[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1101 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 1101
To amend the Social Security Act to remove the restriction on the use
of Coronavirus State Fiscal Recovery funds, to amend the Internal
Revenue Code of 1986 to codify the Trump administration rule on
reporting requirements of exempt organizations, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 30, 2023
Mr. Braun (for himself and Mr. Scott of Florida) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Social Security Act to remove the restriction on the use
of Coronavirus State Fiscal Recovery funds, to amend the Internal
Revenue Code of 1986 to codify the Trump administration rule on
reporting requirements of exempt organizations, 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 ``Simplify, Don't Amplify the IRS
Act''.
TITLE I--PROVISIONS RELATING TO TAX ADMINISTRATION AND TAXPAYER
PROTECTION
SEC. 101. PREVENTING WEAPONIZATION OF THE INTERNAL REVENUE SERVICE.
(a) Organizations Exempt From Reporting.--
(1) Gross receipts threshold.--Clause (ii) of section
6033(a)(3)(A) of the Internal Revenue Code of 1986 is amended
by striking ``$5,000'' and inserting ``$50,000''.
(2) Organizations described.--Subparagraph (C) of section
6033(a)(3) of the Internal Revenue Code of 1986 is amended--
(A) by striking ``and'' at the end of clause (v),
(B) by striking the period at the end of clause
(vi) and inserting a semicolon, and
(C) by adding at the end the following new clauses:
``(vii) any other organization described in
section 501(c) (other than a private foundation
or a supporting organization described in
section 509(a)(3)); and
``(viii) any organization (other than a
private foundation or a supporting organization
described in section 509(a)(3)) which is not
described in section 170(c)(2)(A), or which is
created or organized in a possession of the
United States, which has no significant
activity (including lobbying and political
activity and the operation of a trade or
business) other than investment activity in the
United States.''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
(b) Clarification of Application to Section 527 Organizations.--
(1) In general.--Paragraph (1) of section 6033(g) of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``This section'' and inserting
``Except as otherwise provided by this subsection, this
section'', and
(B) by striking ``for the taxable year.'' and
inserting ``for the taxable year in the same manner as
to an organization exempt from taxation under section
501(a).''.
(2) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
(c) Reporting of Names and Addresses of Contributors.--
(1) In general.--Paragraph (1) of section 6033(a) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following: ``Except as provided in subsections (b)(5) and
(g)(2)(B), such annual return shall not be required to include
the names and addresses of contributors to the organization.''.
(2) Application to section 527 organizations.--Paragraph
(2) of section 6033(g) of the Internal Revenue Code of 1986 is
amended--
(A) by striking ``and'' at the end of subparagraph
(A),
(B) by redesignating subparagraph (B) as
subparagraph (C), and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) containing the names and addresses of all
substantial contributors, and''.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 102. LIMITATION ON TAXPAYER FUNDED UNION OFFICIAL TIME FOR
INTERNAL REVENUE SERVICE EMPLOYEES.
(a) In General.--Section 7131 of title 5, United States Code, is
amended by adding at the end the following:
``(e) The authority provided under subsection (d) shall not apply
with respect to the Internal Revenue Service, or an employee of the
Internal Revenue Service, during the period each year beginning on
February 12 and ending on April 15.''.
(b) Conforming Amendment.--Section 7131(d) of title 5, United
States Code, is amended, in the matter preceding paragraph (1), by
striking ``preceding'' and inserting ``other''.
(c) Application.--The amendments made by subsections (a) and (b)
shall apply to any collective bargaining agreement entered into after
the date of enactment of this section.
SEC. 103. PROTECTING TAXPAYER PRIVACY.
(a) Increase of Penalty for Unauthorized Disclosure of Taxpayer
Information.--
(1) In general.--Paragraph (1) of section 7213(a) of the
Internal Revenue Code of 1986 is amended by striking ``$5,000''
and inserting ``$250,000''.
(2) Disclosures by tax return preparers.--Subsection (a) of
section 7216 of the Internal Revenue Code of 1986 is amended by
striking ``$1,000 ($100,000 in the case of a disclosure or use
to which section 6713(b) applies)'' and inserting ``$250,000''.
(3) Effective date.--The amendments made by this subsection
shall apply to disclosures made on or after the date of the
enactment of this Act.
(b) Removal.--
(1) In general.--Section 7701(c)(1)(A) of title 5, United
States Code, is amended by inserting ``or in the case of an
action involving a removal from the service for an alleged
violation of section 7213(a)(1) of the Internal Revenue Code of
1986,'' after ``described in section 4303,''.
(2) Rule of construction.--The amendments made by paragraph
(1) may not be construed to permit an officer or employee of
the United States to submit an appeal to the Merit Systems
Protection Board if that individual is dismissed from office or
discharged from employment upon conviction for a violation of
section 7213(a)(1) of the Internal Revenue Code of 1986.
