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Taxpayer First Act of 2019 R E P O R T Committee On 1 116TH CONGRESS " ! REPT. 116–39 1st Session HOUSE OF REPRESENTATIVES Part 1 TAXPAYER FIRST ACT OF 2019 R E P O R T OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ON H.R. 1957 [Including cost estimate of the Congressional Budget Office] APRIL 9, 2019.—Ordered to be printed VerDate Sep 11 2014 07:28 Apr 16, 2019 Jkt 089006 PO 00000 Frm 00001 Fmt 6012 Sfmt 6012 E:\HR\OC\HR039P1.XXX HR039P1 SSpencer on DSKBBXCHB2PROD with REPORTS E:\Seals\Congress.#13 TAXPAYER FIRST ACT OF 2019 VerDate Sep 11 2014 07:28 Apr 16, 2019 Jkt 089006 PO 00000 Frm 00002 Fmt 6019 Sfmt 6019 E:\HR\OC\HR039P1.XXX HR039P1 SSpencer on DSKBBXCHB2PROD with REPORTS with DSKBBXCHB2PROD on SSpencer 1 116TH CONGRESS " ! REPT. 116–39 1st Session HOUSE OF REPRESENTATIVES Part 1 TAXPAYER FIRST ACT OF 2019 R E P O R T OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ON H.R. 1957 [Including cost estimate of the Congressional Budget Office] APRIL 9, 2019.—Ordered to be printed U.S. GOVERNMENT PUBLISHING OFFICE 89–006 WASHINGTON : 2019 VerDate Sep 11 2014 07:28 Apr 16, 2019 Jkt 089006 PO 00000 Frm 00003 Fmt 4012 Sfmt 4012 E:\HR\OC\HR039P1.XXX HR039P1 SSpencer on DSKBBXCHB2PROD with REPORTS E:\Seals\Congress.#13 VerDate Sep 11 2014 07:28 Apr 16, 2019 Jkt 089006 PO 00000 Frm 00004 Fmt 4012 Sfmt 4012 E:\HR\OC\HR039P1.XXX HR039P1 SSpencer on DSKBBXCHB2PROD with REPORTS C O N T E N T S Page I. SUMMARY AND BACKGROUND ................................................................. 26 A. Purpose and Summary ......................................................................... 26 B. Background and Need for Legislation ................................................ 26 C. Legislative History ............................................................................... 27 II. EXPLANATION OF THE BILL ...................................................................... 28 TITLE I—PUTTING TAXPAYERS FIRST ............................................................ 28 A. Independent Appeals Process .............................................................. 28 1. Establishment of Internal Revenue Service Independent Office of Appeals (sec. 1001 of the bill and sec. 7803 of the Code) ........ 28 B. Improved Service .................................................................................. 32 1. Comprehensive customer service strategy (sec. 1101 of the bill) ................................................................................................... 32 2. IRS Free File Program (sec. 1102 of the bill) .............................. 33 3. Low-income exception for payments otherwise required in con- nection with a submission of an offer-in-compromise (sec. 1103 of the bill and sec. 7122 of the Code) ............................................ 34 C. Sensible Enforcement ........................................................................... 35 1. Internal Revenue Service seizure requirements with respect to structuring transactions (sec. 1201 of the bill) ........................ 35 2. Exclusion of interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction (sec. 1202 of the bill and new sec. 139H of the Code) ................................................................................................ 38 3. Clarification of equitable relief from joint liability (sec. 1203 of the bill and sec. 6015 of the Code) ............................................ 38 4. Modification of procedures for issuance of third-party sum- mons (sec. 1204 of the bill and sec. 7609 of the Code) ................ 40 5. Private debt collection and special compliance personnel pro- gram (sec. 1205 of the bill and sec. 6306 of the Code) ................ 42 6. Reform of notice of contact of third parties (sec. 1206 of the bill and sec. 7602 of the Code) ....................................................... 44 7. Modification of authority to issue designated summons (sec. 1207 of the bill and sec. 6503(j) of the Code) ............................... 45 8. Limitation on access of non-Internal Revenue Service employ- ees to returns and return information (sec. 1208 of the bill and sec. 7602 of the Code) ............................................................. 48 D. Organizational Modernization ............................................................. 50 1. Office of the National Taxpayer Advocate (sec. 1301 of the bill and sec. 7803(c) of the Code) ................................................... 50 2. Modernization of Internal Revenue Service organizational structure (sec. 1302 of the bill) ...................................................... 53 E. Other Provisions ................................................................................... 