William Roth

Mr. ROTH

Mr. ROTH. I ask unanimous consent that the Senate disagree with the amendment of the House and agree to the request for a conference, and the Chair be authorized to appoint conferees on the part of the Senate.

Mr. ROTH

Mr. ROTH. For the information of all Senators, tomorrow morning there will be a series of rollcall votes beginning at 9 o'clock a.m. on or in relation to amendments to the reconciliation bill, and following that series of votes the Senate will continue to debate amendments to the bill. However, no further votes will occur during Friday's session of the Senate or during Monday's session of the Senate. Any votes ordered on those amendments will occur at 9:30 a.m. on Tuesday. Also, it is the majority leader's intention to turn to the agricultural appropriations bill at 2 p.m. on Monday. Again, Senators intending to offer amendments or raise points of order with respect to the reconciliation bill must do so either tomorrow or Monday.

Mr. ROTH

Mr. ROTH. If there is no further business to come before the Senate, I ask unanimous consent that the Senate now stand in adjournment under the previous order.

Mr. ROTH

Mr. ROTH. Mr. President, the American people should heed the old advertising slogan ``accept no imitations.'' The work first amendment is a well-named imitation of welfare reform. But real reform must have some very basic provisions. It must have real and workable time limits. It must bring closure to entitlement programs. It must not engender dependency and allow multigenerational abuse of the system. Real reform must require able-bodied individuals to work. It must offer flexibility and authority to State governments to be innovative and effective in meeting the needs of their people. While work first has the benefit of good advertising, it is an imitation. Work first has no real time limits. Work first has no real requirements for people to work. Work first lacks the specific, concrete requirements needed for reform. Rather, work first appears to be more of the same. It does not extend real authority to the States. It offers waivers. It grandfathers existing waivers and intends to expedite the process. The Governors have had their fill of waivers. To them, work first is business as usual with Washington bureaucrats dispensing authority one drop, one waiver at a time. But waivers, Mr. President, are not welfare reform. And for requiring individuals to work, work first offers something called parent empowerment contracts. These sound great. And I have much interest in that concept. But we do not know much about them other than intensive job search is required. This is all we know, and that they are designed to move the parent into the work force as soon as possible. For real reform, Mr. President, this rhetoric is simply too vague. I might say, that the Governors have real concern about these contracts. They are concerned that they will be provocative of much litigation for those who would seek to impose obligations on the States because of these contracts. But in any event, real reform must be concrete. As I said, it must have time limits and a bottom line. To create incentives in the hearts and minds of people moving off welfare rolls, they must know that Washington and their State governments are serious. Their behavior must change. Last year the General Accounting Office reported that between 1989 and 1994 the Federal and State governments have spent more than $8 billion through the job program. The GAO told Congress that we do not know what progress has been made in helping poor families become employed and avoid long-term dependence. Real reform must change behavior and foster policies that encourage men and women to make correct choices. Work first attempts to attract support by offering false choices in regard to teen parents, child care, and transitional Medicaid benefits. Make no mistake about it, the Republican welfare bill includes all of these items. Mr. President, I oppose the amendment. It is time for welfare reform. It is time for the real thing. I yield back the balance of my time.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that, as in executive session, the Senate immediately proceed to the consideration of the following Executive Calendar nominations, No. 513, James Jones; No. 576, Donald Molloy. I further ask unanimous consent that the nominations be confirmed, en bloc, the motions to reconsider be laid upon the table, en bloc, and the President be immediately notified of the Senate's action; that any statements relating to any of the nominations appear at the appropriate place in the Record, and the Senate then immediately return to legislative session.

Mr. ROTH

Mr. ROTH. Mr. President, I have a unanimous consent agreement to propound to dispose of two amendments which have been agreed to on both sides of the aisle. They are Senator Faircloth's amendment to clarify that a welfare recipient may provide child care services to satisfy the bill's work requirements. The second one is Senator Coats' amendment allowing welfare recipients to establish individual development accounts. Mr. President, I ask unanimous consent that it be in order for me to offer these two amendments which I now send to the desk.

Mr. ROTH. Yes. Both have been cleared.

Mr. ROTH. We had the two earlier agreements. Amendments Numbered 4923 through 4925, En Bloc

Mr. ROTH. Do you want more?

Mr. ROTH. Actually, I had three more amendments.

Mr. ROTH. Yes. I do confirm that.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that there now be a period for the transaction of morning business with Senators permitted to speak for up to 5 minutes each.

