[Congressional Record Volume 141, Number 13 (Monday, January 23, 1995)]
[Senate]
[Pages S1369-S1373]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. PRYOR (for himself, Mr. Grassley, Mr. Reid, Mr. Bryan, Mr.
Hatch, Mr. Baucus, Mr. Murkowski, Mr. Breaux, Mr. Nickles, Mr.
Exon, Mr. Cochran, Mr. Glenn, Mr. Cohen, Mr. Johnston, Mr.
Lott, Mr. Kerry, Mr. Smith, Ms. Mikulski, Mr. Sarbanes, Mr.
Simon, Mr. Kyl, and Mr. Daschle):
S. 258. A bill to amend the Internal Revenue Code of 1986 to provide
additional safeguards to protect taxpayer rights; to the Committee on
Finance.
the taxpayer bill of rights ii
Mr. PRYOR. Mr. President, I am very sorry my colleagues and chief
cosponsor of the Taxpayer Bill of Rights II, Senator Grassley of Iowa,
has been detained. He is at the White House. I think later in the day
he will speak on this subject matter.
Mr. President, over the past several years, there has been extensive
debate over ways to achieve tax fairness for middle-income Americans.
Proposals are most often costly, and very, very partisan. But there is
one legislative package helping taxpayers, Mr. President, that
transcends political boundaries and costs very little--we call it the
Taxpayer Bill of Rights II.
So, as the debate once again heats up on ways to achieve tax fairness
for middle-income Americans, I want to draw attention to this
legislation which will help bolster taxpayer confidence in dealing with
the Government by ensuring taxpayers are treated fairly by the tax
collector--the Internal Revenue Service.
Mr. President, many of my colleagues in the Senate today were not
here in 1988 when Congress passed, and President Reagan signed into
law, the first Taxpayer Bill of Rights. That bill was the first ever
comprehensive piece of legislation enumerating the rights of taxpayers.
For example:
The right of the taxpayer to be informed of their rights;
The right of the taxpayer to rely on written advice of the IRS;
The right of the taxpayer to representation; and
The right of the taxpayer to recover civil damages and attorneys fees
from the IRS.
I might note that this particular legislation, the Taxpayer Bill of
Rights, which was signed into law in 1988, was the very first piece of
legislation throughout recorded American history that gave the
taxpayers of America their due rights.
Mr. President, these basic, commonsense provisions were codified by
the first Taxpayer Bill of Rights. The battle waged by a strongly
bipartisan coalition for their codification was hard fought and their
ultimate enactment was a giant first step for the American taxpayer.
But the time is overdue to more fully develop and expand these rights.
Mr. President, the Taxpayer Bill of Rights II is the next natural
step which builds on the first effort in 1988.
In 1992, I first introduced the Taxpayer Bill of Rights II with a
considerable bipartisan backing of 52 of my colleagues. The bill passed
Congress twice that year but was ultimately vetoed because it was
included as part of two large tax bills with which President Bush did
not agree.
Since these two bills were vetoed, the Senate has not had the
opportunity to consider the Taxpayer Bill of Rights II. However, Mr.
President, I believe the time is now to enact this legislation, and I
am committed to work along side my friend and colleague Senator
Grassley to push taxpayer rights forward and in the coming months to
look for additional ways to ensure the IRS treats taxpayers with
respect.
Today, Senator Grassley and I come to the floor, once again, with a
strong bipartisan contingent in support of this bill--20 cosponsors--12
Democrats and 8 Republicans--a bill which builds on the foundation laid
by the original Taxpayer Bill of Rights and is the next natural step in
requiring the IRS to achieve higher standards of accuracy, timeliness,
and fair play in providing taxpayer service.
The Taxpayer Bill of Rights II achieves these new standards through
27 provisions, including:
First, expanding the authority of the taxpayer advocate to prevent
hardships on taxpayers.
Second, create the right in small taxpayers to an installment
agreement, and further, rights when installment agreements are denied
or terminated.
Third, require the IRS to abate interest when it has made an
unreasonable error or delay, and enable the courts the power to review
the interest abatement determination.
Fourth, increase the rights of taxpayers to recover civil damages
against the IRS when it has acted negligently or recklessly.
Fifth, strengthen the code so a taxpayer may recover out-of-pocket
costs incurred in a case in which the IRS position was not
substantially justified.
