the
Internal Revenue Service has identified to implementing
improvements.

TITLE II--AMERICAN CITIZENS ABROAD

SEC. 201. REPORT ON COMBINED TAX AND FOREIGN BANK AND
FINANCIAL ACCOUNT REPORTING.

(a) Study.--
(1) In general.--The Secretary shall conduct a study on--
(A) combining and simplifying reporting required under
section 5314 of title 31, United States Code and sections
6038, 6038A, 6038B, 6038C, 6038D, 6039F, 6046A, and 6048 of
the Internal Revenue Code of 1986; and
(B) eliminating duplicative requests for information from
nonresident United States taxpayers.
(2) Consultation.--The study conducted under paragraph (1)
shall include input from the National Taxpayer Advocate and
nonresident United States taxpayers.
(b) Report.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall submit to Congress
a report on the study conducted under subsection (a), which
shall include any actions taken by the Secretary as a result
of such study and any recommendations for legislative changes
necessary to effectuate the goal described in subsection
(a)(1).

SEC. 202. STUDY AND REPORTS ON SIMPLIFICATION.

(a) GAO Study and Report.--
(1) In general.--The Comptroller General of the United
States shall conduct a study on the burdens of compliance
with Federal tax laws applicable to individuals who are
United States persons (as defined in section 7701(a)(30) of
the Internal Revenue Code of 1986) living abroad.
(2) Factors considered.--The study conducted under
subsection (a) shall identify problems relating to compliance
of Federal tax laws for such United States persons, including
burdens specific to low-income and moderate-income
individuals, related to--
(A) understanding and complying with United States tax
obligations, including obligations with respect to--
(i) the duty to file returns and pay taxes while living
abroad, including in the absence of tax treaties that
otherwise eliminate double taxation of income;
(ii) the filing (including through electronic means) of
Federal tax returns and any reports required under section
5314 of title 31, United States Code, in a timely, accurate,
and affordable manner,
(iii) foreign retirement plans treated as passive foreign
investment companies; and
(iv) foreign currency gains;
(B) receiving and responding to inquiries from the Internal
Revenue Service and the Financial Crimes Enforcement Network
about returns and reports described in subparagraph (A)(ii),
and access to services of such agencies with respect to such
returns and reports;

[[Page S5281]]

(C) access to financial products and services abroad,
including local retirement vehicles and bank accounts;
(D) access to affordable tax preparation services for
United States income tax obligations; and
(E) compliance burdens that are disproportionate to the
amount of tax owed.
(3) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General shall submit
to the Secretary of Treasury and to Congress, and make
publicly available, a report on the study conducted under
paragraph (1).
(b) Treasury Report.--Not later than 1 year after the date
on which the Comptroller General submits the report under
subsection (a)(3), the Secretary of the Treasury shall submit
to Congress a report that describes--
(1) actions taken by the Department of Treasury to address
any problems identified by the Comptroller General in such
report; and
(2) any legislation necessary to address such problems.

SEC. 203. EXTENSION OF TIME FOR PERSONS OUTSIDE OF THE UNITED
STATES TO REQUEST ABATEMENT OF MATH ERROR.

(a) In General.--Section 6213(b)(2)(A) is amended by
inserting ``(120 days in the case of a notice addressed to a
person outside the United States)'' after ``60 days''.
(b) Effective Date.--The amendment made by this section
shall apply to notices sent after the date that is 180 days
after the date of the enactment of this Act.

SEC. 204. CLARIFICATION OF ASSESSMENT AUTHORITY; PRE-
ASSESSMENT APPEALS OF FOREIGN INFORMATION
RETURN PENALTIES.

(a) Treatment of Penalties as Taxes.--Section 6671(a) is
amended--
(1) by striking ``The penalties and liabilities provided by
this subchapter'' and inserting the following:
``(1) In general.--Any penalties provided by this title,
including the penalties and liabilities provided by this
subchapter,'',
(2) by striking ``the penalties and liabilities provided by
this subchapter.'' and inserting ``the penalties provided by
this title, including the penalties and liabilities provided
by this subchapter.'', and
(3) by adding at the end the following new paragraph:
``(2) Exception.--Paragraph (1) shall not apply to any
penalty not provided by this subchapter if such penalty is a
penalty for which a civil or criminal action is prescribed as
the method of collection or has been consistently treated by
the Secretary before the date of the enactment of this
paragraph as such a penalty.''.
(b) Notice Requirement for Certain Penalties.--
(1) In general.--Subchapter C of chapter 68 is amended by
adding at the end the following new section:

``SEC. 6752. PRELIMINARY NOTICE AND RIGHT OF REVIEW FOR
COVERED PENALTIES.

``(a) Notice.--
``(1) In general.--No covered penalty shall be assessed
unless the Secretary provides a notice to the taxpayer in
writing by mail to an address as determined under section
6212(b) that contains the following information:
``(A) The covered penalty proposed to be assessed.
``(B) The taxable years or periods involved.
``(C) The basis for the proposed penalty.
``(D) Information about the right of the taxpayer to
request review as provided in subsection (b).
``(2) Timing of notice.--The mailing of the notice
described in paragraph (1) shall precede any notice and
demand of any covered penalty by at least 60 days (120 days
in the case of a notice addressed to a taxpayer outside the
United States).
``(b) Right to a Review.--Within 60 days (120 days in the
case of a notice sent to a taxpayer outside the United
States) of the mailing of the notice described in subsection
(a), the taxpayer may request a review of the proposed
penalty by the Internal Revenue Service Independent Office of
Appeals.
``(c) Suspension of Assessment and Collection.--
``(1) In general.--A covered penalty may not be assessed,
demanded, or collected before--
``(A) the expiration of the period provided under
subsection (b), or
``(B) in any case in which the taxpayer requests a review
under subsection (b), the date a final determination is
issued in such review.
``(2) Statute of limitations.--If a notice described in
subsection (a) with respect to any covered penalty is mailed
before the expiration of the period provided by section 6501
for the assessment of such penalty (determined without regard
to this paragraph), the running of such period shall be
suspended for the period during which assessment is
prohibited under this section and for 30 days thereafter.
``(d) Covered Penalty.--For purposes of this section, the
term `covered penalty' means any penalty imposed under
section 6038(b)(1), 6038A(d)(1), 6038B(c), 6038C(c),
6038D(d)(1), 6039F(c)(1)(B), or 6677.
``(e) Exception for Jeopardy.--This section shall not apply
if the Secretary finds that the collection of the penalty is
in jeopardy.
``(f) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out this section, including regulations
or other guidance relating to--
``(1) procedures for issuing notices under subsection (a),
and
``(2) establishing simplified reviews for cases in which
the penalty amount at issue does not exceed a designated
dollar threshold.''.
(2) Clerical amendment.--The table of sections for
subchapter C of chapter 68 is amended by adding at the end
the following new item:

``Sec. 6752. Preliminary notice and right of review for covered
penalties.''.
(c) Interpretive Rules.--
(1) Taxpayer rights.--Nothing in the amendments made by
this section shall be construed to create any limitation on
the rights of a taxpayer--
(A) under subchapter C or D of chapter 64 of the Internal
Revenue Code of 1986, or
(B) to pursue refund litigation with respect to the
assessment or imposition of any penalty imposed under such
Code.
(2) No inference.--Nothing in the amendments made by this
section shall be construed to create any inference with
respect to the treatment of any covered penalty (as defined
in section 6752 of the Internal Revenue Code of 1986, as
added by this section) before the date of the enactment of
this Act.

SEC. 205. REPEAL OF DUE DATE REQUIREMENTS FOR CERTAIN
INFORMATION RETURNS RELATING TO FOREIGN GIFTS
AND TRUSTS.

(a) In General.--Section 2006(b) of the Surface
Transportation and Veterans Health Care Choice Improvement
Act of 2015 is amended by striking paragraphs (9) and (10).
(b) Effective Date.--The amendment made by this section
shall apply to returns for taxable years beginning after
December 31, 2026.

TITLE III--JUDICIAL REVIEW

SEC. 301. AUTHORIZATION OF SUBPOENAS BEFORE HEARINGS TO
FACILITATE SETTLEMENTS.

Section 7456(a) is amended to read as follows:
``(a) In General.--
``(1) Administration of oaths.--For the efficient
administration of the functions vested in the Tax Court or
any division thereof, any judge or special trial judge, the
clerk or the clerk's deputies, as such, or any other employee
of the Tax Court designated in writing for the purpose by the
chief judge, may administer oaths or affirmations.
``(2) Examination.--Any judge or special trial judge may
examine parties or witnesses.
``(3) Subpoena authority.--Any judge or special trial judge
may require, by subpoena ordered by the Tax Court or any
division thereof and signed by the judge or special trial
judge (or by the clerk of the Tax Court or by any other
employee of the Tax Court when acting as deputy clerk), any
of the following:
``(A) The attendance and testimony of parties or witnesses.
``(B) The production of books, papers, documents,
electronically stored information, or tangible things from
any place in the United States by any party or witness having
custody or control thereof for purposes of discovery or for
use of the things produced as evidence in accordance with the
rules and orders of the Tax Court.
Any such subpoena shall be issued and served, and compliance
therewith shall be compelled, as provided in the rules and
orders of the Tax Court.
``(4) Depositions.--Pursuant to rules and orders of the
Court, the deposition of a witness may be taken before any
designated individual competent to administer oaths under
this title. Any deposition testimony shall be reduced to
writing by the individual taking the deposition, or under
such individual's direction, and shall be subscribed by the
deponent.''.

SEC. 302. CLARIFICATION OF TAX COURT AUTHORITY TO ORDER
RELIEF FROM A JUDGMENT OR ORDER.

Section 7481 is amended--
(1) by striking ``and (d),'' in subsection (a) and
inserting ``(d), and (e),'' and
(2) by adding at the end the following new subsection:
``(e) Relief From a Judgment or Order.--
``(1) Corrections based on clerical mistakes; oversights
and omissions.--
``(A) In general.--The Tax Court may correct a clerical
mistake, or a mistake arising from oversight or omission,
whenever one is found in a judgment, order, or other part of
the record. The Tax Court may do so on motion or on its own,
with or without notice.
``(B) Appellate court leave required on appeal.--After an
appeal has been docketed in the appellate court, and while
such appeal is pending, any such mistake may be corrected
only with the appellate court's leave.
``(2) Grounds for relief from a final judgment or order.--
On motion and just terms, the Tax Court may relieve a party
or its legal representative from a final judgment or order
for any of the following reasons:
``(A) Mistake, inadvertence, surprise, or excusable
neglect.
``(B) Newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for
a new trial under rules prescribed by the Court and that
would have a reasonable likelihood of changing the outcome.
``(C) Fraud (whether previously called intrinsic or
extrinsic), misrepresentation, or misconduct by an opposing
party.

[[Page S5282]]

``(D) The judgment is void.
``(E) Any other circumstance where justice so requires.
``(3) Timing and effect of the motion.--
``(A) Timing.--A motion under paragraph (2)--
``(i) must be made within a reasonable time, and
``(ii) in the case of a reason described in subparagraphs
(A), (B), or (C), not later than 1 year after the entry of
the judgment or order.
``(B) Effect on finality.--While pending, any such motion
does not affect the judgment's finality or suspend its
operation.
``(4) Other powers to grant relief.--This subsection shall
not limit the Tax Court's power to set aside a judgment for
fraud on the Tax Court.
``(5) Court of appeals jurisdiction.--If the Tax Court
provides relief from a judgment or order that is otherwise
final under this section, either or both parties may obtain
review of such relief by filing a notice of appeal under this
subchapter within 90 days of the Court's judgment or order
directing such relief.''.

SEC. 303. AUTHORIZATION OF SPECIAL TRIAL JUDGES TO HEAR
ADDITIONAL CASES AND ADDRESS CONTEMPT.

(a) Consent to Assignment.--Section 7443A(b) is amended by
striking ``and'' at the end of paragraph (6), by
redesignating paragraph (7) as paragraph (8), and by
inserting after paragraph (6) the following new paragraph:
``(7) upon the consent of the parties, and pursuant to
rules promulgated by the Tax Court, any proceeding not
described in paragraphs (1) through (6), and''.
(b) Authorizing Special Trial Judge.--Section 7443A(c) is
amended by striking ``or (6)'' and inserting ``(6), or (7)''.
(c) Contempt Authority.--Section 7443A is amended by adding
at the end the following new subsection:
``(f) Incidental Powers.--A special trial judge appointed
under this section shall have the independent power to punish
for contempt of the authority of the Tax Court as provided in
section 7456(c), except the sentence imposed by such a
special trial judge for any contempt shall not exceed the
penalties for a Class C misdemeanor as set forth in sections
3571(b)(6) and 3581(b)(8) of title 18, United States Code.
This subsection shall not be construed to limit the authority
of a special trial judge to order sanctions under any other
statute or any rule of the Tax Court prescribed pursuant to
section 7453.''.
(d) Effective Date.--The amendments made by subsections (a)
and (b) shall take effect on the date the United States Tax
Court adopts rules implementing the consent procedures of
section 7443A.

SEC. 304. DISQUALIFICATION OF JUDGES AND SPECIAL TRIAL
JUDGES.

(a) In General.--Part II of subchapter C of chapter 76 is
amended by adding at the end the following new section:

``SEC. 7467. DISQUALIFICATION OF JUDGE OR SPECIAL TRIAL
JUDGE.

``Section 455 of title 28, United States Code, shall apply
to judges, special trial judges, and proceedings of the Tax
Court.''.
(b) Clerical Amendment.--The table of sections for such
part is amended by adding at the end the following new item:

``Sec. 7467. Disqualification of judge or special trial judge.''.

SEC. 305. NOTICE AND REVIEW WITH RESPECT TO MULTI-YEAR BANS
ON CLAIMING CREDITS.

