Irs Implements Taxpayer Protections

The Internal Revenue Service is implementing taxpayer protections on its own after a taxpayer bill of rights became snared in the budget fight between President Clinton and Congress.

Republicans and Democrats in Congress and the administration support the provisions, but Clinton vetoed them last month because they were included in Republican’s massive budget-balancing bill.

Last week, IRS Commissioner Margaret Richardson told reporters the agency was moving unilaterally to put some protections in place.

Among the changes, the IRS will make its agents - rather than taxpayers - responsible for verifying disputed information on returns such as the W-2 and 1099 forms submitted by employers, mortgage lenders and interest and dividend payers.

It also will forbid agents to lower the tax liability of an informant in exchange for information about another taxpayer.

Starting in March, the IRS will notify divorced and separated spouses when it takes action to collect jointly-owed taxes from the other spouse.

Many divorced spouses complain the IRS goes after the most readily accessible spouse - often the woman who stays in the family home - rather than the spouse who is most responsible for back taxes.

Divorced spouses say they’re kept in the dark about IRS efforts to collect from the other spouse.

The IRS also increased the authority of its ombudsman, whose office is charged with intervening on taxpayers’ behalf to resolve problems with the tax agency.

New rules will limit the ability of other IRS officials to overrule the ombudsman’s office and give the office increased authority to issue refunds to taxpayers facing severe financial hardship.

For businesses, the IRS will permit increased record keeping on computer imaging systems rather than paper, and it will shorten the appeals process in disputes over whether workers are employees or independent contractors.