Electronic Bookshelf/Electronic Bookshelf.iso/govern/taxbill/taxpayer.txt

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                     TAXPAYERS' BILL OF RIGHTS

The following was prepared by Linda Thompson and may be readily
distributed to bulletin boards.

                        TABLE OF CONTENTS:


1.  EXCERPTED SUMMARY OF THE TAXPAYERS' BILL OF RIGHTS .........1

2.  FULL TEXT OF THE TAXPAYERS' BILL OF RIGHTS..................4

3.  EXCERPTED COMMENTS BY SENATOR PRYOR........................36

4.  FULL TABLE OF CONTENTS, ALL TAX REFORM FROM THE
    TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988............45



Excerpted from:
134 Cong.Rec. S17193-05
100th Congress, Second Session
Congressional Record --- Senate
Proceedings and Debates of the 100th Congress, Second Session
Friday, October 21, 1988

    SUMMARY OF THE HIGHLIGHTS OF THE TAXPAYERS' BILL OF RIGHTS

        AS PASSED IN THE MISCELLANEOUS REVENUE ACT OF 1988

1. PRE INTERVIEW EXPLANATION OF RIGHTS

     Past  law:  Past  law  did  not  require the IRS to explain a
taxpayer's  rights  and  obligations  before  an  initial audit or
collection interview.

     Taxpayers'  Bill  of  Rights:  The Act would require prior to
initial  audit  or  collection interviews that the IRS explain the
audit  and  collection process and the taxpayer's right under that
process.  The  explanation  must provide that the taxpayer has the
right  to  suspend  the  interview  to consult with an attorney or
accountant.

2. POWER OF ATTORNEY

     Past  law:  The  IRS  had administrative procedures governing
the use of powers of attorney.

     Taxpayers'   Bill  of  Rights:  The  Act  gives  taxpayers  a
statutory  right  to  execute powers of attorney to be represented
before  the  IRS  by qualified representatives. Under the new law,
the  taxpayer  could  not  be  forced  to attend an interview, but
could  instead  send  a  representative  with  a properly executed
power of attorney.

3. ABATEMENT OF PENALTIES FOR ERRONEOUS WRITTEN ADVICE OF THE IRS

     Past law: The IRS could, at its discretion, abate penalties.

     Taxpayers'  Bill of Rights: The Act requires the IRS to abate
any   portion   of   any  penalty  or  addition  to  tax  that  is
attributable to erroneous written advice furnished by the IRS.

4. TAXPAYER ASSISTANCE ORDERS

     Past  law:  The  Taxpayer Ombudsman had no statutory right to
intervene on the part of taxpayers.

     Taxpayers'  Bill  of  Rights:  The  Act provides the Taxpayer
Ombudsman  with  the  authority  to  issue  a  taxpayer assistance
order,  if, in the determination of the Ombudsman, the taxpayer is
suffering  or  about  to suffer a significant hardship as a result
of  the  manner  in  which  the  IRS is administering the internal
revenue  laws. The order would suspend any action of the IRS until
modified or rescinded by the Ombudsman.

5. PROHIBITION OF PRODUCTION QUOTAS FOR COLLECTION OFFICERS

     Past  Law:  The IRS administrative manual disallows quotas or
goals based on sums collected to evaluate enforcement officers.

     Taxpayers'  Bill  of  Rights:  The  Act  provides a statutory
prohibition   against   the   IRS   using  statistics  to  suggest
enforcement  goals or quotas. The Act would make each IRS District
Director personally responsible for administering the new rule.

6. EXPLANATION OF TAX LIABILITIES AND PENALTIES

     Past  Law:  The  IRS  Code  does  not  specify the content of
notices sent to taxpayers.

     Taxpayers'  Bill  of Rights: The Act requires all tax notices
to  contain  a  description  of the basis for taxes due, interest,
and  penalties. Additionally. The Act requires the IRS to identify
the amount of tax due, interest, and penalties.

7. INSTALLMENT AGREEMENTS

     Past  Law: The IRS could enter into agreements with taxpayers
to  pay  tax  liabilities  in installments, but could unilaterally
cancel such agreements.

     Taxpayers'  Bill  of  Rights:  The  Act  grants  the  IRS the
statutory   power   to  enter  into  installment  agreements,  and
restricts the IRS' ability to cancel such agreements.

8. ADMINISTRATIVE APPEAL OF LIENS

     Past  Law:  In  the past, there was no formal appeals process
for wrongful liens.

     Taxpayers'  Bill  of  Rights:  The  Act  requires  the IRS to
establish an administrative review process for wrongful liens.

9. PROFESSIONAL FEES AND COSTS

     Past  Law:  Under  past  law,  taxpayers  could  only recover
professional  fees  and  costs incurred for unreasonable claims by
the IRS in court.

     Taxpayers'  Bill  of Rights: Under the new Act, taxpayers can
recover   professional   fees   (for  accountants  and  attorneys)
incurred during the administrative appeals process.



                               - 2 -
10.  CIVIL  CAUSE  OF ACTION FOR DAMAGES DUE TO FAILURE TO RELEASE
LIENS

     Past  Law:  Taxpayers  could  not  recover damages if the IRS
failed to remove wrongful liens.

     Taxpayers'  Bill  of  Rights: Taxpayers could recover damages
up  to  $1,000 from the IRS for failure to remove a wrongful lien.
The  IRS would also have to publish that the lien was wrongful and
should  not  be  considered  a  "blemish" on the taxpayer's credit
record.

11.  CIVIL CAUSE OF ACTION FOR DAMAGES DUE TO UNREASONABLE ACTIONS
OF THE IRS

     Past  Law:  Taxpayers  could  not  sue  the  IRS directly for
damages incurred for wrongful actions by IRS agents.

     Taxpayers'  Bill of Rights: The Act would grant taxpayers the
right  to  sue  the  IRS  if  an agent recklessly or intentionally
disregards  the  Internal Revenue Code in the collection of taxes.
The damages would be capped at $100,000.

(TEXT OF THE ENTIRE BILL FOLLOWS)


                               - 3 -

H.R. 4333

          TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988
                           SUBTITLE J --
                  TAXPAYER RIGHTS AND PROCEDURES

SECTION 6226. SHORT TITLE.

     This  subtitle  may be cited as the "Omnibus Taxpayer Bill of
Rights"

                     PART I -- TAXPAYER RIGHTS

SEC. 6227. DISCLOSURE OF RIGHTS OF TAXPAYERS

     (a)  IN  GENERAL.  -- The Secretary of the Treasury shall, as
soon  as  practicable,  but not later than 180 days after the date
of  the  enactment  of  this  Act,  prepare a statement which sets
forth in simple and nontechnical terms --

     (1)  the  rights  of  a  taxpayer  and the obligations of the
Internal  Revenue   Service  (hereinafter in this section referred
to as the 'Service') during an audit;

     (2)  the  procedures  by  which  a  taxpayer  may  appeal any
adverse  decision  of  the  Service  (including administrative and
judicial appeals);

     (3)  the  procedures for prosecuting refund claims and filing
of taxpayer complaints; and

     (4)  the  procedures  which  the Service may use in enforcing
the   internal   revenue   laws  (including  assessment,  jeopardy
assessment, levy and distraint, and enforcement of liens).

     (b)  TRANSMISSION TO COMMITTEES OF CONGRESS. -- The Secretary
of  the  Treasury  shall transmit drafts of the statement required
under   subsection   (a)   (or  proposed  revisions  of  any  such
statement)  to  the  Committee  on  Ways and Means of the House of
Representatives,  the Committee on Finance of the Senate, and  the
Joint Committee on Taxation on the same day.

     (c)  DISTRIBUTION.  --  The  statement prepared in accordance
with   subsections  (a)  and  (b)  shall  be  distributed  by  the
Secretary  of the Treasury to all taxpayers the Secretary contacts
with  respect to the determination or collection of any tax (other
than  by  providing  tax  forms).  The  Secretary  shall take such
actions  as  the  Secretary  deems  necessary  to ensure that such
distribution  does not result in multiple statements being sent to
any one taxpayer.



                               - 4 -
SEC. 6228. PROCEDURES INVOLVING TAXPAYER INTERVIEWS.

     (a)  IN  GENERAL. -- Chapter 77 of the 1986 Code (relating to
miscellaneous  provisions) is amended by adding at the end thereof
the  following  new  section:   SEC.  7520.  PROCEDURES  INVOLVING
TAXPAYER INTERVIEWS.

     (a) RECORDING OF INTERVIEWS. --

     (1)  RECORDING BY TAXPAYER. -- Any officer or employee of the
Internal   Revenue   Service  in  connection  with  any  in-person
interview  with  any  taxpayer  relating  to  the determination or
collection  of  any  tax  shall,  upon  advance  request  of  such
taxpayer,  allow  the  taxpayer to make an audio recording of such
interview  at  the  taxpayer's own expense and with the taxpayer's
own equipment.

     (2)  RECORDING  BY  IRS OFFICER OR EMPLOYEE. -- An officer or
employee  of the Internal Revenue Service may record any interview
described in paragraph (1) if such officer or employee --

     (A)  informs  the  taxpayer  of  such  recording prior to the
interview, and

     (B)  upon request of the taxpayer, provides the taxpayer with
a  transcript  or  copy of such recording but only if the taxpayer
provides  reimbursement  for  the  cost  of  the transcription and
reproduction of such transcript or copy.

     (b) SAFEGUARDS. --

     (1)  EXPLANATIONS  OF PROCESSES. -- An officer or employee of
the  Internal  Revenue  Service  shall  before  or  at  an initial
interview provide to the taxpayer --

     (A)  in  the case of an in-person interview with the taxpayer
relating  to  the  determination of any tax, an explanation of the
audit process and the taxpayer's rights under such process, or

     (B)  in  the case of an in-person interview with the taxpayer
relating  to  the  collection  of  any  tax, an explanation of the
collection process and the taxpayer's rights under such process.

     (2)  RIGHT OF CONSULTATION. -- If the taxpayer clearly states
to  an  officer or employee of the Internal Revenue Service at any
time  during  any  interview (other than an interview initiated by
an  administrative  summons  issued  under subchapter A of chapter
78)  that  the  taxpayer  wishes  to  consult  with  an  attorney,
certified  public accountant, enrolled agent, enrolled actuary, or
any other person permitted to represent the taxpayer before the


                               - 5 -
Internal  Revenue  Service, such officer or employee shall suspend
such  interview  regardless  of  whether  the  taxpayer  may  have
answered one or more questions.

     (c)   REPRESENTATIVES  HOLDING  POWER  OF  ATTORNEY.  --  Any
attorney,  certified  public  accountant, enrolled agent, enrolled
actuary,  or  any other person permitted to represent the taxpayer
before  the  Internal  Revenue  Service  who  is  not disbarred or
suspended  from  practice  before the Internal Revenue Service and
who  has  a written power of attorney executed by the taxpayer may
be  authorized  by  such taxpayer to represent the taxpayer in any
interview  described  in subsection (a). An officer or employee of
the  Internal  Revenue  Service  may  not  require  a  taxpayer to
accompany  the  representative in the absence of an administrative
summons  issued  to the taxpayer under subchapter A of chapter 78.
Such  an  officer  or  employee, with the consent of the immediate
supervisor  of  such  officer or employee, may notify the taxpayer
directly   that   such   officer   or   employee   believes   such
representative  is responsible for unreasonable delay or hindrance
of  an  Internal  Revenue  Service examination or investigation of
the taxpayer.

     (d)  SECTION  NOT TO APPLY TO CERTAIN INVESTIGATIONS. -- This
section   shall   not   apply   to   criminal   investigations  or
investigations  relating  to  the  integrity  of  any  officer  or
employee of the Internal Revenue Service.

     (b)   REGULATIONS   WITH   RESPECT   TO  TIME  AND  PLACE  OF
EXAMINATION.  --  The Secretary of the Treasury or the Secretary's
delegate  shall  issue  regulations to implement subsection (a) of
section  7605  of  the  1986  Code  (relating to time and place of
examination)  within  1  year  after  the date of the enactment of
this Act.

     (c)  CLERICAL AMENDMENT. -- The table of sections for chapter
77  of  the  1986 Code is amended by adding at the end thereof the
following new item:

     Sec. 7520. Procedures involving taxpayer interviews.'

     (d)  EFFECTIVE  DATE.  --  The amendments made by subsections
(a)  and  (c)  shall apply to interviews conducted on or after the
date  which  is  90  days  after the date of the enactment of this
Act.

SEC.  6229.  TAXPAYERS  MAY  RELY  ON  WRITTEN  ADVICE OF INTERNAL
REVENUE SERVICE.

     (a)  IN  GENERAL.  -- Section 6404 of the 1986 Code (relating
to  abatements)  is  amended  by  adding  at  the  end thereof the
following new subsection:

     (f)  ABATEMENT OF ANY PENALTY OR ADDITION TO TAX ATTRIBUTABLE
TO ERRONEOUS WRITTEN ADVICE BY THE INTERNAL REVENUE SERVICE. --



                               - 6 -
     (1)  IN  GENERAL. -- The Secretary shall abate any portion of
any  penalty  or  addition to tax attributable to erroneous advice
furnished  to the taxpayer in writing by an officer or employee of
the   Internal  Revenue  Service,  acting  in  such  officer's  or
employee's official capacity.

     (2) LIMITATIONS. -- Paragraph (1) shall apply only if --

     (A)  the  written  advice  was  reasonably relied upon by the
taxpayer  and was in response to a specific written request of the
taxpayer, and

     (B)  the  portion  of  the penalty or addition to tax did not
result  from  a  failure  by  the  taxpayer to provide adequate or
accurate information.

     (3)  INITIAL  REGULATIONS.  -- Within 180 days after the date
of   the   enactment  of  this  subsection,  the  Secretary  shall
prescribe  such  initial  regulations as may be necessary to carry
out this subsection.'

     (b)  EFFECTIVE  DATE. -- The amendment made by subsection (a)
shall  apply  with respect to advice requested on or after January
1, 1989.

AMENDMENTS RELATED TO SECTION 1875 OF THE REFORM ACT. --

Subsection  (f)  of  section  6229  of the 1986 Code is amended by
adding  at the end thereof the following new sentence: "The period
described  in  the  preceding  sentence  (including  any extension
period  under  this  sentence) may be extended with respect to any
partner  by  agreement  entered  into  by  the  Secretary and such
partner."

SEC. 6230. TAXPAYER ASSISTANCE ORDERS.

     (a)  IN  GENERAL.  --  Subchapter A of chapter 80 of the 1986
Code  (relating  to  general rules for application of the internal
revenue  laws)  is  amended  by  adding  at  the  end  thereof the
following new section:  SEC. 7811. TAXPAYER ASSISTANCE ORDERS.

     (a)  AUTHORITY  TO  ISSUE.  --  Upon  application  filed by a
taxpayer  with  the Office of Ombudsman (in such form, manner, and
at  such  time  as  the Secretary shall by regulations prescribe),
the  Ombudsman  may  issue  a Taxpayer Assistance Order if, in the
determination  of  the  Ombudsman,  the  taxpayer  is suffering or
about  to  suffer a significant hardship as a result of the manner
in  which  the internal revenue laws are being administered by the
Secretary.