TITLE II--RESTRAINTS ON IRS ENFORCEMENT
SEC. 201. TAX GAP PROJECTION.
(a) In General.--Not later than 180 days after the date of the
enactment of this section, and no later than July 31 annually
thereafter, the Commissioner of Internal Revenue shall submit to
Congress a projection detailing the tax gap estimate for the most
recent taxable year as is practicable using the most recently available
data, and including identification and detailed descriptions of the
data used for such projection and clear identification of the amount of
the projected tax gap associated with nonfiling, underreporting, and
underpayment (including identifying the amount subject to collection
actions).
(b) Use of Artificial Intelligence.--To the extent practicable, for
purposes of reducing the burden on taxpayers subject to National
Research Program audits, the Commissioner shall use artificial
intelligence, including neural machine learning, and other available
data analysis tools, including commercial analytic data providers, to
calculate a projection described in subsection (a).
(c) National Research Program Audits.--In calculating a projection
described in subsection (a), the Commissioner of Internal Revenue shall
not undertake more National Research Program audits in any one fiscal
year than are undertaken in fiscal year 2022.
(d) Tax Gap.--For purposes of this section, the term ``tax gap''
means the difference between tax liabilities owed to the United States
under the Internal Revenue Code of 1986 and those liabilities actually
collected by the Internal Revenue Service.
SEC. 202. JCT REPORT.
(a) In General.--Not later than 180 days after the submission of
the first tax gap projection to Congress under section 201, and not
later than 90 days after the submission of each successive submission,
the Chief of Staff of the Joint Committee on Taxation shall submit to
the Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report analyzing such projection,
including--
(1) identification of methodologies used,
(2) any statistical or methodological uncertainties,
(3) the effect of outdated data, if any, on the accuracy of
such projection, and
(4) such additional information as the Joint Committee on
Taxation determines is useful for Congress to use to assess and
analyze the tax gap projections provided by the Commissioner of
Internal Revenue.
(b) Release of Information.--For purposes of facilitating the
report described in subsection (a), the Secretary of the Treasury
shall, in a timely manner, provide to the Joint Committee on Taxation
such information as such committee requests.
SEC. 203. RESTRICTION ON INCREASED ENFORCEMENT FUNDS.
(a) In General.--Notwithstanding any other provision of law, no
funds appropriated to the Department of the Treasury for audit and
enforcement purposes in excess of the levels appropriated for such
purposes in fiscal year 2022 may be expended for such purposes,
including for salaries, expenses, and enforcement activities, until 180
days after the Internal Revenue Service publishes an updated tax gap
projection pursuant to, and compliant with, section 201.
(b) Sunset.--The provisions of subsection (a) shall not apply after
the date which is one year after the date of the enactment of this
section.
SEC. 204. RESTRICTION ON INCREASED FUNDING FOR OTHER SPECIFIED
PURPOSES.
(a) In General.--Notwithstanding any other provision of law, no
funds appropriated to the Department of the Treasury in excess of the
levels appropriated for specified purposes in fiscal year 2022 may be
expended for specified purposes.
(b) Specified Purposes.--For purposes of subsection (a), the term
``specified purposes'' means--
(1) the implementation of new information reporting
requirements on flows of deposits and withdrawals in individual
and small-business banking accounts and other financial
accounts,
(2) the targeting of United States citizens in response to
the exercise by such citizens of any legally protected or
recognized right guaranteed under the First Amendment to the
United States Constitution,
(3) the targeting of a group for regulatory scrutiny based
on the ideological beliefs of such group,
(4) the auditing of individual taxpayers with an adjusted
gross income of less than $400,000, and
(5) the hiring under an agreement pursuant to the
Intragovernmental Personnel Act of 1970 (sections 3371 et seq.
of title 5, United States Code) or any other authority of an
authorized researcher who is not a full time Federal employee
to access data subject to privacy protections afforded by
section 6103 of the Internal Revenue Code of 1986.
SEC. 205. EFFICIENT USE OF EXISTING IRS RESOURCES.
For purposes of increasing enforcement actions in areas of high
noncompliance and reducing the corporate audit no-change rate of the
Internal Revenue Service to below 20 percent by 2024--
(1) the Secretary (or the Secretary's delegate) shall, not
later than 180 days after the date of the enactment of this
section--
(A) update the methodology that is used for the
selection of corporate returns for audit, and
(B) reassign resources of the Internal Revenue
Service such that the majority of high-income nonfilers
are subject to enforcement actions, and
(2) the Comptroller General of the United States shall,
within one year after the date of the enactment of this
section, issue a comprehensive report to Congress on
information returns and data collected by the Internal Revenue
Service that could be deployed for compliance activities but
that are not currently used for such activities.
SEC. 206. IRS FELLOWSHIP PROGRAM.
