[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1788 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 1788
To provide appropriations for the Internal Revenue Service to overhaul
technology and strengthen enforcement, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 24, 2021
Ms. Warren introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide appropriations for the Internal Revenue Service to overhaul
technology and strengthen enforcement, 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.
This Act may be cited as the ``Restoring the IRS Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) the Internal Revenue Service should be given resources
to increase audits and enforcement of tax compliance of high-
income, high-wealth individuals and corporations, with an
emphasis on the auditing and enforcement of tax compliance by
individuals with gross income of not less than $1,000,000 and
of large corporations;
(2) priorities for actions and resources to improve
compliance with tax laws should be guided by the relative
revenue loss from non-compliance;
(3) the Internal Revenue Service should ensure there are
not racial disparities in its enforcement activities;
(4) it should be the goal of the Internal Revenue service
that, by the tenth tax year after the date of the enactment of
this Act, the net tax gap should be reduced by at least one-
third, as compared with the fraction estimated in the most
recently Internal Revenue Service study prior to such date of
enactment; and
(5) it should be the goal of the Internal Revenue Service
to provide quality, timely, and accurate assistance to all
taxpayers interacting with the Internal Revenue Service.
SEC. 3. INTERNAL REVENUE SERVICE APPROPRIATIONS.
(a) In General.--There is hereby appropriated to each fiscal year
ending after fiscal year 2021, out of any moneys in the Treasury not
otherwise appropriated, $31,500,000,000, for necessary expenses for
activities of the Internal Revenue Service related to the following
activities:
(1) To provide taxpayer services, including pre-filing
assistance and education, filing and account services, taxpayer
advocacy services, other services as authorized by 5 U.S.C.
3109, at such rates as may be determined by the Commissioner,
and other related expenses, including the Tax Counseling for
the Elderly Program, low-income taxpayer clinic grants, and the
Taxpayer Advocate Service.
(2) Tax enforcement activities to determine and collect
owed taxes, to provide legal and litigation support, to conduct
criminal investigations, to enforce criminal statutes related
to violations of internal revenue laws and other financial
crimes, to purchase and hire passenger motor vehicles (31
U.S.C. 1343(b)), to increase audits of high-income taxpayers,
and to provide other services as authorized by 5 U.S.C. 3109,
at such rates as may be determined by the Commissioner.
(3) To support taxpayer services and enforcement programs
and activities, including rent payments; facilities services;
printing; postage; physical security; headquarters and other
IRS-wide administration activities; research and statistics of
income; telecommunications; information technology development
and support, enhancement, operations, maintenance, and
security; the hire of passenger motor vehicles (31 U.S.C.
1343(b)); the operations of the Internal Revenue Service
Oversight Board; and other services as authorized by 5 U.S.C.
3109, at such rates as may be determined by the Commissioner.
(4) For the business systems modernization program for the
capital asset acquisition of information technology systems,
including management and related contractual costs of said
acquisitions, including related Internal Revenue Service labor
costs, and contractual costs associated with operations
authorized by 5 U.S.C. 3109.
(b) Inflation Adjustment.--
(1) In general.--In the case of any fiscal year beginning
after fiscal year 2022, the dollar amount in subsection (a)
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) of the Internal Revenue Code of 1986
for the calendar year in which such fiscal year begins
by substituting ``calendar year 2021'' for ``calendar
year 2016'' in subparagraph (A)(ii) thereof.
(2) Rounding.--Any increase determined under paragraph (1)
shall be rounded to the nearest multiple of $100.
(c) Limitation.--Of the amounts appropriated under subsection (a)--
(1) not less than 50 percent of funds made available for
any fiscal year shall be used for purposes described in
subsection (a)(2) (or for activities described in subsection
(a)(3) that are related to activities described in subsection
(a)(2); and
(2) not less than 15 percent of funds made available for
any fiscal year shall be used for purposes described in
subsection (a)(1).
(d) Administrative Provisions.--None of the funds made available in
this section may be used to enter into, renew, extend, administer,
implement, or enforce any qualified tax collection contract (as defined
in section 6306 of the Internal Revenue Code of 1986).
SEC. 4. RETURNS RELATING TO CERTAIN BUSINESS TRANSACTIONS.
