Text: H.R.3838 — 102nd Congress (1991-1992)All Information (Except Text)

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HR 3838 IH
102d CONGRESS
1st Session
 H. R. 3838
To amend the Internal Revenue Code of 1986 to provide additional safeguards
to protect taxpayers' rights.
IN THE HOUSE OF REPRESENTATIVES
November 21, 1991
Mr. PICKLE (for himself, Mr. SCHULZE, Mr. ARCHER, Mr. ANTHONY, Mr. FORD
of Tennessee, Mr. RANGEL, Mr. JACOBS, Mr. JENKINS, Mr. RUSSO, Mr. SHAW,
Mr. SUNDQUIST, and Mr. BUNNING) introduced the following bill; which was
referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide additional safeguards
to protect taxpayers' rights.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE: AMENDMENT OF 1986 CODE.
  (a) SHORT TITLE- This Act may be cited as the `Taxpayer Bill of Rights
  Act of 1991'.
  (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.
TITLE I--ADDITIONAL SAFEGUARDS TO PROTECT TAXPAYERS' RIGHTS
Subtitle A--Taxpayers' Advocate
SEC. 101. ESTABLISHMENT OF POSITION OF TAXPAYERS' ADVOCATE WITHIN INTERNAL
REVENUE SERVICE.
  (a) GENERAL RULE- Section 7802 is amended by adding at the end thereof
  the following new subsection:
  `(d) OFFICE OF TAXPAYERS' ADVOCATE-
  `(1) IN GENERAL- There is established in the Internal Revenue Service an
  office to be known as the `Office of the Taxpayers' Advocate'. Such office
  shall be under the supervision and direction of an official to be known as
  the `Taxpayers' Advocate' who shall be appointed by the President, by and
  with the advice and consent of the Senate. The Taxpayers' Advocate shall
  be entitled to compensation at the same rate as the Chief Counsel of the
  Internal Revenue Service.
  `(2) FUNCTIONS OF OFFICE-
  `(A) IN GENERAL- It shall be the function of the Office of Taxpayers'
  Advocate to--
  `(i) assist taxpayers in resolving problems with the Internal Revenue
  Service,
  `(ii) identify areas in which taxpayers have problems in dealings with
  the Internal Revenue Service,
  `(iii) to the extent possible, propose changes in the administrative
  practices of the Internal Revenue Service to mitigate such problems, and
  `(iv) identify potential legislative changes which may be appropriate to
  mitigate such problems.
  `(B) ANNUAL REPORTS- Not later than December 31 of each calendar year
  after 1991, the Taxpayers' Advocate shall report to the Committee on Ways
  and Means of the House of Representatives and the Committee on Finance
  of the Senate on its activities during the fiscal year ending during such
  calendar year. Any such report shall--
  `(i) identify the 20 most serious problems which taxpayers have in dealing
  with the Internal Revenue Service,
  `(ii) contain recommendations for such administrative and legislative
  action as may be appropriate to resolve such problems, and
  `(iii) include such other information as the Taxpayers' Advocate may
  deem advisable.
Any such report may, before its submission, be furnished to the Secretary
for comment, but the final determination of the matters to be included in
such report shall be made by the Taxpayers' Advocate.
  `(3) RESPONSIBILITIES OF COMMISSIONER OF INTERNAL REVENUE SERVICE- The
  Commissioner of Internal Revenue shall establish procedures requiring a
  formal response to all recommendations submitted to the Commissioner by
  the Taxpayers' Advocate.'
  (b) CONFORMING AMENDMENTS- Section 7811 (relating to taxpayer assistance
  orders) is amended--
  (1) by striking `the Office of Ombudsman' in subsection (a) and inserting
  `the Office of the Taxpayers' Advocate', and
  (2) by striking `Ombudsman' each place it appears (including in the headings
  of subsections (e) and (f)) and inserting `Taxpayers' Advocate'.
  (c) EFFECTIVE DATE-
  (1) IN GENERAL- The amendments made by this section shall take effect on
  the date of the enactment of this Act.
  (2) TRANSITIONAL RULE- The first appointment by the President of the
  Taxpayers' Advocate shall be made without regard to the requirement for
  the advice and consent of the Senate if the individual so appointed is the
  head of the Office of the Taxpayer Ombudsman on the date of the enactment
  of this Act.
SEC. 102. EXPANSION OF AUTHORITY TO ISSUE TAXPAYER ASSISTANCE ORDERS.
  (a) Paragraph (2) of section 7811(b) (relating to terms of taxpayer
  assistance orders) is amended by striking `cease any action' and inserting
  `cease any action, take any action'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
Subtitle B--Modifications To Installment Agreement Provisions
SEC. 111. NOTIFICATION OF REASONS FOR TERMINATION OF INSTALLMENT AGREEMENTS.
  (a) GENERAL RULE- Subsection (b) of section 6159 is amended by adding at
  the end thereof the following new paragraph:
  `(5) NOTICE REQUIREMENTS- The Secretary may not take any action under
  paragraph (2), (3), or (4) unless--
  `(A) a notice of such action is provided to the taxpayer not later than
  the day 30 days before the date of such action, and
  `(B) such notice includes an explanation why the Secretary intends to take
  such action.
The preceding sentence shall not apply in any case in which the Secretary
believes that collection of any tax to which an agreement under this section
relates is in jeopardy.'
  (b) CONFORMING AMENDMENT- Paragraph (3) of section 6159(b) is amended to
  read as follows:
  `(3) SUBSEQUENT CHANGE IN FINANCIAL CONDITIONS- If the Secretary makes
  a determination that the financial condition of a taxpayer with whom
  the Secretary has entered into an agreement under subsection (a) has
  significantly changed, the Secretary may alter, modify, or terminate
  such agreement.'
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  on the date 6 months after the date of the enactment of this Act.
SEC. 112. ADMINISTRATIVE REVIEW OF DENIAL OF REQUEST FOR INSTALLMENT AGREEMENT.
  (a) GENERAL RULE- Section 6159 (relating to agreements for payment of tax
  liability in installments) is amended by adding at the end thereof the
  following new subsection:
  `(c) ADMINISTRATIVE REVIEW- The Secretary shall establish procedures for
  administrative review of denials of requests for installment agreements
  under this section.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 113. RUNNING OF FAILURE TO PAY PENALTY SUSPENDED DURING PERIOD INSTALLMENT
AGREEMENT IN EFFECT.
  (a) GENERAL RULE- Section 6651 (relating to penalty for failure to file
  tax return or to pay tax) is amended by adding at the end thereof the
  following new subsection:
  `(g) TREATMENT OF INSTALLMENT AGREEMENTS UNDER SECTION 6159- If an
  agreement is entered into under section 6159 for the payment of any tax in
  installments, the period during which such agreement is in effect shall
  be disregarded in determining the amount of any addition under paragraph
  (2) or (3) of subsection (a) with respect to such tax.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  installment agreements entered into after the date of the enactment of
  this Act.
Subtitle C--Interest
SEC. 121. EXTENSION OF INTEREST-FREE PERIOD FOR PAYMENT OF TAX AFTER NOTICE
AND DEMAND.
  (a) GENERAL RULE- Paragraph (3) of section 6601(e) (relating to payments
  made within 10 days after notice and demand) is amended to read as follows:
  `(3) PAYMENTS MADE WITHIN SPECIFIED PERIOD AFTER NOTICE AND DEMAND- If
  notice and demand is made for payment of any amount and if such amount
  is paid within 21 days (10 days if the amount for which such notice and
  demand is made equals or exceeds $100,000) after the date of such notice
  and demand, interest under this section on the amount so paid shall not
  be imposed for the period after the date of such notice and demand.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply in
  the case of any notice and demand given after the date 6 months after the
  date of the enactment of this Act.
SEC. 122. EXPANSION OF AUTHORITY TO ABATE INTEREST.
  (a) GENERAL RULE- Paragraph (1) of section 6404(e) (relating to abatement
  of interest in certain cases) is amended by striking `ministerial act'
  each place it appears and inserting `ministerial or managerial act'.
  (b) CLERICAL AMENDMENT- The subsection heading for subsection (e) of
  section 6404 is amended by striking `Assessments' and inserting `Abatement'.
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to
  interest accruing with respect to deficiencies or payments for taxable
  years beginning after the date of the enactment of this Act.
SEC. 123. EQUALIZATION OF INTEREST RATES.
