,,ii #aadth ,,congress #ast ,session ,s4 #bccc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #cj1 #bjae,mr4 ,cardin introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide taxpayer protection and assistance1 and for other purposes4 #a4 ,short title2 etc 7a7 ,short title ,this ,act may be cited as the ,taxpayer ,rights ,act of #bjae4 7b7 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf1 as amended4 7c7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 etc4 ,,title ,i--,taxpayer ,rights ,sec4 #aja4 ,statement of taxpayer rights4 ,,title ,,ii--,preparation of ,tax ,returns ,sec4 #bja4 ,programs for the benefit of low-income taxpayers4 ,sec4 #bjb4 ,regulation of tax return preparers4 ,sec4 #bjc4 ,preparer penalties with respect to preparation of returns and other submissions4 ,sec4 #bjd4 ,clarification of enrolled agent credentials4 ,sec4 #bje4 ,limit redisclosures and uses of consent-based disclosures of tax return information4 ,,title ,,iii--,improving ,,irs ,procedures ,sec4 #cja4 ,modifications to lien notice filing procedures4 ,sec4 #cjb4 ,modification of requirements relating to tax lien information contained in consumer credit reports4 ,sec4 #cjc4 ,de novo tax court review of innocent spouse relief determinations4 ,sec4 #cjd4 ,release of ,federal tax levies which cause business hardship4 ,sec4 #cje4 ,removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness4 ,sec4 #cjf4 ,special rules for levies that attach to a fixed and determinable right4 ,sec4 #cjg4 ,rules related to levies on qualified retirement plans4 ,sec4 #cjh4 ,taxpayer rights training4 ,sec4 #cji4 ,notice and opportunity for hearing by the ,office of ,appeals4 ,,title ,,iv--,national ,taxpayer ,advocate ,sec4 #dja4 ,modifications relating to taxpayer assistance orders4 ,sec4 #djb4 ,taxpayer advocate directives4 ,sec4 #djc4 ,office of the ,taxpayer ,advocate ,access to ,administrative ,files4 ,sec4 #djd4 ,office of the ,taxpayer ,advocate operations during a lapse in appropriations4 ,i ,taxpayer ,rights #aja4 ,statement of taxpayer rights 7a7 ,in general ,chapter #gg is amended by adding at the end the following new section3 #gebi4 ,statement of taxpayer rights 7a7 ,in general ,the ,secretary shall-- 7#a7 in consultation with the ,national ,taxpayer ,advocate1 publish a summary statement of primary taxpayer rights 7as described in subsection 7b771 and 7#b7 in coordination with the ,commissioner of the ,internal ,revenue ,service1 ensure that the employees of the ,internal ,revenue ,service are familiar with and act in accordance with such rights4 7b7 ,statement of rights ,the statement of rights is as follows3 7#a7 ,right to be informed4 7#b7 ,right to quality service4 7#c7 ,right to pay no more than the correct amount of tax4 7#d7 ,right to challenge the position of the ,internal ,revenue ,service and be heard4 7#e7 ,right of appeal from a decision of the ,internal ,revenue ,service in an independent forum4 7#f7 ,right to finality4 7#g7 ,right to privacy4 7#h7 ,right to confidentiality4 7#i7 ,right to retain representation4 7#aj7 ,right to a fair and just tax system1 including access to the ,taxpayer ,advocate ,service4 4 7b7 ,clerical amendment ,the table of sections for chapter #gg is amended by adding at the end the following new item3 ,sec4 #gebi4 ,statement of taxpayer rights4 4 7c7 ,effective date ,the amendments made by this section shall take effect #ahj days after the date of the enactment of this ,act4 ,,ii ,preparation of ,tax ,returns #bja4 ,programs for the benefit of low-income taxpayers 7a7 ,grants ,to facilitate nationwide availability of volunteer income tax assistance for low-,income and underserved populations 7#a7 ,in general ,the ,secretary1 through the ,internal ,revenue ,service1 shall establish a ,community ,volunteer ,income ,tax ,assistance ,matching ,grant ,program 7hereinafter in this subsection referred to as the ,,vita grant program74 ,except as otherwise provided in this subsection1 the ,,vita grant program shall be administered in a manner which is substantially similar to the ,community ,volunteer ,income ,tax ,assistance matching grants demonstration program established under title ,i of division ,d of the ,consolidated ,appropriations ,act1 #bjjh4 7#b7 ,matching grants 7,a7 ,in general ,the ,secretary shall make available grants under the ,,vita grant program to provide matching funds for the development1 expansion1 or continuation of qualified return preparation programs assisting low-income taxpayers and members of underserved populations4 7,b7 ,application ,in order to be eligible for a grant under this subsection1 a qualified return preparation program shall submit an application to the ,secretary at such time1 in such manner1 and containing such information as the ,secretary may reasonably require for each fiscal year4 7,c7 ,priority ,in awarding grants under this subsection1 the ,secretary shall give priority to applications-- 7i7 demonstrating assistance to low-income taxpayers1 with emphasis on outreach to and services for such taxpayers1 7ii7 demonstrating taxpayer outreach and education around available income supports and refundable credits such as the earned income tax credit under section #cb of the ,internal ,revenue ,code of #aihf1 and 7iii7 demonstrating specific outreach and focus on one or more underserved populations4 7,d7 ,use of funds ,qualified return preparation programs receiving a grant under this subsection may use the grant for-- 7i7 ordinary and necessary costs associated with program operation in accordance with ,cost ,principles ,circulars as set forth by the ,office of ,management and ,budget1 including-- 7,i7 for wages or salaries of persons coordinating the activities of the program1 7,,ii7 to develop training materials1 conduct training1 and perform quality reviews of the returns1 and 7,,iii7 for equipment purchases and vehicle-related expenses associated with remote or rural tax preparation services1 7ii7 outreach and educational activities relating to eligibility and availability of income supports available through the ,internal ,revenue ,code of #aihf1 such as the earned income tax credit1 and 7iii7 