
DATE: Thursday, November 6, 1997            TAG: 9711060446

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY JANET HOOK AND RALPH VARTABEDIAN, LOS ANGELES TIMES 

DATELINE: WASHINGTON                        LENGTH:   54 lines

HOUSE PASSES BILL TO OVERHAUL IRS SENATE CHANGES IN THE MEASURE ARE LIKELY.

Moving to overhaul the Internal Revenue Service for the first time in decades, the House on Wednesday overwhelmingly approved legislation to establish an oversight board to help run the agency and strengthen the hand of taxpayers in disputes with the most widely feared - and much maligned - arm of the federal government.

The bill was approved 426-4, reflecting the powerful momentum for change created by this fall's Senate hearings on mismanagement of the IRS and taxpayer abuse by its agents.

Despite the bill's easy progress through the House, a Senate leader said he would push for key changes to the measure in that chamber. Senate Finance Committee Chairman William V. Roth, R-Del., said he wants to strengthen taxpayer protections in the bill, as well as provide additional powers for the oversight board.

The bill, endorsed by President Clinton last month as congressional support for it snowballed, would for the first time subject the IRS to oversight by a management board dominated by private sector representatives. It also would shift the burden of proof from the taxpayer to the IRS in civil court cases, make it easier for taxpayers to sue the IRS for damages, and increase the interest paid on refunds to taxpayers who have overpaid their taxes.

House Republican leaders portrayed the bill as a capstone of the year's legislative accomplishments, and they promised further anti-tax initiatives.

``People are tired of the current tax code,'' said House Speaker Newt Gingrich, R-Ga. ``They're tired of the way the IRS runs it.''

Gingrich said he expects the House to approve a bill today to require the IRS in January to send a survey to all taxpayers, along with their tax forms for 1997, to sound out public opinion about the tax code.

The bill passed Wednesday was powered into the political fast lane by the recent Senate testimony about IRS abuses and mismanagement. ILLUSTRATION: Graphic

BILL HIGHLIGHTS

Shifts burden of proof on some Tax Court cases from taxpayer to

the IRS.

Lets taxpayers sue the IRS for negligence in collection actions.

Extends the confidentiality privilege in attorney-client

discussions to accountants and other nonlawyers appearing before the

IRS.

Expands protections for a spouse when tax problems are caused by

a former husband or wife without the spouse's knowledge.

Caps penalty for late payment of taxes at 9.5 percent for people

who have reached repayment agreements.

Suspends statute of limitations on tax refunds for people