  (a) GENERAL RULE- Paragraph (1) of section 6621(a) (defining overpayment
  rate) is amended by striking `2 percentage points' and inserting `3
  percentage points'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply for
  purposes of determining interest for periods after December 31, 1992.
SEC. 124. WAIVER OF INTEREST ON ALL OVERPAYMENTS REFUNDED WITHIN 45 DAYS
AFTER RETURN IS FILED.
  (a) GENERAL RULE- Subsection (e) of section 6611 is amended--
  (1) by striking out `tax imposed by subtitle A' and inserting `tax imposed
  by this title', and
  (2) by striking `INCOME TAX' in the subsection heading.
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply in
  the case of returns filed after the date of the enactment of this Act.
Subtitle D--Joint Returns
SEC. 131. REQUIREMENT OF SEPARATE DEFICIENCY NOTICES IN CERTAIN CASES.
  (a) GENERAL RULE- Paragraph (2) of section 6212(b) (relating to address
  for notice of deficiency) is amended to read as follows:
  `(2) JOINT INCOME TAX RETURN- In the case of a joint income tax return
  filed by a husband and wife, such notice of deficiency may be a single
  joint notice, except that if--
  `(A) for the most recent taxable year for which data are available on the
  master files of the Internal Revenue Service such spouses did not file a
  joint return within each other, or
  `(B) the Secretary has been notified by either spouse that separate
  residences have been established,
then, in lieu of the single joint notice, a duplicate original of the joint
notice shall be sent by certified mail or registered mail to each spouse at
such spouse's last known address.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date 6 months after the date of the enactment of this Act.
SEC. 132. DISCLOSURE OF COLLECTION ACTIVITIES.
  (a) GENERAL RULE- Subsection (e) of section 6103 (relating to disclosure to
  persons having material interest) is amended by adding at the end thereof
  the following new paragraph:
  `(8) DISCLOSURE OF COLLECTION ACTIVITIES WITH RESPECT TO JOINT RETURN- If
  any deficiency of tax with respect to a joint return is assessed and the
  individuals filing such return are no longer married or no longer reside in
  the same household, upon request in writing of either of such individuals,
  the Secretary may disclose in writing to the individual making the request
  whether the Secretary has attempted to collect such deficiency from such
  other individual, the general nature of such collection activities, and
  the amount collected.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
SEC. 133. JOINT RETURN MAY BE MADE AFTER SEPARATE RETURNS WITHOUT FULL
PAYMENT OF TAX.
  (a) GENERAL RULE- Paragraph (2) of section 6013(b) (relating to limitations
  on filing of joint return after filing separate returns) is amended by
  striking subparagraph (A) and redesignating the following subparagraphs
  accordingly.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  taxable years beginning after the date of the enactment of this Act.
Subtitle E--Collection Activities
SEC. 141. MODIFICATIONS TO LIEN AND LEVY PROVISIONS.
  (a) WITHDRAWAL OF CERTAIN NOTICES- Section 6323 (relating to validity and
  priority against certain persons) is amended by adding at the end thereof
  the following new subsection:
  `(j) WITHDRAWAL OF NOTICE IN CERTAIN CIRCUMSTANCES-
  `(1) IN GENERAL- If the Secretary determines that the withdrawal of a
  notice of a lien filed under this section would be in the best interest of
  the taxpayer and the United States, the Secretary may withdraw such notice
  and this chapter shall be applied as if the withdrawn notice had not been
  filed. Any such withdrawal shall be made by filing notice thereof at the
  same office as the withdrawn notice.
  `(2) NOTICE TO CREDIT AGENCIES, ETC- Upon written request by the taxpayer
  with respect to whom a notice of a lien was withdrawn under paragraph (1),
  the Secretary shall make reasonable efforts to notify credit reporting
  agencies, and financial institutions specified in such request, of the
  withdrawal of such notice. Any such request shall be in such form as the
  Secretary may prescribe.'
  (b) RETURN OF LEVIED PROPERTY IN CERTAIN CASES- Section 6343 (relating
  to authority to release levy and return property) is amended by adding at
  the end thereof the following new subsection:
  `(d) RETURN OF PROPERTY IN CERTAIN CASES- If--
  `(1) any property has been levied upon, and
  `(2) the Secretary determines that the return of such property would be
  in the best interest of the taxpayer and the United States,
the provisions of subsection (b) shall apply in the same manner as if such
property had been wrongly levied upon; except that no interest shall be
allowed under subsection (c).'
