'Bill of Rights' For Taxpayers Gains in Congress
WASHINGTON -- At a time the Internal Revenue Service is under pressure to step up tax collection efforts to reduce the federal budget deficit, a "taxpayer bill of rights" that would give taxpayers new protections from the IRS is moving in Congress.</br></br>The Senate Finance Committee unanimously approved taxpayer-rights legislation Friday, and the full Senate is expected to pass it. But the measure could face obstacles: There is some opposition from the IRS and the House Ways and Means Committee to any significant restrictions on the agency's ability to collect taxes.</br></br>"The bill is not an attempt to bash the IRS . . . but to protect taxpayers from heavy-handed abuse," said Sen. Lloyd Bentsen (D., Texas), chairman of the Finance Committee.</br></br>The legislation would require the IRS to notify taxpayers in writing of their rights before questioning or auditing them. It would allow taxpayers to sue to recover damages if the IRS proceeds in an unreasonable collection action, and to recover legal fees if they win -- unless the agency could prove that it had "substantial justification" for bringing the case.</br></br>The measure also would extend to 30 days, from 10 days, the written notice that the IRS must give taxpayers before seizing property. And it would require the IRS to waive penalties for taxpayers who don't pay enough taxes as a result of erroneous written IRS advice.