Text: H.R.3479 — 113th Congress (2013-2014)All Bill Information (Except Text)

There is one version of the bill.

Text available as:

Shown Here:
Introduced in House (11/13/2013)


113th CONGRESS
1st Session
H. R. 3479


To provide a taxpayer bill of rights for small businesses.


IN THE HOUSE OF REPRESENTATIVES

November 13, 2013

Mr. Thornberry (for himself, Mr. Sessions, Mr. Nugent, Mr. Huelskamp, Mr. Farenthold, and Mr. Bentivolio) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To provide a taxpayer bill of rights for small businesses.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title; table of contents.

(a) Short title.—This Act may be cited as the “Small Business Taxpayer Bill of Rights Act of 2013”.

(b) Table of contents.—The table of contents of this Act is as follows:


Sec. 1. Short title; table of contents.

Sec. 2. Modification of standards for awarding of costs and certain fees.

Sec. 3. Civil damages allowed for reckless or intentional disregard of Internal Revenue laws.

Sec. 4. Modifications relating to certain offenses by officers and employees in connection with revenue laws.

Sec. 5. Modifications relating to civil damages for unauthorized inspection or disclosure of returns and return information.

Sec. 6. Interest abatement reviews.

Sec. 7. Ban on ex parte discussions.

Sec. 8. Alternative dispute resolution procedures.

Sec. 9. Extension of time for contesting IRS levy.

Sec. 10. Waiver of installment agreement fee.

Sec. 11. Suspension of running of period for filing petition of spousal relief and collection cases.

Sec. 12. Venue for appeal of spousal relief and collection cases.

Sec. 13. Increase in monetary penalties for certain unauthorized disclosures of information.

Sec. 14. De novo tax court review of claims for equitable innocent spouse relief.

Sec. 15. Ban on raising new issues on appeal.

SEC. 2. Modification of standards for awarding of costs and certain fees.

(a) Small businesses eligible without regard to net worth.—Subparagraph (D) of section 7430(c)(4) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (i), by striking the period at the end of clause (ii) and inserting “and”, and by adding at the end the following new clause:

“(iii) in the case of an eligible small business, the net worth limitation in clause (ii) of such section shall not apply.”.

(b) Eligible small business.—Paragraph (4) of section 7430(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

“(F) ELIGIBLE SMALL BUSINESS.—For purposes of subparagraph (D)(iii), the term ‘eligible small business’ means, with respect to any proceeding commenced in a taxable year—

“(i) a corporation the stock of which is not publicly traded,

“(ii) a partnership, or

“(iii) a sole proprietorship,

if the average annual gross receipts of such corporation, partnership, or sole proprietorship for the 3-taxable-year period preceding such taxable year does not exceed $50,000,000. For purposes of applying the test under the preceding sentence, rules similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply.”.

(c) Effective date.—The amendments made by this section shall apply to proceedings commenced after the date of the enactment of this Act.

SEC. 3. Civil damages allowed for reckless or intentional disregard of Internal Revenue laws.

(a) Increase in amount of damages.—Section 7433(b) of the Internal Revenue Code of 1986 is amended by striking “$1,000,000 ($100,000, in the case of negligence)” and inserting “$3,000,000 ($300,000, in the case of negligence)”.

(b) Extension of time To bring action.—Section 7433(d)(3) of the Internal Revenue Code of 1986 is amended by striking “2 years” and inserting “5 years”.

(c) Effective date.—The amendments made by this section shall apply to actions of employees of the Internal Revenue Service after the date of the enactment of this Act.

SEC. 4. Modifications relating to certain offenses by officers and employees in connection with revenue laws.

(a) Increase in penalty.—Section 7214 of the Internal Revenue Code of 1986 is amended—

(1) by striking “$10,000” in subsection (a) and inserting “$25,000”, and

(2) by striking “$5,000” in subsection (b) and inserting “$10,000”.

(b) Effective date.—The amendments made by this section shall take effect on the date of the enactment of this Act.

SEC. 5. Modifications relating to civil damages for unauthorized inspection or disclosure of returns and return information.

(a) Increase in amount of damages.—Subparagraph (A) of section 7431(c)(1) of the Internal Revenue Code of 1986 is amended by striking “$1,000” and inserting “$10,000”.

(b) Effective date.—The amendment made by this section shall apply to inspections and disclosure occurring on and after the date of the enactment of this Act.

SEC. 6. Interest abatement reviews.

(a) Filing period for interest abatement cases.—

(1) IN GENERAL.—Subsection (h) of section 6404 of the Internal Revenue Code of 1986 is amended—

(A) by striking “Review of denial” in the heading and inserting “Judicial review”, and

(B) by striking “‘if such action is brought’” and all that follows in paragraph (1) and inserting “if such action is brought—

“(A) at any time after the earlier of—

“(i) the date of the mailing of the Secretary's final determination not to abate such interest, or

“(ii) the date which is 180 days after the date of the filing with the Secretary (in such form as the Secretary may prescribe) of a claim for abatement under this section, and

“(B) not later than the date which is 180 days after the date described in subparagraph (A)(i).”.

