‘Taxpayer Bill of Rights’ Goes to Clinton

A “Taxpayer Bill of Rights” allowing Americans to sue for wrongful collections and providing other protections against IRS abuse is on its way to President Clinton after easy passage by Congress.

The Senate approved the bill by voice vote Thursday. The popular measure passed the House in April, 425-0, and is backed by the Clinton administration.

It allows taxpayers to sue the Internal Revenue Service for up to $1 million for reckless collections--10 times the current $100,000 cap on such lawsuits.

Taxpayers also would get the right to sue anyone filing a false information return, such as a Form 1099 or Form W-2. In some cases, for example, contractors have filed incorrect forms for workers they have hired, resulting in the workers being assessed unjustified back taxes.

Under the measure, the IRS would have to prove in such disputes that the information it received was correct.

Sen. Charles E. Grassley (R-Iowa), a co-author of the legislation, noted that it would establish an independent taxpayers’ advocate at the IRS to assist consumers in dealing with the agency.

The advocate would have expanded powers to require the IRS to issue refund checks and meet deadlines in performing tasks for taxpayers.

The IRS didn’t quarrel with most of the changes, although it did argue that raising the ceiling on lawsuits would encourage such litigation and disproportionately benefit wealthy taxpayers.