Summary: H.R.5719 — 110th Congress (2007-2008)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (04/15/2008)

Taxpayer Assistance and Simplification Act of 2008 - (Sec. 2) Amends the Internal Revenue Code to modify the standards for imposing penalties on tax return preparers for understatements of tax to require: (1) substantial authority for a position with respect to an item on a tax return if such position was not disclosed with the return; and (2) a reasonable basis for a position that was disclosed with the return.

Requires tax return preparers to have a reasonable belief that a position with respect to a tax shelter or a reportable transaction (a transaction having a potential for tax avoidance or evasion) will more likely than not be sustained on its merits.

(Sec. 3) Removes certain limitations on the tax deduction for employee use of cellular telephones.

(Sec. 4) Delays until 2012 the 3% withholding requirement on government payments to contractors providing goods and services.

(Sec. 5) Exempts recipients of home care services under federally-assisted state or local government home care programs for the elderly or disabled from payment of employment taxes for amounts paid to service providers. Imposes liability for payment of such taxes on the fiscal administrators of such programs.

(Sec. 6) Allows officers and employees of the Department of the Treasury to refer taxpayers for advice and assistance to federally-funded low-income taxpayer clinics.

(Sec. 7) Authorizes the Secretary of the Treasury to make grants to provide matching funds for volunteer income tax assistance programs. Increases to $10 million the annual amount the Secretary may allocate for grants to such programs.

(Sec. 8) Requires the Secretary to provide taxpayers with annual written notices of eligibility for the earned income tax credit.

(Sec. 9) Prohibits the Secretary from providing a debt indicator (notice of a tax refund offset) to businesses that provide refund anticipation loans and engage in predatory business practices with respect to such loans.

(Sec. 10) Directs the Secretary to conduct a feasibility study for delivering tax refunds on debit cards, prepaid cards, and other electronic means to facilitate refunds to individuals who do not have bank accounts.

(Sec. 11) Extends from nine months to two years the period in which the Internal Revenue Service (IRS) may return property that has been wrongfully levied and for bringing a civil action for a wrongful levy.

(Sec. 12) Allows taxpayers to recontribute to their individual retirement accounts (IRAs), without penalty or limitation, amounts that were wrongfully levied by the IRS. Requires the IRS to pay interest on IRA amounts that were wrongfully seized.

(Sec. 13) Requires the Secretary to notify a taxpayer of: (1) any unauthorized use of such taxpayer's identity (suspected identity theft) which the Secretary uncovers during a tax investigation; and (2) any criminal charges brought against an individual who is using the identity of such taxpayer.

(Sec. 14) Repeals the authority of the IRS to enter into private debt collection contracts. Exempts contracts entered into before March 1, 2008, that are not renewed or extended after such date. Nullifies any contract entered into, extended, or renewed on or after such date.

(Sec. 15) Allows the IRS to use any means of mass communication (e.g., the Internet) to publish unclaimed tax refund amounts.

(Sec. 16) Expands the prohibitions against the misuse of Department of the Treasury names and symbols to the use of such names and symbols on an Internet domain address.

(Sec. 17) Sets forth a substantiation requirement for payments from a health savings account. Requires the trustee of a health savings account to report to the Secretary and the account beneficiary any unsubstantiated amount paid from an account for the preceding calendar year.

(Sec. 18) Amends the Internal Revenue Code and title II (Old Age, Survivors, and Disability Insurance Benefits) of the Social Security Act to treat certain foreign subsidiaries of U.S. companies performing services under a contract with the U.S. government as U.S. employers for purposes of Social Security and Medicare employment taxes.

(Sec. 19) Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase estimated tax payments for certain large corporations in the third quarter of 2013.

(Sec. 20) Directs the Comptroller General to study and report to Congress on the use of distributions from health savings accounts.