     (b)  TERMS  OF A TAXPAYER ASSISTANCE ORDER. -- The terms of a
Taxpayer Assistance Order may require the Secretary --



                               - 7 -

     (1) to release property of the taxpayer levied upon, or

     (2)  to  cease any action, or refrain from taking any action,
with respect to the taxpayer under --

     (A) chapter 64 (relating to collection),

     (B)  subchapter  B  of chapter 70 (relating to bankruptcy and
receiverships),

     (C)  chapter  78  (relating  to  discovery  of  liability and
enforcement of title), or

     (D)   any  other  provision  of  law  which  is  specifically
described by the Ombudsman in such order.

     (c)   AUTHORITY   TO  MODIFY  OR  RESCIND.  --  Any  Taxpayer
Assistance  Order  issued  by the Ombudsman under this section may
be  modified  or  rescinded  only  by  the  Ombudsman,  a district
director,   a   service   center  director,  a  compliance  center
director,  a  regional director of appeals, or any superior of any
such person.

     (d)  SUSPENSION  OF  RUNNING  OF PERIOD OF LIMITATION. -- The
running  of  any  period  of limitation with respect to any action
described in subsection (b) shall be suspended for --

     (1)  the  period  beginning  on  the  date  of the taxpayer's
application  under  subsection  (a)  and ending on the date of the
Ombudsman's decision with respect to such application, and

     (2)  any  period  specified  by  the  Ombudsman in a Taxpayer
Assistance Order issued pursuant to such application.

     (e)  INDEPENDENT  ACTION  OF  OMBUDSMAN.  --  Nothing in this
section  shall prevent the Ombudsman from taking any action in the
absence of an application under subsection (a).

     (f)  OMBUDSMAN.  --  For  purposes  of this section, the term
'Ombudsman' includes any designee of the Ombudsman.

     (b)   CLERICAL  AMENDMENT.  --  The  table  of  sections  for
subchapter  A  of chapter 80 of the 1986 Code is amended by adding
at the end thereof the following new item:

     Sec. 7811. Taxpayer Assistance Orders.

     (c)   ISSUANCE  OF  REGULATIONS.  --  The  Secretary  of  the
Treasury  or the Secretary's delegate shall issue such regulations
as  the  Secretary  deems  necessary within 90 days of the date of

                               - 8 -
the  enactment  of  this Act in order to carry out the purposes of
section  7811  of  the 1986 Code (as added by this section) and to
ensure taxpayers uniform access to administrative procedures,

     (d)  EFFECTIVE  DATE.  -- The amendments made by this section
shall take effect on January 1, 1989.

AMENDMENTS RELATED TO SECTION 1875 OF THE REFORM ACT.--

Clause  (ii)  of section 6230(a)(2)(A) of the 1986 Code is amended
bystriking  out  "nonpartnership  items"  and  inserting  in  lieu
thereof"nonpartnership  items  (other  than  by  reason of section
6231(b)(1)(C))".

SEC.  6231.  BASIS  FOR  EVALUATION  OF  INTERNAL  REVENUE SERVICE
EMPLOYEES.

     (a)  IN  GENERAL.  --  The Internal Revenue Service shall not
use records of tax enforcement results --

     (1)  to  evaluate  employees  directly involved in collection
activities and their immediate supervisors, or

     (2)  to  impose  or  suggest  production quotas or goals with
respect to individuals described in clause (i).

     (b)  APPLICATION  OF  IRS  POLICY  STATEMENT. -- The Internal
Revenue  service  shall  not  be  treated  as  failing to meet the
requirements  of  subsection (a) if the Service follows the policy
statement  of  the  Service  regarding  employee evaluation (as in
effect  on  the  date  of  the  enactment of this Act) in a manner
which does not violate subsection (a).

     (c)  CERTIFICATION.  --  Each district director shall certify
quarterly  by  letter to the Commissioner of Internal Revenue that
tax  enforcement  results  are  not used in a manner prohibited by
subsection (a).

     (d)  EFFECTIVE  DATE. -- The provisions of this section shall
apply to evaluations conducted on or after January 1, 1989.

AMENDMENTS RELATED TO SECTION 1875 OF THE REFORM ACT. --

(1)  Clause  (ii)  of  section  6230(a)(2)(A)  of the 1986 Code is
amended  by  striking  out "nonpartnership items" and inserting in
lieu  thereof  "nonpartnership  items  (other  than  by  reason of
section 6231(B)(1)(C))".

SEC.   6232.  PROCEDURES  RELATING  TO  INTERNAL  REVENUE  SERVICE
REGULATIONS.

     (a)  IN  GENERAL.  -- Section 7805 of the 1986 Code (relating
to  rules and regulations) is amended by adding at the end thereof


                               - 9 -
the following new subsections:

     (e) TEMPORARY REGULATIONS. --

     (1)  ISSUANCE.  --  Any  temporary  regulation  issued by the
Secretary shall also be issued as a proposed regulation.

     (2)  3-YEAR  DURATION.  --  Any  temporary  regulation  shall
expire  within  3  years  after  the  date  of  issuance  of  such
regulation.

     (f)  IMPACT  OF  REGULATIONS  ON  SMALL BUSINESS REVIEWED. --
After  the publication of any proposed regulation by the Secretary
and  before  the  promulgation  of  any  final  regulation  by the
Secretary  which  does  not  supersede  a proposed regulation, the
Secretary  shall  submit  such  regulation to the Administrator of
the  Small  Business  Administration  for comment on the impact of
such  regulation on small business. The Administrator shall have 4
weeks from the date of submission to respond.

     (b)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  any regulation issued after the date which is 10
days after the date of the enactment of this Act.

SEC. 6233. CONTENT OF TAX DUE, DEFICIENCY, AND OTHER NOTICES

     (a)  IN  GENERAL. -- Chapter 77 of the 1986 Code (relating to
miscellaneous  provisions) is further amended by adding at the end
thereof  the  following  new  section:   SEC. 7521. CONTENT OF TAX
DUE, DEFICIENCY, AND OTHER NOTICES.

     (a)  GENERAL  RULE.  --  Any  notice  to  which  this section
applies  shall  describe  the  basis for, and identify the amounts
(if  any) of, the tax due, interest, additional amounts, additions
to  the  tax, and assessable penalties included in such notice. An
inadequate  description  under  the  preceding  sentence shall not
invalidate such notice.

     (b)  NOTICES  TO WHICH SECTION APPLIES. -- This section shall
apply to --

     (1)  any  tax  due  notice  or deficiency notice described in
section 6155, 6212, or 6303,

     (2)  any  notice  generated  out  of  any  information return
matching program, and  (3)  the  1st letter of proposed deficiency
which  allows  the  taxpayer  an  opportunity  for  administrative
review in the Internal Revenue Service Office of Appeals.

     (b)   CLERICAL  AMENDMENT.  --  The  table  of  sections  for
chapter  77  of  the 1986 Code is further amended by adding at the
end thereof the following new item:



                              - 10 -
     Sec.   7521.  Content  of  tax  due,  deficiency,  and  other
notices.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall apply to mailings made on or after January 1, 1990.

     (d)  REPORT. -- Not later than July 1, 1989, the Secretary of
the  Treasury  or  his  delegate  shall  submit  a  report  to the
Committee  on  Ways  and Means of the steps taken to carry out the
amendments made by this section:

SEC. 6234. INSTALLMENT PAYMENT OF TAX LIABILITY

     (a)  IN  GENERAL.  --  Subchapter A of chapter 62 of the 1986
Code  (relating  to  place  and  due  date  for payment of tax) is
amended by adding at the end thereof the following new section:

     SEC.  6159.  AGREEMENTS  FOR  PAYMENT  OF  TAX  LIABILITY  IN
INSTALLMENTS.

     (a)   AUTHORIZATION   OF  AGREEMENTS.  --  The  Secretary  is
authorized  to  enter  into  written  agreements with any taxpayer
under  which  such  taxpayer  is  allowed to satisfy liability for
payment  of  any  tax  in  installment  payments  if the Secretary
determines  that such agreement will facilitate collection of such
liability.

     (b) EXTENT TO WHICH AGREEMENTS REMAIN IN EFFECT. --    (1)
IN  GENERAL.  --  Except as otherwise provided in this subsection,
any  agreement  entered into by the Secretary under subsection (a)
shall remain in effect for the term of the agreement.

     (2)  INADEQUATE INFORMATION OR JEOPARDY. -- The Secretary may
terminate  any  agreement  entered  into  by  the  Secretary under
subsection (a) if --

     (A)  information which the taxpayer provided to the Secretary
prior  to  the date such agreement was entered into was inaccurate
or incomplete, or

     (B)  the  Secretary  believes  that  collection of any tax to
which an agreement under this section relates is in jeopardy.

     (3) SUBSEQUENT CHANGE IN FINANCIAL CONDITIONS. --

     (A)  IN  GENERAL.  --  If the Secretary makes a determination
that   the  financial  condition  of  a  taxpayer  with  whom  the
Secretary  has  entered into an agreement under subsection (a) has
significantly   changed,  the  Secretary  may  alter,  modify,  or
terminate such agreement.

     (B)  NOTICE.  --  Action  may be taken by the Secretary under
subparagraph (A) only if --


                              - 11 -

     (i)  notice of such determination is provided to the taxpayer
no later than 30 days prior to the date of such action, and

     (ii)  such  notice  includes  the  reasons  why the Secretary
believes  a  significant  change in the financial condition of the
taxpayer has occurred.

     (4)  FAILURE TO PAY AN INSTALLMENT OR ANY OTHER TAX LIABILITY
WHEN  DUE  OR  TO  PROVIDE REQUESTED FINANCIAL INFORMATION. -- The
Secretary  may  alter,  modify,  or terminate an agreement entered
into  any  the  Secretary  under subsection (a) in the case of the
failure of the taxpayer --

     (A)  to  pay  any  installment  at  the time such installment
payment is due under such agreement,

     (B)  to  pay  any  other  tax  liability  at  the  time  such
liability is due, or

     (C)  to  provide a financial condition update as requested by
the Secretary.

     (b) CONFORMING AMENDMENTS. --

     (1)  Paragraph  (1)  of  section  6601(b)  of  the  1986 Code
(relating  to  last  day  prescribed  for  payment)  is amended by
inserting   'or  any  installment  agreement  entered  into  under
section 6159' after 'time for payment'.

     (2)  The  table of sections for subchapter A of chapter 62 of
the  1986  Code  is  amended  by  adding  at  the  end thereof the
following new item:

     Sec.  6159.  Agreements  for  payment  of  tax  liability  in
installments.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  agreements  entered  into  after the date of the
enactment of this Act.

SEC. 6235. ASSISTANT COMMISSIONER FOR TAXPAYER SERVICES

     (a)  IN  GENERAL.  -- Section 7802 of the 1986 Code (relating
to  Commissioner  of  Revenue;  Assistant  Commissioner  (Employee
Plans  and  Exempt  Organizations) is amended by adding at the end
thereof the following new subsection:

     (c)  ASSISTANT  COMMISSIONER (TAXPAYER SERVICES). -- There is
established  within  the  Internal Revenue Service an office to be
known  as  the  'Office  for  Taxpayer  Services'  to be under the
supervision  and  direction  of  an  Assistant Commissioner of the

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Internal  Revenue. The Assistant Commissioner shall be responsible
for  taxpayer  services  such  as telephone, walk-in, and taxpayer
educational  services,  and  the  design and production of tax and
informational forms.

     (b)   ANNUAL   REPORTS   TO   CONGRESS.   --   The  Assistant
Commissioner  (Taxpayer  Services)  and the Taxpayer Ombudsman for
the  Internal  Revenue Service shall jointly make an annual report
regarding  the  quality of taxpayer services provided. Such report
shall  be  made  to the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives.

     (c)  EFFECTIVE  DATE. -- The amendment made by subsection (a)
shall  take  effect  on  the  date  180 days after the date of the
enactment of this Act.

SEC. 6236. LEVY AND DISTRAINT

     (a)  NOTICE. -- Section 6331(d) of the 1986 Code (relating to
levy and distraint) is amended --

     (1)  by striking out '10 days' in paragraph (2) and inserting
in lieu thereof '30 days',

     (2)  by  striking  out '10-DAY REQUIREMENT' in the heading of
paragraph  (2) and inserting in lieu thereof '30-DAY REQUIREMENT',
and

     (3)   by   adding  at  the  end  thereof  the  following  new
paragraph:

     (4)  INFORMATION INCLUDED WITH NOTICE. -- The notice required
under  paragraph  (f)  shall  include a brief statement which sets
forth in simple and nontechnical terms --

     (A)  the  provisions  of this title relating to levy and sale
of property,

     (B)  the  procedures  applicable  to  the  levy  and  sale of
property under this title,

     (C)  the  administrative  appeals  available  to the taxpayer
with  respect to such levy and sale and the procedures relating to
such appeals,

     (D)  the  alternatives  available  to  taxpayers  which could
prevent  levy  on  the  property (including installment agreements
under section 6159),

     (E)  the  provisions  of this title relating to redemption of
property and release of liens on property, and



                              - 13 -
     (F)  the  procedures applicable to the redemption of property
and the release of liens on property, and

     (b) EFFECT OF LEVY ON SALARY AND WAGES. --

     (1)  IN  GENERAL.  --  Subsection  (e) of section 6331 of the
1986  Code  (relating to levy and distraint) is amended to read as
follows:

     (e)  CONTINUING  LEVY ON SALARY AND WAGES. -- The effect of a
levy  on  salary  or  wages  payable  to or received by a taxpayer
shall  be  continuous  from the date such levy is first made until
such levy is released under section 6343.

     (2)  CROSS  REFERENCE.  --  Section  6331(f) of the 1986 Code
(relating  to  cross  references)  is amended by adding at the end
thereof the following new paragraph:

     (3)  For  release  and notice of release of levy, see section
6343.

     (c)  INCREASE  IN  AMOUNTS  OF  CERTAIN  PROPERTY EXEMPT FROM
LEVY. --

     (1)   FUEL,   PROVISIONS,  FURNITURE,  PERSONAL  EFFECTS.  --
Paragraph  (2)  of  section  6334(a) of the 1986 Code (relating to
property  exempt  from  levy)  is amended by striking out '$1,500'
and  inserting  in  lieu  thereof  '$1,650  ($1,550 in the case of
levies issued during 1989).

     (2)  BOOKS  AND TOOLS. -- Paragraph (3) of section 6334(a) of
the  1986  Code  is amended by striking out '$1,000' and inserting
in  lieu  thereof  '$1,100  ($1,050  in  the case of levies issued
during 1989).

     (3) WAGES, SALARY, AND OTHER INCOME. --

     (A)  INCREASE  IN  AMOUNT EXEMPT. -- Paragraph (1) of section
6334(d)  of  the  1986  Code  (relating to exempt amount of wages,
salary, or other income) is amended to read as follows:

     (1)  INDIVIDUALS  ON  WEEKLY  BASIS.  --  In  the  case of an
individual  who  is paid or receives all of his wages, salary, and
other  income  on a weekly basis, the amount of the wages, salary,
and  other  income  payable  to or received by him during any week
which  is  exempt  from  levy under subsection (a)(9) shall be the
exempt amount.

