KEY SECTIONS FROM IRS REORGANIZATION ACT
I went through the 1998 IRS reorganization act to isolate the sections I felt were most
relevant to securing remedies. I've listed the new or amended Internal Revenue Code
sections that should be most useful for holding IRS' feet to the fire. I downloaded the
annotated sections from Lexis, then went through to list regulations cited in Lexis notes
with the section heading. I think there are 38 Code sections listed below.
I don't know if the U.S.C. sections on the Government Printing Office web site are
current or not. I seriously doubt that the U.S.C. on CD currently available from GPO is
current, though. They're running quite a lot behind. However, the GPO web site has
current regulations, but when I attempted to download some this afternoon, the web site
was operating so slow that I gave up. I'll try again later. (The first download just popped
up about 5 minutes after the fact)
Some of the more interesting sections include 26 U.S.C. §§ 6320 & 6330. If these
sections are available on the GPO on-line edition of the U.S.C., it is current as both are
new. The first provides the opportunity to contest liens, the second provides the
opportunity to contest levies. Both fall under auspices of 26 U.S.C. § 7443A, which is
also new.
The chief judge of the Tax Court is supposed to appoint "special judges" for this function.
The Tax Court is supposed to promulgate rules for evidence, etc., but I haven't had time
to access the Tax Court web site to see if they're posted yet. At any rate, it appears that
this is the "administrative due process" remedy Congress provided.
Another of the more interesting new sections is I.R.C. § 7491, which pushes the "burden
of proof" on the "Secretary" in several areas.
If I recall correctly, subsection (a) requires the "Secretary" to prove liability for taxes in
Subtitles A & B where the "taxpayer" provides "credible evidence" of no liability.
This plays right into the hands of the "gross income source" folks such as Bell and Rose.
And, of course, where we put in an "affidavit of fact" (testimonial evidence), we have, in
fact, submitted the "evidence of a competent witness."
Where the affidavit of fact is presented, IRS has to (1) prove facts contrary to or different
from those attested in the affidavit and/or (2) prove application of law to attested or
different facts.
The last subsection of § 7491 places the burden of proof on the Secretary for any penalty
where the burden isn't already specified by another section. Where frivolous filing
penalties are concerned, the Secretary already has the burden of proof under § 6703(a), so
Congress did us the favor of blocking any loophole IRS might try to escape.
I might say that the new Code sections relating to burden of proof and the like aren't new
law as such. The government always has the burden of proof. What Congress did was
formally close some of the procedural loopholes IRS has been accustomed to using to
create the appearance of liability.
Under § 7609, the taxpayer may move to quash third-party summonses. I think it is a
usable section as IRS doesn't ever specify what tax is involved, and there is no authority
simply to go on fishing trips.
Code sections have been jumbled in several places. The new § 7802 creates the "Internal
Revenue Service Oversight Board." I haven't gone hunting for this entity yet, but it could
be useful to create jeopardy for IRS. There's probably a web link we haven't located yet.
The new Treasury Inspector General of Tax Administration was added to the Treasury
Inspector General Act in the Title 5 Appendix. I couldn't get to that information.
However, the TIGTA has a web location that provides most necessary information.
It appears that most of the new regulations were promulgated by April 1999. There were
relatively few changes in April 2000.
I included § 7214 (criminal for government agents) as there are regulations for this
section. Also, I included 31 U.S.C. § 330 as this is the Code section governing practice
before Treasury agencies, with 31 CFR § 10 relating to IRS. I found it interesting that this
section is governed by 5 U.S.C. § 500, as this section appears to have
"intragovernmental" application. Kind of a curious bucket of worms.
Also, where the amount in dispute is under $50,000 the matter can be taken before the
special judges that operate under auspices of the Tax Court.
I have the impression that the special judges are Congress' answer to administrative law
judges for income tax matters. At any rate, this appears to be a fast track for those who
want to use it.
All sections listed other than 26 U.S.C. § 7214 & 31 U.S.C. § 330 are either new or were
amended by the 1998 legislation.
Dan Meador
New & Amended Internal Revenue Code Sections
§ 6109 Identifying numbers. See 26 CFR §§ 1.6102-1 et seq., 31.6101-1 et seq,
301.6101-1 et seq. & 27 CFR Part 70.
§ 6301 Collection authority. See 26 CFR §§ 1.6302-1 et seq, 301.6301-1 et seq., 601.103
& 601.104.
§ 6304 Fair tax collection practice. No regulations listed as of 6.1.00.