services related to financial education and capability1 asset development1 and the establishment of savings accounts in connection with tax return preparation4 7,e7 ,duration of grants 7i7 ,in general ,except as provided in clause 7ii71 a grant awarded under this subsection shall be for a period of #a year and shall not be renewed other than through an application under subparagraph 7,b74 7ii7 ,extended grants ,the ,secretary may award a grant under this subsection for a period of not more than #c years to any qualified return preparation program which-- 7,i7 received a grant under this subsection for the preceding year1 and 7,,ii7 received a score of #ij percent or better on a technical evaluation4 7,f7 ,use of grants for overhead expenses prohibited ,no grant made under this subsection may be used for overhead expenses that are not directly related to any qualified return preparation program4 7#c7 ,promotion and referral 7,a7 ,promotion ,the ,secretary shall promote the benefits of1 and encourage the use of1 tax preparation through the ,volunteer ,income ,tax ,assistance program through the use of mass communications1 referrals1 and other means4 7,b7 ,internal revenue service referrals ,the ,secretary may refer taxpayers to qualified return preparation programs receiving funding under this subsection4 7,c7 ,,vita grantee referral ,qualified return preparation programs receiving a grant under this subsection are encouraged to refer1 as appropriate1 to local or regional ,low ,income ,tax ,clinics individuals who are eligible to receive services at such clinics4 7#d7 ,authorization of ,appropriations 7,a7 ,in general ,for each of fiscal years #bjaf1 #bjag1 #bjah1 #bjai1 and #bjbj1 there are authorized to be appropriated #cj1jjj1jjj to carry out the purposes of this subsection4 7,b7 ,reservation ,from the funds appropriated under subparagraph 7,a7 for any fiscal year1 the ,secretary shall reserve not more than #c percent for administration of the program4 7,c7 ,availability ,amounts appropriated pursuant to the authority of subparagraph 7,a7 shall remain available without fiscal year limitation until expended4 7b7 ,national center ,to promote quality1 excellence1 and evaluation in volunteer income tax assistance 7#a7 ,national center to promote quality1 excellence1 and evaluation in volunteer income tax assistance 7,a7 ,establishment ,there is hereby established the ,national ,center to ,promote ,quality1 ,excellence1 and ,evaluation in ,volunteer ,income ,tax ,assistance 7hereinafter in this subsection referred to as the ,center74 7,b7 ,purpose ,the ,center shall-- 7i7 promote the adoption of a universally accessible volunteer training platform for the preparation of ,federal income tax returns1 7ii7 provide capacity-building technical assistance to qualified return preparation program managers1 7iii7 identify and disseminate best practices related to tax site management emerging from ,states1 community-based organizations1 nonprofit providers1 and local government entities1 7iv7 support outreach and marketing efforts to encourage the use of qualified return preparation programs receiving funding under subsection 7a71 and 7v7 provide evaluation of programs and activities funded under this section1 including-- 7,i7 identification1 both in aggregate and disaggregate1 of gaps in services for low-income taxpayers and underserved populations1 and 7,,ii7 independent evaluation of progress toward program objectives1 as defined by the ,secretary4 7,c7 ,administration 7i7 ,in general ,the ,secretary shall-- 7,i7 designate1 through a competitive process1 one qualified entity to be the lead national organization1 and 7,,ii7 provide an annual grant to the lead national organization designated under subclause 7,i74 7ii7 ,duties of lead national organization ,the lead national organization shall use funds provided through the grant in clause 7i77,,ii7 to-- 7,i7 carry out the purposes of the ,center1 and 7,,ii7 make subgrants as provided in paragraph 7#b74 7#b7 ,subgrants 7,a7 ,in general ,the lead national organization shall make available subgrants to eligible organizations to facilitate specialized technical assistance in reaching one or more underserved populations4 7,b7 ,eligible organization ,for purposes of this paragraph1 the term eligible organization means any organization which-- 7i7 is described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code1 7ii7 has1 to the satisfaction of the lead national organization1 demonstrated expertise and evidenced-based practices in specialized outreach to1 and service of1 one or more underserved populations1 and 7iii7 has1 to the satisfaction of the lead national organization1 demonstrated expertise in the provision of specialized technical assistance relating to qualified return preparation programs for one or more targeted underserved populations4 7,c7 ,application ,in order to be eligible for a subgrant under this paragraph1 an eligible organization shall submit an application to the lead national organization at such time1 in such manner1 and containing such information as the lead national organization may reasonably require for each fiscal year4 7,d7 ,use of funds ,an eligible organization which receives a subgrant under this paragraph shall assist the ,center by-- 7i7 providing technical assistance to qualified return preparation programs with targeted outreach and assistance to one or more underserved populations1 and 7ii7 including strategies for the provision of technical assistance targeting individuals and families with annual household earnings at or below #bej percent of the poverty line within the underserved populations served by the subgrant4 7,e7 ,subgrant amount 7i7 ,in general ,each year1 the lead national organization shall make available subgrants which1 in the aggregate1 do not exceed #dj percent of the grant received under paragraph 7#a74 7ii7 ,underserved populations ,of the amount of subgrants provided under clause 7i7-- 7,i7 not less than #be percent shall be dedicated to specialized technical assistance in serving taxpayers with disabilities1 7,,ii7 not less than #be percent shall be dedicated to specialized