     (B)  EXEMPT AMOUNT DEFINED. -- Subsection (d) of section 6334
of  the  1986  Code  (relating  to  property  exempt from levy) is
amended  by  redesignating  paragraph  (2) as paragraph (3) and by
inserting after paragraph (1) the following new paragraph:


                              - 14 -

     (2)  EXEMPT  AMOUNT.  --  For  purposes of paragraph (1), the
term 'exempt amount' means an amount equal to --

     (A) the sum of --

     (i) the standard deduction, and

     (ii)  the  aggregate  amount  of  the deductions for personal
exemptions  allowed  the taxpayer under section 151 in the taxable
year in which such levy occurs, divided by

     (B) 52.

     Unless  the  taxpayer  submits to the Secretary a written and
properly  verified  statement  specifying  the  facts necessary to
determine  the  proper amount under subparagraph (A), subparagraph
(A)  shall be applied as if the taxpayer were a married individual
filing a separate return with only 1 personal exemption.

     (4) ADDITIONAL PROPERTY EXEMPT FROM LEVY. --

     (A)  IN  GENERAL.  --  Subsection  (a) of section 6334 of the
1986  Code  (relating  to property exempt from levy) is amended by
adding at the end thereof the following new paragraphs:

     (11)  CERTAIN  PUBLIC  ASSISTANCE  PAYMENTS.  --  Any  amount
payable  to  an  individual  as  a  recipient of public assistance
under --

     (A)  title  IV  (relating  to  aid to families with dependent
children)  or  title XVI (relating to supplemental security income
for the aged, blind, and disabled) of the Social Security Act, or

     (B)  State  or  local  government public assistance or public
welfare  programs  for  which eligibility is determined by a needs
or income test.

     (12)  ASSISTANCE  UNDER  JOB TRAINING PARTNERSHIP ACT. -- Any
amount   payable   to   a   participant  under  the  Job  Training
Partnership  Act  (29 U.S.C. 1501 et seq.) from funds appropriated
pursuant to such Act.

     (13)   PRINCIPAL  RESIDENCE  EXEMPT  IN  ABSENCE  OF  CERTAIN
APPROVAL  OR  JEOPARDY.  --  Except  to  the  extent  provided  in
subsection  (e),  the  principal residence of the taxpayer (within
the meaning of section 1034).

     (B)   LEVY  PERMITTED  ON  PRINCIPAL  RESIDENCE  IN  CASE  OF
JEOPARDY  OR APPROVAL BY CERTAIN OFFICIALS. -- Section 6334 of the
1986  Code  is  amended by adding at the end thereof the following
new subsection:


                              - 15 -

     (e)  LEVY  ALLOWED ON PRINCIPAL RESIDENCE IN CASE OF JEOPARDY
OR  CERTAIN  APPROVAL. -- Property described in subsection (a)(13)
shall not be exempt from levy if --

     (1)  a  district  director  or assistant district director of
the  Internal Revenue Service personally approves (in writing) the
levy of such property, or

     (2)  the  Secretary  finds  that  the collection of tax is in
jeopardy.'

     (d) UNECONOMICAL LEVY; LEVY ON APPEARANCE DATE OF SUMMONS. --
  Section  6331  of the 1986 Code (relating to levy and distraint)
is  amended  by redesignating subsection (f) as subsection (h) and
by inserting after subsection (e) the following new subsections:

     (f)  UNECONOMICAL  LEVY.  --  No  levy  may  be  made  on any
property  if  the  amount  of  the  expenses  which  the Secretary
estimates  (at  the  time  of  levy)  would  be  incurred  by  the
Secretary  with  respect  to  the  levy  and sale of such property
exceeds  the  fair  market  value  of such property at the time of
levy.

     (g) LEVY ON APPEARANCE DATE OF SUMMONS. --

     (1)  IN  GENERAL.  --  No levy may be made on the property of
any  person  on  any  day  on  which  such  person  (or officer or
employee  of  such  person) is required to appear in response to a
summons  issued by the Secretary for the purpose of collecting any
underpayment of tax.

     (2)  NO  APPLICATION  IN CASE OF JEOPARDY. -- This subsection
shall  not apply if the Secretary finds that the collection of tax
is in jeopardy.'

     (e)  SURRENDER OF BANK ACCOUNTS SUBJECT TO LEVY ONLY AFTER 21
DAYS. --

     (1)  IN  GENERAL.  -- Section 6332 of the 1986 Code (relating
to  surrender  of property subject to levy), as amended by title I
of  this Act is amended by redesignating subsections (c), (d), and
(e)  as  subsections  (d),  (e),  and  (f),  respectively,  and by
inserting after subsection (b) the following new subsection:

     (c)  SPECIAL  RULE  FOR  BANKS.  --  Any  bank (as defined in
section  408(n))  shall  surrender  (subject  to  an attachment or
execution   under   judicial   process)  and  deposits  (including
interest  thereon)  in  such bank only after 21 days after service
of levy.

     (2) CONFORMING AMENDMENTS. --


                              - 16 -

     (A)  Subsection  (a)  of  section  6332  of  the 1986 Code is
amended  by  striking  out  "subsection (b)" and inserting in lieu
thereof "subsections (b) and (c)"

     (B)  Subsection  (e)  of  section  6332  of the 1986 Code, as
redesignated   by  paragraph  (1),  is  amended  by  striking  out
"subsection  (c)(1)"  and  inserting  in  lieu thereof "subsection
(d)(1)"

     (f)  RELEASE  OF  LEVY.  -- Subsection (a) of section 6343 of
the  1986 Code (relating to release of levy) is amended to read as
follows:

     (a) RELEASE OF LEVY AND NOTICE OF RELEASE. --

     (1)  IN  GENERAL.  --  Under  regulations  prescribed  by the
Secretary,  the Secretary shall release the levy upon all, or part
of,  the  property or rights levy was made (if any) that such levy
has been released if --

     (A)  the  liability for which such levy was made is satisfied
or becomes unenforceable by reason of lapse of time,

     (B)  release  of  such levy will facilitate the collection of
such liability,

     (C)  the taxpayer has entered into an agreement under section
6159  to  satisfy such liability by means of installment payments,
unless such agreement provides otherwise,

     (D)  the  Secretary has determined that such levy is creating
an  economic  hardship  due  to  the  financial  condition  of the
taxpayer, or

     (E)  the  fair  market  value  of  the  property exceeds such
liability  and  release  of  the  levy  on a part of such property
could be made without hindering the collection of such liability.

     For  purposes  of  subparagraph  (C),  the  Secretary  is not
required  to  release  such  levy if such release would jeopardize
the secured creditor status of the Secretary.

     (2)  EXPEDITED DETERMINATION ON CERTAIN BUSINESS PROPERTY. --
In  the  case  of  any  tangible  personal  property  essential in
carrying  on  the trade or business of the taxpayer, the Secretary
shall  provide  for an expedited determination under paragraph (1)
if  levy  on  such  tangible  personal  property would prevent the
taxpayer form carrying on such trade or business.

     (3)  SUBSEQUENT  LEVY. -- The release of levy on any property
under  paragraph (1) shall not prevent any subsequent levy on such
property.



                              - 17 -
     (g)  RIGHT  OF  TAXPAYER  TO  REQUEST THAT SEIZED PROPERTY BE
SOLD  WITHIN  60  DAYS. -- Section 6335 of the 1986 Code (relating
to   sale   of   seized  property)  is  amended  by  redesignating
subsection   (f)   as   subsection  (g)  and  by  inserting  after
subsection (e) the following new subsection:

     (f)  RIGHT TO REQUEST SALE OF SEIZED PROPERTY WITHIN 60 DAYS.
--  The  owner of any property seized by levy may request that the
Secretary  sell  such  property  within 60 days after such request
(or  within  such longer period as may be specified by the owner).
The  Secretary shall comply with such request unless the Secretary
determines  (and  notifies the owner within such period) that such
compliance  would  not  be  in  the  best  interests of the United
States.

     (h) EFFECTIVE DATE. --

     (1)  IN  GENERAL.  --  The  amendments  made  by this section
(other  than  subsection  (g))  shall apply to levies issued on or
after July 1, 1989.

     (2)  SUBSECTION  (g). -- The amendment made by subsection (g)
shall apply to requests made on or after January 1, 1989.

SEC. 6237. REVIEW OF JEOPARDY LEVY AND ASSESSMENT PROCEDURES

     (a)  IN  GENERAL. -- Subsection (a)(1) of section 7429 of the
1986  Code  (relating to review of jeopardy assessment procedures)
is amended --

     (1)  by inserting "or levy is made under section 6331(a) less
than  30  days  after  notice and demand for payment is made under
section 6331(a)," after "6862,", and

     (2) by inserting "or levy" after "such assessment".

     (b)   ADMINISTRATIVE  DETERMINATIONS.  --  Paragraph  (3)  of
section  7429(a)  of the 1986 Code (relating to redetermination by
the Secretary) is amended to read as follows:

     (3)  REDETERMINATION  BY  SECRETARY.  --  After a request for
review  is made under paragraph (2), the Secretary shall determine
--

     (A) whether or not --

     (i)  the  making  of the assessment under section 6851, 6861,
or   6862,   as   the   case  may  be,  is  reasonable  under  the
circumstances, and

     (ii)  the  amount  so assessed or demanded as a result of the
action  taken  under  section  6851,  6861, or 6862 is appropriate
under the circumstances, or


                              - 18 -
     (B)  whether  or  not the levy described in subsection (a)(1)
is reasonable under the circumstances.

     (c)  TAX  COURT  REVIEW  JURISDICTION.  --  Subsection (b) of
section 7429 of the 1986 Code is amended to read as follows:

     (b) JUDICIAL REVIEW. --

     (1)  PROCEEDINGS  PERMITTED.  --  Within  90  days  after the
earlier of --

     (A)  the  day  the  Secretary  notifies  the  taxpayer of the
Secretary's determination described in subsection (a)(3), or

     (B)  the  16th  day after the request described in subsection
(a)(2)  was  made,  the  taxpayer may bring a civil action against
the  United  States  for  a determination under this subsection in
the court with jurisdiction determined under paragraph (2).

     (2) JURISDICTION FOR DETERMINATION. --

     (A)  IN  GENERAL.  -- Except as provided in subparagraph (B),
the  district  courts  of  the  United States shall have exclusive
jurisdiction  over any civil action for a determination under this
subsection.

     (B)  TAX  COURT.  -- If a petition for a redetermination of a
deficiency  under  section  6213(a) has been timely filed with the
Tax  Court  before  the  making  of  an assessment or levy that is
subject  to  the  review procedures of this section, and 1 or more
of  the  taxes and taxable periods before the Tax Court because of
such  petition  is  also included in the written statement that is
provided  to the taxpayer under subsection (a), then the Tax Court
also   shall  have  jurisdiction  over  any  civil  action  for  a
determination  under this subsection with respect to all the taxes
and taxable periods included in such written statement.



                              - 19 -
     (3)  DETERMINATION  BY  COURT.  --  Within  20  days  after a
proceeding  is  commenced  under  paragraph  (1),  the court shall
determine --

     (A) whether or not --

     (i)  the  making  of the assessment under section 6851, 6861,
or   6862,   as   the   case  may  be,  is  reasonable  under  the
circumstances, and

     (ii)  the  amount  so assessed or demanded as a result of the
action  taken  under  section  6851,  6861, or 6862 is appropriate
under the circumstances, or

     (B)  whether  or  not the levy described in subsection (a)(1)
is reasonable under the circumstances.

     If  the  court determines that proper service was not made on
the  United  States  or  on  the Secretary, as may be appropriate,
within  5  days  after the date of commencement of the proceeding,
then  the  running of the 20-day period set forth in the preceding
sentence  shall  not  begin before the day on which proper service
was  made  on  the  United  States  or on the Secretary, as may be
appropriate.

     (4)  ORDER  OF  COURT.  --  If  the court determines that the
making  of  such  a  levy is unreasonable, that the making of such
assessment  is  unreasonable,  or  that  the  amount  assessed  or
demanded  is inappropriate, then the court may order the Secretary
to  release  such  levy,  to abate such assessment, to redetermine
(in  whole or in part) the amount assessed or demanded, or to take
such other action as the court finds appropriate.

     (d)  VENUE.  -- Section 7429(e) of the 1986 Code (relating to
venue) is amended to read as follows:

     (e) VENUE. --

     (1)  DISTRICT  COURT.  --  A civil action in a district court
under  subsection  (b)  shall  be  commenced  only in the judicial
district  described  in  section  1402(a)(1)  or  (2) of title 28,
United States Code.

     (2)  TRANSFER OF ACTIONS. -- If a civil action is filed under
subsection  (b) with the Tax Court and such court finds that there
is  want of jurisdiction because of the jurisdiction provisions of
subsection  (b)(2),  then  the  Tax  Court  shall,  if  such court
determines  it  is  in the interest of justice, transfer the civil
action  to  the district court in which the action could have been
brought  at  the  time  such action was filed. Any civil action so
transferred  shall proceed as if such action had been filed in the
district  court to which such action is transferred on the date on


                              - 20 -
which  such  action was actually filed in the Tax Court from which
such action is transferred.

     (e) CONFORMING AMENDMENTS. --

     (1)  Section  7429(c) of the 1986 Code (relating to extension
of  20-day  period where taxpayer so requests) and section 7429(f)
(relating  to  finality  of determination) are amended by striking
out 'district' each place it appears.

     (2)  Section  7429(g) of the 1986 Code (relating to burden of
proof) is amended --

     (A)   by  inserting  "the  making  of  a  levy  described  in
subsection (a)(1) or " after "whether" in paragraph (1),

     (B)   by   striking  out  "TERMINATION"  in  the  heading  of
paragraph  (1) and inserting in lieu thereof "LEVY, TERMINATION,",
and

     (C)  by  striking  out  "an  action"  and  inserting  in lieu
thereof "a proceeding" in paragraphs (1) and (2).

     (3)  The  heading of section 7429 of the 1986 Code is amended
by inserting "LEVY OR" after "JEOPARDY".

     (4)  The  table of sections for subchapter B of chapter 76 of
the  1986  Code is amended by inserting 'levy or' after 'jeopardy'
in the item relating to section 7429.

     (f)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to jeopardy levies issued and assessments made on or
after July 1, 1989.

SEC. 6238. ADMINISTRATIVE APPEAL OF LIENS.

     (a)  ESTABLISHMENT  OF  ADMINISTRATIVE  APPEAL  FOR  DISPUTED
LIENS. --

  Subchapter  C  of  chapter 64 of the 1986 Code (relating to lien
for  taxes)  is  amended  by redesignating section 6326 as section
6327   and   inserting   after  section  6325  the  following  new
section:   SEC. 6326. ADMINISTRATIVE APPEAL OF LIENS.

     (a)  IN  GENERAL.  --  In  such  form and at such time as the
Secretary  shall  prescribe  by  regulations,  any person shall be
allowed  to  appeal  to the Secretary after the filing of a notice
of  a  lien under this subchapter on the property or the rights to
property  of  such  person  for a release of such lien alleging an
error in the filing of the notice of such lien.



                              - 21 -
     (b)  CERTIFICATE  OF  RELEASE. -- If the Secretary determines
that  the  filing  of  the  notice  of any lien was erroneous, the
Secretary  shall  expeditiously  (and,  to the extent practicable,
within  14  days  after such determination) issue a certificate of
release  of  such  lien  and  shall  include in such certificate a
statement that such filing was erroneous.

