Internal Revenue Service Accountability Act - Amends the Internal Revenue Code to impose a fine or imprisonment upon any U.S. officer or employee who willfully and maliciously disregards any revenue law or related regulation relating to any proceeding against a taxpayer.
Allows, if litigation costs are awarded, a portion of the costs to be assessed against any current or former Internal Revenue Service officer or employee (prohibiting Government reimbursement) if the proceeding resulted from any arbitrary, capricious, or malicious act of the officer or employee. Allows Government defense of the officer or employee, but makes the officer or employee liable for defense costs if the employee is found liable for litigation costs. Imposes similar liabilities regarding civil damages for a failure to release a lien or for certain unauthorized collection actions.
Amends provisions allowing civil damages for disclosure of returns and return information to allow the damages for access as well as disclosure and apply the provisions to former as well as current officers and employees. Provides for dismissal from office or discharge from employment, a fine or imprisonment, and costs of prosecution for unauthorized access. Prohibits unauthorized access and, on discovery of unauthorized access, requires immediate taxpayer notification.
Requires reasonable justification (not random selection) for examining a return. Prohibits, except on court approval, a second examination of a return or extending an examination back beyond three taxable years.
Extends from 21 to 90 calendar days after notice and demand the deadline to pay a tax required to be shown on certain returns but not shown.
Allows a district court to rule on a decision by the Secretary of the Treasury to not acquiesce regarding conclusions of law in identical, similar, or previously-decided cases.
Requires court consent for a levy to collect a tax.
Prohibits interest on assessable penalties, additional amounts, or additions to tax.
Sets the interest rate for overpayments and underpayments (the same rate for both).
Modifies requirements regarding abatement of interest, penalties, additional amounts, or additions to tax attributable to a mathematical or clerical error.
[Congressional Bills 105th Congress]
[From the U.S. Government Printing Office]
[H.R. 1227 Introduced in House (IH)]
105th CONGRESS
1st Session
H. R. 1227
To amend the Internal Revenue Code of 1986 to provide for increased
accountability by Internal Revenue Service agents and other Federal
Government officials in tax collection practices and procedures, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 8, 1997
Ms. Dunn (for herself, Mr. Gingrich, Mr. Watts of Oklahoma, Ms.
Granger, Mr. Christensen, Mr. Sam Johnson of Texas, Mr. Snowbarger, Mr.
Metcalf, Mr. Gibbons, Mr. English of Pennsylvania, Mr. Shimkus, Mrs.
Emerson, Mr. Franks of New Jersey, Mr. Gutknecht, Mr. Hayworth, Mr.
Herger, Mr. Hastings of Washington, Mr. Barr of Georgia, Mr. Paul, Mr.
Deal of Georgia, Mr. Camp, Mr. Cook, and Mr. Weller) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for increased
accountability by Internal Revenue Service agents and other Federal
Government officials in tax collection practices and procedures, 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. SHORT TITLE.
This Act may be cited as the ``Internal Revenue Service
Accountability Act''.
SEC. 2. CRIMINAL PENALTY FOR CERTAIN UNAUTHORIZED ACTIONS.
(a) In General.--Section 7214 of the Internal Revenue Code of 1986
(relating to offenses by officers and employees of the United States)
is amended--
(1) by striking ``or'' at the end of paragraph (8),
(2) by adding ``or'' at the end of paragraph (9),
(3) by inserting after paragraph (9) the following new
paragraph:
``(10) who willfully and maliciously disregards such law,
or any regulation promulgated under such law, relating to any
proceeding against any taxpayer;'', and
(4) by striking ``$10,000, or imprisoned not more than 5
years, or both'' and inserting ``$10,000 ($1,000, in the case
of an offense under paragraph (10)), or imprisoned not more
than 5 years (1 year, in the case of an offense under paragraph
(10), or both''.
(b) Effective Date.--The amendments made by this section shall
apply to actions by officers or employees after the date of the
enactment of this Act.
