- 15 -
H. Rept. 105-148, at 640 (1997); S. Rept. 105-33, at 304 (1997).
The House report states:
Explanation of Provisions
The bill provides that, in connection with the
audit of any person, if there is an actual controversy
involving a determination by the IRS as part of an
examination that (a) one or more individuals performing
services for that person are employees of that person
or (b) that person is not entitled to relief under
section 530 of the Revenue Act of 1978, the Tax Court
would have jurisdiction to determine whether the IRS is
correct. For example, one way the IRS could make the
required determination is through a mechanism similar
to the employment tax early referral procedures.[7]
The bill provides for de novo review (rather than
review of the administrative record). Assessment and
collection of the tax would be suspended while the
matter is pending in the Tax Court. Any determination
by the Tax Court would have the force and effect of a
decision of the Tax Court and would be reviewable as
such; accordingly, it would be binding on the parties.
Awards of costs and certain fees (pursuant to section
7430) would be available to eligible taxpayers with
respect to Tax Court determinations pursuant to the
bill. The bill also provides a number of procedural
rules to incorporate this new jurisdiction within the
existing procedures applicable in the Tax Court.
H. Rept. 105-148, supra at 639-640. The Senate report is
essentially the same. S. Rept. 105-33, supra at 304-305.
The last sentence of the explanation states that section
7436 provides several procedural rules to incorporate this new
jurisdiction into the existing procedural rules which apply to
cases before our Court. H. Rept. 105-148, supra at 640; S. Rept.
105-33, supra at 305; see H. Conf. Rept. 105-220, at 734 (1997).
7 See Announcement 97-52, 1997-2 I.R.B. 22; Announcement 96-
13, 1996-12 I.R.B. 33.
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