(a) Notice.--
(1) In general.--Section 6212(a) is amended--
(A) by striking ``If the'' and inserting the following:
``(1) Notice.--If the'',
(B) by striking ``Such notice shall include a notice'' and
inserting the following:
``(2) Matters included.--Such notice shall include--
``(A) a notice'',
(C) by striking period at the end of the second sentence
and inserting ``, and'', and
(D) by adding at the end the following new subparagraph:
``(B) in any case in which such deficiency for a taxable
year is attributable to the denial of a credit under section
24, 25A, or 32, a statement--
``(i) identifying the credit or credits which are denied
and providing the grounds for each such denial,
``(ii) informing the taxpayer that, unless the denial is
overturned on appeal, the taxpayer will not be able to claim
such credit for any subsequent taxable year unless the
taxpayer provides information required by the Secretary to
demonstrate eligibility for the credit, and
``(iii) in any case in which the Secretary has made a
determination to impose a disallowance period under section
24(g)(1), 25A(b)(4)(A), or 32(k)(1), providing the grounds
for such disallowance period (and the length of the
disallowance period unless overturned on appeal).''.
(2) Effective date.--The amendments made by this subsection
shall apply to notices mailed on or after the date that is 36
months after the date of enactment of this Act.
(b) Authority of the Tax Court.--
(1) In general.--Section 6214 is amended by redesignating
subsection (e) as subsection (f) and by inserting after
subsection (d) the following new subsection:
``(e) Jurisdiction With Respect to Multi-Year Bans With
Respect to Certain Credits.--
``(1) In general.--The Tax Court shall have jurisdiction--
``(A) to redetermine the imposition of any disallowance
period with respect to any credit under section 24, 25A, or
32 for the taxable year in which such disallowance period was
imposed if the deficiency relates to such taxable year, and
``(B) to determine whether any such disallowance period
should be imposed if claim therefor is asserted by the
Secretary in the answer or an amended answer filed in
accordance with the rules of the Tax Court.
``(2) Disallowance period.--For purposes of this
subsection, the term `disallowance period' has the meaning
given such term under section 6751(d).''.
(2) Effective date.--The amendments made by this subsection
apply to petitions filed on or after the date of enactment of
this Act.
(3) Transition rule for review of previously imposed
disallowance periods.--
(A) In general.--In the case of any deficiency which is
attributable to an entry on the return claiming a credit
under section 24, 25A, or 32 of the Internal Revenue Code of
1986 for a taxable year in a disallowance period described in
subparagraph (B), the Tax Court shall have jurisdiction to
redetermine whether the disallowance period was properly
imposed.
(B) Disallowance period described.--A disallowance period
is described in this subparagraph if the notice of the
deficiency under section 6212 of such Code for the taxable
year with respect to which the determination to impose the
disallowance period was made--
(i) did not include the grounds for such disallowance
period, and
(ii) was mailed before the date that is 36 months after the
date of the enactment of this Act.
(C) Disallowance period.--For purposes of this paragraph,
the term ``disallowance period'' has the meaning given such
term under section 6751(d) of the Internal Revenue Code of
1986 (as added by this Act).
(D) Refunds.--Notwithstanding section 6512(b)(1) of the
Internal Revenue Code of 1986, in the case of a petition with
respect to a disallowance period described in subparagraph
(B), the Tax Court shall have jurisdiction to determine the
amount of an overpayment for any taxable year in the
disallowance period, and such amount shall, notwithstanding
section 6511, when the decision of the Tax Court has become
final, be credited or refunded to the taxpayer. If a notice
of appeal in respect of the decision of the Tax Court is
filed under section 7483 of such Code, the Secretary is
authorized to refund or credit the overpayment determined by
the Tax Court to the extent the overpayment is not contested
on appeal.
(c) Burden of Production.--
(1) In general.--Section 7491(c) is amended--
(A) by striking ``Notwithstanding'' and inserting the
following:
``(1) In general.--Notwithstanding'',
(B) by striking ``with respect to the liability'' and
inserting ``with respect to--
``(A) the liability'',
(C) by striking the period after ``title'' and inserting
``, and'',
(D) by adding at the end the following new subparagraph:
``(B) the application of any disallowance period (as
defined in section 6751(d)) to any individual.'', and
(E) by adding at the end the following new paragraph:
``(2) Standard of proof for certain disallowance periods.--
In the case of any court proceeding with respect to any
disallowance period described in section 24(g)(1)(B)(i),
25A(b)(4)(A)(ii)(I), or 32(k)(1)(B)(i), the standard of proof
shall be the same standard as required in a proceeding under
section 7454(a).''.
(2) Effective date.--The amendments made by this subsection
shall apply to court proceedings beginning after the date
that is 36 months after the date of the enactment of this Act
in connection with disallowance periods (as defined in
section 6751(d) of the Internal Revenue Code of 1986, as
added by this Act) determined after such date.
(d) Modification of Disallowance Period.--
(1) Child tax credit.--Section 24(g)(1) is amended--
(A) in subparagraph (B), by striking ``for which there was
a final determination that the taxpayer's claim of credit
under this section was'' each place it appears in clauses (i)
and (ii) and inserting ``for which a notice of deficiency has
been sent under section 6212(a) which notifies the taxpayer
that the taxpayer's claim of credit under this section was
denied, or a determination that has become final under
section 7481 has been made by the Tax Court to deny such
claim,'', and
(B) by adding at the end the following new subparagraph:
``(C) Allowance of previously denied credits after tax
court consideration.--Notwithstanding subparagraphs (A) and
(B), a taxable year shall not be treated as a taxable year in
the disallowance period if the Tax Court determines that the
disallowance period was not properly imposed for such year
pursuant to section 6214(e).''.
(2) American opportunity tax credit.--Section 25A(b)(4)(A)
is amended--
(A) in clause (ii), by striking ``for which there was a
final determination that the taxpayer's claim of the American
Opportunity Credit under this section was'' each place it

[[Page S5283]]

appears in subclauses (I) and (II) and inserting ``for which
a notice of deficiency has been sent under section 6212(a)
which notifies the taxpayer that the taxpayer's claim of
credit under this section was denied, or a determination that
has become final under section 7481 has been made by the Tax
Court to deny such claim,'', and
(B) by adding at the end the following new clause:
``(iii) Allowance of previously denied credits after tax
court consideration.--Notwithstanding clauses (i) and (ii), a
taxable year shall not be treated as a taxable year in the
disallowance period if the Tax Court determines that the
disallowance period was not properly imposed for such year
pursuant to section 6214(e).''.
(3) Earned income tax credit.--Section 32(k)(1) is
amended--
(A) in subparagraph (B), by striking ``for which there was
a final determination that the taxpayer's claim of credit
under this section was'' each place it appears in clauses (i)
and (ii) and inserting ``for which a notice of deficiency has
been sent under section 6212(a) which notifies the taxpayer
that the taxpayer's claim of credit under this section was
denied, or a determination that has become final under
section 7481 has been made by the Tax Court to deny such
claim,'', and
(B) by adding at the end the following new subparagraph:
``(C) Allowance of previously denied credits after tax
court consideration.--Notwithstanding subparagraphs (A) and
(B), a taxable year shall not be treated as a taxable year in
the disallowance period if the Tax Court determines that the
disallowance period was not properly imposed for such year
pursuant to section 6214(e).''.
(4) Suspension of running of limitations period filing of a
claim for credit or refund.--Section 6511(d) is amended by
adding at the end the following new paragraph:
``(9) Special rules relating to disallowance periods.--The
running of the periods described in subsections (a) and
(b)(2) with respect to any claim for a credit allowed under
section 24, 25A, or 32 for any taxable year in a disallowance
period (as defined in section 6751(d)) shall be suspended
during any period in which the imposition of such
disallowance period is pending before the Tax Court.''.
(5) Effective date.--
(A) In general.--The amendments made by paragraphs (1),
(2), and (3) shall apply to--
(i) taxable years beginning after the date that is 36
months after the date of the enactment of this Act, and
(ii) disallowance periods (as defined in section 6751(d) of
the Internal Revenue Code of 1986, as added by this Act) in
taxable years beginning on or before such date if the notice
of deficiency for the taxable year with respect to which the
determination to impose such disallowance period was made was
sent after such date.
(B) Suspension of running of limitations period.--The
amendment made by paragraph (4) shall apply to petitions
filed after the date of the enactment of this Act.

SEC. 306. AUTHORIZATION OF DE NOVO REVIEW OF INNOCENT SPOUSE
RELIEF BY THE TAX COURT AND OTHER COURTS.

(a) Review.--Section 6015(e)(7) is amended by striking ``by
the Tax Court and shall be based upon'' and all that follows
and inserting a period.
(b) Clarification of Scope of Review.--Section
6015(e)(1)(A) is amended by inserting ``(including any remedy
applicable in a suit for refund or collection or in a
bankruptcy case)'' after ``In addition to any other remedy
provided by law''.
(c) Effective Date.--The amendments made by this section
shall apply to petitions, requests, and suits filed or
pending on or after the date of the enactment of this Act.
(d) No Inference.--Nothing in the amendments made by this
section shall be construed to limit the authority or
jurisdiction of the Tax Court or any other court to grant
relief under section 6015 of the Internal Revenue Code of
1986 or to review any relief granted under such section.

SEC. 307. CLARIFICATION OF CERTAIN COURT FILING DEADLINES.

(a) In General.--
(1) Treatment of deadlines.--Section 7451 is amended by
redesignating subsection (b) as subsection (c) and by
inserting after subsection (a) the following new subsection:
``(b) Treatment of Deadlines for Certain Petitions.--
``(1) In general.--The deadlines for filing petitions under
section 6015(e)(1)(A), the first sentence of section 6213(a),
and section 6330(d)(1)(A) shall be considered
nonjurisdictional claims-processing rules subject to waiver,
forfeiture, estoppel, and equitable tolling. For purposes of
section 6015(e)(1)(B), the second and fourth sentences of
section 6213(a), and the last sentence of section 6330(e)(1),
a petition not timely filed shall be treated as timely filed
if the Tax Court determines that the failure to timely file
is excused by waiver, forfeiture, estoppel, or equitable
tolling.
``(2) Treatment of collection activity.--If the Tax Court
determines that the failure to timely file a petition under
section 6015(e)(1)(A), 6213(a), or 6330(d)(1)(A) is excused
by waiver, forfeiture, estoppel, or equitable tolling, the
Secretary (or the Attorney General, as the case may be) shall
abate any assessment made under section 6213(c) to which the
petition relates, suspend any levy or proceeding for the
collection of the liability to which the petition relates,
and (unless the taxpayer otherwise requests) refund any
amount of such liability previously collected. The previous
sentence shall not apply if section 6330(e)(2), 6330(f),
6330(g), 6851, 6852, or 6861 applies. The Tax Court shall
have jurisdiction to enforce this paragraph.''.
(2) Conforming amendments.--
(A) Section 6015(e) is amended--
(i) in paragraph (1)(B)(i), by striking ``or, if a petition
has been filed with the Tax Court under subparagraph (A),
until the decision of the Tax Court has become final'' and
inserting ``or, if a timely petition has been filed with the
Tax Court under subparagraph (A), from the date such petition
is filed (or, if filed after the close of the 90th day
referred to in subparagraph (A)(ii), the date the Tax Court
determines such petition is excused under section 7451(b))
until the decision of the Tax Court has become final'', and
(ii) in paragraph (2)--

(I) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and by moving such clauses two
ems to the right,
(II) by striking ``for the period'' and inserting ``for any
period'',
(III) by striking ``for 60 days thereafter'' and inserting
``for 60 days after the latest of such periods'',
(IV) by striking ``shall be suspended'' and inserting
``shall--

``(A) be suspended--'', and

(V) by striking the period after ``Secretary'' and
inserting ``, and

``(B) if the Tax Court determines that the failure to
timely file a petition under paragraph (1)(A) is excused
under section 7451(b), be extended by the number of days
between the deadline for filing the petition (determined
without regard to the application of section 7451(b)) and the
date on which the court determines that the failure to timely
file the petition is excused.''.
(B) The second sentence of section 6213(a) is amended--
(i) by inserting ``timely'' before ``petition'', and
(ii) by inserting ``from the time such petition is filed
(or, if filed after the close of the 90-day or 150-day
period, the date the Tax Court determines such filing is
excused under section 7451(b))'' before ``until the
decision''.
(C) Section 6213(c) is amended by inserting ``(without
regard to the application of section 7451(b))'' after ``the
time prescribed in subsection (a)''.
(D) Section 6330(e)(1) is amended--
(i) by inserting ``timely'' before ``appeals therein'', and
(ii) by striking ``are pending'' through ``a final
determination in such hearing.'' and inserting the following:
``are pending, but in no event shall any such period expire
before the 90th day after the day on which there is a final
determination in such hearing. If the Tax Court determines
that the failure to timely file a petition under subsection
(d) is excused under section 7451(b), such levy actions shall
be suspended between the date the court so determines and the
date which is 90 days after the decision of the Tax Court
becomes final, and the running of any such period of
limitations shall be extended by the number of days between
the deadline for filing the petition (determined without
regard to the application of section 7451(b)) and the date on
which the court determines that the failure to timely file
the petition is excused.''.
(E) Section 6503(a)(1) is amended--
(i) by striking ``the period'' and inserting ``any
period'',
(ii) by striking ``for 60 days thereafter'' and inserting
``for 60 days after the latest of such periods'', and
(iii) by adding at the end the following new sentence: ``If
the Tax Court determines that the failure to timely file a
petition under section 6213(a) is excused under section
7451(b), the periods of limitations provided in sections 6501
and 6502 on the making of assessments and the collection by
levy or a proceeding in court shall be extended by the number
of days between the deadline for filing the petition
(determined without regard to the application of section
7451(b)) and the date on which the court determines that the
failure to timely file the petition is excused.''.
(F) Section 7459(d) is amended to read as follows:
``(d) Effect of Decision Dismissing Petition.--
``(1) In general.--If a petition has been filed by the
taxpayer under section 6015(e)(1)(A), 6213(a), or
6330(d)(1)(A), a decision of the Tax Court dismissing the
proceeding shall be considered as its decision on the merits,
unless the dismissal is--
``(A) for lack of jurisdiction,
``(B) for failure to timely file the petition, or
``(C) in the case of a petition under section 6015(e)(1)(A)
or 6330(d)(1)(A), at the request of the taxpayer (unless the
Tax Court orders that the dismissal shall be considered its
decision on the merits).
``(2) Entry of order.--An order specifying the amount of
deficiency or liability, if appropriate, shall be entered in
the records of the Tax Court unless the Tax Court cannot
determine such amount from the record in the proceeding.''.
(b) Tolling of Time in Certain Cases.--Section 7451(c), as
redesignated by subsection (a)(1), is amended by striking
``date'' and inserting ``day (in whole or in part)''.
(c) Effective Date.--The amendments made by this section
shall apply to cases

[[Page S5284]]

pending on or after the date of the enactment of this Act.
(d) No Inference.--The amendments made by subsection (a)
shall not be construed to create any inference with respect
to the treatment of--
(1) any case brought under section 6015(e)(1)(A), the
second sentence of section 6213(a), or section 6330(d)(1)(A)
of the Internal Revenue Code of 1986 for which there is a
final determination by the Tax Court before the date of the
enactment of this Act, or
(2) any other petition filed with the Tax Court under any
other provision of the Internal Revenue Code of 1986 before,
on, or after such date.

SEC. 308. CLARIFICATION OF TAX COURT JURISDICTION TO
DETERMINE TAX LIABILITY IN COLLECTION DUE
PROCESS APPEALS.

(a) In General.--Section 6330(c)(2)(B) is amended by
inserting ``in the Tax Court or any other Federal court
(other than through a suit for a refund under section 7442 or
under section 1346(a)(1) of title 28, United States Code)''
after ``otherwise have an opportunity to dispute such tax
liability''.
(b) Underlying Tax Liability.--Section 6330(c)(4) is
amended by striking ``An issue may not be raised'' and
inserting ``An issue which is not related to the amount or
existence of the underlying tax liability may not be
raised''.

