**Joint Committee on TaxationMarch 31, 1998JCX-23-98**

**DESCRIPTION OF ADDITIONAL MODIFICATIONS TO**

**SENATE FINANCE COMMITTEE CHAIRMAN'S MARK RELATING TO**

**REFORM AND RESTRUCTURING OF THE INTERNAL REVENUE SERVICE**

**AND TAX TECHNICAL CORRECTION PROVISIONS**

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**I.  EXECUTIVE BRANCH GOVERNANCE**

**A.  IRS Restructuring and Creation of IRS Oversight Board**

**2.  Establishment and duties of IRS Oversight Board**

	The modification would provide that the IRS Oversight Board's limited access to taxpayerreturn information would not extend to any taxpayer's name, address, social security number, oremployer identification number.

**III.  TAXPAYER BILL OF RIGHTS 3**

**C.  Relief for Innocent Spouses and Persons with Disabilities**

**1.  Innocent spouse relief**

The modification would require that, whenever practicable, the IRS send appropriatenotifications to both spouses.

	The modification also would clarify that innocent spouse relief would not be available forspouses who joined in the filing of a joint return to the extent the spouse had actual knowledge ofthe understatement of tax.

**F.  Disclosures to Taxpayers**

**6.  Notification of change in tax matters partner**

	The modification would require the IRS to notify all partners of any resignation of the taxmatters partner that is required by the IRS, and to notify the partners of any successor tax matterspartner. 

**I.  Studies**
**1.  Study of penalty administration**

	The modification would provide that the separate studies to be conducted by the JointCommittee on Taxation and by the Department of Treasury regarding the administration andimplementation of certain penalty reform provisions also would include an analysis of the interestprovisions in the Code.  Such studies would include legislative and administrativerecommendations deemed appropriate to simplify the administration of the interest provisions andto reduce taxpayer burden.

**K.  Offers-in-Compromise**

**7.  Liberal acceptance policy for offers-in-compromise**

	The modification would remove the provision of the Chairman's Mark that provides thatthe IRS should implement liberal acceptance procedures for offers-in-compromise.  However,language similar to that contained in the deleted provision would be inserted in the CommitteeReport.

**L.  Additional Items**

	The Chairman's Mark would include the following new item 11:

**11.  Moratorium and Sense of the Committee**

	The modification would provide that no temporary or final regulations with respect toNotice 98-11 may be implemented prior to six months after the date of enactment of thisprovision.

	In addition, the modification would provide that it is the Sense of the Senate Committeeon Finance that:

	(1)  The Department of the Treasury and the Internal Revenue Service should withdrawNotice 98-11 and the regulations issued thereunder.  Congress, not the Department of theTreasury nor the Internal Revenue Service, should determine the international tax policy issuespresented with respect to the treatment of hybrid transactions under the subpart F provisions ofthe Internal Revenue Code.  

	(2)  The Department of the Treasury and the Internal Revenue Service should limit anyregulations issued under Notice 98-5 to the specific transactions described therein.  It is expectedthat (a) such regulations would not affect transactions undertaken in the ordinary course ofbusiness; (b) any regulations issued under Notice 98-5 would not have an effective date anyearlier than the date of issuance of proposed regulations; and (c) the issuance of such regulationswould follow normal regulatory procedures, including a comment period.  Nothing herein shall beconstrued to limit the ability of the Department of the Treasury and the Internal Revenue Serviceto address abusive transactions.

**IV.  CONGRESSIONAL ACCOUNTABILITY FOR THE IRS
**B.  Tax Law Complexity Analysis
	The modification would clarify that the cost of taxpayer compliance would be consideredas part of the tax law complexity analysis to be provided by the Joint Committee on Taxation.****