FOR IMMEDIATE RELEASE Press Release #105-315
May 6, 1998

SENATE "HITS A DOUBLE"
APPROVES ROTH FUNDING AMENDMENT FOR IRS REFORM BILL
Main Offset Would Allow More Seniors to Rollover to Roth IRA

WASHINGTON -- The Senate Wednesday approved, by a vote of 56 to 42, an amendment that would fully fund the IRS reform bill and allow more senior citizens to roll over their traditional IRA's into Roth IRA's. The amendment was introduced Wednesday morning by Senate Finance Committee Chairman William V. Roth, Jr. (R-DE).

"With the approval of this amendment, the Senate today has hit a double. We have fully funded a comprehensive overhaul of the IRS and we have extended the Roth IRA to more senior citizens. It just doesn't get much better than that," Roth stated.

The IRS reform bill was reported out of the Senate Finance Committee on March 31 with the first five years fully offset in compliance with the Budget Act, but without full funding for the second five years. Under the Senate's pay-as-you-go budget rules, legislation must be fully paid for over ten years, or else a budget point of order can be brought against the bill on the Senate floor.

The offsets approved by the Senate today are:

€ A provision to tighten the definition of operating losses that are eligible for a special ten year carry back;
€ A provision that would modify the rollover rules for Roth IRAs; € A four year extension of the current law user fees charged by the IRS for private letter rulings;
€ A dedication of the balance on the pay go scorecard;
€ A change in the effective date of the foreign tax credit revenue raiser, already part of the legislation, to tax years beginning after 1998.

Some of the highlights of the Senate's IRS reform legislation include:

€ Giving the IRS oversight board that was created in the House bill oversight over law enforcement and collection activities with limited 6103 authority to carry out that responsibility.
€ Making the Taxpayer Advocates office independent of the Agency to ensure that they represent the interest of the taxpayer.
€ Giving the Commissioner the statutory authority he needs to restructure the agency.
€ Holding IRS employees accountable for their actions by requiring the IRS to terminate employees who commit perjury, falsify documents, or violate the rules to retaliate against a taxpayer.
€ Ensuring that innocent spouses are responsible only for their own tax liability.
€ Suspending interest and certain penalties when the IRS does not provide appropriate notice to a taxpayer within one year after a return is filed.
€ Ensuring due process in collections activities.

The Senate will consider further amendments to the legislation today. A vote on final passage is expected either Wednesday night or sometime Thursday.

# # #