[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5206 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 5206
To require the Internal Revenue Service to issue a report on the tax
gap, to establish a fellowship program within the Internal Revenue
Service to recruit mid-career tax professionals to create and
participate in an audit task force, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 10, 2021
Mr. Brady (for himself, Mr. Kelly of Pennsylvania, Mr. Nunes, Mr.
Buchanan, Mr. Smith of Nebraska, Mr. Reed, Mrs. Miller of West
Virginia, Mr. Smith of Missouri, Mr. Rice of South Carolina, Mr.
Schweikert, Mrs. Walorski, Mr. LaHood, Mr. Wenstrup, Mr. Arrington, Mr.
Ferguson, Mr. Estes, Mr. Smucker, and Mr. Hern) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Financial Services, for a period to
be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To require the Internal Revenue Service to issue a report on the tax
gap, to establish a fellowship program within the Internal Revenue
Service to recruit mid-career tax professionals to create and
participate in an audit task force, 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. TAX GAP PROJECTION.
(a) In General.--Not later than 180 days after the date of the
enactment of this section, and no later than July 31 annually
thereafter, the Commissioner of Internal Revenue shall submit to
Congress a projection detailing the tax gap estimate for the most
recent taxable year as is practicable using the most recently available
data, and including identification and detailed descriptions of the
data used for such projection and clear identification of the amount of
the projected tax gap associated with nonfiling, underreporting, and
underpayment (including identifying the amount subject to collection
actions).
(b) Use of Artificial Intelligence.--To the extent practicable, for
purposes of reducing the burden on taxpayers subject to National
Research Program audits, the Commissioner shall use artificial
intelligence, including neural machine learning, and other available
data analysis tools, including commercial analytic data providers, to
calculate a projection described in subsection (a).
(c) National Research Program Audits.--The Commissioner of Internal
Revenue shall not undertake more National Research Program audits than
in Fiscal Year 2021 to calculate a projection described in subsection
(a).
(d) Tax Gap.--For purposes of this section, the term ``tax gap''
means the difference between tax liabilities owed to the Internal
Revenue Service and those liabilities actually collected by such
Service.
SEC. 2. JCT REPORT.
(a) In General.--Not later than 180 days after the submission of
the first tax gap projection to Congress under section 1, and not later
than 90 days after the submission of each successive submission, the
Chief of Staff of the Joint Committee on Taxation shall submit to the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report analyzing such projection,
including--
(1) identification of methodologies used,
(2) any statistical or methodological uncertainties,
(3) the effect of outdated data, if any, on the accuracy of
such projection, and
(4) such additional information as the Joint Committee on
Taxation determines is useful for Congress to use to assess and
analyze the tax gap projections provided by the Commissioner of
Internal Revenue.
(b) Release of Information.--For purposes of facilitating the
report described in subsection (a), the Secretary of the Treasury
shall, in a timely manner, provide to the Joint Committee on Taxation
such information as such committee requests.
SEC. 3. RESTRICTION ON INCREASED ENFORCEMENT FUNDS.
(a) In General.--Notwithstanding any other provision of law, no
funds appropriated to the Department of the Treasury for audit and
enforcement purposes in excess of the levels appropriated for such
purposes in fiscal year 2021 may be expended for such purposes,
including for salaries, expenses, and enforcement activities, until 180
days after the Internal Revenue Service publishes an updated tax gap
projection pursuant to, and compliant with, section 1.
(b) Sunset.--The provisions of subsection (a) shall not apply after
the date which is one year after the date of the enactment of this
section.
SEC. 4. RESTRICTION ON INCREASED FUNDING FOR OTHER SPECIFIED PURPOSES.
(a) In General.--Notwithstanding any other provision of law, no
funds appropriated to the Department of the Treasury in excess of the
levels appropriated for specified purposes in fiscal year 2021 may be
expended for specified purposes.
(b) Specified Purposes.--For purposes of subsection (a), the term
``specified purposes'' means--
(1) the implementation of new information reporting
requirements on flows of deposits and withdrawals in individual
and small business banking accounts and other financial
accounts,
(2) the targeting of United States citizens in response to
the exercise by such citizens of any legally protected or
recognized right guaranteed under the First Amendment to the
United States Constitution,
(3) the targeting of a group for regulatory scrutiny based
on the ideological beliefs of such group,
(4) the auditing of individual taxpayers with an adjusted
gross income of less than $400,000, and
(5) the hiring under an agreement pursuant to the
Intragovernmental Personnel Act of 1970 (5 U.S.C. 3371-3376) or
any other authority of an authorized researcher who is not a
full-time Federal employee to access data subject to privacy
protections afforded by section 6103 of the Internal Revenue
Code of 1986.
SEC. 5. EFFICIENT USE OF EXISTING IRS RESOURCES.
