Failure to Agree to Extension

A taxpayer's failure to agree to an extension of the statute of limitations for assessment will not be considered in determining whether the taxpayer has exhausted all administrative remedies.

The taxpayer may thus be awarded attorney's fees (having met the test for the exhaustion of administrative remedies) without having signed such an agreement.

Effective for proceedings commenced after date of enactment

Award of Litigation Costs

Eliminates the present-law restrictions on awarding attorney's fees in all declaratory judgment proceedings.

Effective for proceedings commenced after date of enactment

Unauthorized Collection Activities

Increase Recovery Limit

Increases the award ceiling against the United States from $100,000 to $1 million, for recovery of civil damages for reckless or intentional disregard of guidelines by IRS employees in connection with the collection of a taxpayer's Federal tax.

Effective for unauthorized actions occurring after the date of enactment.

Court Discretion to Reduce Award

Permits (but does not require) a court discretion to reduce an award for civil damages if the taxpayer has not exhausted administrative remedies.

Effective for proceedings commenced after the date of enactment.