SEC. 309. AUTHORIZATION OF THE TAX COURT TO ISSUE REFUNDS IN
COLLECTION DUE PROCESS CASES.

(a) In General.--Section 6330(d)(1) is amended--
(1) by striking ``The person may'' and inserting the
following:
``(A) In general.--The person may'',
(2) by inserting ``and, unless a challenge was precluded
under subsection (c), with respect to the determination of
any overpayments of tax for the taxable periods or events at
issue in the determination'' after ``matter'' , and
(3) by adding at the end the following new subparagraphs:
``(B) Determination and enforcement of overpayments.--Rules
similar to the rules of paragraphs (1) and (2) of section
6512(b) shall apply for purposes of this paragraph.
``(C) Limitation on amount of credit or refund.--
``(i) In general.--In the case of any petition under
subparagraph (A), no credit or refund shall be allowed or
made of any portion of the tax unless the Tax Court
determines as part of its decision that such portion was
paid--

``(I) after the notice described in subsection (a)(1) or
section 6320(a)(1) (as the case may be) was given,
``(II) within the period which would be applicable under
section 6511(b)(2), (c), or (d), if, on the date the notice
described in subsection (a)(1) or section 6320(a)(1) (as the
case may be) was given, a claim had been filed (whether or
not filed) stating the grounds upon which the Tax Court finds
that there is an overpayment, or
``(III) within the period which would be applicable under
section 6511(b)(2), (c), or (d), in respect of any claim for
refund filed within the applicable period specified in
section 6511 and before the date the notice described in
subsection (a)(1) or section 6320(a)(1) (as the case may be)
was given--

``(aa) which had not been disallowed before that date,
``(bb) which had been disallowed before that date and in
respect of which a timely suit for refund could have
commenced as of that date, or
``(cc) in respect of which a suit for refund had been
commenced before that date and within the period specified in
section 6532.

In a case described in subclause (II) where the date the
notice described in subsection (a)(1) or section 6320(a)(1)
(as the case may be) is given is during the third year after
the due date (determined without regard to any extensions)
for filing the return of tax and no return was filed before
such date, the applicable period under subsections (a) and
(b)(2) of section 6511 shall be 3 years.

``(ii) Date notice was given.--For purposes of this
subparagraph--

``(I) if notice was given under subsection (a)(2) or
section 6320(a)(2) by mail, the date the notice was given
shall be the date such notice was mailed, and
``(II) if notice was given under subsection (a)(2) or
6320(a)(2) by leaving such notice at the dwelling or usual
place of business of the person, the date the notice was
given shall be the date such notice was left.''.

(b) Suspension of Period of Limitations for Credit or
Refund During Proceedings.--
(1) In general.--Section 6330(e)(1) is amended by inserting
``section 6511 (relating to limitations on credit or
refund),'' after ``section 6502 (relating to collection after
assessment)''.
(2) Prohibition on crediting of overpayments against
disputed tax liability during collection action
proceedings.--Section 6402 is amended by adding at the end
the following new subsection:
``(o) Prohibition on Crediting of Overpayments Against
Disputed Tax Liability During Collection Action
Proceedings.--If a hearing is properly requested under
section 6320(a)(3)(B) or 6330(a)(3)(B), and an underlying tax
liability referred to in section 6330(c)(2)(B) is properly
disputed at such hearing, such tax liability shall not,
except with the consent of the taxpayer, be taken into
account under subsection (a) for the period during which the
period of limitations for filing a claim for credit or refund
relating to such tax liability is suspended by reason of
section 6330(e).''.
(c) Clarification of Application of Certain Levy Hearing
Rules to Lien Hearings.--Section 6330(c)(2)(A) is amended by
striking ``unpaid tax or the proposed levy'' and inserting
``unpaid tax, collection action, or proposed collection
action''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in paragraph
(2) or (3), the amendments made by this section shall apply
to cases pending on or after the date of the enactment of
this Act.
(2) Prohibition on crediting of overpayments.--The
amendment made by subsection (b)(2) shall apply with respect
to any period described in section 6402(o) of the Internal
Revenue Code of 1986 (as added by this section) if any
portion of such period is after the date of the enactment of
this Act.
(3) Clarification of application of certain levy hearing
rules to lien hearings.--The amendment made by subsection (c)
shall take effect on the date of the enactment of this Act.

SEC. 310. AUTHORIZATION OF THE TAX COURT TO HEAR SUITS FOR
REFUNDS OR CREDITS.

(a) In General.--Section 7442 is amended--
(1) by striking ``The Tax Court'' and inserting the
following:
``(a) In General.--The Tax Court'', and
(2) by adding at the end the following new subsection:
``(b) Actions for Refunds.--
``(1) Jurisdiction.--
``(A) In general.--In addition to any other court
authorized by law, the Tax Court shall, subject to section
7422, have jurisdiction over any action, not exceeding the
applicable amount, for the recovery of any internal revenue
tax alleged to have been erroneously or illegally assessed or
collected, or any penalty claimed to have been collected
without authority or of any sum alleged to have been
excessive or in any manner wrongfully collected under the
internal revenue laws to the same extent as the district
courts of the United States.
``(B) Applicable amount.--For purposes of this paragraph,
the applicable amount means--
``(i) $2,000,000 for any one taxable year, in the case of
taxes imposed by subtitle A,
``(ii) $2,000,000, in the case of the tax imposed by
chapter 11,
``(iii) $2,000,000 for any one calendar year, in the case
of the tax imposed by chapter 12,
``(iv) $2,000,000 for any 1 taxable period (or, if there is
no taxable period, taxable event) in the case of any tax
imposed by subtitle C, D, or E, and
``(v) $2,000,000, in the case of any other amount
collected.
``(2) Further notice of deficiency.--If the Secretary prior
to the hearing of a suit brought by a taxpayer under
paragraph (1) mails to the taxpayer a notice that a
deficiency has been determined in respect of the tax which is
the subject matter of the taxpayer's suit, the proceedings in
the taxpayer's suit shall be stayed during the period of time
in which the taxpayer may file a petition with the Tax Court
for a redetermination of the asserted deficiency, and for 60
days thereafter. If the taxpayer files such a petition with
the Tax Court, such petition shall be consolidated with the
suit brought under paragraph (1).''.
(b) Use of Small Dispute Procedures.--Section 7463(f) is
amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(4) a petition to the Tax Court under section 7442(b) in
which the amount of the refund sought does not exceed
$50,000.''.
(c) Conforming Amendments.--
(1) Section 7422(k) is amended by adding at the end the
following new paragraph:
``(5) For jurisdiction of the Tax Court, see section
7442(b).''.
(2) Section 7482(b)(1) is amended by striking ``or'' at the
end of subparagraph (F), by striking the period at the end of
subparagraph (G) and inserting ``, or'', and by adding at the
end the following new subparagraph:
``(H) in the case of a petition under section 7442(b)--
``(i) the legal residence of the petitioner if the
petitioner is an individual, and
``(ii) the principal place of business or principal office
or agency if the petitioner is an entity other than an
individual.''.
(3) Section 1346(a) of title 28, United States Code, is
amended--
(A) in the matter preceding paragraph (1), by striking ``,
concurrent with the United States Court of Federal Claims,'',
(B) in paragraph (1), by striking ``Any'' and inserting
``Concurrent with the United States Court of Federal Claims
and the Tax Court, any'', and
(C) in paragraph (2), by striking ``Any'' and inserting
``Concurrent with the United States Court of Federal Claims,
any''.
(d) Effective Date.--The amendments made by this section
shall apply to actions filed after the date that is 12 months
after the date of the enactment of this Act.

SEC. 311. AUTHORIZATION TO ALLOW CLAIMS FOR REFUND IN CERTAIN
CASES WHERE FULL TAX NOT PAID.

(a) In General.--Section 7422, as amended by this Act, is
amended by redesignating subsection (k) as subsection (l) and
by inserting after subsection (j) the following new
subsection:
``(k) Special Rule for Actions Where There Is an Agreement
in Effect With the

[[Page S5285]]

Taxpayer Under Section 6159 or When the Taxpayer Is in
Currently Not Collectible Status.--
``(1) In general.--The district courts of the United
States, the United States Court of Federal Claims, and the
Tax Court shall not fail to have jurisdiction over any
applicable action brought by a taxpayer to determine the
correct amount of liability of such taxpayer solely because
the full amount of such liability has not been paid.
``(2) Applicable action.--For purposes of this subsection,
the term `applicable action' means any action to determine
the correct amount of the liability of such taxpayer (or for
any refund with respect thereto) with respect to any amount
if, as of the date such action is filed, such amount--
``(A) is the subject of an agreement under section 6159 for
which all installments the due date for which is on or before
the date the action is filed have been paid, or
``(B) has been determined by the Secretary to be not
collectible (within the meaning of section 6343(e)).
``(3) Permissive dismissal.--
``(A) Request for dismissal.--The United States (or the
Secretary, in the case of a case in the Tax Court) may
request the dismissal of an applicable action if the taxpayer
is no longer in compliance with an installment agreement
under section 6159 or is no longer in currently not
collectible status (within the meaning of section 6343(e)).
``(B) Court action.--In any case in which there is a
request for dismissal under subparagraph (A), the court may,
with or without taking any evidence or holding a hearing,
dismiss the action with leave to refile when either the full
amount of such liability has been paid or the conditions in
paragraph (2) are met at the time of refiling. In deciding
whether to dismiss the action, the court may consider the
extent to which the action has proceeded, the extent to which
full payment has been made, any burden that may result to the
taxpayer, the United States, the Secretary, or the court from
such dismissal (including reasons the taxpayer is no longer
in compliance with an installment agreement under section
6159), and any other reason relating to the policy of the
full payment rule. A dismissal under this paragraph shall not
be reviewed by any other court.
``(4) Prohibition on collection of disallowed liability.--
If the court redetermines under paragraph (1) the correct
amount of liability of the taxpayer, no part of such
liability which is disallowed by a decision of such court
which has become final may be collected by the Secretary, and
amounts paid in excess of the amount determined by the court
as correctly paid shall be refunded.''.
(b) Effective Date.--The amendments made by this section
shall apply to actions filed on or after the date that is 12
months after the date of the enactment of this Act.

SEC. 312. ADJUSTMENT OF THRESHOLD FOR SMALL DISPUTES.

(a) In General.--Section 7463, as amended by this Act, is
amended--
(1) by striking ``$50,000'' each place it appears in
subsections (a) and (f) and inserting ``$100,000'', and
(2) by adding at the end the following new subsection:
``(g) Inflation Adjustment.--
``(1) In general.-- In the case of any petition filed in a
calendar year beginning after 2026, each of the $100,000
amounts in subsections (a) and (f) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2025' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase determined under paragraph
(1) is not a multiple of $1,000, such increase shall be
rounded to the next lowest multiple of $1,000.''.
(b) Proceedings for Determination of Employment Status.--
Section 7436(c)(1) is amended by striking ``if the amount of
employment taxes placed in dispute is $50,000 or less for
each calendar quarter involved'' and inserting ``if the
amount of employment taxes placed in dispute is equal to or
less than the dollar amount in effect under section
7463(a)(1) (determined at the time the pleading is filed
under subsection (a)) for each calendar quarter involved''.
(c) Conforming Amendments.--
(1) Section 7443A(b)(3) is amended by striking ``$50,000''
and inserting ``the dollar amount in effect under section
7463(a)(1) (determined at the time the pleading is filed)''.
(2) Section 7463(f)(2) is amended by striking ``an appeal''
and inserting ``a petition''.
(3) The heading for section 7463 is amended by striking
``disputes involving $50,000 or less'' and inserting ``small
disputes''.
(4) The item relating to section 7463 in the table of
section for part II of subchapter C of chapter 76 is amended
by striking ``Disputes involving $50,000 or less'' and
inserting ``Small disputes''.
(d) Effective Date.--The amendments made by this section
shall apply to proceedings commencing after the date of the
enactment of this Act.

TITLE IV--OFFICE OF THE TAXPAYER ADVOCATE

SEC. 401. NTA AUTHORIZATION TO DIRECT HIRE ATTORNEYS.

Section 7803(c)(2)(D) is amended--
(1) in clause (i)--
(A) in subclause (I), by striking ``and'' at the end,
(B) in subclause (II), by striking the period at the end
and inserting ``; and'', and
(C) by adding at the end the following:

``(III) appoint counsel in the Office of the Taxpayer
Advocate to report directly to the National Taxpayer Advocate
or delegate thereof.'', and

(2) by adding at the end the following:
``(iii) Counsel.--For purposes of clause (i)(III)--

``(I) the National Taxpayer Advocate may utilize direct
hire authority to recruit and appoint qualified applicants,
without regard to any preference requirements,
``(II) any counsel appointed pursuant to such clause shall
not report to the Chief Counsel for the Internal Revenue
Service and shall not represent the Government in litigation,
``(III) any legal interpretation of counsel appointed
pursuant to such clause shall not be binding on the
Secretary, and
``(IV) pursuant to section 301(f)(2) of title 31, United
States Code, and subsection (b)(2)(A), the Chief Counsel for
the Internal Revenue Service shall continue to provide advice
to the National Taxpayer Advocate and the Office of the
Taxpayer Advocate.''.

SEC. 402. NTA AUTHORIZATION TO MAKE PERSONNEL DECISIONS.

(a) In General.--Section 7803(c)(2)(D)(i)(II) is amended by
striking ``any employee of any local office of a taxpayer
advocate described in subclause (I)'' and inserting ``any
officer or employee of the Office of the Taxpayer Advocate''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date which is 12 months after the
date of enactment of this Act.

SEC. 403. ACCESS TO INTERNAL REVENUE SERVICE INFORMATION,
LEGAL ADVICE, AND MEETINGS.

(a) In General.--Section 7803(c) is amended by adding at
the end the following new paragraph:
``(6) Access to information and meetings.--
``(A) In general.--Upon request, the Commissioner shall
provide the Office of the Taxpayer Advocate with access to
any of the following:
``(i) In the case of any request made by a taxpayer for
assistance by the Office of the Taxpayer Advocate which is
open and pending--

``(I) any return or return information (as such terms are
defined in section 6103(b)) which the National Taxpayer
Advocate determines is necessary to assist such taxpayer,
``(II) any legal advice provided by the staff of the Office
of Chief Counsel to any employee of the Internal Revenue
Service (including any legal advice prepared in contemplation
of litigation) which the National Taxpayer Advocate
determines is necessary to assist such taxpayer, regardless
of whether such legal advice cannot be disclosed to such
taxpayer, and
``(III) any meeting between such taxpayer and any employee
of the Internal Revenue Service.

``(ii) To the extent necessary to perform a full and
substantive analysis included in any report described in
paragraph (2)(B)--

``(I) any relevant document, data, or statistical
information, and
``(II) any legal advice provided by the staff of the Office
of the Chief Counsel to any employee of the Internal Revenue
Service (including any legal advice prepared in contemplation
of litigation).