Sixth, and, prohibit the IRS from issuing retroactive proposed
regulations unless the Congress provides otherwise.
These are some of the examples of the 27 provisions that Senator
Grassley and our 20 cosponsors in the Senate in a bipartisan effort
will bring to this body for action later in this session.
Mr. President, the Taxpayer Bill of Rights II contains many more
commonsense provisions designed to safeguard the rights of taxpayers,
and I believe, will work to instill some confidence into our system of
taxation.
Mr. President, joining me later in the day, as I have mentioned, is
my friend and colleague, Senator Grassley. We worked very hard on these
provisions in the past, and we look forward to our work in the future.
Let me name one other individual who has worked very, very hard in
this field and that, of course, is Senator Harry Reid of Nevada.
Senator Reid came from the House of Representatives to the Senate.
Mr. President, one day I was presiding in the chair when the Democrats
had control of the Senate. I noticed over to my far extreme right that
Senator Reid of Nevada was making his very first maiden speech in the
Senate. And it was about taxpayers' rights. I, too, had been interested
in this issue. I called for a page to come up, and I handed the page a
note. I said, ``Harry Reid, I want to work with you on this provision
that you are so concerned about.'' Ultimately, Senator Reid, Senator
Grassley, Senator Levin, and many of us worked through the course of
that year in developing the Taxpayer Bill of Rights I, which was in
fact signed into law.
So it has been a great pleasure and honor to have worked with these
fine Members of the Senate, I must say in a very bipartisan way. As the
Finance Committee continues its march of progress, let us say during
the next several months, I look forward to the development now of
Taxpayer Bill of Rights II and working with my colleagues on both sides
of the aisle.
Mr. President, I think there are other Senators who seek recognition.
[[Page S1370]]
Mr. BRYAN. Mr. President, I am pleased to once again sing on
as a cosponsor to the bill introduced by Senator Pryor, the taxpayer
bill of rights II. I was a cosponsor of this important legislation in
both the 102d and 103d Congress.
Over the years, many have cited abused by the IRS during tax audits
and collection. Aware of these types of problems, Congress passed the
taxpayer bill of rights in 1988. While the original bill was in many
ways successful, it is clear that further action is necessary.
The taxpayer bill of rights II builds on the success of the original
bill, and provides taxpayers with expanded protections against improper
collection techniques. This legislation expands protection for
taxpayers by requiring the IRS to pay legal fees when it loses in
court, increases from $100,000 to $1 million the cap on damages a
taxpayer can collect from the IRS, and revokes the agencies authority
to issue retroactive regulations.
The bill also establishes a better taxpayer advocate within the IRS
who will have the authority to intervene and help taxpayers cases, and
increases taxpayers' ability to get a fair hearing in disputes with the
IRS.
It is unfortunate that this bill is necessary; however, in such a
monumental task as collecting taxes it is inevitable that there will be
mistakes made. This bill will help to ensure that taxpayers are not
forced to pay for the mistakes for which they had no control over.
I have heard too many times from anguished constituents in Nevada
regarding their dealings with the IRS. While dealing with discrepancies
with the IRS is never an enjoyable experience, once this bill becomes
law taxpayers will finally have their rights protected.
In past sessions of Congress, this bill has received overwhelming
bipartisan support. I am hopeful that we can again join together, pass
this bill and give taxpayers the rights that they deserve.
Mr. President, I ask unanimous consent that additional material be
printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
Taxpayer Bill of Rights II (T2)
A.--TAXPAYER ADVOCATE
Section 101. Establishment of Position of Taxpayer Advocate
within Internal Revenue Service. The Office of the Taxpayer
Ombudsman was statutorily created in 1987 in the Omnibus
Taxpayer Bill of Rights. The Ombudsman is presently hired by
and reports directly to the IRS Commissioner.
T2 will replace the Ombudsman with the new Office of
Taxpayer Advocate which will have expanded authority as
provided in A.2 below. The Taxpayer Advocate will continue to
be hired by and report to the IRS Commissioner.
Presently, the Office of the Taxpayer Ombudsman carries out
its duties and responsibilities in the local field offices
through the Problem Resolution Office (PRO). However, PROs
are hired, supervised, reviewed, and promoted by the local
IRS District Director, not the Ombudsman. T2 will provide
that the PRO will report directly to the Office of Taxpayer
Advocate.
