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H.R. 6495 · House bill · 119th Congress
This bill expands the Internal Revenue Service (IRS) notice requirements for contacting a third party (e.g., employer or bank) for information related to a taxpayer’s federal tax liability and the rights of the taxpayer in such situation. (Conditions and exceptions apply.)
Currently, the IRS must notify a taxpayer at least 45 days in advance of a time period during which the IRS intends to contact a third party for information related to the taxpayer’s tax liability but is not required to specify what information is being sought.
The bill requires the IRS to specify in a notice to a taxpayer each item of information sought from a third party when (1) the IRS has not previously requested such information from the taxpayer, and (2) the taxpayer can reasonably provide such information. This requirement does not apply if the IRS determines such third-party information is necessary.
Further, under the bill, a taxpayer is allowed no less than 45 days (or more if requested by the taxpayer and deemed reasonable) to respond before the IRS contacts such third party.
This Act may be cited as the “Taxpayer Notification and Privacy Act”.
(a) In general.— Paragraph (1) of section 7602(c) of the Internal Revenue Code of 1986 is amended—
(1) by striking “and” at the end of subparagraph (A),
(2) by redesignating subparagraph (B) as subparagraph (C),
(3) by inserting after subparagraph (A) the following new subparagraph:
“(B) in any case in which the information sought to be obtained from such other persons is related to determining tax liability, has not been previously requested from the taxpayer, and could reasonably be provided by the taxpayer, identifies each specific item of information intended to be sought from such persons, and”, and
(4) by amending subparagraph (C), as redesignated by paragraph (2), to read as follows:
“(C) except as otherwise provided by the Secretary, provides the taxpayer with reasonable opportunity and a period of not less than 45 days (or more, if the taxpayer requests additional time and shows reasonable cause) to respond before contact is made with such other persons.”.
(b) Exception.— Section 7602(c)(3) of the Internal Revenue Code of 1986 is amended—
(1) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and by moving such clauses 2 ems to the right,
(2) by striking “Exceptions.—This subsection” and inserting “Exceptions.—
“(A) In general.— This subsection”, and
(3) by adding at the end the following new subparagraph:
“(B) Exception for information specificity.— Subparagraph (B) of paragraph (1) shall not apply to information sought from a person other than the taxpayer if the Secretary determines that such information is necessary.”.
(c) Effective date.— The amendments made by this section shall apply to notices provided under section 7602(c) of the Internal Revenue Code of 1986 after the date that is 12 months after the date of the enactment of this Act.