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TAS Act
Introduced Feb 26, 2026 · Last action Feb 26, 2026 — Read twice and referred to the Committee on Finance.
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Summary
This legislation is called the TAS Act. It is being reviewed by a committee.
Full bill text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3931 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 3931
To improve services provided to taxpayers by the Internal Revenue
Service.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 26, 2026
Mr. Crapo (for himself and Mr. Wyden) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To improve services provided to taxpayers by the Internal Revenue
Service.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer
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. Simplification of currency exchanges rules.
Sec. 204. Increase in threshold for simplified foreign tax credit rules
and reporting.
Sec. 205. Extension of time for persons outside of the United States to
request abatement of math error.
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 use deficiency procedures for certain
penalties.
Sec. 312. Authorization to allow claims for refund in certain cases
where full tax not paid.
Sec. 313. Adjustment of threshold for small disputes.
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. Penalties for failure to provide valid preparer
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. Establishment of failure-to-pay penalty safe harbor for
individuals.
Sec. 903. Extension of mailbox rule to electronic submissions and
payments.
Sec. 904. Specificity of third-party contact notices.
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.
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
practicable, 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.
(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--
``(A) 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), or
``(B) any taxpayer which has--
``(i) entered into the installment
agreement using the public website of the
Internal Revenue Service, and
``(ii) agreed to make payments under the
installment agreement by electronic payment
through a debit instrument.''.
(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.
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 (b), 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 from such taxpayer
after acceptance of the 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
``(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, and
(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.
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 of the Treasury (or the
Secretary's delegate) 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 of the Treasury (or the Secretary's delegate)
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 goals described in paragraphs (1)
and (2) of subsection (a).
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;
(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 the 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 the Treasury to
address any problems identified by the Comptroller General in
such report; and
(2) any legislation necessary to address such problems.
SEC. 203. SIMPLIFICATION OF CURRENCY EXCHANGES RULES.
(a) Increase in Threshold for Exclusion for Personal
Transactions.--
(1) In general.--The second sentence of section 988(e)(2)
is amended by striking ``$200'' and inserting ``$1,000''.
(2) Inflation adjustment.--Section 988(e) is amended by
adding at the end the following new paragraph:
``(4) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning after 2025, the $1,000 amount in paragraph
(2) 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 in which the taxable year begins,
determined by substituting in subparagraph
(A)(ii) thereof `calendar year 2024' for
`calendar year 2016'.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $50, such dollar
amount shall be rounded to the next lowest multiple of
$50.''.
(b) Foreign Currency Losses Related to Sales of Personal
Residences.--
(1) In general.--Section 165(c) is amended by striking
``and'' at the end of paragraph (2), by striking the period at
the end of paragraph (3) and inserting a comma, and by adding
at the end the following new paragraphs:
``(4) foreign currency losses not described in paragraph
(1) or (2) with respect to qualified mortgage debt, but only to
the extent of any gain recognized during the taxable year on
the sale of a qualified residence (as defined in section
163(h)(5)) which is located outside of the United States or any
possession of the United States and which secures such
qualified mortgage debt, and
``(5) losses (not described in paragraph (1) or (2)) from
the sale or exchange of a qualified residence (as so defined)
which is located outside of the United States or any possession
of the United States, but only to the extent of any foreign
currency gain recognized during the taxable year with respect
to qualified mortgage debt secured by such qualified
residence.''.
(2) Qualified mortgage debt.--Section 165 is amended by
redesignating subsection (m) as subsection (n) and by inserting
after subsection (l) the following new subsection:
``(m) Definitions Related to Qualified Mortgage Debt and Foreign
Currency Gains and Losses.--For purposes of this section--
``(1) Qualified mortgage debt.--The term `qualified
mortgage debt' means--
``(A) any acquisition indebtedness (as defined in
section 163(h)(3)(B), determined without regard to
clause (ii) thereof) of an individual,
``(B) any home equity indebtedness (as defined in
section 163(h)(3)(C), determined without regard to
clause (ii) thereof) of an individual, and
``(C) any other indebtedness (including any non-
debt that functions as debt) which is related to the
purchase or ownership of real estate by, or for the
benefit of, individuals and which is approved under
regulations or guidance provided by the Secretary.