T2 will require the Taxpayer Advocate to provide the
Committee on Ways and Means of the U.S. House of
Representatives and the Committee on Finance of the U.S.
Senate two annual reports. The first report is on the
activities of the Taxpayer Advocate during the previous
fiscal year. The report must identify the initiatives the
Taxpayer Advocate has taken to improve taxpayer services and
IRS responsiveness, contain recommendations received from
individuals who have the authority to issue a TAO, contain a
summary of at least 20 of the most serious problems which
taxpayers have in dealing with the IRS, describe in detail
the progress made in implementing these recommendations,
include recommendations for such administrative and
legislative action as may be appropriate to resolve such
problems, and to include other such information as the
Taxpayer Advocate may deem advisable. The Commissioner is
required to establish procedures that will ensure a formal
IRS response to all recommendations submitted by the Taxpayer
Advocate. The first report is due not later than December 31
for each fiscal year after September 30, 1995.
In the second report, the Taxpayer Advocate must furnish to
the tax writing committees its annual objectives, not later
than December 31 of each calendar year after 1994.
All reports should contain full and substantive analysis,
in addition to statistical information.
Effective Date.--The provision is effective on the date of
enactment except for the specified due dates of the above
reports.
Section 102. Expansion of Authority of the Taxpayer to
Issue Taxpayer Assistance Orders. Under current law, section
7811(a) authorizes the Taxpayer Ombudsman to issue a Taxpayer
Assistance Order (TAO) if, in the determination of the
Ombudsman, the taxpayer is suffering or about to suffer a
``significant hardship'' as a result of the manner in which
the tax laws are being administered by the Secretary.
T2 eliminates the qualifier of ``significant'' hardship
from section 7811 to allow PROs to assist taxpayers in
avoiding hardship before it occurs since the standard of
``significant'' hardship presupposes that a taxpayer must be
some degree of hardship before any relief can be afforded.
Currently under section 7811(b), a TAO allows a PRO to
``cease any [IRS] action'' with respect to a taxpayer.
However, section 7811(b) does not allow the terms of a TAO to
authorize affirmative steps to help a taxpayer.
T2 will authorize the terms of a TAO to ``cease any action,
take any action'' with respect to a taxpayer, and therefore,
allow a TAO to both stop IRS action and to take affirmative
steps with respect to a taxpayer. For example, the Taxpayer
Advocate's new scope of power will specifically include, but
not be limited to, the authority to (1) abate assessments,
(2) grant refund requests, and (3) stay collection activity.
Further, a TAO may specify a period of time within which the
TAO must be followed. The Taxpayer Advocate will have the
power to grant authority to his or her designees (i.e., the
Problems Resolution Officers).
Current law provides that a TAO may be modified or
rescinded by the Ombudsman, a district director, a service
center director, a compliance center director, a regional
director of appeals, or any superior of such person.
T2 provides that a TAO may be modified or rescinded only by
the Taxpayer Advocate and/or the IRS Commissioner.
Effective date.--The provision is effective on the date of
enactment.
b.--modifications to installment agreement provisions
Section 201. Taxpayer's Right to Installment Agreement. T2
amends section 6159 to provide that, upon request, an
individual taxpayer has an automatic right to an installment
agreement if the taxpayer has not been delinquent in the
previous 3 years and the liability is under $10,000.
Effective date.--The provision is effective for installment
agreements entered after the date of enactment.
Section 202. Running of Failure to Pay Penalty Suspended
During Period Section 111 Installment Agreement in Effect.
Under present law, a taxpayer is subject to ``failure to
pay'' penalties even though he of she has agreed to pay his
or her tax liability with interest by entering into an
installment agreement.
T2 will amend current law to prevent the IRS from imposing
the ``failure to pay'' on installment agreements, under
section 111 above, where the taxpayer requests an agreement
on or before the due date of the tax return.
Effective date.--The provision is effective for installment
agreements entered after the date of enactment.
Section 203. Notification of Reasons for Termination of
Installment Agreements. Section 6159(b)(3) presently requires
the IRS to give the taxpayer a 30-day notice before
terminating an installment agreement, if it is determined
that the financial condition of the taxpayer has
significantly changed. However, no notice is required if the
taxpayer defaults for any other reason. In these cases, the
IRS may unilaterally terminate the installment agreement with
no notice to the taxpayer.
