ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, July 13, 1996 TAG: 9607150074
SECTION: NATIONAL/INTERNATIONAL PAGE: A-2 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
A ``Taxpayer Bill of Rights'' allowing Americans to sue for wrongful collections and providing other protections against IRS abuse is on its way to President Clinton after easy passage by Congress.
The Senate approved the bill Thursday by voice vote.
The popular measure passed the House in April, 425-0, and is backed by the Clinton administration.
It allows taxpayers to sue the Internal Revenue Service for up to $1 million for reckless collections - 10 times the current $100,000 cap on such lawsuits.
Taxpayers also would get the right to sue anyone filing a false information return, such as a Form 1099 or Form W-2. In some cases, contractors have filed incorrect forms for workers they have hired, resulting in the workers' being assessed unjustified back taxes. Under the bill, the IRS would have to prove in such disputes that the information it received was correct.
``When an average of 25 percent of one's earnings goes to the federal government instead of into one's own bank account, the last thing hardworking Americans deserve is an unwarranted hassle from the IRS,'' said Sen. Charles Grassley, R-Iowa, a co-author of the legislation. ``This bill works to correct inequities in the federal tax collection system.''
Grassley noted that the measure would establish an independent taxpayers' advocate at the IRS to assist consumers in dealing with the agency. The advocate would have expanded powers to require the IRS to issue refund checks and meet deadlines in performing tasks for taxpayers.
The IRS didn't quarrel with most of the changes, although it did argue that raising the ceiling on lawsuits would encourage such litigation and disproportionately benefit wealthy taxpayers.
The bill also would:
* Require the IRS to notify former spouses when it begins action to collect jointly owed back taxes from the other ex-spouse.
* Make it easier for taxpayers who win lawsuits against the IRS to obtain reimbursement of legal fees and raise the cap on reimbursement from $75 to $110 an hour.
Permit the use of private delivery services, in addition to the Postal Service, to deliver tax returns and other documents to the IRS.
Require the IRS to give taxpayers 30 days' notice before canceling or ending installment agreements for paying taxes, interest and penalties.
Make it easier for the IRS to remove liens from taxpayers' property and accept compromise offers to settle delinquent tax accounts.
* Require the IRS to notify taxpayers annually of overdue taxes, rather than just allow penalties and interest to accumulate without notice, and contact taxpayers within 60 days when it receives a payment it can't match with a particular account.
LENGTH: Medium: 57 linesby CNB