Taxpayers Bill of Rights Act

Taxpayers Bill of Rights Act - Requires the Secretary of the Treasury to prepare pamphlets setting forth in nontechnical terms: (1) the rights and obligations of a taxpayer and of the Internal Revenue Service (IRS) during a tax audit; (2) the procedures by which a taxpayer may appeal adverse decisions, prosecute refund claims, and file complaints; and (3) the procedures that the IRS may use in enforcing revenue laws. Directs the Secretary to transmit drafts of such statement to specified congressional committees. Provides for distribution of the final statement to any taxpayer, upon request, and for its mandatory distribution in certain cases.

Establishes within the IRS the Office of Investigative Counsel. Sets forth criteria to govern the appointment, term, and removal of the Investigative Counsel (Counsel). Requires such Counsel to: (1) receive, investigate, and take appropriate action relating to certain allegations concerning IRS personnel practices and other activities of IRS employees; (2) represent, upon request, IRS whistleblowers; and (3) review and, when appropriate, file objections to the implementation of, certain rules and regulations issued by the Director of the Office of Personnel Management.

Authorizes the Counsel, among other things, to: (1) conduct independent investigations for certain purposes; (2) issue subpoenas and grant immunity; (3) prescribe rules and regulations; and (4) appear in certain adjudicative proceedings, including actions before the Merit Systems Protection Board (Board) in cases involving an IRS employee, with the consent of such employee. Permits the Counsel to obtain judicial review in U.S. district court of orders generated from such Board actions with respect to which Counsel is a party.

Prohibits the Counsel from issuing advisory opinions.

Details procedures to govern receipt and treatment of disclosures by IRS employees, including requirements with respect to: (1) the confidentiality of the whistleblower's identity; (2) time limits applicable to various phases of the review process; (3) actions and reports of the Commissioner of Internal Revenue (Commissioner) in the event Counsel makes a positive determination regarding an allegation; (4) negative determinations by the Counsel with respect to an allegation; (5) cases involving intelligence information; and (6) public access to information about investigated matters.

Authorizes the Counsel or an IRS employee to request the Board to order a stay in certain personnel actions involving IRS employees upon a claim that there are reasonable grounds for believing that the personnel action occurred, or will occur, as a result of a prohibited personnel practice. Details procedures concerning the granting of such stays and their effect on certain related proceedings begun during their pendency.

Directs the Counsel to petition the Board for corrective action if, during the time of such stay, the IRS has not acted with respect to the prohibited personnel practice justifying the stay. Sets forth procedural rules to govern such petitions. Requires the Counsel to report to the Commissioner and to the Attorney General when investigations lead to a determination that there is reasonable cause to believe that an IRS employee has engaged in a criminal violation. Directs the Counsel to report to the Commissioner any violation that is neither a criminal offense nor a prohibited personnel practice.

Authorizes the Counsel to initiate disciplinary action against any IRS employee who commits prohibited acts or fails to comply with a Board order. Describes the rights of an employee subject to such complaint, including the right to: (1) representation by an attorney; (2) a Board hearing; and (3) a written decision, with reasons. Permits a final Board disciplinary order to impose any combination of: (1) removal; (2) a reduction in grade; (3) debarment from Federal employment for up to five years; (4) suspension; (5) a reprimand; and (6) a civil penalty of up to $1,000. Prohibits administrative appeal of such disciplinary orders. Permits their appeal in the appropriate U.S. court of appeals.

Provides for Counsel referral of certain discrimination complaints to the Equal Employment Opportunity Commission.

Authorizes the Counsel to investigate certain political and other activities of IRS employees. Describes actions to be taken in such cases.

Requires the Counsel to submit to the Congress an annual report concerning the activities of the Office of Investigative Counsel and containing specified information and recommendations.

