text: SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
  
      (a) Short Title.--This Act may be cited as the ``Eliminating 
  Improper and Abusive IRS Audits Act of 2014''.
      (b) Table of Contents.--The table of contents of this Act is as 
  follows:
  
  Sec. 1. Short title; table of contents.
  Sec. 2. Civil damages allowed for reckless or intentional disregard of 
                              internal revenue laws.
  Sec. 3. Modifications relating to certain offenses by officers and 
                              employees in connection with revenue laws.
  Sec. 4. Modifications relating to civil damages for unauthorized 
                              inspection or disclosure of returns and 
                              return information.
  Sec. 5. Extension of time for contesting IRS levy.
  Sec. 6. Increase in monetary penalties for certain unauthorized 
                              disclosures of information.
  Sec. 7. Ban on raising new issues on appeal.
  Sec. 8. Limitation on enforcement of liens against principal 
                              residences.
  Sec. 9. Additional provisions relating to mandatory termination for 
                              misconduct.
  Sec. 10. Extension of declaratory judgment procedures to social welfare 
                              organizations.
  Sec. 11. Review by the Treasury Inspector General for Tax 
                              Administration.
  
  SEC. 2. CIVIL DAMAGES ALLOWED FOR RECKLESS OR INTENTIONAL DISREGARD OF 
                INTERNAL REVENUE LAWS.
  
      (a) Increase in Amount of Damages.--Section 7433(b) of the Internal 
  Revenue Code of 1986 is amended by striking ``$1,000,000 ($100,000, in 
  the case of negligence)'' and inserting ``$3,000,000 ($300,000, in the 
  case of negligence)''.
      (b) Extension of Time To Bring Action.--Section 7433(d)(3) of the 
  Internal Revenue Code of 1986 is amended by striking ``2 years'' and 
  inserting ``5 years''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to actions of employees of the Internal Revenue Service after the 
  date of the enactment of this Act.
  
  SEC. 3. MODIFICATIONS RELATING TO CERTAIN OFFENSES BY OFFICERS AND 
                EMPLOYEES IN CONNECTION WITH REVENUE LAWS.
  
      (a) Increase in Penalty.--Section 7214 of the Internal Revenue Code 
  of 1986 is amended--
              (1) by striking ``$10,000'' in subsection (a) and inserting 
          ``$25,000'', and
              (2) by striking ``$5,000'' in subsection (b) and inserting 
          ``$10,000''.
      (b) Effective Date.--The amendments made by this section shall take 
  effect on the date of the enactment of this Act.
  
  SEC. 4. MODIFICATIONS RELATING TO CIVIL DAMAGES FOR UNAUTHORIZED 
                INSPECTION OR DISCLOSURE OF RETURNS AND RETURN 
                INFORMATION.
  
      (a) Increase in Amount of Damages.--Subparagraph (A) of section 
  7431(c)(1) of the Internal Revenue Code of 1986 is amended by striking 
  ``$1,000'' and inserting ``$10,000''.
      (b) Effective Date.--The amendment made by this section shall apply 
  to inspections and disclosure occurring on and after the date of the 
  enactment of this Act.
  
  SEC. 5. EXTENSION OF TIME FOR CONTESTING IRS LEVY.
  
      (a) Extension of Time for Return of Property Subject to Levy.--
  Subsection (b) of section 6343 of the Internal Revenue Code of 1986 is 
  amended by striking ``9 months'' and inserting ``3 years''.
      (b) Period of Limitation on Suits.--Subsection (c) of section 6532 
  of the Internal Revenue Code of 1986 is amended--
              (1) in paragraph (1) by striking ``9 months'' and inserting 
          ``3 years'', and
              (2) in paragraph (2) by striking ``9-month'' and inserting 
          ``3-year''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to--
              (1) levies made after the date of the enactment of this 
          Act, and
              (2) levies made on or before such date if the 9-month 
          period has not expired under section 6343(b) of the Internal 
          Revenue Code of 1986 (without regard to this section) as of 
          such date.
  
  SEC. 6. INCREASE IN MONETARY PENALTIES FOR CERTAIN UNAUTHORIZED 
                DISCLOSURES OF INFORMATION.
  
      (a) In General.--Paragraphs (1), (2), (3), and (4) of section 
  7213(a) of the Internal Revenue Code of 1986 are each amended by 
  striking ``$5,000'' and inserting ``$10,000''.
      (b) Effective Date.--The amendments made by this section shall 
  apply to disclosures made after the date of the enactment of this Act.
  
