House passes IRS reform bill; Senate expected to vote soon.

House Passes IRS Reform Bill; Senate Expected to Vote Soon

The House passed by a vote of 426 to 4 legislation to restructure the Internal Revenue Service and provide taxpayers with new protections; however, a vote on the Senate version of the legislation will have to wait until Congress reconvenes later this month.

The Internal Revenue Service Restructuring and Reform Act (HR 2676) would create an oversight body (composed of eight private-sector members, the secretary of the treasury, a representative from a union representing a substantial number of IRS employees and the IRS commissioner) to oversee IRS administration, management, conduct, direction and supervision of the execution and application of the Internal Revenue Code.

HR 2676 also contains language on taxpayer rights, including provisions that would shift the burden of proof to the IRS in certain civil tax cases, provide innocent spouse relief and create a more equitable interest differential between tax overpayments and underpayments.

The near-unanimous vote put pressure on the Senate to act on its own version of the legislation, S 1096, before it adjourned in November, but Senate Finance Committee chairman William V. Roth (R-Del.) did not want to act on restructuring legislation until 1998—he wanted more time to add language to the legislation that would give the oversight board even broader powers.

The Senate will reconvene on January 27 and is expected to put S 1096 high on its 1998 agenda.