T2 will require the IRS to provide a taxpayer with a 30-day
notice before terminating an installment agreement for any
reason except when the collection of the tax is determined to
be in jeopardy. In addition, T2 will require the notice to
include the reason(s) why the IRS considers the installment
agreement to be in default.
Effective date.--The provision is effective six months
after the date of enactment.
Section 204. Administrative Review of Termination or Denial
of Request for Installment Agreement. Under present law, a
taxpayer has no right to an independent review of a
termination or denial of his request for an installment
agreement.
T2 will require the IRS to establish procedures for an
independent administrative review of a termination of or
denial of a request, for an installment agreement. T2 will
also require the IRS to provide a written response to a
taxpayer who requested an installment agreement. The written
response must state the decision of the IRS and the basis for
such decision. Finally, T2 will require the IRS to include in
the instructions for filing Federal income tax returns the
rules and procedures for requesting installment agreements.
Effective date.--The provision is effective January 1,
1996.
c.--interest
Section 301. Expansion of Authority to Abate Interest.
Section 6404(e)(1) (Assessment of interest attributable to
errors and delays by the IRS) provides ``the Secretary may
abate'' interest on ``any deficiency in whole or in part to
[due to] any error or delay by an officer or employee of the
IRS (acting in his official capacity) in performing a
ministerial act''.
The ministerial act requirement too narrowly limits the
possibility of relief to the taxpayer with the result that
the IRS does not abate interest even if it is the IRS' fault.
Further, IRS rejection of a taxpayer request
[[Page S1371]] to abate interest cannot be reviewed because
section 6404(e)(1) provides no authorization for courts to
review an IRS rejection and no appropriate standard of
review. The resulting interest assessment may be especially
onerous on small taxpayers who do not have cash on hand to
invest in anticipation of paying future tax assessments.
T2 will provide that for qualified small taxpayers, as
defined in section 7430(c)(4)(A)(iii), the Secretary must
abate or refund interest when the IRS has made an
unreasonable error or delay. This will allow courts to review
the IRS determination on the abatement of interest issue for
small taxpayers. For nonqualified ``larger'' taxpayers,
courts will still not be allowed to review the IRS
determination on the interest abatement issue, however, the
new standard of review will allow the IRS more flexibility in
providing relief.
Section 302. Extension of Interest-Free Period for Payment
of Tax After Notice and Demand. When the IRS sends a first
notice requesting payment to a taxpayer, section 6601(e)
provides a 10-day interest-free period from the date of the
notice. The 10-day requirement is virtually impossible to
meet given delivery time to and from the taxpayer attempting
to timely remit payment.
T2 will extend taxpayers' interest-free period for payment
of the tax liability reflected in the first notice from 10
days to 21 days, when the total tax liability on the notice
of deficiency is less than $100,000.
Effective date.--The provision applies in the case of any
notice and demand given six months after the date of
enactment.
D.--Joint Returns
Section 401. Disclosure of Collection Activities. Present
law does not allow the IRS to inform either spouse as to the
efforts of the IRS to collect the tax liability from the
other spouse.
T2 will permit that, if either spouse or former spouse
makes a written request, the IRS is required to disclose in
writing whether the IRS has attempted to collect the
deficiency from his or her spouse or former spouse, the
general nature of such collection activities, and the amount
collected. The IRS may refuse such request in cases where
disclosure of such information may result in the threat of
physical danger or harassment to a taxpayer.
Effective date.--The provision is effective on the date of
enactment.
Section 402. Joint Return May Be Made After Separate
Returns Without Full Payment of Tax. Under section
6013(b)(2), taxpayers, who file separate returns and
subsequently determine that their tax liability would have
been less if they had filed a joint return, may not reduce
their tax liability by filing jointly unless they are able to
pay the entire amount of the joint return liability before
the expiration of the 3-year period for making the election.
T2 will repeal the provision requiring full payment of the
tax liability as a precondition to taxpayers switching from
married filing separately to married filing jointly status.
Effective date.--The provision applies to taxable years
beginning after the date of the enactment.
e.--collection activities
Section 501. Modifications to Lien and Levy Provisions. A
Notice of tax lien provides public notice that a taxpayer
owes the government money. Section 6326(b) requires the IRS
to issue a Certificate of Release for such notices for
erroneous liens only. This extremely narrow language prevents
the IRS from issuing the Release on premature or incorrectly
filed liens.
