[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1578 Introduced in Senate (IS)]
114th CONGRESS
1st Session
S. 1578
To amend the Internal Revenue Code of 1986 to enhance taxpayer rights,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 16, 2015
Mr. Grassley (for himself and Mr. Thune) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to enhance taxpayer rights,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Taxpayer Bill of
Rights Enhancement Act of 2015''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--TAXPAYER BILL OF RIGHTS AND INTERNAL REVENUE SERVICE
ACCOUNTABILITY
Sec. 101. Duty to ensure that IRS employees are familiar with and act
in accord with certain taxpayer rights.
Sec. 102. Revisions relating to termination of employment of IRS
employees for misconduct.
Sec. 103. Codification of rules for retention of Internal Revenue
Service emails.
TITLE II--THE RIGHT TO PRIVACY
Sec. 201. Criminal penalty for unauthorized disclosure or inspection.
Sec. 202. Civil damages for unauthorized disclosure or inspection.
Sec. 203. IRS employees prohibited from using personal email accounts
for official business.
Sec. 204. Compliance by contractors with confidentiality safeguards.
TITLE III--THE RIGHT TO APPEAL IN AN INDEPENDENT FORUM AND TO CHALLENGE
THE INTERNAL REVENUE SERVICE POSITION AND BE HEARD
Sec. 301. Increase in limitations on civil damages for certain
unauthorized collection actions.
Sec. 302. Extension of time limit for contesting IRS levy.
Sec. 303. Expansion of declaratory judgment remedy to tax-exempt
organizations.
TITLE IV--THE RIGHT TO A FAIR AND JUST TAX SYSTEM
Sec. 401. Waiver of user fee for installment agreements using automated
withdrawals.
Sec. 402. Individuals held harmless on improper levy on individual
retirement plan.
Sec. 403. Office of Chief Counsel review of offers-in-compromise.
Sec. 404. Authority of the National Taxpayer Advocate to comment on
Treasury regulations.
Sec. 405. Individual estimated tax.
Sec. 406. Corporate estimated tax.
Sec. 407. Increase in large corporation threshold for estimated tax
payments.
Sec. 408. Expansion of interest netting.
Sec. 409. Clarification of application of Federal tax deposit penalty.
TITLE V--THE RIGHT TO BE INFORMED
Sec. 501. Collection activities with respect to joint return
disclosable to either spouse based on oral
request.
Sec. 502. Disclosure of taxpayer identity for tax refund purposes.
Sec. 503. Release of information regarding the status of certain
investigations.
Sec. 504. Mandatory electronic filing for annual returns of exempt
organizations.
TITLE VI--THE RIGHT TO QUALIFY SERVICE
Sec. 601. Free electronic filing.
Sec. 602. Access to appeals.
TITLE I--TAXPAYER BILL OF RIGHTS AND INTERNAL REVENUE SERVICE
ACCOUNTABILITY
SEC. 101. DUTY TO ENSURE THAT IRS EMPLOYEES ARE FAMILIAR WITH AND ACT
IN ACCORD WITH CERTAIN TAXPAYER RIGHTS.
(a) In General.--Section 7803(a) of the Internal Revenue Code of
1986 is amended by redesignating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following new paragraph:
``(3) Execution of duties in accord with taxpayer rights.--
In discharging his duties, the Commissioner shall ensure that
employees of the Internal Revenue Service are familiar with and
act in accord with taxpayer rights as afforded by other
provisions of this title, including--
``(A) the right to be informed,
``(B) the right to quality service,
``(C) the right to pay no more than the correct
amount of tax,
``(D) the right to challenge the position of the
Internal Revenue Service and be heard,
``(E) the right to appeal a decision of the
Internal Revenue Service in an independent forum,
``(F) the right to finality,
``(G) the right to privacy,
``(H) the right to confidentiality,
``(I) the right to retain representation, and
``(J) the right to a fair and just tax system.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 102. REVISIONS RELATING TO TERMINATION OF EMPLOYMENT OF IRS
EMPLOYEES FOR MISCONDUCT.
