[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2809 Introduced in Senate (IS)]
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114th CONGRESS
2d Session
S. 2809
To amend the Internal Revenue Code of 1986 to preserve taxpayers'
rights to administrative appeal of deficiency determinations, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 18, 2016
Mr. Portman introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to preserve taxpayers'
rights to administrative appeal of deficiency determinations, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. ENSURING TAXPAYER RIGHT TO APPEAL.
(a) In General.--Subsection (a) of section 6212 of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``In General.--If the Secretary'' and
inserting ``In General.--
``(1) Authorization.--If--
``(A) the Secretary'',
(2) by striking ``44, he is authorized'' and inserting
``44, and
``(B) the requirements of paragraph (2) have been
met with respect to such deficiency,
the Secretary is authorized'', and
(3) by adding at the end the following new paragraph:
``(2) Opportunity for administrative review in the office
of appeals.--
``(A) In general.--The requirements of this
paragraph are met with respect to a deficiency if,
prior to the issuance of the notice of deficiency under
paragraph (1)--
``(i) the taxpayer has been issued a letter
of proposed deficiency that explains the basis
for the determination of deficiency and allows
the taxpayer an opportunity for administrative
review in the Internal Revenue Service Office
of Appeals, and
``(ii) either--
``(I) the time provided in such
letter for contacting the Office of
Appeals has expired and the taxpayer
has not so contacted such Office, or
``(II) the Office of Appeals has
issued a decision with respect to such
deficiency.
``(B) Frivolous tax positions.--The Secretary is
authorized to issue regulations limiting the
application of subparagraph (A) in cases involving
solely the failure or refusal to comply with the tax
laws because of moral, religious, political,
constitutional, conscientious, or similar grounds, or
for other positions listed as frivolous under section
6702(c).
``(C) Cases designated for litigation.--
Subparagraph (A) shall not apply in the case of issues
designated for litigation in accordance with section
7124.''.
(b) Opportunity for Appeal if Fewer Than 60 Days Remain on Statute
of Limitations.--Section 6212 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
``(e) Opportunity for Appeal if Fewer Than 60 Days Remain on
Statute of Limitations.--In the case of any issues relating to a
potential deficiency with respect to which 60 days or fewer remain in
the period applicable under section 6501, if the taxpayer agrees to the
extension of such period by 12 months, the Secretary shall issue a
letter of proposed deficiency described in subsection (a)(2)(A)(i)
allowing the taxpayer an opportunity for administrative review of such
issues in the Internal Revenue Service Office of Appeals before a
notice of deficiency is issued under this section. Rules similar to the
rules of subsection (a)(2)(B) shall apply for purposes of this
subsection.''.
(c) Effective Date.--The amendments made by this section shall
apply to notices of deficiency issued after April 20, 2016.
SEC. 2. APPEALS DISPUTE RESOLUTION PROCEDURES.
Subsection (a) of section 7123 of the Internal Revenue Code of 1986
is amended to read as follows:
``(a) Referral to Appeals Procedures.--The Secretary shall
prescribe procedures by which any taxpayer may request--
``(1) early referral of 1 or more unresolved issues from
the examination or collection division to the Internal Revenue
Service Office of Appeals, or
``(2) consideration by such Office of Appeals of issues
included in--
``(A) a letter of proposed deficiency described in
section 6212(a)(2)(A), or
``(B) a notice of deficiency pursuant to section
6212, whether or not the taxpayer has filed a petition
with the Tax Court pursuant to section 6213(a), a claim
for refund, or a suit in a district court or the United
States Court of Federal Claims with respect to such
issues.
Such regulations may limit such procedures in cases involving
solely the failure or refusal to comply with the tax laws
because of moral, religious, political, constitutional,
conscientious, or similar grounds, or for other positions
listed as frivolous under section 6702(c). Such procedures
shall not be available in the case of issues designated for
litigation in accordance with section 7124.''.
SEC. 3. RESTRICTION ON SECRETARIAL AUTHORITY TO DESIGNATE CASES FOR
LITIGATION.
(a) In General.--Chapter 74 of the Internal Revenue Code of 1986 is
amended by redesignating section 7124 as section 7125 and by inserting
after section 7123 the following new section:
``SEC. 7124. RESTRICTION ON SECRETARIAL AUTHORITY TO DESIGNATE CASES
FOR LITIGATION.
``(a) In General.--The Secretary may designate issues arising from
the examination or collection division for litigation, and not permit
the taxpayer to request consideration of such issues by the Internal
Revenue Service Office of Appeals under section 7123(a), only to the
extent such issues relate to listed transactions (as defined in section
6707A(c)(2)).
``(b) Settlement.--In offering terms under a settlement agreement
for purposes of the resolution of any issues arising from the
examination or collection division, the Secretary may offer terms that
preclude the taxpayer from requesting consideration of such issues by
the Office of Appeals under section 7123(a) only to the extent such
issues relate to listed transactions (as defined in section
6707A(c)(2)).''.
(b) Clerical Amendment.--The table of sections for chapter 74 of
the Internal Revenue Code of 1986 is amended by striking the item
relating to section 7124 and inserting the following new items:
``Sec. 7124. Restriction on Secretarial authority to designate cases
for litigation.
``Sec. 7125. Cross references.''.
(c) Effective Date.--The amendments made by this section shall
apply to the designation of issues for litigation, and offers of
settlement terms, after April 20, 2016.
SEC. 4. MODIFICATION OF AUTHORITY TO ISSUE DESIGNATED SUMMONS.
(a) In General.--Paragraph (1) of section 6503(j) of the Internal
Revenue Code of 1986 is amended by striking ``coordinated examination
program'' and inserting ``coordinated industry case program''.
(b) Designated Summons.--Clause (i) of section 6503(j)(2)(A) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(i) the issuance of such summons is
preceded by a review and written approval of
such issuance by the Large Business and
International Division Commissioner and the
Division Counsel of the Office of Chief Counsel
(or their successors)--
``(I) which clearly establishes
that the taxpayer did not reasonably
cooperate with reasonable requests by
the Secretary for witnesses, documents,
meetings, and interviews, and
``(II) which is attached to such
summons,''.
(c) Burden of Proof.--Subsection (j) of section 6503 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(4) Burden of proof.--In any court proceeding described
in paragraph (3), the Secretary shall bear the burden of
proving that the corporation described in paragraph (1) did not
reasonably cooperate with reasonable requests by the Secretary
for witnesses, documents, meetings, and interviews.''.
(d) Effective Date.--The amendments made by this section shall
apply to summonses issued after April 20, 2016.
SEC. 5. LIMITATION ON ACCESS OF NON-IRS EMPLOYEES TO RETURNS AND RETURN
INFORMATION ACQUIRED BY SUMMONS.
(a) In General.--Section 7602 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(f) Limitation on Access of Persons Other Than IRS Officers and
Employees.--The authority granted under this section may not be
delegated, directly or indirectly, to any person authorized to receive
returns and return information under section 6103(n).''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall take effect on the date of
the enactment of this Act.
(2) Application to contracts in effect.--The amendment made
by this section shall apply to any contract in effect under
section 6103(n) of the Internal Revenue Code of 1986, pursuant
to temporary Treasury Regulation section 301.7602-1T proposed
in Internal Revenue Bulletin 2014-28 or any similar or
successor regulation, that is in effect on the date of the
enactment of this Act.
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