T2 will give discretion to the IRS to remove such liens
without prejudice when (1) the filing of the notice was
premature or not in accordance with administration procedures
of the IRS; (2) the taxpayer has entered into an installment
agreement for the payment of the tax liability with respect
to the tax on which the lien is imposed; (3) the withdrawal
of the lien will facilitate the collection of the tax
liability; or (4) the withdrawal of the lien would be in the
best interest of the taxpayer and the United States (with the
best interests of the taxpayer to be determined by the
Taxpayer Advocate).
T2 will require that, upon written request by the taxpayer
in the 4 cases cited above, the IRS shall make prompt efforts
to notify the credit reporting agencies specified that the
notice has been withdrawn. T2 will also require the IRS to
return levied-upon-property to the taxpayer in the 4 above
cited cases.
T2 will raise the levy exemption amounts of $1500 for
personal property and of $1100 for equipment and property for
a trade, business, or profession, which were set in 1990, to
the present indexed amounts of $1750 and $1250, respectively.
Effective date.--The provisions are effective on the date
of enactment.
Section 502. Offers-in-Compromise. Section 7122 provides
that the IRS may settle a tax debt pursuant to an offer-in-
compromise. Amounts over $500 can be accepted only if the
reasons for the acceptance are documented in detail and
supported by an opinion of the IRS Chief Counsel. Further,
section 6103(k) requires public disclosure of the names of
taxpayers whose tax debts are compromised, as well as the
amount owed and the amount accepted by the Government. These
burdensome requirements result in the IRS not pursuing the
offer-in-compromise route in settling even small tax
disputes.
T2 will provide that, in cases where the unpaid tax
assessment is less than $50,000, the opinion of the IRS Chief
Counsel is not required. However, the IRS shall subject these
offers-in-compromise to an IRS quality review. Further, T2
will amend 6103(k) to provide that in cases where the unpaid
tax assessment is less than $50,000, the offer-in-compromise
will not be subject to public disclosure.
Effective date.--The provision is effective on the date of
enactment.
Section 503. Notification of Examination. Presently, in
many cases, the IRS is approaching taxpayers, requesting
books and records, but not notifying taxpayers of
examination. If the taxpayer is contacted and the agent
requests to review the taxpayer's books and records, a
written notice, followed by an examination report, should be
required.
T2 will amend section 7605 to require that the IRS give the
taxpayer written notice that the taxpayer is under
examination. The notice will be required for examinations
under all sub-titles of the Code. Such notice will include an
explanation of the process as described in section 7521
(explanation of examination process, right to be represented
by an attorney, etc.).
Effective date.--The provision is effective on the date of
enactment.
Section 504. Increase in Limit on Recovery of Civil Damage.
Section 7433 caps civil damage awards for unauthorized
collections actions against the IRS at $100,000. Section 7433
also limits recovery to reckless and intentional'' actions of
the IRS.
T2 will increase the $100,000 cap for ``reckless and
intentional actions'' to $1 million, and in addition, T2 will
include recovery for ``negligent'' actions of the IRS capped
at $100,000.
Effective date.--The provision applies to actions by IRS
employees that occur after the date of enactment.
Section 505. Designated Summons. T2 requires that issuance
of any designated summons with respect to a corporation's tax
return be preceded by review of such issuance by the Regional
Counsel, Office of Chief Counsel to the IRS, for the Region
in which the examination of the corporation's return is being
conducted.
In addition, T2 requires that the corporation whose return
is in issue be promptly notified in writing in any case where
the Secretary issues a designated summons (or another
summons, the litigation over which suspends the running of
the assessment period under the designated summons procedure)
to a third party. It is expected that the IRS generally will
meet this requirement by issuing such notice on the same day
that it issues such summons, and by transmitting such notice
to the corporation in a manner reasonably designed to bring
it to the prompt attention of an agent of the corporation
responsible for communicating with the IRS in connection with
the examination.
Effective date.--This provision applies to summonses issued
after date of enactment.
f.--information returns
Section 601. Phone Number of Person Providing Payee
Statements Required to be Shown on Such Statement. Taxpayers
frequently need to contact payors issuing information returns
in order to resolve disputes. Presently, information returns
(e.g. W-2s, 1099s, etc.) require only the name and address of
the payor.