technical assistance in serving limited ,english speaking taxpayers1 and 7,,iii7 not less than #be percent shall be dedicated to specialized technical assistance in serving ,native ,american taxpayers4 7,f7 ,duration of subgrants ,a subgrant awarded under this paragraph shall be for a period of #a year and shall not be renewed other than through an application under subparagraph 7,c74 7#c7 ,authorization of ,appropriations 7,a7 ,in general ,for each of fiscal years #bjaf1 #bjag1 #bjah1 #bjai1 and #bjbj1 there are authorized to be appropriated #e1jjj1jjj to carry out the purposes of this subsection4 7,b7 ,availability ,amounts appropriated pursuant to the authority of subparagraph 7,a7 shall remain available without fiscal year limitation until expended4 7c7 ,definitions ,as used in subsections 7a7 and 7b73 7#a7 ,qualified return preparation program ,the term qualified return preparation program means any program-- 7,a7 which provides assistance to individuals1 not less than #ij percent of whom are low-income taxpayers1 in preparing and filing ,federal income tax returns1 including schedules reporting sole proprietorship or farm income1 7,b7 which is administered by a qualified entity1 7,c7 in which all of the volunteers who assist in the preparation of ,federal income tax returns meet the training requirements prescribed by the ,secretary1 and 7,d7 which uses a quality review process which reviews #ajj percent of all returns4 7#b7 ,qualified entity 7,a7 ,in general ,the term qualified entity means any entity which-- 7i7 is described in subparagraph 7,b71 7ii7 is in compliance with ,federal tax filing and payment requirements1 7iii7 is not debarred or suspended from ,federal contracts1 grants1 or cooperative agreements1 and 7iv7 agrees to provide documentation to substantiate any matching funds provided under the ,,vita grant program4 7,b7 ,entity described ,an entity is described in this subparagraph if such entity is-- 7i7 an institution of higher education which is described in section #ajb 7other than subsection 7a77#a77;,c7 thereof7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh71 as in effect on the date of the enactment of this section1 and which has not been disqualified from participating in a program under title ,,iv of such ,act1 7ii7 an organization described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code1 7iii7 a ,state or local government agency1 including-- 7,i7 a county or municipal government agency1 7,,ii7 an ,indian tribe1 as defined in section #d7ab7 of the ,native ,american ,housing ,assistance and ,self-,determination ,act of #aiif 7#be ,u4,s4,c4 #dajc7ab771 including any tribally designated housing entity 7as defined in section #d7ba7 of such ,act 7#be ,u4,s4,c4 #dajc7ba7771 tribal subsidiary1 subdivision1 or other wholly owned tribal entity1 and 7,,iii7 a ,state government agency1 but only if no other eligible organization is available to assist the targeted population or community1 7iv7 a local1 ,state1 regional1 or national coalition 7with one lead organization which meets the eligibility requirements of clause 7i71 7ii71 or 7iii7 acting as the applicant organization71 or 7v7 a ,cooperative ,extension ,service office1 but only if no other eligible organization is available to assist the targeted population or community4 7#c7 ,low-income taxpayers ,the term low-income taxpayer means a taxpayer who has an income which does not exceed #bej percent of the poverty line 7as defined in section #baaj7;c77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acig;jj7c77#e7774 7#d7 ,underserved population ,the term underserved population includes populations of persons with disabilities1 persons with limited ,english proficiency1 ,native ,americans1 individuals living in rural areas1 and the elderly4 7#e7 ,lead national organization ,the term lead national organization means an organization described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code which has demonstrated1 to the satisfaction of the ,secretary-- 7,a7 capacity in a minimum of #ae ,states1 territories1 or tribal areas1 7,b7 expertise in the provision of tax preparation services to low-income taxpayers and underserved populations1 7,c7 an ability to train program leadership and staff1 7,d7 capacity to disseminate information throughout the ,united ,states1 and 7,e7 capacity to-- 7i7 maintain a ,web site through which information is disseminated in an easily accessible manner1 and 7ii7 provide technical assistance and training through ,web-based technologies4 7#f7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury or the ,secretary's delegate4 7d7 ,low-,income taxpayer clinics 7#a7 ,increase in authorized grants ,paragraph 7#a7 of section #gebf7;c7 is amended by striking #f1jjj1jjj and inserting #bj1jjj1jjj4 7#b7 ,use of grants for overhead expenses prohibited 7,a7 ,in general ,section #gebf7;c7 is amended by adding at the end the following new paragraph3 7#f7 ,use of grants for overhead expenses prohibited ,no grant made under this section may be used for overhead expenses that are not directly related to the clinic4 4 7,b7 ,conforming amendments ,section #gebf7;c77#e7 is amended-- 7i7 by inserting qualified before low-income1 and 7ii7 by striking the last sentence4 7#c7 ,promotion of clinics ,section #gebf is amended by adding at the end the following new subsection3 7d7 ,promotion of clinics ,the ,secretary is authorized to promote the benefits of and encourage the use of qualified low-income taxpayer clinics through the use of mass communications1 referrals1 and other means4 4 7#d7 ,,irs referrals to clinics ,subsection 7c7 of section #gebf1 as amended by paragraph 7#b77;,a71 is amended by adding at the end the following new paragraph3 7#g7 ,,irs referrals ,notwithstanding any other provision of law1 the ,secretary may refer taxpayers to specific qualified low-income taxpayer clinics receiving funding under this section4 4 7#e7 ,poverty line ,section #gebf7;b77#a77;,b77i7 is amended by striking poverty level1 as determined in accordance with criteria established by the ,director of the ,office of ,management and ,budget and inserting poverty line 7as