  SEC. 7. BAN ON RAISING NEW ISSUES ON APPEAL.
  
      (a) In General.--Chapter 77 of the Internal Revenue Code of 1986 is 
  amended by adding at the end the following new section:
  
  ``SEC. 7529. PROHIBITION ON INTERNAL REVENUE SERVICE RAISING NEW ISSUES 
                IN AN INTERNAL APPEAL.
  
      ``(a) In General.--In reviewing an appeal of any determination 
  initially made by the Internal Revenue Service, the Internal Revenue 
  Service Office of Appeals may not consider or decide any issue that is 
  not within the scope of the initial determination.
      ``(b) Certain Issues Deemed Outside of Scope of Determination.--For 
  purposes of subsection (a), the following matters shall be considered 
  to be not within the scope of a determination:
              ``(1) Any issue that was not raised in a notice of 
          deficiency or an examiner's report which is the subject of the 
          appeal.
              ``(2) Any deficiency in tax which was not included in the 
          initial determination.
              ``(3) Any theory or justification for a tax deficiency 
          which was not considered in the initial determination.
      ``(c) No Inference With Respect to Issues Raised by Taxpayers.--
  Nothing in this section shall be construed to provide any limitation in 
  addition to any limitations in effect on the date of the enactment of 
  this section on the right of a taxpayer to raise an issue, theory, or 
  justification on an appeal from a determination initially made by the 
  Internal Revenue Service that was not within the scope of the initial 
  determination.''.
      (b) Clerical Amendment.--The table of sections for chapter 77 of 
  such Code is amended by adding at the end the following new item:
  
  ``Sec. 7529. Prohibition on Internal Revenue Service raising new issues 
                              in an internal appeal.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to matters filed or pending with the Internal Revenue Service 
  Office of Appeals on or after the date of the enactment of this Act.
  
  SEC. 8. LIMITATION ON ENFORCEMENT OF LIENS AGAINST PRINCIPAL 
                RESIDENCES.
  
      (a) In General.--Section 7403(a) of the Internal Revenue Code of 
  1986 is amended--
              (1) by striking ``In any case'' and inserting the 
          following:
              ``(1) In general.--In any case'', and
              (2) by adding at the end the following new paragraph:
              ``(2) Limitation with respect to principal residence.--
                      ``(A) In general.--Paragraph (1) shall not apply to 
                  any property used as the principal residence of the 
                  taxpayer (within the meaning of section 121) unless the 
                  Secretary of the Treasury makes a written determination 
                  that--
                              ``(i) all other property of the taxpayer, 
                          if sold, is insufficient to pay the tax or 
                          discharge the liability, and
                              ``(ii) such action will not create an 
                          economic hardship for the taxpayer.
                      ``(B) Delegation.--For purposes of this paragraph, 
                  the Secretary of the Treasury may not delegate any 
                  responsibilities under subparagraph (A) to any person 
                  other than--
                              ``(i) the Commissioner of Internal Revenue, 
                          or
                              ``(ii) a district director or assistant 
                          district director of the Internal Revenue 
                          Service.''.
      (b) Effective Date.--The amendments made by this section shall 
  apply to actions filed after the date of the enactment of this Act.
  
  SEC. 9. ADDITIONAL PROVISIONS RELATING TO MANDATORY TERMINATION FOR 
                MISCONDUCT.
  
      (a) Termination of Unemployment for Inappropriate Review of Tax-
  Exempt Status.--Section 1203(b) of the Internal Revenue Service 
  Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note) is amended 
  by striking ``and'' at the end of paragraph (9), by striking the period 
  at the end of paragraph (10) and inserting ``; and'', and by adding at 
  the end the following new paragraph:
              ``(11) in the case of any review of an application for tax-
          exempt status by an organization described in section 501(c) of 
          the Internal Revenue Code of 1986, developing or using any 
          methodology that applies disproportionate scrutiny to any 
          applicant based on the ideology expressed in the name or 
          purpose of the organization.''.
      (b) Mandatory Unpaid Administrative Leave for Misconduct.--
  Paragraph (1) of Section 1203(c) of the Internal Revenue Service 
  Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note) is amended 
  by adding at the end the following new sentence: ``Notwithstanding the 
  preceding sentence, if the Commissioner of Internal Revenue takes a 
  personnel action other than termination for an act or omission 
  described in subsection (b), the Commissioner shall place the employee 
  on unpaid administrative leave for a period of not less than 30 
  days.''.
      (c) Limitation on Alternative Punishment.--Paragraph (1) of section 
  1203(c) of the Internal Revenue Service Restructuring and Reform Act of 
  1998 (26 U.S.C. 7804 note) is amended by striking ``The Commissioner'' 
  and inserting ``Except in the case of an act or omission described in 
  subsection (b)(3)(A), the Commissioner''.
  
