WASHINGTON -- Senate Finance Committee Chairman William V. Roth's
IRS reform bill would have prevented many of the problems that taxpayers
brought before the Finance Committee last fall and earlier this year.
How the Roth IRS Reform bill would have helped the taxpayers who testified
before the Finance Committee:
1. Katherine Lund Hicks:
Problem: Case began when the IRS came after Mrs. Lund Hicks for her ex-husband's
Solution: Innocent spouse changes: Mrs. Lund Hicks would not have been
held responsible for the $7000 tax liability on the money her ex husband
Problem: The IRS could not answer the question of how much she owed.
Solution: All notices that Mrs. Lund Hicks received would have had a name,
phone number and address of an IRS employee that she would have been able
to contact regarding the notice. This person would have had to get her
Problem: The IRS would not tell her whether her ex husband had paid
the tax liability.
Solution: Treasury Inspector General would have ensured that IRS notified
Mrs. Lund Hicks of the amount they collected from her ex husband.
Problem: The IRS filed a (inappropriate) tax lien against Mrs. Lund
Hicks and her husband without notice:
Solution: Lien would have not been allowed because original tax debt was
less than $5000.
Solution: There would have been many more safeguards in the system
to prevent an inappropriate lien.
Solution: Mrs. Lund Hicks and her new husband would have had due
process rights to prevent or delay the lien.
Problem: IRS continued collection activity while Mrs. Lund Hicks
was trying to resolve problem.
Solution: Not allowed under Roth bill.
Problem: IRS Fresno office would not provide Problem Resolution
Officer with necessary documents to prove that Mrs. Lund Hicks owed nothing.
Problem: Collection agent told Mrs. Lund Hicks that he knew the
tax had been paid and that she did not owe the money but she still had
to pay the $8000 to get rid of the lien.
Problem: After Mrs. Lund Hicks paid the IRS, she received a Certificate
of Release of Lien. However, five years later she received a Notice of
Intent to Levy. She was told that the Release of Lien was meaningless.
She then went to the problems resolution office and found that they acted
like an arm of the collections division.
Solution: Taxpayer Advocates office will be independent and would have
been much more helpful to Mrs. Lund Hicks under the Roth bill.
Problem: Later the IRS levied against her husband's salary, allowing
him to keep $18 a week to support his family.
Solution: Offers in compromise program would have allowed her husband to
keep much more.
2. Tom Savage
Problem: IRS went after Mr. Savage for money owed by a non related sub
contractor. The IRS asserted falsely that Mr. Savage and the subcontractor
were partners so that the agency could go after Mr. Savage for the sub's
Solution: Employee who created this false partnership would have been terminated
under the Roth bill.
3. Monsignor Lawrence Ballweg
Problem: Eight month ordeal with the IRS because of their bureaucracy.
Solution: Under the Roth bill, all IRS notices and correspondence must
include the name,phone number and address of an IRS employee the taxpayer
should contact regarding the notice. If Monsignor Ballweg had had a point
of contact at the IRS, he could have gotten the problems straightened out.
4. Nancy Jacobs
Problem: 17 year ordeal due to mix up with various employer identification
numbers. This led to erroneous lien filed against her and her husband for
unpaid back payroll taxes. The Jacobs paid the erroneous lien because they
didn't want to fight it. Later, they were hit with a second lien. IRS still
owes the Jacobs thousands of dollars.
Solution: The agency under the Roth legislation as well as the Rossotti
reforms would have been much more willing to help the Jacobs.
5. Innocent spouses
Problem: IRS harassing taxpayers for ex spouse's tax liability.
Solution: All of the women at our innocent spouse hearing could not be
held responsible for any of the tax liability under the Roth bill.
And, while our innocent spouse changes will not be retroactive,
any cases that are still pending will be covered by our changes to the
innocent spouse law.