| Home > 106th Congressional Bills > H.R. 4163 (rh) To amend the Internal Revenue Code of 1986 to provide for increased fairness to taxpayers. [Reported in House] ...
H.R. 4163 (rh) To amend the Internal Revenue Code of 1986 to provide for increased fairness to taxpayers. [Reported in House] ...
106th CONGRESS 2d Session H. R. 4163 _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES April 12, 2000 Received, read twice and referred to the Committee on Finance _______________________________________________________________________ AN ACT To amend the Internal Revenue Code of 1986 to provide for increased fairness to taxpayers. 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 Bill of Rights 2000''. (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.-- Sec. 1. Short title; etc. TITLE I--PENALTIES AND INTEREST Sec. 101. Failure to pay estimated tax penalty converted to interest charge on accumulated unpaid balance. Sec. 102. Exclusion from gross income for interest on overpayments of income tax by individuals. Sec. 103. Reductions of penalty for failure to pay tax. Sec. 104. Abatement of interest. Sec. 105. Deposits made to stop the running of interest on potential underpayments. Sec. 106. Expansion of interest netting for individuals. TITLE II--CONFIDENTIALITY AND DISCLOSURE Sec. 201. Disclosure and privacy rules relating to returns and return information. Sec. 202. Expansion of type of advice available for public inspection. Sec. 203. Collection activities with respect to joint return disclosable to either spouse based on oral request. Sec. 204. Taxpayer representatives not subject to examination on sole basis of representation of taxpayers. Sec. 205. Disclosure in judicial or administrative tax proceedings of return and return information of persons who are not party to such proceedings. Sec. 206. Prohibition of disclosure of taxpayer identification information with respect to disclosure of accepted offers-in-compromise. Sec. 207. Compliance by State contractors with confidentiality safeguards. Sec. 208. Higher standards for requests for and consents to disclosure. Sec. 209. Notice to taxpayer concerning administrative determination of browsing; annual report. Sec. 210. Disclosure of taxpayer identity for tax refund purposes. TITLE III--OTHER REQUIREMENTS Sec. 301. Clarification of definition of church tax inquiry. Sec. 302. Expansion of declaratory judgment remedy to tax-exempt organizations. Sec. 303. Employee misconduct report to include summary of complaints by category. Sec. 304. Increase in threshold for Joint Committee reports on refunds and credits. Sec. 305. Annual report on awards of costs and certain fees in administrative and court proceedings. Sec. 306. Annual report on abatement of penalties. Sec. 307. Better means of communicating with taxpayers. Sec. 308. Explanation of statute of limitations and consequences of failure to file. TITLE I--PENALTIES AND INTEREST SEC. 101. FAILURE TO PAY ESTIMATED TAX PENALTY CONVERTED TO INTEREST CHARGE ON ACCUMULATED UNPAID BALANCE. (a) Penalty Moved to Interest Chapter of Code.--The Internal Revenue Code of 1986 is amended by redesignating section 6654 as section 6641 and by moving section 6641 (as so redesignated) from part I of subchapter A of chapter 68 to the end of subchapter E of chapter 67 (as added by subsection (e)(1) of this section). (b) Penalty Converted to Interest Charge.--The heading and subsections (a) and (b) of section 6641 (as so redesignated) are amended to read as follows: ``SEC. 6641. INTEREST ON FAILURE BY INDIVIDUAL TO PAY ESTIMATED INCOME TAX. ``(a) In General.--Interest shall be paid on any underpayment of estimated tax by an individual for a taxable year for each day of such underpayment. The amount of such interest for any day shall be the product of the underpayment rate established under subsection (b)(2) multiplied by the amount of the underpayment. ``(b) Amount of Underpayment; Interest Rate.--For purposes of subsection (a)-- ``(1) Amount.--The amount of the underpayment on any day shall be the excess of-- ``(A) the sum of the required installments for the taxable year the due dates for which are on or before such day, over ``(B) the sum of the amounts (if any) of estimated tax payments made on or before such day on such required installments. ``(2) Determination of interest rate.-- ``(A) In general.--The underpayment rate with respect to any day in an installment underpayment period shall be the underpayment rate established under section 6621 for the first day of the calendar quarter in which such installment underpayment period begins. ``(B) Installment underpayment period.--For purposes of subparagraph (A), the term `installment underpayment period' means the period beginning on the day after the due date for a required installment and ending on the due date for the subsequent required installment (or in the case of the 4th required installment, the 15th day of the 4th month following the close of a taxable year). ``(C) Daily rate.--The rate determined under subparagraph (A) shall be applied on a daily basis and shall be based on the assumption of 365 days in a calendar year. ``(3) Termination of estimated tax interest.--No day after the end of the installment underpayment period for the 4th required installment specified in paragraph (2)(B) for a taxable year shall be treated as a day of underpayment with respect to such taxable year.''. (c) Increase in Safe Harbor Where Tax is Small.-- (1) In general.--Clause (i) of section 6641(d)(1)(B) (as so redesignated) is amended to read as follows: ``(i) the lesser of-- ``(I) 90 percent of the tax shown on the return for the taxable year (or, if no return is filed, 90 percent of the tax for such year), or ``(II) the tax shown on the return for the taxable year (or, if no return is filed, the tax for such year) reduced (but not below zero) by $2,000, or''. (2) Conforming amendment.