SEC. 3. INTERNAL REVENUE SERVICE EMPLOYEES PERSONALLY LIABLE FOR
DAMAGES AND LITIGATION COSTS IN CERTAIN CASES.
(a) Litigation Costs.--Section 7430 of the Internal Revenue Code of
1986 (relating to awarding of costs and certain fees) is amended by
adding at the end the following new subsection:
``(g) Personal Liability of Internal Revenue Service Officers and
Employees in Certain Cases.--
``(1) In general.--In any proceeding in which the
prevailing party is awarded a judgment for reasonable
litigation costs under this section, the court may assess a
portion of such costs against any Internal Revenue Service
officer or employee (and such officer or employee shall not be
reimbursed by the United States for the costs so assessed) if
the court determines that such proceeding resulted from any
arbitrary, capricious, or malicious act of such officer or
employee. For purposes of this section, the term `officer or
employee' includes a former officer or employee.
``(2) Representation of officer or employee.--Upon the
request of any Internal Revenue Service officer or employee,
such officer or employee may be represented by the United
States in any proceeding with respect to the issue of whether
there is to be an assessment against such officer or employee
under paragraph (1). If, in any case in which such an officer
or employee is so represented by the United States, it is
finally determined that such officer or employee is liable for
an assessment under paragraph (1), such officer or employee
shall also be liable to repay the United States for the costs
of its representation under this paragraph.''.
(b) Civil Damages and Court Costs for Failure To Release Lien.--
Section 7432 of the Internal Revenue Code of 1986 (relating to civil
damages for failure to release lien) is amended by adding at the end
the following new subsection:
``(f) Personal Liability of Internal Revenue Service Officers and
Employees in Certain Cases.--
``(1) In general.--In any proceeding in which the
prevailing plaintiff is awarded a judgment under this section
for damages described in subsection (b), the court may assess a
portion of such damages against any Internal Revenue Service
officer or employee (and such officer or employee shall not be
reimbursed by the United States for the damages so assessed) if
the court determines that such proceeding resulted from any
arbitrary, capricious, or malicious act of such officer or
employee. For purposes of this section, the term `officer or
employee' includes a former officer or employee.
``(2) Representation of officer or employee.--Upon the
request of any Internal Revenue Service officer or employee,
such officer or employee may be represented by the United
States in any proceeding with respect to the issue of whether
there is to be an assessment against such officer or employee
under paragraph (1). If, in any case in which such an officer
or employee is so represented by the United States, it is
finally determined that such officer or employee is liable for
an assessment under paragraph (1), such officer or employee
shall also be liable to repay the United States for the costs
of its representation under this paragraph.''.
(c) Civil Damages and Court Costs for Certain Unauthorized
Collection Actions.--Section 7433 of the Internal Revenue Code of 1986
(relating to civil damages for certain unauthorized collection actions)
is amended by adding at the end the following new subsection:
``(e) Personal Liability of Internal Revenue Service Officers and
Employees in Certain Cases.--
``(1) In general.--In any proceeding in which the
prevailing plaintiff is awarded a judgment for damages
described in subsection (b), the court may assess a portion of
such damages against any Internal Revenue Service officer or
employee (and such officer or employee shall not be reimbursed
by the United States for the damages so assessed) if the court
determines that such proceeding resulted from any arbitrary,
capricious, or malicious act of such officer or employee. For
purposes of this section, the term `officer or employee'
includes a former officer or employee.
``(2) Representation of officer or employee.--Upon the
request of any Internal Revenue Service officer or employee,
such officer or employee may be represented by the United
States in any proceeding with respect to the issue of whether
there is to be an assessment against such officer or employee
under paragraph (1). If, in any case in which such an officer
or employee is so represented by the United States, it is
finally determined that such officer or employee is liable for
an assessment under paragraph (1), such officer or employee
shall also be liable to repay the United States for the costs
of its representation under this paragraph.''.
(d) Effective Date.--The amendments made by this section shall
apply in the case of proceedings commenced after the date of the
enactment of this Act.
SEC. 4. PROTECTING THE PRIVACY OF TAXPAYERS.
