Bill That Seeks to Curb Abuses by IRS Introduced in Congress

Legislation that backers said would curb abuses by the Internal Revenue Service and hold the agency to the same standards as taxpayers was introduced Friday in Congress.

Sen. David Pryor, an Arkansas Democrat and principal sponsor of the Senate bill, said it was aimed at ending a “bounty-hunter mentality” in the tax-collection agency.

“The IRS performs an essential function: collecting our nation’s revenues,” Pryor said. “But, in this process of collecting our tax dollars, we have seen that all too often the rights of American taxpayers are forgotten.”

Similar Bill in House

A similar version was introduced in the House by Rep. Robin Tallon (D-S.C.).

The legislation breaks with earlier proposed taxpayer rights legislation in not shifting the burden of proof to the IRS. Instead, it would hold the agency to the same standards of care as the law now requires of taxpayers.

Taxpayers would be able to recover defense costs if an IRS claim were proved unreasonable and could recover actual damages if IRS actions were proved to be careless, reckless or in intentional disregard of statutes.

“We have in the IRS an agency that simply has too much power,” said Sen. Carl Levin (D-Mich.), a supporter of the measure who has been pushing for taxpayer rights legislation since 1980. “We want taxes to be collected, but we don’t want excess power in any agency.”

Other Provisions

The bill would also:

--Make banks hold accounts garnisheed by the IRS in escrow for 21 days.

--Expand the powers of the Tax Court.

--Create an assistant commissioner of taxpayer services.

--Require the IRS to report annually to Congress on the state of taxpayer services.

Pryor said backers hope to attach the legislation to the budget reconciliation bill, which is the final version of the budget to be passed by Congress.