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  on the date of the enactment of this Act.
SEC. 142. OFFERS-IN-COMPROMISE.
  (a) GENERAL RULE- Subsection (a) of section 7122 is amended by adding at
  the end thereof the following new sentence: `The Secretary may make such a
  compromise in any case where the Secretary determines that such compromise
  would be in the best interest of the United States.'.
  (b) REVIEW REQUIREMENTS- Subsection (b) of section 7122 (relating to records)
  is amended by striking `$500' and inserting `$50,000'.
  (c) EFFECTIVE DATE- The amendments made by this section shall take effect
  on the date of the enactment of this Act.
Subtitle E--Erroneous And Fraudulent Information Returns
SEC. 151. PHONE NUMBER OF PERSON PROVIDING PAYEE STATEMENTS REQUIRED TO BE
SHOWN ON SUCH STATEMENT.
  (a) GENERAL RULE- The following provisions are each amended by striking
  `name and address' and inserting `name, address, and phone number':
  (1) Section 6041(d)(1).
  (2) Section 6041A(e)(1).
  (3) Section 6042(c)(1).
  (4) Section 6044(e)(1).
  (5) Section 6045(b)(1).
  (6) Section 6049(c)(1)(A).
  (7) Section 6050B(b)(1).
  (8) Section 6050H(d)(1).
  (9) Section 6050I(e)(1).
  (10) Section 6050J(e).
  (11) Section 6050K(b)(1).
  (12) Section 6050N(b)(1).
  (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to
  statements required to be furnished after December 31, 1992 (determined
  without regard to any extension).
SEC. 152. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION RETURNS.
  (a) GENERAL RULE- Subchapter B of chapter 76 (relating to proceedings by
  taxpayers and third parties) is amended by redesignating section 7434 as
  section 7435 and by inserting after section 7433 the following new section:
`SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION RETURNS.
  `(a) IN GENERAL- If any person willfully files a false or fraudulent
  information return with respect to payments purported to be made to any
  other person, such other person may bring a civil action for damages
  against the person so filing such return.
  `(b) DAMAGES- In any action brought under subsection (a), upon a finding
  of liability on the part of the defendant, the defendant shall be liable
  to the plaintiff in an amount equal to the greater of $5,000 or the sum of--
  `(1) any actual damages sustained by the plaintiff as a proximate result
  of the filing of the false or fraudulent information return (including any
  costs attributable to resolving deficiencies asserted as a result of such
  filing), and
  `(2) the costs of the action.
  `(c) PERIOD FOR BRINGING ACTION- Notwithstanding any other provision of law,
  an action to enforce the liability created under this section may be brought
  without regard to the amount in controversy and may be brought only within
  6 years after the filing of the false or fraudulent information return.
  `(d) INFORMATION RETURN- For purposes of this section, the term `information
  return' means any statement described in section 6724(d)(1)(A).'
  (b) CLERICAL AMENDMENT- The table of sections for subchapter B of chapter
  76 is amended by striking the item relating to section 7434 and inserting
  the following:
`Sec. 7434. Civil damages for fraudulent filing of information returns.
`Sec. 7435. Cross references.'
  (c) EFFECTIVE DATE- The amendments made by this section shall apply to false
  or fraudulent information returns filed after the date of the enactment
  of this Act.
SEC. 153. REQUIREMENT TO VERIFY ACCURACY OF INFORMATION RETURNS.
  (a) GENERAL RULE- Section 6201 (relating to assessment authority) is amended
  by redesignating subsection (d) as subsection (e) and by inserting after
  subsection (c) the following new subsection:
  `(d) REQUIRED VERIFICATION OF INFORMATION RETURNS- When making a
  determination of a deficiency based on an information return filed with
  the Secretary under chapter 61 by a third party, the Secretary shall take
  reasonable steps to corroborate the accuracy of such information return
  when such return is disputed by the taxpayer.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
Subtitle F--Modifications to Penalty for Failure to Collect and Pay Over Tax
SEC. 161. NO PENALTY IF PROMPT NOTIFICATION OF THE SECRETARY.