defined in section #baaj7;c77#e7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acig;jj7c77#e7774 7#f7 ,notice of availability of clinics in notice of deficiency ,subsection 7a7 of section #fbab is amended by inserting 1 as well as notice regarding the availability of low-income taxpayer clinics and information about how to contact them before the period at the end4 7#g7 ,notice of availability of clinics in notice of hearing upon filing of notice of lien ,subsection 7a7 of section #fcbj is amended by adding at the end the following new sentence3 ,such notice shall include a notice to the taxpayer of the availability of low-income taxpayer clinics and information about how to contact them4 4 7#h7 ,notice of availability of clinics in notice and opportunity of hearing before levy ,paragraph 7#c7 of section #fccj7;a7 is amended by adding at the end the following flush sentence3 ,such notice shall include a notice to the taxpayer of the availability of low-income taxpayer clinics and information about how to contact them4 4 7e7 ,effective ,date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4 #bjb4 ,regulation of tax return preparers 7a7 ,in general ,subsection 7a7 of section #ccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking paragraph 7#a7 and inserting the following3 7#a7 regulate-- 7,a7 the practice of representatives of persons before the ,department of the ,treasury2 and 7,b7 the practice of tax return preparers2 and 1 and 7#b7 in paragraph 7#b7-- 7,a7 by inserting or tax return preparer after representative each place it appears1 and 7,b7 by inserting or in preparing their tax returns1 claims for refund1 or documents in connection with tax returns or claims for refund after cases in subparagraph 7,d74 7b7 ,authority ,to sanction regulated tax return preparers ,subsection 7b7 of section #ccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking before the ,department1 7#b7 by inserting or tax return preparer after representative each place it appears1 and 7#c7 in paragraph 7#d71 by striking misleads or threatens and all that follows and inserting misleads or threatens-- 7,a7 any person being represented or any prospective person being represented2 or 7,b7 any person or prospective person whose tax return1 claim for refund1 or document in connection with a tax return or claim for refund1 is being or may be prepared4 4 7c7 ,tax return preparer defined ,section #ccj of title #ca1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7e7 ,tax return preparer ,for purposes of this section-- 7#a7 ,in general ,the term tax return preparer has the meaning given such term under section #ggja7;a77#cf7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,tax return ,the term tax return has the meaning given to the term return under section #ffif7;e77#a7 of the ,internal ,revenue ,code of #aihf4 7#c7 ,claim for refund ,the term claim for refund has the meaning given such term under section #ffif7;e77#b7 of such ,code4 4 #bjc4 ,preparer penalties with respect to preparation of returns and other submissions 7a7 ,inclusion of other submissions in penalty provisions 7#a7 ,understatement of taxpayer's liability by tax return preparer 7,a7 ,in general ,section #ffid is amended by striking return or claim of refund each place it appears and inserting return1 claim of refund1 or other submission to the ,secretary4 7,b7 ,conforming amendments ,section #ffid1 as amended by paragraph 7#a71 is amended by striking return or claim each place it appears and inserting return1 claim1 or other submission to the ,secretary4 7#b7 ,increase in penalty in case of gross misconduct ,subsection 7b7 of section #ffid is amended by adding at the end the following new paragraph3 7#d7 ,increase in penalty in case of gross misconduct ,in the case of an understatement to which this section applies that is attributable to the tax return preparer's making a false or fraudulent return or claim for refund without the taxpayer's knowledge1 subsection 7a7 shall be applied by substituting #ajj percent of the amount of the understatement for #ej percent of the amount derived 7or to be derived7 by the tax return preparer with respect to the return or claim4 ,this penalty shall be in addition to any other penalties provided by law4 4 7#c7 ,other assessable penalties 7,a7 ,in general ,section #ffie is amended by striking return or claim of refund each place it appears and inserting return1 claim of refund1 or other submission4 7,b7 ,conforming amendments ,section #ffie1 as amended by paragraph 7#a71 is amended by striking return or claim each place it appears and inserting return1 claim1 or other submission4 7b7 ,increase in certain other assessable penalty amounts 7#a7 ,in general ,subsections 7a71 7b71 and 7c7 of section #ffie are each amended by striking #ej and inserting #a1jjj4 7#b7 ,removal of annual limitation ,subsections 7a71 7b71 and 7c7 of section #ffie are each amended by striking the last sentence thereof4 7c7 ,review by the ,treasury ,inspector ,general for ,tax ,administration ,subparagraph 7,a7 of section #ghjc7;d77#b7 is amended by striking and at the end of clause 7iii71 by striking the period at the end of clause 7iv7 and inserting 1 and1 and by adding at the end the following new clause3 7v7 a summary of the penalties assessed and collected during the reporting period under sections #ffid and #ffie and under the regulations promulgated under section #ccj of title #ca1 ,united ,states ,code1 and a review of the procedures by which violations are identified and penalties are assessed under those sections1 4 7d7 ,additional certification on documents other than returns 7#a7 ,identifying number required for all submissions to the ,,irs by tax return preparers ,the first sentence of paragraph 7#d7 of section #faji7;a7 is amended by striking return or claim for refund and inserting return1 claim for refund1 statement1 or other document4 7#b7 ,effective date ,the amendment made by paragraph 7#a7 shall apply to any return1 claim for refund1 or submission to the ,secretary that is filed after the date of the enactment of this ,act4 7e7 ,coordination with section #fjfj7;a7 ,the ,secretary