(a) Termination for Taking Official Actions for Political
Purposes.--Paragraph (10) of section 1203(b) of the Internal Revenue
Service Restructuring and Reform Act of 1998 is amended to read as
follows:
``(10) performing, delaying, or failing to perform (or
threatening to perform, delay, or fail to perform) any official
action (including any audit) with respect to a taxpayer for
purpose of extracting personal gain or benefit or for a
political purpose.''.
(b) Notification of Decision Not To Terminate Employment.--Section
1203(c) of the Internal Revenue Service Restructuring and Reform Act of
1998 is amended by adding at the end the following new paragraph:
``(4) Notification.--In any case in which the Commissioner
exercises the authority under paragraph (1), the Commissioner
shall submit to the chairman and ranking member of the
Committee on Finance of the Senate and the chairman and ranking
member of the Committee on Ways and Means of the House of
Representatives of the reasons for taking a personnel action
other than termination.''.
SEC. 103. CODIFICATION OF RULES FOR RETENTION OF INTERNAL REVENUE
SERVICE EMAILS.
(a) Retention of Records.--Email records of the Internal Revenue
Service shall be retained in an appropriate electronic system that
supports records management and litigation requirements, including the
capability to identify, retrieve, and retain the records, in accordance
with this subsection:
(1) Prior to the date on which the Treasury Inspector
General for Tax Administration makes the certification under
subsection (c)(1), the Commissioner of Internal Revenue and the
Chief Counsel for the Internal Revenue Service shall retain all
email records.
(2) Not later than December 31, 2016, the Commissioner of
Internal Revenue and the Chief Counsel for the Internal Revenue
Service shall maintain email records of all principal officers
and specified employees of the Internal Revenue Service for a
period of 15 years beginning on the date such record was
generated.
(b) Transmission of Records to the National Archives.--Not later
than the last day of the 15-year period described in subsection (a)(2),
the Commissioner of Internal Revenue and the Chief Counsel for the
Internal Revenue Service shall transfer the email records of principal
officers of the Internal Revenue Service to the Archivist of the United
States.
(c) Compliance.--
(1) Certification.--On the date that the Treasury Inspector
General for Tax Administration determines that the Internal
Revenue Service has a program in place that complies with the
requirements of subsections (a)(2) and (b), the Treasury
Inspector General for Tax Administration shall certify to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives that the Internal
Revenue Service is in compliance with such requirements.
(2) Reports.--
(A) Interim report.--Not later than March 1, 2016,
the Treasury Inspector General for Tax Administration
shall submit a report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the
House of Representatives on the steps being taken by
the Commissioner of Internal Revenue and the Chief
Counsel for the Internal Revenue Service to comply with
the requirements of subsections (a)(2) and (b).
(B) Final report.--Not later than March 1, 2017,
the Treasury Inspector General for Tax Administration
shall submit a report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the
House of Representatives describing whether the
Internal Revenue Service is in compliance with the
requirements of subsections (a)(2) and (b).
(d) Definitions.--
(1) Principal officers.--For purposes of this section, the
term ``principal officer'' means, with respect to the Internal
Revenue Service--
(A) any employee whose position is listed under the
Internal Revenue Service in the most recent version of
the United States Government Manual published by the
Office of the Federal Register,
(B) any employee who is a senior staff member
reporting directly to the Commissioner of Internal
Revenue, and
(C) any--
(i) associate counsel, deputy counsel, or
division head in the Office of the Chief
Counsel for the Internal Revenue Service, and
(ii) any employee who is a senior staff
member,
who reports directly to such Chief Counsel.
(2) Specified employees.--The term ``specified employee''
means, with respect to the Internal Revenue Service, any
employee who--
(A) holds a Senior Executive Service position (as
defined in section 3132 of title 5, United States Code)
in the Internal Revenue Service or the Office of Chief
Counsel for the Internal Revenue Service), and
(B) is not a principal officer of the Internal
Revenue Service.
TITLE II--THE RIGHT TO PRIVACY
SEC. 201. CRIMINAL PENALTY FOR UNAUTHORIZED DISCLOSURE OR INSPECTION.
