Printer Friendly

Taxpayer Bill of Rights 2 is now law.

President Clinton signed into law a bill that will provide administrative relief to taxpayers who must deal with the Internal Revenue Service. The Taxpayer Bill of Rights 2 (HR 2337), heralded as a victory for taxpayers, was widely supported by both Democrats and Republicans in Congress. It contains over three dozen pro-taxpayer provisions and is the culmination of an effort that began with the enactment of the original Taxpayer Bill of Rights in 1988 (see "House Passes Taxpayer Rights Legislation, But Many Provisions Are Already in Practice," JofA, June 96, page 31).

"This is great news for taxpayers," said Patrick G. Heck, senior manager of Ernst & Young in Washington, D.C. Heck said that it was very difficult for taxpayers who found themselves under examination to get the IRS to listen to their claims and take the appropriate corrective action. "Many of the provisions in the new law give the IRS the power to fix mistakes it recognized it had made," said Heck.

A friend inside the IRS

The new law replaces the position of taxpayer ombudsman with the new, high-level position of taxpayer advocate. The taxpayer advocate has the authority to take affirmative action, such as issuing taxpayer assistance orders, on behalf of taxpayers who are facing significant hardship. The advocate must report annually to Congress the problems taxpayers encounter as well as recommendations for improvements in the tax system.

Other key provisions in the Taxpayer Bill of Rights, which are intended to make it easier for taxpayers to deal with the IRS:

* Require the IRS to notify taxpayers before it alters or terminates installment agreements.

* Allow the IRS to abate interest due to unreasonable errors or delays resulting from such things as the loss of records by the IRS, IRS personnel transfers, extended illnesses and personal training or leave.

* Allow the IRS to withdraw a public notice of tax lien before the tax liability is paid in full and require the IRS to make reasonable efforts to notify major credit agencies and financial institutions if it files erroneous liens.

* Give the IRS the authority to return levied property under certain conditions.

* Award costs and certain fees in taxpayer disputes with the IRS.

* Allow married couples who file separately to elect to file joint returns before they have paid off the balance of their tax liabilities.

The act raises $33 million to offset projected revenue losses by imposing sanctions on not-for-profit organizations with excess benefit violations. It also applies failure-to-pay penalties to substitute returns--which are filed by the IRS when no return is filed by a taxpayer--just as they are applied to delinquent returns filed by taxpayers.
COPYRIGHT 1996 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Oct 1, 1996
Previous Article:IRS, forced to operate with less, to see a decline in service.
Next Article:IRS receives thousands of claims for slavery reparation.

Related Articles
Ways and Means Committee penalty reform package - very good, but could be better.
Comments on the New York State bank audit fee December 27, 1990.
Uniform Exchange of Information Agreement.
AICPA's Walker urges stronger taxpayer rights.
Taxpayer Bill of Rights 2.
A practitioners' roundtable on the Taxpayer Bill of Rights 2.
Taxpayer Bill of Rights 3.
TEI supports creation of independent Kansas Tax Appeals Commission.
New law provides additional assistance in solving client problems.
Will a tax opinion still prevent penalties?

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters