I

104TH CONGRESS

1ST SESSION H. R. 2450

To amend the Internal Revenue Code of 1986 to place the burden of proof

on the Secretary of the Treasury in civil cases and on the taxpayer

in administrative proceedings, to require 30 days notice and judicial

consent before lien or seizure, to increase the limit on recovery of civil

damages for unauthorized collection actions and exclude such damages

from income, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 29, 1995

Mr. TRAFICANT introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to place the

burden of proof on the Secretary of the Treasury in

civil cases and on the taxpayer in administrative proceedings, to require 30 days notice and judicial consent before lien or seizure, to increase the limit on recovery

of civil damages for unauthorized collection actions and

exclude such damages from income, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. BURDEN OF PROOF.

2 (a) GENERAL RULE.—Chapter 77 of the Internal

3 Revenue Code of 1986 (relating to miscellaneous provi4 sions) is amended by adding at the end the following new

5 section:

6 ‘‘SEC. 7524. BURDEN OF PROOF.

7 ‘‘(a) ADMINISTRATIVE PROCEEDINGS.—Notwith8 standing any other provision of this title, in the case of

9 any administrative proceeding under this title, the burden

10 of proof with respect to all issues shall be upon the

11 taxpayer.

12 ‘‘(b) COURT PROCEEDINGS.—Notwithstanding any

13 other provision of this title, in the case of any court pro14 ceeding under this title, the burden of proof with respect

15 to all issues shall be upon the Secretary.’’

16 (b) CLERICAL AMENDMENT.—The table of sections

17 for chapter 77 of such Code is amended by adding at the

18 end the following new item:

‘‘Sec. 7524. Burden of proof.’’

19 (c) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to administrative and court pro21 ceedings filed on or after the date of the enactment of

22 this Act.

23 SEC. 2. REQUIREMENT OF 30 DAYS NOTICE AND JUDICIAL

24 CONSENT BEFORE LIEN OR SEIZURE.

25 (a) LIEN.—
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1 (1) 30-DAY NOTICE REQUIREMENT.—Section

2 6322 of such Code is amended by striking ‘‘at the

3 time the assessment is made’’ and inserting ‘‘on the

4 date occurring 30 days after notice of the assess5 ment is provided to the taxpayer’’.

6 (2) JUDICIAL CONSENT.—

7 (A) IN GENERAL.—Subchapter C of chap8 ter 64 of such Code is amended by redesignat9 ing section 6327 as section 6328 and by insert10 ing after section 6326 the following new sec11 tion:

12 ‘‘SEC. 6327. JUDICIAL CONSENT REQUIRED.

13 ‘‘Notwithstanding any other provision of law, no lien

14 may arise under this subchapter without judicial consent.’’

15 (B) CLERICAL AMENDMENT.—The table of

16 sections for subchapter C of chapter 64 of such

17 Code is amended by striking the item relating

18 to section 6327 and inserting the following new

19 items:

‘‘Sec. 6327. Judicial consent required.

‘‘Sec. 6328. Cross references.’’

20 (b) SEIZURE.—

21 (1) 30-DAY NOTICE REQUIREMENT.—Subsection

22 (a) of section 6331 of such Code is amended—

23 (A) in the first sentence, by striking ‘‘10

24 days’’ and inserting ‘‘30 days’’, and
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1 (B) in the last sentence, by striking ‘‘10-

2 day period’’ and inserting ‘‘30-day period’’.

3 (2) JUDICIAL CONSENT.—Subchapter D of

4 chapter 64 of such Code is amended by redesignat5 ing section 6344 as section 6345 and by inserting

6 after section 6343 the following new section:

7 ‘‘SEC. 6344. JUDICIAL CONSENT REQUIRED.

8 ‘‘Notwithstanding any other provision of law, the Sec9 retary may not collect any tax (or other sum) under this

10 subchapter by levy without judicial consent.’’

11 (B) CLERICAL AMENDMENT.—The table of

12 sections for subchapter C of chapter 64 of such

13 Code is amended by striking the item relating

14 to section 6327 and inserting the following new

15 items:

‘‘Sec. 6344. Judicial consent required.

‘‘Sec. 6345. Cross references.’’

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to taxes due for taxable years be18 ginning after the date of the enactment of this Act.

19 SEC. 3. INCREASE IN LIMIT ON RECOVERY OF CIVIL DAM20 AGES FOR UNAUTHORIZED COLLECTION AC21 TIONS; EXCLUSION OF SUCH DAMAGES FROM

22 INCOME.

23 (a) INCREASE IN LIMIT.—Subsection (b) of section

24 7433 of the Internal Revenue Code of 1986 (relating to
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1 damages) is amended by striking ‘‘$100,000’’ and insert2 ing ‘‘$1,000,000’’.

3 (b) EXCLUSION FROM INCOME.—Section 7433 of

4 such Code is amended by adding at the end the following

5 new subsection:

6 ‘‘(e) EXCLUSION OF DAMAGES FROM INCOME.—

7 Damages awarded under this section shall be excluded

8 from gross income under this title.’’

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to actions by officers or employees

11 of the Internal Revenue Service after the date of the en12 actment of this Act.

13 SEC. 4. REPORT ON MEANS TO OFFSET REVENUE CON14 SEQUENCES REGARDING BURDEN OF PROOF.

15 The Comptroller General of the United States shall

16 conduct a study of possible means to offset any revenue

17 losses resulting from section 7524(b) of the Internal Reve18 nue Code of 1986 (as added by section 1). The Comptrol19 ler General shall submit to the Congress, not later than

20 1 year after the date of the enactment of this Act, a report

21 detailing the results of such study.

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