(a) Unauthorized Disclosure.--Section 7213 is amended by striking
``$5,000'' each place it appears in subsections (a) and (d) and
inserting ``$20,000''.
(b) Unauthorized Inspection.--Section 7213A(b)(1) is amended by
striking ``$1,000'' and inserting ``$5,000''.
(c) Effective Date.--The amendments made by this section shall
apply to violations occurring after the date of the enactment of this
Act.
SEC. 202. CIVIL DAMAGES FOR UNAUTHORIZED DISCLOSURE OR INSPECTION.
(a) Notice to Taxpayer.--Subsection (e) of section 7431 is amended
by adding at the end the following new sentences: ``The Secretary shall
also notify such taxpayer if the Internal Revenue Service or, upon
notice to the Secretary by a Federal or State agency, if such Federal
or State agency, proposes an administrative determination as to
disciplinary or adverse action against an employee arising from the
employee's unauthorized inspection or disclosure of the taxpayer's
return or return information. The notice described in this subsection
shall include the date of the inspection or disclosure and the rights
of the taxpayer under such administrative determination.''.
(b) Payment Authority Clarified.--
(1) In general.--Section 7431 is amended by adding at the
end the following new subsection:
``(i) Payment Authority.--Claims pursuant to subsection (a)(1)
shall be payable out of funds appropriated under section 1304 of title
31, United States Code.''.
(2) Annual reports of payments.--The Secretary of the
Treasury shall annually report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives regarding payments made from the United States
Judgment Fund under section 7431(i) of the Internal Revenue
Code of 1986.
(c) Burden of Proof for Good Faith Exception Rests With Person
Making Inspection or Disclosure.--Section 7431(b) is amended by adding
at the end the following new flush sentence:
``In any proceeding involving the issue of the existence of good faith,
the burden of proof with respect to such issue shall be on the person
who made the inspection or disclosure.''.
(d) Reports.--Subsection (p) of section 6103 is amended by adding
at the end the following new paragraph:
``(9) Report on willful unauthorized disclosure and
inspection.--As part of the report required by paragraph (3)(C)
for each calendar year, the Secretary shall furnish information
regarding the willful unauthorized disclosure and inspection of
returns and return information, including the number, status,
and results of--
``(A) administrative investigations,
``(B) civil lawsuits brought under section 7431
(including the amounts for which such lawsuits were
settled and the amounts of damages awarded), and
``(C) criminal prosecutions.''.
(e) Increase in Amount of Damages Per Violation.--
(1) In general.--Subparagraph (A) of section 7431(c)(1) is
amended to read as follows:
``(A) the sum of--
``(i) $5,000 for each act of unauthorized
inspection of a return or return information
with respect to which such defendant is found
liable, and
``(ii) $10,000 for each act of unauthorized
disclosure of a return or return information
with respect to which such defendant is found
liable, or''.
(2) Punitive damages.--
(A) In general.--Section 7431(c) is amended by
redesignating paragraphs (2) and (3) as paragraphs (3)
and (4), respectively, and by inserting after paragraph
(1) the following new paragraph:
``(2) in the case of willful inspection or disclosure or an
inspection or disclosure which is the result of gross
negligence, punitive damages, plus''.
(B) Conforming amendment.--Subparagraph (B) of
section 7431(c) is amended to read as follows:
``(B) the actual damages sustained by the plaintiff
as a result of such unauthorized inspection or
disclosure, plus''.
(f) Effective Dates.--
(1) Notice.--The amendment made by subsection (a) shall
apply to determinations made after the date which is 180 days
after the date of the enactment of this Act.
(2) Payment authority.--The amendment made by subsection
(b)(1) shall take effect on the date which is 180 days after
the date of the enactment of this Act.
(3) Burden of proof.--The amendments made by subsection (c)
shall apply to inspections and disclosures occurring on and
after the date which is 180 days after the date of the
enactment of this Act.
(4) Reports.--Subsection (b)(2) and the amendment made by
subsection (d) shall apply to calendar years ending after the
date which is 180 days after the date of the enactment of this
Act.
(5) Increase in damages.--The amendment made by subsection
(e) shall apply to proceedings commenced after the date of the
enactment of this Act.
