ESTABLISHMENT OF POSITION OF TAXPAYER ADVOCATE WITHIN INTERNAL REVENUE SERVICE.

Sec. 101. ESTABLISHMENT OF POSITION OF TAXPAYER ADVOCATE WITHIN INTERNAL REVENUE SERVICE. (a) General Rule.— Section 7802 (relating to Commissioner of Internal Revenue; Assistant Commissioner (Employee Plans and 110 STAT. 1454Exempt Organizations)) is amended by adding at the end the following new subsection: “(d) Office of Taxpayer Advocate.— “(1) In general.— There is established in the Internal Revenue Service an office to be known as the ‘Office of the Taxpayer Advocate’. Such office shall be under the supervision and direction of an official to be known as the Taxpayer Advocate’ who shall be appointed by and report directly to the Commissioner of Internal Revenue. the Taxpayer Advocate shall be entitled to compensation at the same rate as the highest level official reporting directly to the Deputy Commissioner of the Internal Revenue Service. “(2) Functions of Office.— “(A) In general.— It shall be the function of the Office of Taxpayer Advocate to— “(i) assist taxpayers in resolving problems with the Internal Revenue Service, “(ii) identify areas in which taxpayers have problems in dealings with the Internal Revenue Service, “(iii) to the extent possible, propose changes in the administrative practices of the Internal Revenue Service to mitigate problems identified under clause (ii), and “(iv) identify potential legislative changes which may be appropriate to mitigate such problems. “(B) Annual Reports.— “(i) Objectives.— Not later than June 30 of each calendar year after 1995, the Taxpayer Advocate shall report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on the objectives of the Taxpayer Advocate for the fiscal year beginning in such calendar year. Any such report shall contain full and substantive analysis, in addition to statistical information. “(ii) Activities.— Not later than December 31 of each calendar year after 1995, the Taxpayer Advocate shall report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on the activities of the Taxpayer Advocate during the fiscal year ending during such calendar year. Any such report shall contain full and substantive analysis, in addition to statistical information, and shall— “(I) identify the initiatives the Taxpayer Advocate has taken on improving taxpayer services and Internal Revenue Service responsiveness, “(II) contain recommendations received from individuals with the authority to issue Taxpayer Assistance Orders under section 7811, “(III) contain a summary of at least 20 of the most serious problems encountered by taxpayers, including a description of the nature of such problems, 110 STAT. 1455 “(IV) contain an inventory of the items described in subclauses (I), (II), and (III) for which action has been taken and the result of such action, “(V) contain an inventory of the items described in subclauses (I), (II), and (III) for which action remains to be completed and the period during which each item has remained on such inventory, “(VI) contain an inventory of the items described in subclauses (II) and (III) for which no action has been taken, the period during which each item has remained on such inventory, the reasons for the inaction, and identify any Internal Revenue Service official who is responsible for such inaction, “(VII) identify any Taxpayer Assistance Order which was not honored by the Internal Revenue Service in a timely manner, as specified under section 7811(b), “(VIII) contain recommendations for such administrative and legislative action as may be appropriate to resolve problems encountered by taxpayers, “(IX) describe the extent to which regional problem resolution officers participate in the selection and evaluation of local problem resolution officers, and “(X) include such other information as the Taxpayer Advocate may deem advisable, (iii) Report to be Submitted Directly.— Each report required under this subparagraph shall be provided directly to the Committees referred to in clauses (i) and (ii) without any prior review or comment from the Commissioner, the Secretary of the Treasury, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. “(3) Responsibilities of Commissioner.— The Commissioner of Internal Revenue shall establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the Taxpayer Advocate within 3 months after submission to the Commissioner.”, (b) Conforming Amendments.— (1) Section 7811 (relating to Taxpayer Assistance Orders) is amended— (A) by striking “the Office of Ombudsman” in subsection (a) and inserting “the Office of the Taxpayer Advocate”, and (B) by striking “Ombudsman” each place it appears (including in the headings of subsections (e) and (f)) and inserting “Taxpayer Advocate”. (2) the heading for section 7802 is amended to read as follows: 110 STAT. 1456 “Sec. 7802. COMMISSIONER OF INTERNAL REVENUE; ASSISTANT COMMISSIONERS; TAXPAYER ADVOCATE.”. (3) the table of sections for subchapter A of chapter 80 is amended by striking the item relating to section 7802 and inserting the following new item: “Sec. 7802. Commissioner of Internal Revenue; Assistant Commissioners; Taxpayer Advocate.”. (c) Effective Date.— The amendments made by this section shall take effect on the date of the enactment of this Act.