``(iii) Legal advice from the staff of the Office of Chief
Counsel on any matter or issue.
``(B) Deadline.--Access to any information, advice, or
meeting described in subparagraph (A) shall be provided by
the Commissioner not later than--
``(i) the date which is 2 weeks after the date on which a
written request submitted by the Office of the Taxpayer
Advocate has been received by the Commissioner, or
``(ii) such date as is otherwise agreed to by the
Commissioner and the Office of the Taxpayer Advocate.
``(C) Meetings.--For purposes of subparagraph (A)(i)(III),
the Commissioner shall be deemed to have satisfied the
requirement under such subparagraph if the Commissioner has
extended an invitation to attend the meeting to the Office of
the Taxpayer Advocate, without regard to whether such an
invitation was declined by any employee of the Office of the
Taxpayer Advocate.
``(D) Privilege.--Any access provided to the Office of the
Taxpayer Advocate pursuant to this paragraph with respect to
information or legal advice from the staff of the Office of
Chief Counsel shall have no effect on any privilege which
otherwise applies to such information or legal advice.''.
(b) Annual Reports.--Section 7803(c)(2)(B)(ii) is amended--
(1) in subclause (XII), by striking ``and'' at the end,
(2) in subclause (XIII), by striking the period at the end
and inserting ``; and'', and
(3) by adding at the end the following new subclause:

``(XIV) identify any failure by the Commissioner to provide
access to any information, advice, or meeting described in
subparagraph (A) of paragraph (6) by the date required under
subparagraph (B) of such paragraph.''.

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

[[Page S5286]]

SEC. 404. REPEAL OF LIMITATION PERIOD SUSPENSION FOR
TAXPAYERS SEEKING ASSISTANCE FROM TAS.

(a) In General.--Section 7811 is amended--
(1) by striking subsection (d), and
(2) by redesignating subsections (e) through (g) as
subsections (d) through (f), respectively.
(b) Conforming Amendment.--Section 6306(k)(2) is amended by
striking ``section 7811(g)'' and inserting ``section
7811(f)''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act.

SEC. 405. OPERATIONS TO ASSIST TAXPAYERS EXPERIENCING
HARDSHIPS DURING LAPSE IN APPROPRIATIONS.

(a) In General.--Notwithstanding the third sentence of
section 1342 of title 31, United States Code, for purposes of
the first sentence of such section, during any lapse in
appropriations, functions described in subsection (b)
performed by an employee of the Internal Revenue Service who
is designated by the Commissioner of Internal Revenue or the
National Taxpayer Advocate for purposes of this section shall
be treated in the same manner as an emergency involving the
safety of human life or the protection of property.
(b) Function Described.--The functions described in this
subsection are functions necessary--
(1) to assist any taxpayer who is or may be experiencing an
economic hardship (within the meaning of section
6343(a)(1)(D) of the Internal Revenue Code of 1986) as a
result of any action or inaction by the Internal Revenue
Service, and
(2) to comply with any Taxpayer Assistance Order issued
pursuant to section 7811 of such Code.

TITLE V--TAX RETURN PREPARERS

SEC. 501. PENALTIES FOR TAX RETURN PREPARERS WHO IMPROPERLY
ALTER RETURNS.

(a) In General.--Paragraph (1) of section 6696(e) is
amended to read as follows:
``(1) Return.--The term `return' means--
``(A) any return of any tax imposed by this title,
``(B) any administrative adjustment request under section
6227,
``(C) any partnership adjustment tracking report under
section 6226(b)(4)(A), and
``(D) any other document purporting to be a return,
request, or report described in subparagraphs (A) through
(C).''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act.

SEC. 502. ENSURING THE USE OF VALID PREPARER IDENTIFICATION
NUMBERS AND ELECTRONIC FILING IDENTIFICATION
NUMBERS.

(a) In General.--
(1) Penalty.--Section 6695 is amended--
(A) by striking subsection (c) and inserting the following:
``(c) Failure to Furnish Valid Identifying Number.--
``(1) In general.--
``(A) Penalty.--Any person who is a tax return preparer
with respect to any return or claim for refund and who fails
to furnish an identifying number which complies with section
6109(a)(4)(A) with respect to such return or claim shall pay
a penalty of $250 for such failure.
``(B) Non-compliance.--For purposes of this paragraph, an
identifying number shall be deemed to not comply with section
6109(a)(4)(A) if such identifying number--
``(i) is assigned to another person,
``(ii) does not exist,
``(iii) is inactive or expired,
``(iv) has been withdrawn,
``(v) is suspended or has been revoked, or
``(vi) is otherwise invalid for use by the tax return
preparer.
``(2) Exception.--The penalty imposed under paragraph (1)
shall not apply if it is shown that such failure is due to
reasonable cause and not due to willful neglect.
``(3) Limitation.--The maximum penalty imposed under this
subsection on any person with respect to documents filed
during any calendar year shall not exceed $75,000.'',
(B) by redesignating subsection (h) as subsection (i),
(C) by inserting after subsection (g) the following new
subsection:
``(h) Use of Invalid or Appropriated Electronic Filing
Identification Number.--
``(1) In general.--Any person who is an electronic return
originator with respect to any applicable electronically
filed document who fails to meet the requirements of
paragraph (2), with respect to such applicable electronically
filed document, shall pay a penalty of $250 for such failure,
unless it is shown that such failure is due to reasonable
cause and not due to willful neglect.
``(2) Requirement.--The requirements of this paragraph are
met if--
``(A) the electronic return originator uses an electronic
filing identification number which is assigned to such person
by the Secretary, and
``(B) in the case of any applicable electronically filed
document filed after the date on which the program under
paragraph (4) is established, the electronic filing
identification number has been validated under such program
at the time of the filing.
``(3) Definitions.--For purposes of this subsection--
``(A) Electronic return originator.--
``(i) In general.--The term `electronic return originator'
means a person who originates the electronic submission of 1
or more applicable electronically filed documents.
``(ii) Exceptions.--The term `electronic return originator'
shall not include a person merely because such person
originates an electronic submission described in clause (i)--

``(I) by providing services which are limited to typing,
reproduction, or other mechanical assistance,
``(II) at the direction of an employer (or of an officer or
employee of the employer) by whom such person is regularly
and continuously employed,
``(III) as a fiduciary, or
``(IV) in response to a determination by the Secretary that
directly or indirectly affects the tax liability of a
taxpayer.

``(B) Electronic filing identification number.--
``(i) In general.--The term `electronic filing
identification number' means a unique identifier issued by
the Secretary to authorize a person or entity to
electronically file on behalf of other taxpayers--

``(I) any return of Federal tax,
``(II) any claim for a refund, and
``(III) except as provided by the Secretary, any other
document required to be filed with the Secretary under this
title.

``(ii) Suspension or revocation.--In the case of any
electronic filing identification number which has been
suspended or revoked by the Secretary, such number shall not
be deemed valid for purposes of paragraph (1).
``(C) Applicable electronically filed document.--The term
`applicable electronically filed document' means any document
which is described in subclause (I), (II), or (III) of
subparagraph (B)(i) and filed electronically on behalf of
other taxpayers.
``(4) Electronic filing identification number validation
program.--
``(A) In general.--Not later than 24 months after the date
of the enactment of this paragraph, the Secretary shall
establish and maintain a program for the validation of
electronic filing identification numbers.
``(B) Timing and frequency of validation.--The Secretary
shall validate an electronic filing identification number--
``(i) prior to the initial use of such electronic filing
identification number for electronic filing, and
``(ii) at such intervals, or upon such events, as the
Secretary determines appropriate, to ensure the continued
validity and integrity of such electronic filing
identification number.
``(C) Real-time validation system.--
``(i) In general.--The program established under this
paragraph shall provide a real-time system for the validation
of electronic filing identification numbers.
``(ii) System requirements.--The system provided under
clause (i) shall--

``(I) provide immediate confirmation of the validity status
of an electronic filing identification number,
``(II) identify whether an electronic filing identification
number has been suspended, revoked, or compromised or is
otherwise ineligible for the activity for which it is used,
and
``(III) be designed to support secure, automated, and high-
volume validation requests, including usage by large-scale
tax preparation software systems.

``(D) Access.--The Secretary shall--
``(i) provide access to the system in such form and manner
as the Secretary may prescribe, and
``(ii) accept a validation request only from a person
authenticated and authorized in accordance with requirements
prescribed by the Secretary and only with respect to an
electronic filing identification number and electronic filing
activity for which such person is authorized to request
validation, whether on its own behalf or in connection with
services provided to the person to whom the electronic filing
identification number was issued.'', and
(D) in subsection (i)(1), as redesignated by paragraph (2),
by striking ``and (g)'' and inserting ``(g), and (h)''.
(2) Requirement for filing software to provide for use of
validation program.--Software which enables the electronic
filing of applicable electronically filed documents (as
defined in section 6695(h) of the Internal Revenue Code of
1986, as amended by paragraph (1)(C)) with the Secretary--
(A) shall require validation of an electronic filing
identification number (as defined in section 6695(h) of such
Code, as amended by this section) under the program described
in section 6695(h)(4) of such Code (as amended by this
section) prior to the electronic filing of any applicable
electronically filed document (as so defined) filed after the
date such program has been established, and
(B) shall not permit such electronic filing unless such
electronic filing identification number has been validated
under such program.
(3) Validation program implementation plan and report.--
(A) Implementation plan.--Not later than 180 days after the
date of enactment of this section, the Secretary shall submit
to the Committee on Finance of the Senate and the Committee
on Ways and Means of the House of Representatives an
implementation plan for the program established under section
6695(h)(4) of the Internal Revenue Code of 1986 (as added by
this subsection). Such plan shall include--
(i) a description of the planned design and operation of
the program,
(ii) the implementation timeline, major milestones, and
testing schedule,

[[Page S5287]]

(iii) the categories of persons eligible to submit
validation requests and the procedures for authorizing such
persons,
(iv) the proposed performance and reliability standards and
contingency procedures, and
(v) a description of the administrative, technical, and
physical safeguards to prevent unauthorized discovery,
enumeration, testing, or bulk verification of electronic
filing identification numbers.
(B) Post-implementation report.--Not later than 2 years
after the date on which the program under section 6695(h)(4)
of the Internal Revenue Code of 1986 (as added by this
subsection) is established, the Secretary shall submit to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives a report on the
implementation and operation of the program. Such report
shall include--
(i) the performance of the program, including system
availability, response times, and peak-volume performance,
(ii) the number, duration, and effect on electronic filing
of any material service disruptions,
(iii) the aggregate number of validation requests and the
aggregate number of affirmative, negative, and unable-to-
validate responses,
(iv) the nature and extent of any use of contingency
procedures,
(v) any material deviation from the implementation plan
submitted under subparagraph (A), and the actions taken or
planned to address such deviation, and
(vi) any recommendations for administrative or legislative
changes.
(b) Modification of Definition of Tax Return Preparer.--
Section 7701(a)(36) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) In general.--The term `tax return preparer' means any
person who prepares for compensation, or who employs one or
more persons to prepare for compensation, any return of tax
imposed by this title, any document purporting to be a return
of tax imposed by this title, or any claim for refund of tax
imposed by this title. For purposes of the preceding
sentence, the preparation of a substantial portion of a
return, document purporting to be a return, or claim for
refund shall be treated as if it were the preparation of such
return, document purporting to be a return, or claim for
refund.'', and
(2) in subparagraph (B)--
(A) in clause (ii), by striking ``return or claim for
refund'' and inserting ``return, document purporting to be a
return, or claim for refund'', and
(B) in clause (iii), by striking ``return or claim for
refund'' and inserting ``return, document purporting to be a
return, or claim for refund''.
(c) Prevention of Inadvertent Errors Involving Identifying
Numbers.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall establish a
program to improve voluntary compliance with respect to
requirements under subsections (c) and (h) of section 6695 of
the Internal Revenue Code of 1986 (as amended by this
section) and avoid the imposition of penalties under such
subsections.
(2) Consultation.--The program described in paragraph (1)
shall be established by the Secretary following consultation
with--
(A) the National Taxpayer Advocate,
(B) qualified low-income taxpayer clinics that have
received a grant under section 7526 of the Internal Revenue
Code of 1986, and
(C) other relevant stakeholders.
(3) Opportunity to correct.--For purposes of the program
described in paragraph (1), the Secretary shall--
(A) prior to acceptance for processing, identify--
(i) any return or claim for refund which has been
electronically submitted and does not include an identifying
number which complies with section 6109(a)(4)(A) of the
Internal Revenue Code of 1986, and
(ii) any return or claim for refund which has been
electronically submitted and does not use an electronic
filing identification number (as defined in section
6695(h)(3)(B) of such Code) or which uses an electronic
filing identification number which been suspended, revoked,
or compromised or is otherwise ineligible for the activity
for which it is used, and
(B) provide an opportunity for the person who submitted
such return or claim for refund to avoid imposition of a
penalty under subsection (c) or (h) of section 6695 of such
Code, as applicable, if the correct identifying number or
electronic filing identification number is provided.
(d) Criminal Penalty.--
(1) In general.--Part I of subchapter A of chapter 75 is
amended by adding at the end the following new section:

``SEC. 7218. WILLFUL FAILURE TO PROVIDE A VALID PREPARER
IDENTIFICATION NUMBER.

``(a) In General.--Any tax return preparer who, with
respect to any return, document purporting to be a return, or
claim for refund willfully fails to furnish an identifying
number which complies with section 6109(a)(4)(A) with respect
to such return or document or willfully furnishes a preparer
tax identification number which is described in section
6695(c)(1)(B) with intent to evade or defeat the application
of any requirement under any provision of this title which
requires such preparer to obtain and furnish such number,
shall, in addition to any other penalties provided by law, be
guilty of a felony and, upon conviction thereof, shall be
fined not more than $50,000 ($100,000 in the case of a
corporation), or imprisoned not more than 3 years, or both,
together with the costs of prosecution.
``(b) Preparer Tax Identification Number.--In this section,
the term `preparer tax identification number' means an
identifying number described in section 6109(a)(4)(A).''.
(2) Clerical amendment.--The table of sections for part I
of subchapter A of chapter 75 is amended by adding at the end
the following new item:

``Sec. 7218. Willful failure to provide a valid preparer identification
number.''.
(e) Effective Date.--The amendments made by this section
shall apply to returns or claims for refund filed after the
date which is 18 months after the date of enactment of this
Act.

SEC. 503. PENALTIES FOR IMPROPER TAX PREPARATION OR
MISAPPROPRIATION OF REFUNDS.

