I
105TH CONGRESS
2D SESSION
H. R. 3493
To amend the Internal Revenue Code of 1986 to provide additional taxpayer
rights.
IN THE HOUSE OF REPRESENTATIVES
MARCH 18, 1998
Mr. COYNE (for himself, Mrs. JOHNSON of Connecticut, Mr. RANGEL, Mr.
HERGER, Mr. STARK, Mr. CAMP, Mr. MATSUI, Mr. RAMSTAD, Mrs. KEN-
NELLY of Connecticut, Ms. DUNN, Mr. LEVIN, Mr. PORTMAN, Mr.
CARDIN, Mr. ENGLISH
of Pennsylvania, Mr. MCDERMOTT, Mr.
CHRISTENSEN, Mr. KLECZKA, Mr. WATKINS, Mr. LEWIS of Georgia, Mr.
HAYWORTH, Mr. NEAL of Massachusetts, Mr. WELLER, Mr. MCNULTY,
Mr. JEFFERSON, Mr. TANNER, Mr. BECERRA, and Mrs. THURMAN) in-
troduced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
additional taxpayer rights.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CON-
TENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Taxpayer Protection Act of 1998’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; reference; table of contents.
TITLE I—RESTRICTIONS ON LEVY AND OTHER COLLECTION
ACTIVITIES
Sec. 101. Levy prohibited during pendency of certain proceedings.
Sec. 102. Levy prohibited while offer in compromise pending, while offer for in-
stallment agreement pending, and during period installment
agreement in effect.
Sec. 103. Levy prohibited while determining validity of assessment.
Sec. 104. IRS counsel approval required for certain third-party collection activi-
ties.
Sec. 105. Approval required for levy on certain assets.
Sec. 106. Approval required for jeopardy and termination assessments and
jeopardy levies.
Sec. 107. Approval required before sale of perishable goods.
Sec. 108. Increase in amount of certain property on which lien not valid.
TITLE II—APPLICATION OF CERTAIN FAIR DEBT COLLECTION
PROCEDURES
Sec. 201. Application of certain fair debt collection procedures.
TITLE III—PROVISIONS RELATING TO INSTALLMENT
AGREEMENTS
Sec. 301. Guaranteed availability of installment agreements.
TITLE IV—EXPANSION OF JUDICIAL REMEDIES
Sec. 401. Taxpayers allowed motion to quash all third-party summonses.
Sec. 402. Civil action for release of erroneous lien.
Sec. 403. Civil damages for IRS violations of bankruptcy procedures.
TITLE V—MISCELLANEOUS CHANGES
Sec. 501. Personal delivery of notice of penalty under section 6672.
Sec. 502. Service of summonses to third-party recordkeepers permitted by mail.
Sec. 503. Increase of size of cases permitted to use Tax Court small case proce-
dures.
TITLE 
I—RESTRICTIONS 
ON
LEVY AND OTHER COLLEC-
TION ACTIVITIES
SEC. 101. LEVY PROHIBITED DURING PENDENCY OF CER-
TAIN PROCEEDINGS.
(a) IN GENERAL.—Section 6331 (relating to levy and
distraint) is amended by redesignating subsection (i) as
subsection (j) and by inserting after subsection (h) the fol-
lowing new subsection:
‘‘(i) NO LEVY DURING PENDENCY OF CERTAIN PRO-
CEEDINGS.—
‘‘(1) PROCEEDINGS
IN
TAX
COURT
BY
ONE
SPOUSE INVOLVING LIABILITY ON JOINT RETURN.—
No levy may be made under subsection (a) on the
property or rights to property of any individual with
respect to any unpaid tax relating to a joint return
filed by such individual and any other individual
during the pendency of a proceeding brought in the
Tax Court by such other individual with respect to
such unpaid tax.
‘‘(2) PROCEEDINGS FOR REFUND OF DIVISIBLE
TAX.—
‘‘(A) IN GENERAL.—No levy may be made
under subsection (a) on the property or rights
to property of any person with respect to any
unpaid divisible tax during the pendency of any
proceeding brought by such person in a proper
court for the recovery of any portion of such di-
visible tax which was paid by such person if—
‘‘(i) the decision in such proceeding
would be res judicata with respect to such
unpaid tax, or
‘‘(ii) such person would be collaterally
estopped from contesting such unpaid tax
by reason of such proceeding.
‘‘(B) DIVISIBLE
TAX.—For purposes of
subparagraph (A), the term ‘divisible tax’
means—
‘‘(i) any tax imposed by subtitle C,
and
‘‘(ii) the penalty imposed by section
6672 with respect to any such tax.
‘‘(3) EXCEPTIONS.—
‘‘(A) CERTAIN UNPAID TAXES.—This sub-
section shall not apply with respect to any un-
paid tax if—
‘‘(i) the taxpayer files a written notice
with the Secretary which waives the re-
striction imposed by this subsection on levy
with respect to such tax, or
‘‘(ii) the Secretary finds that the col-
lection of such tax is in jeopardy.
‘‘(B) CERTAIN
LEVIES.—This subsection
shall not apply to—
‘‘(i) any levy to carry out an offset
under section 6402, and
‘‘(ii) any levy which was first made
before the date that the applicable proceed-
ing under this subsection commenced.
‘‘(4) AUTHORITY TO ENJOIN LEVY.—No pro-
ceeding in court for the collection of any unpaid tax
to which paragraph (1) or (2) applies shall be begun
by the Secretary during the pendency of a proceed-
ing under such paragraph. Notwithstanding section
7421(a), such a levy or collection proceeding may be
enjoined (during the period such prohibition is in
force) by the court in which the proceeding under
paragraph (1) or (2) is brought.
‘‘(5) SUSPENSION OF STATUTE OF LIMITATIONS
ON COLLECTION.—The period of limitations under
section 6502 shall be suspended for the period dur-
ing which the Secretary is prohibited under this sub-
section from making a levy.
‘‘(6) PENDENCY
OF
PROCEEDING.—For pur-
poses of this subsection, a proceeding is pending be-
ginning on the date such proceeding commences and
ending on the date the decision in such proceeding
becomes final.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to unpaid tax attributable to tax-
able periods beginning after December 31, 1998.
SEC. 102. LEVY PROHIBITED WHILE OFFER IN COM-
PROMISE PENDING, WHILE OFFER FOR IN-
STALLMENT 
AGREEMENT 
PENDING, 
AND
DURING PERIOD INSTALLMENT AGREEMENT
IN EFFECT.
(a) IN GENERAL.—Section 6331 (relating to levy and
distraint) is amended by redesignating subsection (j) as
subsection (k) and by inserting after subsection (i) the fol-
lowing new subsection:
‘‘(j) NO LEVY WHILE CERTAIN OFFERS PENDING
AND WHILE INSTALLMENT AGREEMENT IN EFFECT.—
‘‘(1) OFFER
IN
COMPROMISE
PENDING.—No
levy may be made under subsection (a) on the prop-
erty or rights to property of any person with respect
to any unpaid tax—
‘‘(A) during the period that an offer by
such person in compromise under section 7122
of such unpaid tax is pending with the Sec-
retary, and