133 STAT. 981 PUBLIC LAW 116–25—JULY 1, 2019 Public Law 116–25 116th Congress An Act To amend the Internal Revenue Code of 1986 to modernize and improve the Internal Revenue Service, 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; ETC. (a) SHORT TITLE.—This Act may be cited as the ‘‘Taxpayer First Act’’. (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. (c) TABLE OF CONTENTS.—The table of contents for this Act is as follows: Sec. 1. Short title; etc. TITLE I—PUTTING TAXPAYERS FIRST Subtitle A—Independent Appeals Process Sec. 1001. Establishment of Internal Revenue Service Independent Office of Ap- peals. Subtitle B—Improved Service Sec. 1101. Comprehensive customer service strategy. Sec. 1102. Low-income exception for payments otherwise required in connection with a submission of an offer-in-compromise. Subtitle C—Sensible Enforcement Sec. 1201. Internal Revenue Service seizure requirements with respect to struc- turing transactions. Sec. 1202. Exclusion of interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction. Sec. 1203. Clarification of equitable relief from joint liability. Sec. 1204. Modification of procedures for issuance of third-party summons. Sec. 1205. Private debt collection and special compliance personnel program. Sec. 1206. Reform of notice of contact of third parties. Sec. 1207. Modification of authority to issue designated summons. Sec. 1208. Limitation on access of non-Internal Revenue Service employees to re- turns and return information. Subtitle D—Organizational Modernization Sec. 1301. Office of the National Taxpayer Advocate. Sec. 1302. Modernization of Internal Revenue Service organizational structure. Subtitle E—Other Provisions Sec. 1401. Return preparation programs for applicable taxpayers. Sec. 1402. Provision of information regarding low-income taxpayer clinics. Sec. 1403. Notice from IRS regarding closure of taxpayer assistance centers. 26 USC 1 note. Taxpayer First Act. July 1, 2019 [H.R. 3151] VerDate Sep 11 2014 07:02 Nov 04, 2019 Jkt 089139 PO 00025 Frm 00001 Fmt 6580 Sfmt 6582 E:\PUBLAW\PUBL025.116 PUBL025 dkrause on DSKBC28HB2PROD with PUBLAWS 133 STAT. 982 PUBLIC LAW 116–25—JULY 1, 2019 Sec. 1404. Rules for seizure and sale of perishable goods restricted to only perish- able goods. Sec. 1405. Whistleblower reforms. Sec. 1406. Customer service information. Sec. 1407. Misdirected tax refund deposits. TITLE II—21ST CENTURY IRS Subtitle A—Cybersecurity and Identity Protection Sec. 2001. Public-private partnership to address identity theft refund fraud. Sec. 2002. Recommendations of Electronic Tax Administration Advisory Committee regarding identity theft refund fraud. Sec. 2003. Information sharing and analysis center. Sec. 2004. Compliance by contractors with confidentiality safeguards. Sec. 2005. Identity protection personal identification numbers. Sec. 2006. Single point of contact for tax-related identity theft victims. Sec. 2007. Notification of suspected identity theft. Sec. 2008. Guidelines for stolen identity refund fraud cases. Sec. 2009. Increased penalty for improper disclosure or use of information by pre- parers of returns. Subtitle B—Development of Information Technology Sec. 2101. Management of Internal Revenue Service information technology. Sec. 2102. Internet platform for Form 1099 filings. Sec. 2103. Streamlined critical pay authority for information technology positions. Subtitle C—Modernization of Consent-Based Income Verification System Sec. 2201. Disclosure of taxpayer information for third-party income verification. Sec. 2202. Limit redisclosures and uses of consent-based disclosures of tax return information. Subtitle D—Expanded Use of Electronic Systems Sec. 2301. Electronic filing of returns. Sec. 2302. Uniform standards for the use of electronic signatures for disclosure au- thorizations to, and other authorizations of, practitioners. Sec. 2303. Payment of taxes by debit and credit cards. Sec. 2304. Authentication of users of electronic services accounts. Subtitle E—Other Provisions Sec. 2401. Repeal of provision regarding certain tax compliance procedures and re- ports. Sec. 2402. Comprehensive training strategy. TITLE III—MISCELLANEOUS PROVISIONS Subtitle A—Reform of Laws Governing Internal Revenue Service Employees Sec. 3001. Prohibition on rehiring any employee of the Internal Revenue Service who was involuntarily separated from service for misconduct. Sec. 3002. Notification of unauthorized inspection or disclosure of returns and re- turn information. Subtitle B—Provisions Relating to Exempt Organizations Sec. 3101. Mandatory e-filing by exempt organizations. Sec. 3102. Notice required before revocation of tax-exempt status for failure to file return. Subtitle C—Revenue Provision Sec. 3201. Increase in penalty for failure to file. TITLE IV—BUDGETARY EFFECTS Sec. 4001. Determination of budgetary effects. VerDate Sep 11 2014 07:02 Nov 04, 2019 Jkt 089139 PO 00025 Frm 00002 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL025.116 PUBL025 dkrause on DSKBC28HB2PROD with PUBLAWS 133 STAT. 983 PUBLIC LAW 116–25—JULY 1, 2019 TITLE I—PUTTING TAXPAYERS FIRST Subtitle A—Independent Appeals Process SEC. 1001. ESTABLISHMENT OF INTERNAL REVENUE SERVICE INDE- PENDENT OFFICE OF APPEALS. (a) IN GENERAL.