(a) Other Assessable Penalties With Respect to the
Preparation of Tax Returns for Other Persons.--Section 6695,
as amended by the preceding provisions of this Act, is
amended--
(1) in subsection (a)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting ``$50,000'',
(2) in subsection (b)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting ``$75,000'',
(3) in subsection (d)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting ``$50,000'',
(4) in subsection (e)--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$25,000'' and inserting ``$75,000'',
(5) in subsection (g), by striking ``$500'' and inserting
``$1,000'', and
(6) in subsection (i)(1)--
(A) by striking ``2014'' and inserting ``2025'', and
(B) by striking ``calendar year 2013'' and inserting
``calendar year 2024''.
(b) Misappropriation of Refunds.--
(1) In general.--Subsection (f) of section 6695 is amended
to read as follows:
``(f) Misappropriation.--
``(1) In general.--Any person who is a tax return preparer
who misappropriates any payment made in respect of the taxes
imposed by this title which is issued to a taxpayer (other
than the tax return preparer) shall pay a penalty in an
amount determined under paragraph (2).
``(2) Penalty.--The amount of the penalty determined under
this paragraph shall, with respect to each payment described
in paragraph (1), be equal to the greater of--
``(A) $1,000, or
``(B) the full amount of such payment.
``(3) Exception.--Paragraph (1) shall not apply with
respect to the deposit by a bank (within the meaning of
section 581) of the full amount of the payment in the
taxpayer's account in such bank for the benefit of the
taxpayer.''.
(2) Conforming amendment.--Section 6695(i)(1) is amended by
striking ``(f),'' and inserting ``(f)(2)(A),''.

SEC. 504. AUTHORITY TO DENY, REVOKE, OR SUSPEND PREPARER TAX
IDENTIFICATION NUMBERS.

(a) In General.--Section 6109 is amended--
(1) in subsection (a), by striking paragraph (4) and
inserting the following:
``(4) Furnishing identifying number of tax return
preparer.--
``(A) In general.--Any return, claim for refund, or
document purporting to be a return or claim for refund which
is prepared by a tax return preparer shall bear such
identifying number for securing proper identification of such
preparer, their employer, or both, as may be prescribed.
``(B) Suspension or revocation.--In the case of any
identifying number which has been suspended or revoked by the
Secretary under subsection (e), such number shall not be
deemed valid for purposes of subparagraph (A).
``(C) Definitions.--For purposes of this section--
``(i) Specified practitioner.--The term `specified
practitioner' means a certified public accountant, attorney,
or enrolled agent--

``(I) who is--

``(aa) in good standing with--
``(AA) the Department of the Treasury, and,
``(BB) in the case of a certified public accountant or
attorney, State licensing authorities, and
``(bb) authorized to represent persons before the
Department of the Treasury under section 330 of title 31,
United States Code, and

``(II) whose professional license or certification has not
been revoked or suspended.

``(ii) Return; claim for refund.--The terms `return' and
`claim for refund' have the respective meanings given to such
terms by section 6696(e).'', and
(2) by inserting after subsection (d) the following:

[[Page S5288]]

``(e) Identifying Number of Tax Return Preparer.--
``(1) In general.--The Secretary shall maintain a program
for administration of preparer tax identification numbers
required under subsection (a)(4), which shall include
restrictions on the issuance of such numbers to any
individual other than an individual who--
``(A) meets the suitability requirements of paragraph (2)
and the education requirements of paragraph (3),
``(B) meets the state program requirements of paragraph
(4), or
``(C) is a specified practitioner.
``(2) Demonstration of suitability.--
``(A) In general.--An individual meets the suitability
requirements of this paragraph if such individual has
demonstrated to the Secretary the individual's suitability to
be a tax return preparer by--
``(i) providing such information as the Secretary
determines necessary, and
``(ii) passing a background check, including a review by
the Secretary regarding compliance with personal tax
obligations.
``(B) Conduct demonstrating lack of suitability.--For
purposes of subparagraph (A), an individual shall be deemed
to have failed to demonstrate their suitability to be a tax
return preparer if--
``(i) any license or registration issued to such individual
by a State to prepare tax returns has been suspended or
revoked by such State, or
``(ii) the Secretary determines that such individual is
described in clauses (ii) through (vi) of paragraph (5)(A).
``(C) Regulations and guidance.--The Secretary shall issue
such regulations or other guidance as the Secretary
determines necessary to carry out the purposes of this
paragraph.
``(D) Prohibition on examinations.--For purposes of
subparagraph (A), except as provided in paragraph
(3)(C)(iii), the Secretary may not require an examination as
a prerequisite for the assignment or renewal of a preparer
tax identification number.
``(E) Grandfathering of prior background checks.--
``(i) In general.--Subject to clause (ii), for purposes of
subparagraph (A)(ii), in the case of a class of individuals
(as identified by the Secretary) who have passed a background
check prior to the date of enactment of this subsection, the
Secretary may deem such class of individuals to have
satisfied the requirement under such subparagraph.
``(ii) Nonapplication to requirement regarding compliance
with personal tax obligations.--Clause (i) shall not apply
with respect to review by the Secretary under subparagraph
(A)(ii) regarding compliance with personal tax obligations.
``(3) Educational programs.--
``(A) In general.--An individual shall meet the education
requirements of this paragraph if such individual completes a
specified number of hours of educational programs on ethics,
professional responsibility, and tax law (including recently
enacted Federal income tax legislation) as required by the
Secretary prior to the assignment or renewal of a preparer
tax identification number.
``(B) Additional educational requirements for renewal.--The
Secretary may require any individual seeking the renewal of a
preparer tax identification number to complete educational
programs in addition to those required under subparagraph
(A). Any educational programs required under this
subparagraph shall be based on--
``(i) a review of returns which include the preparer tax
identification number of such preparer, and
``(ii) any errors identified by the Secretary as part of
the review described in clause (i).
``(C) Other requirements.--For purposes of this paragraph,
the Secretary--
``(i) may not require a tax return preparer to annually
complete more than 18 hours of educational programs,
``(ii) shall require that any educational program include
written materials which satisfy such standards as are
established by the Secretary,
``(iii) shall require that any educational program include
a method to ensure that the tax return preparer attended the
program and sufficiently understood the material presented,
and
``(iv) may not direct any educational program to be
completed through a specific provider.
``(D) Notice of failure to timely complete requirements.--
The Secretary shall provide any tax return preparer who fails
to complete the requirements of this paragraph notice of such
failure and a 30-day period in which to cure such failure.
``(E) Publication of approved courses.--The Secretary shall
publish, on the public website of the Internal Revenue
Service--
``(i) a list of educational programs which have been
determined by the Secretary to satisfy the requirement under
clause (ii) of subparagraph (C) (and, if applicable, the
requirement under clause (iii) of such subparagraph),
including the providers of such programs, and
``(ii) any such requirements as the Secretary deems
necessary to impose with respect to any additional programs
required under subparagraph (B), provided that such
requirements are similar to the requirements provided under
section 330 of title 31, United States Code, or regulations
prescribed thereunder.
``(4) Exemption.--
``(A) In general.--Subject to subparagraph (B), any
individual meets the state program requirements of this
paragraph if such individual maintains a valid State license
or registration issued by a State licensing program or State
registration program (including State tax education councils)
which includes examination, education, and background check
requirements that are comparable to the suitability
requirements described in paragraph (2) and the education
requirements described in paragraph (3).
``(B) Grandfathering of certain programs.--For purposes of
subparagraph (A), with respect to determining whether a State
licensing program or State registration program (including
State tax education councils) includes examination,
education, and background check requirements which are
comparable to the suitability requirements described in
paragraph (2) and the education requirements described in
paragraph (3), such determination shall be made by the
Secretary without regard to whether such requirements were
included in such program at the time that such individual was
licensed or registered under such program, provided that such
requirements are, as of the date that such individual
requested assignment or renewal of a preparer tax
identification number under this subsection, presently
included in such program.
``(5) Authority to revoke or suspend preparer tax
identification number.--
``(A) In general.--The Secretary may suspend or revoke a
preparer tax identification number if, after notice and
opportunity for a hearing, the Secretary makes a
determination that the tax return preparer--
``(i) has not met--

``(I) the suitability requirements of paragraph (2) and the
education requirements of paragraph (3), or
``(II) the state program requirements of paragraph (4),

``(ii) is incompetent, as demonstrated by a repeated
pattern of errors in returns that were prepared by such
preparer which affected the determination of tax liability in
such returns,
``(iii) is disreputable, as demonstrated by--

``(I) giving false or misleading information under
paragraph (2)(A)(i),
``(II) willful failure to comply with personal tax
obligations,
``(III) an unpaid tax delinquency--

``(aa) which is outstanding for greater than 180 days,
``(bb) which is not being actively disputed, and
``(cc) which is not--
``(AA) subject to an agreement or compromise under section
6159 or 7122,
``(BB) classified as currently not collectible (within the
meaning of section 6343(e)), or
``(CC) subject to a pending application for such an
agreement, compromise, or status,

``(IV) revocation or suspension of any license or
registration issued by a State for the preparation of tax
returns,
``(V) conviction of any criminal offense--

``(aa) involving dishonesty or breach of trust, or
``(bb) which is punishable under this title,

``(VI) a final determination of liability for a penalty
pursuant to section 6694, 6695(h), 6700, 6701, 6702, or 6713,
``(VII) subject to an injunction under section 7407 or
7408, or
``(VIII) any conduct similar to the conduct described in
subclauses (I) through (VII), as provided under regulations
prescribed by the Secretary,

``(iv) in the case of a person subject to regulation under
section 330 of title 31, United States Code, or regulations
prescribed thereunder, has violated the requirements under
such section or such regulations,
``(v) with intent to defraud, willfully and knowingly
misleads or threatens--

``(I) the person whose return or claim for refund is being
prepared, or
``(II) a prospective person seeking for a return or claim
for refund to be prepared, or

``(vi) has engaged in conduct (as identified in regulations
or guidance issued by the Secretary) which is similar to the
conduct described in clauses (i) through (v) and that the
denial, suspension, or revocation of such number would
promote compliance with the requirements of this title and
effective tax administration.
``(B) Monetary penalty.--
``(i) In general.--In addition to, or in lieu of, any
suspension or revocation of a preparer tax identification
number under subparagraph (A), the Secretary may impose a
penalty in any amount not exceeding $5,000.
``(ii) Reduction.--Any penalty imposed under clause (i)
shall be reduced by the amount of any penalty imposed under
section 6694, 6695, 6700, 6701, 6702, or 6713 with regard to
the same conduct.
``(iii) Adjustment for inflation.--

``(I) In general.--In the case of any penalty imposed
during any calendar year beginning after 2025, the dollar
amount in clause (i) shall be increased by an amount equal
to--

``(aa) such dollar amount, multiplied by
``(bb) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.

``(II) Rounding.--If any amount determined under subclause
(I) is not a multiple of $100, such amount shall be rounded
to the nearest multiple of $100.

[[Page S5289]]

``(C) Reinstatement.--The Secretary shall, through
regulations or other guidance, establish procedures to allow
any tax return preparer whose preparer tax identification
number has been suspended or revoked pursuant to subparagraph
(A) to have such number reissued (or, in the case of a
suspension, for such suspension to be terminated), provided
that such preparer demonstrates, to the satisfaction of the
Secretary, that--
``(i) the conduct described in such paragraph which was the
basis for such suspension or revocation has been sufficiently
addressed or resolved (such as through completion of
educational programs described in paragraph (3) or
reinstatement of a license issued by a State for the
preparation of tax returns), and
``(ii) effective tax administration would be promoted by
terminating the suspension of such number or reissuing such
number to such preparer.
``(D) Preliminary suspension.--
``(i) In general.--After notice and opportunity to respond,
the Secretary may suspend the preparer tax identification
number of a tax return preparer for a period of not greater
than 180 days if the Secretary determines that--

``(I) such tax return preparer has engaged in any conduct
described in clauses (i) through (vi) of subparagraph (A),
and
``(II) such suspension is necessary to prevent serious
economic harm to taxpayers or serious impairment of effective
tax administration, such as to prevent the filing of
fraudulent returns or claims for refund.

``(ii) Limitation.--For purposes of clause (i), if the
preparer tax identification number of a tax return preparer
has been suspended pursuant to such clause 2 times during any
5-year period, the Secretary may not issue an additional
suspension pursuant to such clause with respect to such
preparer during such period unless such suspension is
subsequent to a determination by the Secretary to suspend or
revoke the preparer tax identification number of such
preparer pursuant to subparagraph (A).
``(E) Regulations.--Not later than 24 months after the date
of enactment of this subsection, the Secretary shall issue
such regulations or other guidance as the Secretary
determines necessary to carry out the purposes of this
paragraph, including--
``(i) guidelines that identify the particular penalty
applicable to any conduct described in subparagraph (A), and
``(ii) the manner of notice and opportunity to respond for
purposes of subparagraph (D).
``(F) No inference.--Nothing in this paragraph shall be
construed to create any inference with respect to the
definition or meaning of any term used in section 330 of
title 31, United States Code, or regulations prescribed
thereunder.
``(6) Appeal.--In the case of any tax return preparer for
whom the Secretary has made a determination--
``(A) that such preparer has not met the requirements of
paragraphs (2) and (3) or of paragraph (4) and that issuance
of a preparer tax identification number should be denied,
``(B) under paragraph (5)(A) that the preparer tax
identification number for such preparer should be suspended
or revoked, or
``(C) that a penalty should be imposed pursuant to
paragraph (5)(B),
such preparer shall be provided with an opportunity to appeal
such determination pursuant to procedures (as established by
the Secretary through regulations or other guidance) which
are similar to the procedures provided under section 330 of
title 31, United States Code, and regulations prescribed
thereunder.
``(7) Disclosure of final determinations.--
``(A) In general.--In the case of any determination--
``(i) in which an extended suspension or revocation of a
preparer tax identification number is imposed under this
subsection, and
``(ii) for which all administrative and judicial appeals
are exhausted,
not later than 30 days following such determination, the
Secretary shall publish such determination on the public
website of the Internal Revenue Service, which shall include
a statement of the facts and circumstances relating to such
determination and the reasons for the determination.
``(B) Extended suspension.--For purposes of subparagraph
(A), the term `extended suspension' means a suspension issued
by the Secretary pursuant to paragraph (5)(A) for a period of
greater than 180 days.
``(8) Preparer tax identification number.--For purposes of
this subsection, the term `preparer tax identification
number' means an identifying number described in subsection
(a)(4)(A).''.
(b) Determinations Regarding Practice Before the
Department.--Section 330 of title 31, United States Code, is
amended--
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following:
``(e) Disclosure of Final Determinations.--In the case of
any determination under subsection (c) or (d)--
``(1) in which a suspension, disbarment, or censure, or
other penalty is imposed, and
``(2) for which all administrative and judicial appeals are
exhausted,
not later than 30 days following such determination, the
Secretary shall publish such determination on a public
website, which shall include a statement of the facts and
circumstances relating to such determination and the reasons
for the determination.''.
(c) Disclosure Relating to Misconduct by Practitioners and
Tax Return Preparers.--
(1) In general.--Section 6103(k) is amended by adding at
the end the following new paragraph:
``(16) Disclosure relating to misconduct by practitioners
and tax return preparers.--Under such procedures as the
Secretary may prescribe, the Secretary may disclose returns
and return information to the extent the Secretary determines
it is necessary to publish determinations pursuant to section
6109(e)(7) and section 330(e) of title 31, United States
Code, provided that such disclosure is redacted to remove--
``(A) any name, address, or other identifying information
with respect to any persons other than the representative or
tax return preparer who is the subject of such determination,
and
``(B) such other information as the Secretary determines
appropriate to protect the privacy of such persons.''.
(2) Conforming amendment.--Section 6103(p)(3)(A) is amended
by striking ``or (9)'' and inserting ``(9), or (16)''.
(d) Requirement to Include Identifying Number for Paid
Preparer of Offer-in-compromise.--
(1) In general.--Section 6109(a) is amended by inserting
after paragraph (4) the following new paragraph:
``(5) Furnishing identifying number for offer-in-
compromise.--Any offer-in-compromise (as described in section
7122), including any required schedule or statement, which
has been prepared by any person for compensation shall
include such identifying number as may be prescribed for
securing proper identification of such person.''.
(2) Penalty.--Section 7122, as amended by this Act, is
amended by adding at the end the following new subsection:
``(i) Failure to Furnish Identifying Number.--
``(1) In general.--
``(A) Penalty.--Any person who prepares an offer-in-
compromise (including any required schedule or statement) for
compensation and who fails to include an identifying number
which complies with section 6109(a)(5) with respect to such
offer-in-compromise shall pay a penalty of $250 for such
failure.
``(B) Non-compliance.--For purposes of this paragraph, an
identifying number shall be deemed to not comply with section
6109(a)(5) if such identifying number--
``(i) is assigned to another person,
``(ii) does not exist,
``(iii) is inactive or expired,
``(iv) has been withdrawn,
``(v) is suspended or has been revoked, or
``(vi) is otherwise invalid for use by the preparer.
``(C) Adjustment for inflation.--
``(i) In general.--In the case of any documents filed
during any calendar year beginning after 2025, the $250
amount in subparagraph (A) shall be increased by an amount
equal to--

``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.