Requires the IRS, upon taxpayer request, to conduct any interview regarding a deficiency assessment in the principal residence or place of business of the taxpayer and at a time convenient to the taxpayer, and to permit the taxpayer to make a recording of the interview. Authorizes the IRS interviewer to record such interview if the taxpayer has been given prior notice and is provided, upon request and payment of reproduction costs, with a transcript of the recording. Requires the interviewer to inform the taxpayer that: (1) he or she has a right to remain silent; (2) any statement the taxpayer makes may be used against him or her; and (3) he or she has the right to the presence of an attorney. Permits a waiver of such rights if voluntarily and knowingly made.

Directs the Comptroller General of the General Accounting Office to: (1) establish a program for a continuing audit and investigation of the IRS with respect to the efficiency, uniformity, and equity of the internal revenue laws; and (2) conduct special audits or investigations of internal revenue law administration upon the request of any congressional committee or Member of Congress. Requires the Comptroller to report annually to the Congress on specified findings concerning IRS management, efficiency, procedures, and structure.

Amends the Internal Revenue Code (IRC) to prescribe criminal penalties for: (1) any investigation or surveillance by an officer or employee of the United States in connection with Federal revenue laws that inquires into the beliefs, associations, or activities of any individual or organization; or (2) the maintenance of any records containing information derived from such an investigation.

Directs the Secretary of the Treasury (Secretary) to provide, upon a taxpayer's request, a copy of any information in the IRS master files concerning the taxpayer. Permits a reasonable fee to be charged for such service.

Mandates an audit, at least biennially, by the Comptroller General (Comptroller) of agencies to which the IRS makes tax returns available to determine whether the safeguards and procedures being used ensure the confidentiality of such returns. (Current law authorizes, but does not require, such audits.) Directs the Comptroller to notify a taxpayer in the event that the confidentiality of such taxpayer's return has not been ensured.

Prohibits the Secretary from contracting with private persons for the processing of any tax returns.

Prohibits evaluations of IRS personnel based on revenue collected from taxpayers as a result of audits or investigations involving such personnel. Prohibits the Secretary from requiring IRS personnel to meet any revenue collection quotas.

Extends from ten to 30 days the period between the required notice to a person who neglects or refuses to pay tax liability and a levy on such person's salary, wages, or other property. Specifies information that must be incorporated in such notice, including possible alternative actions and the appropriate appeals procedures. Adds to the circumstances triggering termination of such a levy: (1) an agreement between the taxpayer and the Secretary for payment of the liability; and (2) the Secretary's determination that the taxpayer's financial condition precludes enforceability of the liability. Requires that any levy be preceded by the Secretary's written offer to enter into an agreement with the taxpayer, if qualified, permitting installment payments of the unpaid tax. Prohibits a levy on any property unless the Secretary first obtains a court order from the appropriate Federal district court specifically authorizing such levy.

Revises the list of property exempt from levy to increase the exempt amount permitted for certain personal effects, the property of a business, and wages.

Prohibits a levy on any property when levy and sales expenses exceed either the liability for which the levy is made or the fair market value of the levied property.

Provides an express exemption from levy, except under limited circumstances specified in this Act, for the taxpayer's principal residence, a motor vehicle used by the taxpayer as the primary means of transportationn to work, and certain tangible property necessary for the business of the taxpayer.

Sets forth situations in which the Secretary must release a levy.

Amends the IRC to authorize the Secretary to enter into a binding agreement with a taxpayer under which such taxpayer may pay tax liability in installments when the Secretary determines that such an agreement will facilitate the collection of the tax liability. Permits such an agreement with any individual: (1) whose tax liability is $20,000 or less; and (2) who has not been delinquent in installment tax payments under similar agreements during a specified period. Permits the Secretary, after proper notice and a hearing, to modify or annul such an agreement upon the finding that the financial condition of the affected taxpayer has significantly changed. Makes the entire amount of unpaid tax due and payable upon the Secretary's notice and demand when an installment is not timely paid.

Places upon the IRS the burden of proof on all issues in all administrative and judicial proceedings between the IRS and a taxpayer, except in cases when the taxpayer has exclusive control over certain evidence.