54 1. Return preparation programs for applicable taxpayers (sec. 1401 of the bill and new sec. 7526A of the Code) ........................ 54 2. Provision of information regarding low-income taxpayer clinics (sec. 1402 of the bill and sec. 7526 of the Code) .......................... 57 3. Notice from IRS regarding closure of Taxpayer Assistance Centers (sec. 1403 of the bill) ........................................................ 58 4. Rules for seizure and sale of perishable goods restricted to only perishable goods (sec. 1404 of the bill and sec. 6336 of the Code) ......................................................................................... 58 5. Whistleblower reforms (sec. 1405 of the bill and sec. 6103 of the Code) ..................................................................................... 59 6. Customer service information (sec. 1406 of the bill) ................... 61 (III) VerDate Sep 11 2014 00:40 Apr 17, 2019 Jkt 089006 PO 00000 Frm 00005 Fmt 5904 Sfmt 5904 E:\HR\OC\HR039P1.XXX HR039P1 SSpencer on DSKBBXCHB2PROD with REPORTS IV Page TITLE I—PUTTING TAXPAYERS FIRST—Continued E. Other Provisions—Continued 7. Misdirected tax refund deposits (sec. 1407 of the bill and sec. 6402 of the Code) ..................................................................... 62 TITLE II—21ST CENTURY IRS ............................................................................ 63 A. Cybersecurity and Identity Protection ................................................ 63 1. Public-private partnership to address identity theft tax refund fraud (sec. 2001 of the bill) ............................................................ 63 2. Recommendations of Electronic Tax Administration Advisory Committee regarding identity theft refund fraud (sec. 2002 of the bill) ........................................................................................ 64 3. Information sharing and analysis center (sec. 2003 of the bill and sec. 6103 of the Code) ....................................................... 65 4. Compliance by contractors with confidentiality safeguards (sec. 2004 of the bill and sec. 6103 of the Code) ................................... 69 5. Report on electronic payments (sec. 2005 of the bill) ................. 71 6. Identity protection personal identification numbers (sec. 2006 of the bill) ........................................................................................ 71 7. Single point of contact for tax-related identity theft victims (sec. 2007 of the bill) ...................................................................... 73 8. Notification of suspected identity theft (sec. 2008 of the bill and new sec. 7529 of the Code) ..................................................... 74 9. Guidelines for stolen identity theft refund fraud cases (sec. 2009 of the bill) ............................................................................... 76 10. Increased penalty for improper disclosure or use of informa- tion by preparers of returns (sec. 2010 of the bill and sec. 6713 of the Code) ............................................................................ 77 B. Development of Information Technology ............................................ 78 1. Management of IRS information technology (sec. 2101 of the bill and sec. 7803 of the Code) ....................................................... 78 2. Internet platform for Form 1099 filings (sec. 2102 of the bill) .. 80 3. Streamlined critical pay authority for information technology positions (sec. 2103 of the bill and new sec. 7812 of the Code) .. 81 C. Modernization of Consent-Based Income Verification System ......... 83 1. Disclosure of taxpayer information for third-party income verification (sec. 2201 of the bill and sec. 6103 of the Code) ...... 83 2. Limit redisclosures and uses of consent-based disclosures of tax return information (sec. 2202 of the bill and sec. 6103 of the Code) ..................................................................................... 85 D. Expanded Use of Electronic Systems .................................................. 86 1. Electronic filing of returns (sec. 2301 of the bill and sec. 6011 of the Code) ............................................................................ 86 2. Uniform standards for the use of electronic signatures for disclosure authorizations to, and other authorizations of, prac- titioners (sec. 2302 of the bill and sec. 6061 of the Code) ........... 88 3. Payment of taxes by debit and credit cards (sec. 2303 of the bill and sec. 6311 of the Code) ................................................ 90 4. Authentication of users of electronic services accounts (sec. 2304 of the bill) ............................................................................... 91 F. Other Provisions
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