BILL TO DEFANG IRS APPROVED IN NEAR-UNANIMOUS HOUSE VOTE.

Byline: Richard W. Stevenson The New York Times

The House overwhelmingly passed legislation Wednesday to give taxpayers new rights in their dealings with the Internal Revenue Service, with members of both parties saying Congress should now begin turning its attention to a more daunting problem, the complexity of the tax code.

By a vote of 426-4, the House approved a bill that would create a board made up largely of private citizens to oversee the tax collection agency, make it easier for taxpayers to prevail in tax-court cases and enact 28 other provisions intended to put taxpayers on a more equal footing with the IRS during disputes.

``Today all of us as taxpayers are the real winners,'' said Rep. Rob Portman, R-Ohio, who was one of the bill's authors.

Although most of the provisions in the bill are narrowly drawn and would affect relatively few people, the legislation's supporters said it would send a powerful signal to the IRS to focus on improving the service it provides and stop treating so many taxpayers as if they were criminals or deadbeats.

``The IRS is too big and too mean,'' said Rep. Dick Armey of Texas, the House majority leader.

There is broad bipartisan support for a similar measure in the Senate, and 42 Democrats there sent the Senate Republican leader, Trent Lott of Mississippi, a letter Wednesday night urging him to schedule a vote on the bill before Congress adjourns for the year in the next week or so.

But Senate Republican leaders have so far held firm to their plan to take up the bill early next year, saying they need more time to develop what may prove to be even tougher legislation, and a spokeswoman for Lott said Wednesday night that this schedule was unchanged.

President Clinton has said he will sign the bill as passed by the House, where the only four dissenters Wednesday were Reps. Steny Hoyer of Maryland, Jim McDermott of Washington, and Robert Matsui of Sacramento and Pete Stark of

Fremont, Calif.

All are Democrats, and all had expressed reservations about various provisions of the bill. For instance, critics say, a provision that would shift the burden of proof in tax court, from the taxpayer to the government, would cause IRS investigators to turn increasingly aggressive and make the agency all the more intrusive.

The legislation would bring the first sweeping changes in more than 40 years to the way the IRS is managed. Its passage in the House came just two days after the Senate had confirmed a new commissioner of internal revenue, Charles Rossotti, a business executive who has promised to make the agency more efficient and more responsive to taxpayers.

Republicans said improving the performance of the IRS was just a prelude, though, to their long-gestating effort to create an entirely new tax system that, they say, would be fairer and simpler and would limit or eliminate the role of the IRS.

During debate on the House floor on Wednesday, Democrats said they too wanted a simpler tax code, and challenged Republicans to specify how they would achieve it.