  (a) IN GENERAL- Section 6672 (relating to failure to collect and pay over
  tax, or attempt to evade or defeat tax) is amended by adding at the end
  thereof the following new subsection:
  `(c) PENALTY NOT APPLICABLE WHERE PROMPT NOTIFICATION OF FAILURE-
  `(1) IN GENERAL- A person shall not be liable for any penalty under
  subsection (a) by reason of any failure referred to in subsection (a) if--
  `(A) such person is not a significant owner, or highly compensated employee,
  of the trade or business with respect to which such failure occurred,
  `(B) such person notifies the Secretary (in such manner as he may prescribe)
  that such failure has occurred within 10 days after the date of such
  failure, and
  `(C) such notification was before any notice by the Secretary to any person
  with respect to such failure.
  `(2) DEFINITIONS- For purposes of paragraph (1)--
  `(A) SIGNIFICANT OWNER- The term `significant owner' means--
  `(i) any person holding an interest as a proprietor in a trade or business
  carried on as a proprietorship, and
  `(ii) in the case of a trade or business conducted by a corporation or
  partnership, any person who is a 5-percent owner (as defined in section
  416(i)(1)) in such corporation or partnership, as the case may be.
  `(B) HIGHLY COMPENSATED EMPLOYEE- The term `highly compensated employee'
  means any employee who receives compensation from the employer at an annual
  rate in excess of $75,000.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply in
  the case of failures after the date of the enactment of this Act.
SEC. 162. DISCLOSURE OF CERTAIN INFORMATION WHERE MORE THAN 1 PERSON SUBJECT
TO PENALTY.
  (a) IN GENERAL- Subsection (e) of section 6103 (relating to disclosure to
  persons having material interest) is amended by adding at the end thereof
  the following new paragraph:
  `(9) DISCLOSURE OF CERTAIN INFORMATION WHERE MORE THAN 1 PERSON SUBJECT TO
  PENALTY UNDER SECTION 6672- If the Secretary determines that a person is
  liable for a penalty under section 6672(a) with respect to any failure,
  upon request in writing of such person, the Secretary may disclose in
  writing to such person--
  `(A) the name of any other person whom the Secretary has determined to be
  liable for such penalty with respect to such failure, and
  `(B) whether the Secretary has attempted to collect such penalty from
  such other person, the general nature of such collection activities,
  and the amount collected.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
  on the date of the enactment of this Act.
Subtitle G--Awarding of Costs And Certain Fees
SEC. 171. DEFINITION OF PREVAILING PARTY.
  Subparagraph (A) of section 7430(c)(4) is amended to read as follows:
  `(A) IN GENERAL- The term `prevailing party' means any party in any
  proceeding to which subsection (a) applies (other than the United States
  or any creditor of the taxpayer involved)--
  `(i) which--
  `(I) has substantially prevailed with respect to the amount in controversy,
  or
  `(II) has substantially prevailed with respect to the most significant
  issue or set of issues presented, and
  `(ii) which meets the requirements of the first sentence of section
  2412(d)(1)(B) of title 28, United States Code (as in effect on October 22,
  1986), except to the extent differing procedures are established by rule of
  court and meets the requirements of section 2412(d)(2)(B) of such title 28
  (as so in effect).'
SEC. 172. TREATMENT OF PREVAILING PARTY WHO REPRESENTS HIMSELF.
  Subsection (c) of section 7430 is amended by adding at the end thereof
  the following new paragraph:
  `(8) SPECIAL RULE WHERE PREVAILING REPRESENTS HIMSELF- If a prevailing
  party represents himself in any proceeding referred to in subsection (a),
  a reasonable allowance (as determined by the court, or, in any case where
  the determination under paragraph (4)(B) is made by the Internal Revenue
  Service, as determined by the Internal Revenue Service) for the value
  (determined under the principles of paragraph (1)(B)(iii)) of the party's
  time involved in the performance of such representation shall be treated
  as reasonable litigation costs or reasonable administrative costs, as the
  case may be.'
SEC. 173. INTERNAL REVENUE SERVICE EMPLOYEES PERSONALLY LIABLE IN CERTAIN
CASES.