of the ,treasury shall coordinate the requirements under the regulations promulgated under sections #ccj and #ccj;,a of title #ca1 ,united ,states ,code1 with the return requirements of section #fjfj of the ,internal ,revenue ,code of #aihf4 7f7 ,effective date ,the regulations required by this section shall be prescribed not later than one year after the date of the enactment of this ,act4 #bjd4 ,clarification of enrolled agent credentials ,section #ccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by redesignating subsections 7b71 7c71 and 7d7 as subsections 7c71 7d71 and 7e71 respectively1 and 7#b7 by inserting after subsection 7a7 the following new subsection3 7b7 ,any enrolled agents properly licensed to practice as required under rules promulgated under subsection 7a7 shall be allowed to use the credentials or designation of enrolled agent1 ,,ea1 or ,e4,a44 4 #bje4 ,limit redisclosures and uses of consent-based disclosures of tax return information 7a7 ,in general ,subsection 7c7 of section #fajc is amended by striking ,however1 return and inserting the following3 ,persons designated by the taxpayer to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of1 or request by1 the taxpayer4 ,return4 7b7 ,effective date ,the amendment made by this section shall apply to disclosures after the date of the enactment of this ,act4 ,,iii ,improving ,,irs ,procedures #cja4 ,modifications to lien notice filing procedures 7a7 ,in general ,section #fcbc is amended by adding at the end the following new subsection3 7k7 ,required procedures before filing notice of lien 7#a7 ,secretarial determination 7,a7 ,in general ,the ,secretary may not file a notice of lien with respect to any taxpayer unless-- 7i7 the lien attaches to distrainable property1 and 7ii7 weighing all facts and circumstances pertaining to the collection of a taxpayer's delinquent tax assessment1 the ,secretary determines that-- 7,i7 the benefit to the ,federal ,government of the filing outweighs the harm to the taxpayer1 and 7,,ii7 the filing will not jeopardize the taxpayer's prospective ability-- 7aa7 to comply with the internal revenue laws1 and 7bb7 if the taxpayer is an otherwise viable business taxpayer1 to continue to secure funding to maintain business operations4 7,b7 ,factors to consider ,in making the determination under subparagraph 7,a77ii71 the ,secretary shall consider-- 7i7 the amount due1 7ii7 the lien filing fee1 7iii7 the value of the taxpayer's equity in the property or rights to property1 7iv7 the taxpayer's tax compliance history1 7v7 extenuating circumstances1 if any1 that explain the delinquency1 and 7vi7 the effect of the filing on the taxpayer's ability to obtain financing1 generate future income1 and pay current and future tax liabilities4 7#b7 ,taxpayer appeal prior to filing 7,a7 ,in general ,the ,secretary may not file a notice of lien with respect to any taxpayer unless-- 7i7 the ,secretary notifies the taxpayer that the ,secretary has determined to file such a notice with respect to the taxpayer1 and 7ii7 the taxpayer is afforded an opportunity to appeal such determination to the ,internal ,revenue ,service ,office of ,appeals4 ,the ,secretary shall provide the notice under subparagraph 7,a7 in writing and make reasonable efforts to provide such notice by telephone or direct personal contact4 7,b7 ,jeopardy notice of lien ,the ,secretary may file a notice of lien without regard to subparagraph 7,a77ii7 if the ,secretary finds that the collection of the tax would be in jeopardy if the notice of lien is not filed before the conclusion of such an appeal4 7#c7 ,supervisory approval required for liens in certain cases 7,a7 ,in general ,in any case to which this paragraph applies1 a notice of lien may not be filed unless the immediate supervisor 7or such higher level official as the ,secretary may designate7 of the individual making the initial determination under paragraph 7#a7 has individually reviewed and approved such determination4 7,b7 ,cases to which paragraph applies ,this paragraph shall apply in any case in which-- 7i7 the collection of the liability would create an economic hardship within the meaning of section #fcdc7;a77#a77;,d71 7ii7 the taxpayer has no equity in assets1 or 7iii7 there has been no personal contact with the taxpayer to discuss collection alternatives1 including an offer in compromise and partial payment installment agreement4 4 7b7 ,jeopardy notice of lien 7#a7 ,in general ,subparagraph 7,a7 of section #gdbi7;a77#a7 is amended by inserting after or #fhfb1 the following3 no notice of lien may be filed pursuant to section #fcbc7k77#b77;,b714 7#b7 ,redetermination by ,secretary ,paragraph 7#c7 of section #gdbi7;a7 is amended by striking or at the end of subparagraph 7,a71 by redesignating subparagraph 7,b7 as subparagraph 7,c71 and by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 whether or not the filing of the notice of lien pursuant to section #fcbc7k77#b77;,b7 is reasonable under the circumstances1 or 4 7#c7 ,redetermination by ,tax ,court ,paragraph 7#c7 of section #gdbi7;b7 is amended by striking or at the end of subparagraph 7,a71 by redesignating subparagraph 7,b7 as subparagraph 7,c71 and by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 whether or not the filing of the notice of lien pursuant to section #fcbc7k77#b77;,b7 is reasonable under the circumstances1 or 4 7#d7 ,conforming amendments 7,a7 ,the heading for section #gdbi is amended by inserting 1 notice of lien filing1 after levy4 7,b7 ,subparagraphs 7,a7 and 7,b7 of section #gdbi7;a77#a7 are each amended by striking assessment or levy each place it appears and inserting assessment1 notice of lien filing1 or levy4 7,c7 ,subparagraph 7,b7 of section #gdbi7;b77#b7 is amended by striking assessment or levy and inserting assessment1 notice of lien filing1 or levy4 7,d7 ,paragraph 7#d7 of section #gdbi7;b7 is amended-- 7i7 by inserting that the filing of such notice of lien is unreasonable1 after that the making of such levy is unreasonable11 and 7ii7 by inserting to withdraw such notice of lien1 after to release such levy14 7,e7 ,paragraph 7#a7 of section #gdbi7;g7 is amended-- 