(a) Civil Penalty for Unauthorized Access of Returns and Return
Information.--Section 7431 of the Internal Revenue Code of 1986
(relating to civil damages for unauthorized disclosure of returns and
return information) is amended--
(1) by inserting ``or accesses'' after ``discloses'' in
subsection (a)(1),
(2) by inserting ``or Access'' after ``Disclosure'' in the
heading for subsection (a)(1),
(3) by inserting ``(or former officer or employee)'' after
``officer or employee'' both places it appears in subsection
(a),
(4) by inserting ``or access'' after ``disclosure'' each
place it appears in subsections (b), (c)(1), and (d),
(5) by inserting ``the earlier of notification to or''
after ``after the date of'' in subsection (d), and
(6) by inserting ``or access'' after ``disclosure'' in the
heading.
(b) Criminal Penalty for Unauthorized Access of Returns and Return
Information.--Section 7213(a)(1) of the Internal Revenue Code of 1986
(relating to Federal employees and other persons) is amended--
(1) by striking ``this paragraph'' and inserting ``this
subparagraph'',
(2) by striking ``It shall be unlawful'' and inserting the
following:
``(A) Disclosure.--It shall be unlawful'', and
(3) by adding at the end the following new subparagraph:
``(B) Access.--It shall be unlawful for any
officer, employee, or other person described in
subparagraph (A) willfully to access without
authorization any return or return information (as
defined in section 6103(b)). Any violation of this
subparagraph shall be punishable by dismissal from
office or discharge from employment and, further, shall
be a misdemeanor punishable upon conviction by a fine
in any amount not exceeding $1,000, or imprisonment of
not more than 1 year, or both, together with costs of
prosecution, and, if necessary, by dismissal from
office or discharge from employment.''.
(c) Notification of Unauthorized Access.--Section 6103 of the
Internal Revenue Code of 1986 (relating to confidentiality and
disclosure of returns and return information) is amended by
redesignating subsection (q) as subsection (r) and by inserting after
subsection (p) the following new subsection:
``(q) Unauthorized Access Prohibited.--
``(1) In general.--Except as authorized by this title, no
officer or employee (or former officer or employee) of the
United States shall access any return or return information.
``(2) Notification.--Upon discovery that a taxpayer's
return or return information has been accessed in violation of
paragraph (1), the taxpayer shall be notified immediately.''.
(d) Conforming Amendment.--The table of sections for subchapter B
of chapter 76 of the Internal Revenue Code of 1986 is amended by
inserting ``or access'' after ``disclosure'' in the item relating to
section 7431.
(e) Effective Date.--The amendments made by this section shall
apply to actions by officers or employees after the date of the
enactment of this Act.
SEC. 5. LIMITATIONS ON EXAMINATIONS.
(a) In General.--Section 7602 of the Internal Revenue Code of 1986
(relating to examination of books and witnesses) is amended by adding
at the end the following new subsection:
``(d) Limitations on Authority To Examine.--In taking any action
under subsection (a), the Secretary--
``(1) shall demonstrate, upon demand of any person
described in subsection (a), reasonable justification (and not
random selection) for initiating an examination of a return,
and
``(2) shall not--
``(A) initiate an examination of a return or issue
of a return if such return or issue of a return has
previously been examined, or
``(B) extend back an examination under subsection
(a), once initiated, beyond a 3-taxable-year period
ending on the day before the beginning of the taxable
year which includes the date of initiation,
except upon court approval if in the course of an investigation
into possible criminal activity.''.
(b) Effective Date.--The amendment made by this section shall apply
to examinations initiated after the date of the enactment of this Act.
SEC. 6. EXTENSION OF TIME TO PAY TAX AFTER NOTICE AND DEMAND.
(a) In General.--Section 6651(a)(3) of the Internal Revenue Code of
1986 (relating to addition to the tax) is amended by striking ``21
calendar days'' and inserting ``90 calendar days''.