  Section 7430 is amended by adding at the end thereof the following new
  subsection:
  `(g) PERSONAL LIABILITY OF INTERNAL REVENUE SERVICE EMPLOYEES IN CERTAIN
  CASES- In any proceeding in which the prevailing party is awarded a judgment
  for reasonable litigation costs under this section, the court may assess
  a portion of such costs against any Internal Revenue Service employee
  (and such employee shall not be reimbursed by the United States for the
  costs so assessed) if the court determines that such proceeding resulted
  from any arbitrary, capricious, or malicious act of such employee.'
SEC. 174. FAILURE TO AGREE TO EXTENSION NOT TAKEN INTO ACCOUNT.
  Paragraph (1) of section 7430(b) (relating to requirement that administrative
  remedies be exhausted) is amended by adding at the end thereof the following
  new sentence: `Any failure to agree to an extension of the time for the
  assessment of any tax shall not be taken into account for purposes of
  determining whether the prevailing party meets the requirements of the
  preceding sentence.'
SEC. 175. EFFECTIVE DATE.
  The amendments made by this subtitle shall apply in case of proceedings
  commenced after the date of the enactment of this Act.
Subtitle H--Other Provisions
SEC. 181. REQUIRED CONTENT OF CERTAIN NOTICES.
  (a) GENERAL RULE- Subsection (a) of section 7522 (relating to content
  of tax due, deficiency, and other notices) is amended by striking `shall
  describe the basis for, and identify' and inserting `shall set forth the
  adjustments which are the basis for, and shall identify'.
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
  notices sent after the date 6 months after the date of the enactment of
  this Act.
SEC. 182. TREATMENT OF SUBSTITUTE RETURNS UNDER SECTION 6651.
  (a) GENERAL RULE- Section 6651 (relating to failure to file tax return
  or to pay tax) is amended by adding at the end thereof the following
  new subsection:
  `(h) TREATMENT OF RETURNS PREPARED BY SECRETARY UNDER SECTION 6020(b)-
  In the case of any return made by the Secretary under section 6020(b)--
  `(1) such return shall be disregarded for purposes of determining the
  amount of the addition under paragraph (1) of subsection (a), but
  `(2) such return shall be treated as the return filed by the taxpayer for
  purposes of determining the amount of the addition under paragraphs (2)
  and (3) of subsection (a).'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply in
  the case of any return the due date for which (determined without regard
  to extensions) is after the date of the enactment of this Act.
SEC. 183. PROTECTION FOR TAXPAYERS WHO RELY ON CERTAIN GUIDANCE OF THE
INTERNAL REVENUE SERVICE.
  (a) IN GENERAL- Section 7805 (relating to rules and regulations) is amended
  by adding at the end thereof the following new subsection:
  `(g) PROTECTION FOR TAXPAYERS WHO RELY ON CERTAIN GUIDANCE- If a taxpayer
  takes any position or other action in reasonable reliance on guidance
  published by the Secretary in a press release, information release,
  or Revenue Ruling, such position or other action taken by the taxpayer
  shall be treated as consistent with the provision to which such guidance
  relates. Any subsequent guidance published by the Secretary in any form
  shall not have the effect of treating such position or other action as
  being inconsistent with such provision for the period before the date the
  subsequent guidance is published.'
  (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply
  in cases where the initial guidance is published after the date of the
  enactment of this Act.
TITLE II--FORM MODIFICATIONS; STUDIES
SEC. 200. DEFINITIONS.
  For purposes of this title--
  (1) SECRETARY- The term `Secretary' means the Secretary of the Treasury
  or his delegate.
  (2) 1986 CODE- The term `1986 Code' means the Internal Revenue Code of 1986.
  (3) TAX-WRITING COMMITTEES- The term `tax-writing Committees' means
  the Committee on Ways and Means of the House of Representatives and the
  Committee on Finance of the Senate.
Subtitle A--Form Modifications
SEC. 201. EXPLANATION OF CERTAIN PROVISIONS.
  (a) GENERAL RULE- The Secretary shall take such actions as may be
  appropriate to ensure that taxpayers are aware of the provisions of the
  1986 Code permitting payment of tax in installments, extensions of time
  for payment of tax, and compromises of tax liability. Such actions shall
  include revising the instructions for filing income tax returns so that
  such instructions include an explanation of--
  (1) the procedures for requesting the benefits of such provisions, and
  (2) the terms and conditions under which the benefits of such provisions
  are available.