SEC. 203. IRS EMPLOYEES PROHIBITED FROM USING PERSONAL EMAIL ACCOUNTS
FOR OFFICIAL BUSINESS.
No officer or employee of the Internal Revenue Service may use a
personal email account to conduct any official business of the
Government.
SEC. 204. COMPLIANCE BY CONTRACTORS WITH CONFIDENTIALITY SAFEGUARDS.
(a) In General.--Section 6103(p), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(10) Disclosure to contractors and other agents.--
Notwithstanding any other provision of this section, no return
or return information shall be disclosed to any contractor or
other agent of a Federal, State, or local agency unless such
agency, to the satisfaction of the Secretary--
``(A) has requirements in effect which require each
such contractor or other agent which would have access
to returns or return information to provide safeguards
(within the meaning of paragraph (4)) to protect the
confidentiality of such returns or return information,
``(B) agrees to conduct an on-site review every 3
years (or a mid-point review in the case of contracts
or agreements of less than 3 years in duration) of each
contractor or other agent to determine compliance with
such requirements,
``(C) submits the findings of the most recent
review conducted under subparagraph (B) to the
Secretary as part of the report required by paragraph
(4)(E), and
``(D) certifies to the Secretary for the most
recent annual period that such contractor or other
agent is in compliance with all such requirements.
The certification required by subparagraph (D) shall include
the name and address of each contractor and other agent, a
description of the contract or agreement with such contractor
or other agent, and the duration of such contract or agreement.
The requirements of this paragraph shall not apply to
disclosures pursuant to subsection (n) for purposes of Federal
tax administration.''.
(b) Conforming Amendment.--Subparagraph (B) of section 6103(p)(8)
is amended by inserting ``or paragraph (10)'' after ``subparagraph
(A)''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to disclosures made after the date of the enactment of
this Act.
(2) Certifications.--The first certification under section
6103(p)(10)(D) of the Internal Revenue Code of 1986, as added
by subsection (a), shall be made with respect to the portion of
calendar year 2015 following the date of the enactment of this
Act.
TITLE III--THE RIGHT TO APPEAL IN AN INDEPENDENT FORUM AND TO CHALLENGE
THE INTERNAL REVENUE SERVICE POSITION AND BE HEARD
SEC. 301. INCREASE IN LIMITATIONS ON CIVIL DAMAGES FOR CERTAIN
UNAUTHORIZED COLLECTION ACTIONS.
(a) In General.--Section 7433(b) is amended by striking
``$1,000,000 ($100,000'' and inserting ``$1,500,000 ($150,000''.
(b) Punitive Damages in the Case of Reckless or Intentional
Action.--Subsection (b) of section 7433 is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and by moving such
subparagraphs 2 ems to the right,
(2) by striking ``In any action'' and inserting the
following:
``(1) In general.--In any action'', and
(3) by adding at the end the following new paragraph:
``(2) Punitive damages for willful and reckless actions.--
In any action brought under subsection (a) or petition filed
under subsection (e) in which the defendant is found to be
liable and to have acted recklessly or intentionally, the court
may award the plaintiff punitive damages.''.
(c) Period for Bringing Action.--Paragraph (3) of section 7433(d)
is amended by striking ``the date the right of action accrues'' and
inserting ``the later of the date of on which administrative remedies
available within the Internal Revenue Service have been exhausted or
the date on which the taxpayer reasonably could have discovered that
the actions of the officer or employee were done in disregard of a
provision of this title or any regulation promulgated under this
title''.
(d) Effective Date.--The amendments made by this section shall
apply in the case of proceedings commenced after the date of the
enactment of this Act.
SEC. 302. EXTENSION OF TIME LIMIT FOR CONTESTING IRS LEVY.
(a) Extension of Time for Return of Property Subject to Levy.--
Subsection (b) of section 6343 is amended by striking ``9 months'' and
inserting ``2 years''.
(b) Period of Limitation on Suits.--Subsection (c) of section 6532
is amended--
(1) by striking ``9 months'' in paragraph (1) and inserting
``2 years'', and
(2) by striking ``9-month'' in paragraph (2) and inserting
``2-year''.