(b) Effective Date.--The amendment made by this section shall apply
to notices and demands given after the date of the enactment of this
Act.
SEC. 7. ENSURING THE INTEGRITY OF JUDICIAL PROCEEDINGS.
(a) In General.--Subchapter B of chapter 76 of the Internal Revenue
Code of 1986 (relating to proceedings by taxpayers and third parties)
is amended by redesignating section 7436 as section 7437 and by
inserting after section 7435 the following new section:
``SEC. 7436. DECLARATORY JUDGMENTS RELATING TO SECRETARIAL
NONACQUIESCENCE.
``In a case of actual controversy involving the Secretary's
decision to not acquiesce with respect to conclusions of law in
identical or similar cases to a case or cases previously decided within
the same court jurisdiction or appellate circuit, upon the filing of an
appropriate pleading and the exhaustion of administrative remedies
available to the petitioner within the Internal Revenue Service, the
district court for such jurisdiction may make a declaration with
respect to the Secretary's decision. Any such declaration shall have
the force and effect of a final judgment or decree of the district
court and shall be reviewable as such.''.
(b) Conforming Amendment.--The table of sections for such
subchapter B is amended by striking the item relating to section 7436
and inserting the following new items:
``Sec. 7436. Declaratory judgments
relating to secretarial
nonacquiescence.
``Sec. 7437. Cross references.''.
(c) Effective Date.--The amendments made by this section shall
apply to court proceedings initiated after the date of the enactment of
this Act.
SEC. 8. LIMITATIONS ON ASSET SEIZURES AND LEVIES.
(a) In General.--Section 6331(a) of the Internal Revenue Code of
1986 (relating to levy and distraint) is amended by inserting ``, upon
the consent of an appropriate court,'' after ``it shall be lawful for
the Secretary''.
(b) Effective Date.--The amendment made by this section shall apply
to levies initiated after the date of the enactment of this Act.
SEC. 9. NO INTEREST ON PENALTIES, ADDITIONAL AMOUNTS, AND ADDITIONS TO
TAX.
(a) In General.--Section 6601(e)(2) of the Internal Revenue Code of
1986 (relating to applicable rules) is amended to read as follows:
``(2) No interest on penalties, additional amounts, and
additions to tax.--Interest shall not be imposed under
subsection (a) in respect of any assessable penalty, additional amount,
or addition to tax.''.
(b) Effective Date.--The amendment made by this section shall apply
to notices and demands given after the date of the enactment of this
Act.
SEC. 10. INTEREST RATE FOR OVERPAYMENTS TO EQUAL RATE FOR
UNDERPAYMENTS.
(a) In General.--Section 6621(a) of the Internal Revenue Code of
1986 (relating to determination of rate of interest) is amended to read
as follows:
``(a) General Rule.--The overpayment rate and the underpayment rate
established under this section shall be the Federal short-term rate
determined under subsection (b).''.
(b) Conforming Amendment.--Section 6621 of the Internal Revenue
Code of 1986 (relating to determination of rate of interest) is amended
by striking subsection (c).
(c) Effective Date.--The amendments made by this section shall
apply for purposes of determining interest to periods after the date of
the enactment of this Act.
SEC. 11. FAIRNESS WHEN COLLECTING A TAX DUE TO MATHEMATICAL AND
CLERICAL ERRORS.
(a) In General.--Section 6404(d) of the Internal Revenue Code of
1986 (relating to abatements) is amended to read as follows:
``(d) Abatement of Interest, Penalty, Additional Amount, and
Addition to Tax Attributable to Certain Mathematical or Clerical
Errors.--In the case of an assessment of additional tax attributable to
a mathematical or clerical error (as defined in section 6213(g)(2)),
the Secretary shall abate any interest, penalty, additional amount, and
addition to tax with respect to such assessment if, within 60 days
after notice of such assessment is sent under section 6213(b)(1) by
certified mail or registered mail, the taxpayer pays, or files a
request for an abatement of, such assessment.''.
(b) Effective Date.--The amendment made by this section shall apply
to notices filed after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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