The "Taxpayer Bill of Rights 2" and the 1998 Reform Act added significant protections for taxpayers.
Key Provisions
- Burden of Proof: In some court proceedings, the burden of proof shifts to the IRS if the taxpayer has maintained good records and cooperated.
- Spousal Relief: "Innocent Spouse Relief" rules were expanded to protect spouses who were unaware of their partner's tax understatements.
- Interest & Penalties: The IRS must suspend interest and penalties if they fail to contact you within 18 months of filing a return.
- Damages: Taxpayers can sue the IRS for up to $1 million if an employee recklessly disregards the law during collection.