Mr. ROTH

Mr. ROTH. Mr. President, today the Senate will pass the Taxpayer Bill of Rights 2 which provides taxpayers with added protections in their dealings with the Internal Revenue Service. I urge the President to sign this bipartisan legislation. One of my longstanding concerns relates to serious complaints by taxpayers that the tax laws can and are being enforced unfairly by the Internal Revenue Service. With the broad authority conferred on this agency, the Internal Revenue Service has the potential to abuse its power at the expense of law-abiding and well-meaning taxpayers. The Taxpayer Bill of Rights 2 is the taxpayers' arsenal against an often heavy-handed IRS. When the Federal Government thinks it has more rights to your paycheck than you do, something is terribly wrong with the system. That is why this legislation, which returns power to the taxpayers, is so important. While it is not a complete solution by any means, it is a good first step. The Finance Committee has worked on this legislation for several years on a bipartisan basis. I would like to give special recognition to Senators Grassley and Pryor for their tenacity in pursuing enactment of these taxpayer protections. Let me also mention that the procedure for this is somewhat unique. In the usual course, a tax bill from the House of Representatives would be referred to the Senate Finance Committee for review before consideration by the full Senate. However, Taxpayer Bill of Rights 2 provisions were previously approved by the Finance Committee and included in the Balanced Budget Act of 1995, which was vetoed by President Clinton. The Finance Committee worked closely with the Ways and Means Committee on this new bill, which was unanimously passed by the House of Representatives. In order to expedite passage of this important legislation, I decided that this bill should bypass the Finance Committee and go directly to the full Senate. Mr. President, the bill provides the following provisions which increase taxpayer protections: 1. Establish Office of The Taxpayer Advocate The bill establishes a taxpayer advocate, which would replace the taxpayer ombudsman, at the Internal Revenue Service [IRS] to assist taxpayers. The taxpayer advocate must annually provide an independent report to Congress without review or censure by Treasury or the IRS. 2. Expand Taxpayer Assistance Authority The bill provides the taxpayer advocate with additional tools to help taxpayers deal with the IRS. In order to prevent the IRS from dragging its feet in complying with the taxpayer advocate's orders, the bill requires such matters to be resolved on a timely basis. 3. Notice of Reason for Termination of Installment Agreements The bill requires the IRS to notify taxpayers 30 days before altering, modifying, or terminating any installment agreement for paying taxes. An exception is provided if collection is in jeopardy. 4. Administrative Review of Termination of Installment Agreement The bill requires the IRS to establish an additional administrative reiew before terminating installment agreements. 5. Expand Authority to Abate Interest The bill expands the IRS's ability to abate interest due to IRS error or delay. 6. Judicial Review of IRS Failure to Abate Interest The bill grant the Tax Court jurisdiction to review whether the IRS's failure to abate interest was an abuse of discretion. 7. Extend Interest-free Period to Pay Tax The bill extends the interest-free period to pay tax from 10 to 21 calendar days from noticve and demand when the total tax liability is less than $100,000. 8. Abate Penalty for Failure to Deposit Payroll Tax The bill allows the IRS to abate penalties for certain inadvertent failures to deposit payroll tax. 9. Studies of Joint Return Issues Must Be Conducted 10. Joint return May Be Made after Separate Returns Without Full Payment of Joint Return Tax 11. Disclosure of Collection Activities with Respect to Joint Returns The bill requires the IRS, upon request, to disclose in writing whether the IRS has attempted to collect unpaid taxes from the other individual who joined in the filing of a joint return. 12. Withdrawal of Notice of Lien The bill allows the IRS to withdraw a public notice of tax lien prior to full payment by the indebted taxpayer. Upon request, the IRS must make reasonable efforts to notify credit agencies, etc. 13. return of levied property The bill allows the IRS to return levied property without full payment of tax debt. 14. modify certain levy exemption amounts The bill increases the amount exempt from a tax levy for personal property from $1,650 to $2,500 and for books and tools of a trade from $1,100 to $1,250. These amounts will be indexed after 1997. 15. offers-in-compromise The bill streamlines the procedure for settling tax debts under $50,000 by increasing from $500 to $50,000 the amount requiring a written opinion from the Office of Chief Counsel in order to settle a tax debt. 16. civil damages for fraudulent filing of information returns The bill creates a civil cause of action by an individual against any person who files a fraudulent information return with respect to purported payments made to the individual. The plaintiff may obtain the greater of $5,000 or the actual amount of damages, costs, and attorney's fees. 17. irs must conduct reasonable investigation of information returns The bill requires the IRS to prove that its position in court was substantially justified if a taxpayer asserts a reasonable dispute with respect to an information return and fully cooperates with the IRS. The IRS is not presumed to be correct as under current law. 18. awarding of costs and fees: irs must prove its position was substantially justified The bill provides that once a taxpayer substantially prevails over the IRS in a tax dispute, the IRS has the burden of proving that its position was substantially justified. The taxpayer may be awarded attorney's fees if the IRS does not meet its burden. 