(c) Effective Date.--The amendments made by this section shall
apply to--
(1) levies made after the date of the enactment of this
Act, and
(2) levies made on or before such date if the 9-month
period has not expired under section 6343(b) of the Internal
Revenue Code of 1986 (without regard to this section) as of
such date.
SEC. 303. EXPANSION OF DECLARATORY JUDGMENT REMEDY TO TAX-EXEMPT
ORGANIZATIONS.
(a) In General.--Paragraph (1) of section 7428(a) is amended--
(1) in subparagraph (B) by inserting after ``509(a))'' the
following: ``or as a private operating foundation (as defined
in section 4942(j)(3))''; and
(2) by amending subparagraph (C) to read as follows:
``(C) with respect to the initial qualification or
continuing qualification of an organization as an
organization described in section 501(c) (other than
paragraph (3)) or 501(d) which is exempt from tax under
section 501(a), or''.
(b) Court Jurisdiction.--Subsection (a) of section 7428 is amended
in the material following paragraph (2) by striking ``United States Tax
Court, the United States Claims Court, or the district court of the
United States for the District of Columbia'' and inserting the
following: ``United States Tax Court (in the case of any such
determination or failure) or the Court of Federal Claims or the
district court of the United States for the District of Columbia (in
the case of a determination or failure with respect to an issue
referred to in subparagraph (A), (B), or (D) of paragraph (1)),''.
(c) Technical Amendment.--Section 7428, as amended by subsection
(b), is amended by striking ``Claims Court'' each place it appears in
subsection (a), (b)(2), and (c)(1)(C)(iii) and inserting ``Court of
Federal Claims''.
(d) Effective Date.--The amendments made by this section shall
apply to pleadings filed after the date of the enactment of this Act.
TITLE IV--THE RIGHT TO A FAIR AND JUST TAX SYSTEM
SEC. 401. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS USING AUTOMATED
WITHDRAWALS.
(a) In General.--Section 6159 is amended by redesignating
subsections (e) and (f) as subsections (f) and (g), respectively, and
by inserting after subsection (d) the following new subsection:
``(e) Waiver of User Fees for Installment Agreements Using
Automated Withdrawals.--In the case of a taxpayer who enters into an
installment agreement in which automated installment payments are
agreed to, the Secretary shall waive the fee (if any) for entering into
the installment agreement.''.
(b) Effective Date.--The amendments made by this section shall
apply to agreements entered into on or after the date which is 180 days
after the date of the enactment of this Act.
SEC. 402. INDIVIDUALS HELD HARMLESS ON IMPROPER LEVY ON INDIVIDUAL
RETIREMENT PLAN.
(a) In General.--Section 6343 is amended by adding at the end the
following new subsection:
``(f) Individuals Held Harmless on Wrongful Levy, etc. on
Individual Retirement Plan.--
``(1) In general.--If the Secretary determines that an
individual retirement plan has been levied upon in a case to
which subsection (b) or (d)(2)(A) applies and property or an
amount of money is returned to the individual who is the
beneficiary of such plan--
``(A) the individual may contribute such property
or an amount equal to the sum of--
``(i) the amount of money returned by the
Secretary on account of such levy, and
``(ii) interest paid under subsection (c)
on such amount of money,
into an individual retirement plan (other than an
endowment contract) to which a rollover contribution of
a distribution from the plan levied upon is permitted
if such contribution is made not later than the due
date (not including extensions) for filing the return
of tax for the taxable year in which such property or
amount of money is returned, and
``(B) the Secretary shall, at the time such
property or amount of money is returned, notify such
individual that a contribution described in
subparagraph (A) may be made.
``(2) Treatment as rollover.--The distribution on account
of the levy and any contribution under paragraph (1) with
respect to such distribution shall be treated for purposes of
this title as if such distribution and contribution were part
of a rollover contribution described in section
408(d)(3)(A)(i); except that--
``(A) the contribution shall be treated as having
been made to the individual retirement plan for the
taxable year in which the distribution on account of
the levy occurred, and the interest paid under
subsection (c) shall be treated as earnings within such
plan after the contribution and as not includible in
gross income, and
``(B) such contribution shall not be taken into
account under section 408(d)(3)(B).