     (b)  REGULATIONS.  --  The  Secretary  of the Treasury or the
Secretary's  delegate shall prescribe the regulations necessary to
implement  the administrative appeal provided for in the amendment
made  by  subsection  (a)  within  180  days after the date of the
enactment of this Act.

     (c)   CLERICAL  AMENDMENT.  --  The  table  of  sections  for
subchapter  C  of  chapter  64  of  the  1986  Code  is amended by
striking  out  the  item relating to section 6326 and inserting in
lieu thereof the following:

     Sec. 6326. Administrative appeal of liens. Sec.  6327.  Cross
references.

     (d)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  take  effect  on  the  date which is 60 days after the date
regulations are issued undersubsection (b).

SEC.  6239.  AWARDING  OF COSTS AND CERTAIN FEES IN ADMINISTRATIVE
AND COURT PROCEEDINGS

     (a)  IN  GENERAL. -- Section 7430 of the 1986 Code is amended
to  read  as  follows:   SEC.  7430. AWARDING OF COSTS AND CERTAIN
FEES.

     (a)  IN GENERAL. -- In any administrative or court proceeding
which  is  brought  by  or against the United States in connection
with   the  determination,  collection,  or  refund  of  any  tax,
interest,  or  penalty  under this title, the prevailing party may
be awarded a judgment or a settlement for --

     (1)  reasonable  administrative  costs incurred in connection
with  such  administrative  proceeding within the Internal Revenue
Service, and

     (2)  reasonable  litigation costs incurred in connection with
such court proceeding.

     (b) LIMITATIONS. --

     (1) REQUIREMENT THAT ADMINISTRATIVE REMEDIES BE EXHAUSTED. --
  A  judgment for reasonable litigation costs shall not be awarded
under  subsection  (a)  in  any  court proceeding unless the court
determines   that   the   prevailing   party   has  exhausted  the
administrative   remedies  available  to  such  party  within  the
Internal Revenue Service.


                              - 22 -

     (2)  ONLY  COSTS  ALLOCABLE TO THE UNITED STATES. -- An award
under  subsection (a) shall be made only for reasonable litigation
and  administrative costs which are allocable to the United States
and not to any other party.

     (3) EXCLUSION OF DECLARATORY JUDGMENT PROCEEDINGS. --

     (A)  IN  GENERAL. -- No award for reasonable litigation costs
may  be  made under subsection (a) with respect to any declaratory
judgment proceeding.

     (B)  EXCEPTION FOR SECTION 501(c)(3) DETERMINATION REVOCATION
PROCEEDINGS.   --   Subparagraph   (A)  shall  not  apply  to  any
proceeding  which  involves the revocation of a determination that
the organization is described in section 501(c)(3).

     (4)   COSTS   DENIED   WHERE   PARTY   PREVAILING   PROTRACTS
PROCEEDINGS.   --   No   award   for   reasonable  litigation  and
administrative  costs  may  be  made  under  subsection  (a)  with
respect  to  any portion of the administrative or court proceeding
during  which  the  prevailing  party  has unreasonably protracted
such proceeding.

     (c) DEFINITIONS. -- For purposes of this section --

     (1)  REASONABLE  LITIGATION  COSTS.  --  The term 'reasonable
litigation costs' includes --

     (A) reasonable court costs, and

     (B)  based  upon  prevailing  market  rates  for  the kind or
quality of services furnished --

     (i)   the   reasonable   expenses   of  expert  witnesses  in
connection  with a court proceeding, except that no expert witness
shall  be  compensated  at a rate in excess of the highest rate of
compensation for expert witnesses paid by the United States,

     (ii)  the reasonable cost of any study, analysis, engineering
report,  test,  or  project  which  is  found  by  the court to be
necessary for the preparation of the party's case, and

     (iii)  reasonable  fees  paid or incurred for the services of
attorneys  in  connection  with  the court proceeding, except that
such  fees shall not be in excess of $75 per hour unless the court
determines  that  an  increase  in the cost of living or a special
factor,  such  as  the limited availability of qualified attorneys
for such proceeding, justifies a higher rate.

     (2)  REASONABLE ADMINISTRATIVE COSTS. -- The term 'reasonable
administrative costs' means --


                              - 23 -

     (A)  any  administrative  fees  or similar charges imposed by
the Internal Revenue Service, and

     (B)  expenses, costs, and fees described in paragraph (1)(B),
except  that any determination made by the court under clause (ii)
or  (iii) thereof shall be made by the Internal Revenue Service in
cases  where  the  determination  under  paragraph  (4)(B)  of the
awarding  of  reasonable  administrative  costs  is  made  by  the
Internal Revenue Service.

     Such  term  shall only include costs incurred on or after the
earlier  of  (i)  the  date  of the receipt by the taxpayer of the
notice  of  the decision of the Internal Revenue Service Office of
Appeals, or (ii) the date of the notice of deficiency.

     (3)  ATTORNEY'S  FEES.  -- For purposes of paragraphs (1) and
(2),  fees  for  the  services of an individual (whether or not an
attorney)  who  is  authorized to practice before the Tax Court or
before  the  Internal Revenue Service shall be treated as fees for
the services of an attorney.

     (4) PREVAILING PARTY. --

     (A)  IN  GENERAL.  --  The  term "prevailing party" means any
party  in  any  proceeding  to which subsection (a) applies (other
than the United States or any creditor of the taxpayer involved) -
-

     (i)  which establishes that the position of the United States
in the proceeding was not substantially justified,

     (ii) which --

     (I)  has  substantially  prevailed with respect to the amount
in controversy, or

     (II)  has  substantially  prevailed  with respect to the most
significant issue or set of issues presented, and

     (iii)  which  meets  the  requirements of the 1st sentence of
section  2412(d)(1)(B)  of  title  28,  United  States Code (as in
effect  on  October  22,  1986)  except  to  the  extent differing
procedures  are  established  by  rule  of  court  and  meets  the
requirements  of  section 2412(d)(2)(B) of such title 28 (as so in
effect).

     (B)   DETERMINATION   AS   TO   PREVAILING   PARTY.   --  Any
determination  under  subparagraph  (A) as to whether a party is a
prevailing party shall be made by agreement of the parties or --

     (i)  in  the  case where the final determination with respect
to  the  tax,  interest,  or penalty is made at the administrative

                              - 24 -
level, by the Internal Revenue Service, or

     (ii)  in the case where such final determination is made by a
court, the court.

     (5)  ADMINISTRATIVE  PROCEEDINGS. -- The term "administrative
proceeding"  means  any  procedure  or  other  action  before  the
Internal Revenue Service.

     (6)  COURT  PROCEEDINGS. -- The term "court proceeding" means
any  civil  action  brought  in  a  court  of  the  United  States
(including the Tax Court and the United States Claims Court).

     (7)  POSITION  OF UNITED STATES. -- The term "position of the
United States" means --

     (A)  the  position  taken  by the United States in a judicial
proceeding to which subsection (a) applies, and

     "(B)  the  position  taken in an administrative proceeding to
which subsection (a) applies as of the earlier of --

     (i)  the date of the receipt by the taxpayer of the notice of
the  decision  of  the Internal Revenue Service Office of Appeals,
or

     (ii) the date of the notice of deficiency.

     (d) SPECIAL RULES FOR PAYMENT OF COSTS. --

     (1)   REASONABLE   ADMINISTRATIVE  COSTS.  --  An  award  for
reasonable  administrative  costs  shall  be  payable out of funds
appropriated under section 1304 of title 31, United States Code.

     (2)  REASONABLE  LITIGATION COSTS. -- An award for reasonable
litigation  costs shall be payable in the case of the Tax Court in
the same manner as such an award by a district court.

     (e)  MULTIPLE  ACTIONS.  --  For purposes of this section, in
the case of --

     (1)   multiple  actions  which  could  have  been  joined  or
consolidated, or

     (2)  a  case  or  cases  involving a return or returns of the
same  taxpayer  (including  joint  returns of married individuals)
which  could  have been joined in a single court proceeding in the
same  court,  such  actions  or  cases shall be treated as 1 court
proceeding  regardless  of  whether  such joinder or consolidation
actually  occurs,  unless the court in which the action is brought
determines,  in  its discretion, that it would be inappropriate to
treat such actions or cases as joined or consolidated.


                              - 25 -

     (f) RIGHT OF APPEAL. --

     (1)  COURT  PROCEEDINGS.  -- An order granting or denying (in
whole   or   in  part)  an  award  for  reasonable  litigation  or
administrative  costs  under subsection (a) in a court proceeding,
may  be  incorporated as a part of the decision or judgment in the
court  proceeding  and  shall  be  subject  to  appeal in the same
manner as the decision or judgment.

     (2)  ADMINISTRATIVE  PROCEEDINGS.  --  A decision granting or
denying   (in   whole   or   in  part)  an  award  for  reasonable
administrative  costs under subsection (a) by the Internal Revenue
Service  shall  be  subject to appeal to the Tax Court under rules
similar  to  the  rules  under section 7463 (without regard to the
amount in dispute).

     (b)  CONFORMING  AMENDMENT. -- Section 504 of title 5, United
States  Code,  is  amended  by  adding  at  the  end  thereof  the
following new subsection.

     (f)  No award may be made under this section for costs, fees,
or  other  expenses which may be awarded under section 7430 of the
Internal Revenue Code of 1986.

     (c)   CLERICAL  AMENDMENT.  --  The  table  of  sections  for
subchapter  B  of  chapter  76  of  the  1986  Code  is amended by
striking out 'court' in the item relating to section 7430.

     (d)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  proceedings  commencing  after  the  date of the
enactment of this Act.

SEC.  6240.  CIVIL  CAUSE  OF  ACTION FOR DAMAGES SUSTAINED DUE TO
FAILURE TO RELEASE LIEN

     (a)  IN  GENERAL.  --  Subchapter B of chapter 76 of the 1986
Code  (relating  to proceedings by taxpayers and third parties) is
amended  by  redesignating  section  7432  as  section 7433 and by
inserting  after  section  7431  the  following new section:  SEC.
7432. CIVIL DAMAGES FOR FAILURE TO RELEASE LIENS.

     (a)  IN  GENERAL.  --  If  any  officer  or  employee  of the
Internal  Revenue  Service  knowingly, or by reason of negligence,
fails  to  release  a  lien  under section 6325 on property of the
taxpayer,  such  taxpayer  may  bring  a  civil action for damages
against  the  United  States  in  a  district  court of the United
States.

     (b)  DAMAGES.  -- In any action brought under subsection (a),
upon  a  finding  of  liability  on the part of the defendant, the
defendant  shall  be liable to the plaintiff in an amount equal to

                              - 26 -
the sum of --

     (1)   actual,   direct  economic  damages  sustained  by  the
plaintiff  which,  but for the actions of the defendant, would not
have been sustained, plus

     (2) the costs of the action.

     (c)  PAYMENT  AUTHORITY.  --  Claims pursuant to this section
shall  be  payable out of funds appropriated under section 1304 of
title 31, United States Code.

     (d) LIMITATIONS. --

     (1) REQUIREMENT THAT ADMINISTRATIVE REMEDIES BY EXHAUSTED. --
  A judgment for damages shall not be awarded under subsection (b)
unless  the  court determines that the plaintiff has exhausted the
administrative  remedies  available  to  such plaintiff within the
Internal Revenue Service.

     (2)  MITIGATION  OF DAMAGES. -- The amount of damages awarded
under  subsection  (b)(1)  shall  be reduced by the amount of such
damages   which  could  have  reasonably  been  mitigated  by  the
plaintiff.

     (3)  PERIOD FOR BRINGING ACTION. -- Notwithstanding any other
provision  of  law,  an  action to enforce liability created under
this  section  may  be  brought  without  regard  to the amount in
controversy  and may be brought only within 2 years after the date
the right of action accrues.

     (e)  NOTICE  OF  FAILURE  TO  RELEASE  LIEN. -- The Secretary
shall   by   regulation  prescribe  reasonable  procedures  for  a
taxpayer  to notify the Secretary of the failure to release a lien
under section 6325 on property of the taxpayer.

     (b)  CLERICAL AMENDMENT. -- The table of sections for chapter
B  of  chapter  76 of the 1986 Code is amended by striking out the
item  relating  to  section 7432 and inserting in lieu thereof the
following new items:

     Sec. 7432. Civil damages for failure to release lien.

     Sec. 7433. Cross references.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply to notices provided by the taxpayer of the failure to
release a lien, and damages arising, after December 31, 1988.

SEC.  6241.  CIVIL  CAUSE  OF  ACTION FOR DAMAGES SUSTAINED DUE TO
CERTAIN UNAUTHORIZED ACTIONS BY INTERNAL REVENUE SERVICE.

     (a)  IN  GENERAL.  --  Subchapter B of chapter 76 of the 1986

                              - 27 -
Code  (relating  to proceedings by taxpayers and third parties) is
further  amended by redesignating section 7433 as section 7434 and
by  inserting after section 7432 the following new section:   SEC.
7433. CIVIL DAMAGES FOR CERTAIN UNAUTHORIZED COLLECTION ACTIONS.

     (a)  IN  GENERAL. -- If, in connection with any collection of
Federal  tax  with  respect to a taxpayer, any officer or employee
of  the  Internal  Revenue  Service  recklessly  or  intentionally
disregards   any  provision  of  this  title,  or  any  regulation
promulgated  under  this  title,  such  taxpayer may bring a civil
action  for  damages against the United States in a district court
of  the  United  States.  Except as provided in section 7432, such
civil  action shall be the exclusive remedy for recovering damages
resulting from such actions.

     (b)  DAMAGES.  -- In any action brought under subsection (a),
upon  a  finding  of  liability  on the part of the defendant, the
defendant  shall  be liable to the plaintiff in an amount equal to
the lesser of $100,000 or the sum of --

     (1)   actual,   direct  economic  damages  sustained  by  the
plaintiff  as  a  proximate  result of the reckless or intentional
actions of the officer or employee, and

     (2) the costs of the action.

     (c)  PAYMENT  AUTHORITY.  --  Claims pursuant to this section
shall  be  payable out of funds appropriated under section 1304 of
title 31, United States Code.

     (d) LIMITATIONS. --

     (1) REQUIREMENT THAT ADMINISTRATIVE REMEDIES BE EXHAUSTED. --
  A judgment for damages shall not be awarded under subsection (b)
unless  the  court determines that the plaintiff has exhausted the
administrative  remedies  available  to  such plaintiff within the
Internal Revenue Service.

     (2)  MITIGATION  OF DAMAGES. -- The amount of damages awarded
under  subsection  (b)(1)  shall  be reduced by the amount of such
damages   which  could  have  reasonably  been  mitigated  by  the
plaintiff.

     (3)  PERIOD FOR BRINGING ACTION. -- Notwithstanding any other
provision  of  law,  an  action to enforce liability created under
this  section  may  be  brought  without  regard  to the amount in
controversy  and may be brought only within 2 years after the date
the right of action accrues.

