Taxpayers given more rights to fight IRS.

You may not feel it as you wrestle with your tax return, but you have more rights as a taxpayer than you did last year. In August, 1996, the Congress passed a revamped taxpayers, bill of rights (and the Internal Revenue Service actually implemented some portions of it in advance). The act gives the individual taxpayer a little more power when disputes or problems arise. According to the Institute of Certified Financial Planners, Denver, Colo., highlights of the legislation include:

Taxpayer's advocate. The act replaced the Office of the Taxpayer Ombudsman, created under the original 1988 Taxpayers' Bill of Rights Act, with a more independent and powerful Office of the Taxpayer Advocate, The advocate is supposed to look out for the taxpayer's interests when disputes arise with the IRS. The advocate can step in if a taxpayer is suffering undue hardship caused by IRS officials, and the advocate's rulings can be overturned only by the deputy commissioner or the commissioner. The advocate also is charged with identifying problem areas and recommending administrative changes. The advocate will report directly to Congress twice a year, without interference from other IRS officials. The hitch, note some experts, is that the advocate is appointed by the IRS commissioner, not Congress or the president, which more likely would mean an appointee sympathetic to the IRS.

Interest delays. Another taxpayer irritant was the IRS's policy of continuing to impose interest charges in cases where delays were no fault of the taxpayer, such as loss of records by the IRS or illness or transfer of IRS personnel working on the case. Now, the IRS can eliminate that interest. The act extends from 10 to 21 calendar days the interest-free period the taxpayer has...