``(3) Refund, etc., of income tax on levy.--Except in the
case of a rollover contribution under this subsection from an
individual retirement plan that is not a Roth IRA to a Roth
IRA, if any amount is includible in gross income for a taxable
year by reason of a levy referred to in paragraph (1) and any
portion of such amount is treated as a rollover contribution
under paragraph (2), any tax imposed by chapter 1 on such
portion shall not be assessed, and if assessed shall be abated,
and if collected shall be credited or refunded as an
overpayment made on the due date for filing the return of tax
for such taxable year.
``(4) Interest.--Notwithstanding subsection (d), interest
shall be allowed under subsection (c) in a case in which the
Secretary makes a determination described in subsection
(d)(2)(A) with respect to a levy upon an individual retirement
plan.
``(5) Treatment of inherited accounts.--For purposes of
paragraph (1)(A), section 408(d)(3)(C) shall be disregarded in
determining whether an individual retirement plan is a plan to
which a rollover contribution of a distribution from the plan
levied upon is permitted.''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid under subsections (b), (c), and (d)(2)(A) of section
6343 of the Internal Revenue Code of 1986 after December 31, 2015.
SEC. 403. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-COMPROMISE.
(a) In General.--Section 7122(b) is amended by striking ``Whenever
a compromise'' and all that follows through ``his delegate'' and
inserting ``If the Secretary determines that an opinion of the General
Counsel for the Department of the Treasury, or the Counsel's delegate,
is required with respect to a compromise, there shall be placed on file
in the office of the Secretary such opinion''.
(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. 404. AUTHORITY OF THE NATIONAL TAXPAYER ADVOCATE TO COMMENT ON
TREASURY REGULATIONS.
(a) In General.--Section 7805 is amended by adding at the end the
following new subsection:
``(g) Review of Impact of Regulations on Taxpayer Rights.--
``(1) Submissions to national taxpayer advocate.--Prior to
publication of any proposed or temporary regulation by the
Secretary, the Secretary shall submit such regulation to the
National Taxpayer Advocate for comment on the impact of such
regulation on taxpayer rights or taxpayer burden. Not later
than the date 4 weeks after the date of such submission, the
National Taxpayer Advocate shall submit comments, if any, on
such regulation to the Secretary.
``(2) Consideration of comments.--In prescribing any final
regulation which supersedes a proposed or temporary regulation
with respect to which the National Taxpayer Advocate has
submitted comments--
``(A) the Secretary shall consider the comments of
the National Taxpayer Advocate on such proposed or
temporary regulation, and
``(B) the Secretary shall discuss its response to
such comments in the preamble of such final
regulation.''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to regulations issued after the date of the enactment of
this Act.
SEC. 405. INDIVIDUAL ESTIMATED TAX.
(a) Increase in Exception for Individuals Owing Small Amount of
Tax.--Section 6654(e)(1) is amended by striking ``$1,000'' and
inserting ``$2,000''.
(b) Computation of Addition to Tax.--Section 6654 is amended by
striking subsections (a) and (b) and inserting the following:
``(a) Addition to the Tax.--
``(1) In general.--Except as otherwise provided in this
section, in the case of any underpayment of estimated tax by an
individual for a taxable year, there shall be added to the tax
under chapter 1, the tax under chapter 2, and the tax under
chapter 2A for such taxable year the sum of the amounts
determined under paragraph (2) for each day for which there is
an underpayment.
``(2) Amount of addition to tax.--The amount determined
under this paragraph for any day shall be the product of--
``(A) the underpayment rate established under
subsection (b)(2) for such day, multiplied by
``(B) the amount of the underpayment for such day.
``(b) Amount of Underpayment; Underpayment Rate.--For purposes of
subsection (a)--
``(1) Amount.--The amount of underpayment on any day shall
be the excess (if any) of--
``(A) the sum of the required installments for the
taxable year the due dates for which are on or before
such day, over
``(B) the sum of the amounts of estimated tax
payments made for such taxable year on or before such
day.