19. increase limit on attorney's fees from $75 to $110 per hour and indexed after 1996 20. failure to agree to extension not taken into account The bill provides that in making a determination whether a taxpayer is eligible for an attorney's fees award, any failure to agree to an extension of the statute of limitations may not be considered in determining whether a taxpayer exhausted administrative remedies. 21. award of litigation costs permitted in declaratory judgment proceedings The bill eliminates the present-law restrictions on awarding attorney's fees in all declaratory judgment proceedings. 22. increase limit on recovery of civil damages for unauthorized collection actions The bill increase--from $100,000 to $1 million--the amount a taxpayer may be awarded for reckless or intentional action by an IRS officer or employee. 23. court discretion to reduce award for litigation costs for failure to exhaust administrative remedies The bill permits, but does not require, a court to reduce an award if the taxpayer has not exhausted administrative remedies. 24. preliminary notice requirement The bill requires the IRS to issue a notice to an individual the IRS has determined to be a responsible person for unpaid trust fund taxes, i.e., payroll taxes, at least 60 days before issuing a notice and demand penalties. 25. disclosure of certain information where more than one person liable for penalty The bill requires the IRS, if requested in writing by a person the IRS believes is responsible for unpaid trust fund taxes, to disclose in writing information about collection activity against others for the same tax liability. 26. right of contribution where more than one person liable for penalty The bill creates a Federal cause of action for contribution. Persons who paid an amount in excess of their proportionate share of trust fund tax penalties may sue other responsible persons for their proportionate share. The proceeding must be separate from an IRS proceeding. 27. volunteer board members of tax-exempt organizations are exempt from penalty The bill clarifies that volunteer, unpaid board members serving on an honorary basis are not subject to responsible person penalties for unpaid trust fund taxes. 28. enrolled agents are third-party record keepers 29. safeguards relating to designated summonses The bill limits the issuance of designated summonses to examinations involving the largest 1600 corporate taxpayers and requires review by regional counsel before issuance. 30. annual report on number of designated summonses within preceding 12 months 31. relief from retroactive application of treasury department regulations within 18 month safe-harbor The bill generally prohibits Treasury regulations from being effective before publication in the Federal Register. Exceptions are provided to prevent abuse or if the regulation is filed or issued within 18 months of enactment of the statute to which it relates. Taxpayers may elect to retroactively apply a regulation. 32. information returns must include the phone number of the contact person 33. required notice to taxpayers of certain payments The bill requires the IRS to make reasonable efforts to notify within 60 days taxpayers who have made payments which the IRS cannot trace to the taxpayer. 34. Civil Damages for Unauthorized Enticement of Information Disclosure The bill allows a taxpayer to sue the United States for up to $500,000 if any officer or employee of the United States intentionally compromises collection or determination of tax due from an attorney, certified public accountant, or enrolled agent representing the taxpayer in exchange for information concerning the taxpayer's tax liability. 35. annual reminders to taxpayers with outstanding tax debts 36. Five-year extension of authority for undercover operations The bill allows the IRS to churn the income earned in an undercover operation to pay for its expenses. 37. disclosure of returns on cash transactions Any person who receives more than $10,000 in cash in one transaction, or two or more related transactions must file a form with the IRS. The bill allows the IRS to disclose information from this form to other Federal and State agencies. 38. disclosure of returns and return information to designee of taxpayer The bill deletes the word ``written'' from the requirement that written consent from a taxpayer is required for disclosure of taxpayer information. This change facilitates development of the tax system modernization projects. 39. report on netting of interest on overpayments and liabilities The bill requires Treasury to conduct a study on the netting of interest on overpayments and underpayment. 40. Use of non-postal delivery services for timely-mailing-as-timely- filing rule Under current law, only items mailed with the U.S. Postal Service are deemed filed with the IRS when they are mailed. The bill expands the timely-mailing-as-timely-filing rule to designated delivery services. 41. annual reports on misconduct by IRS employees The bill requires the IRS to make annual reports to the tax writing committees on all allegations of IRS employee misconduct. Mr. President, passage of the Taxpayer Bill of Rights 2 is the first step in eliminating unfair enforcement of our tax laws by giving taxpayers an arsenal against the IRS. I again urge my colleagues to approve this important legislation and urge President Clinton to sign it.