``(2) Foreign currency loss.--The term `foreign currency
loss' means, with respect to any qualified mortgage debt, any
loss which would be described in section 988(b)(2) if the
transaction involving the qualified mortgage debt were treated
as a section 988 transaction.
``(3) Foreign currency gain.--The term `foreign currency
gain' means, with respect to any qualified mortgage debt, any
gain which would be described in section 988(b)(1) if the
transaction involving the qualified mortgage debt were treated
as a section 988 transaction.''.
(3) Character and source of loss.--Section 165(f) is
amended to read as follows:
(A) by striking ``Losses from'' and inserting the
following:
``(1) In general.--Losses from'', and
(B) by adding at the end the following new
paragraph:
``(2) Special rule for amounts attributable to qualified
mortgage debt.--The character and source of any foreign
currency loss with respect to qualified mortgage debt which is
allowed under section 165(c)(4) shall be the same character and
source as the character and source of the gain on the sale of
the qualified residence which secures such qualified mortgage
debt.
``(3) Special rule for losses from the sale or exchange of
qualified residences.--The character and source of any loss
from the sale or exchange of a qualified residence which is
allowed under subsection (c)(5) shall be the same character and
source as the character and source of the gain of the qualified
mortgage debt secured by such qualified residence.''.
(4) Treatment of foreign currency loss deduction.--Section
62(a) is amended by inserting after paragraph (21) the
following new paragraph:
``(22) Certain foreign currency losses.--The deduction
allowed by section 165(c)(4).''.
(c) Special Rule for Home Mortgage Refinancing Transactions.--
Section 989 is amended by redesignating subsection (c) as subsection
(d) and by inserting after subsection (b) the following new subsection:
``(c) Special Rule for Home Mortgage Refinancing Transactions.--In
the case of the refinancing of any qualified mortgage debt (as defined
in section 165(m)) in a nonfunctional currency--
``(1) no foreign currency gain or loss shall be recognized,
and
``(2) the amount of foreign currency gain or loss on the
repayment of such debt shall be determined by reference to the
liability of the borrower at the time the debt was originally
incurred (as determined under regulations or other guidance
prescribed by the Secretary).''.
(d) Election To Use Average Exchange Rate With Respect to Certain
Foreign Currency Transactions.--Section 989, as amended by subsection
(c), is further amended by redesignating subsection (d) as subsection
(e) and by inserting after subsection (c) the following new subsection:
``(d) Election To Aggregate Transaction With Respect to Foreign
Earned Income.--
``(1) In general.--In the case of a qualified individual
who makes an election under this subsection--
``(A) all transactions during a calendar year which
involve an item of qualified income or expense shall be
treated as 1 transaction, and
``(B) the amount of foreign currency gain or loss
attributable to such transaction shall be determined by
using the average exchange rate for the calendar year.
``(2) Qualified individual.--For purposes of this
subsection, the term `qualified individual' has the meaning
given such term under section 911(d)(1).
``(3) Item of qualified income or expense.--For purposes of
this subsection, the term `item of qualified income or expense'
means--
``(A) foreign earned income (as defined in section
911(b)(1)(A), determined without regard to section
911(b)(1)(B)), and
``(B) any other item of income or expense specified
by the Secretary in regulations.''.
(e) Effective Date.--The amendments made by this section shall
apply to transactions in taxable years beginning after the date of the
enactment of this Act.
SEC. 204. INCREASE IN THRESHOLD FOR SIMPLIFIED FOREIGN TAX CREDIT RULES
AND REPORTING.
(a) In General.--Subparagraph (B) of section 904(j)(2) is amended
by striking ``$300 ($600'' and inserting ``$1,000 ($2,000''.