7i7 by inserting 1 the filing of a notice of lien pursuant to section #fcbc7k77#b77;,b71 after the making of a levy described in subsection 7a77#a71 and 7ii7 by inserting notice of lien filing after ,reasonableness of in the heading thereof4 7c7 ,effective date ,the amendment made by this section shall take effect on the date of the enactment of this ,act4 #cjb4 ,modification of requirements relating to tax lien information contained in consumer credit reports 7a7 ,in general ,paragraph 7#c7 of section #fje7;a7 of the ,fair ,credit ,reporting ,act 7#ae ,u4,s4,c4 #afha;c7a77#c77 is amended to read as follows3 7#c7 ,tax liens ,the following tax liens3 7,a7 ,any tax lien released pursuant to section #fcbe7;a7 of the ,internal ,revenue ,code of #aihf not more than #b years after the date that the notice of such lien was filed4 7,b7 ,any tax lien released pursuant to section #fcbe7;a7 of such ,code-- 7i7 more than #b years after the date that the notice of such lien was filed1 and 7ii7 more than #b years before the report4 7,c7 ,any tax lien if-- 7i7 the notice of such lien was not refiled during the required refiling period 7as defined in section #fcbc7;g77#c7 of such ,code71 and 7ii7 such period ends more than #f years before the report4 7,d7 ,any tax lien the notice of which is withdrawn pursuant to section #fcbc7;j77#a7 of such ,code4 7,e7 ,any tax lien released pursuant to section #fcbf7;b7 of such ,code if the notice of such lien was erroneously filed4 4 7b7 ,effective date ,the amendment made by this section shall take effect on the date of the enactment of this ,act4 #cjc4 ,de novo tax court review of innocent spouse relief determinations 7a7 ,in general ,section #fjae is amended-- 7#a7 in subsection 7e71 by adding at the end the following new paragraph3 7#f7 ,standard and scope of review ,any review of a determination made under this section shall be reviewed de novo by the ,tax ,court and shall be based upon-- 7,a7 the administrative record established at the time of the determination1 and 7,b7 any additional newly discovered or previously unavailable evidence4 1 and 7#b7 by amending subsection 7f7 to read as follows3 7f7 ,equitable relief 7#a7 ,in general ,under procedures prescribed by the ,secretary1 if-- 7,a7 taking into account all the facts and circumstances1 it is inequitable to hold the individual liable for any unpaid tax or any deficiency 7or any portion of either71 and 7,b7 relief is not available to such individual under subsection 7b7 or 7c71 the ,secretary may relieve such individual of such liability4 7#b7 ,limitation ,a request for equitable relief under this subsection may be made with respect to any portion of any liability that-- 7,a7 has not been paid1 provided that such request is made before the expiration of the applicable period of limitation under section #fejb1 or 7,b7 has been paid1 provided that such request is made during the period in which the individual could submit a timely claim for refund or credit of such payment4 4 7b7 ,effective date ,the amendments made by this section shall apply to petitions or requests filed or pending on and after the date of the enactment of this ,act4 #cjd4 ,release of ,federal tax levies which cause business hardship 7a7 ,in general ,subparagraph 7,d7 of section #fcdc7;a77#a7 is amended by inserting or any trade or business of the taxpayer before 1 or4 7b7 ,criteria for determining business hardship ,subsection 7a7 of section #fcdc is amended by adding at the end the following new paragraph3 7#d7 ,criteria for determining business hardship ,for purposes of making a determination under paragraph 7#a77;,d71 with respect to a trade or business of the taxpayer1 the ,secretary shall take into consideration-- 7,a7 the economic viability of such trade or business1 7,b7 the nature and extent of the hardship1 including the extent to which the taxpayer exercised ordinary business care and prudence1 and 7,c7 any hardships which would be caused to other individuals or businesses if such trade or business were liquidated4 4 7c7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4 #cje4 ,removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness 7a7 ,in general ,subsection 7c7 of section #fjej,p is amended by adding at the end the following new paragraph3 7#d7 ,determining date of discharge ,whether an entity has discharged the indebtedness of any person shall not be determined based solely on the passage of a specified period of time during which the entity has not received payment on such indebtedness4 4 7b7 ,effective date ,the amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this ,act4 #cjf4 ,special rules for levies that attach to a fixed and determinable right 7a7 ,in general ,section #fcca is amended by redesignating subsection 7l7 as subsection 7m7 and by inserting after subsection 7k7 the following new subsection3 7l7 ,limitation on levy after expiration of collection period 7#a7 ,penalties and interest ,in the case of a levy that attaches to a fixed and determinable right to payments or other property1 penalties1 additions to tax1 and interest shall not accrue after the expiration of the period of limitations provided in section #fejb4 7#b7 ,retirement and disability payments ,in the case of a levy on benefits under title ,,ii of the ,social ,security ,act1 benefits under a plan on account of a disability1 or retirement benefits or amounts held in a retirement plan1 such levy is not enforceable with respect to such benefits or amounts after the expiration of the period of limitations provided in section #fejb unless the taxpayer has committed a flagrant act 7as defined in section #fccd7;f77#b774 4 7b7 ,effective date ,the amendments made by this section shall apply to levies served after the date of the enactment of this ,act4 #cjg4 ,rules related to levies on qualified retirement plans 7a7 ,levy allowed on qualified retirement plans in certain circumstances ,section #fccd is amended-- 7#a7 by redesignating subsections 7f7 and 7g7 as subsections 7g7 and 7h71 respectively1 7#b7 by inserting after subsection 7e7 the following new subsection3 7f7 ,levy allowed on certain retirement plans 