TAX LAW COMPLEXITY ANALYSIS.

SEC. 4022. TAX LAW COMPLEXITY ANALYSIS. (a) Commissioner Study.— (1) In general.— The Commissioner of Internal Revenue shall conduct each year after 1998 an analysis of the sources of complexity in administration of the Federal tax laws. Such analysis may include an analysis of— (A) questions frequently asked by taxpayers with respect to return filing; (B) common errors made by taxpayers in filling out their returns; (C) areas of law which frequently result in disagreements between taxpayers and the Internal Revenue Service; (D) major areas of law in which there is no (or incomplete) published guidance or in which the law is uncertain; (E) areas in which revenue officers make frequent errors interpreting or applying the law; (F) the impact of recent legislation on complexity; and (G) forms supplied by the Internal Revenue Service, including the time it takes for taxpayers to complete and review forms, the number of taxpayers who use each form, and how recent legislation has affected the time it takes to complete and review forms. (2) Report.— The Commissioner shall not later than March 1 of each year report the results of the analysis conducted under paragraph (1) for the preceding year to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. The report shall include any recommendations— (A) for reducing the complexity of the administration of Federal tax laws; and (B) for repeal or modification of any provision the Commissioner believes adds undue and unnecessary complexity to the administration of the Federal tax laws. (b) Analysis to Accompany Certain Legislation.— (1) In general.— The Joint Committee on Taxation, in consultation with the Internal Revenue Service and the Department of the Treasury, shall include a tax complexity analysis in each report for legislation, or provide such analysis to members of the committee reporting the legislation as soon as practicable after the report is filed, if—112 STAT. 786 (A) such legislation is reported by the Committee on Finance in the Senate, the Committee on Ways and Means of the House of Representatives, or any committee of conference; and (B) such legislation includes a provision which would directly or indirectly amend the Internal Revenue Code of 1986 and which has widespread applicability to individuals or small businesses. (2) Tax complexity analysis.— For purposes of this subsection, the term “tax complexity analysis” means, with respect to any legislation, a report on the complexity and administrative difficulties of each provision described in paragraph (1)(B) which— (A) includes— (i) an estimate of the number of taxpayers affected by the provision; and (ii) if applicable, the income level of taxpayers affected by the provision; and (B) should include (if determinable)— (i) the extent to which tax forms supplied by the Internal Revenue Service would require revision and whether any new forms would be required; (ii) the extent to which taxpayers would be required to keep additional records; (iii) the estimated cost to taxpayers to comply with the provision; (iv) the extent to which enactment of the provision would require the Internal Revenue Service to develop or modify regulatory guidance; (v) the extent to which the provision may result in disagreements between taxpayers and the Internal Revenue Service; and (vi) any expected impact on the Internal Revenue Service from the provision (including the impact on internal training, revision of the Internal Revenue Manual, reprogramming of computers, and the extent to which the Internal Revenue Service would be required to divert or redirect resources in response to the provision). (3) Legislation subject to point of order in house of representative.— (A) Legislation reported by committee on ways and means.— Clause 2(1) of rule XI of the Rules of the House of Representatives is amended by adding at the end the following new subparagraph: “(8) The report of the Committee on Ways and Means on any bill or joint resolution containing any provision amending the Internal Revenue Code of 1986 shall include a Tax Complexity Analysis prepared by the Joint Committee on Taxation in accordance with section 4022(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 unless the Committee on Ways and Means causes to have such Analysis printed in the Congressional Record prior to the consideration of the bill or joint resolution.”. (B) Conference reports.— Rule XXVIII of the Rules of the House of Representatives is amended by adding at the end the following new clause:112 STAT. 787 “7. It shall not be in order to consider the report of a committee of conference which contains any provision amending the Internal Revenue Code of 1986 unless— “(a) the accompanying joint explanatory statement contains a Tax Complexity Analysis prepared by the Joint Committee on Taxation in accordance with section 4022(b) of the Internal Revenue Service Restructuring and Reform Act of 1998; or “(b) such Analysis is printed in the Congressional Record prior to the consideration of the report.”. (C) Rules of house of representatives.— This paragraph is enacted by the House of Representatives— (i) as an exercise of the rulemaking power of the House of Representatives, and as such it is deemed a part of the Rules of the House, and it supersedes other rules only to the extent that it is inconsistent therewith; and (ii) with full recognition of the constitutional right of the House to change its rules at any time, in the same manner and to the same extent as in the case of any other rule of the House. (4) Effective date.— This subsection shall apply to legislation considered on and after January 1, 1999.