(b) Inflation Adjustment.--Section 904(j) is amended by adding at
the end the following new paragraph:
``(4) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2025, each of the
dollar amounts under paragraph (2)(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 in which the taxable year begins,
determined by substituting in subparagraph
(A)(ii) thereof `calendar year 2024' for
`calendar year 2016'.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $50, such dollar
amount shall be rounded to the next lowest multiple of
$50.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 205. 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.
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.
``(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 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 of
the Treasury (or the Secretary's delegate) 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
paragraph:
``(A) 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)(ii),
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 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) Effective Date.--The amendment made by this section shall apply
to petitions and requests filed or pending on or after the date of the
enactment of this Act.
(c) No Inference.--Nothing in the amendment 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.--The deadlines
for filing petitions under sections 6015(e)(1)(A), 6213(a), and
6330(d)(1)(A) shall be considered nonjurisdictional claims-processing
rules subject to waiver, forfeiture, estoppel and equitable tolling.''.
(2) Conforming amendment.--Section 7459(d) is amended--
(A) by striking ``If a petition'' and inserting the
following:
``(1) In general.--If a petition'',
(B) by inserting ``, unless the dismissal is for
lack of jurisdiction'' after ``determined by the
Secretary'',
(C) by striking ``, or unless the dismissal is for
lack of jurisdiction'', and
(D) by adding at the end the following new
paragraph:
``(2) Exception.--Paragraph (1) shall not apply with
respect to any dismissal which is solely based on a decision of
the Tax Court that equitable tolling does not apply to extend
the deadline for filing a petition.''.
(b) Tolling of Time in Certain Cases.--Section 7451(c), as
redesignated by subsection (a), 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 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), 6213(a),
or 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 (other than through a suit for a refund under section
7442(b))'' 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) Conforming Amendment.--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)''.
(c) Effective Date.--The amendments made by this section shall
apply to cases pending on or after 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) 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''.
(c) 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 USE DEFICIENCY PROCEDURES FOR CERTAIN
PENALTIES.
(a) In General.--Chapter 63 is amended by adding at the end the
following new subchapter:
``Subchapter D--Treatment of Penalties
``Sec. 6251. Assessment of certain penalties under deficiency
procedures.
``SEC. 6251. ASSESSMENT OF CERTAIN PENALTIES UNDER DEFICIENCY
PROCEDURES.
``(a) In General.--The Secretary may treat the amount of any
applicable penalty as a deficiency of tax to which subchapter B applies
(and such deficiency may be assessed as provided in such subchapter).
``(b) Applicable Penalty.--For purposes of this section--
``(1) In general.--The term `applicable penalty' means any
penalty imposed under this title which the Secretary identifies
in guidance as not otherwise assessable (determined without
regard to this section).
``(2) Exception.--Such term shall not include any penalty
expressly required to be recovered in a civil or criminal
action.
``(c) Special Rules.--
``(1) Limitation on assessment after notice of
deficiency.--If the Secretary sends a notice of deficiency with
respect to an applicable penalty as provided in section 6212,
the Secretary may not thereafter, except as otherwise provided
in sections 6213 and 6215, assess such penalty for the same
taxable period or with respect to the same act (or failure to
act) occurring before the date of such notice unless such
notice has been rescinded as provided in section 6212(d).
``(2) Additional deficiency letters restricted.--If the
Secretary has mailed to the taxpayer a notice of deficiency as
provided in section 6212(a) with respect to an applicable
penalty, and the taxpayer files a petition with the Tax Court
within the time prescribed in section 6213(a), the Secretary
shall have no right to determine any additional deficiency with
respect to an act (or failure to act) to which such petition
relates.
``(3) Exceptions.--Paragraphs (1) and (2) shall not apply
to any penalty imposed under section 6038(b)(2), 6038A(d)(2),
or 6038D(d)(2).
``(4) Coordination with other provisions.--Any applicable
penalty treated as a deficiency under this section shall be
subject to the requirements of sections 6212, 6213, 6214, 6215,
6503, and, as applicable, 6751(b).''.
(b) Conforming Amendment.--The table of subchapters for chapter 63
is amended by adding at the end the following new item:
``subchapter d--treatment of penalties''.