  (b) COLLECTION NOTICES- In any notice of an underpayment of tax or proposed
  underpayment of tax sent by the Secretary to any taxpayer, the Secretary
  shall include a notification of the availability of the provisions of
  sections 6159, 6161, and 7122 of the 1986 Code.
SEC. 202. IMPROVED PROCEDURES FOR NOTIFYING SERVICE OF CHANGE OF ADDRESS
OR NAME.
  The Secretary shall provide improved procedures for taxpayers to notify the
  Secretary of changes in names and addresses. Such procedures shall include
  a check-off box for purposes of indicating such changes on envelopes which
  the Service provides to taxpayers for use in mailing tax returns. Not
  later than April 15, 1992, the Secretary shall institute procedures for
  timely updating all Internal Revenue Service records with change-of-address
  information provided to the Secretary by taxpayers.
SEC. 203. RIGHTS AND RESPONSIBILITIES OF DIVORCED INDIVIDUALS.
  The Secretary shall include in the Internal Revenue Service publication
  entitled `Your Rights As A Taxpayer' a section on the rights and
  responsibilities of divorced individuals.
SEC. 204. PENALTIES UNDER SECTION 6672.
  (a) PUBLIC INFORMATION REQUIREMENTS- The Secretary shall take such
  actions as may be appropriate to ensure that employees are aware of their
  responsibilities under the Federal tax depository system, the circumstances
  under which employees may be liable for the penalty imposed by section
  6672 of the 1986 Code, and the responsibility to promptly report to the
  Internal Revenue Service any failure referred to in subsection (a) of such
  section 6672. Such actions shall include--
  (1) printing of a warning on deposit coupon booklets and the appropriate
  tax returns that certain employees may be liable for the penalty imposed
  by such section 6672, and
  (2) the development of a special information packet.
  (b) BOARD MEMBERS OF TAX-EXEMPT ORGANIZATIONS-
  (1) VOLUNTARY BOARD MEMBERS- The penalty under section 6672 of the 1986
  Code shall not be imposed on volunteer members of any board of trustees or
  directors of an organization referred to in section 501 of the 1986 Code to
  the extent such members are solely serving in an honorary capacity and do not
  participate in the day-to-day or financial operations of the organization.
  (2) DEVELOPMENT OF EXPLANATORY MATERIALS- The Secretary shall develop
  materials explaining the circumstances under which board members of
  tax-exempt organizations (including voluntary and honorary members) may
  be subject to penalty under section 6672 of the 1986 Code. Such materials
  shall be made available to tax-exempt organizations.
  (3) IRS INSTRUCTIONS- The Secretary shall clarify the instructions to
  Internal Revenue Service employees on the application of the penalty under
  section 6672 of the 1986 Code with regard to honorary or volunteer members
  of boards of trustees or directors of tax-exempt organizations.
  (c) ANNUAL DESIGNATION OF RESPONSIBLE OFFICERS- The Secretary shall require--
  (1) each employer to list on such employer's income tax return (or in the
  case of a tax-exempt organization, such organization's annual information
  return) the names of each of such employer's employees who are responsible
  for the collection and paying over to the Secretary of withheld taxes, and
  (2) such employer to notify the employees so listed of such action.
Such listing shall not be binding on the Secretary nor on any person so listed.
  (d) PROMPT NOTIFICATION- To the maximum extent practicable, the Secretary
  shall notify all persons who have failed to make timely and complete
  deposit of any taxes of such failure within 30 days after the date on
  which the Secretary is first aware of such failure.
SEC. 205. REQUIRED NOTICE OF CERTAIN PAYMENTS.
  If any payment is received by the Secretary from any taxpayer and the
  Secretary cannot associate such payment with any outstanding tax liability
  of such taxpayer, the Secretary shall make reasonable efforts to notify the
  taxpayer of such inability within 60 days after the receipt of such payment.
Subtitle B--Studies
SEC. 211. PILOT PROGRAM FOR APPEAL OF ENFORCEMENT ACTIONS.
  (a) GENERAL RULE- The Secretary shall establish a 1-year pilot program for
  appeals of enforcement actions (including lien, levy, and seizure actions)--
  (1) where the deficiency was assessed without actual knowledge of the
  taxpayer,
  (2) where the deficiency was assessed without an opportunity for
  administrative appeal, and
  (3) in other appropriate circumstances.