—Section 7803 is amended by adding at the end the following new subsection: ‘‘(e) INDEPENDENT OFFICE OF APPEALS.— ‘‘(1) ESTABLISHMENT.—There is established in the Internal Revenue Service an office to be known as the ‘Internal Revenue Service Independent Office of Appeals’. ‘‘(2) CHIEF OF APPEALS.— ‘‘(A) IN GENERAL.—The Internal Revenue Service Inde- pendent Office of Appeals shall be under the supervision and direction of an official to be known as the ‘Chief of Appeals’. The Chief of Appeals shall report directly to the Commissioner of Internal Revenue and shall be entitled to compensation at the same rate as the highest rate of basic pay established for the Senior Executive Service under section 5382 of title 5, United States Code. ‘‘(B) APPOINTMENT.—The Chief of Appeals shall be appointed by the Commissioner of Internal Revenue with- out regard to the provisions of title 5, United States Code, relating to appointments in the competitive service or the Senior Executive Service. ‘‘(C) QUALIFICATIONS.—An individual appointed under subparagraph (B) shall have experience and expertise in— ‘‘(i) administration of, and compliance with, Fed- eral tax laws, ‘‘(ii) a broad range of compliance cases, and ‘‘(iii) management of large service organizations. ‘‘(3) PURPOSES AND DUTIES OF OFFICE.—It shall be the function of the Internal Revenue Service Independent Office of Appeals to resolve Federal tax controversies without litiga- tion on a basis which— ‘‘(A) is fair and impartial to both the Government and the taxpayer, ‘‘(B) promotes a consistent application and interpreta- tion of, and voluntary compliance with, the Federal tax laws, and ‘‘(C) enhances public confidence in the integrity and efficiency of the Internal Revenue Service. ‘‘(4) RIGHT OF APPEAL.—The resolution process described in paragraph (3) shall be generally available to all taxpayers. ‘‘(5) LIMITATION ON DESIGNATION OF CASES AS NOT ELIGIBLE FOR REFERRAL TO INDEPENDENT OFFICE OF APPEALS.— ‘‘(A) IN GENERAL.—If any taxpayer which is in receipt of a notice of deficiency authorized under section 6212 requests referral to the Internal Revenue Service Inde- pendent Office of Appeals and such request is denied, the Commissioner of Internal Revenue shall provide such tax- payer a written notice which— ‘‘(i) provides a detailed description of the facts involved, the basis for the decision to deny the request, Notice. 26 USC 7803. VerDate Sep 11 2014 07:02 Nov 04, 2019 Jkt 089139 PO 00025 Frm 00003 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL025.116 PUBL025 dkrause on DSKBC28HB2PROD with PUBLAWS 133 STAT. 984 PUBLIC LAW 116–25—JULY 1, 2019 and a detailed explanation of how the basis of such decision applies to such facts, and ‘‘(ii) describes the procedures prescribed under subparagraph (C) for protesting the decision to deny the request. ‘‘(B) REPORT TO CONGRESS.—The Commissioner of Internal Revenue shall submit a written report to Congress on an annual basis which includes the number of requests described in subparagraph (A) which were denied and the reasons (described by category) that such requests were denied. ‘‘(C) PROCEDURES FOR PROTESTING DENIAL OF REQUEST.—The Commissioner of Internal Revenue shall prescribe procedures for protesting to the Commissioner of Internal Revenue a denial of a request described in subparagraph (A). ‘‘(D) NOT APPLICABLE TO FRIVOLOUS POSITIONS.—This paragraph shall not apply to a request for referral to the Internal Revenue Service Independent Office of Appeals which is denied on the basis that the issue involved is a frivolous position (within the meaning of section 6702(c)). ‘‘(6) STAFF.— ‘‘(A) IN GENERAL.—All personnel in the Internal Rev- enue Service Independent Office of Appeals shall report to the Chief of Appeals. ‘‘(B) ACCESS TO STAFF OF OFFICE OF THE CHIEF COUNSEL.—The Chief of Appeals shall have authority to obtain legal assistance and advice from the staff of the Office of the Chief Counsel. The Chief Counsel shall ensure, to the extent practicable, that such assistance and advice is provided by staff of the Office of the Chief Counsel who were not involved in the case with respect to which such assistance and advice is sought and who are not involved in preparing such case for litigation. ‘‘(7) ACCESS TO CASE FILES.