     (b) DAMAGES FOR FRIVOLOUS OR GROUNDLESS CLAIMS. --



                              - 28 -
     (1)  IN  GENERAL.  -- Section 6673 of the 1986 Code (relating
to  damages  assessable for instituting proceedings before the Tax
Court  primarily  for delay, etc.) is amended by inserting "(a) IN
GENERAL.  --"  before  "Whenever" and by adding at the end thereof
the following new subsection:

     (b)  CLAIMS UNDER SECTION 7433. -- Whenever it appears to the
court  that  the  taxpayer's  position  in  proceedings before the
court  instituted  or  maintained  by  such taxpayer under section
7433  is  frivolous  or  groundless,  damages  in an amount not in
excess  of  $10,000  shall  be awarded to the United States by the
court  in  the  court's  decision.  Damages  so  awarded  shall be
assessed  at  the same time as the decision and shall be paid upon
notice and demand from the Secretary.

     (2)  CLERICAL  AMENDMENT.  -- The heading for section 6673 of
the 1986 Code is amended by striking out "TAX".

     (c)   CLERICAL  AMENDMENT.  --  The  table  of  sections  for
subchapter  B of chapter 76 of the 1986 Code is further amended by
striking  out  the  item relating to section 7433 and inserting in
lieu thereof the following new items:

     Sec.  7433. Civil damages for certain unauthorized collection
actions.

     Sec. 7434. Cross references.

     (d)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  actions by officers or employees of the Internal
Revenue Service after the date of the enactment of this Act.

SEC.  6242.  ASSESSABLE  PENALTY FOR IMPROPER DISCLOSURE OR USE OF
INFORMATION BY PREPARERS OF RETURNS

     (a)  IN  GENERAL.  -- Part I of subchapter B of chapter 68 of
the  1986  Code  (relating  to assessable penalties) is amended by
adding  at  the end thereof the following new section:  SEC. 6712.
DISCLOSURE OR USE OF INFORMATION BY PREPARERS OF RETURNS.

     (a)  IMPOSITION  OF  PENALTY. -- If any person who is engaged
in  the business of preparing, or providing services in connection
with  the  preparation of, returns of tax imposed by chapter 1, or
any  person  who for compensation prepares any such return for any
other person, and who --

     (1)  discloses  any  information  furnished to him for, or in
connection with, the preparation of any such return, or

     (2)  uses  any such information for any purpose other than to
prepare,  or  assist  in  preparing  any  such return, shall pay a

                              - 29 -
penalty  of  $250  for  each such disclosure or use, but the total
amount  imposed  under  this  subsection  on such a person for any
calendar year shall not exceed $10,000.

     (b)  EXCEPTIONS.  -- The rules of section 7216(b) shall apply
for purposes of this section.

     (c)  DEFICIENCY  PROCEDURES  NOT TO APPLY. -- Subchapter B of
chapter  63 (relating to deficiency procedures for income, estate,
gift,  and certain excise taxes) shall not apply in respect of the
assessment or collection of any penalty imposed by this section.

     (b)  CRIMINAL PENALTY TO APPLY ONLY WHERE KNOWING OR RECKLESS
DISCLOSURE  OR  USE.  --  The  material preceding paragraph (1) of
section  7216(a)  of the 1986 Code is amended by striking out "and
who  --"  and  inserting  in  lieu  thereof  "and who knowingly or
recklessly  --".       (c)  CLERICAL  AMENDMENT.  --  The table of
sections  for  part  I  of  subchapter B of chapter 68 of the 1986
Code  is  amended  by  adding at the end thereof the following new
item:   Sec.  6712.  Disclosure or use of information by preparers
of returns.

     (d)  EFFECTIVE  DATE.  -- The amendments made by this section
shall apply to disclosures or uses after December 31, 1988.

SEC.    6243.   JURISDICTION   TO   RESTRAIN   CERTAIN   PREMATURE
ASSESSMENTS.

     (a)   IN  GENERAL.  --  Section  6213(a)  of  the  1986  Code
(relating   to   time  for  filing  petition  and  restriction  on
assessment)  is  amended  by striking out the period at the end of
the  last  sentence  and inserting in lieu thereof ",including the
Tax  Court. The Tax Court shall have no jurisdiction to enjoin any
action  or  proceeding  under  this  subsection  unless  a  timely
petition  for  a  redetermination of the deficiency has been filed
and  then only in respect of the deficiency that is the subject of
such petition."

     (b)  APPEAL  OF ORDER RESTRAINING ASSESSMENT, ETC. -- Section
7482(a)  of  the 1986 Code (relating to jurisdiction on appeal) is
amended by adding at the end thereof the following new paragraph:

     (3)  CERTAIN  ORDERS  ENTERED  UNDER  SECTION  6213(a). -- An
order  of  the  Tax  Court  which  is  entered  under authority of
section  6213(a)  and  which  resolves  a  proceeding  to restrain
assessment  or  collection  shall  be treated as a decision of the
Tax  Court  for  purposes  of this section and shall be subject to
the  same  review  by  the  United  States  Court  of Appeals as a
similar order of a district court.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to orders entered after the date of the enactment of
this Act.



                              - 30 -
SEC. 6244. JURISDICTION TO ENFORCE OVERPAYMENT DETERMINATIONS.

     (a)   IN  GENERAL.  --  Section  6512(b)  of  the  1986  Code
(relating  to  overpayment determined by the Tax Court) is amended
by  striking  out  "paragraph  (2)"  and inserting in lieu thereof
"paragraph  (3)"  in paragraph (1), by redesignating paragraph (2)
as  paragraph  (3),  and  by inserting the following new paragraph
after paragraph (1):

     (2)  JURISDICTION  TO  ENFORCE. -- If, after 120 days after a
decision  of  the  Tax  Court  has become final, the Secretary has
failed  to  refund  the  overpayment  determined by the Tax Court,
together  with the interest thereon as provided in subchapter B of
chapter  67,  then  the  Tax  Court,  upon motion by the taxpayer,
shall  have  jurisdiction  to order the refund of such overpayment
and interest.

     (b) AMENDMENTS ADDING CROSS REFERENCES. --

     (1)  Section  6214(e) of the 1986 Code is amended by striking
out  'REFERENCE. --' and inserting in lieu thereof 'REFERENCES. --
'  in  the  heading,  by designating the undesignated paragraph as
paragraph  (1), and by adding at the end thereof the following new
paragraph:

     (2)  For  provision  giving Tax Court jurisdiction to order a
refund  of  an  overpayment  and  to  award sanctions, see section
6512(b)(2).

     (2)  Section  6512(c) of the 1986 Code is amended by striking
out  "REFERENCE. --" and inserting in lieu thereof "REFERENCES. --
"  in  the  heading,  by designating the undesignated paragraph as
paragraph  (1), and by adding at the end thereof the following new
paragraph:

     (2)  For  provision  giving  Tax  Court jurisdiction to award
reasonable   litigation   costs   in  proceedings  to  enforce  an
overpayment determined by such court, see section 7430.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  overpayments  determined  by the Tax Court which
have  not  yet been refunded by the 90th day after the date of the
enactment of this Act.

SEC. 6244. JURISDICTION TO ENFORCE OVERPAYMENT DETERMINATIONS.

     (a)   IN  GENERAL.  --  Section  6512(b)  of  the  1986  Code
(relating  to  overpayment determined by the Tax Court) is amended
by  striking  out  'paragraph  (2)'  and inserting in lieu thereof
'paragraph  (3)'  in paragraph (1), by redesignating paragraph (2)
as  paragraph  (3),  and  by inserting the following new paragraph
after paragraph (1):



                              - 31 -
     (2)  JURISDICTION  TO  ENFORCE. -- If, after 120 days after a
decision  of  the  Tax  Court  has become final, the Secretary has
failed  to  refund  the  overpayment  determined by the Tax Court,
together  with the interest thereon as provided in subchapter B of
chapter  67,  then  the  Tax  Court,  upon motion by the taxpayer,
shall  have  jurisdiction  to order the refund of such overpayment
and interest.

     (b) AMENDMENTS ADDING CROSS REFERENCES. --

     (1)  Section  6214(e) of the 1986 Code is amended by striking
out  'REFERENCE. --' and inserting in lieu thereof 'REFERENCES. --
'  in  the  heading,  by designating the undesignated paragraph as
paragraph  (1), and by adding at the end thereof the following new
paragraph:

     (2)  For  provision  giving Tax Court jurisdiction to order a
refund  of  an  overpayment  and  to  award sanctions, see section
6512(b)(2).

     (2)  Section  6512(c) of the 1986 Code is amended by striking
out  "REFERENCE. --" and inserting in lieu thereof "REFERENCES. --
"  in  the  heading,  by designating the undesignated paragraph as
paragraph  (1), and by adding at the end thereof the following new
paragraph:

     (2)  For  provision  giving  Tax  Court jurisdiction to award
reasonable   litigation   costs   in  proceedings  to  enforce  an
overpayment determined by such court, see section 7430.

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to  overpayments  determined  by the Tax Court which
have  not  yet been refunded by the 90th day after the date of the
enactment of this Act.

SEC.   6245.  JURISDICTION  TO  REVIEW  CERTAIN  SALES  OF  SEIZED
PROPERTY.

     (a)  JURISDICTION  TO  REVIEW  CERTAIN  SALES OF PROPERTY. --
Section  6863(b)(3)  of the 1986 Code (relating to stay of sale of
seized  property  pending Tax Court decision) is amended by adding
at the end thereof the following new subparagraph:

     (C)  REVIEW  BY  TAX COURT. -- If, but for the application of
subparagraph  (B),  a  sale  would  be  prohibited by subparagraph
(A)(iii),  then  the  Tax  Court shall have jurisdiction to review
the  Secretary's  determination  under  subparagraph  (B) that the
property  may be sold. Such review may be commenced upon motion by
either  the  Secretary  or the taxpayer. An order of the Tax Court
disposing  of a motion under this paragraph shall be reviewable in
the same manner as a decision of the Tax Court.



                              - 32 -
     (b)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  take effect on the 90th day after the date of the enactment
of this Act.

SEC. 6246. JURISDICTION TO REDETERMINE INTEREST ON DEFICIENCIES.

     (a)  IN  GENERAL.  -- Section 7481 of the 1986 Code (relating
to  date  when  Tax  Court  decision  becomes final) is amended by
adding at the end thereof the following new subsection:

     (c)    JURISDICTION    OVER   INTEREST   DETERMINATIONS.   --
Notwithstanding

     (1)  an  assessment  has  been  made  by  the Secretary under
section 6215 which includes interest as imposed by this title,

     (2)   the   taxpayer  has  paid  the  entire  amount  of  the
deficiency plus interest claimed by the Secretary, and

     (3)  within  1  year  after  the date the decision of the Tax
Court  becomes  final  under  subsection (a), the taxpayer files a
petition  in  the Tax Court for a determination that the amount of
interest  claimed  by the Secretary exceeds the amount of interest
imposed  by  this  title,  then  the Tax Court may reopen the case
solely  to  determine whether the taxpayer has made an overpayment
of  such  interest  and the amount of any such overpayment. If the
Tax  Court  determines under this subsection that the taxpayer has
made  an overpayment of interest, then that determination shall be
treated   under  section  6512(b)(1)  as  a  determination  of  an
overpayment  of  tax.  An order of the Tax Court redetermining the
interest  due,  when  entered upon the records of the court, shall
be reviewable in the same manner as a decision of the Tax Court.

     (b) CONFORMING AMENDMENTS. --



                              - 33 -
     (1)  Section  6512(a) of the 1986 Code (relating to effect of
petition  to  Tax  Court)  is  amended by inserting after 'section
6213(a)'   the   following:   '(or   7481(c)  with  respect  to  a
determination of statutory interest).

     (2)  Subsection  (a)  of  section  7481  of  the 1986 Code is
amended  by  striking  out  "subsection (b)" and inserting in lieu
thereof "subsections (b) and (c)".

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  apply  to assessments of deficiency redetermined by the Tax
Court made after the date of the enactment of this Act.

SEC.  6247. JURISDICTION TO MODIFY DECISIONS IN CERTAIN ESTATE TAX
CASES

     (a)  IN GENERAL -- Section 7481 oF the 1986 Code (relating to
date  when  Tax  Court  decision  becomes  final),  as  amended by
section  783(a),  is  further amended by adding at the end thereof
the following new subsection:

     (d)  DECISIONS  RELATING TO ESTATE TAX EXTENDED UNDER SECTION
6166  ---  If  with  respect  to  a decedent's estate subject to a
decision of the Tax Court --

     (1)  the  time  for  payment  of  an amount of tax imposed by
chapter 11 is extended under section 6166, and

     (2)  there  is  treated  as  an  administrative expense under
section 2053 either --

     (A)  any amount of interest which a decedent's estate pays on
any  portion of the tax imposed by section 2001 on such estate for
which the time of payment is extended under section 6166, or

     (B)   interest   on   any   estate,  succession,  legacy,  or
inheritance  tax  imposed  by  a  State  on such estate during the
period  of  the  extension of time for payment under section 6166,
then  upon  a  motion by the petitioner in such case in which such
time  for payment of tax has been extended under section 6166, the
Tax  Court  may  reopen  the  case  solely  to  modify the Court's
decision  to  reflect such estate's entitlement to a deduction for
such  administration  expenses  under  section  2053  and may hold
further  trial solely with respect to the claim for such deduction
if,  within  the  discretion  of  the Tax Court, such a hearing is
deemed  necessary. An order of the Tax Court disposing of a motion
under  this subsection shall be reviewable in the same manner as a
decision  of  the  Tax Court, but only with respect to the matters
determined in such order.

     (b) CONFORMING AMENDMENTS. --



                              - 34 -
     (1)  Section  6512(a) of the 1986 Code (relating to effect of
petition  to  Tax  Court),  as  amended  by  this part, is further
amended  by striking out "interest)" and inserting in lieu thereof
"interest   or   section   7481(d)   solely   with  respect  to  a
determination of estate tax by the Tax Court).

     (2)  Subsection  (a)  of  section  7481  of the 1986 Code, as
amended   by  this  part,  is  further  amended  by  striking  out
"subsections   (b)   and   (c)"  and  inserting  in  lieu  thereof
"subsections (b), (c), and (d)".

     (c)  EFFECTIVE  DATE.  -- The amendments made by this section
shall  be  effective with respect to Tax Court cases for which the
decision is not final on the date of the enactment of this Act.



                              - 35 -
134 Cong.Rec. S17193-05
100th Congress, Second Session
Congressional Record --- Senate
Proceedings and Debates of the 100th Congress, Second Session
Friday, October 21, 1988

                   THE TAXPAYERS' BILL OF RIGHTS

     Senator  Pryor:   Mr. President, the Internal Revenue Service
is  now  124  years  old.  The  first Internal Revenue Service was
established  by  President  Abraham  Lincoln.  The  first Internal
Revenue  Service consisted of about three employees, and it was in
the  basement  of this Capitol, in which we sit tonight, this late
October night of 1988.

     We  have  seen  a  massive  growth  of  the  Internal Revenue
Service,  not only in terms of employees, which number 111,000; we
have  also  seen  a  commensurate  growth  of  the  powers  of the
Internal  Revenue  Service  to  collect  and  levy  the  taxes and
necessary  funding  that  we  must have to perform the services of
our federal system of government.