  (b) REPORT- Not later than December 31, 1992, the Secretary shall submit to
  the tax-writing Committees a report on the pilot program established under
  subsection (a), together with such recommendations as he may deem advisable.
SEC. 212. STUDY ON TAXPAYERS WITH SPECIAL NEEDS.
  (a) GENERAL RULE- The Secretary shall conduct a study on ways to assist
  the elderly, physically impaired, foreign-language speaking, and other
  taxpayers with special needs to comply with the internal revenue laws.
  (b) REPORT- Not later than December 31, 1992, the Secretary shall submit to
  the tax-writing Committees a report on the study conducted under subsection
  (a), together with such recommendations as he may deem advisable.
SEC. 213. REPORTS ON TAXPAYER-RIGHTS EDUCATION PROGRAM.
  Not later than April 15, 1992, the Secretary shall submit a report to
  the tax-writing Committees on the scope and content of the Internal
  Revenue Service's taxpayer-rights education program for its officers and
  employees. Not later than December 31, 1992, the Secretary shall submit a
  report to the tax-writing Committees on the effectiveness of the program
  referred to in the preceding sentence.
SEC. 214. BIENNIAL REPORTS ON MISCONDUCT BY INTERNAL REVENUE SERVICE EMPLOYEES.
  (a) GENERAL RULE- During December of 1992 and during December of each second
  calendar year thereafter, the Secretary shall report to the tax-writing
  Committees on all cases involving complaints about misconduct of Internal
  Revenue Service employees and the disposition of such complaints.
  (b) METHOD OF MAKING REPORT- Any report required under subsection (a)
  shall be made in 2 forms as follows:
  (1) A form which may include information not disclosable under section 6103
  of the 1986 Code and the report in such form may be made only as permitted
  under paragraphs (1) and (4)(A) of section 6103(f) of the 1986 Code.
  (2) A form which does not include information not disclosable under section
  6103 of the 1986 Code.
SEC. 215. STUDY OF NOTICES OF DEFICIENCY.
  (a) GENERAL RULE- The Comptroller General shall conduct a study on--
  (1) the effectiveness of current Internal Revenue Service efforts to
  notify taxpayers with regard to tax deficiencies under section 6212 of
  the 1986 Code,
  (2) the number of registered or certified letters and other notices returned
  to the Internal Revenue Service as undeliverable,
  (3) any follow-up action taken by the Internal Revenue Service to locate
  taxpayers who did not receive actual notice,
  (4) the effect that failures to receive notice of such deficiencies have
  on taxpayers, and
  (5) recommendations to improve Internal Revenue Service notification
  of taxpayers.
  (b) REPORT- Not later than December 31, 1992, the Comptroller General shall
  submit to the tax-writing Committees a report on the study conducted under
  subsection (a), together with such recommendations as he may deem advisable.
SEC. 216. NOTICE AND FORM CLARITY STUDY.
  (a) GENERAL RULE- The Comptroller General shall conduct annual studies of
  the accuracy and clarity of 25 of the most commonly used Internal Revenue
  Service forms, notices, and publications. In conducting any such study,
  the Comptroller General shall examine the suitability and usefulness of
  Internal Revenue Service telephone numbers on Internal Revenue Service
  notices and shall solicit and consider the comments of organizations
  representing taxpayers, employers, and tax professionals.
  (b) REPORTS- The Comptroller General shall submit to the tax-writing
  Committees a report on each study conducted under subsection (a), together
  with such recommendations as he may deem advisable. The first such report
  shall be submitted not later than December 31, 1992.
SEC. 217. INTERNAL REVENUE SERVICE EMPLOYEES' SUGGESTIONS STUDY.
  (a) GENERAL RULE- The Comptroller General shall conduct a study of the
  Internal Revenue Service employee-suggestion programs. Such study shall
  include a review of the suggestions which were accepted and rewarded by
  the Internal Revenue Service, an analysis of the suggestions which were
  implemented, and an analysis of why other suggestions were not accepted.
  (b) REPORT- Not later than December 31, 1992, the Comptroller General shall
  submit to the tax-writing Committees a report on the study conducted under
  subsection (a), together with such recommendations as he may deem advisable.