— ‘‘(A) IN GENERAL.—In any case in which a conference with the Internal Revenue Service Independent Office of Appeals has been scheduled upon request of a specified taxpayer, the Chief of Appeals shall ensure that such tax- payer is provided access to the nonprivileged portions of the case file on record regarding the disputed issues (other than documents provided by the taxpayer to the Internal Revenue Service) not later than 10 days before the date of such conference. ‘‘(B) TAXPAYER ELECTION TO EXPEDITE CONFERENCE.— If the taxpayer so elects, subparagraph (A) shall be applied by substituting ‘the date of such conference’ for ‘10 days before the date of such conference’. ‘‘(C) SPECIFIED TAXPAYER.—For purposes of this para- graph— ‘‘(i) IN GENERAL.—The term ‘specified taxpayer’ means— ‘‘(I) in the case of any taxpayer who is a nat- ural person, a taxpayer whose adjusted gross income does not exceed $400,000 for the taxable year to which the dispute relates, and Definition. Applicability. Deadline. VerDate Sep 11 2014 07:02 Nov 04, 2019 Jkt 089139 PO 00025 Frm 00004 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL025.116 PUBL025 dkrause on DSKBC28HB2PROD with PUBLAWS 133 STAT. 985 PUBLIC LAW 116–25—JULY 1, 2019 ‘‘(II) in the case of any other taxpayer, a tax- payer whose gross receipts do not exceed $5 million for the taxable year to which the dispute relates. ‘‘(ii) AGGREGATION RULE.—Rules similar to the rules of section 448(c)(2) shall apply for purposes of clause (i)(II).’’. (b) CONFORMING AMENDMENTS.— (1) The following provisions are each amended by striking ‘‘Internal Revenue Service Office of Appeals’’ and inserting ‘‘Internal Revenue Service Independent Office of Appeals’’: (A) Section 6015(c)(4)(B)(ii)(I). (B) Section 6320(b)(1). (C) Subsections (b)(1) and (d)(3) of section 6330. (D) Section 6603(d)(3)(B). (E) Section 6621(c)(2)(A)(i). (F) Section 7122(e)(2). (G) Subsections (a), (b)(1), (b)(2), and (c)(1) of section 7123. (H) Subsections (c)(7)(B)(i) and (g)(2)(A) of section 7430. (I) Section 7522(b)(3). (J) Section 7612(c)(2)(A). (2) Section 7430(c)(2) is amended by striking ‘‘Internal Rev- enue Service Office of Appeals’’ each place it appears and inserting ‘‘Internal Revenue Service Independent Office of Appeals’’. (3) The heading of section 6330(d)(3) is amended by inserting ‘‘INDEPENDENT’’ after ‘‘IRS’’. (c) OTHER REFERENCES.—Any reference in any provision of law, or regulation or other guidance, to the Internal Revenue Service Office of Appeals shall be treated as a reference to the Internal Revenue Service Independent Office of Appeals. (d) SAVINGS PROVISIONS.—Rules similar to the rules of para- graphs (2) through (6) of section 1001(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 shall apply for pur- poses of this section (and the amendments made by this section). (e) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this sub- section, the amendments made by this section shall take effect on the date of the enactment of this Act. (2) ACCESS TO CASE FILES.—Section 7803(e)(7) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to conferences occurring after the date which is 1 year after the date of the enactment of this Act. Subtitle B—Improved Service SEC. 1101. COMPREHENSIVE CUSTOMER SERVICE STRATEGY. (a) IN GENERAL.—Not later than the date which is 1 year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall submit to Congress a written comprehensive customer service strategy for the Internal Revenue Service. Such strategy shall include— (1) a plan to provide assistance to taxpayers that is secure, designed to meet reasonable taxpayer expectations, and adopts appropriate best practices of customer service provided in the Plan. 26 USC 7804 note. Deadline. Applicability. Time period. 26 USC 7803 note. 26 USC 7803 note. Applicability. 26 USC 7803 note. 26 USC 6015. Applicability. VerDate Sep 11 2014 07:02 Nov 04, 2019 Jkt 089139 PO 00025 Frm 00005 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL025.116 PUBL025 dkrause on DSKBC28HB2PROD with PUBLAWS 133 STAT. 986 PUBLIC LAW 116–25—JULY 1, 2019 private sector, including online services, telephone call back services, and training of employees providing customer services; (2) a thorough assessment of the services that the Internal Revenue Service can co-locate with other Federal services or offer as self-service options; (3) proposals to improve Internal Revenue Service customer service in the short term (the current and following fiscal year), medium term (approximately 3 to 5 fiscal years), and long term (approximately 10 fiscal years); (4) a plan to update guidance and training materials for customer service employees of [Text truncated for display. Full text available on Congress.gov.]