(a) Establishment.--Not later than September 30, 2024, the
Commissioner of Internal Revenue (hereinafter known as the
``Commissioner'') after consultation with the Chief Counsel of the
Internal Revenue Service (hereinafter known as the ``Chief Counsel''),
shall establish within the Internal Revenue Service a fellowship
program (hereinafter known as the ``program'') to recruit private
sector tax experts to join the Internal Revenue Service to create and
participate in the audit task force established under subsection (e).
(b) Objective.--The Commissioner, after consultation with the Chief
Counsel, shall design the program in a manner such that the program--
(1) addresses such tax cases handled by the Internal
Revenue Service as the Commissioner determines--
(A) are the most complex, or
(B) include new and emerging issues, and
(2) recruits and retains outstanding and qualified tax
experts.
(c) Advertisement of Program.--The Commissioner shall advertise the
program in such a way as to attract mid-career tax professionals,
including certified public accountants, tax attorneys, and such other
tax professionals as the Commissioner determines are appropriately
qualified to handle the most complex tax cases.
(d) Structure.--
(1) In general.--The program shall be staffed by not fewer
than 30 fellows at the discretion of the Commissioner based on
needs of the Internal Revenue Service and the availability of
qualified candidates.
(2) Term of service.--
(A) In general.--Each fellow shall be hired for a
2-, 3-, or 4-year term of service.
(B) Extensions.--
(i) In general.--A fellow may apply for,
and the Commissioner may grant, a 1-year
extension of the fellowship.
(ii) No limit on number of extensions.--
There shall be no limit on the number of
extensions under clause (i).
(3) Fellowship vacancies.--The Commissioner, after
consultation with the Chief Counsel, shall fill vacant
fellowships--
(A) in such a manner as to ensure that the program
is staffed with no fewer than 15 fellows, and
(B) as soon as practicable after the vacancy
arises.
(4) Hiring authority.--The Commissioner shall have
authority to permanently hire a fellow at the end of the term
of service for such fellow.
(e) Task Force.--Not later than the date on which the first
fellowship is awarded under this section, the Commissioner shall
establish a task force within the Internal Revenue Service and the
office of the Chief Counsel in both national and regional office
placements that includes the fellows hired pursuant to subsection (d),
the purpose of which is to--
(1) perform audit case selection,
(2) educate Internal Revenue Service employees on emerging
issues,
(3) audit selected taxpayers,
(4) address offshore tax evasion and issues implicating the
Foreign Account Tax Compliance Act, and
(5) identify, mentor, and train junior employees from the
Internal Revenue Service with respect to audits.
(f) Composition.--The task force established under subsection (e)
may be composed of both--
(1) fellows, and
(2) permanent employees of the Internal Revenue Service.
(g) Pay of Fellows.--
(1) In general.--The Secretary of the Treasury (or the
Secretary's delegate) shall determine, subject to the
provisions of this subsection, the pay of fellows recruited
under subsection (a).
(2) Pay scale.--For purposes of paragraph (1), the pay of a
fellow shall not be less than the minimum rate payable for GS-
15 of the General Schedule and shall not exceed the amount of
annual compensation (excluding expenses) specified in section
102 of title 3, United States Code.
(h) Administration of Program.--The Secretary may appoint a lead
program officer to administer and advertise the program.
(i) Annual Review and Report.--Not later than 1 year after the date
on which the first fellowship is awarded under this section, and
annually thereafter, the Commissioner shall submit to Congress a report
containing--
(1) an analysis of the effects of the program,
(2) an analysis of the return on investment of the program,
including calculations of all costs incurred and all tax
revenue and penalties collected due to the work of the task
force,
(3) a description of the total number of fellows who apply
each year, and
(4) recommendations for changes to the program, if any.
(j) Rules and Regulations.--The Commissioner, with the approval of
the Secretary of the Treasury (or the Secretary's delegate, other than
the Commissioner), shall promulgate such rules and regulations as may
be necessary for the efficient administration of the program.
TITLE III--PROVISIONS TO REDUCE IMPROPER TAX PAYMENTS
SEC. 301. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that when the Internal Revenue
Service makes payments to taxpayers, the Internal Revenue Services must
make every effort to confirm that the right recipient is receiving the
right payment for the right reason at the right time.
(b) Purpose.--The purpose of this title is to--
(1) reduce improper tax payments by the Internal Revenue
Service--
(A) by intensifying efforts to eliminate payment
error, waste, fraud, and abuse; and
(B) by continuing to ensure that the Internal
Revenue Service provides accessible taxpayer services;
(2) adopt a comprehensive set of policies, including--
(A) transparency of significant improper tax
payments; and
(B) accountability for reducing improper tax
payments; and
(3) protect taxpayer services.
SEC. 302. IMPROPER TAX PAYMENT DEFINED.