     Some  say that we do not need the Internal Revenue Service. I
do  not agree with that. Some people say that the Internal Revenue
Service is illegal. I do not agree with that.

     But  what  we  have  seen,  especially during these last four
decades,  is  a  growing  power  through  court decisions, through
regulations  of  the  Internal  Revenue  Service  and also through
legislation  passed  by  Congress  mandating  the Internal Revenue
Service to collect more and more and more taxes.

     For  40 years we have never seen a piece of legislation which
has  given  to  the  American  taxpayer  a  strengthening of their
hands,  especially  for  the  little  guy,  the  rights  that  the
taxpayer might have in dealing with the Internal Revenue Service.

     Tonight,  we are hopefully on the brink-hopefully a few hours
from  now,  or  maybe  within 2 hours from now, this Congress will
pass   a  monumental  piece  of  legislation.  It  is  called  the
Taxpayers' Bill of Rights.

     I  might  add that the present occupant of the Chair not only
is  a  member  of  the  Finance  Committee but also was one of the
early  cosponsors  of the Taxpayers' Bill of Rights. We have 72 of
our  colleagues  on the Democratic side and the Republican side of
the  aisle  who  now  are  cosponsors,  and 250 of our friends and
colleagues  in  the other body, the House of Representatives, have
cosponsored the Taxpayers' Bill of Rights.

     We  know  we  have  to  collect  taxes, but we know something
else:  We  know  that  the  small  taxpayers  have to be protected
against  some  of  the  overzealous  and some of the abuses of the

                              - 36 -
Internal  Revenue Service which have been heaped upon them through
complicated  tax  laws,  through an absolute array of unbelievable
complexities  that we have passed even in the 10 years that I have
been here in the changes of the Tax Code.

     This  is  the  first  time in the history of the relationship
between  the taxpayer and the tax collector that we are attempting
to  level  that  playing  field, especially for the small business
person and the individual taxpayer.

     This  is the first time that this Congress or any Congress in
one   comprehensive   piece   of   legislation  has  attempted  to
strengthen  the  hand of the taxpayer in dealing with the Internal
Revenue Service.

     A  lot  of people think that the Taxpayers' Bill of Rights is
a  sense-of-the-  Senate resolution, that it just sets out sort of
broad  concepts. A lot of people think that it is just a statement
of  principle,  mandating the Internal Revenue Service by Congress
to  treat  the  taxpayer  as  a  customer  or to treat the average
taxpayer a little more kindly or a little more gently.

     Mr.  President, the Taxpayers' Bill of Rights is 72 pages, 25
sections,  and  for 2 years this piece of legislation has not only
been  the  subject  of  4  hearings  in  the  Finance Committee, 2
intensive  markups  or  actually  3 days of markups by the Finance
Committee,  it  has  also  received  the  support  of such diverse
groups  as  the  National  Taxpayers  Union,  the  U.S. Chamber of
Commerce,  the  ACLU,  if I many mention that word on the floor of
this  Senate,  the  NFIB  <  National  Federation  of  Independent
Businesses  ;  it  also has the support of the National Society of
Public  Accountants,  the  Small  Business  United,  and the Small
Business Legislative Council.

     We  have  debated  this  issue  on two occasions with the tax
section  of  the American Bar Association, one in San Francisco in
1987 and one in New Orleans in 1988.

     I  have spent countless hours not only with this Commissioner
of  the  Internal Revenue Service, Mr. Gibb, but also every former
Commissioner  of the Internal Revenue Service with whom I have had
the   privilege  of  talking  about  the  necessity  of  restoring
credibility  to the Tax Code and to the system by which we collect
taxes.

     Today,  Mr.  President,  the  Taxpayers' Bill of Rights among
other   things  would  attempt  to  eliminate  the  bounty  hunter
mentality  that  the  Internal  Revenue Service has had in dealing
with  many  of our smaller and certainly more vulnerable taxpayers
across America.



                              - 37 -
     We  do  this  by  stating  it in the law that we are about to
pass  either  in  a  few  moments  or a few hours. We establish by
statute  that  the Internal Revenue Service no longer can continue
promoting  or  demoting  employees of the Internal Revenue Service
based  upon  the number of dollars they collect. We have seen case
after  case.  We  have  read letter after letter. We have received
testimony  from IRS agents who have literally risked their jobs in
coming  before  the  Subcommittee on IRS Oversight to tell how the
real  Internal Revenue Service really works in the collection, the
seizure, and the levy process.

     Let  me  say what has happened over these years I do fear has
been  a  system based upon the number of dollars that these agents
collect in the seizure and collection areas.

     I  had  the  privilege  of visiting with several of these IRS
agents.  They  were  from  California.  They were from Texas. They
were  from  Baltimore, MD. They were from Kansas City. And I said,
"gentlemen,  let  me  tell  you that there is a great deal of fear
today  by  the  average  American taxpayer of the Internal Revenue
Service."

     I  will never forget, Mr. President, that one of these agents
looked  at me-he was somewhat timid, a little bit shy-and he said:
"Senator  PRYOR,  I  cannot  tell  you the amount of fear that the
Internal  Revenue  Service agents have with regard to the Internal
Revenue  Service,  the pressure to seize, the pressure to collect,
even  when  the  law  and the facts are not on the side of the tax
collector."

     I  strongly  believe,  notwithstanding the fact that a lot of
people  say  or  have  said  in  the past that this is an anti-IRS
piece of legislation, it is not.

     The  distinguished  chairman  of  the  Finance Committee some
months  ago  confirmed  this  fact  when  he, too, became a formal
endorser  and  advocate  of the Taxpayers' Bill of Rights, when he
opened  the  Senate  Finance Committee's markup on this monumental
piece  of legistion and when he stated before the press and before
the  Commissioner of the IRS that this is not an IRS-bashing piece
of  legislation.  I think that set the tone that the time has come
in  this country that we must level that playing field and to give
that  small  taxpayer,  that  independent business person who does
not  have  the help, the counsel, the tax attorneys, and the CPA's
to  advise  him  through  this  complex morass of tax laws that we
have visited upon him especially in the last decade.

     One  thing  that  is  so  important,  and  after  reading and
receiving  almost 20,000 letters from every State in our Union, we
have  taken  those letters and those problems that were enunciated
and  eloquently  stated  in  each  of those letters and in each of
those  problems  that  we  have  seen we have attempted to draft a
solution  that  would  answer some of the problems expressed to me

                              - 38 -
and  to  the  members  of this committee and to the Members of the
U.S. Senate in making a fairer system of taxation.

     I  think  that the Taxpayers' Bill of Rights will not hamper,
it  will  not impede, it will not damage, it will not handcuff the
Internal  Revenue  Service  collection procedures. I think it will
encourage  negotiation,  it  will delay the time in which property
can  be  seized  from 10 days to 30 days, and it will enable those
safeguards,  those  basic safeguards, to go to the taxpayer rather
than  extra  rights  and  extra  powers  to  the  Internal Revenue
Service. And I think it is long overdue.

     Mr.  President,  also, there has been something remiss in the
relationship  between the tax collector and the taxpayer, and that
is   that   we   have  seen  50  State  jurisdictions  many  times
implementing  the  rules  and  the  regulations of tax collections
very,  very  differently. In Little Rock, AR, they might allow you
to  have  a  tape  recorder  or  to send a CPA to represent you in
their  first  interview  or audit. In Huntington, WV, the taxpayer
may  walk  into  that  office  of  the IRS and be denied that same
right  that  in  Little  Rock  or Amarillo or Miami or Baltimore a
taxpayer was given.

     We  are  saying that these rules and procedures cannot longer
be  made  just  by  internal changes. We are saying today that the
changes  brought  about  by  the  Taxpayers'  Bill of Rights, that
these  changes can only be made by statute, making this the law of
the  land, making every taxpayer in this country not only aware of
the  rules  of  the  game, but, Mr. President, the obligations and
the  responsibilities  of  the  taxpayer,  and  the  rights of the
individual  taxpayer  are  going to be spelled out in no uncertain
terms.

     Mr.  President,  we have a great Commissioner of the Internal
Revenue  Service.  His  name  is  Larry  Gibbs.  But I have done a
little  research  on  IRS Commissioners. I have found that, during
the  course  of  the  history of the Internal Revenue Service, the
average  Commissioner  of  the Internal Revenue Service remains in
that  job  for  2  years  and  2  months, then they are gone. They
usually  go back to their law practice or go with a major CPA firm
or  go  with  a  big  accounting  firm  or  go back into business,
wherever.  But  the  remainder  of  the  111,000  personnel of the
Internal  Revenue  Service,  they  stay here. They are part of the
bureaucracy.  They  are  part  of  a bureaucracy and the mentality
that  this  Taxpayers'  Bill  of  rights  to  which, once again, I
mention,  the  distinguished  occupant  of  the Chair was an early
cosponsor, is attempting to change and rectify.

     Many  of  those  employees,  Mr.  President,  of the Internal
Revenue Service I respect greatly.



                              - 39 -
     I  also  would like to repeat, as I stated just a week or two
ago  on  the  floor,  that I was at an airport waiting to get on a
plane  early  one  morning.  A  young  man came up to me and said,
"Aren't you Senator Pryor?"

     "Yes."

     He  said,  "Senator  Pryor,  I support the IRS legislation. I
support your Taxpayers' Bill of Rights."

     And  I said, "My goodness, what do you do? Where do you work?
Who are you employed by?"

     He  said,  "Senator  Pryor,  I  am  employed  by the Internal
Revenue Service."

     I said, "Why do you support the Taxpayers' Bill of Rights?"

     He  said,  very  simply,  but, I may say, very eloquently, "I
support  the Taxpayers' Bill of Rights because this legislation is
going  to make us a better agency of the Federal Government. It is
going  to  help  to  give  us the credibility that we need to deal
with  the  average  American  taxpayer, and it is going to help at
long  last to give us respect rather than to have us motivate this
system based upon fear."

     That  is what it is all about, Mr. President. A lot of people
said,  "You  are  very  naive. There is no way that you can have a
tax collection system that is not based upon fear."

     Mr.  President,  I  disagree.  I think that we can have a tax
collection  system  based upon respect. The distinguished occupant
of   the   Chair  was  the  Governor  of  West  Virginia,  a  most
distinguished  Governor,  I  might  add. The speaker at this time,
the  Senator  from  Arkansas,  was a Governor of that great State.
And  I  would  just wager that in West Virginia and Arkansas, that
our  particular tax collection system was not, in fact, based upon
fear.  It  was  not.  It was based upon respect. It was based upon
fairness  and  it  was  based upon the tax collector being willing
and  able  and  desirous, working with the largest business or the
smallest   business   or  the  richest  taxpayer  or  the  poorest
taxpayer,  of  them  all  being treated equal, none getting favors
that others did not get.

     Mr.  President,  this  is  a far-reaching bill. It has come a
long  way  in  2  years.  It has been a piece of legislation that,
frankly,  has  been  most  educational for me. I have said on many
occasions  that  we probably know more about the KGB in the Soviet
Union than we do about our own Internal Revenue Service.

     I  might  have overspoken, Mr. President. I might have used a
little  hyperbole from time to time. From time to time, during the
formation  of  this legislation, I may have been a little rough on

                              - 40 -
the  Internal  Revenue  Service. A lot of people tell me that I am
going  to  be  audited and I will wind up in Fort Leavenworth, and
whatever.

     Mr.  President,  I  am willing to take that chance, because I
have  enough  faith  in  the system and I have enough faith in the
people  that  motivate  this system. I am going to have a lot more
faith,  Mr.  President,  on  January  1 1989, when I know that the
Taxpayers'  Bill  of  Rights  has  become  a part, and an integral
part, of the law of this land.

     It  is not going to be out there in some procedural manual on
an  agent's desk in Omaha. It is not going to be our there in some
dusty  regulation book in Talahassee. It is going to be the law of
this  land.  It  will not be an internal process which was changed
by  regulation  in  Washington.  It  is going to be changed by the
U.S.  Congress,  Mr.  President, which created and gave the powers
and  gave  the  authority  to  the Internal Revenue Service in its
inception 124 years ago.

     It  is  time  to make those changes, Mr. President. I know in
1986  we  used  to say to the taxpayer, "Oh, you're going to get a
great  tax  reform  bill. It is going to be simple. It is going to
be  easy.  It  is  going  to  be fair." We did not live up to that
commitment.

     But  we  can  live up to a commitment tonight, Mr. President,
by  including  the  Taxpayers'  Bill  of  Rights  in the technical
corrections  bill,  by  making  it  the  law  of this land, and by
saying  to the average American taxpayer, "You are going to have a
better  chance, you are going to have a better shot, you are going
to  have  a  better opportunity when you deal with the awesome and
tremendous power of the Internal Revenue Service."

     This  is  the first stage, Mr. President. Next year, in 1989,
I  plan  to  chair  many  hearings  on  the  issues  of penalties-
penalties-of  the  Internal  Revenue Service. Ten years ago, there
were  40  penalties  that  the Internal Revenue Service could tack
onto   an  individual  taxpayer's  deficit,  or  amount  owed  the
Service.  Today  there  are  152  penalties,  most of which can be
arbitrarily  attached  to  the taxpayer's debt. And, in most cases
we  have  seen,  in fact 8 out of 10 that we have studied, we have
seen  that  the  interest  and the penalties on that tax liability
are  many  times,  2  and 3 and 4 and even up to 15 times what the
original liability was.

     This  is a problem. We are going to deal with that problem in
1989.  But the problem that we are going to deal with at long last
on  October  22, 1988, is, for the first time in 124 years, in one
composite  package, we are going to give some rights to the little
taxpayer, that have been eroded year after year.



                              - 41 -
     I  think  it  will  be  a  good  day  for  the  taxpayer, Mr.
President.  I  want to thank the occupant of the Chair for being a
supporter  of  this  legislation.  Seventy  two of our colleagues,
right  here  in  the U.S. Senate, sense that this bill needs to be
leveled and balances need to be placed into that system.

     Mr.  President,  ask  unanimous  consent that I be allowed to
have  printed  in  the  RECORD  a  side-by-side  chart on what the
present  law  is and, God help us, what the law will be on January
1,  1989  assuming  that the Taxpayers' Bill of Rights becomes the
law of this land.

     Mr. President, I yield the floor and I thank the Chair.

     There  being  no  objection,  the  material was ordered to be
printed   in   the  RECORD,  as  follows:   (See  SUMMARY  OF  THE
HIGHLIGHTS OF THE TAXPAYERS' BILL OF RIGHTS

     The PRESIDING OFFICER: The Senator from Kentucky.

     SENATOR  FORD:  Mr.  President, there are very few times that
you  really feel good about something that has happened and I feel
good  today  that  we  have  really  finally given the taxpayer an
opportunity, if I might say, to fight city hall.

     We  get  fussed  at  a  lot  in this job. It is not one where
everybody  comes  up  and  pats  you  on  the  back  and gives you
accolades  that something has occurred. But it is like taking your
children  to a new civic center and not having to receive a plaque
saying  that you helped raise a few dollars to help build this new
civic  center  for  your community, but you say to yourself as you
take  your  children into this new civic center: This is something
I did for you. You feel good about it.

     I  just want to say to my distinguished friend from Arkansas,
Senator  PRYOR,  we  feel  good  about the Senator because he took
this  challenge  and  tonight,  as I understand it, it will become
law.