  SEC. 10. EXTENSION OF DECLARATORY JUDGMENT PROCEDURES TO SOCIAL WELFARE 
                ORGANIZATIONS.
  
      (a) In General.--Section 7428(a)(1) of the Internal Revenue Code of 
  1986 is amended by striking ``or'' at the end of subparagraph (C) and 
  by adding at the end the following new subparagraph:
                      ``(E) with respect to the initial classification or 
                  continuing classification of an organization described 
                  in section 501(c)(4) which is exempt from tax under 
                  section 501(a), or''.
      (b) Effective Date.--The amendments made by this section shall 
  apply with respect to pleading filed after the date of the enactment of 
  this Act.
  
  SEC. 11. REVIEW BY THE TREASURY INSPECTOR GENERAL FOR TAX 
                ADMINISTRATION.
  
      (a) Review.--Subsection (k)(1) of section 8D of the Inspector 
  General Act of 1978 (5 U.S.C. App.) is amended--
              (1) in subparagraph (C), by striking ``and'' at the end;
              (2) by redesignating subparagraph (D) as subparagraph (E);
              (3) by inserting after subparagraph (C) the following new 
          subparagraph:
                      ``(D) shall--
                              ``(i) review any criteria employed by the 
                          Internal Revenue Service to select tax returns 
                          (including applications for recognition of tax-
                          exempt status) for examination or audit, 
                          assessment or collection of deficiencies, 
                          criminal investigation or referral, refunds for 
                          amounts paid, or any heightened scrutiny or 
                          review in order to determine whether the 
                          criteria discriminates against taxpayers on the 
                          basis of race, religion, or political ideology; 
                          and
                              ``(ii) consult with the Internal Revenue 
                          Service on recommended amendments to such 
                          criteria in order to eliminate any 
                          discrimination identified pursuant to the 
                          review described in clause (i); and''; and
              (4) in subparagraph (E), as so redesignated, by striking 
          ``and (C)'' and inserting ``(C), and (D)''.
      (b) Semiannual Report.--Subsection (g) of such section is amended 
  by adding at the end the following new paragraph:
              ``(3) Any semiannual report made by the Treasury Inspector 
          General for Tax Administration that is required pursuant to 
          section 5(a) shall include--
                      ``(A) a statement affirming that the Treasury 
                  Inspector General for Tax Administration has reviewed 
                  the criteria described in subsection (k)(1)(D) and 
                  consulted with the Internal Revenue Service regarding 
                  such criteria; and
                      ``(B) a description and explanation of any such 
                  criteria that was identified as discriminatory by the 
                  Treasury Inspector General for Tax Administration.''.
target: Eliminating Improper and Abusive IRS Audits Act of 2014 - Amends the Internal Revenue Code to: (1) increase the maximum amount of civil damages for which Internal Revenue Service (IRS) officers or employees shall be liable for reckless, intentional, or negligent disregard of internal revenue laws and extend the period for bringing a claim for such damages; (2) increase the penalties against federal officers and employees for violations of internal revenue laws and for unauthorized inspection or disclosure of tax returns and return information; (3) extend the period in which taxpayer property that has been wrongfully levied upon may be returned and the period for bringing suit for a wrongful tax levy; (4) increase civil fines for unauthorized disclosures of tax return information; (5) prohibit the consideration by the IRS Office of Appeal on appeal of any issue that was not within the scope of the initial determination; (6) prohibit a tax lien against a taxpayer's principal residence unless a written determination is made that all other property of the taxpayer, if sold, is insufficient to pay the tax liability and the lien will not create an economic hardship for the taxpayer; (7) require the termination of an IRS employee for disproportionate scrutiny of an organization applying for tax-exempt status based on the ideology expressed in the name or purpose of the organization; (8) allow a declaratory judgment with respect to the initial or continuing classification of a tax-exempt social welfare organization; and (9) require the Inspector General for Tax Administration of the Department of the Treasury to review any IRS criteria for selection of tax returns for examination or audit, assessment or collection of deficiencies, criminal investigation or referral, refunds for amounts paid, or any heightened scrutiny or review to determine whether such criteria discriminates against taxpayers on the basis of race, religion, or political ideology and to consult with the IRS on recommended amendments to such criteria. 
feat_title: Eliminating Improper and Abusive IRS Audits Act of 2014