Mr. ROTH

Mr. ROTH. I thank the Senator from Missouri and the Senator from Arkansas for bringing this matter to our attention. Although the Participating Security Program is relatively new, it appears to have great potential for small business. Let us see what we can do to resolve this issue.

Mr. ROTH. At this time, I am happy to yield to the senior Senator from Kansas.

Mr. ROTH. If I might ask a question at this point, it is my understanding that heretofore, the IRS has been willing to confirm that these certificates are debt obligations of the United States Government. Is that correct?

Mr. ROTH. My distinguished colleague from New York makes some good points, and his views reflect his long standing interest in the economic stability of Puerto Rico. Let me note that I view section 936 as an overgenerous tax benefit. However, I recognize that our provision for a continuing wage credit provides significant economic stability for Puerto Rico and enhances job security for these many thousands of employees of U.S. firms. I included the continuing wage credit in the Finance Committee bill as a response to the concerns raised by Senator Moynihan about Puerto Rico.

Mr. ROTH. I thank my good friend and colleague, Senator Moynihan, for his contribution to the development of both the Finance Committee legislation as well as the managers' amendment. It could not have been done without his contribution. I just want it to be known that he has, as always, brought great intelligence, skill, and knowledge to this most important task. I share with him his interest and concern in education. I think it is only fair to say that in today's world, where technology and knowledge are changing so rapidly, there has never been a time for it to be more important that we keep the most well educated people anywhere in the world, and certainly Senator Moynihan has been a leader in that effort. I have to say to my distinguished colleague that many of these extenders I think are critically important. One of my first questions on it is, Why don't we make them permanent? Unfortunately, we have a problem of cost and budget rules, but this is something that we will have to look at jointly in the future.

Mr. ROTH. Mr. President, I note that a copy of the amendment and its explanation will be available on the desk of each Senator on the Senate floor. Many Members of the Senate have raised tax proposals for consideration in this managers' and leaders' amendment. Some of these proposals are outside the scope of the objectives I mentioned. Other proposals are relevant to our objectives but they are controversial or costly. This managers' and leaders' amendment strives to stick with the small business and extenders themes, so these controversial, nongermane proposals are not included. Mr. President, the major components of the managers' amendment are: First, to extend most of the expired provisions to December 31, 1997. This is a half-year extension. I note that the section 29 alternative fuels credit is extended to December 31, 1998, and the grandfather for certain publicly traded partnerships is extended to December 31, 1999. Second, this amendment provides additional pension simplification provisions. Most of these are directed at protecting spouses of pension plan participants. Third, at the request of a bipartisan group of Labor Committee Senators, led by Senator Kassebaum, our amendment offers a clarification of the effect of the Harris Trust Supreme Court case. The Harris Trust case overturned 20 years of Labor Department policy regarding insurance companies. It created additional uncertainty about the liability of insurance companies that fund employee benefit plans. Our proposal adopts the Labor Committee's directive to the Labor Department, mandating a clarification of the treatment of insurance companies under the Employee Retirement Income Security Act [ERISA]. In a recent letter from Secretary Robert Reich, he stated the Labor Department's strong support for the Labor Committee's bill. In that letter, the Secretary writes: ``The legislation will provide the guidance necessary to avert disruption in the insurance industry, thereby improving the security of American workers' pension plan assets.'' Fourth, our amendment provides additional clarifications of the worker classification safe harbor known as section 530. This concerns the distinction between employees and independent contractors for employment tax purposes. I believe these additional clarifications are necessary steps to help clear up the confusion and controversy in worker classification. Mr. President, the managers' and leaders' amendment is fully offset, and I would like to comment on a couple of these. First, the managers' and leaders' amendment adopts a proposal from the President's budget that denies the personal exemption deduction and dependent care credit if taxpayers do not supply the dependent's Social Security number. I believe this proposal is necessary to insure against fraud. Another important offset is the extension of the 10-percent air ticket and cargo excise taxes. The House bill did not include an extension of this ticket tax. The aviation program's authorization terminates on September 30, 1996. In response to concerns raised by Commerce Committee members, the Finance Committee bill extends the ticket tax through the end of this year as an interim measure to ensure adequate funding for the aviation program until it is reauthorized. Under the managers' and leaders' amendment, the air ticket and cargo excise taxes are further extended until April 15, 1997--an additional 3\1/2\ months. This is an extension I agreed to reluctantly and one I believe should be revisited in conference with the House. Mr. President, I believe the managers' and leaders' amendment lives up to the spirit of the bipartisan Finance Committee bill. I urge my colleagues' support. Mr. President, I yield the floor. Mr. MOYNIHAN addressed the Chair.

Mr. ROTH. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. ROTH. Mr. President, I send to the desk a copy of the managers' and leaders' amendment.

Mr. ROTH

Mr. ROTH. Mr. President, I send to the desk a modification to the managers' amendment that has been cleared by the two managers and the two leaders.

Mr. ROTH. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. ROTH. Mr. President, I ask for the yeas and nays.

Mr. ROTH. This modification includes two provisions. First, multiemployer pension plans are exempted from the Tax Code pension benefit limits and, second, employee contributions to the Federal Government retirement funds would be subject to the judgment of a divorce court in the same way annuity and survivor benefits are subject to such orders. I yield back the remainder of my time. Mr. LOTT addressed the Chair.