``(2) Determination of underpayment rate.--
``(A) In general.--The underpayment rate with
respect to any day in an installment underpayment
period shall be the underpayment rate established under
section 6621 for the first day of the calendar quarter
in which such installment underpayment period begins.
``(B) Installment underpayment period.--For
purposes of subparagraph (A), the term `installment
underpayment period' means the period beginning on the
day after the due date for a required installment and
ending on the due date for the subsequent required
installment (or in the case of the 4th required
installment, the 15th day of the 4th month following
the close of a taxable year).
``(C) Daily rate.--The rate determined under
subparagraph (A) shall be applied on a daily basis and
shall be based on the assumption of 365 days in a
calendar year.
``(3) Termination of estimated tax underpayment.--No day
after the end of the installment underpayment period for the
4th required installment specified in paragraph (2)(B) for a
taxable year shall be treated as a day of underpayment with
respect to such taxable year.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
SEC. 406. CORPORATE ESTIMATED TAX.
(a) Increase in Small Tax Amount Exception.--Section 6655(f) is
amended by striking ``$500'' and inserting ``$1,000''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2015.
SEC. 407. INCREASE IN LARGE CORPORATION THRESHOLD FOR ESTIMATED TAX
PAYMENTS.
(a) In General.--Section 6655(g)(2) is amended--
(1) by striking ``$1,000,000'' in subparagraph (A) and
inserting ``the applicable amount'',
(2) by striking ``the $1,000,000 amount specified in
subparagraph (A)'' in subparagraph (B)(ii) and inserting ``the
applicable amount'',
(3) by redesignating subparagraph (B) as subparagraph (C),
and
(4) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Applicable amount.--For purposes of this
paragraph, the applicable amount is $1,000,000
increased (but not above $1,500,000) by $50,000 for
each taxable year beginning after 2015.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2015.
SEC. 408. EXPANSION OF INTEREST NETTING.
(a) In General.--Subsection (d) of section 6621 is amended by
adding at the end the following new sentence: ``Solely for purposes of
the preceding sentence, section 6611(e) shall not apply.''.
(b) Effective Date.--The amendment made by this section shall apply
to interest accrued after December 31, 2015.
SEC. 409. CLARIFICATION OF APPLICATION OF FEDERAL TAX DEPOSIT PENALTY.
Nothing in section 6656 of the Internal Revenue Code of 1986 shall
be construed to permit the percentage specified in subsection
(b)(1)(A)(iii) thereof to apply other than in a case where the failure
is for more than 15 days.
TITLE V--THE RIGHT TO BE INFORMED
SEC. 501. COLLECTION ACTIVITIES WITH RESPECT TO JOINT RETURN
DISCLOSABLE TO EITHER SPOUSE BASED ON ORAL REQUEST.
(a) In General.--Paragraph (8) of section 6103(e) is amended by
striking ``in writing'' the first place it appears.
(b) Effective Date.--The amendment made by this section shall apply
to requests made after the date of the enactment of this Act.
SEC. 502. DISCLOSURE OF TAXPAYER IDENTITY FOR TAX REFUND PURPOSES.
Section 6103(m)(1) is amended by striking ``taxpayer identity
information to the press and other media'' and by inserting ``a
person's name and the city and State of the person's mailing address to
the press, other media, and through any other means of mass
communication,''.
SEC. 503. RELEASE OF INFORMATION REGARDING THE STATUS OF CERTAIN
INVESTIGATIONS.
(a) In General.--Subsection (e) of section 6103 is amended by
adding at the end the following new paragraph:
``(11) Disclosure to certain relevant persons of
information regarding status of certain investigations.--
``(A) Information upon request.--With respect to
any investigation conducted by the officers and
employees of the Treasury Inspector General for Tax
Administration which relates to possible violations of
the internal revenue laws or related statutes, the
Secretary and the Attorney General may, upon written
request by any relevant person, disclose to such person
(or such person's designee)--
``(i) whether there is or has been such an
investigation with respect to which such person
is a relevant person, and
``(ii) if there is or has been such an
investigation--
``(I) whether such investigation is
on-going or has been completed, and
``(II) if such investigation has
been completed, the conclusions of such
investigation, including whether there
was a referral to administrative
authorities or for criminal
prosecution, and the contact
information of the person handling the
referred matter.