(2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to claims for abatement of interest filed with the Secretary after the date of the enactment of this Act.

(b) Small tax case election for interest abatement cases.—

(1) IN GENERAL.—Subsection (f) of section 7463 of the Internal Revenue Code of 1986 is amended—

(A) by striking “and” at the end of paragraph (1),

(B) by striking the period at the end of paragraph (2) and inserting “, and”, and

(C) by adding at the end the following new paragraph:

“(3) a petition to the Tax court under section 6404(h) in which the amount of interest abatement sought does not exceed $50,000.”.

(2) EFFECTIVE DATE.—The amendments made by this subsection shall apply to—

(A) cases pending as of the day after the date of the enactment of this Act, and

(B) cases commenced after such date of enactment.

SEC. 7. Ban on ex parte discussions.

(a) In general.—Notwithstanding section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998, the Internal Revenue Service shall prohibit any ex parte communications between officers in the Internal Revenue Service Office of Appeals and other Internal Revenue Service employees with respect to any matter pending before such officers.

(b) Termination of employment for misconduct.—Subject to subsection (c), the Commissioner of Internal Revenue shall terminate the employment of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that such employee committed any act or omission prohibited under subsection (a) in the performance of the employee’s official duties. Such termination shall be a removal for cause on charges of misconduct.

(c) Determination of commissioner.—

(1) IN GENERAL.—The Commissioner of Internal Revenue may take a personnel action other than termination for an act prohibited under subsection (a).

(2) DISCRETION.—The exercise of authority under paragraph (1) shall be at the sole discretion of the Commissioner of Internal Revenue and may not be delegated to any other officer. The Commissioner of Internal Revenue, in his sole discretion, may establish a procedure which will be used to determine whether an individual should be referred to the Commissioner of Internal Revenue for a determination by the Commissioner under paragraph (1).

(3) NO APPEAL.—Any determination of the Commissioner of Internal Revenue under this subsection may not be appealed in any administrative or judicial proceeding.

(d) TIGTA reporting of termination or mitigation.—Section 7803(d)(1)(E) of the Internal Revenue Code of 1986 is amended by inserting “or section 7 of the Small Business Taxpayer Bill of Rights Act of 2013” after “1998”.

SEC. 8. Alternative dispute resolution procedures.

(a) In general.—Section 7123 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(c) Availability of dispute resolutions.—

“(1) IN GENERAL.—The procedures prescribed under subsection (b)(1) and the pilot program established under subsection (b)(2) shall provide that a taxpayer may request mediation or arbitration in any case unless the Secretary has specifically excluded the type of issue involved in such case or the class of cases to which such case belongs as not appropriate for resolution under such subsection. The Secretary shall make any determination that excludes a type of issue or a class of cases public within 5 working days and provide an explanation for each determination.

“(2) INDEPENDENT MEDIATORS.—

“(A) IN GENERAL.—The procedures prescribed under subsection (b)(1) shall provide the taxpayer an opportunity to elect to have the mediation conducted by an independent, neutral individual not employed by the Office of Appeals.

“(B) COST AND SELECTION.—

“(i) IN GENERAL.—Any taxpayer making an election under subparagraph (A) shall be required—

“(I) to share the costs of such independent mediator equally with the Office of Appeals, and

“(II) to limit the selection of the mediator to a roster of recognized national or local neutral mediators.

“(ii) EXCEPTION.—Clause (i)(I) shall not apply to any taxpayer who is an individual or who was a small business in the preceding calendar year if such taxpayer had an adjusted gross income that did not exceed 250 percent of the poverty level, as determined in accordance with criteria established by the Director of the Office of Management and Budget, in the taxable year preceding the request.

“(iii) SMALL BUSINESS.—For purposes of clause (ii), the term ‘small business’ has the meaning given such term under section 41(b)(3)(D)(iii).

“(3) AVAILABILITY OF PROCESS.—The procedures prescribed under subsection (b)(1) and the pilot program established under subsection (b)(2) shall provide the opportunity to elect mediation or arbitration at the time when the case is first filed with the Office of Appeals and at any time before deliberations in the appeal commence.”.

(b) Effective date.—The amendment made by this section shall take effect on the date of the enactment of this Act.

SEC. 9. Extension of time for contesting IRS levy.

(a) Extension of time for return of property subject to levy.—Subsection (b) of section 6343 of the Internal Revenue Code of 1986 is amended by striking “9 months” and inserting “3 years”.

(b) Period of limitation on suits.—Subsection (c) of section 6532 of the Internal Revenue Code of 1986 is amended—

(1) in paragraph (1) by striking “9 months” and inserting ‘‘3 years”, and

(2) in paragraph (2) by striking “9-month” and inserting “3-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. 10. Waiver of installment agreement fee.

(a) In general.—Section 6159 of the Internal Revenue Code of 1986 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:

“(f) Waiver of installment agreement fee.—The Secretary shall waive the fees imposed on installment agreements under this section for any taxpayer with an adjusted gross income that does not exceed 250 percent of the poverty level, as determined in accordance with criteria established by the Director of the Office of Management and Budget, and who has agreed to make payments under the installment agreement by electronic payment through a debit instrument.”.

