[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1274 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1274

  To amend the Internal Revenue Code of 1986 to prohibit the Internal 
Revenue Service from using the threat of audit to compel agreement with 
the Tip Reporting Alternative Commitment or the Tip Rate Determination 
                               Agreement.


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                   IN THE SENATE OF THE UNITED STATES

                            October 8, 1997

 Mr. Campbell introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to prohibit the Internal 
Revenue Service from using the threat of audit to compel agreement with 
the Tip Reporting Alternative Commitment or the Tip Rate Determination 
                               Agreement.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. FINDINGS.

    Congress finds that--
            (1) the Tip Reporting Alternative Commitment Agreement and 
        the Tip Rate Determination Agreement are voluntary agreements 
        developed by the Internal Revenue Service and the restaurant 
        industry as a means of improving the reporting of tip income;
            (2) there have been reports that the Internal Revenue 
        Service may be compelling members of the restaurant industry to 
        accept such voluntary agreement by using the possibility of 
        audit to intimidate; and
            (3) the Internal Revenue Service has the authority to 
        perform audits to assure taxpayer compliance with the internal 
        revenue laws.

SEC. 2. PROHIBITION ON USING THE THREAT OF AUDIT TO COMPEL AGREEMENT 
              WITH THE TIP REPORTING ALTERNATIVE COMMITMENT.

    Section 7602 of the Internal Revenue Code of 1986 (relating to 
examination of books and witnesses) is amended by adding at the end the 
following new subsection:
    ``(d) No Threat of Summons or Examinations To Compel Agreement With 
Tip Reporting Alternative Commitment or the Tip Rate Determination 
Agreement.--The Secretary shall not use the threat of making an 
examination or issuing a summons under subsection (a) to compel a 
taxpayer to agree to or sign the Tip Reporting Alternative Commitment 
Agreement (TRAC) or the Tip Rate Determination Agreement (TRDA).''
                                 <all>