--Subsection (e) of section 6641 (as so redesignated) is amended by striking paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. (d) Conforming Amendments.-- (1) Paragraphs (1) and (2) of subsection (e) (as redesignated by subsection (c)(2)) and subsection (h) of section 6641 (as so designated) are each amended by striking ``addition to tax'' each place it occurs and inserting ``interest''. (2) Section 167(g)(5)(D) is amended by striking ``6654'' and inserting ``6641''. (3) Section 460(b)(1) is amended by striking ``6654'' and inserting ``6641''. (4) Section 3510(b) is amended-- (A) by striking ``section 6654'' in paragraph (1) and inserting ``section 6641''; (B) by amending paragraph (2)(B) to read as follows: ``(B) no interest would be required to be paid (but for this section) under 6641 for such taxable year by reason of the $2,000 amount specified in section 6641(d)(1)(B)(i)(II).''; (C) by striking ``section 6654(d)(2)'' in paragraph (3) and inserting ``section 6641(d)(2)''; and (D) by striking paragraph (4). (5) Section 6201(b)(1) is amended by striking ``6654'' and inserting ``6641''. (6) Section 6601(h) is amended by striking ``6654'' and inserting ``6641''. (7) Section 6621(b)(2)(B) is amended by striking ``addition to tax under section 6654'' and inserting ``interest required to be paid under section 6641''. (8) Section 6622(b) is amended-- (A) by striking ``Penalty for'' in the heading; and (B) by striking ``addition to tax under section 6654 or 6655'' and inserting ``interest required to be paid under section 6641 or addition to tax under section 6655''. (9) Section 6658(a) is amended-- (A) by striking ``6654, or 6655'' and inserting ``or 6655, and no interest shall be required to be paid under section 6641,''; and (B) by inserting ``or paying interest'' after ``the tax'' in paragraph (2)(B)(ii). (10) Section 6665(b) is amended-- (A) in the matter preceding paragraph (1) by striking ``, 6654,''; and (B) in paragraph (2) by striking ``6654 or''. (11) Section 7203 is amended by striking ``section 6654 or 6655'' and inserting ``section 6655 or interest required to be paid under section 6641''. (e) Clerical Amendments.-- (1) Chapter 67 is amended by inserting after subchapter D the following: ``Subchapter E--Interest on Failure by Individual to Pay Estimated Income Tax ``Sec. 6641. Interest on failure by individual to pay estimated income tax.''. (2) The table of subchapters for chapter 67 is amended by adding at the end the following new items: ``Subchapter D. Notice requirements. ``Subchapter E. Interest on failure by individual to pay estimated income tax.''. (3) The table of sections for part I of subchapter A of chapter 68 is amended by striking the item relating to section 6654. (f) Effective Date.--The amendments made by this section shall apply to installment payments for taxable years beginning after December 31, 2000. SEC. 102. EXCLUSION FROM GROSS INCOME FOR INTEREST ON OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS. (a) In General.--Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 139A and by inserting after section 138 the following new section: ``SEC. 139. EXCLUSION FROM GROSS INCOME FOR INTEREST ON OVERPAYMENTS OF INCOME TAX BY INDIVIDUALS. ``(a) In General.--In the case of an individual, gross income shall not include interest paid under section 6611 on any overpayment of tax imposed by this subtitle. ``(b) Exception.--Subsection (a) shall not apply in the case of a failure to claim items resulting in the overpayment on the original return if the Secretary determines that the principal purpose of such failure is to take advantage of subsection (a). ``(c) Special Rule for Determining Modified Adjusted Gross Income.--For purposes of this title, interest not included in gross income under subsection (a) shall not be treated as interest which is exempt from tax for purposes of sections 32(i)(2)(B) and 6012(d) or any computation in which interest exempt from tax under this title is added to adjusted gross income.''. (b) Clerical Amendment.--The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Exclusion from gross income for interest on overpayments of income tax by individuals. ``Sec. 139A. Cross references to other Acts.''. (c) Effective Date.--The amendments made by this section shall apply to interest received in calendar years beginning after the date of the enactment of this Act. SEC. 103. REDUCTIONS OF PENALTY FOR FAILURE TO PAY TAX. (a) Reductions of Penalty for Failure To Pay Tax.-- (1) Reduction of penalty by 50 percent.-- (A) In general.--Paragraphs (2) and (3) of section 6651(a) are each amended by striking ``0.5'' each place it appears and inserting ``0.25''. (B) Conforming amendment.--Paragraph (1) of section 6651(d) is amended by striking ``by substituting `1 percent' for `0.5 percent''' and inserting ``by substituting `0.5 percent' for `0.25 percent'''. (2) Reduction of penalty to zero during period of installment agreement.--Subsection (h) of section 6651 is amended by striking ``by substituting `0.25' for `0.5''' and inserting ``by substituting `zero' for `0.25'''. (3) Effective date.--The amendments made by this subsection shall apply for purposes of determining additions to tax for months beginning after December 31, 2000. (b) Prohibition of Fee for Installment Agreements Using Automated Withdrawals.-- (1) In general.--Section 6159 (relating to agreements for payment of tax liability in installments) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: ``(e) Prohibition of Fee for Installment Agreements Using Automated Withdrawals.--The Secretary may not charge a taxpayer a fee for entering into an agreement with the Secretary under this section only for so long as payments under such agreement are made by means of electronic transfer or by similar automated means.''. (2) Effective date.--The amendments made by this subsection shall apply to installment agreements entered into more than 30
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