DUE PROCESS IN INTERNAL REVENUE SERVICE COLLECTION ACTIONS.

SEC. 3401. DUE PROCESS IN INTERNAL REVENUE SERVICE COLLECTION ACTIONS. (a) Notice and Opportunity for Hearing Upon Filing of Notice of Lien.— Subchapter C of chapter 64 (relating to lien for taxes) is amended by inserting before the table of sections the following: “Part I. Due process for liens. “Part II. Liens. “PART I— DUE PROCESS FOR LIENS “Sec. 6320. Notice and opportunity for hearing upon filing of notice of lien. “SEC. 6320. NOTICE AND OPPORTUNITY FOR HEARING UPON FILING OF NOTICE OF LIEN. “(a) Requirement of Notice.— “(1) In general.— The Secretary shall notify in writing the person described in section 6321 of the filing of a notice of lien under section 6323. “(2) Time and method for notice.— The notice required under paragraph (1) shall be— “(A) given in person; “(B) left at the dwelling or usual place of business of such person; or “(C) sent by certified or registered mail to such person’s last known address, not more than 5 business days after the day of the filing of the notice of lien. “(3) Information included with notice.— The notice required under paragraph (1) shall include in simple and nontechnical terms— “(A) the amount of unpaid tax; “(B) the right of the person to request a hearing during the 30-day period beginning on the day after the 5-day period described in paragraph (2); “(C) the administrative appeals available to the taxpayer with respect to such lien and the procedures relating to such appeals; and “(D) the provisions of this title and procedures relating to the release of liens on property. “(b) Right to Fair Hearing.— “(1) In general.— If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals. “(2) One hearing per period.— A person shall be entitled to only one hearing under this section with respect to the taxable period to which the unpaid tax specified in subsection (a)(3)(A) relates. “(3) Impartial officer.— The hearing under this subsection shall be conducted by an officer or employee who has 112 STAT. 747had no prior involvement with respect to the unpaid tax specified in subsection (a)(3)(A) before the first hearing under this section or section 6330. A taxpayer may waive the requirement of this paragraph. “(4) Coordination with section 6330.— To the extent practicable, a hearing under this section shall be held in conjunction with a hearing under section 6330. “(c) Conduct of Hearing; Review; Suspensions.— For purposes of this section, subsections (c), (d) (other than paragraph (2)(B) thereof), and (e) of section 6330 shall apply. “PART II— LIENS”. (b) Notice and Opportunity for Hearing Before Levy.— Subchapter D of chapter 64 (relating to seizure of property for collection of taxes) is amended by inserting before the table of sections the following: “Part I. Due process for collections. “Part II. Levy. “PART I— DUE PROCESS FOR COLLECTIONS “Sec. 6330. Notice and opportunity for hearing before levy. “SEC. 6330. NOTICE AND OPPORTUNITY FOR HEARING BEFORE LEVY. “(a) Requirement of Notice Before Levy.— “(1) In general.— No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates. “(2) Time and method for notice.— The notice required under paragraph (1) shall be— “(A) given in person; “(B) left at the dwelling or usual place of business of such person; or “(C) sent by certified or registered mail, return receipt requested, to such person’s last known address; not less than 30 days before the day of the first levy with respect to the amount of the unpaid tax for the taxable period. “(3) Information included with notice.— The notice required under paragraph (1) shall include in simple and nontechnical terms— “(A) the amount of unpaid tax; “(B) the right of the person to request a hearing during the 30-day period under paragraph (2); and “(C) the proposed action by the Secretary and the rights of the person with respect to such action, including a brief statement which sets forth— “(i) the provisions of this title relating to levy and sale of property; “(ii) the procedures applicable to the levy and sale of property under this title; “(iii) the administrative appeals available to the taxpayer with respect to such levy and sale and the procedures relating to such appeals;112 STAT. 748 “(iv) the alternatives available to taxpayers which could prevent levy on property (including installment agreements under section 6159); and “(v) the provisions of this title and procedures relating to redemption of property and release of liens on property. “(b) Right to Fair Hearing.— “(1) In general.— If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals. “(2) One hearing per period.— A person shall be entitled to only one hearing under this section with respect to the taxable period to which the unpaid tax specified in subsection (a)(3)(A) relates. “(3) Impartial officer.— The hearing under this subsection shall be conducted by an officer or employee who has had no prior involvement with respect to the unpaid tax specified in subsection (a)(3)(A) before the first hearing under this section or section 6320. A taxpayer may waive the requirement of this paragraph. “(c) Matters Considered at Hearing.— In the case of any hearing conducted under this section— “(1) Requirement of investigation.— The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met. “(2) Issues at hearing.— “(A) In general.— The person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including— “(i) appropriate spousal defenses; “(ii) challenges to the appropriateness of collection actions; and “(iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-copromise. “(B) Underlying liability.— The person may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. “(3) Basis for the determination.— The determination by an appeals officer under this subsection shall take into consideration— “(A) the verification presented under paragraph (1); “(B) the issues raised under paragraph (2); and “(C) whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary. “(4) Certain issues precluded.— An issue may not be raised at the hearing if— “(A) the issue was raised and considered at a previous hearing under section 6320 or in any other previous administrative or judicial proceeding; and112 STAT. 749 “(B) the person seeking to raise the issue participated meaningfully in such hearing or proceeding. This paragraph shall not apply to any issue with respect to which subsection (d)(2)(B) applies. “(d) Proceeding After Hearing.— “(1) Judicial review of determination.— The person may, within 30 days of a determination under this section, appeal such determination— “(A) to the Tax Court (and the Tax Court shall have jurisdiction to hear such matter); or “(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States. If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court. “(2) Jurisdiction retained at irs office of appeals.— The Internal Revenue Service Office of Appeals shall retain jurisdiction with respect to any determination made under this section, including subsequent hearings requested by the person who requested the original hearing on issues regarding— “(A) collection actions taken or proposed with respect to such determination; and “(B) after the person has exhausted all administrative remedies, a change in circumstances with respect to such person which affects such determination. “(e) Suspension of Collections and Statute of Limitations.— “(1) In general.— Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending. In no event shall any such period expire before the 90th day after the day on which there is a final determination in such hearing. “(2) Levy upon appeal.— Paragraph (1) shall not apply to a levy action while an appeal is pending if the underlying tax liability is not at issue in the appeal and the court determines that the Secretary has shown good cause not to suspend the levy. “(f) Jeopardy and State Refund Collection.— If— “(1) the Secretary has made a finding under the last sentence of section 6331(a) that the collection of tax is in jeopardy; or “(2) the Secretary has served a levy on a State to collect a Federal tax liability from a State tax refund, this section shall not apply, except that the taxpayer shall be given the opportunity for the hearing described in this section within a reasonable period of time after the levy. “PART II— LEVY”. (c) Review by Special Trial Judges Allowed.— 112 STAT. 750 (1) In general.— Section 7443(b) (relating to proceedings which may be assigned to special trial judges) is amended by striking “and” at the end of paragraph (3), by redesignating paragraph (4) as paragraph (5), and by inserting after paragraph (3) the following new paragraph: “(4) any proceeding under section 6320 or 6330, and”. (2) Authority to make decisions.— Section 7443(c) (relating to authority to make court decisions) is amended by striking “or (3)” and inserting “(3), or (4)”. (d) Effective Date.— The amendments made by this section shall apply to collection actions initiated after the date which is 180 days after the date of the enactment of this Act.