(a) In General.--
(1) Return requirement.--Subpart B of part III of
subchapter A of chapter 61 of the Internal Revenue Code of 1986
is amended by adding at the end the following new section:
``SEC. 6050Z. RETURNS RELATING TO ACCOUNT TRANSACTIONS.
``(a) Requirement of Reporting.--Any covered financial institution
shall make the information return described in subsection (b) at such
time as the Secretary may by regulations prescribe.
``(b) Return.--A return is described in this subsection if such
return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains, with respect to each account maintained by
the covered financial institution--
``(A) the name, address, and TIN of the person on
whose behalf the account is maintained,
``(B) the monthly gross inflows and outflows with
respect to such account,
``(C) in the case of an account that is not related
to a trade or business, the amount of such inflows and
outflows that are related to--
``(i) cash transactions,
``(ii) foreign transactions, and
``(iii) transfers to related accounts, and
``(D) such other information as the Secretary may
require for tax administration and enforcement
purposes.
``(c) Statement To Be Furnished to Taxpayers With Respect to Whom
Information Is Required.--
``(1) In general.--Every covered financial institution that
is required to make a return under subsection (a) shall furnish
to each person whose identity is required to be set forth in
such return a written statement showing--
``(A) the name, address, and phone number of the
information contact of the covered financial
institution required to make such a return, and
``(B) the information required to be shown on such
return with respect to such person.
``(2) Furnishing of information.--The written statement
required under paragraph (1) shall be furnished to the person
on or before January 31 of the year following the calendar year
for which the return under subsection (a) is required to be
made.
``(d) Covered Financial Institution.--For purposes of this section,
the term `covered financial institution' means any financial
institution (as determined under regulations provided by the Secretary)
which maintains an account on behalf of another person.''.
(2) Regulations.--
(A) In general.--Not later than 12 months after the
date of the enactment of this Act, the Secretary of the
Treasury (or the Secretary's delegate) shall issue
regulations on information reporting required under
section 6050Z of the Internal Revenue Code of 1986 (as
added by paragraph (1)), including regulations
specifying any other information required to be
reported under such section for purposes of closing the
tax gap (as defined in section 4(a)(2)).
(B) Avoidance of additional burden.--The
regulations established under subparagraph (A) shall
minimize additional reporting burdens on taxpayers.
(b) Penalties.--
(1) Returns.--Section 6724(d)(1)(B) of the Internal Revenue
Code of 1986 is amended by striking ``or'' at the end of clause
(xxv), by striking ``and'' at the end of clause (xxvi), and by
inserting after clause (xxvi) the following new clause:
``(xxvii) section 6050Z (relating to
information with respect to account
transactions),''.
(2) Statements.--Section 6724(d)(2) of such Code is
amended--
(A) by striking ``or'' at the end of subparagraph
(II),
(B) by striking the period at the end of the first
subparagraph (JJ) (relating to section 6035) and
inserting a comma,
(C) by redesignating the second subparagraph (JJ)
(relating to section 6050Y) as subparagraph (KK),
(D) by striking the period at the end of
subparagraph (KK) (as redesignated by subparagraph (C))
and inserting ``, or'', and
(E) by inserting after subparagraph (KK) (as so
redesignated) the following new subparagraph:
``(LL) section
6050Z (relating to
information with
respect to account
transactions).''.
(c) Clerical Amendment.--The table of sections for subpart B of
part III of subchapter A of chapter 61 of such Code is amended by
adding at the end the following new item:
``Sec. 6050Z. Returns relating to account transactions.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2022.
SEC. 5. REPORTS TO CONGRESS.
Not later than 1 year after the date of the enactment of this Act
and annually thereafter, the Commissioner of the Internal Revenue
Service, after consultation with the Comptroller General, shall submit
to Congress a report containing the following:
(1) Audit plan.--A comprehensive description of--
(A) a plan to--
(i) shift more of the auditing and
enforcement assets of the Internal Revenue
Service toward high-income, high-wealth tax
filers and corporations, and
(ii) recruit and retain auditors with the
skills essential to audit high-income
individuals, and
(B) the progress made in implementing such plan.