     I  have  been a small businessman. We did not have unkind IRS
people  in  my  community, but they changed from time to time. And
they  would  come  by your place of business and tell you how they
wanted  the  reports and how they should be prepared, and when you
would  send this in. They would be with you for a couple of years-
about as long as the Commissioner of IRS.

     Then  when  they turn over, a new man would come in. He would
say  no,  you are doing it wrong. You have got to change it. So we
were  always  changing  it,  always  doing  something else, always
fearful,  as  the  Senator  said. Let us get the fear out. We were
always  fearful  we  would be doing something wrong. A new man was
coming  in,  we  would have to change. We were not sure whether he
was  right  or  the man before. Then you say "He told me how to do

                              - 42 -
it,"  and  they say, "No, he was wrong. This is the way you should
have done it."

     So  tonight,  as  we approach the hour of, I think, conquest,
the  taxpayers  in  this country should be thankful that there are
people  here  that  fight  their  battles.  As  the  distinguished
Senator  said,  there  are  72  of  us that have signed on to this
piece  of  legislation.  I do not know whether I will get a letter
or  not  thanking  me for this. But I feel good about it, I say to
Senator  PRYOR,  distinguished  Senator from Arkansas. I feel like
we have accomplished something.

     If  I  never  get a letter, I feel like we have put something
together  that  is important. And the important thing here also is
it  is  not going to quit. Next year we are going to have hearings
on  penalties;  10 years ago there were 40, now there are 152. And
they  are  arbitrary.  You never know whether you are going to get
1,  2,  3,  or  10 times. Poor, unsuspecting individuals out there
have  been  honest  about  it  but they do not understand all that
paper,  they  do  not  have  the money to hire a CPA. Probably the
CPA,  at  a  minimum, would charge them more than their taxes. And
yet they make a mistake and it is multiplied.

     So  I  want  to  compliment the Senator from Arkansas for the
job  he  has  done  and  the  Chair  for  being  one  of the early
cosponsors.  Senators  can  feel  good  here  tonight that this is
about  to  transpire and that we will accomplish something for the
people that we represent.

     I  feel inadequate to say it, to appropriately compliment the
Senator.  As  I  heard  one fellow say, "I only come hard with the
silver  tongue  of  the  truth."  The  truth is, this is good. The
truth  is,  we are going to do better. Because we are not going to
stop  here. We are going to make things work a little better. And,
Lord  willing,  as  we  would  say down home, if the creeks do not
rise  we will all be back here in the 101st, and I look forward to
working with my colleague.

     I  say  to  my  good  friend,  more power to the Senator from
Arkansas,  and  I  will  support  him  any  way I can. I yield the
floor.

     SENATOR  PRYOR: Mr. President, I ask unanimous consent that I
may be permitted to respond to the distinguished Senator.

     The  PRESIDING  OFFICER:  Without  objection, the Senator may
proceed.

     SENATOR  PRYOR:  Mr.  President,  first  I would like to take
this  opportunity  to  apologize to the Chair and to the Senate. I
did  not  know  that  I was under any time constraints. I was only
going  to  speak  about  2  minutes.  I  probably  spoke  about 20
minutes.


                              - 43 -

     As  we  say,  I  got  a  little bit carried away on one of my
favorite  subjects, Mr. President, so I apologize to the Chair for
taking  the  time  of  the  Senate.  But  I  did not see any other
business  that  was  pressing  at  the moment so I thought I would
just take that opportunity.

     Mr.  President,  let  me  also say, if I might, and I did not
see  the  Senator  from  Kentucky-this  is  my  bad eye over here-
sitting  in  the  Chamber  at  the  time that I was addressing the
Senate.

     But,  Mr.  President, the distinguished Senator from Kentucky
ever  since  I  have  known  him has been a champion of the little
people. He has been a champion of the little people.

     And  the  little  people know it. And once again, he has been
able  to  champion  the  little people tonight with the Taxpayers'
Bill  of  Rights.  I  have stated two or three times on this floor
that  I  received  all  these thousands of letters. But one person
that  I  have  not  received  a letter from is Lee Iacocca. He has
plenty  of  tax  lawyers. He has plenty of CPA's, Mr. President. I
have  not  received  a  letter  from  the chairman of the board of
General Motors or IBM or AT&T. they have plenty of tax counsel.

     But  the  little  people are confused and they need some help
and  I  know  that  those  little people, even though they may not
write  a letter to Senator FORD from Kentucky, they will know that
Congress  ultimately  cared,  that  we  as an institution cared. I
will  bet  you,  back  into Kentucky they will know that the great
Senator  and  former  Governor  of  that  State was there on their
side,  there  to  support  them.  And, Mr. President, there to not
only vote for but to cosponsor the Taxpayers' Bill of Rights.

     Mr.  President, I thank the Chair. Once again, I apologize to
the Chair, and I yield the floor.


                              - 44 -

          TECHNICAL AND MISCELLANEOUS REVENUE ACT OF 1988

SECTION 1. SHORT TITLE
   (a) SHORT TITLE
   (b) DEFINITIONS
   (1) 1986 CODE
   (2) REFORM ACT
   (c) CLERICAL AMENDMENT
   (d) TABLE OF CONTENTS

TITLE I -- TECHNICAL CORRECTIONS TO TAX REFORM ACT OF 1986

   Sec. 1001. Amendments related to title I of the Reform Act.

   Sec. 1002. Amendments related to title II of the Reform Act.

   Sec. 1003. Amendments related to title III of the Reform Act.

   Sec. 1004. Amendments related to title IV of the Reform Act.

   Sec. 1005. Amendments related to title V of the Reform Act.

   Sec. 1006. Amendments related to title VI of the Reform Act.

   Sec. 1007. Amendments related to title VII of the Reform Act.

   Sec. 1008. Amendments related to title VIII of the Reform Act.

   Sec. 1009. Amendments related to title IX of the Reform Act.

   Sec. 1010. Amendments related to title X of the Reform Act.

   Sec.  1011.  Amendments related to parts I and II of subtitle A
   of title XI of the Reform Act.

   Sec.  1011A. Amendments related to parts III and IV of subtitle
   A of title XI of the Reform Act.

   Sec.  1011B.  Amendments  related to subtitles B and C of title
   XI of the Reform Act.

   Sec. 1012. Amendments related to title XII of the Reform Act.

   Sec. 1013. Amendments related to title XIII of the Reform Act.

   Sec. 1014. Amendments related to title XIV of the Reform Act.

   Sec. 1015. Amendments related to title XV of the Reform Act.

   Sec. 1016. Amendments related to title XVI of the Reform Act.

   Sec. 1017. Amendments related to title XVII of the Reform Act.



                              - 45 -
   Sec.  1018.  Amendments  related  to  title XVIII of the Reform
   Act.

   Sec. 1019. Effective date.


TITLE  II  --  AMENDMENTS  RELATED  TO  TAX  PROVISIONS  IN  OTHER
LEGISLATION

   Sec.  2001.  Amendments  related  to  Superfund  Revenue Act of
   1986.

   Sec.  2002.  Amendments  related  to Harbor Maintenance Revenue
   Act of 1986.

   Sec.  2003. Amendments related to Omnibus Budget Reconciliation
   Act of 1986.

   Sec. 2004. Amendments related to the Revenue Act of 1987.

   Sec.  2005.  Amendments  related  to Pension Protection Act and
   full funding limitations.

   Sec.  2006.  Amendments  related to Section 9201 of the Omnibus
   Budget Reconciliation Act of 1987.

TITLE III--ADDITIONAL SIMPLIFICATION AND CLARIFICATION PROVISIONS

          Subtitle A -- Diesel Fuel Excise Tax Collection
                     and Exemption Procedures

   Sec. 3001. Tax-free purchases of certain fuels.

   Sec.   3002.   Expedited  refund  for  certain  fuels  used  in
   nontaxable uses.

   Sec. 3003. Marine retailers treated as producers.

             Subtitle B -- Health Care Continuation Rules

   Sec.  3011.  Failure  to  satisfy  continuation requirements of
   group health plans.

        Subtitle C -- Employee Benefit Nondiscrimination Rules

   Sec.  3021. Modifications to discrimination rules applicable to
   certain employee benefit plans.

                 Subtitle D -- Estate and Gift Taxes

       Sec. 3031. Estate tax valuation freezes.

                 Subtitle E -- Indian Fishing Rights


                              - 46 -

   Sec.  3041.  Federal tax treatment of income derived by Indians
   from exercise of fishing rights secured by treaty, etc.

   Sec.  3042.  State  tax  treatment of income derived by Indians
   from exercise of fishing rights secured by treaty, etc.

   Sec.   3043.   Conforming   amendments   relating  to  old-age,
   survivors, and disability insurance program.

   Sec. 3044. Effective date; no inference created.

TITLE IV--EXTENSIONS AND MODIFICATIONS OF EXPIRING TAX PROVISIONS

   Sec.   4001.   Extension  and  modification  of  exclusion  for
   employer-provided education assistance.

   Sec.  4002.  Extension and modification of exclusion of amounts
   received under group legal services plans.

   Sec.  4003.  Carryover  of  post-1987 low-income housing credit
   dollar amounts permitted.

   Sec.  4004.  Simplification  of  rule  where  partnership holds
   qualified low-income building.

   Sec.  4005.  Provisions  relating to mortgage revenue bonds and
   mortgage credit certificates.

   Sec.   4006.   Extension  of  credit  for  increasing  research
   activities.

   Sec.   4007.   Extension  of  credit  for  increasing  research
   activities.

   Sec.  4008.  Denial  of  deduction  for  50  percent of amounts
   allowed as a research credit.

   Sec.    4009.   Allocation   of   research   and   experimental
   expenditures.

   Sec. 4010. Extension and modification of targeted jobs credit.

   Sec.  4011.  Treatment of publicly offered regulated investment
   companies under 2-percent floor.

   Sec.  4012.  Extension and modifications of provisions relating
   to financial institutions.

TITLE V -- REVENUE INCREASE PROVISIONS



                              - 47 -
         Subtitle A -- Corporate Estimated Tax Provisions

   Sec. 5001. Corporate estimated tax payments.

                  Subtitle B -- Insurance Provisions

   Sec.  5011.  Limitation  on  unreasonable  mortality  and other
   expense charges under section 7702.

   Sec. 5012. Treatment of modified endowment contracts.

   Sec. 5013. Valuation of group-term life insurance.

   Sec. 5014. Study.

                 Subtitle C -- Loss Transfer Rules
                   for Alaska Native Corporations

   Sec.  5021. Repeal of rules permitting loss transfers by Alaska
   Native Corporations.

             Subtitle D -- Estate and Gift Tax Provisions

   Sec. 5031. Valuation tables.

   Sec.  5032.  Rate  schedule  for tax on estates of nonresidents
   not citizens.

   Sec.  5033.  Disallowance  of marital deduction where spouse is
   not citizen of United States.

             Subtitle E -- Long-Term Contract Provisions

       Sec. 5041. Long-term contract provisions.

               Subtitle F -- Tax-Exempt Bond Provisions

   Sec. 5051. Treatment of certain pooled financing bonds.

   Sec.  5052.  Treasury  regulations  relating  to  student  loan
   bonds.

   Sec.  5053.  Restrictions  on bonds used to provide residential
   rental property for family units.

                 Subtitle G -- Excise Tax Provisions

   Sec.   5061.   Imposition  of  excise  tax  on  manufacture  or
   importation of pipe tobacco.

   Sec.  5062.  Modification  of  distilled spirits tax credit for
   flavors content.



                              - 48 -
           Subtitle H -- Other Revenue Increase Provisions

   Sec. 5071. Increase in penalty for bad checks.

   Sec.  5072.  Time  for  payment  of tax on reversion of pension
   plan assets.

   Sec.   5073.   Denial  of  deduction  for  certain  residential
   telephone service.

   Sec.  5074. Partnership reporting of unrelated business taxable
   income.

   Sec. 5075. Options subject to wash sale rules.

   Sec.  5076.  Interest  charge  on  installment sales of certain
   property.

TITLE VI -- OTHER SUBSTANTIVE REVENUE PROVISIONS

         Subtitle A -- Provisions Relating to Individuals

   Sec.  6001.  Treatment  of  certain  amounts paid to or for the
   benefit of an institution of higher education.

   Sec.  6002. Nonrecognition of gain where one spouse dies before
   occupying new residence.

   Sec.  6003. Meals on certain vessels and offshore oil platforms
   exempt from 80 percent limitation  on deduction for meals.

   Sec. 6004. Treatment of certain innocent spouses.

   Sec. 6005. Interim treatment of certain amounts awarded to
   Christa McAuliffe Fellows.

   Sec.  6006.  Election to claim certain unearned income of child
   on parent's return.

   Sec.  6007.  Jury duty pay remitted to an individual's employer
   allowed as a deduction in computing gross income.

   Sec. 6008. Business use of automobiles by rural mail carriers.

   Sec.  6009.  Exclusion from gross income for income from United
   States savings bonds used to pay tuition and fees.

   Sec.  6010.  Modification  of  additional exemption for student
   dependents.

   Sec. 6011. Principal residence capital gains exclusion.



                              - 49 -
  Subtitle B -- Provisions Relating to Accounting and Agriculture

   Sec. 6026. Amendments to uniform capitalization rules.

   Sec.   6027.   Treatment  of  single  purpose  agricultural  or
   horticultural structures.

   Sec. 6028. Treatment of property used in the farming business.

   Sec. 6029. Treatment of certain trees.

   Sec.  6030.  One-year deferral of proceeds from live-stock sold
   on account of drought.

   Sec. 6031. Certain repledges permitted.

   Sec.  6032. Treatment of indirect holdings through trusts under
   section 448 of the 1986 Code.

   Sec.   6033.  Disaster  assistance  act  payments  included  in
   special rule for taxable year of inclusion.

           Subtitle C -- Pensions and Employee Benefits

   Sec.    6051.    Provisions    relating   to   benefits   under
   discriminatory plans.

   Sec.  6052. Modifications of discrimination rules applicable to
   certain annuity contracts.

   Sec.   6053.   Required   distribution   beginning   date   for
   governmental and church plans.

   Sec. 6054. Section 415 limitation for State and local plans.

   Sec. 6055. Minimum participation standards.

   Sec.  6056.  Study  of  effect of minimum participation rule on
   employers required to provide certain retirement benefits.

   Sec.  6057.  Prohibition  on  collectibles not to include State
   coins.

   Sec.  6058.  Application of fundings rules to multiple employer
   plans.

   Sec.  6059.  Application  of  section 415 limitations to police
   and firefighters.

   Sec.  6060.  Excise  tax on disposition of stock by an ESOP not
   to apply to certain forced dispositions.

   Sec. 6061. Loans to acquire employer securities.


                              - 50 -

   Sec.  6062.  Effective  date  of  section  415  limitations  of
   collectively bargained agreements.

   Sec.  6063.  Treatment of pre-1989 elections for dependent care
   assistance under cafeteria plans.

   Sec. 6064. Modifications to section 457.

   Sec. 6065. Exception for governmental plans.

   Sec.  6066.  Air  transportation  of  cargo  and  of passengers
   treated  as  same  service  for  purposes  of  fringe  benefits
   inclusion.