T2 will require the payor to also provide the phone number
of the payor's information contact. Payors may have the
option of providing the name of its customer service
department, if appropriate, an Form 1099.
Effective date.--The provision applies to statements
required to be furnished after December 31, 1993 (determined
without regard to any extension).
Section 602. Civil Damages for Fraudulent Filing of
Information Returns. Some taxpayers have suffered significant
personal loss and inconvenience as the result of the IRS
receiving fraudulent information returns. These false returns
have been filed by payors whose intent is to defraud the IRS
or to harass taxpayers.
T2 will provide that, if any person files a false or
fraudulent information return with respect to payments made
to another person, with the intent of either defrauding the
IRS or harassing another person, the other person may bring a
civil action for damages against the person filing such
return. Further, T2 will provide that damage awards in such
cases be at least $5000, and that the plaintiff must bring
action within 6 years from the time the fraudulent return was
filed with the IRS.
Effective date.-- The provision applies to false or
fraudulent information returns filed after the date of
enactment.
Section 603. Requirement to Conduct a Reasonable
Investigation of Information Returns. Section 6212(a)
authorizes the IRS to determine tax deficiencies. The term
``determine'' is not defined in the Code, and until recently,
courts have declined to inquire whether or not, and how, the
IRS made its determination. Further, courts have begun to
chip away at the long-standing presumption of correctness
afforded deficiency notices.
T2 will amend section 6212(a) to provide that a
``determination'' must be ``a thoughtful and considered
determination that the United States is entitled to an amount
not yet paid.'' Portillo v. Commissioner, 832 F. 2d 1128 (5th
Circuit 1991). If the IRS fails to
[[Page S1372]] make a thoughtful and considered
determination, then the notice of deficiency will be invalid.
T2 will provide that where the taxpayer asserts a
reasonable dispute with respect to any item of income
reported to the IRS on an information return, the IRS, not
the taxpayer, will bear the burden of proof in any deficiency
or refund proceeding absent a showing that the IRS conducted
a reasonable investigation of the facts surrounding the
taxpayer's return.
Effective date.--The provision is effective on the date of
enactment.
g.--modifications to penalty for failure to collect and pay over tax
Section 701. Preliminary Notice Requirement. Section 6672
imposes personal liability on those persons who are required
to collect employment taxes (``responsible officers'') and
who willfully fail to pay over these taxes to the IRS. The
Code additionally provides for a 100% penalty on responsible
officers failing to pay over such taxes. Taxpayers who may be
responsible persons are assessed the taxes owed and the
penalty without the right to an administrative review.
T2 will require the IRS to issue a preliminary notice which
will give the taxpayer the right to an administrative appeals
hearing.
Effective date.--The provisions applies to failures
occurring after the date of enactment.
Section 702. Disclosure of Certain Information Where More
Than One Person Subject to Penalty. The IRS may recover more
than the amount owed under section 6672 (since each
responsible person is jointly and severally liable). There is
no procedure to ensure that the IRS does not collect more
than 100% of what is owed.
T2 will require that a person liable for a section 6672
penalty may request, in writing, that the IRS disclose any
other person who is liable for such penalty along with
general nature of the IRS' collection activities.
Effective date.--The provision is effective on the date of
enactment.
Section 703. Penalties Under Section 6672. Under current
law, unpaid, volunteers, who serve on boards of tax-exempt
organizations, may be held liable for the 100% penalty
depending on the duties and roles of the individual involved.
T2 provides that the 100% penalty will not be imposed on
unpaid, volunteer members of any board of trustees or
directors of a tax exempt organization.
T2 will also require the IRS to develop materials to better
inform employees and volunteers of their responsibilities
under the law.
h.--awarding of costs and certain fees
Section 801. Motion for Disclosure of Information. Once a
taxpayer has substantially prevailed in his case with the
IRS, he may file a petition for an order requiring the
disclosure of all information and copies of relevant records
in the possession of the IRS with respect to the taxpayer's
case and the substantial justification for the position taken
by the IRS.
Effective date.--The provision is effective for notices
made and proceedings commenced after the date of enactment.
Section 802. Increased Limit on Attorney Fees. T2 will
amend section 7430 to provide that reasonable fees incurred
for the services of qualified taxpayer representatives shall
not be indexed for inflation occurring since 1981, currently
$110 per hour, and this amount shall be indexed to inflation
in the future.
