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United States · Law · HR

H.R. 2337 (104th)

Taxpayer Bill of Rights 2

enactedUnited States· United States Congress· EN

Introduced

14 September 1995

Last action

—

Status

Became Public Law No: 104-168.

Sponsors

—

Subjects

Discovery layer

Source updated

7 April 2025

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Summary

TABLE OF CONTENTS: Title I: Taxpayer Advocate Title II: Modifications to Installment Agreement Provisions Title III: Abatement of Interest and Penalties Title IV: Joint Returns Title V: Collection Activities Title VI: Information Returns Title VII: Awarding of Costs and Certain Fees Title VIII: Modification to Recovery of Civil Damages for Unauthorized Collection Actions Title IX: Modifications to Penalty for Failure to Collect and Pay Over Tax Title X: Modifications of Rules Relating to Summonses Title XI: Relief From Retroactive Application of Treasury Department Regulations Title XII: Miscellaneous Provisions Taxpayer Bill of Rights 2 - Title I: Taxpayer Advocate - Amends the Internal Revenue Code to establish in the Internal Revenue Service (IRS) the Office of Taxpayer Advocate to: (1) assist taxpayers in resolving problems with the IRS; (2) identify areas in which taxpayers have problems in dealings with the IRS; and (3) propose administrative and identify legislative changes to mitigate the problems. Requires a formal response to all recommendations submitted to the Commissioner of Internal Revenue by the Taxpayer Advocate. Replaces the Office of the Ombudsman with the Office of the Taxpayer Advocate. (Sec. 102) Allows Taxpayer Assistance Orders to require the Secretary of the Treasury to: (1) act within a specified time period; and (2) take certain actions (currently, only to cease or refrain from taking certain actions). Title II: Modifications to Installment Agreement Provisions - Requires prior notification to taxpayers under an installment agreement to pay tax liability before altering, modifying, or terminating such an agreement. (Sec. 202) Provides for administrative review of installment agreement terminations. Title III: Abatement of Interest and Penalties - Authorizes the abatement of interest in the case of an assessment due to the unreasonable error or delay (currently, due to the error or delay) of an IRS act. (Sec. 302) Grants the Tax Court jurisdiction over actions brought by a taxpayer meeting specified requirements to determine whether the failure to abate interest was an abuse of discretion. (Sec. 303) Extends from ten to 21 days the period for which interest will not be imposed after notice and demand for payment, if such payment is less than $100,000. (Sec. 304) Allows abatement of the penalty on a person's: (1) inadvertent failure to deposit any employment tax in certain circumstances; and (2) first inadvertent sending of the required deposit to the Secretary instead of the appropriate depository. Title IV: Joint Returns - Directs the Secretary and the Comptroller General to each conduct separate studies and report to specified congressional committees regarding certain issues related to joint returns. (Sec. 402) Removes limitations on filing a joint return after filing separate returns for the same taxable year. (Sec. 403) Requires the disclosure of collection activities to an individual requesting such information in the case of a joint return where such individual is no longer married to or resides in the same household as the other joint filer. Title V: Collection Activities - Authorizes the Secretary, in certain cases, to: (1) withdraw a notice of a lien; (2) return property that has been levied upon; and (3) offer compromises in civil or criminal cases. Requires the Secretary to provide a copy of such notice of withdrawal to the taxpayer and, at the request of the taxpayer, to make reasonable efforts to notify credit reporting agencies and financial institutions of such withdrawal of notice. (Sec. 502) Waives a requirement of filing of a Treasury Department General Counsel's opinion regarding compromises involving amounts less than $100,000 (currently, less than $500). Title VI: Information Returns - Establishes civil damages for filing fraudulent information returns. (Sec. 602) Imposes on the Secretary, in any court proceeding where a taxpayer disputes income reported on an information return filed by a third party and the taxpayer has fully cooperated with the Secretary, the burden of producing reasonable and probative information concerning the deficiency in addition to the return. Title VII: Awarding of Costs and Certain Fees - Shifts, in the awarding of certain costs and fees to the prevailing party, the burden of proof (regarding establishing whether the United States was substantially justified) from the prevailing party to the United States. Establishes a rebuttable presumption that the U.S. was not substantially justified if the IRS did not follow its published guidance in the administrative proceeding. (Sec. 702) Increases the limit on attorney's fees. (Sec. 703) Provides that any failure to agree to an extension of time for the assessment of any tax shall not be taken into account in determining whether a prevailing party has exhausted all administrative remedies. (Sec. 704) Allows the awarding of litigation costs in declaratory judgment proceedings. Title VIII: Modification to Recovery of Civil Damages for Unauthorized Collection Actions - Increases the dollar limit on the recovery of civil damages for unauthorized collection actions. (Sec. 802) Allows a court to reduce (currently, prohibits) damages if the plaintiff has not exhausted administrative remedies. Title IX: Modifications to Penalty for Failure to Collect and Pay Over Tax - Establishes preliminary notice requirements regarding failure to pay tax. (Sec. 902) Directs the Secretary to disclose certain information where more than one person is liable for a penalty. Allows each person who paid the penalty to recover proportionately from other liable persons. (Sec. 904) Prohibits imposing a penalty (for a failure to collect and pay over a tax) on unpaid, volunteer, honorary board members of tax-exempt organizations who do not participate in day-to-day financial operations or have actual knowledge of the failure. Directs the Secretary to ensure that IRS employees are aware of their responsibilities under the tax depository system, the circumstances under which they may be liable for penalties, and certain reporting responsibilities. Title X: Modifications of Rules Relating to Summonses - Includes enrolled agents in the definition of "third-party recordkeeper" for purposes of provisions relating to third-party summonses. (Sec. 1002) Revises designated summons provisions concerning the standard of review and the persons to whom such a summons may be issued. Title XI: Relief from Retroactive Application of Treasury Department Regulations - Prohibits, subject to exception, retroactive regulations. Allows taxpayers to elect retroactive application in certain circumstances. Title XII: Miscellaneous Provisions - Directs the Secretary to submit to specified congressional committees, by a specified date, a report on the pilot program for appeals of enforcement actions. (Sec. 1202) Requires payee statements to provide the phone number (as well as the name and address) of the person providing payment. (Sec. 1203) Requires notification of a taxpayer from whom a payment is received if the Secretary cannot associate the payment with the taxpayer. (Sec. 1204) Authorizes a taxpayer to bring a civil damage suit against the United States if any U.S. officer or employee intentionally compromises the determination or collection of any tax due from an attorney, certified public accountant (CPA), or enrolled agent representing a taxpayer in exchange for information conveyed by the taxpayer for purposes of obtaining advice concerning tax liability, except where conveyed for the purpose of perpetrating a fraud or crime. (Sec. 1205) Mandates annual notice to each taxpayer who has a tax delinquent account. (Sec. 1206) Amends the Anti-Drug Abuse Act of 1988 to extend the termination date of certain rules relating to undercover operations. Amends the Internal Revenue Code to modify related reporting and audit requirements. (Sec. 1207) Authorizes disclosure to Federal, State, local, or foreign country governmental agencies of information in returns filed under Internal Revenue Code provisions relating to cash received in a trade or business, subject to the same conditions as apply to reports filed under provisions of Federal law relating to reports on coins and currency transactions. (Sec. 1208) Allows disclosure of returns and return information to a designee of a taxpayer on the taxpayer's request (currently, on the taxpayer's written request) for or consent to the disclosure. (Sec. 1209) Mandates a hearing, study, and report on the manner in which the IRS has implemented the netting of interest on overpayments and underpayments and on the policy and administrative implications of global netting.

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