For purposes of this title, the term ``improper tax payment'' means
any credit or refund of an overpayment of a tax imposed under the
Internal Revenue Code of 1986 that should not have been made or that
was made in an incorrect amount.
SEC. 303. TRANSPARENCY.
(a) In General.--Not later than 90 days after the date of enactment
of this section, the Secretary of the Treasury shall establish, in
coordination with the Commissioner of Internal Revenue, annual targets
for reducing improper tax payments made by the Internal Revenue
Service.
(b) Published Information.--
(1) In general.--Not later than 180 days after the date of
enactment of this section, and annually thereafter, the
Secretary of the Treasury shall publish on the internet
information about improper tax payments made by the Internal
Revenue Service.
(2) Contents.--The information published under paragraph
(1) shall include, subject to Federal privacy policies and to
the extent permitted by law--
(A) the name of the accountable official designated
under section 304(a);
(B) rates and amounts as of the date of enactment
of this section, and historical rates and amounts, of
improper tax payments made by the Internal Revenue
Service, including, if known and appropriate, the
causes of the improper tax payments;
(C) rates and amounts as of the date of enactment
of this section, and historical rates and amounts, of
the recovery of improper tax payments (estimated on the
basis of applicable samples where appropriate); and
(D) the annual targets for reducing improper tax
payments.
(c) Methodology.--The methodology used for identifying and
measuring improper tax payments under this section shall meet the
requirement of section 3352(c)(1)(A) of title 31, United States Code.
(d) Links.--The Commissioner of Internal Revenue shall prominently
display on the homepage of the website of the Internal Revenue Service
a link to internet-based resources for addressing improper tax
payments, including the information published under subsection (b)(1).
SEC. 304. ACCOUNTABILITY AND COORDINATION.
(a) Accountable Officials.--Not later than 120 days after the date
of enactment of this section, the Commissioner of Internal Revenue
shall designate an official to be accountable for meeting the reduction
targets under section 303(a) without unduly burdening taxpayer
services.
(b) Report.--
(1) In general.--Not later than 180 days after the date of
enactment of this section, and annually thereafter, the
official who is designated under subsection (a) shall provide
the Director of the Office of Management and Budget and the
appropriate congressional committees a report that includes--
(A) the methodology used for identifying and
measuring improper tax payments under section 303(c);
(B) the plans for meeting the reduction targets
under section 303(a); and
(C) the plans and supporting analysis for ensuring
that initiatives undertaken in accordance with this
title do not unduly burden taxpayer services.
(2) Appropriate congressional committees.--For purposes of
paragraph (1), the term ``appropriate congressional
committees'' means the Committee on Finance of the Senate and
the Committee on Ways and Means of the House of
Representatives.
(c) Duties of Inspector General.--Not later than 60 days after the
date on which the annual report required under subsection (b) is
submitted, the Treasury Inspector General for Tax Administration
shall--
(1) assess the level of risk for improper tax payments by
the Internal Revenue Service;
(2) determine the extent of oversight warranted (in
addition to oversight requirements under section 3353 of title
31, United States Code); and
(3) provide the Commissioner of Internal Revenue with
recommendations, if any, for modifying the methodology,
improper tax payment reduction plans, or taxpayer services.
(d) Agency Failure.--
(1) In general.--If the Internal Revenue Service does not
demonstrate an improvement in reducing improper tax payments,
fails to develop a plan to meet reduction targets under
subsection (b)(1)(B), or fails to implement the plans described
in subsection (b)(1)(C) for not less than 2 consecutive years,
the official designated under subsection (a) shall submit to
the Commissioner of Internal Revenue, the Treasury Inspector
General for Tax Administration, and the Chief Financial Officer
of the Internal Revenue Service a report that--
(A) describe the likely causes of the lack or
improvement or failure; and
(B) proposes a remedial plan.
(2) Review.--Annually, the Commissioner of Internal Revenue
shall, with respect to a remedial plan proposed under paragraph
(1)(B)--
(A) review the remedial plan; and
(B) in consultation with the Treasury Inspector
General for Tax Administration and Chief Financial
Officer of the Internal Revenue Service, forward the
remedial plan and any additional comments and analysis
to the Director of the Office of Management and Budget.
SEC. 305. POLICY PROPOSALS.
(a) In General.--Not later than 180 days after the date of
enactment of this section, the Secretary of the Treasury, in
consultation with the Commissioner of Internal Revenue and the Treasury
Inspector General for Tax Administration, shall develop policy
recommendations, including potential legislative proposals, designed to
reduce improper tax payments, including improper tax payments caused by
error, waste, fraud, and abuse, made by the Internal Revenue Service.
(b) Inclusion.--The recommendations developed under subsection (a)
shall be included, as appropriate, in the budget of the President under
section 1105(a) of title 31, United States Code, for fiscal year 2024
and each fiscal year thereafter.
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