Summary: S.3156 — 114th Congress (2015-2016)All Information (Except Text)

Bill summaries are authored by CRS.

Shown Here:
Reported to Senate without amendment (07/12/2016)

(This measure has not been amended since it was introduced. The summary of that version is repeated here.)

Taxpayer Protection Act of 2016

This bill amends the Internal Revenue Code to modify requirements regarding tax assessment and collection procedures, assistance provided to individuals in filing tax returns, whistle-blower protections, Internal Revenue Service (IRS) employment policies, tax-exempt organizations, and protecting taxpayers from identity theft and tax fraud.

The bill extends the time limit for contesting an IRS levy and holds individuals harmless for making certain contributions to retirement plans after an improper levy on a retirement plan.

The bill establishes several requirements to assist taxpayers in filing returns, including:

  • establishing a permanent Community Volunteer Income Tax Assistance Matching Grant Program,
  • limiting redisclosures and uses of consent-based disclosures of tax return information,
  • modifying rules regarding equitable relief from joint liability,
  • limiting user fees for installment agreements,
  • requiring the IRS to notify Congress prior to closing a Taxpayer Assistance Center, and
  • requiring the Department of Defense to take certain actions to identify and recover severance payments that were improperly withheld from veterans with combat-related injuries.

The bill requires the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration to report on whistle-blower awards. It also modifies requirements regarding: disclosures to whistle-blowers, updates on whistle-blower investigations, and anti-retaliation whistle-blower protections for employees.

The bill revises IRS employment policies to:

  • establish electronic record retention requirements;
  • prohibit the rehiring of former IRS employees who were removed for misconduct;
  • provide the IRS with additional authorities to remove or transfer senior executives based on performance or misconduct;
  • bar the IRS from delegating to third-party contractors the authority to examine books and records, summon persons, or take sworn testimony related to a tax matter; and
  • require the Department of the Treasury to notify taxpayers regarding certain unauthorized inspections or disclosures of returns and return information.

The bill modifies policies for tax-exempt organizations to:

  • expand electronic filing requirements,
  • repeal the substantiation exception for charitable contributions reported by donee organizations,
  • prohibit the IRS from targeting U.S. citizens for exercising any right guaranteed under the First Amendment to the U.S. Constitution, and
  • require the IRS to notify a tax-exempt organization prior to revoking its tax-exempt status for failing to file information returns.

The bill also requires the IRS to take several actions to protect taxpayers from identity theft and tax fraud, including: establishing a single point of contact for identity theft victims, providing taxpayers who call the IRS with information on identity theft and tax scams, and providing specified notifications and information to suspected victims of identity theft.

The GAO must submit reports to Congress regarding:

  • IRS authority to compromise tax matters;
  • opportunities for hearings by the IRS Office of Appeals;
  • phones and in-person services provided by the IRS to taxpayers residing in certain areas with populations of less than 50,000; and
  • federal employee wage and tax withholding reporting to state tax agencies.

The IRS must report to Congress on the status of efforts to expand online taxpayer services.

The Treasury Inspector General for Tax Administration must submit reports to Congress regarding: (1) IRS audit criteria, and (2) technological solutions to help protect taxpayers from telephone calls from individuals who are falsely claiming to be calling from or on behalf of the IRS.