Senate Sends IRS Reform Bill To President's Desk . . . bill includes Leahy Internet reforms

July 9, 1998

WASHINGTON (July 9, 1998) The U.S. Senate on July 9 passed the final version of the IRS reform bill and sent it to the President, who has said he will sign it. The bill is supported by both of Vermont's U.S. senators, Patrick Leahy and Jim Jeffords.

"This bipartisan bill will institute a wide range of constructive and sensible steps to reshape the IRS and improve the way it deals with the American taxpayers they are supposed to serve," said Leahy. "I have heard from many Vermonters who support the reining in of the IRS. They want the IRS to be more responsive to their questions and more respectful of their rights, and that is exactly what they deserve from their government. This bill will make the IRS more responsive to the average taxpayer and give people more explicit rights when dealing with the IRS."

Three provisions advanced by Leahy are in the final bill. The first, based on the Taxpayer Internet Assistance Act of 1998 that Leahy introduced with Sen. John Ashcroft, RMo., will require the IRS to provide taxpayers with speedy access to tax forms, publications and other published guidance over the Internet. The forthcoming law will also require the online posting of documents created by IRS during the most recent five years.

A second Leahy provision, also offered with Ashcroft, will require the IRS to treat an electronically authenticated document the same as a paper document. Leahy said this directive is needed as more and more people file their returns online and use electronic signatures. The provision will ensure that people who use an electronic signature will have no less or no greater status in the tax context than those using a physical signature.

"By retaining these two amendments, the Senate is recognizing the importance of the Internet and its potential to give taxpayers greater access to information and service," said Leahy.

A third provision in the IRS reform bill parallels the Equal Access to Justice for Taxpayers Act, S.1612, which Leahy had introduced with Senator Russ Feingold, DWisc. Under current law, many taxpayers are unable to recover their legal fees and other costs when the IRS takes unjust actions against them. Now, under the forthcoming law, taxpayers will have the same rights as other citizens to fight unjust governmental actions.

Other highlights of the bipartisan IRS reform bill:

• Burden of Proof. The burden of proof is on the IRS in all court cases for tax years beginning after the date of enactment of this bill.
• Innocent Spouse Relief. Innocent spouses and former spouses will no longer be held responsible for tax liabilities incurred by the other spouse.
• Interest and Penalties. If the IRS fails to notify the taxpayer of a delinquency within 18 months, the taxpayer will not be held responsible for penalties and interest accrued during that time.
• IRS Accountability. IRS employees will be held more accountable for their actions and advancement will be based on a system of merit.
• LowIncome Taxpayer Clinics. $6 million will be provided in matching grants to establish taxpayer clinics to provide tax assistance to lowincome taxpayers.
• Oversight Board. A ninemember IRS Oversight Board will be established. This board will consist of the Secretary of the Treasury, the Commissioner of the IRS, a representative of IRS employees or a fulltime Federal employee, and six members from the private sector.
• Collections. This bill establishes formal procedures to ensure due process for any liens or levies placed on a taxpayer.
• Confidential Communications. Privileged communications will be expanded to include tax advice between an accountant or tax advisor and a taxpayer.