Effective date.--The provision applies to notices made and
proceedings commenced after the date of enactment.
Section 803. Failure to Agree to Extension not taken into
Account. Section 7430 requires the taxpayer to exhaust all
administrative remedies before costs may be awarded. T2
provides that a taxpayer's failure to agree to an extension
of time shall not be taken into account in determining
whether a taxpayer has exhausted his or her administrative
remedies.
Section 804. Authority for Court to Award Reasonable
Administrative Costs. Section 7430 provides for the recovery
of administrative costs incurred on or after the earlier of
the receipt of the final decision of IRS Appeals or the
statutory notice of deficiency. Because, generally, no
administrative costs are incurred after this period, the
provision is ineffective.
T2 remedies the statute by deleting the time limitations on
the recovery of costs and by providing that the court may in
its discretion determine the commencement date of the running
of administrative costs on a case by case basis.
i.--other provisions
Section 901. Required Content of Notices. Section 7522
(Content of tax due, deficiency, and other notices.) requires
the IRS to clarify certain notices by identifying and
describing the basis for any tax due, as well as any interest
and penalties assessed. However, the IRS is not required to
separately set forth, in the notice, the components and
explanation for each adjustment.
T2 will amend section 7522 to require that the IRS set
forth the components and explanation for each specific
adjustment which is the basis for the total tax deficiency.
Section 902. Relief from Retroactive Application of
Treasury Department Regulations. T2 will generally require
that temporary and proposed regulations issued by the
Treasury Department are to effective prospectively from the
date of filing with the Federal Register except: (1)
temporary or proposed regulations may take effect from the
date any notice which substantially describes the regulation
is issued to the public, (2) Congress may explicitly
authorize Treasury to prescribe the effective date, (3)
Treasury may issue retroactive temporary or proposed
regulations to prevent abuse of the statute, (4) Treasury may
issue retroactive temporary, proposed, or final regulations
to correct a procedural defect in the issuance of a
regulation, (5) Treasury may provide that taxpayers may elect
to apply a temporary or proposed regulation retroactively.
Effective date.--The provision applies with respect to any
temporary or proposed regulation published on or after
January 5, 1993, and any temporary or proposed regulation
published before January 5, 1993, and published as a final
regulation after that date.
Section 903. Required Notice of Certain Payments. T2 will
provide that, if the IRS receives a payment from a taxpayer
and cannot associate that payment with any outstanding tax
liability, then the IRS must make reasonable efforts to
notify the taxpayer of such inability within 60 days after
receipt of such payment.
Mr. GRASSLEY. Mr. President, as many taxpayers are struggling in the
midst of the current tax filing season, the issue of taxpayer's rights
takes on a special importance. Although most IRS employees provide
valuable and responsible service, taxpayer abuse by the Government is
an ongoing problem. With this in mind, I am very happy to be joining
Senator Pryor and others in reintroducing the taxpayer bill of rights
II. This is very necessary legislation that builds upon the original
taxpayer bill of rights that we passed into law in 1988.
I was unable to be here earlier today when the bill was introduced
because I was taking part in the President's signing ceremony of the
Congressional Accountability Act, of which I am the lead Senate
sponsor. But, I'm glad to be here now to offer my strong support to
this ongoing effort.
Mr. President, for me, the long process of trying to ensure taxpayer
protections began in the early 1980's, when I was a member and then
chairman of the Finance Subcommittee on IRS Oversight. We made
progress, but it was only the beginning.
Senator Pryor continued the cause when he succeeded me as chairman in
1987. At that time, he took the initiative and asked me to work with
him in pushing for a taxpayer bill of rights by expanding legislation I
and others had introduced. It took nearly 2 years, but we ultimately
succeeded in achieving this goal.
We now have a 6-year record of implementation regarding the taxpayer
bill of rights. Great strides toward taxpayer protection were achieved
through this legislation. However, the taxpayer bill of rights of 1988
was never expected to be the final chapter of the book on taxpayer
protection. It was a major step in the continuing process of stamping
out taxpayer abuse. And that process continues today, as we look into
ways to improve the current law.
In reviewing the record, it's clear that much more needs to be done.
There's no question that breakdowns in implementing the law have
occurred, and there are gaps in the law that need to be filled. For
instance, we believe the current ombudsman position is too limited and
too beholden to IRS insiders. Our legislation will turn the ombudsman
into a more independent office of taxpayer advocate that will have
expanded powers to help taxpayers.