7#a7 ,in general ,amounts in a qualified retirement plan 7as defined in section #digd7;c77 or amounts in a taxpayer's account in the ,thrift ,savings ,fund 7as described in section #hdci7;a77#b7 of title #e1 ,united ,states ,code7 shall be exempt from levy unless-- 7,a7 the amount of tax 7excluding interest and penalties7 owed by the taxpayer exceeds #aj1jjj1 7,b7 the ,secretary determines that the taxpayer has committed a flagrant act1 and 7,c7 the ,secretary determines that such levy will not create an economic hardship due to the financial condition of the taxpayer 7as described in section #fcdc7;a77#a77;,d774 7#b7 ,flagrant act ,for purposes of this subsection1 the term flagrant act means-- 7,a7 the filing of a fraudulent return by the taxpayer1 or 7,b7 that the taxpayer acted with the intent to evade or defeat any tax imposed by this title or the collection or payment thereof4 1 and 7#c7 in subsection 7h71 as redesignated by paragraph 7#a7-- 7,a7 by redesignating paragraph 7#b7 as paragraph 7#c71 7,b7 in paragraph 7#c71 as redesignated by subparagraph 7,a71 by inserting or 7#b7 after paragraph 7#a71 and 7,c7 by inserting after paragraph 7#a7 the following new paragraph3 7#b7 ,other amounts ,in the case of any calendar year beginning after #bjae1 the dollar amount referred to in subsection 7f77#a77;,a7 shall be increased by an amount equal to-- 7,a7 #aj1jjj1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year1 by substituting calendar year #bjad for calendar year #aiib in subparagraph 7,b7 thereof4 4 7b7 ,authority ,to release levy and return property ,section #fcdc is amended by adding at the end the following new subsection3 7f7 ,individual held harmless for wrongful levy on certain retirement plans 7#a7 ,in general ,if the ,secretary determines that a qualified retirement plan 7as defined in section #digd7;c77 or a taxpayer's account in the ,thrift ,savings ,fund 7as described in section #hdci7;a77#b7 of title #e1 ,united ,states ,code7 has been levied upon in a manner described in section #gdcc or subsection 7b7 or 7d7 of this section1 the applicable amount 7as determined under paragraph 7#b77 may be deposited into-- 7,a7 if permissible1 the plan or account levied upon1 or 7,b7 an individual retirement plan 7other than an endowment contract7 to which a rollover from the plan or account levied upon is permitted4 7#b7 ,applicable amount ,for purposes of paragraph 7#a71 the applicable amount is an amount equal to the sum of-- 7,a7 the amount of money or damages returned by the ,secretary on account of a levy described in paragraph 7#a71 and 7,b7 any interest paid pursuant to subsection 7c7 on such amount4 7#c7 ,treatment as rollover ,for purposes of this title1 the distribution on account of the levy and any deposit under paragraph 7#a7 with respect to such distribution shall be treated as if such distribution and deposit were a rollover contribution described in section #djh7;d77#c77;,a77i71 except that-- 7,a7 any interest paid pursuant to subsection 7c7 shall be treated as a part of such distribution and not included in gross income1 7,b7 the #fj-;day requirement under such section shall be deemed to have been met if the deposit is made not later than the #fjth day after the day on which the taxpayer receives an amount described in paragraph 7#a7 from the ,secretary1 and 7,c7 such deposit shall not be taken into account for purposes of section #djh7;d77#c77;,b74 7#d7 ,treatment of income tax on levy ,if any amount is includible in gross income for a taxable year by reason of a levy described in paragraph 7#a7 and any portion of such amount is treated as a rollover pursuant to paragraph 7#c71 any tax imposed by chapter #a on such portion shall not be assessed1 and if assessed shall be abated1 and if collected shall be credited or refunded as an overpayment made on the due date for filing the return of tax for such taxable year4 7#e7 ,interest ,notwithstanding subsection 7d71 interest shall be allowed under subsection 7c7 in any case in which the ,secretary makes a determination described under section #gdcc or paragraph 7#b7 of subsection 7d7 with respect to a levy upon a qualified retirement plan or an account in the ,thrift ,savings ,fund4 4 7c7 ,effective date ,the amendments made by this section shall apply to levies served after the date of the enactment of this ,act4 #cjh4 ,taxpayer rights training 7a7 ,in general 7#a7 ,taxpayer ,advocate ,subparagraph 7,c7 of section #ghjc7;c77#b7 is amended by striking and at the end of clause 7iii71 by striking the period at the end of clause 7iv7 and inserting 2 and1 and by adding at the end the following new clause3 7v7 develop annual training for all ,internal ,revenue ,service officers and employees regarding taxpayer rights1 the ,office of the ,taxpayer ,advocate's case criteria and mission1 and ,taxpayer ,assistance ,order procedures4 4 7#b7 ,commissioner ,paragraph 7#c7 of section #ghjc7;c7 is amended-- 7,a7 by striking the period at the end and inserting 2 and1 and 7,b7 by striking shall establish procedures requiring and inserting the following3 shall establish procedures-- 7,a7 requiring 1 and 7,c7 by adding at the end the following new subparagraph3 7,b7 for providing annually the training described in subsection 7c77#b77;,c77v7 4 7b7 ,effective date ,the amendments made by this section shall take effect on the date of the enactment of this ,act4 #cji4 ,notice and opportunity for hearing by the ,office of ,appeals 7a7 ,in general ,section #fbab is amended by adding at the end the following new subsection3 7e7 ,requirement of preliminary notice and opportunity for hearing 7#a7 ,right to a hearing ,subject to paragraph 7#c71 any taxpayer which receives a notice of deficiency under this section shall be entitled to a hearing held by the ,internal ,revenue ,service ,office of ,appeals with respect to the proposed deficiency4 7#b7 ,requirement of preliminary notice ,subject to paragraph 7#c71 any notice of deficiency sent to a taxpayer under this section shall include notice of their right to a hearing 7as described in paragraph 7#a774 7#c7 ,regulatory authority ,the ,secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section1 