In addition, spouses who are divorced, legally separated, or living apart for at least a year may make a separate-liability election in connection with an understatement as late as two years after the IRS has begun collection activities. The Act gives the United States Tax Court jurisdiction to review denials of innocent spouse relief and separate-liability elections and restrains the IRS collection division from collection efforts while a Tax Court petition is pending. Procedural Due Process. The IRS is now required to develop procedures under which any taxpayer may request early referral of issues from the examination or the collection division to the Appeals Division. Further, procedures must be developed under which either a taxpayer or the Office of Appeals may request nonbinding mediation of any unresolved issue at the conclusion of the appeals procedure.
Judicial approval is also necessary for the seizure of certain business assets.
The IRS is now prohibited from using records of tax enforcement results to evaluate its employees' performance or to impose or suggest production quotas or goals. The suspensions will end 21 days after the notice is provided. Taxpayers are entitled to a zero interest rate when outstanding overpayments and under payments of income and self- employment taxes are equal. The interest rate paid by the IRS on refunds for individuals is now raised to equal the underpayment rate paid by taxpayers. For tax refunds payable after 1999, the IRS's refund offset program will include past-due, legally enforceable state income tax debts that have been reduced to judgment.