We were successful in passing a very similar proposal through the
Congress in 1992. However, the underlying legislation that the proposal
was attached to was vetoed by President Bush. So, we're back again in
this new Congress.
Since 1987, Senator Pryor and I have worked in a cooperative,
bipartisan effort to further taxpayer rights. As our roles change
somewhat in this new Republican-controlled Congress, I hope to continue
our successful teamwork.
Beyond the introduction of this bill today, Senator Pryor and I will
be working on further improvements and even more protaxpayer provisions
that will be offered at a later date.
I urge my colleagues to join us in this effort to help make the IRS
more responsible and more accountable to the taxpayers of this country.
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By Mr. McCAIN:
S. 260. A bill to provide for the protection of books and materials
from the Library of Congress, and for other
[[Page S1373]] purposes; to the Committee on Rules and Administration.
the library of congress book protection act
Mr. McCAIN. Mr. President, I introduce legislation to help
protect the valuable resources of the Library of Congress. The Library
of Congress Protection Act will help the Library of Congress stop
abuses of its free book loan program by authorizing the Library to
impose fines for books that are long overdue.
I am reintroducing this legislation to empower Library of Congress
officials to crack down on individuals who seriously abuse their
Library privileges, by keeping books too long or failing to return
them. Library of Congress officials should not have to tolerate the
fact that many individuals are apparently unconcerned about returning
the books that taxpayers provide for them. Congress should not prevent
the Library from instituting strengthened policies to hold severely
delinquent borrowers responsible for their tardiness.
This legislation will enable the Library of Congress to implement a
reasonable overdue book charge policy similar to those of most public
libraries across America. By doing so, the many Members of Congress,
congressional staffers, and executive branch employees who benefit from
this magnificent institution will have an added incentive to comply
with the generous loan policies of the Library of Congress.
This proposal is very basic, but it will afford Library officials the
leverage and flexibility they need to address this problem. This bill
will help Library of Congress officials keep better track of their
resources, and will spur many delinquent borrowers to return the books
that taxpayers provide for them completely free of charge.
The Library of Congress Book Protection Act would direct the Library
to implement an overdue book charge policy for books improperly held
over 70 days. These individuals or offices will have their privileges
suspended until their fines are paid in full. Library of Congress
officials will, however, be able to waive such penalties when
appropriate. The Library would also be authorized to retain the funds
received from late book fines, as well. Finally, the offices of
severely delinquent borrowers and the fines they owe will be published
in the annual report submitted by the Library to its oversight
committees.
Figures published by the Library during the 103d Congress showed that
out of the 20,000 books that were out on loan, over one-third were
listed as overdue. One half of the 4,200 books on loan to congressional
staff and the media were listed as overdue, and one in five books out
on loan to Members, committees, and congressional support agencies had
been overdue for more than 2 months. Library of Congress officials
state that over 300,000 books are missing from their collections dating
back to 1978, and the estimated cost of these thefts is $12 million.
I am concerned about the fact that it is all too easy for individuals
to disregard their responsibility to return books to the Library of
Congress in a timely manner. This negligence is not only unfair to the
other users of the Library, but it also drains the Library's resources
in chasing down overdue or missing books.
In addition to Members of Congress and congressional staff, the
Library of Congress also makes loans to executive branch departments
and agencies, the judiciary and diplomatic corps, the press, and other
institutions. As I have mentioned, Mr. President, the Library of
Congress is barred from charging late fees for overdue books in
contrast to virtually every other publicly funded Library in America.
Furthermore, the Library cannot retain any funds that might be
collected due to the loss or damage of loaned books. It's clearly time
to change these unwise restrictions and strengthen the Library's
ability to protect its resources, and I hope Members of the Senate will
support this legislation to do so.
Surely it's not asking too much of the individuals and offices
fortunate enough to the use the Library of Congress to do so in a
responsible manner. Even under the new borrowing guidelines that would
be instituted by this legislation, there really is no reason for any
well-intentioned borrower ever to have to pay late fines or have their
privileges suspended. I'm optimistic that the mere specter of having to
pay overdue book fines will coax delinquent borrowers into
responsibility renewing their book loans or returning the books.
I hope that the Senate will adopt this legislation to implement
prudent new guidelines in the book loan policies of the Library of
Congress.
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