``(B) Notification upon conclusion.--Not later than
30 days after the completion of any investigation--
``(i) which is conducted by the officers
and employees of the Treasury Inspector General
for Tax Administration, and
``(ii) the results of which indicate that--
``(I) there is substantial evidence
that there has been a violation of the
internal revenue laws or related
statutes, and
``(II) such violation involves one
or more relevant persons,
the Secretary shall disclose to all such relevant
persons (or designees) the conclusions of the
investigation, including whether there was a referral
to administrative authorities or for criminal
prosecution, and the contact information of the person
handling the referred matter.
``(C) Relevant person.--For purposes of this
paragraph, the term `relevant person' means, with
respect to any investigation--
``(i) any complainant who provided
information to the Treasury Inspector General
for Tax Administration related to the
investigation, and
``(ii) any taxpayer who is directly
connected with the matter being
investigated.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
SEC. 504. MANDATORY ELECTRONIC FILING FOR ANNUAL RETURNS OF EXEMPT
ORGANIZATIONS.
(a) In General.--Section 6033 is amended by redesignating
subsection (n) as subsection (o) and by inserting after subsection (m)
the following new subsection:
``(n) Mandatory Electronic Filing.--Any organization required to
file a return under this section shall file such return in electronic
form.''.
(b) Inspection of Electronically Filed Annual Returns.--Subsection
(b) of section 6104 is amended by adding at the end the following:
``Any annual return required to be filed electronically under section
6033(n) shall be made available by the Secretary to the public in
machine readable format as soon as practicable.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after the date of the enactment of this Act.
(2) Transitional relief.--
(A) Small organizations.--
(i) In general.--In the case of any small
organizations, or any other organizations for
which the Secretary determines the application
of the amendments made by subsection (a) would
cause undue burden without a delay, the
Secretary may delay the application of such
amendments, but not later than taxable years
beginning 2 years after the date of the
enactment of this Act.
(ii) Small organization.--For purposes of
clause (i), the term ``small organization''
means any organization--
(I) the gross receipts of which for
the taxable year are less than
$200,000, and
(II) the aggregate gross assets of
which at the end of the taxable year
are less than $500,000.
(B) Organizations filing form 990-T.--In the case
of any organization described in section 511(a)(2) of
the Internal Revenue Code of 1986 which is subject to
the tax imposed by section 511(a)(1) of such Code on
its unrelated business taxable income, or any
organization required to file a return under section
6033 of such Code and include information under
subsection (e) thereof, the Secretary may delay the
application of the amendments made by this section, but
not later than taxable years beginning 2 years after
the date of the enactment of this Act.
TITLE VI--THE RIGHT TO QUALIFY SERVICE
SEC. 601. FREE ELECTRONIC FILING.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall, in cooperation with the private sector technology
industry, maintain a program that provides free individual income tax
preparation and electronic filing services to low-income taxpayers and
elderly taxpayers.
(b) Requirements of Program.--The Secretary shall by regulation or
other guidance prescribe with respect to the program--
(1) the qualifications, selection process, and contract
term for businesses participating in the program,
(2) a process for periodic review of businesses
participating in the program,
(3) procedures for terminating business participation in
the program for failure to comply with any program
requirements, and
(4) such other procedures as the Secretary determines are
necessary or appropriate to carry out the purposes of the
program.
(c) Free File Program.--The Internal Revenue Service Free File
program, as set forth in the notice published in the Federal Register
on November 4, 2002 (67 Fed. Reg. 67247), shall be treated as meeting
the requirements of subsection (a).
SEC. 602. ACCESS TO APPEALS.
Subsection (b) of section 3465 of the Internal Revenue Service
Restructuring and Reform Act of 1998 is amended by striking ``an
appeals officer is regularly available within each State'' and
inserting ``there is at least one appeals officer and one settlement
officer located and permanently available in each State, the District
of Columbia, and Puerto Rico''.
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