``(ii) Rounding.--If any amount determined under clause (i)
is not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.
``(2) Exception.--The penalty imposed under paragraph (1)
shall not apply if it is shown that such failure is due to
reasonable cause and not due to willful neglect.
``(3) Limitation.--
``(A) In general.--The maximum penalty imposed under this
subsection on any person with respect to documents filed
during any calendar year shall not exceed $75,000.
``(B) Adjustment for inflation.--
``(i) In general.--In the case of any penalty imposed
during any calendar year beginning after 2025, the $75,000
amount in subparagraph (A) shall be increased by an amount
equal to--

``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.

``(ii) Rounding.--If any amount determined under clause (i)
is not a multiple of $1,000, such amount shall be rounded to
the nearest multiple of $1,000.
``(4) Other applicable rules.--Rules similar to the rules
of section 6696 shall apply for purposes of this
subsection.''.
(e) GAO Study and Report on the Exchange of Information
Between the IRS and State Taxation Authorities.--
(1) In general.--Not later than 18 months after the date of
the enactment of this Act, the Comptroller General of the
United States shall conduct a study and submit to Congress a
report on the sharing of information between the Secretary
and State authorities, as authorized under subsections (d)
and (k)(5) of section 6103 of the Internal Revenue Code of
1986, regarding identification numbers issued to paid tax
return preparers and return preparer minimum standards.
(2) Increased information sharing.--The study and report
described in paragraph (1) shall include an analysis of the
impact that

[[Page S5290]]

increased information sharing between Federal and State
authorities would have on efforts to enforce minimum
standards on paid tax return preparers.
(3) Audit of internal revenue service.--Section 6103(i)(8)
is amended by adding at the end the following new
subparagraph:
``(D) Application to study conducted under taxpayer
assistance and service act.--For purposes of this paragraph,
the study and report described in section 504(e)(1) of the
Taxpayer Assistance and Service Act shall be deemed to be an
audit of the Internal Revenue Service.''.
(f) Publication of Common Errors and Penalties.--Not later
than 36 months after the date of the enactment of this Act
and annually thereafter, the Commissioner of the Internal
Revenue shall publish on the public website of the Internal
Revenue Service--
(1) the 10 most frequent errors found on tax returns which
were prepared by tax return preparers (as defined in section
7701(a)(36) of the Internal Revenue Code of 1986) during the
most recent calendar year for which data is available, and
(2) with respect to the preceding calendar year, the top 10
reasons that tax return preparers were--
(A) subject to penalties imposed under the Internal Revenue
Code of 1986, or
(B) otherwise disciplined under section 6109 of such Code
or section 330 of title 31, United States Code.
(g) Rule of Construction.--Nothing in this section (or
amendment made by this section) shall be construed to require
the Secretary to eliminate or terminate any existing program
or authority--
(1) which, pursuant to section 330 of title 31, United
States Code, permits a tax return preparer to represent a
taxpayer before the Department of the Treasury in cases in
which such preparer prepared and signed the return of tax, or
(2) for publication of a public database on the website of
the Internal Revenue Service of tax return preparers who have
satisfied the requirements for issuance of a preparer tax
identification number (as defined in section 6109(e)(8) of
the Internal Revenue Code of 1986).
(h) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect on the date which is 180 days after the date of
enactment of this Act.
(2) Transition rules for educational requirements for tax
return preparers.--
(A) Annual filing season program.--In the case of any tax
return preparer who, as of the date of enactment of this Act,
has received a record of completion with respect to the
Annual Filing Season Program established by the Internal
Revenue Service, such tax return preparer shall be deemed to
have satisfied the education requirements of section
6109(e)(3) of the Internal Revenue Code of 1986 (as added by
this section) for the calendar year for which such record of
completion applies.
(B) Approved courses.--In the case of any entity which, as
of the date of enactment of this Act, is approved to provide
continuing education for purposes of the Annual Filing Season
Program established by the Internal Revenue Service, such
entity shall be deemed to satisfy the applicable requirements
under section 6109(e)(3) of the Internal Revenue Code of 1986
until the date on which the Secretary has--
(i) issued such regulations or other guidance as the
Secretary determines necessary for purposes of establishing
standards for educational programs under such section, and
(ii) pursuant to subparagraph (E) of such section,
published a list of educational programs which have been
determined by the Secretary to satisfy the applicable
requirements under such section.

TITLE VI--APPEALS

SEC. 601. AUTHORIZATION FOR OFFICE OF APPEALS TO HIRE
ATTORNEYS.

Subparagraph (B) of section 7803(e)(6) is amended to read
as follows:
``(B) Hiring of counsel.--The Chief of Appeals shall have
the authority to appoint counsel in the Internal Revenue
Service Independent Office of Appeals to report directly to
the Chief of Appeals. Any counsel appointed pursuant to this
subparagraph shall not report to the Chief Counsel for the
Internal Revenue Service and shall not represent the
Government in litigation. Any legal interpretation of counsel
appointed pursuant to this subparagraph shall not be binding
on the Secretary.''.

SEC. 602. AUTHORIZATION FOR OFFICE OF APPEALS TO DIRECT HIRE
CERTAIN INDIVIDUALS.

Section 7803(e)(6) is amended by adding at the end the
following:
``(C) Authority to appoint individuals not employed by
internal revenue service.--The Secretary may utilize direct
hire authority to recruit and appoint qualified applicants,
without regard to any notice or preference requirements, to
positions within the Internal Revenue Service Independent
Office of Appeals, provided that such applicants are not
employees of the Internal Revenue Service engaged in
enforcement functions.''.

SEC. 603. RESPONSES TO CLAIMS FOR REFUND REQUIRED; APPEAL OF
CLAIMS FOR REFUND AUTHORIZED.

(a) In General.--Subsection (l) of section 6402 is amended
to read as follows:
``(l) Explanation of Reason for Refund Disallowance;
Appeals.--
``(1) In general.--Not later than the applicable date, the
Secretary shall review any claim for refund, make a
determination with respect to such claim, and, in the case of
a disallowance of such claim (in whole or in part), provide
the taxpayer with a detailed written explanation for such
disallowance, which shall--
``(A) be mailed to the last known address of the taxpayer,
and
``(B) in the case of any taxpayer entitled to an appeal of
such determination, include instructions for appealing such
disallowance to the Internal Revenue Service Independent
Office of Appeals.
``(2) Failure to make timely determination.--
``(A) In general.--In the case of any claim for refund for
which the Secretary fails to satisfy the requirements of
paragraph (1) by the applicable date, for purposes of
determining interest on any overpayment for any period
subsequent to such date, the overpayment rate (as established
under section 6621(a)(1)) shall be increased by 1 percentage
point.
``(B) Limitation.--With respect to any claim for refund
described in subparagraph (A), the amount of any increase in
interest on any overpayment pursuant to such subparagraph
shall not exceed $500.
``(C) Adjustment for inflation.--
``(i) In general.--In the case of any claim for refund
filed during any calendar year beginning after 2026, the $500
amount in subparagraph (B) shall be increased by an amount
equal to--

``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2024' for `calendar year 2016' in
subparagraph (A)(ii) thereof.

``(ii) Rounding.--If any amount determined under clause (i)
is not a multiple of $50, such amount shall be rounded to the
nearest multiple of $50.
``(3) Appeals.--
``(A) In general.--Any disallowance of a claim for refund
may, within 30 days after the date such disallowance is
mailed (or, if mailed to an address outside of the United
States, 90 days), be appealed to the Internal Revenue Service
Independent Office of Appeals. Notwithstanding paragraph (4)
of section 6532(a), during the period in which any such
appeal is pending before the Internal Revenue Service
Independent Office of Appeals (and for 30 days thereafter),
the 2-year period in paragraph (1) of such section for filing
suit for refund after disallowance of a claim shall be
suspended.
``(B) Deemed disallowance.--For purposes of subparagraph
(A), in the case of any claim for refund for which the
Secretary has failed to make a determination with respect to
such claim by the date described in paragraph (5)(A), the
taxpayer may elect for such claim to be deemed to have been
disallowed by the Secretary as of such date.
``(4) Frivolous claims.--
``(A) In general.--In the case of any frivolous claim--
``(i) paragraphs (1) and (3) shall not apply, and
``(ii) not later than the applicable date, written
notification of the denial of such claim shall be mailed to
the last known address of the taxpayer.
``(B) Definition.--For purposes of this paragraph, the term
`frivolous claim' means a claim for refund which is based
on--
``(i) a position which the Secretary has identified as
frivolous for purposes of subsection (c) of section 6702, or
``(ii) a position which is substantially similar to a
position described in clause (i).
``(5) Applicable date.--For purposes of this subsection,
the term `applicable date' means, with respect to any claim
for refund--
``(A) the date which is 12 months after the date of receipt
of such claim by the Secretary, or
``(B) such other date as is agreed to by the Secretary and
the taxpayer.''.
(b) Effective Date.--The amendment made by this section
shall apply to any claim for refund received after the date
which is 12 months after the date of enactment of this Act.

SEC. 604. APPEALS OF RETURNED OFFERS.

Section 7122(e) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) for an independent administrative review of--
``(A) any determination that an offer-in-compromise be
returned to the taxpayer because such offer-in-compromise is
not accepted for processing or is otherwise determined to be
nonprocessable before such determination is communicated to
the taxpayer, and
``(B) any rejection of a proposed offer-in-compromise or
installment agreement made by a taxpayer under this section
or section 6159 before such rejection is communicated to the
taxpayer, and'', and
(2) in paragraph (2), by striking ``any rejection of such
offer or agreement'' and inserting ``any determination
described in paragraph (1)(A) or any rejection described in
paragraph (1)(B)''.

SEC. 605. PURPOSES AND DUTIES OF INDEPENDENT OFFICE OF
APPEALS; RIGHT OF APPEAL CLARIFIED.

(a) In General.--Section 7803(e) is amended--
(1) in paragraph (3)--
(A) in subparagraph (B), by striking ``and'' at the end,

[[Page S5291]]

(B) in subparagraph (C), by striking the period at the end
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(D) without exception, evaluates and considers all
hazards of litigation in resolving any case referred to the
Internal Revenue Service Independent Office of Appeals.'',
(2) by striking paragraph (4) and inserting the following
new paragraph:
``(4) Right of appeal.--
``(A) In general.--Except as otherwise provided under this
title, the resolution process described in paragraph (3)
shall be available to all taxpayers with respect to any
determination by the Secretary concerning a Federal tax
controversy regarding subtitles A, B, or C and relating to--
``(i) liability for, or any claim for refund of, any tax,
``(ii) liability for, or any claim for refund of, any
penalty or addition to tax,
``(iii) eligibility for alternatives to collection of a tax
liability, such as an installment agreement or compromise
under section 6159 or 7122,
``(iv) any determination to deny or revoke the tax-exempt
status of an organization, or
``(v) any exercise of discretion by the Secretary with
respect to any determination described in clauses (i) through
(iv).
``(B) Exceptions.--Notwithstanding subparagraph (A), the
Secretary may restrict access to the resolution process
described in paragraph (3) with respect to any appeal--
``(i) to the extent that such appeal is based on a claim
that--

``(I) a law is unconstitutional, unless there is a final
and unreviewable decision rendered by a Federal court that
the relevant provision of such law is unconstitutional, or
``(II) a regulation, notice, or revenue procedure which was
issued by the Secretary is procedurally invalid, unless there
is a final and unreviewable decision rendered by a Federal
court that the relevant provision of such regulation, notice,
or revenue procedure is procedurally invalid,

``(ii) which--

``(I) is based on a position which--

``(aa) a Federal court has determined to be frivolous, and
``(bb) the Secretary has identified as frivolous for
purposes of subsection (c) of section 6702,

``(II) is substantially similar to a position described in
subclause (I), or
``(III) relates to any penalty imposed under such section
with respect to such position,

``(iii) which relates to any matter agreed upon pursuant to
an agreement under section 7121,
``(iv) subject to subparagraph (C), during any period in
which--

``(I) the Secretary is actively investigating whether to
refer the taxpayer to the Attorney General for criminal
prosecution,
``(II) a recommendation made by the Secretary to the
Attorney General for the criminal prosecution of the taxpayer
for any offense connected with the administration or
enforcement of the internal revenue laws is pending, or
``(III) any criminal prosecution of the taxpayer, or of any
other person in a case in which the taxpayer is a witness,
for any offense connected with the administration or
enforcement of the internal revenue laws is pending, or

``(v) with respect to any issue in a case which, based on
the relevant facts and circumstances of such case, the Chief
Counsel for the Internal Revenue Service--

``(I) has designated for litigation, and
``(II) is prepared to proceed with such litigation in a
timely manner.

