Taxpayer Bill of Rights  

Press Release #105-276

Summary of Highlights of Chairman Roth's
Comprehensive IRS Reform Legislation

This IRS reform proposal is the most comprehensive overhaul of the Internal Revenue Service ever proposed. It will protect taxpayers by increasing oversight of the agency, holding employees accountable for their actions and creating a new arsenal of taxpayer protections.

This proposal will increase oversight of the agency by:

  1. Giving the Board that the House bill created more oversight responsibility over IRS law enforcement and collection activities. The Board could not intervene in specific taxpayer cases or specific personnel matters.
    If the Board identifies a certain problem, it can ask the Treasury Inspector General to investigate and report back.
  2. Making the Taxpayer Advocate more independent of the IRS to ensure that office represents the interests of the taxpayers without undue interference by the IRS.
  3. Transferring the IRS Office of Chief Inspector to the Treasury Inspector General's office to provide more effective oversight and to eliminate the mismanagement and conflict of interest that we have found permeates that office.

The bill will hold IRS employees accountable for their actions by:

  1. Require the IRS to terminate an employee if any of the following conduct relating to the employees official duties is proven in a disciplinary or other proceeding:
    • Perjury.
    • Falsifying or destroying documents to cover up mistakes.
    • Failure to obtain the required approval signatures on documents authorizing the seizure of a taxpayer's home, personal belongings or business assets.
    • Assault or battery on a taxpayer or other IRS employee.
    • Civil rights violations.
    Violation of the rules for the purpose of retaliating against a taxpayer or other employee.
  2. Holding managers accountable in the collection area.
  3. Requiring all IRS notices and correspondence to include the name and phone number of an employee to contact.

The bill puts the law on the side of honest taxpayers by:

  1. Shifting the burden of proof to the IRS in court and also eliminating some of the complexity included in the House bill.
  2. Shifting the burden of proof in court to the IRS if it uses statistics to construct a taxpayer's income.
  3. Reforming the law to protect innocent spouses by ensuring that individuals are only responsible for the taxes on their own income.
  4. Providing interest and penalty relief for taxpayers by:
    Suspending interest and certain penalties when the IRS does not provide appropriate notice to the taxpayer within one year after a return is filed.
    • Suspending the failure to pay penalty while the taxpayer is paying off a tax liability.
    Allowing small businesses to designate deposits for each payroll period to prevent cascading penalties.
    • Requiring each penalty notice to include a computation of the penalty.
    Requiring management approval of non-computer generated penalties.
  5. Creating a safety net for taxpayers by increasing their protection against audit or collection by:
    • Extending the attorney client privilege to accountants and other tax practitioners.
    • Expanding the authority of the Taxpayer Advocate to assist taxpayers.
    Prohibiting a waiver of the 10 year collection statute of limitations.
  6. Making it easier for taxpayers who are attempting to comply with the system to enter into installment agreements and offers in compromise.
  7. Ensuring due process for taxpayers in collections activities.
    Gives the taxpayer 30 days to request a hearing before property is taken by the IRS. During that time there could be no other collection activities.
  8. Holding supervisors accountable for appropriateness of liens, levies and seizures.
  9. Prohibits the IRS from seizing residences to satisfy unpaid liabilities of less than $5,000.

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