(b) Effective date.—The amendment made by this section shall take effect on the date of the enactment of this Act.

SEC. 11. Suspension of running of period for filing petition of spousal relief and collection cases.

(a) Petitions for spousal relief.—

(1) IN GENERAL.—Subsection (e) of section 6015 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) SUSPENSION OF RUNNING OF PERIOD FOR FILING PETITION IN TITLE 11 CASES.—In the case of a person who is prohibited by reason of a case under title 11, United States Code, from filing a petition under paragraph (1)(A) with respect to a final determination of relief under this section, the running of the period prescribed by such paragraph for filing such a petition with respect to such final determination shall be suspended for the period during which the person is so prohibited from filing such a petition, and for 60 days thereafter.”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to petitions filed under section 6015(e) of the Internal Revenue Code of 1986 after the date of the enactment of this Act.

(b) Collection proceedings.—

(1) IN GENERAL.—Subsection (d) of section 6330 of the Internal Revenue Code of 1986 is amended—

(A) by striking “appeal such determination to the Tax Court” in paragraph (1) and inserting “petition the Tax Court for review of such determination”,

(B) by striking “Judicial review of determination” in the heading of paragraph (1) and inserting “Petition for review by Tax Court”,

(C) by redesignating paragraph (2) as paragraph (3), and

(D) by inserting after paragraph (1) the following new paragraph:

“(2) SUSPENSION OF RUNNING OF PERIOD FOR FILING PETITION IN TITLE 11 CASES.—In the case of a person who is prohibited by reason of a case under title 11, United States Code, from filing a petition under paragraph (1) with respect to a determination under this section, the running of the period prescribed by such subsection for filing such a petition with respect to such determination shall be suspended for the period during which the person is so prohibited from filing such a petition, and for 30 days thereafter.”.

(2) CONFORMING AMENDMENT.—Subsection (c) of section 6320 of such Code is amended by striking “(2)(B)” and inserting “(3)(B)”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to petitions filed under section 6330 of the Internal Revenue Code of 1986 after the date of the enactment of this Act.

SEC. 12. Venue for appeal of spousal relief and collection cases.

(a) In general.—Paragraph (1) of section 7482(b) of the Internal Revenue Code of 1986 is amended—

(1) by striking “or” at the end of subparagraph (E),

(2) by striking the period at the end of subparagraph (F) and inserting a comma, and

(3) by inserting after subparagraph (F) the following new subparagraphs:

“(G) in the case of a petition under section 6015(e), the legal residence of the petitioner, or

“(H) in the case of a petition under section 6320 or 6330—

“(i) the legal residence of the petitioner if the petitioner is an individual, and

“(ii) the principal place of business or principal office or agency if the petitioner is an entity other than an individual.”.

(b) Effective date.—The amendments made by this section shall apply to petitions filed after the date of enactment of this Act.

SEC. 13. Increase in monetary penalties for certain unauthorized disclosures of information.

(a) In general.—Paragraphs (1), (2), (3), and (4) of section 7213(a) of the Internal Revenue Code of 1986 are each amended by striking “$5,000” and inserting “$10,000”.

(b) Effective date.—The amendments made by this section shall apply to disclosures made after the date of the enactment of this Act.

SEC. 14. De novo tax court review of claims for equitable innocent spouse relief.

(a) In general.—Subparagraph (A) of section 6015(e)(1) of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence:

“Any review of a determination by the Secretary with respect to a claim for equitable relief under subsection (f) shall be reviewed de novo by the Tax Court.”.

(b) Effective date.—The amendment made by this section shall apply to petitions filed or pending before the Tax Court on and after the date of the enactment of this Act.

SEC. 15. Ban on raising new issues on appeal.

(a) In general.—Chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“SEC. 7529. Prohibition on Internal Revenue Service raising new issues in an internal appeal.

“(a) In general.—In reviewing an appeal of any determination initially made by the Internal Revenue Service, the Internal Revenue Service Office of Appeals may not consider or decide any issue that is not within the scope of the initial determination.

“(b) Certain issues deemed outside of scope of determination.—For purposes of subsection (a), the following matters shall be considered to be not within the scope of a determination:

“(1) Any issue that was not raised in a notice of deficiency or an examiner's report which is the subject of the appeal.

“(2) Any deficiency in tax which was not included in the initial determination.

“(3) Any theory or justification for a tax deficiency which was not considered in the initial determination.

“(c) No inference with respect to issues raised by taxpayers.—Nothing in this section shall be construed to provide any limitation in addition to any limitations in effect on the date of the enactment of this section on the right of a taxpayer to raise an issue, theory, or justification on an appeal from a determination initially made by the Internal Revenue Service that was not within the scope of the initial determination.”.

(b) Clerical amendment.—The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:


“Sec. 7529. Prohibition on Internal Revenue Service raising new issues in an internal appeal.”.

(c) Effective date.—The amendments made by this section shall apply to matters filed or pending with the Internal Revenue Service Office of Appeals on or after the date of the enactment of this Act.