``(C) Exception for certain criminal prosecutions.--
Subparagraph (B)(iv) shall not apply if the Chief Counsel for
the Internal Revenue Service determines that the resolution
process described in paragraph (3) would not interfere with
the criminal prosecution of a taxpayer.
``(D) Notice to tax-exempt organizations.--In the case of
any determination described in subparagraph (A)(iv), the
Secretary shall provide written notice to the organization of
the availability of the resolution process described in
paragraph (3).
``(E) Definitions.--In this paragraph--
``(i) Federal tax controversy.--The term `Federal tax
controversy' means a dispute described in paragraph (2) or
(3) of section 301.7803-2 of title 26, Code of Federal
Regulations (as in effect on the date of enactment of the
Taxpayer Assistance and Service Act).
``(ii) Procedurally invalid.--The term `procedurally
invalid' means, with respect to any regulation, notice, or
revenue procedure, that such regulation, notice, or revenue
procedure failed to comply with any applicable requirement
under subchapter II of chapter 5 and chapter 7 of title 5,
United States Code (commonly known as the `Administrative
Procedure Act').
``(F) Rule of construction.--Nothing in this paragraph
shall be construed to limit the availability of the
resolution process described in paragraph (3) solely to the
Federal tax controversies described in subparagraph (A).'',
and
(3) in paragraph (5)--
(A) by redesignating subparagraph (D) as subparagraph (E),
and
(B) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Clarification of tax court authority.--In any case
before the Tax Court, the Tax Court may direct the parties to
request referral to the Internal Revenue Service Independent
Office of Appeals in any case in which the Tax Court
determines that the resolution process described in paragraph
(3) is appropriate.''.

TITLE VII--WHISTLEBLOWERS

SEC. 701. STANDARD AND SCOPE OF REVIEW OF WHISTLEBLOWER AWARD
DETERMINATIONS.

(a) In General.--Paragraph (4) of section 7623(b) is
amended--
(1) by striking ``appealed to'' and inserting ``reviewed
by''; and
(2) by adding at the end the following: ``Any review by the
Tax Court under the preceding sentence shall be de novo and
shall be based on the administrative record established at
the time of the original determination and any additional
newly discovered or previously unavailable evidence.''.
(b) Conforming Amendment.--The heading of paragraph (4) of
section 7623(b) is amended by striking ``Appeal'' and
inserting ``Review''.
(c) Effective Date.--The amendments made by this section
shall apply to petitions under section 7623(b)(4) of the
Internal Revenue Code of 1986 which are pending on, or filed
on or after, the date of the enactment of this Act.

SEC. 702. EXEMPTION FROM SEQUESTRATION.

(a) In General.--Section 255 of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 905) is
amended--
(1) by redesignating subsection (k) as subsection (l); and
(2) by inserting after subsection (j) the following:
``(k) Awards to Whistleblowers.--An award authorized under
section 7623 of the Internal Revenue Code of 1986 shall be
exempt from reduction under any order issued under this
part.''.
(b) Applicability.--The amendment made by this section
shall apply to any sequestration order issued under the
Balanced Budget and Emergency Deficit Control Act of 1985 (2
U.S.C. 900 et seq.) after the date of enactment of this Act.

SEC. 703. WHISTLEBLOWER PRIVACY PROTECTIONS.

(a) In General.--Paragraph (6) of section 7623(b) is
amended by adding at the end the following new subparagraph:
``(D) Whistleblower anonymity before the tax court.--
Notwithstanding sections 7458 and 7461, a whistleblower shall
proceed anonymously before the Tax Court for all proceedings
under this section absent a finding by the Tax Court that a
societal interest exists for disclosing the whistleblower's
identity which exceeds the potential harm disclosure could
cause to the whistleblower.''.
(b) Effective Date.--The amendment made by this section
shall apply to petitions filed with the Tax Court which are
pending on, or filed on or after, the date of the enactment
of this Act.

SEC. 704. MODIFICATION OF IRS WHISTLEBLOWER REPORT.

(a) In General.--Section 406(c) of division A of the Tax
Relief and Health Care Act of 2006 is amended by striking
``such use,'' in paragraph (1) and inserting ``such use
(which shall include a list and descriptions of the top tax
avoidance schemes, not to exceed 10, disclosed by
whistleblowers during such year),''.
(b) Effective Date.-- The amendments made by this section
shall apply to reports for fiscal years ending after the
enactment of this Act.

SEC. 705. INTEREST ON WHISTLEBLOWER AWARDS.

(a) In General.--Section 7623(b) is amended by adding at
the end the following new paragraph:
``(7) Interest.--
``(A) In general.--If the Secretary has not provided notice
to an individual described in paragraph (1) of a preliminary
award recommendation before the applicable date, the amount
of any award under this subsection shall include interest
from such date at the overpayment rate under section 6621(a).
``(B) Exception.--No interest shall accrue under this
paragraph after the date on which the Secretary provides
notice to the individual of a preliminary award
recommendation.
``(C) Applicable date.--For purposes of this paragraph, the
applicable date is the date that is 12 months after the first
date on which--
``(i) all of the proceeds resulting from actions subject to
the award recommendation have been collected, and
``(ii) either--

``(I) the statutory period for filing a claim or suit for
refund has expired, or
``(II) the taxpayers subject to the actions and the
Secretary have agreed with finality to the tax or other
liabilities for the periods at issue, and either the
taxpayers have waived the right to file a claim or suit for
refund or any claim or suit for refund has been resolved.''.

(b) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect 180 days after the date of the enactment of this
Act.
(2) Special rule.--If, as of the date described in
paragraph (1)--
(A) the Secretary has not provided notice to the individual
of a preliminary award recommendation as described in
paragraph (7)(A) of section 7623(b) of the Internal Revenue
Code of 1986, as added by this Act, and
(B) the applicable date provided in paragraph (7)(C) of
such section, as so added, has passed,
the applicable date for purposes of such paragraph (7)(C) is
the date that is 12 months after the date described in
paragraph (1).

[[Page S5292]]

SEC. 706. CORRECTION REGARDING DEDUCTIONS FOR ATTORNEY'S
FEES.

(a) In General.--Section 62(a)(21)(A)(i) is amended by
striking ``7623(b)'' and inserting ``7623''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.

TITLE VIII--HOSTAGES

SEC. 801. POSTPONEMENT OF TAX DEADLINES FOR HOSTAGES AND
INDIVIDUALS WRONGFULLY DETAINED ABROAD.

(a) In General.--Chapter 77 is amended by inserting after
section 7510 the following new section:

``SEC. 7511. TIME FOR PERFORMING CERTAIN ACTS POSTPONED FOR
HOSTAGES AND INDIVIDUALS WRONGFULLY DETAINED
ABROAD.

``(a) Time to Be Disregarded.--
``(1) In general.--The period during which an applicable
individual was unlawfully or wrongfully detained abroad, or
held hostage abroad, shall be disregarded in determining,
under the internal revenue laws, in respect of any tax
liability of such individual--
``(A) whether any of the acts described in section
7508(a)(1) were performed within the time prescribed thereof
(determined without regard to extension under any other
provision of this subtitle for periods after the initial date
(as determined by the Secretary) on which such individual was
unlawfully or wrongfully detained abroad or held hostage
abroad),
``(B) the amount of any interest, penalty, additional
amount, or addition to the tax for periods after such date,
and
``(C) the amount of any credit or refund.
``(2) Application to spouse.--The provisions of paragraph
(1) shall apply to the spouse of any individual entitled to
the benefits of such paragraph.
``(b) Applicable Individual.--
``(1) In general.--For purposes of this section, the term
`applicable individual' means any individual who is--
``(A) a United States national unlawfully or wrongfully
detained abroad, as determined under section 302 of the
Robert Levinson Hostage Recovery and Hostage-Taking
Accountability Act (22 U.S.C. 1741), or
``(B) a United States national taken hostage abroad, as
determined pursuant to the findings of the Hostage Recovery
Fusion Cell (as described in section 304 of the Robert
Levinson Hostage Recovery and Hostage-Taking Accountability
Act (22 U.S.C. 1741b)).
``(2) Information provided to treasury.--For purposes of
identifying individuals described in paragraph (1), not later
than January 1, 2027, and annually thereafter--
``(A) the Secretary of State shall provide the Secretary
with a list of the individuals described in paragraph (1)(A),
as well as any other information necessary to identify such
individuals, and
``(B) the Attorney General, acting through the Hostage
Recovery Fusion Cell, shall provide the Secretary with a list
of the individuals described in paragraph (1)(B), as well as
any other information necessary to identify such individuals.
``(c) Special Rule for Overpayments.--
``(1) In general.--Subsection (a) shall not apply for
purposes of determining the amount of interest on any
overpayment of tax.
``(2) Special rules.--If an individual is entitled to the
benefits of subsection (a) with respect to any return and
such return is timely filed (determined after the application
of such subsection), subsections (b)(3) and (e) of section
6611 shall not apply.
``(d) Modification of Treasury Databases and Information
Systems.--The Secretary shall update, as necessary, any
database or information system of the Department of the
Treasury in order to ensure that the provisions of subsection
(a) are applied with respect to each applicable individual.
``(e) Refund and Abatement of Penalties and Fines Imposed
Prior to Identification as Applicable Individual.--In the
case of any applicable individual--
``(1) for whom any interest, penalty, additional amount, or
addition to the tax in respect to any tax liability for any
taxable year ending during the period described in subsection
(a)(1) was assessed or collected, and
``(2) who was, subsequent to such assessment or collection,
determined to be an individual described in subparagraph (A)
or (B) of subsection (b)(1),
the Secretary shall abate any such assessment and refund any
amount collected to such applicable individual in the same
manner as any refund of an overpayment of tax under section
6402.''.
(b) Clerical Amendment.--The table of sections for chapter
77 is amended by inserting after the item relating to section
7510 the following new item:

``Sec. 7511. Time for performing certain acts postponed for hostages
and individuals wrongfully detained abroad.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of
enactment of this Act.

SEC. 802. REFUND AND ABATEMENT OF PENALTIES AND FINES PAID BY
ELIGIBLE INDIVIDUALS.

(a) In General.--Section 7511, as added by section 801 of
this Act, is amended by adding at the end the following new
subsection:
``(f) Refund and Abatement of Penalties and Fines Paid by
Eligible Individuals.--
``(1) In general.--
``(A) Establishment.--Not later than January 1, 2027, the
Secretary (in consultation with the Secretary of State and
the Attorney General) shall establish a program to allow any
eligible individual (or the spouse or any dependent (as
defined in section 152) of such individual) to apply for a
refund or an abatement of any amount described in paragraph
(2) (including interest) to the extent such amount was
attributable to the applicable period.
``(B) Identification of individuals.--Not later than
January 1, 2027, the Secretary of State and the Attorney
General, acting through the Hostage Recovery Fusion Cell (as
described in section 304 of the Robert Levinson Hostage
Recovery and Hostage-Taking Accountability Act (22 U.S.C.
1741b)), shall--
``(i) compile a list, based on such information as is
available, of individuals who were applicable individuals
during the applicable period, and
``(ii) provide the list described in clause (i) to the
Secretary.
``(C) Notice.--For purposes of carrying out the program
described in subparagraph (A), the Secretary (in consultation
with the Secretary of State and the Attorney General) shall,
with respect to any individual identified under subparagraph
(B), provide notice to such individual--
``(i) in the case of an individual who has been released on
or before the date of enactment of this subsection, not later
than 90 days after the date of enactment of this subsection,
or
``(ii) in the case of an individual who is released after
the date of enactment of this subsection, not later than 90
days after the date on which such individual is released,
that such individual may be eligible for a refund or an
abatement of any amount described in paragraph (2) pursuant
to the program described in subparagraph (A).
``(D) Authorization.--
``(i) In general.--Subject to clause (ii), in the case of
any refund described in subparagraph (A), the Secretary shall
issue such refund to the eligible individual in the same
manner as any refund of an overpayment of tax under section
6402.
``(ii) Extension of limitation on time for refund.--With
respect to any refund under subparagraph (A)--

``(I) the 3-year period of limitation prescribed by section
6511(a) shall be extended until the end of the 1-year period
beginning on the date that the notice described in
subparagraph (C) is provided to the eligible individual, and
``(II) any limitation under section 6511(b)(2) shall not
apply.

``(2) Eligible individual.--For purposes of this
subsection, the term `eligible individual' means any
applicable individual who, for any taxable year ending during
the applicable period, paid or incurred any interest,
penalty, additional amount, or addition to the tax in respect
to any tax liability for such year of such individual based
on a determination that an act described in section
7508(a)(1) which was not performed by the time prescribed
therefor (without regard to any extensions).
``(3) Applicable period.--For purposes of this subsection,
the term `applicable period' means the period--
``(A) beginning on January 1, 2021, and
``(B) ending on the date of enactment of this
subsection.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending on or before the date of
enactment of this Act.

TITLE IX--SMALL BUSINESSES

SEC. 901. IMPLEMENTATION OF VOLUNTARY WITHHOLDING AGREEMENTS
FOR PAYMENTS TO INDEPENDENT CONTRACTORS.

(a) In General.--Section 3402(p) is amended by
redesignating paragraph (3) as paragraph (4) and by inserting
after paragraph (2) the following new paragraph:
``(3) Voluntary withholding on certain non-wage
remuneration.--
``(A) In general.--If, at the time a payment of applicable
non-wage remuneration is made to any person, there is a
voluntary agreement in effect between the person making and
the person receiving the payment that the applicable non-wage
remuneration be subject to withholding, then for purposes of
this chapter and so much of subtitle F as relates to this
chapter, such payment shall be treated as if it were a
payment of wages by an employer to an employee.
``(B) Applicable non-wage remuneration.--For purposes of
this subsection, the term `applicable non-wage remuneration'
means remuneration for services performed by an individual
which (without regard to this paragraph) does not constitute
wages.
``(C) Regulations and guidance.--Not later than the date
that is 18 months after the date of the enactment of this
subparagraph, the Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry
out the provisions of this section, including such
regulations or guidance for determining the amount to be
deducted and withheld and the types of payments which are
considered to be applicable non-wage remuneration.''.

SEC. 902. EXTENSION OF MAILBOX RULE TO ELECTRONIC SUBMISSIONS
AND PAYMENTS.

(a) In General.--Section 7502(c) is amended--
(1) in the heading, by inserting ``and Payment'' after
``Filing'',

[[Page S5293]]

(2) in paragraph (2)--
(A) in the heading, by striking ``; electronic filing'',
and
(B) by striking ``and electronic filing'', and
(3) by adding at the end the following:
``(3) Electronic filing and payment.--
``(A) In general.--In the case of any document or payment
which the Secretary has permitted to be filed or made by
electronic means, if such document or payment is--
``(i) authorized to be submitted by the taxpayer using a
permitted electronic means to the agency, officer, or office
to which the document was required to be filed (or payment
was required to be made) on or before the prescribed date (or
within the period required) with respect to such document or
payment, and
``(ii) received (or, in the case of a payment, received and
accounted for) no later than 3 business days after the
prescribed date or period required with respect to such
document or payment,
the date that such document or payment was authorized to be
submitted (as described in clause (i)) shall be deemed to be
the date that such document was filed or such payment was
made.
``(B) Exception.--This paragraph shall not apply to any
payment if the Secretary determines that the taxpayer (or any
intermediary used by the taxpayer) used a system designed
with a principal purpose of delaying the transfer of funds to
the Treasury to derive economic benefit from the period of
such delay.
``(C) Regulations.--Not later than the date which is 1 year
after the date of enactment of the Taxpayer Assistance and
Service Act, the Secretary shall issue such regulations or
other guidance as the Secretary determines necessary to carry
out the purposes of this paragraph, including regulations or
other guidance describing the records or proof sufficient to
demonstrate timely electronic submission.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to any document or payment sent on or after the
date which is 1 year after the date of enactment of this Act.

