Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, September 13, 1995                   TAG: 9509130037
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

BILL WOULD RAISE CAP ON TAXPAYER SUITS

Taxpayers would be able to sue reckless IRS tax collectors for up to $1 million under a taxpayer bill of rights moving through Congress with bipartisan backing.

Prodded by growing voter sentiment against the Internal Revenue Service, lawmakers plan to fold the legislation into a massive budget bill late this fall that also would cut taxes and the growth of Medicare.

The taxpayer-rights measure, recommended on a voice vote Tuesday by the House Ways and Means oversight subcommittee, would raise the current $100,000 cap on civil suits against the IRS to $1 million. The provision is aimed at protecting taxpayers from overzealous collection actions.

The agency has opposed it, saying a higher cap would ``encourage lawsuits, consume IRS resources and disproportionately benefit large taxpayers.''

Other provisions would:

Make it easier for taxpayers who win disputes with the IRS to be reimbursed for attorney fees and raise the limit on reimbursement from $75 an hour to $110 an hour.

Waive interest charged taxpayers as a result of delays that are caused by the IRS. This is the current practice but the rules are written so tightly that the IRS considers almost no delays in resolving disputes to be its fault.

Make the IRS, not the taxpayer, responsible for verifying information returns - such as W-2 and 1099 forms - submitted by employers, mortgage lenders, and interest and dividend payers. It also would increase the civil penalties for willfully filing false information returns and require those filing information returns to provide their phone numbers to taxpayers.

Two other provisions didn't make it into the bill. One would have shifted the burden of proof in tax disputes, making the IRS prove its case against a taxpayer as opposed to the current practice of requiring taxpayers to prove the accuracy of their returns.

The other would have made married couples signing joint returns ``proportionately liable'' for any taxes owed. Currently, each spouse can be held liable for the entire tax owed even if it's due on income attributable to the other spouse. That means that after a divorce or separation the so-called ``innocent spouse'' can be held liable for unpaid taxes uncovered by audits.