including establishing procedures and exceptions with respect to the right to a hearing established under paragraph 7#a7 and notice of such right under paragraph 7#b74 4 7b7 ,effective date ,the amendments made by subsection 7a7 shall take effect on the date of the enactment of the ,act4 7c7 ,ensuring nationwide access to ,appeals ,officers and ,settlement ,agents ,the ,secretary of the ,treasury shall ensure that not less than #a ,appeals ,officer and #a ,settlement ,agent from the ,office of ,appeals of the ,internal ,revenue ,service are assigned to each ,state and made available to the residents of each such ,state4 ,,iv ,national ,taxpayer ,advocate #dja4 ,modifications relating to taxpayer assistance orders 7a7 ,clarification of authority with respect to closing agreements and compromises ,paragraph 7#b7 of section #ghaa7;b7 is amended-- 7#a7 by redesignating subparagraphs 7,c7 and 7,d7 as subparagraphs 7,d7 and 7,e71 respectively1 and 7#b7 by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 chapter #gd 7relating to closing agreements and compromises71 4 7b7 ,appeal of certain modified or rescinded orders ,subsection 7c7 of section #ghaa is amended by adding at the end the following new sentence3 ,if the ,deputy ,commissioner of ,internal ,revenue modifies or rescinds a ,taxpayer ,assistance ,order1 the ,national ,taxpayer ,advocate may appeal the decision to the ,commissioner of ,internal ,revenue for a final determination4 4 7c7 ,effective date ,the amendments made by this section shall apply to orders issued after the date of the enactment of this ,act4 #djb4 ,taxpayer advocate directives 7a7 ,in general ,subchapter ,a of chapter #hj is amended by adding at the end the following new section3 #ghab4 ,taxpayer advocate directives 7a7 ,authority ,to issue ,the ,national ,taxpayer ,advocate 7but not a delegate thereof7 may issue a ,taxpayer ,advocate ,directive to mandate changes to improve the operation of a functional process or to grant relief to groups of taxpayers 7or all taxpayers7 if1 as a result of the manner in which the internal revenue laws are being administered by the ,secretary1 its implementation will protect the rights of taxpayers1 prevent undue burden1 ensure equitable treatment1 or provide an essential service to taxpayers4 ,the terms of a ,taxpayer ,advocate ,directive may require the ,internal ,revenue ,service to implement it within a specified period of time4 7b7 ,authority ,to modify or rescind 7#a7 ,appeal ,an ,internal ,revenue ,service division or other function may appeal a ,taxpayer ,advocate ,directive by delivering a written explanation that facilitates a full and fair consideration of the issues to the ,national ,taxpayer ,advocate and ,deputy ,commissioner of ,internal ,revenue1 either of whom may modify or rescind such ,taxpayer ,advocate ,directive4 ,if the ,deputy ,commissioner of ,internal ,revenue modifies or rescinds a ,taxpayer ,advocate ,directive1 the ,deputy ,commissioner 7or a delegate chosen by the ,deputy ,commissioner7 shall provide a detailed written explanation of the reasons for the modification or rescission4 7#b7 ,final determination ,the ,national ,taxpayer ,advocate may appeal such decision to the ,commissioner of ,internal ,revenue for a final determination4 ,if the ,commissioner does not affirm the ,taxpayer ,advocate ,directive in full1 then the ,commissioner shall provide a written explanation of such determination1 and the reasons therefor1 not later than #ij days after the submission of such appeal4 ,such explanation shall address in detail each issue raised in the ,taxpayer ,advocate ,directive4 4 7b7 ,annual report 7#a7 ,in general ,clause 7ii7 of section #ghjc7;c77#b77;,b7 is amended by redesignating subclauses 7,,iii7 through 7,,xi7 as subclauses 7,,iv7 through 7,,xii71 respectively1 and by inserting after subclause 7,,ii7 the following new subclause3 7,,iii7 contain ,taxpayer ,advocate ,directives issued under section #ghab2 4 7#b7 ,conforming amendments ,clause 7ii7 of section #ghjc7;c77#b77;,b71 as amended by paragraph 7#a71 is amended-- 7,a7 by striking subclauses 7,i71 7,,ii71 and 7,,iii7 in subclauses 7,v71 7,,vi71 and 7,,vii7 thereof and inserting subclauses 7,i71 7,,ii71 7,,iii71 and 7,,iv71 and 7,b7 in subclause 7,,viii7-- 7i7 by inserting or ,taxpayer ,advocate ,directive after ,taxpayer ,assistance ,order1 and 7ii7 by inserting or #ghab7;a7 after section #ghaa7;b74 7c7 ,clerical amendment ,the table of sections for subchapter ,a of chapter #hj is amended by inserting after the item relating to section #ghaa the following new item3 ,sec4 #ghab4 ,taxpayer advocate directives4 4 #djc4 ,office of the ,taxpayer ,advocate ,access to ,administrative ,files ,section #ghjc7;c7 is amended by adding at the end the following new paragraph3 7#e7 ,access to taxpayer administrative files 7,a7 ,in general ,in furtherance of the functions1 responsibilities1 and authorities described in this subsection1 and in addition to the authority provided under section #fajc7;h77#a71 taxpayer administrative files shall1 upon request1 be open to inspection by or disclosure to officers and employees of the ,office of the ,taxpayer ,advocate whose duties require such inspection or disclosure4 7,b7 ,meetings with ,,irs ,in the case of a taxpayer seeking the assistance of the ,office of the ,taxpayer ,advocate1 any officer or employee of such ,office may1 at the request of the taxpayer1 attend any meeting between the ,internal ,revenue ,service and such taxpayer4 4 #djd4 ,office of the ,taxpayer ,advocate operations during a lapse in appropriations ,paragraph 7#b7 of section #ghjc7;c7 is amended by adding at the end the following new subparagraph3 7,e7 ,operations during a lapse in appropriations ,during any lapse in appropriations for the ,internal ,revenue ,service1 the ,commissioner of ,internal ,revenue1 in consultation with the ,national ,taxpayer ,advocate1 shall designate as essential employees a sufficient number of employees of the ,office of the ,taxpayer ,advocate to provide assistance to taxpayers relating to enforcement actions carried out during the lapse in appropriations4 4