   Sec.  6067.  Special rule for applying spin-off rules to bridge
   banks.

   Sec.  6068.  Income averaging allowed to lump-sum distributions
   of alternate payees.

   Sec. 6069. Increase in employer reversion tax.

   Sec.  6070.  Definition  of  part-time employee for purposes of
   section 89.

   Sec.  6071.  Rural  telephone  cooperatives  permitted  to have
   qualified cash or to deferred arrangements.

   Sec. 6072. Study of treatment of certain technical personnel.

                  Subtitle D -- Insurance Provisions

   Sec. 6076. Treatment of certain workers' compensation funds.

   Sec. 6077. Special estimated tax payments.

   Sec.  6078.  Church  self-funded death benefit plans treated as
   life insurance.

   Sec. 6079. Treatment of structured settlements.

   Sec.   6080.   Variable   contracts   invested   in  government
   securities permitted.

                 Subtitle E -- Excise Tax Provisions

   Sec.  6101. Authority to prescribe tolerances for the volume of
   wine in bottles for purposes of the excise tax on wine.

   Sec.  6102.  Wholesale  distributors  to  administer claims for
   refund of gasoline tax.



                              - 51 -
   Sec.  6103.  Authority  to  exempt  articles from excise tax on
   heavy  trucks  and  trailers  where  benefit  accrues to United
   States.

   Sec.   6104.  Application  of  reduced  gasoline  tax  rate  to
   blenders.

   Sec.  6105.  Certain  educational institutions exempt from user
   fees  on  permits  for  industrial  use  of specially denatured
   distilled spirits.

   Sec.  6106.  Small  procedures  exempt from occupational tax on
   distilled spirits plants.

   Sec. 6107. Quarterly payment of archery excise tax.

   Sec.   6108.   Extension   of  time  for  enacting  authorizing
   legislation relating to the oil spill liability trust fund.

   Sec. 6109. Donated cargo exempt from harbor maintenance tax.

   Sec. 6110. Relay cargo.

   Sec.  6111. Clarification of meaning of manufacture under truck
   excise tax.

                   Subtitle F -- Foreign Provisions

   Sec. 6126. Dual resident companies.

   Sec.  6127.  Election  to be treated as qualified electing fund
   to be made by taxpayer.

   Sec.   6128.  Treatment  of  certain  United  States  affiliate
   obligations.

   Sec.  6129.  Treatment of certain insurance branches of foreign
   corporations.

   Sec.  6130.  Treatment  of  certain  instruments  under foreign
   currency rules.

   Sec.   6131.  Treatment  of  insurance  companies  under  chain
   deficit rule.

   Sec.  6132. Virgin Islands treated as qualified Caribbean basin
   country.

   Sec.  6133. Treatment of certain United States obligations held
   by possession banks.

   Sec.  6134.  Treatment of certain gambling winnings received by
   nonresident aliens.


                              - 52 -

   Sec. 6135. Election to be treated as domestic corporation.

   Sec. 6136. Tax exemption for ENJEBI community trust fund.

   Sec. 6137. Application of section 912 to judicial employees.

   Sec. 6138. Study of definition of United States resident.

   Sec. 6139. Sunset of treaty provisions.

   Sec.  6140.  Treatment  of certain awards by the district court
   of Guam.

                 Subtitle G -- Estate Tax Provisions


   Sec. 6151. Treatment of certain rents under section 2032A.

   Sec.  6152.  Clarification  of  treatment of joint and survivor
   annuities under Q-tip rules.

               Subtitle H -- Tax-Exempt Bond Provisions

   Sec.  6176.  Clarification  of  small  issue bond definition of
   manufacturing facility.

   Sec.  6177.  Rules  applicable  to tax and revenue anticipation
   bonds.

   Sec.   6178.   Amendment   to   mortgage  bond  purchase  price
   regulations.

   Sec.  6179.  Application  of  security  interest  test  to bond
   financing of hazardous waste clean-up activities.

   Sec. 6180. Tax-exempt financing for certain rail facilities.

   Sec.  6181.  Rules  relating to rebate on earnings on bona fide
   debt service fund.

   Sec. 6182. Bonds issued by volunteer fire departments.

   Sec.  6183.  Disregard of pooled financings in determination of
   qualification for small issuer exception.

     Subtitle I -- Provisions Relating to Exempt Organizations

   Sec.  6201.  Certain  games  of chance not treated as unrelated
   trade or business.

   Sec.  6202.  Purchase  of  insurance  by  cooperative  hospital
   service organizations.


                              - 53 -

   Sec.  6203.  Cancellation  of  certain  debts  originated by or
   guaranteed  by  the  United  States  not  taken into account in
   determining tax exempt status of certain organizations.

   Sec.  6204.  Determination  of  operating foundation status for
   certain purposes.

             Subtitle J -- Taxpayer Rights and Procedures

                       Sec. 6226. Short title.

                      PART I -- TAXPAYER RIGHTS

   Sec. 6227. Disclosure of rights of taxpayers.

   Sec. 6228. Procedures involving taxpayer interviews.

   Sec.  6229.  Taxpayers  may  rely on written advice of Internal
   Revenue Service.

   Sec. 6230. Taxpayer assistance orders.

   Sec.  6231.  Basis  for  evaluation of Internal Revenue Service
   employees.

   Sec.  6232.  Procedures  relating  to  Internal Revenue Service
   regulations.

   Sec. 6233. Content of tax due, deficiency, and other notices.

   Sec. 6234. Installment payment of tax liability.

   Sec. 6235. Assistant Commissioner for taxpayer services.

                 PART II -- LEVY AND LIEN PROVISIONS

   Sec. 6236. Levy and distraint.

   Sec. 6237. Review of jeopardy levy and assessment procedures.

   Sec. 6238. Administrative appeal of liens.

                 PART III -- PROCEEDINGS BY TAXPAYERS

   Sec.  6239.  Awarding  costs and certain fees in administrative
   and court proceedings.

   Sec.  6240.  Civil cause of action for damages sustained due to
   failure to release lien.

   Sec.  6241.  Civil cause of action for damages sustained due to
   certain unauthorized actions by Internal Revenue Service.


                              - 54 -

   Sec.  6242.  Assessable  penalty for improper disclosure or use
   of information by preparers of returns.

                 PART IV -- TAX COURT JURISDICTION

   Sec.   6243.   Jurisdiction   to   restrain  certain  premature
   assessments.

   Sec. 6244. Jurisdiction to enforce overpayment determinations.

   Sec.  6245.  Jurisdiction  to  review  certain  sales of seized
   property.

   Sec.    6246.   Jurisdiction   to   redetermine   interest   on
   deficiencies.

   Sec.  6247.  Jurisdiction  to modify decision in certain estate
   tax cases.

            Subtitle K -- Other Administrative Provisions

   Sec. 6251. Exchange of information.

   Sec. 6252. Provisions relating to previously required studies.

   Sec.  6253.  Repeal of secretarial authority to prescribe class
   lives.

   Sec.  6254. Amendments related to Crude Oil Windfall Profit Tax
   Act of 1980.

          Subtitle L -- Provisions Relating to Corporations
                    and Personal Holding Companies

   Sec.  6276.  Authority to pay refunds to certain fiduciaries of
   insolvent members of affiliated groups.

   Sec.  6277.  Application  of  net operating loss limitations to
   bankruptcy reorganizations.

   Sec.  6278.  Application  of  section  7503  of  1986  Code for
   purposes of section 10222(b) of Revenue Act of 1987.

   Sec.  6279.  Interest  earned  by  brokers or dealers not taken
   into account as personal holding company income.

   Sec. 6280. Treatment of certain bank holding companies.

   Sec.   6281.  Authority  to  waive  appraisal  requirement  for
   certain charitable contributions of property.

   Sec. 6282. Distributions by cooperative housing corporations.


                              - 55 -

                Subtitle M -- Miscellaneous Provisions

   Sec. 6301. Repeal of limit on long-term bonds.

   Sec.  6302.  One-year  extension  of  credit for producing fuel
   from a nonconventional source.

   Sec.  6303.  Certain  discharge  of debt income not included in
   adjusted book income.

   Sec. 6304. Nonconventional fuels credit.

   Sec. 6305. Treatment of certain family services providers.

TITLE VII -- RAILROAD UNEMPLOYMENT AND RETIREMENT PROGRAMS

   Sec. 7001. Short title.
   Sec. 7002. References to Railroad Unemployment Insurance Act.

                Subtitle A -- Financing Provisions

   Sec.    7101.    Amendments    relating    to   definition   of
   "compensation".

   Sec. 7102. Contribution adjustments.

   Sec. 7103. Administrative expenses.

   Sec. 7104. Notification to employer.

   Sec. 7105. Annual report.

   Sec.   7106.   Amendments  relating  to  railroad  unemployment
   repayment tax.

   Sec. 7107. GAO study of fraud and payment errors.

   Sec.  7108.  One-year extension of time limit for filing report
   by Commission on Railroad Retirement Reform.

            Subtitle B -- Benefit and Other Adjustments

   Sec. 7201. Waiting period for benefits and benefit increases.

   Sec. 7202. Qualifying condition.

   Sec.   7203.   Increase   in   maximum   permitted   subsidiary
   remuneration.

               Subtitle C -- Retirement Act Amendments

   Sec. 7301. Additional lump sum payment in certain cases.


                              - 56 -

   Sec.   7302.   Deletion   of   last   person   service   as   a
   disqualification.

   Sec. 7303. Earnings of disability annuitants.

   Sec. 7304. Allowance of credit for military service.

TITLE VIII -- AMENDMENTS RELATING TO SOCIAL SECURITY ACT PROGRAMS

    Subtitle A -- Old-Age, Survivors, and Disability Insurance
                      and Related Provisions

   Sec.  8001.  Interim  disability  benefits  in cases of delayed
   final decisions.

   Sec.   8002.   Application   of   earnings   test  in  year  of
   individual's death.

   Sec. 8003. Phaseout of reduction in windfall benefits.

   Sec.  8004.  Denial  of  benefits  to  individuals  deported or
   ordered  deported  on  the  basis of associations with the Nazi
   Government of Germany during World War II.

   Sec.  8005.  Modifications  in  the  term  of  office of public
   members  of  the board of trustees of the social security trust
   funds.

   Sec. 8006. Continuation of disability benefits during appeal.

   Sec.  8007.  Exemption  from  social security for employers and
   employees who are both members of certain religious faiths.

   Sec. 8008. Blood donor locator service.

   Sec.  8009.  Requirement of social security account number as a
   condition for receipt of social security benefits.

   Sec.   8010.   Substitution  of  certificate  of  election  for
   application   to  establish  entitlement  for  certain  reduced
   widow's and widower's benefits.

   Sec.  8011.  Calculation  of  the  windfall  benefit  guarantee
   amount  based  on pension amounts payable in the first month of
   concurrent entitlement rather than concurrent eligibility.

   Sec.  8012.  Consolidation  of reports on continuing disability
   reviews.

   Sec.  8013.  Exclusion  of  employees separated from employment
   before  January  1,  1989, from rule including as wages taxable
   under FICA certain payments for group-term life insurance.


                              - 57 -

   Sec.   8014.   Clarification  of  applicability  of  Government
   pension offset to certain Federal employees.

   Sec.  8015.  Amendments  to  rules  governing  social  security
   coverage of Federal employment.

   Sec. 8016. Technical corrections in OASDI provisions.

   Sec.  8017.  Certain  cash  wages paid to seasonal agricultural
   laborers excluded from OASDI coverage.

   Sec.  8018. Certain employer pension contributions not included
   in FICA wage base.

   Sec.   8019.   Reports   regarding  certain  disability-related
   benefits.

              Subtitle B -- Public Assistance Provisions

   Sec.  8101.  Extension of prohibition against implementation of
   certain proposed regulations.

   Sec.  8102.  Review  of  policy  governing use of AFDC funds to
   meet  emergency  needs  of  families  eligible for AFDC through
   emergency  assistance  or  special  needs  payments;  report to
   Congress.

   Sec.  8103. Disregard of certain housing assistance payments in
   determining income and resources under SSI program.

   Sec. 8104. Foster care independent living initiatives.

   Sec.  8105.  Technical  corrections  to  Family  Support Act of
   1988.

            Subtitle C -- National Commission on Children

   Sec.  8201.  Delay in reporting date for National Commission on
   Children

               Subtitle D -- Unemployment Compensation

   Sec. 8301. Self-employment demonstration project.

                 Subtitle E -- Medicare and Medicaid

         PART I -- PROVISIONS RELATING TO PART A OF MEDICARE

   Sec. 8401. Extension of disproportionate share provisions.

   Sec. 8402. Maintenance of bad debt collection policy.



                              - 58 -
   Sec.  8403.  Application  of  wage  indices  in  case  of areas
   affected by section 4005(a)(1) of OBRA of 1987.

   Sec.  8404.  Demonstration  projects  with  respect  to chronic
   ventilator- dependent units in hospitals.

   Sec. 8405. Election of personnel policy for PROPAC employees.

       PART II -- RELATING TO PARTS A AND B OF MEDICARE PROGRAM

   Sec.  8411.  Elimination  of  waivers  of  50:50  rule  for HMO
   enrollment.

   Sec.  8412.  Increase  in authorization for the patient outcome
   assessment research program.

   Sec. 8413. Delay in reporting deadline for the United States
   Bipartisan Commission on Comprehensive Health Care.

        PART III -- PROVISIONS RELATING TO PART B OF MEDICARE

   Sec.   8421.   Budget   neutrality   adjustment  for  certified
   registered nurse anesthetists.

   Sec.  8422.  Coverage  of psychologists' services when provided
   off-site as part of a treatment plan.

   Sec.  8423.  Nonapplication of certain requirements to physical
   therapists in independent practice.

   Sec. 8424. Functions of physician payment review commission.

   Sec.  8425.  Moratorium  on  laboratory  payment  demonstration
   extended.

   Sec. 8426. Study of trip fees for clinical laboratories.

              PART IV -- PROVISIONS RELATING TO MEDICAID

   Sec.  8431.  Delay  in issuance of final regulations concerning
   the  use  of voluntary contributions and provider-paid taxes by
   States to receive Federal matching funds.

   Sec. 8432. Medicaid long-term care waiver program.

   Sec.   8433.   Extension  of  time  period  for  submission  of
   correction  and  reduction  plans for certain intermediate care
   facilities for the mentally retarded.

   Sec. 8434. Correction relating to medicare buy-in.

   Sec.  8435.  Clarification  of  Federal financial participation
   for cases-management services.


                              - 59 -

   Sec.  8436.  Determination  of  premium  amounts  for  extended
   medical assistance.

TITLE IX -- TRADE PROVISIONS

   Sec. 9001. Trade technical amendments.

   Sec. 9002. Foreign trade zones.

   Sec.  9003.  Report  on  the small business innovation research
   program.

   Sec.  9004.  Extension  of certain existing suspensions of duty
   and duty reductions.

TITLE X -- MANASSAS NATIONAL BATTLEFIELD PARK

   Sec. 10001. Short title.

   Sec. 10002. Addition to Manassas National Battlefield Park.

   Sec. 10003. Visual protection.

   Sec. 10004. Highway relocation.