(c) No Inference.--Nothing in the amendments made by this section
shall be construed to create any inference with respect to the
treatment of any applicable penalty (as defined in section 6251(b) of
the Internal Revenue Code of 1986, as added by subsection (a)) before
the date of the enactment of this Act.
SEC. 312. 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 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
tax 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 tax 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--
``(A) such amount--
``(i) 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
``(ii) has been determined by the Secretary
to be not collectible (within the meaning of
section 6343(e)), and
``(B) there is no pending procedural period with
respect to such amount.
``(3) Pending procedural period.--For purposes of paragraph
(2)(B), there is a pending procedural period with respect to an
amount if--
``(A) a notice has been provided under section 6320
or 6330 with respect to such amount, and
``(B)(i) the time period under such notice for
requesting a hearing has not expired,
``(ii) a hearing has been requested, or
``(iii) the period under section 6330(d)(1) for
appealing any determination of all issues considered at
such a hearing has not expired.
``(4) 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.
``(5) Prohibition on collection of disallowed liability.--
If the court redetermines under paragraph (1) the correct
amount of tax 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. 313. ADJUSTMENT OF THRESHOLD FOR SMALL DISPUTES.
(a) In General.--Section 7463 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 or appeal
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) Conforming Amendments.--
(1) The heading for section 7463 is amended by striking
``disputes involving $50,000 or less'' and inserting ``small
disputes''.
(2) 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''.
(c) 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.
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.
Notwithstanding section 1341(a) of title 31, United States Code,
during any lapse in appropriations, the Commissioner and the Office of
the Taxpayer Advocate may incur obligations in advance of
appropriations for such amounts as may be 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) for the purpose of complying 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. PENALTIES FOR FAILURE TO PROVIDE VALID PREPARER
IDENTIFICATION NUMBERS.
(a) In General.--Section 6695 is amended--
(1) 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.'',
(2) by redesignating subsection (h) as subsection (i),
(3) 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 return or claim for refund who
fails to use, with respect to such return or claim, an
electronic filing identification number which is assigned to
such person by the Secretary, 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) 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 returns or claims for refund on behalf of
other taxpayers.
``(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 to a person
described in such subclause,
``(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 an
identification number assigned by the Secretary
to a person authorized to file returns in
electronic format on behalf of other taxpayers.
``(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).'', and
(4) in subsection (i)(1), as redesignated by paragraph (2),
by striking ``and (g)'' and inserting ``(g), and (h)''.
(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
include an electronic filing identification
number (as defined in section 6695(h)(2)(B) of
such Code), 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 the Department of the
Treasury and 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:
``(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.
``(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 is amended by adding at the end
the following new subsection:
``(h) 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 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 a position which--
``(i) a Federal court has determined to be
frivolous, and
``(ii) the Secretary has identified as
frivolous for purposes of subsection (c) of
section 6702.
``(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,
(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.'', and
(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, including--
``(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
agreement or compromise under section 6159 or
7122, or
``(iv) any exercise of discretion by the
Secretary with respect to any determination
described in clauses (i) through (iii).
``(B) Exceptions.--Subparagraph (A) shall not apply
with respect to any appeal--
``(i) which is solely based on a challenge
to the constitutionality or validity of any
law, regulation, notice, revenue ruling, or
revenue procedure issued by the Secretary,
unless there is a final and unreviewable
decision rendered by a Federal court that the
relevant provision of such law, regulation,
notice, revenue ruling, or revenue procedure
which is being challenged is unconstitutional
or otherwise 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, or
``(II) 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) Federal tax controversy.--For purposes of
this paragraph, 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).''.
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).
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.
``(3) Special rule for overpayments.--The rules of section
7508(b) shall apply for purposes of this section.
``(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. 1741(b))).
``(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) 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.
``(d) 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:
``(e) 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. 1741(b))), 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
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Status
In Committee
- 1Introduced
- 2Committee
- 3Floor
- 4Passed
- 5Signed
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Sponsors
- Rep. Crapo, Mike [R-ID-2]RHouseID
Cosponsors
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