§ 6320 Notice & opportunity for hearing upon filing of notice of lien. No regulations
listed as of 6.1.00. See also § 7443A.
§ 6325 Release of lien or discharge of property. See 26 CFR § 301.6321-1; Procedure &
administration, 27 CFR Part 70; estate taxes 26 CFR § 20.6018-1 et seq; Temporary
regulations for the act of 1966 at 26 CFR § 400.1-1 (expiration after 3 years from
promulgation)
§ 6330 Notice & opportunity for hearing prior to levy. No regulations as of 6.1.00. See
also, § 7443A.
§ 6331 Levy authority. See 26 CFR §§ 301.6331-1 et seq, 404.6334 & 27 CFR Part 70.
§ 6334 Property exempt from levy. See 26 CFR §§ 301. 6331-1 et seq., 404.6334 &
601.104.
§ 6343 Authority to resolve levy & return property. See 26 CFR §§ 301.6331-1 et seq,
601.104 & 27 CFR Part 70.
§ 6402 Authority for credits & refunds. See 26 CFR §§ 31.6001-1, 301.6401-1 et seq &
27 CFR Part 70.
§ 6404 Abatements. See 26 CFR §§ 31.6001-1 et seq. & 301.6401-1 et seq.
§ 6601 Interest on underpayment, nonpayment, etc. See 26 CFR §§ 1.9006 et seq,
301.6601-1 et seq. & 27 CFR Part 70.
§ 6631 Notice requirements for interest (after Dec. 31, 2000).
§ 6651 Failure to file a tax return or pay tax. See 26 CFR § 1.6654-1 et seq., 301.6651-1
et seq., 601.104 & 27 CFR § 70.
§ 6672 Failure to collect or pay tax, attempt to evade or defeat tax. No retulations as of
6.1.00.
§ 6751 Procedural requirements for penalties. See particularly subsection (b) requirement
for supervisor approval. No regulations listed as of 6.1.00.
§ 7123 Appeals dispute resolution procedure (arbitration). No regulations listed as of
6.1.00.
§ 7124 Cross reference only. See criminal penalties at 26 CFR § 301.7121-1 et seq.
§ 7214 Offenses of officers & employees of the U.S. See 26 CFR § 301.7207-1 et seq &
27 CFR 70.
§ 7421 Prohibition of suits to restrain assessment or collection. See section amendments.
See 26 CFR § 301.7422-1 et seq.
§ 7426 Civil action by persons other than taxpayer. See 26 CFR § 301.7422-1 & 27 CFR
§ 70.
§ 7429 Review of jeopardy levy or assessment procedure. See 26 CFR § 301.7422-1 et
seq. & 27 CFR Part 70.§ 7430 Awarding of costs & certain fees. See 26 CFR § 301.74221 et seq. & 27 CFR Part 70.
§ 7433 Civil damages for unauthorized collection actions. No regulations as of 6.1.00.
§ 7436 Proceedings for determination of employment status. No regulations as of 6.1.00.
§ 7443 Tax court membership.
§ 7443A Special trial judges (Tax Court appointees). No regulations. Relates to 26 U.S.C.
§§ 6320 & 6330. Tax court rules & regulations.
§ 7463 Disputes involving $50,000 or less. Tax Court to promulgate rules.
§ 7491 Burden of proof. When a taxpayer introduces credible evidence, the burden of
proof lies with the Secretary. No regulations as of 6.1.00.
§ 7525 Confidentiality privileges relating to taxpayer communications with
representative. No regulations.
§ 7602 Examining of books & witnesses. No regulations as of 6.1.00.
§ 7609 Special procedures for third-party summonses. (Taxpayer may move to quash.)
See 26 CFR §§ 301.7601-1, 601.105 & 27 CFR Part 70.
§ 7801 Authority of Department of Treasury. Revisions added. See 26 CFR § 601.101 et
seq.
§ 7802 Internal Revenue Service Oversight Board. (New)
§ 7804 Other personnel. See authority relating to delinquent revenue officers in
subsection (d). Also, review notes for this section and old § 7804 in notes.
§ 7805 Rules & regulations. See 26 CFR § 31.6001-1 and administrative regulations at §
301.
§ 8021 Joint Committee on Taxation. Powers.
§ 8022 Joint Committee on Taxation. Duties.
31 U.S.C. § 330. Practice before the Department of the Treasury. See also, 5 U.S.C. §
500 and 26 U.S.C. § 6103. Regulation relating to IRS at 31 CFR § 10.