Requires the Secretary of the Treasury (Secretary) to prepare a statement setting forth in nontechnical terms:
(1) the rights and obligations of a taxpayer and of the Internal Revenue Service (IRS) during a tax audit;
(2) the procedures by which a taxpayer may appeal adverse decisions, prosecute refund claims, and file complaints; and
(3) the procedures that the IRS may use in enforcing revenue laws.
Directs the Secretary to transmit drafts of the statement to specified congressional committees and to distribute the final statement to all taxpayers the Secretary contacts with respect to the determination or collection of any tax (other than in connection with providing tax forms).
Requires the IRS, upon taxpayer request, to permit any taxpayer to record any interview regarding the determination or collection of any tax.
Authorizes the IRS interviewer to record the interview if the taxpayer has been given prior notice and is provided with a transcript of the recording.
Requires the interviewer to explain to the taxpayer the audit or collection process, including the taxpayer's rights with respect to the relevant process.
Directs the Secretary to issue regulations with respect to the time and place of certain taxpayer interviews and examinations of taxpayer records.
Requires the Secretary to abate any portion of any penalty or addition to tax attributable to erroneous advice in writing given to a taxpayer by an IRS officer or employee in response to the taxpayer's specific inquiry.
Authorizes the IRS Ombudsman, upon application filed by a taxpayer, to issue a Taxpayer Assistance Order if, in the determination of the Ombudsman, the taxpayer is suffering or is about to suffer a significant hardship as a result of the manner in which the Secretary is administering the internal revenue laws.
Allows the terms of the Taxpayer Assistance Order to require the Secretary to release property of the taxpayer levied upon or to cease or refrain from certain actions.
Directs the Secretary to issue regulations with respect to Taxpayer Assistance Orders, including provisions to assure full, fair, and impartial due process for affected taxpayers.
Amends the Inspector General Act of 1978 and other Federal law to establish an Office of Inspector General within the Department of the Treasury and a corresponding Office of Assistant Commissioner (Inspection) within the IRS. Transfers to such Offices the existing audit and investigation units of the Department. Sets forth criteria with respect to:
(1) the authority of the Inspector General to conduct an investigation; and
(2) the authority of the Secretary in cases of audits or investigations requiring access to sensitive or confidential information.
Allows the Secretary to prohibit investigations under specified circumstances.
Restricts disclosures by the Inspector General of tax returns and return information.
Prohibits records of tax enforcement results from being used to evaluate certain IRS personnel or to impose or suggest production quotas.
Requires any temporary regulation issued by the Secretary to be issued as a proposed regulation as well.
Directs the Secretary to submit proposed regulations to the Administrator of the Small Business Administration for comment on their impact on small business.
Amends the Internal Revenue Code to specify required contents for tax due notices and deficiency notices, including the basis of the deficiency and a breakdown of the total amount into tax, interest, and penalty.
Authorizes the Secretary to enter into an agreement with a taxpayer under which the taxpayer may pay tax liability in installments if the Secretary determines that such an agreement will facilitate collection of the liability.
Permits the Secretary, after proper notice and a hearing, to modify or annul the agreement upon the finding that the financial condition of the affected taxpayer has significantly changed.
Permits the Secretary to modify or annul an agreement if the taxpayer fails to pay any installment or any other tax liability when due or fails to provide requested financial information.
Establishes in the IRS the Office for Taxpayers Services, under the supervision of an Assistant Commissioner of Internal Revenue. Directs the Assistant Commissioner to:
(1) be responsible for telephone, walk-in, and educational services, and for the design and production of tax and information forms; and
(2) prepare annually for presentation to specified congressional committees a joint report (with the Taxpayer Ombudsman for the IRS) on the quality of taxpayer services.