SEC. 903. SPECIFICITY OF THIRD-PARTY CONTACT NOTICES.

(a) In General.--Paragraph (1) of section 7602(c) is
amended--
(1) by striking ``and'' at the end of subparagraph (A),
(2) by redesignating subparagraph (B) as subparagraph (C)
and by inserting after subparagraph (A) the following new
subparagraph:
``(B) in any case in which the information sought to be
obtained from such other persons could reasonably be provided
by the taxpayer, identifies the item of information intended
to be sought from such persons, and'', and
(3) by amending subparagraph (C), as redesignated by
paragraph (2), to read as follows:
``(C) provides the taxpayer with reasonable opportunity and
a period of not less than 45 days (or more, if the taxpayer
requests additional time and shows reasonable cause) to
respond, including by providing the information described in
subparagraph (B), before contact is made with such other
persons.''.
(b) Exception.--Section 7602(c)(3) is amended--
(1) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively, and by moving
such clauses 2 ems to the right,
(2) by striking ``This subsection'' and inserting the
following:
``(A) In general.--This subsection'', and
(3) by adding at the end the following new subparagraph:
``(B) Good cause.--For purposes of subparagraph (A)(ii),
good cause includes a reasonable belief that compliance with
this subsection will lead to--
``(i) attempts by any person to conceal, remove, destroy,
or alter records or assets that may be relevant to any tax
examination or collection activity;
``(ii) attempts by any person to prevent other persons,
through intimidation, bribery, or collusion, from
communicating any information that may be relevant to any tax
examination or collection activity; or
``(iii) attempts by any person to flee, or otherwise avoid
testifying or producing records that may be relevant to any
tax examination or collection activity.''.
(c) Effective Date.--The amendments made by this section
shall apply to notices provided under section 7602(c) of the
Internal Revenue Code of 1986 after the date that is 12
months after the date of the enactment of this Act.

SEC. 904. MODIFICATION OF ESTIMATED TAX RULES FOR FARMERS AND
FISHERMEN.

(a) In General.--Section 6654(i)(1)(D)(i) is amended by
striking ``March 1'' and inserting ``April 15''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 905. BUSINESS CHILD CARE LIAISON.

Section 7803 is amended by adding at the end the following
new subsection:
``(g) Business Child Care Liaison.--
``(1) In general.--The Commissioner of Internal Revenue
shall appoint within the Internal Revenue Service a Business
Child Care Liaison. The appointment shall be made without
regard to the provisions of title 5, United States Code,
relating to appointments in the competitive service or Senior
Executive Service. At the Commissioner's discretion, the
Commissioner may create an office with additional support
staff to assist the Business Child Care Liaison in carrying
out the duties described in this subsection.
``(2) Duties.--The Business Child Care Liaison shall--
``(A) act as a liaison between the Internal Revenue
Service, employer-provided child care benefit advocates,
businesses considering providing or expanding child care
benefits for their employees, state workforce boards, state
economic development agencies, child care resource and
referral agencies, tribal organizations (as defined in
section 4(l) of the Indian Self-Determination and Education
Assistance Act), and other stakeholders, including child
development experts,
``(B) provide public education and assistance related to
the expansion of employer-provided child care benefits
through the establishment and maintenance of practices that
promote employer-provided child care benefits, including the
use of dependent care assistance programs (as defined in
section 129(d)), on-site or subsidized child care, Dependent
Care Flexible Spending Accounts, child care stipends, near-
site child care partnerships, shared and pooled child-care
arrangements, backup child care, and resource and referral
services,
``(C) issue a fact sheet for use by tax return preparers
listing the different tax benefits for employer-provided
child care and the appropriate rules for each such benefit,
``(D) help facilitate communication between businesses and
the Internal Revenue Service about the operational challenges
and opportunities that exist to improve the use of Federally
incentivized child care benefits such as dependent care
assistance programs (as so defined), Dependent Care Flexible
Spending Accounts, and the credit under section 45F,
``(E) in collaboration with the General Services
Administration, within 120 days of the date of the enactment
of this subsection, establish a link on the homepage of
SAM.gov, which allows website visitors to access a landing
page on the SAM.gov website which is tailored to helping
businesses learn about utilizing dependent care assistance
programs (as so defined), Dependent Care Flexible Spending
Accounts, and the credit under section 45F, resources for
understanding the rules and regulations with these programs,
and the benefits of utilizing these programs on worker
recruitment, retention, productivity, and well-being,
``(F) identify and recommend to Congress potential
legislative and administrative changes to increase practices
that promote employer-provided child care benefits, and
``(G) coordinate with other Federal agencies and officials,
including the Secretary, the Administrator of the Small
Business Administration, the Secretary of Commerce, the
Secretary of Health and Human Services, the Secretary of the
Interior, the Secretary of Labor, and the Secretary of
Education, or the designee of any such individual, and State
and local governments on outreach and education to inform
employers and employees about the possibilities and benefits
of employer-provided child care benefits and particularly
reducing information barriers for small businesses.
``(3) Consultation and input.--The Commissioner of Internal
Revenue shall solicit advice and input from the Business
Child Care Liaison in developing regulations or
interpretations of this title that relate to employer-
provided child care benefits.
``(4) Compensation.--The Business Child Care Liaison shall
be entitled to compensation at the same rate as the rate of
basic pay in effect for a position at level V of the
Executive Schedule under section 5316 of title 5, United
States Code.
``(5) Annual report.--
``(A) In general.--Not later than December 31 of each
calendar year beginning after the date of the enactment of
this subsection, the Business Child Care Liaison shall submit
a report to the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives
on the activities of the Business Child Care Liaison during
the fiscal year ending during such calendar year.
``(B) Contents.--Each report submitted pursuant to
subparagraph (A) shall--
``(i) summarize the assistance requests received by the
Business Child Care Liaison during the fiscal year ending
during the calendar year of such report,
``(ii) describe the activities conducted by the Business
Child Care Liaison, including the activities described under
subparagraphs (B) and (F) of paragraph (2), and evaluate the
effectiveness of the Business Child Care Liaison during such
fiscal year,
``(iii) describe any significant problems the Business
Child Care Liaison has identified during such fiscal year and
ways to mitigate such problems,
``(iv) contain recommendations for any administrative or
legislative action which may be appropriate to resolve
barriers to, and to incentivize, practices which promote
employer-provided child care benefits, and
``(v) describe progress related to employer-provided child
care benefits in businesses in the United States, including
data updated at least annually on the utilization of
dependent care assistance programs, Dependent Care Flexible
Spending Accounts, and the credit under section 45F, in
particular--

[[Page S5294]]

``(I) the number of employers utilizing these tax benefits,
``(II) a breakdown of the size of employers utilizing these
tax benefits, and
``(III) other relevant information as deemed appropriate by
the Business Child Care Liaison.

``(C) Concurrent submission.--The Business Child Care
Liaison shall submit a copy of each report submitted pursuant
to subparagraph (A) to the Commissioner of Internal Revenue,
and any other appropriate official, at the same time such
report is submitted pursuant to such subparagraph.
``(D) Public availability.--The Commissioner shall make a
copy of each report submitted pursuant to subparagraph (A)
available and widely accessible to the public.''.

TITLE X--MISCELLANEOUS

SEC. 1001. AUTHORITY FOR REDISCLOSURE OF CERTAIN TAX
INFORMATION RELATED TO EDUCATION LOANS TO THE
CONGRESSIONAL BUDGET OFFICE.

(a) In General.--Section 6103(l)(13)(D) is amended by
adding at the end the following new clause:
``(vii) Redisclosure to the congressional budget office.--
Authorized persons may, upon written request by the Director
of the Congressional Budget Office to the Secretary of
Education, redisclose return information received under
subparagraphs (A), (B), and (C) to officers and employees of
the Congressional Budget Office for the purpose of, but only
to the extent necessary in, carrying out the purposes
described in subclause (III) of clause (i).''.
(b) Conforming Amendment.--Section 6103(l)(13)(F) is
amended by striking ``(iv) (v), or (vi)'' and inserting
``(iv), (v), (vi), or (vii)''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures made after the date of the
enactment of this Act.
(d) Reports.--The Secretary of Education shall annually
submit a written report to the Secretary of the Treasury--
(1) regarding redisclosures of return information under
subparagraph (D)(vii) of section 6103(l)(13) of the Internal
Revenue Code of 1986 (as added by this section), including
the number of such redisclosures; and
(2) regarding any unauthorized use, access, or disclosure
of return information disclosed under such section.

SEC. 1002. AUTHORIZATION TO REQUIRE LARGE PARTNERSHIPS TO
FILE ON MAGNETIC MEDIA.

(a) In General.--Section 6011(e) is amended--
(1) by striking the first paragraph (6), as added by
section 2301(b) of the Taxpayer First Act, and inserting the
following:
``(6) Partnerships required to file on magnetic media.--
Notwithstanding paragraph (2)(A), the Secretary shall require
a partnership to file returns on magnetic media if, at the
close of the partnership's taxable year--
``(A) the partnership has more than 50 partners, or
``(B) the value of the partnership's assets equals or
exceeds $1,000,000, as determined under regulations
prescribed by the Secretary.'', and
(2) by redesignating the second paragraph (6), as added by
section 202(d) of the Setting Every Community Up for
Retirement Enhancement Act of 2019, as paragraph (7).
(b) Effective Date.--The amendments made by this section
shall apply to returns filed on or after January 1 of the
first calendar year beginning after the date of enactment of
this Act.

SEC. 1003. LIMITATION PERIOD NOT EXTENDED FOR VICTIMS OF
PREPARER FRAUD.

(a) In General.--Section 6501(c)(1) is amended--
(1) by inserting ``by the taxpayer'' after ``intent'', and
(2) by adding at the end the following new sentence: ``For
purposes of this paragraph, in the case of a joint return
under section 6013, intent by either spouse to evade tax with
respect to such return shall be treated as intent by the
taxpayer, and this paragraph shall apply to both spouses.''.
(b) Effective Date.--The amendments made by this section
shall apply to assessments made or proceedings begun after
the date of enactment of this Act.

SEC. 1004. TECHNICAL AMENDMENT RELATED TO THE DISASTER
RELATED EXTENSION OF DEADLINES ACT.

(a) In General.--Subsection (f) of section 7508A (as added
by the Disaster Related Extension of Deadlines Act) is
redesignated as subsection (g).
(b) Effective Date.--The amendment made by this section
shall take effect as if included in section 2(a) of the
Disaster Related Extension of Deadlines Act.

SEC. 1005. TIME FOR FILING CERTAIN INFORMATION RETURNS.

(a) In General.--Section 6071(b) is amended--
(1) by striking ``Returns made under'' and inserting the
following:
``(1) In general.--Returns made under'', and
(2) by adding at the end the following new paragraph:
``(2) Special rule for certain returns.--
``(A) In general.--In the case of any return to which this
paragraph applies and which is filed electronically, such
return shall be filed on or before January 31 of the year
following the calendar year to which such return relates.
``(B) Returns.--This paragraph shall apply to any return
required to be filed under section 6041 (other than returns
and statements required to be filed with respect to
nonemployee compensation), 6042, 6047(d), 6049, 6050F, or
6050W.''.
(b) IRA Reporting.--Section 408(i)(1) is amended by
inserting ``(but not later than January 31 of the calendar
year following the calendar year to which reports relate in
the case of reports relating to distributions)'' after ``at
such time''.
(c) Effective Date.--The amendments made by this section
shall apply to returns relating to calendar years after
December 31, 2027.

SEC. 1006. MODIFICATIONS TO PENALTIES FOR UNAUTHORIZED
DISCLOSURES OF TAXPAYER INFORMATION.

(a) Criminal Penalties.--
(1) In general.--Paragraphs (1), (2), (3), (4), and (5) of
section 7213(a) are each amended by striking ``$5,000, or
imprisonment of not more than 5 years'' each place it appears
and inserting ``$250,000, or imprisonment of not more than 7
years''.
(2) Failure of contractors to maintain safeguards.--
(A) In general.--Part I of subchapter A of chapter 75 of
subtitle F is amended by inserting after section 7213A the
following new section:

``SEC. 7213B. FAILURE OF IRS CONTRACTORS TO MAINTAIN
SAFEGUARDS.

``(a) In General.--In the case of a contractor of the
Internal Revenue Service that willfully fails to implement or
enforce any applicable requirement under section 6103 (or
regulations prescribed thereunder) to protect the
confidentiality of returns or return information, if such
failure results in the unauthorized disclosure of returns or
return information, such contractor shall be guilty of a
felony and, upon conviction thereof, shall be fined the
greater of--
``(1) $500,000, or
``(2) an amount equal to 25 percent of the specific
contract with the Internal Revenue Service under which such
contractor was provided access to the returns or return
information related to the unauthorized disclosure.
``(b) Definitions.--For purposes of this section, the term
`contractor of the Internal Revenue Service' means any person
described in section 6103(n) (including any officer or
employee of such person) in connection with a written
contract with the Internal Revenue Service.''.
(B) Clerical amendment.--The table of sections for part I
of subchapter A of chapter 75 of subtitle F is amended by
inserting after the item relating to section 7213A the
following new item:

``Sec. 7213B. Failure of IRS contractors to maintain safeguards.''.
(C) Conforming amendments.--
(i) Section 6103(e)(11) is amended by inserting ``7213B,''
after ``7213A,''.
(ii) Section 6105(d) is amended by inserting ``7213B,''
after ``7213A,''.
(iii) Section 7431(e) is amended by striking the first
sentence and inserting the following: ``If any person is
criminally charged by indictment or information with--
``(1) inspection or disclosure of a taxpayer's return or
return information in violation of--
``(A) paragraph (1) or (2) of section 7213(a),
``(B) section 7213A(a), or
``(C) subparagraph (B) of section 1030(a)(2) of title 18,
United States Code, or
``(2) failure to protect the confidentiality of returns or
return information which results in the unauthorized
disclosure of the taxpayer's return or return information in
violation of section 7213B(a),
the Secretary shall notify such taxpayer as soon as
practicable of such inspection or disclosure.''.
(iv) Section 7513(c) is amended by striking ``section
7213'' and inserting ``sections 7213 and 7213B''.
(b) Civil Damages.--Section 7431(c)(1)(A) is amended by
striking ``$1,000'' and inserting ``$5,000''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures or inspections made after the date
of the enactment of this Act.
______