For purposes of increasing enforcement actions in areas of high
noncompliance and reducing the corporate audit no-change rate of the
Internal Revenue Service to below 20 percent by 2023--
(1) the Secretary (or the Secretary's delegate) shall, not
later than 180 days after the date of the enactment of this
section--
(A) update the methodology that is used for the
selection of corporate returns for audit, and
(B) reassign resources of the Internal Revenue
Service such that the majority of high-income nonfilers
are subject to enforcement actions, and
(2) the Comptroller general of the United States shall,
within one year after the date of the enactment of this
section, issue a comprehensive report to Congress on
information returns and data collected by the Internal Revenue
Service that could be deployed for compliance activities but
that are not currently used for such activities.
SEC. 6. IRS FELLOWSHIP PROGRAM.
(a) Establishment.--Not later than September 30, 2022, the
Commissioner of Internal Revenue (hereinafter known as the
``Commissioner'') after consultation with the Chief Counsel of the
Internal Revenue Service (hereinafter known as the ``Chief Counsel''),
shall establish within the Internal Revenue Service a fellowship
program (hereinafter known as the ``program'') to recruit private
sector tax experts to join the Internal Revenue Service to create and
participate in the audit task force established under subsection (e).
(b) Objective.--The Commissioner, after consultation with the Chief
Counsel, shall design the program in a manner such that the program--
(1) addresses such tax cases handled by the Internal
Revenue Service as the Commissioner determines--
(A) are the most complex, or
(B) include new and emerging issues, and
(2) recruits and retains outstanding and qualified tax
experts.
(c) Advertisement of Program.--The Commissioner shall advertise the
program in such a way as to attract mid-career tax professionals,
including certified public accountants, tax attorneys, and such other
tax professionals as the Commissioner determines are appropriately
qualified to handle the most complex tax cases.
(d) Structure.--
(1) In general.--The program shall be staffed by not fewer
than 30 fellows at the discretion of the Commissioner based on
needs of the Internal Revenue Service and the availability of
qualified candidates.
(2) Term of service.--
(A) In general.--Each fellow shall each be hired
for a 2-, 3-, or 4-year term of service.
(B) Extensions.--
(i) In general.--A fellow may apply for,
and the Commissioner may grant, a 1-year
extension of the fellowship.
(ii) No limit on number of extensions.--
There shall be no limit on the number of
extensions under paragraph (1).
(3) Fellowship vacancies.--The Commissioner, after
consultation with the Chief Counsel, shall fill vacant
fellowships--
(A) in such a manner as to ensure that the program
is staffed with no fewer than 15 fellows, and
(B) as soon as practicable after the vacancy
arises.
(4) Hiring authority.--The Commissioner shall have
authority to permanently hire a fellow at the end of the term
of service for such fellow.
(e) Task Force.--Not later than the date on which the first
fellowship is awarded under this section, the Commissioner shall
establish a task force within the Internal Revenue Service and the
office of the Chief Counsel in both national and regional office
placements that includes the fellows hired pursuant to subsection (d),
the purpose of which is to--
(1) perform audit case selection,
(2) educate Internal Revenue Service employees on emerging
issues,
(3) audit selected taxpayers,
(4) address offshore tax evasion and issues implicating the
Foreign Account Tax Compliance Act, and
(5) identify, mentor, and train junior employees from the
Internal Revenue Service with respect to audits.
(f) Composition.--The task force established under subsection (e)
may be composed of with both--
(1) fellows, and
(2) permanent employees of the Internal Revenue Service.
(g) Pay of Fellows.--
(1) In general.--The Secretary of the Treasury (or the
Secretary's delegate) shall determine, subject to the
provisions of this subsection, the pay of fellows recruited
under subsection (a).
(2) Pay scale.--For purposes of paragraph (1), the pay of a
fellow shall not be less than the minimum rate payable for GS-
15 of the General Schedule and shall not exceed the amount of
annual compensation (excluding expenses) specified in section
102 of title 3.
(h) Administration of Program.--The Secretary may appoint a lead
program officer to administer and advertise the program.
(i) Annual Review and Report.--Not later than 1 year after the date
on which the first fellowship is awarded under this section, and
annually thereafter, the Commissioner shall submit to Congress a report
containing--
(1) an analysis of the effects of the program,
(2) an analysis of the return on investment of the program,
including calculations of all costs incurred and all tax
revenue and penalties collected due to the work of the task
force,
(3) a description of the total number of fellows who apply
each year, and
(4) recommendations for changes to the program, if any.
(j) Rules and Regulations.--The Commissioner, with the approval of
the Secretary of the Treasury (or the Secretary's delegate), shall
promulgate such rules and regulations as may be necessary for the
efficient administration of the program.
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