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H.R. 3340 (115th): Strengthening Taxpayer Rights Act of 2017

The text of the bill below is as of Jul 20, 2017 (Introduced).


I

115th CONGRESS

1st Session

H. R. 3340

IN THE HOUSE OF REPRESENTATIVES

July 20, 2017

(for himself, Ms. Judy Chu of California, Ms. DelBene, Mr. Higgins of New York, Mr. Levin, Ms. Sewell of Alabama, and Mr. Thompson of California) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to provide taxpayer protection and assistance, and for other purposes.

1.

Short title; etc

(a)

Short title

This Act may be cited as the Strengthening Taxpayer Rights Act of 2017.

(b)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986, as amended.

(c)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; etc.

Title I—Preparation of Tax Returns

Sec. 101. Preparer penalties with respect to preparation of returns and other submissions.

Sec. 102. Limit redisclosures and uses of consent-based disclosures of tax return information.

Title II—Improving IRS Procedures

Sec. 201. Modification of requirements relating to tax lien information contained in consumer credit reports.

Sec. 202. De novo tax court review of innocent spouse relief determinations.

Sec. 203. Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness.

Sec. 204. Special rules for levies that attach to a fixed and determinable right.

I

Preparation of Tax Returns

101.

Preparer penalties with respect to preparation of returns and other submissions

(a)

Inclusion of other submissions in penalty provisions

(1)

Understatement of taxpayer’s liability by tax return preparer

(A)

In general

Section 6694 is amended by striking return or claim of refund each place it appears and inserting return, claim of refund, or other submission to the Secretary.

(B)

Conforming amendments

Section 6694, as amended by paragraph (1), is amended by striking return or claim each place it appears and inserting return, claim, or other submission to the Secretary.

(2)

Increase in penalty in case of gross misconduct

Subsection (b) of section 6694 is amended by adding at the end the following new paragraph:

(4)

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 knowledge, subsection (a) shall be applied by substituting 100 percent of the amount of the understatement for 50 percent of the amount derived (or to be derived) by the tax return preparer with respect to the return or claim. This penalty shall be in addition to any other penalties provided by law.

.

(3)

Other assessable penalties

(A)

In general

Section 6695 is amended by striking return or claim for refund each place it appears and inserting return, claim for refund, or other submission.

(B)

Conforming amendments

Section 6695, as amended by paragraph (1), is amended by striking return or claim each place it appears and inserting return, claim, or other submission.

(b)

Increase in certain other assessable penalty amounts

(1)

In general

Subsections (a), (b), and (c) of section 6695 are each amended by striking $50 and inserting $1,000.

(2)

Removal of annual limitation

Subsections (a), (b), and (c) of section 6695 are each amended by striking the last sentence thereof.

(c)

Review by the Treasury Inspector General for Tax Administration

Subparagraph (A) of section 7803(d)(2) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and, and by adding at the end the following new clause:

(v)

a summary of the penalties assessed and collected during the reporting period under sections 6694 and 6695 and under the regulations promulgated under section 330 of title 31, United States Code, and a review of the procedures by which violations are identified and penalties are assessed under those sections,

.

(d)

Additional certification on documents other than returns

(1)

Identifying number required for all submissions to the IRS by tax return preparers

The first sentence of paragraph (4) of section 6109(a) is amended by striking return or claim for refund and inserting return, claim for refund, statement, or other document.

(2)

Effective date

The amendment made by paragraph (1) shall apply to any return, claim for refund, or submission to the Secretary that is filed after the date of the enactment of this Act.

(e)

Coordination with section 6060(a)

The Secretary of the Treasury shall coordinate the requirements under the regulations promulgated under sections 330 and 330A of title 31, United States Code, with the return requirements of section 6060 of the Internal Revenue Code of 1986.

(f)

Effective date

The regulations required by this section shall be prescribed not later than one year after the date of the enactment of this Act.

102.

Limit redisclosures and uses of consent-based disclosures of tax return information

(a)

In general

Subsection (c) of section 6103 is amended by striking However, return and inserting the following: 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 of, or request by, the taxpayer. Return.

(b)

Effective date

The amendment made by this section shall apply to disclosures after the date of the enactment of this Act.

II

Improving IRS Procedures

201.

Modification of requirements relating to tax lien information contained in consumer credit reports

(a)

In general

Paragraph (3) of section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)(3)) is amended to read as follows:

(3)

Tax liens

The following tax liens:

(A)

Any tax lien released pursuant to section 6325(a) of the Internal Revenue Code of 1986 not more than 2 years after the date that the notice of such lien was filed.

(B)

Any tax lien released pursuant to section 6325(a) of such Code—

(i)

more than 2 years after the date that the notice of such lien was filed, and

(ii)

more than 2 years before the report.

(C)

Any tax lien if—

(i)

the notice of such lien was not refiled during the required refiling period (as defined in section 6323(g)(3) of such Code), and

(ii)

such period ends more than 6 years before the report.

(D)

Any tax lien the notice of which is withdrawn pursuant to section 6323(j)(1) of such Code.

(E)

Any tax lien released pursuant to section 6326(b) of such Code if the notice of such lien was erroneously filed.

.

(b)

Effective date

The amendment made by this section shall take effect on the date of the enactment of this Act.

202.

De novo tax court review of innocent spouse relief determinations

(a)

In general

Section 6015 is amended—

(1)

in subsection (e), by adding at the end the following new paragraph:

(6)

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—

(A)

the administrative record established at the time of the determination, and

(B)

any additional newly discovered or previously unavailable evidence.

; and

(2)

by amending subsection (f) to read as follows:

(f)

Equitable relief

(1)

In general

Under procedures prescribed by the Secretary, if—

(A)

taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either), and

(B)

relief is not available to such individual under subsection (b) or (c),

the Secretary may relieve such individual of such liability.
(2)

Limitation

A request for equitable relief under this subsection may be made with respect to any portion of any liability that—

(A)

has not been paid, provided that such request is made before the expiration of the applicable period of limitation under section 6502, or

(B)

has been paid, provided that such request is made during the period in which the individual could submit a timely claim for refund or credit of such payment.

.

(b)

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 Act.

203.

Removal of nonpayment period from list of triggering events for returns relating to cancellation of indebtedness

(a)

In general

Subsection (c) of section 6050P is amended by adding at the end the following new paragraph:

(4)

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 indebtedness.

.

(b)

Effective date

The amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this Act.

204.

Special rules for levies that attach to a fixed and determinable right

(a)

In general

Section 6331 is amended by redesignating subsection (l) as subsection (m) and by inserting after subsection (k) the following new subsection:

(l)

Limitation on levy after expiration of collection period

(1)

Penalties and interest

In the case of a levy that attaches to a fixed and determinable right to payments or other property, penalties, additions to tax, and interest shall not accrue after the expiration of the period of limitations provided in section 6502.

(2)

Retirement and disability payments

In the case of a levy on benefits under title II of the Social Security Act, benefits under a plan on account of a disability, or retirement benefits or amounts held in a retirement plan, such levy is not enforceable with respect to such benefits or amounts after the expiration of the period of limitations provided in section 6502 unless the taxpayer has committed a flagrant act (as defined in section 6334(f)(2)).

.

(b)

Effective date

The amendments made by this section shall apply to levies served after the date of the enactment of this Act.