(2) Tax gap analysis.--
(A) In general.--A comprehensive description of the
tax gap, including--
(i) the amount attributed to high-income,
high-wealth tax filers and corporations, and
(ii) how other information reporting
improvements could reduce the tax gap,
including strengthened third-party reporting on
ownership of C-corporations and ultimate
ownership of partnerships.
(B) Tax gap.--For purposes of this paragraph, the
term ``tax gap'' means, with respect to any tax year,
the difference between--
(i) the amount of taxes owed by taxpayers
under the Internal Revenue Code of 1986 for
such tax year, and
(ii) the amount of revenue paid voluntarily
and timely by taxpayers under such Code for
such tax year.
(3) Racial disparities analysis.--A comprehensive analysis
and description of whether there exist any racial disparities
in the Internal Revenue Service's enforcement activities,
including audits, based on gross income, including a
comprehensive description of any plans the Internal Revenue
Service has to address any such disparities in the coming
fiscal year.
SEC. 6. UNDERPAYMENT PENALTIES INCREASED FOR CERTAIN TAXPAYERS.
(a) In General.--Subsection (a) of section 6662 of the Internal
Revenue Code of 1986 is amended to read as follows:
``(a) Imposition of Penalty.--
``(1) In general.--If this section applies to any portion
of an underpayment of tax required to be shown on a return,
there shall be added to the tax an amount equal to the
applicable percentage of the portion of the underpayment to
which this section applies.
``(2) Applicable percentage.--For purposes of paragraph
(1), the term `applicable percentage' means--
``(A) in the case of a taxpayer with a taxable
income of less than $2 million, 20 percent,
``(B) in the case of a taxpayer with a taxable
income greater than $2 million but less than $5
million, 30 percent, and
``(C) in the case of a taxpayer with a taxable
income greater than $5 million, 40 percent.''.
(b) Conforming Amendments.--
(1) Gross valuation misstatements.--Section 6662(h)(1) of
such Code is amended by striking ``with respect to such portion
by substituting'' and all that follows and inserting ``with
respect to such portion--
``(A) by substituting `40 percent' for `20 percent'
in paragraph (2)(A) thereof,
``(B) by substituting `45 percent' for `30 percent'
in paragraph (2)(B) thereof, and
``(C) by substituting `50 percent' for `40 percent'
in paragraph (2)(C) thereof.''.
(2) Nondisclosed noneconomic substance transactions.--
Section 6662(i)(1) of such Code is amended by striking ``with
respect to such portion by substituting'' and all that follows
and inserting ``with respect to such portion--
``(A) by substituting `40 percent' for `20 percent'
in paragraph (2)(A) thereof,
``(B) by substituting `45 percent' for `30 percent'
in paragraph (2)(B) thereof, and
``(C) by substituting `50 percent' for `40 percent'
in paragraph (2)(C) thereof.''.
(3) Undisclosed foreign financial asset understatements.--
Section 6662(j)(3) of such Code is amended by striking ``with
respect to such portion by substituting'' and all that follows
and inserting ``with respect to such portion--
``(A) by substituting `40 percent' for `20 percent'
in paragraph (2)(A) thereof,
``(B) by substituting `45 percent' for `30 percent'
in paragraph (2)(B) thereof, and
``(C) by substituting `50 percent' for `40 percent'
in paragraph (2)(C) thereof.''.
(c) Effective Date.--The amendments made by this section shall
apply to returns on the due date which (determined without regard to
extensions) is after December 31, 2022.
SEC. 7. APPLICATION OF FALSE CLAIMS RULES TO THE TAX CLAIMS.
(a) In General.--Subsection (d) of section 3729 of title 31, United
States Code is amended to read as follows:
``(d) Internal Revenue Code.--
``(1) General exclusion.--Except as provided under
paragraph (2), this section does not apply to claims, records,
or statements made under the Internal Revenue Code of 1986.
``(2) Exception.--This section shall apply to any claims,
records, or statements made under the Internal Revenue Code of
1986 if--
``(A) the gross income of the person making the
claim equals or exceeds $10,000,000 for the taxable
year with respect to which the claim is made; and
``(B) the damages sustained by the Government
because of the act of the person exceed $1,000,000.''.
(b) Effective Date.--The amendments made by this section shall
apply to claims, records, or statements made after the date of the
enactment of this Act.
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