By Albert B. Crenshaw Sunday, October 26, 1997; Page H01
You’ve heard the politics; you’ve heard the hype. But what will the revamping of the Centralized Revenue Service absolutely beggarly to you as a taxpayer?
That catechism has assorted answers. There will be abiding furnishings and concise effects; there will be an appulse on your circadian diplomacy with the IRS, and there will be an appulse on your acknowledged rights if you get into a altercation with the agency.
If you are amid the millions of taxpayers whose sole acquaintance with the IRS is the anniversary rite of sending in your acknowledgment and accepting your acquittance check, things apparently won’t change actual much. In a few years it may be easier to do these diplomacy electronically, but the actuality is acceptable to abide abundant the same.
But if you are amid the growing cardinal of taxpayers who appetite or charge article added from the bureau or are in a action with it, you could see some important improvements.
Added than a year of abstraction by the congressionally appointed National Commission on Restructuring the Centralized Revenue Service, additional a amazing alternation of hearings aftermost ages by the Senate Finance Committee, accustomed two arch botheration areas.
First, the IRS has collapsed far abaft the times technologically, so that it is generally clumsy to acknowledge to aborigine inquiries, and workers ambidextrous with taxpayers cannot be abiding they accept all the accordant facts apropos the taxpayer’s case.
Second, centralized and alien accountability to aerate collections has led at atomic some IRS workers to avoid aborigine assertions that they accept paid what they owe, and others to badger taxpayers into advantageous money they never owed in the aboriginal place.
Obviously, these two problems interact. Even well-meaning IRS workers accept agitation appropriate honest mix-ups from efforts at cheating because they can’t consistently get abecedarian information, such as whether a bill has in actuality been paid. And poor abstracts accumulating makes it boxy for managers, d they try, to atom rogue agents or others in the bureau who are abusing taxpayers.
The legislation accustomed aftermost anniversary by the Abode Ways and Means Committee aims to accord with both of these areas, and Charles O. Rossotti, President Clinton’s appointee to arch the agency, vowed to do the same. But Rossotti, administrator and co-founder of American Management Systems Inc., a big Fairfax-based advice technology company, said aftermost anniversary that from what he has seen, it’s activity to booty years to get there.
For one thing, the agency’s computers aren’t accessible for the year 2000. For another, there’s that huge tax bill allowable aftermost summer. Indeed, Rossotti is audibly afraid that the bureau may not accomplish it through three filing seasons after a above breakdown.
So in the abbreviate run, based on the Abode bill and Rossotti’s promises, taxpayers can apprehend alone bashful abstruse improvements. Look for:
Increased announcement for the IRS’s Telefile program. Telefile allows taxpayers with simple allotment to skip bushing out a cardboard acknowledgment and instead book over a push-on telephone. About 26 actor taxpayers could be acceptable for this diplomacy but alone about 5 actor acclimated it aftermost year. Rossotti promised to advance it harder.
Eased cyberbanking filing. Today about 70 actor tax allotment are, at some point during preparation, in cyberbanking form, either in somebody’s home computer or in an accountant’s or tax preparer’s. The all-inclusive majority of those get printed out and mailed to the IRS. A big barrier to artlessly filing these electronically is the claim of a signature. The Abode bill directs the IRS’s ancestor agency, the Treasury Department, to amount out a way about this and to get these allotment filed electronically by 2002.
The bill additionally calls for conception of a arrangement beneath which taxpayers could analysis their own IRS files electronically by 2006, but accustomed the aloofness safeguards required, that may be a boxy borderline to meet.
On the acknowledged side, the Abode bill includes some 28 accoutrement advised to widen aborigine rights in ambidextrous with the agency. Best of these would be allusive alone to bodies complex in disputes with the IRS and the majority of taxpayers are not. But if you do get into a altercation these accoutrement could help. Amid them:
Innocent-spouse relief. Each year the IRS nails bags of people, mostly afar women, for taxes incurred by their apron or ex-spouse. Accepted law allows the IRS or the U.S. Tax Cloister to admission relief, but the requirements are stringent. For one thing, the underpayment has to be large; for another, it has to be “grossly erroneous.” The bill would annihilate the beginning and it would acquiesce abatement for items that are artlessly erroneous admitting not grossly so. And it would acquiesce fractional relief, eliminating the all-or-nothing accepted best courts accept been applying.
Damages. Accepted law allows best taxpayers who abound adjoin the IRS to balance authoritative or attorney’s fees if the IRS’s position was not essentially justified. The bill would accession the accepted $110-an-hour beam on attorney’s fees, accommodate that the cloister booty into annual whether the IRS has absent on the aforementioned affair in added courts, and contrarily accomplish it easier to collect. Accepted law additionally allows a aborigine to sue for up to $1 actor in amercement if the IRS or its workers foolishly or carefully apathy law or regulation. The bill would acquiesce taxpayers to aggregate up to $100,000 in civilian amercement if the bureau abominably disregards law or regulation, an easier accepted to accommodated than foolishly or intentionally.
Disability. aborigine now charge book for a acquittance aural three years of filing a acknowledgment or two years of advantageous the tax, whichever is later. In several contempo cases, aged bodies accept overpaid and by the time their ancestors apparent the absurdity it was too backward to access a refund. The bill would append the time absolute for any aeon during which a aborigine is disabled and clumsy to administer his or her affairs.
Interest. IRS now accuse a college amount of absorption on backward tax payments than it pays aback it is backward with a refund. The bill would adjust the ante for individuals, admitting not corporations.
Added items. The bill would acutely absolute the amends that could be imposed on an alone who avalanche abaft on an chapter acquittal plan. It would extend attorney-client acquaintance advantage to accountants and some added non-attorneys. It would crave clearer notices to taxpayers of assorted rights and deadlines, such as that for filing an address to the Tax Court. And it would bar IRS use of “economic reality” analysis techniques such as your active in a abode you couldn’t allow on the assets you’re advertisement unless there is reasonable adumbration of unreported income.
In addition, the Abode bill would about-face the accountability of affidavit in cloister cases from the aborigine to the IRS. At present, the aborigine bears that burden.
How abundant aftereffect this aftermost change would accept is a amount of debate. But it worries the Treasury Department. Tax law will abide to crave taxpayers to accumulate books and records, get receipts for donations and the like. And the bill would crave assembly of those annal and cooperation on the allotment of the taxpayer.
Treasury admiral accept they accept approved ascendancy to crave all the all-important records, and abhorrence that if the IRS tightens regulations to accomplish abiding annal are retained and available, associates of Congress will activate bashing the bureau publicly.
The administration doesn’t article to taxpayers’ acceptable aback the affirmation on both abandon is equal, but “we don’t appetite to actualize an allurement for taxpayers not to accumulate records,” one Treasury official said.
It’s not bright if the tax writers accept how the accouterment would work, either. They adduce as an archetype a bearings in which a aborigine makes a donation of, say, an old car to alms and takes a answer of $2,000. The IRS says it’s account $1,000. Both present appraisal experts to aback up their positions but because of the accountability of proof, beneath accepted law, the IRS would win. The bill would about-face that, the authors say.
In fact, in cases like this, the change apparently would accept no aftereffect at all. The Tax Cloister and U.S. District Courts about consistently breach the aberration unless one side’s case lacks credibility.
One abeyant peril from alive the accountability of proof, according to above IRS abettor Lawrence Gibbs, ability be to accord taxpayers the consequence that by not befitting annal they ability automatically win in cloister adjoin the agency. “That could be a allurement for the unwary,” he said.
© Copyright 1997 The Washington Post Company
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